Monday 16th December 2024
(2 days, 12 hours ago)
Lords ChamberFootball Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Amendment Paper: HL Bill 41-V(a) Amendment for Committee (Supplementary to the Fifth Marshalled List) - (13 Dec 2024)
Baroness Brady
Baroness Brady (Con)
My Lords, I refer the Committee to my interests as declared in the register. This group of amendments includes Amendment 110 in my name which addresses a concern about potential political interference in football’s new regulatory framework.
The Bill creates an unusual—and, I believe, likely to be unnecessary—requirement for football governance statements every three years from the Secretary of State. This is not merely a question of frequency; I believe that the expectation created for this statement may raise questions about regulatory independence and broader international implications, which we have discussed in this Committee a number of times.
As I and other noble Lords have pointed out, UEFA and FIFA maintain strict provisions against state interference in football. We have already seen UEFA’s general secretary express serious concerns about various aspects of this Bill. In that context, we are obliged to ask whether creating a requirement, or even an expectation, for regular political statements about football governance risks providing these bodies with an additional point of leverage over English football’s development. UEFA has been clear that it is watching the implementation of this framework very closely, including in relation to possible scope creep and stepping over the line, so it behoves us to consider carefully the possible practical implications of such a mechanism and to question its necessity.
Every three years, the Secretary of State may make a statement about football governance. The Minister may say that there is no obligation here, and that it is just providing for the possibility. However, it seems inevitable that putting this expectation into statute creates a very strong likelihood that these statements will then be made. What will they say—that everything is fine, or are they more likely to look at more areas that the regulator can examine and then expand into, as we have seen with this Bill so far?
As the general secretary of UEFA spelled out in a letter sent to me last week:
“UEFA has previously shared its concerns about the creation of an Independent Football Regulator … as normally football regulation should be managed by the national federation. It is essential to ensure that the establishment of this structure fully adheres to the principle of sports autonomy, thus preventing any risk of political or governmental interference in the legitimate and appropriate functioning of recognised sports governing bodies. The IFR’s mandate must be clearly defined and strictly limited to the long-term financial sustainability of clubs and heritage assets”.
Despite these repeated warnings, it seems reasonable to assume that the expectation of a football governance statement will create not just inevitable domestic pressure for political intervention but opportunities for international bodies to question the regulator’s independence. There may be a whole range of wider issues going on with international governing bodies at the time of the football governance statement—for example, negotiations on the football calendar or the future of competition formats. With these football governance statements, we seem to be creating an unnecessary risk that the statements, almost irrespective of their content, may be deemed to constitute political interference. English football will not be served well by such a dynamic.
My amendment would align the statement cycle with the other five-year regulatory timeframes in the Bill, reducing the frequency of these potential pressure points. However, this is about not just timing but protecting football’s independence while maintaining proper oversight. I look forward to hearing from the Minister on how necessary these statements are.
Professional football requires long-term certainty for investment. In my long experience, stadium development can take up to 10 years to plan and execute. Academy investment needs at least a five-year horizon. Infrastructure projects require stable planning frameworks. Yet we seem to be risking the creation of a system where policy could shift every three years in response to short-term political steers, with each statement also potentially triggering questions about regulatory independence. I worry that these regular political statements could create permanent pressure for intervention beyond the regulator’s core purpose.
I would be very grateful if the Minister could give us the Government’s perspective on these important questions. What is the rationale for creating this unique pressure point for political intervention? How does the Minister believe that it will support long-term investment, especially given the international oversight concerns? What protections exist or could exist against scope creep through these regular statements? How will the Government manage UEFA and FIFA concerns about state interference in relation to this? I beg to move.
Lord Maude of Horsham (Con)
My Lords, I rise to support my noble friend’s amendment, and to question whether it is wise for the Government to include this clause in the Bill. It says:
“The Secretary of State may prepare a statement”,
and then it goes on. A Secretary of State can prepare a statement of anything at any time. It requires no statutory permission in a Bill to enable this to happen, but the effect of putting this in the Bill is, precisely as my noble friend has explained, to raise the spectre that UEFA, in particular, will see this as further evidence of political and government interference in football, which is a big concern for it. The Government have so far tiptoed around the edge of the concerns that UEFA has, but we know that the consequences for English football, if they go on to the wrong side of that line, will be severe.
Lord Pannick (CB)
My Lords, I repeat my declaration of interest, having spent much of the past three months representing Manchester City Football Club against disciplinary charges brought by the Premier League.
I pay tribute to the noble Baroness, Lady Brady, who has long been a friend of mine. She has unrivalled experience of being employed by Birmingham City Football Club and, for many years, West Ham United Football Club, and has achieved great success at both those clubs. I respectfully suggest, though, that here she protests too much. Clause 11(2) contains a very important restriction on what a football governance statement may do. It
“may not contain any policies that are inconsistent with the purpose of this Act or with the IFR’s objectives”.
The second protection is in subsection (6):
“The Secretary of State must lay any football governance statement, or any revised statement, published under this section before Parliament”.
Those are very considerable protections.
We listen to concerns that companies that own football clubs need long-term planning, but surely any company is subject to changes of government policy over the years. There is no protection whatever against those and the consequences thereof. I see absolutely no reason why football clubs should be protected by more than the three-year period stated here.
Lord Hayward (Con)
My Lords, before I start my comments on this clause, I thank the Minister for meeting me last week to discuss a number of issues—they did not include this clause, but I appreciate the opportunity to discuss other issues with her. My concern about this clause comes from the very first words of the Bill, which say that it is to:
“Establish the Independent Football Regulator”—
an independent regulator, not one circumscribed by a government Statement as laid out in Clause 11.
I disagree with the noble Lord, Lord Maude, who said, if I heard him correctly, that this was unique. It is not. Sadly, my mind goes back to a previous occasion when the Government wanted to circumscribe an independent regulator. I remember the debate clearly, because the late and great Lord Judge made a massive contribution to it, scything through the then Government’s arguments about why they should have a Statement in relation to an independent regulator. The independent regulator to which I refer is encompassed in the Elections Act. The previous Government said, “Ah, we’ve got an Elections Act. We don’t really like what the Electoral Commission is doing, so we’ll put in a nice little clause which requires the Government to make a Statement”, which, in effect, circumscribed the Electoral Commission. What is fascinating about that set of circumstances, which Lord Judge and I—and the Liberal Democrats and the Labour Party—criticised comprehensively, is that the wording in Clause 11 is remarkably similar to that in Section 16 of the Elections Act. In fact, Clause 11(5) of the Bill is almost identical, word for word, to new Section 4A(7) of PPERA inserted by that section.
I said just now that people on other Benches spoke against the Government imposing some form of Statement on the Electoral Commission as
“‘not fit for purpose and inconsistent with the … role as an independent regulator’”.—[Official Report, 6/2/24; col. 1604.]
We are talking here about the same wording. Those were words from the Liberal Front Bench—the noble Lord, Lord Rennard. The Labour Front Bench, in the form of the noble Lord, Lord Khan, said that
“this statement is unnecessary and the Government have provided no evidence for why it is needed … There was cross-party agreement that the commission’s independence is vital”.—[Official Report, 6/2/24; col. 1602.]
I could go on quoting the noble Lords, Lord Khan and Lord Rennard, making the point that a regulator is independent if it is independent, not because it is circumscribed by a set of conditions as set out in Clause 11. I recommend anybody to look at the relevant amendments to the Elections Act 2022, where the wording is virtually identical. The Government then wanted to circumscribe the Electoral Commission. I would not be surprised if the officials discussing this Bill when it was in draft under the previous Government said, “Oh, we’ve got a good basic tenet; we’ve even got a set of words which we can lift, virtually verbatim, and it’ll circumscribe the independent regulator”.
I opposed the Government’s imposition of that statement in the Elections Act, because I believed it circumscribed what should have been an independent regulator. When the then Opposition forced a vote on it, I sat where the noble Lord, Lord Bassam, is now and abstained, because I refused to support the Government imposing on an independent regulator a provision which is virtually word for word that set out in Clause 11. I therefore strongly support the amendments and oppose this clause standing part of the Bill.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will speak to my Amendment 111, which is part of this group, and pick up some of the points that my noble friends have raised in the debate.
My Amendment 111 states that the Secretary of State should not be permitted to revise a football governance statement simply because there has been a “significant change” in government policy on football. The reasoning for this comes from much the same place as my noble friend Lady Brady’s Amendment 110: both try to prevent the possibility of frequent changes in the Government’s policies for the regulator. If the Secretary of State took up every opportunity that the Bill allows to alter the governance statement—it could be every three years, after every general election and after every change in government policy—we could see this governance statement being altered rather frequently, every few years, with effects on the stability of football.
How would clubs have the certainty they need to plan their investment? As my noble friend Lady Brady said, football clubs plan their infrastructure and stadium developments over periods of 10 to 15 years or more. The talent pipeline, which is needed to develop the players of the future, requires much more than five years of careful thought and investment. To do all this and deliver the sustainability of English football, clubs need to know what the policies of the regulator will be over the long term. They need to know what the regulator will require of them.
My noble friend Lord Hayward reflected on a broader point in his remarks. The Government have been at pains to stress the importance of the independence of this regulator. I do not doubt their intention, but how will that independence be maintained when there could be regular and changing political statements setting out the policies to which the regulator will have to adhere? We need some assurances that these governance statements will not interfere with the operational independence of the regulator. To do that, it seems much more sensible that the Secretary of State should not be able to revise these statements on a whim or because the department’s Secretaries of State are changing with the regularity that we have seen in recent years.
I hope the Minister will address the points that have been raised and look favourably on these amendments. I look forward to her reassurances.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)
I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Parkinson of Whitley Bay, for their amendments. Clause 11 permits the Secretary of State to publish a statement on government policy related to football governance. The statement is non-binding, but the regulator will be required to have regard to it when exercising its functions.
On Amendment 110, in the name of the noble Baroness, Lady Brady, we believe that, given the fast-paced nature of football and the changing regulatory landscape, every three years is a suitable time to pass before the Secretary of State can amend this statement. This decision was reached following consultation with other regulators.
There is no duty on the Secretary of State to amend or publish a statement every three years, unless there is reason to. I understand the noble Baroness has concerns that this could present an opportunity to exert political influence on the regulator and thus a risk to the regulator’s independence. Although this is a standard provision for most economic regulators, I recognise the intent behind the amendments, to reduce the risk of interference.
The noble Lords, Lord Parkinson and Lord Hayward, raised concerns that this clause might limit independence. The football governance statement cannot be used to direct the regulator’s day-to-day operations, so it will not impinge on the operational independence of the regulator. The Bill has been brought forward as a result of the policy of this and the previous Government. As the noble Lord, Lord Pannick, made clear, the regulator’s statutory scope and powers would remain unchanged and it would be under no obligation to act in accordance with any statement. We want to ensure that the regulator remains free of any undue political interference; this drafting, as with the previous Government’s version of the Bill, achieves that.
The noble Baroness, Lady Brady, and the noble Lord, Lord Maude of Horsham, raised concerns around UEFA’s position in relation to this clause. As I have reiterated previously, we have engaged extensively with both the FA and UEFA in the development of the Bill. As has been confirmed by the FA, we are confident that the Bill as drafted will not breach any UEFA statutes. The regulator will be operationally independent of the Government and will not exert an undue influence on the FA’s ability to govern the game. This was confirmed by the FA itself in oral evidence given to the House of Commons Public Bill Committee on 14 May during the passage of the previous Bill introduced by the last Government.
Baroness Brady (Con)
I thank the Minister for her response and assurances about the purpose and scope of the football governance statements, and I thank other noble Lords for their contributions. I remain concerned about the potential for these statements to introduce unnecessary political pressure points and raise questions about regulatory independence. I appreciate the intent to use them as an optional tool for accountability and transparency. However, I respectfully request that the Minister and the Government reflect on the points raised in the debate, particularly regarding the implications for long-term investment and the risk of creating permanent leverage for international bodies, such as UEFA and FIFA, that will disproportionately affect Premier League clubs playing or aspiring to play in European competitions.
I want to pick up on the comment about Spain made by the noble Baroness, Lady Taylor, which the Minister mentioned. That legislation concerns a very specific clause which was due to the dominance of Barcelona and Real Madrid. They sold their own rights and retained all the money, which collapsed the entire Spanish football system. That legislation is very different from the binary process of the backstop and allows for 10% of the revenues to be redistributed—as an aside, the Premier League is already distributing 16%. The clause is very specific and very different from this first-ever government intervention into British sport. The interaction between the statements and the broader regulatory framework must be very carefully managed to ensure that English football is not placed at a disadvantage in global competitions and subjected to unnecessary uncertainty and potentially harmful leverage.
I am also grateful for the Minister’s reassurance about scope creep and the need to respect the regulator’s independence. The Minister mentioned the FA’s appearance in front of the Select Committee; she will know that that was before this Bill was published. I suggest that it would be good for the Minister to speak to the FA again. There is room for further clarity on how these statements, if they are necessary at all, will be framed to avoid triggering concerns about state interference, particularly in light of UEFA’s clear reservations. I again ask the Minister to publish the letter UEFA sent to her, which, by all accounts, was very alarming.
With those points noted, I will withdraw my amendment, but I hope the Minister will continue to engage with stakeholders on these important issues. I beg leave to withdraw.
Baroness Brady
Baroness Brady (Con)
My Lords, in moving Amendment 12 I will also speak to Amendments 113 to 115 in my name and Amendments 116 to 119 in the name of my noble friend Lord Parkinson. These amendments address what is in my view a weakness in the Bill’s approach to regulatory guidance and consultation. They are important amendments because they go to the heart of how this new regulator will operate in practice.
The Minister has reassured us that this will be a collaborative regulator working closely with football; that is very welcome. Yet, unfortunately, the Bill requires the production of guidance only for the imposition of discretionary licence conditions. For every other major regulatory function, including some of the most significant interventions ever proposed in British sport, there is no obligation for the regulator to explain how it will act via guidance. Nor, indeed, is there any requirement to consult those affected as it produces that guidance.
I welcome my noble friend Lord Parkinson’s suggestion of a code of practice to guide the regulator’s approach in a number of important areas. Perhaps I can highlight just three crucial areas where I believe we need more clarity. The first is financial sustainability, the regulator’s core purpose. Despite extensive debates in this Committee about what financial sustainability means, or should mean, in practice, the regulator would have no obligation to define how it will assess soundness or resilience in guidance or what system it will use to make it work.
That means that a club such as my own, West Ham United, seeking to make long-term investment decisions, would have no clarity on how they might be judged. Worse than that, there is no requirement to consult with the industry on what these vital definitions should look like. Ministers have described the regulatory model as light touch. One of my amendments seeks to ensure that this is indeed the case when it comes to financial regulation, asking the regulator to publish guidance on the financial outcomes it wishes to see from clubs.
Secondly, there is the owners’ and directors’ test. This vital mechanism, critical to attracting responsible investment, is not written into the legislation. It is left—albeit with some considerations in the Bill—to the regulator to develop. Again, there is no requirement to consult clubs, leagues or potential investors on its design. I do not think it unreasonable to ask: how can English football expect to attract responsible, long-term investment without requirements for regulatory transparency or co-operation that would undoubtedly result in higher-quality and better-informed regulation?
Thirdly, and perhaps most concerning, is the backstop power over financial distributions. This unprecedented mechanism could fundamentally alter football’s financial flows, yet the regulator does not need to explain how it will approach such decisions or consult on its methodology. Billions of pounds are at stake, along with the very existence of the key competitive measures, tools, structures and incentives that currently underpin the English pyramid’s success. It is the most extraordinary of interventions, yet there is no requirement for even the most ordinary of procedural safeguards.
This absence of guidance risks creating real uncertainty. The Premier League recently agreed a new domestic broadcasting deal running through to 2029. Clubs are making infrastructure investments over similar timelines. As I have already said, academy and stadium developments require five to 10-year horizons. I must emphasise that it puts football clubs in a really difficult position to be able to make major commitments without any real clarity on how they will be regulated.
We have a real lack of a clarity on a range of areas in the Bill, compounded by uncertainty as to how the regulator will go about regulating in practice. My amendments in this group do not seek to constrain the regulator’s authority in any way. They seek only to ensure that its powers are exercised transparently and intelligently. They would simply require the regulator to provide guidance across all its functions and consult appropriately on its development. This is a minimal yet clearly critical requirement.
I hope and expect the Minister to say that it is her clear intention that this regulator will be collaborative. If that is the case, I think it is fair to ask: why not go the extra step and enshrine that approach in the Bill? What justification exists for allowing such significant powers to be exercised without clear guidance or consultation?
In conclusion, I encourage the Minister to examine these vital improvements and consider them clearly. Transparency and collaboration should not be optional extras. They should instead be the cornerstones of this new framework. I beg to move.
Baroness Evans of Bowes Park (Con)
My Lords, I will speak briefly in favour of this group of amendments. I particularly support those that would introduce a requirement for the IFR to consult those affected as it produces guidance. Consultation with key interested and impacted parties, particularly the leagues, is critical.
The IFR is an entirely new regulator operating in an entirely new regulated space with no real international experience to draw on. As I highlighted at Second Reading:
“The Explanatory Notes themselves acknowledge that football ‘was previously not regulated by statutory provisions’, and explicitly state that ‘the new regime and the distributions provisions in particular are unique and unprecedented’”.—[Official Report, 13/11/24; col. 1850.]
A duty to consult on key areas, such as those set out by my noble friend Lady Brady, to ensure that unintended and potentially damaging consequences are avoided as the regulator begins its work and develops its guidance, is surely a no-brainer.
At our recent meeting with the shadow regulator, and in various responses from the Minister during Committee, the desire and expectation of the regulator to work in a collaborative and proportionate way have been repeatedly reiterated. Several amendments in this group simply put that consultative approach firmly and squarely on the face of the Bill. I hope the Minister can look favourably on them.
Lord Pannick (CB)
My Lords, I too hope very much that the Minister and the department will look favourably on these amendments, for the reasons given by the noble Baronesses, Lady Brady and Lady Evans. They seem to be absolutely essential for reasons of efficacy and to give confidence to those who will be regulated that they and others will be properly consulted. I would be very surprised to be told that the regulator would not intend to do so. If that is right, it is surely essential, as in other legislation, that this is put in the Bill so that there is no doubt about it and so that the confidence that is absolutely essential is promoted.
Lord Addington (LD)
My Lords, this amendment about the bodies that will be regulated has a fair bit of common sense behind it. I am sure the Government will have done great work on consultation and making sure there is communication between the bodies that will be being regulated and the new regulator. If the Minister can tell us how this is being done, some of my worries will be removed. Also, stating where that information will be provided would very much help. If not, it has to be in the Bill somewhere.
Lord Parkinson of Whitley Bay (Con)
My Lords, I will speak to my amendments in this group and say a little about the amendments tabled by my noble friends Lady Brady and Lord Moynihan.
The amendments relate to the guidance the new independent regulator will be required to publish. My noble friend Lady Brady and I agree that the Bill, as drafted, should be strengthened to ensure that the regulated clubs have the information they need to meet the requirements of the new regulator.
My Amendment 116 would require the independent football regulator to issue a code of practice for competition organisers and licensed clubs. The regulator would be required to consult the FA, each competition organiser and each club in preparing this code. The overriding point of all the amendments in this group, I think, is to support clubs and competition organisers in complying with the requirements of the new regulator. We cannot expect the regulator to be effective unless it is doing its work in a clear way. These amendments would help to deliver that clarity.
I will not speak at length on this point as it is a simple one. We seek clarity from the Government more than anything else. Will the Minister give the Committee an assurance today that the regulator will produce a code of practice for regulated clubs and competitions? Might there be a way of publishing a draft code of practice while the Bill is being considered? That was certainly very helpful when we looked at the new regulatory regime brought in through the Online Safety Act, although I appreciate that, in that case, Ofcom had more of a head start than the shadow regulator does here—but it would be helpful if that were feasible.
My Amendment 117 delivers much the same result as the sensible amendment in the name of my noble friend Lady Brady. Again, we want to give clubs and competition organisers a fuller picture of the independent football regulator’s plans for the future, so they can prepare for the impact it will have on the game. Again, I hope the Government will look favourably on this amendment and the point that lies behind it.
Lord Moynihan (Con)
My Lords, I will speak to my Amendment 119A in this group. Noble Lords will recall that, on many occasions, I have been active on the appointments made by the DCMS, in particular when it came to the consumer protection Bill in your Lordships’ House and the non-declaration of the CEO of Seatwave, which was an online European ticketing marketplace that was then to be sold to Ticketmaster. The announcement of the individual concerned to the DCMS board made no mention of that, and nor was there any declaration in the House, despite the fact that Seatwave was subject to very significant criticisms about ticket touting and the impact on consumers.
I took an interest over the weekend to look in more detail at some of the appointments that have been made, to satisfy myself and the Committee that they were wholly independent of government. Could the Minister provide the Committee, in due course, with a comprehensive answer on the process that has been followed to date for each and every appointment to the senior levels of the shadow football regulator, including when and how the legal requirements for Civil Service recruitment have been implemented, namely that selections must be based on merit and on fair and open competition? Departments and agencies can develop their own recruitment approaches, but how has the governance code on public appointments been followed, including integrity, merit, openness, diversity and assurance? Who has been on the appointment boards and how many appointments have been made from outside DCMS officials?
What would help the Committee to understand the question of the degree of true independence of the proposed football regulator is to know how many of the Bill team and the paid advisers to the DCMS are going on from government to join the shadow regulator and, in due course, the full regulator. Are the shadow regulator contracts in any way tied to appointments to jobs with the full regulator? If so, how many and whose?
My probing amendment does not question in any sense the integrity or competence of the candidates concerned. But I went on LinkedIn this weekend and had the opportunity to read, as a result of a connection on LinkedIn, that one of the most senior appointments made was based, in part no doubt, on the outstanding work that was done by that individual on football governance while doing their PhD. I will give one quote from that—and, again, it is not in any way impugning the integrity or professionalism or the outstanding nature of this somewhat long PhD. With this quote, I was a bit concerned about whether the independence of the appointments was truly up to the standard we would wish to see:
“Granting an authority the power to legally regulate the football industry, compelling all English football clubs to comply with the established economic framework or risk being unable to use their football facilities, thereby prohibiting the club from playing in any football competition, either domestic or international, would transfer economic power back from the clubs and leagues to the regulatory authority, reversing the process initiated by the creation of the EPL in 1992”.
That is a fairly major statement that counterbalances the Premier League’s autonomy and would question the true independence of the proposed independent regulator.
I have not had the opportunity to read the whole thesis. I look forward to doing so, and to reading any other public documentation through LinkedIn. I think it is incredibly important that, if we are going to have an independent football regulator, that regulator has to be truly independent. All the appointments need to be made on merit, bringing in the very best people in regulation from across the country, and indeed possibly from abroad, to fulfil those important responsibilities and posts. I would be grateful if the Minister could give us the confidence that that is exactly what is being pursued.
Baroness Twycross (Lab)
I thank the noble Baroness, Lady Brady, and the noble Lords, Lord Moynihan and Lord Parkinson of Whitley Bay, for putting forward these amendments.
On Amendments 112, 113, 114, 115 and 117, in the name of the noble Baroness, Lady Brady, we clearly agree that producing guidance will be a really important part of the regulator’s work. It will help to clarify the practicalities of the legislation and ensure that clubs’ owners and competition organisers know what is expected of them and what to expect from the regulator. However, while I recognise the intent of the approach proposed, I disagree to some extent with the approach to guidance that the noble Baroness, Lady Brady, has suggested we take. Amendments 112, 113, 115 and 117 would require the regulator to produce guidance on all aspects of its functions. This is likely to be a disproportionate and needlessly burdensome requirement that would likely end up being more unhelpful than helpful.
There is little benefit in issuing guidance on issues that are self-explanatory or that do not have a direct impact on the industry. I will endeavour to find some examples of that type of guidance to meet some of the queries from noble Lords—for example, on every one of the regulator’s operational or administrative functions, excessive guidance would make it harder and more burdensome for clubs to understand and comply with the system, not easier, and National League clubs would potentially struggle to sift through reams of guidance to get to what was relevant to them. We expect that the regulator will publish guidance on all relevant parts of its regime, as appropriate. It is in everyone’s interests to maximise the industry’s understanding and compliance.
On Amendment 114, in the name of the noble Baroness, Lady Brady, the regulator is already required to publish guidance on how it will use discretionary licence conditions, including the outcomes it seeks to achieve. We believe that this requirement is sufficient, and it will be for the regulator to determine what that guidance should look like and how best to aid the industry without unduly burdening it.
I turn to Amendments 116 and 118, in the name of the noble Lord, Lord Parkinson. Amendment 116 would require the regulator to prepare and issue a code of practice for all competition organisers and licensed clubs. We do not believe that a code of practice for all clubs would allow for a proportionate, tailored approach to regulation, where what is required of a club should vary depending on the club’s specific circumstances. The regulator’s current approach of bespoke regulation will address the unique challenges and risks faced by clubs better than a list of one-size-fits-all recommended measures, and its guidance, as per Clause 12, should already help clubs to understand what is required of them and to comply.
On the points raised by the noble Baronesses, Lady Brady and Lady Evans of Bowes Park, on Amendment 118, the regulator is already required to consult such persons it considers appropriate when publishing guidance. We strongly expect that this will include the FA, competition organisers and regulated clubs, since those persons will all be directly relevant to and affected by that guidance. However, we have not taken the approach in this Bill of listing every person the regulator should consult for every piece of guidance issued. To do so would, in our view, be counter to the operationally independent and agile regulator that we are trying to establish.
There may be times when different levels of consultation are necessary, or with different stakeholders. The regulator is best placed to draw the line between comprehensive consultation and needless bureaucracy, and to ensure that the correct groups are consulted on a case-by-case basis. On the specific consultation requirements in the Bill, including on guidance, the regulator has a regulatory principle that it should co-operate and proactively and constructively engage with clubs, owners, officers and competition organisers. I hope that that gives the noble Baroness, Lady Brady, some confidence around the collaborative points she raised. This amendment would require the regulator to consult on minor revisions to guidance, needlessly creating an administrative burden for the regulator and those consulted.
Finally, Amendment 119, in the name of the noble Lord, Lord Parkinson, and Amendment 119A, in the name of the noble Lord, Lord Moynihan, relate to the Secretary of State guidance in Clause 13. Amendment 119 seeks to extend the period that the Secretary of State cannot amend guidance on the regulator’s functions from three to five years. While the regulator must have regard to the Secretary of State’s guidance, as an operationally independent body it will not be obliged to follow it. The industry and fans alike have been clear that they do not want to see excessive ongoing government involvement in football. That is why the Secretary of State may not revise this guidance any more frequently than every three years. The Secretary of State must consult both the regulator and anyone else they consider appropriate before publishing or revising any guidance, and must lay the guidance before Parliament. While I appreciate the concerns of undue influence, extending this to five years, when there may be an issue that needs clarificatory guidance before then, would be sub-optimal.
On Amendment 119A, I agree that the regulator should be independent and free from government influence. I do not have the level of detail that the noble Lord, Lord Moynihan, requested. However, I am confident that appointments will be made on merit. I will write to him with additional detail following the debate. Secretary of State guidance on this point would be unnecessary. The employees of the regulator will already be independent from the Government, like other regulators in the country. Independence has been at the heart of the regulator’s design, with it having sole discretion over its operational decisions. The aims of this amendment are therefore already achieved by the Bill’s current drafting.
I have noted the points from across the Committee on the amendments in this group and I am happy to discuss these further ahead of Report. However, for the reasons I have set out, I hope the noble Lords will not press their amendments.
Lord Addington (LD)
I take it that we have a consensus that there should be some way to find out what the regulation is and the reactions to it. Will the Minister give us an assurance that it will be published somewhere we can find it? That is the real point.
Baroness Twycross (Lab)
Perhaps the noble Lord could clarify whether he means once the regulator is up and running. I assume so. It would be very unusual for that to not be the case, but I will confirm that and get back to him, I hope, in the course of the evening.
Baroness Brady (Con)
My Lords, I thank the Minister for her response and for the points raised. I note her desire not to put any major burdens on the regulator, but I worry about the major burdens that that in turn puts on the 116 football clubs that this regulation affects.
I respectfully push back on the notion that the amendments are not necessary or that the IFR’s flexibility would be somehow unduly constrained by requiring proper guidance and consultation. Perhaps the Government could look at it another way: amendments of this sort could actually enhance the regulator’s ability to act effectively by building trust and clarity from the outset. That is really what the football clubs want: clarity.
The Minister points to collaboration, yet the Bill imposes no duty to consult on key areas such as financial sustainability, the owners’ and directors’ tests or the backstop powers. Without clear consultative frameworks, football will face uncertainty and investment decisions could stall. Football is a global business and investors require regulatory predictability. These amendments are not about adding bureaucracy but about ensuring that clubs, leagues and investors understand how regulatory powers will apply—that is what this is about.
Instead of creating unnecessary delays, the amendments, or amendments like them, would prevent regulatory uncertainty, providing everyone with a clear framework for guidance. Reactive and unclear regulation is likely to create much greater delays and generate a higher workload for the regulator and the clubs. I remain concerned that the existing provisions do not address the scale of the regulatory powers that the Bill is creating. The regulator will oversee billions of pounds in football revenue, critical tests of ownership and sustainability of the entire pyramid. We are the first country to do this and, in my view, these very wide-ranging powers demand the highest levels of transparency and consultation. Football deserves a regulator that collaborates in practice, not just in promise.
That said, I am somewhat—I repeat somewhat—encouraged by the Minister’s recognition of the importance of these issues, as reflected from all sides of the Committee. I hope that we might continue to engage on how best to embed these principles within the framework of the regulator. I will reflect further on her response and I hope we can consider how these concerns might be addressed as the Bill progresses. For now, I beg leave to withdraw the amendment.
Lord Markham
“Delegation of regulatory powers to competition organisers(1) The Secretary of State may by regulations direct the IFR to delegate some of its functions under this Act to specified competition organisers.(2) For the purposes of subsection (1) the IFR may only delegate a function to a specified competition organiser if it is satisfied that the competition organiser—(a) would discharge the function delegated under subsection (1) with the same degree of stringency as the IFR;(b) would discharge the function delegated under subsection (1) with regard to the IFR’s objectives under section 6;(c) would discharge the function delegated under subsection (1) with regard to section 7(2);(d) would not alter or disregard its obligations under this section.(3) If the IFR is satisfied that the specified competition organiser meets the conditions set out in subsection (2), and the Secretary of State has directed the IFR to delegate a function under this Act, the IFR must abide by the Secretary of State’s direction.(4) If the Secretary of State is not satisfied that the IFR has taken all reasonable steps to comply with the direction to delegate a function under subsection (1), then the Secretary of State may take such action as is deemed necessary to ensure the IFR does comply.”
Lord Markham (Con)
I hope noble Lords will see this as another constructive measure that is in keeping with many of the issues on which there has been broad consensus in the Committee. The principle behind the amendment is delegating regulatory functions to the competition organisers where they are considered best placed to discharge them.
Many noble Lords have said that the competition organisers already regulate their own competitions to a large degree. We are all aware of the fit and proper owner test and of financial fair play, to mention just a couple of areas. We would all agree that competition organisers have extensive experience in this space, having been doing it for a number of years. If they were discharging a lot of the functions and the regulator was also discharging them, there would be the danger of duplication. Again, I think most noble Lords want the regulator to be light touch and low cost, particularly as all the costs are coming out of the pockets of the clubs.
I hope that this will be seen as a sensible move. The regulator would be asked to look at each area of responsibility and to decide which of the competition organisers might be best placed to carry it out. If the regulator thinks that, in delegating some of those powers, the current Premier League or EFL owner tests are insufficient, there would be nothing to stop the regulator saying that, on top of competition organisers’ existing processes, it would like them to add X, Y and Z. That would be entirely appropriate and would give the competition organisers the opportunity to prove themselves.
Given that the regulator would have overall responsibility, it would always have the opportunity to take the powers back if it thought the competition organisers were not up to the job. Amending the Bill in this way would be seen as a sensible move. It would send a good signal to football that we want to work with it in setting up the new regulator. We have all heard the Minister say that she does not want to increase the burdens on the independent regulator—in fact, she made that point in responding to the last group—so here is a way to reduce the burden we put on the regulator and to delegate it to a local level, where others are felt best placed to carry out the functions in a collaborative way. I beg to move.
Lord Pannick (CB)
The noble Lord, Lord Markham, puts his case very powerfully but I for one am not persuaded, because the delegation of functions to competition organisers would frustrate the very purpose of independent regulation. The whole purpose is that regulation is done by the independent regulator. As I said in considering the previous group of amendments, it is of course vital that the regulator consults those affected and takes into account their concerns and expertise. But to delegate the responsibility to those who are being regulated, or to the competition organisers, would be an abdication of regulatory responsibility.
Lord Maude of Horsham (Con)
My Lords, I support the amendment of my noble friend Lord Markham and strongly disagree with the noble Lord, Lord Pannick. We constantly hear that the purpose of the Bill is for the regulator to be agile, to be as light touch as possible and not to impose unnecessary additional burdens on football. Every million pounds spent on the cost of running the regulator, as well as the additional compliance costs for football clubs themselves, means there is less of the pie to be distributed under the redistribution parts of the Bill.
Surely one of the key ways in which we can do our best to avoid that cost burden being excessive is to avoid duplication. The reality is that the competitions, the leagues, already exercise a self-regulatory function—not regulating themselves but regulating the clubs that are members of the leagues. That is in their nature: there are conditions of belonging to those leagues that they rightly enforce, and they are going to be obliged to carry on doing that anyway. It is possible that not all of them have done that perfectly, and that not all of them will continue to do it perfectly in the future, but it is also possible that the independent regulator will not do its job perfectly. We should consider that possibility at this stage of consideration of this really important Bill, given that many clubs—not just the Premier League clubs but right down through the pyramid—have concerns about the costs, imposition and impact that creating the regulator will involve. When we move on to the next group, we will be looking at the really big, crunchy part of the Bill that covers the regulator’s operating licensing powers.
If we are to be sensitive to these genuine concerns of football clubs—which, by and large, have been pretty successful over the decades—this is a good way of showing it. If this amendment is passed and accepted by the Government and goes into the Bill, none of it says that the powers have to be delegated to any particular competition organiser; but at least giving the possibility of avoiding this overburden of new regulation, cost and impositions on something which is already very successful would be a very good signal for the Government to send.
I hope the Minister when she responds to this amendment will not rule it out out of hand but will take it away and say that we should now be looking for ways to address some of these genuine concerns. This would be a very good way of doing it.
Lord Goddard of Stockport (LD)
My Lords, I rise to comment on the amendment of the noble Lord, Lord Markham, which, on the face of it, sounds sensible, obvious, simple, light touch and low cost. I rise also to defend the noble Lord, Lord Pannick, for pointing out the blindingly obvious biggest bear trap of the entire Bill up to now: delegating the power of the regulator to the very people it is trying to regulate. It would seem to any right-minded person that this is the least sensible thing to do. Being concerned about the power of the regulator but trying to persuade us that it could give some of its powers up to someone else to help them along the way defeats the object of having the regulator.
Lord Maude of Horsham (Con)
Before the noble Lord sits down, there are two groups which, if the Bill goes through and is enacted, will be subject to regulation. There will be the competition organisers, of course, but the biggest burden will be on the clubs themselves, and that should be our principal concern. If the competition organisers, who would themselves be overseen by the regulator, are able to discharge the regulatory functions effectively without creating a whole new panoply of compliance and enforcement mechanisms and apparatus, surely that is worth looking at and considering.
Lord Goddard of Stockport (LD)
There is some merit in what the noble Lord says. The noble Lord, Lord Addington, and I met Rick Parry and some people from the EFL this week and they are quite content with this. They do not see this as an onerous burden on them. They are looking forward to the regulator, a level playing field and a real chance for them to progress, so they are not going to oppose this resolution.
Lord Hayward (Con)
My Lords, in relation to consultation, on which several comments have been made during the discussions on this and previous groups, it is worth bearing in mind, when the Minister tells us that there will be wide consultation in whatever circumstances, what my noble friend Lady Brady said on day one of Committee. She said that the Government had consulted seven Premier League clubs, which did not include Manchester City. They consulted those seven clubs for about as long as it took Spurs to score four goals against Southampton yesterday. It was hardly serious communication and consideration. That is what worries so many of us: we are listening to a series of comments that sound reasonable in themselves—and I have sympathy with what the noble Lord, Lord Goddard, said—but I would believe it if there had been a very clear indication at previous stages of the Bill that there had been consultation with the interested parties.
Baroness Brady (Con)
My Lords, I support Amendment 124. I think it introduces a sensible and proportionate idea: that the independent football regulator should have the power to delegate certain functions to competition organisers, such as the Premier League, the EFL and the National League, where it is appropriate. First, I want to consider the position of the leagues themselves, especially the Premier League and the EFL, both of which already play central roles in the regulation and operation of English football. These organisations are not merely administrative bodies; they are sophisticated, well-sourced entities with established systems for financial monitoring, licensing and governance.
For example, the Premier League currently performs all the UEFA licensing for clubs on behalf of the FA, demonstrating its capability to operate efficiently and effectively under stringent regulatory frameworks. It also has robust financial monitoring mechanisms in place, which ensure that clubs comply with obligations relating to profitability, sustainability and long-term planning. As I mentioned earlier in Committee, the Premier League also invests significant resources and time in performing its owners’ and directors’ tests to a very high standard, and intends to continue to do so.
Simply duplicating all these existing structures within the IFR would be inefficient and burdensome, as the White Paper that led to the Bill rightly acknowledged:
“The Regulator may wish to allow concurrent systems, or delegate responsibilities to industry bodies, in certain circumstances. It would manage this in a way that is coherent and simple for all involved, especially clubs”.
Unfortunately, however, no sensible delegation power currently exists in the Bill, so I commend my noble friends Lord Markham and Lord Parkinson for addressing this issue and allowing for this conversation. This amendment would align perfectly with that principle expressed in the White Paper. It would be a smart, almost unarguable step to take: delegation would allow the regulator to focus its resources, especially in the early years of its life, on areas where independent oversight is essential, such as addressing market failures and managing systemic risks. At the same time, it would give the regulator the option of leaning on existing processes or information systems where they are already successfully implemented.
Delegation would also address an important practical reality. The workload facing the IFR will be immense. I am not surprised that the EFL wishes to offload some of its costs to the regulator, and that is its right. In its early years, this regulator will have to establish itself, build capacity and gain the trust of stakeholders across the ecosystem. That is a big burden. Allowing it to delegate certain functions, with appropriate safeguards, ensures that it can deliver its objectives without being overwhelmed by administrative tasks that others are well placed to manage.
However, this clearly cannot be done on blind trust. The amendment includes what seem to be important safeguards: the IFR must ensure that any competition organiser meets the same degree of stringency, aligns with its objectives, and adheres to its regulatory principles. This would seem to protect the integrity of the regulatory framework, while avoiding unnecessary duplication and, therefore, unnecessary cost.
More broadly still, this amendment raises an important question that we must address about the future role of the Football Association. While the fan-led review’s position was that the FA’s current governance arrangements make it unsuitable to house the IFR at present, it also envisaged a scenario where one day this might change. As the review noted,
“the FA might at some point be a suitable location for IREF … However, the Review has concluded that this is not appropriate at this time”.
This amendment raises the possibility of the delegation of certain functions to the FA, as part of its reform journey. If the FA continues to modernise its governance structures and demonstrate the capability to take on certain functions, it could play a much larger role in football’s regulatory framework.
Indeed, I encourage the Government to consider including the FA in the scope of this clause as such, because it should meet the same rigorous criteria that the leagues have to. Delegation to football bodies could be tied to a broad review of football governance a few years into this regime. This review could assess not only the progress of the IFR but the readiness of the FA and other football bodies to take on greater responsibilities. This will ensure that the IFR can be a dynamic institution, evolving in response to the needs of the game and empowering existing bodies to step up, where it makes sense. I believe that all stakeholders, including the most ardent supporters of the fan-led review, as well as those worried about the unintended consequences of this delegation, could support this kind of sensible amendment.
Finally, but most importantly, in a letter sent to me by the general-secretary of UEFA only last week, he said:
“UEFA appreciate the background of the Football Governance Bill discussions and proposals, and we were encouraged by the intent of the original Fan Led Review which stated that this regulatory area should be returned to The FA in time. UEFA supports The FA and UK policymakers in ensuring that this is still the case”.
The FA told me, also last week, that it has recently told DCMS that
“the FA is willing to take on delegated powers from the IFR, if there are services that the regulator believes we can operate and deliver effectively”.
I ask the Minister: is it still the case, as UEFA and the FA seem to believe, that the Government intend the future delegation of powers to be handed back to the FA at some point? If it is, surely this is an amendment that the Government could and should support.
Lord Sentamu (CB)
My Lords, I have spoken only once—about my little club, York City—but I have attended all the Committee debates. First, I think that York City will find it puzzling if, for the first time that there is an independent regulator, the same Act will say that some functions will be delegated. That is a confusion. Down the road, that might be thought about, but we want to see this person—man or woman—who will be the independent regulator doing the job. If it becomes an impossibility or too burdensome, it is at that stage that you delegate. But to say in the Bill, right at the beginning, that certain functions will be delegated, maybe to some powerful clubs, will be a confusion.
Secondly, no one would want to be an independent regulator. If I had the ability to do so, I would tie down the job, because, otherwise, it muddies the water. What we have not teased out a bit more, unfortunately, are the amendments from the noble Baroness, Lady Brady, on consultation—that is the key bit. I hope that the Government will think through those amendments, because, without consultation, the little club of York City would think that somebody wants to swallow it up.
Remember that all football clubs are like tribes. They will defend their colours and their game. The only way to deal with tribes is to make sure that they are consulted. I think this amendment is unhelpful at this stage. Let us see what happens with the kind of regulatory power that is created. This independent person must actually be independent.
Lord Parkinson of Whitley Bay (Con)
My Lords, I want to say a little about Amendment 124, which my noble friend Lord Markham has outlined and to which I have added my name. I am sorry that we have not yet fully convinced noble Lords across the Committee in favour of it, but it might be helpful to clear up some of the confusions which have arisen.
We are proposing delegating these duties not to clubs but to competition organisers. In doing so, we seek to avoid the sort of confusion that the noble and right reverend Lord, Lord Sentamu, has just highlighted about duplication in the regime. As noble Lords have pointed out, there are already football bodies which have a regulatory role—the Football Association, the Premier League, the English Football League and, indeed UEFA. They will retain many of those functions. As the noble Lord, Lord Pannick, knows well, Manchester City’s dispute with the Premier League is because of its powers to make some of the rules for the competition to which it relates. We are trying to avoid the duplication of regulatory functions. If an existing competition organiser has processes in place to carry out these functions effectively, why could the Secretary of State not direct the regulator to delegate them to these competition organisers and bring them closer to the clubs that are playing in that competition of their own free choice?
Lord Pannick (CB)
The noble Lord emphasises that the purpose of the amendment is to allow for delegation of powers to competition organisers, not to clubs. But the noble Lord will know that the Premier League, which is a competition organiser, simply consists of the will of the 20 clubs.
Lord Parkinson of Whitley Bay (Con)
The 20 clubs have competed to get into it. It is a changing 20, based on the ability of clubs to take part in that competition.
Similarly, it might be more appropriate for functions to be carried out by other competition organisers at other levels of football, if there are sufficient safeguards for them to do so in a way in which the Secretary of State feels is appropriate.
In our amendment, we have tried to reflect these safeguards to make sure that the same regulatory standards apply to the bodies to which functions are delegated. Subsection (2) of the new clause proposed in Amendment 124 says that a function can be delegated only if the regulator is satisfied that the competition organiser would discharge the function with the same degree of stringency as the regulator itself and that it would meet the objectives established by Clause 6 and discharge the function with regard to the negative outcomes as outlined in Clause 7(2).
We are where are because there are elements of football which have not been good at self-regulating in a way that has pleased fans. More than one political party has been concerned enough to bring this Bill before your Lordships’ House. Are we saying that we have reached a point of no return? If the competition organisers and other football organisations get their house in order and meet the standards set out in this Bill which the regulator is trying to do, will there never be a situation in which we will be able to delegate some of these functions back down to the level of competition organisers? This would mean a much more light-touch, organic form of regulation, which I think is what a lot of noble Lords in the Committee would like to see. That is the thinking behind the amendment and on which I would be interested in hearing an answer from the Minister.
Lord Maude of Horsham (Con)
Picking up the point that was made by the noble Lord, Lord Pannick, particularly focusing on the Premier League, we have discussed in previous debates on this Bill the league’s concerns that the burdens of new regulation and compliance costs fall more heavily on smaller clubs than on big ones. Looking at the effect of this, my concern is how this amendment would operate if it were to be incorporated in the Bill. I would expect the Secretary of State to be looking in the first instance at the lower leagues, as that is where the pain will really be felt of imposing new burdens.
Lord Parkinson of Whitley Bay (Con)
My noble friend makes an important point. It may also be in the lower leagues that we see the examples of better behaviour. The Secretary of State may then feel that it is right and proper to delegate some of these functions to the competition organisers for the clubs in the lower leagues.
Baroness Twycross (Lab)
My Lords, before I respond to the points that have been raised, I want to respond to the point raised by the noble Lord, Lord Addington, in the previous group, in relation to the regulator’s guidance. I can confirm that the regulator’s guidance will be published. Clause 12(5) of the Bill states:
“The IFR must publish any guidance”.
I also want to clarify a point raised by the noble Lord, Lord Hayward, because I am concerned that if I let it lie then, at a later date, somebody may suggest that it was accepted. It was that only seven clubs had been met with. I stress to your Lordships’ House that this Bill is the culmination of almost five years’ work which started in 2019. Officials have had extensive regular engagement with key stakeholders, including with the clubs which will be subject to the regulation. All clubs have had a number of formal opportunities to share their views, particularly as part of the fan-led review and the football governance White Paper. Over this five-year period, DCMS has had hundreds of meetings with clubs, leagues, fan groups and other stakeholders. No club that has requested a meeting has not had one. I hope that clarifies that point.
Lord Hayward (Con)
While I understand the Minister citing a series of meetings that have taken place over a number of years, we are now talking about a Bill which has been introduced by this Government with changes from the previous Bill. Some of those changes have already been debated, and some have not. Surely, it behoves the Secretary of State and any Minister within a Government to have slightly more than a half-hour conversation with seven members of the Premier League when we know that they are going to be the most affected clubs in terms of cost burdens.
Baroness Twycross (Lab)
The noble Lord and I may need to agree to disagree on the level and extent of the consultation. The culmination of consultations between officials and the various meetings that have taken place constitute very sound consultation. I was concerned that it might appear to your Lordships and to people externally that only seven clubs had been met during the whole course of the design of a new regulator, which I think all noble Lords would agree would be highly unusual and undesirable. I may return to that point; noble Lords may raise it again in Committee. I look forward to further discussion of what constitutes consultation.
I thank the noble Lord, Lord Markham, for his Amendment 124, which creates a mechanism for the regulator to delegate its function to the competition organisers. I understand that some noble Lords believe that the regulator should act as an overseeing body, only acting through the leagues and only stepping in once the leagues have failed to address a problem or, in some instances, not wishing the regulator to exist at all. Without wanting to disappoint noble Lords, including the noble Lords, Lord Maude of Horsham and Lord Hayward, the noble Baroness, Lady Brady, and others who support this amendment, I am afraid that the model of regulation is not one that we are proposing and nor is it the model that the previous Government proposed. Notwithstanding the points that have been raised repeatedly, this is now this Government’s Bill and we are very proud to bring it before your Lordships.
The fan-led review laid bare the issues with industry self-regulation, and this is an amendment where it is important for your Lordships’ Committee to reflect on the fact that football has had ample opportunity to get this right. We are legislating only because the leagues do not have the incentives and governance structures to address these problems adequately.
I agree with the point made by the noble Lord, Lord Goddard of Stockport, that this amendment could be argued to represent a bear trap. I also agree with a number of points raised by the noble Lord, Lord Pannick, and the noble and right reverend Lord, Lord Sentamu. As has been demonstrated, compliance with current competition organiser rules has not proved an effective way of ensuring sustainability of the game. That is precisely why a new bespoke regulator is required, with the powers, incentives and agility to act where competition organisers are unable to.
However, I want to reassure the noble Lord that the regulatory system is already designed in such a way that the regulator should not need to intervene if the required standards are already being met. If clubs are meeting their threshold requirements naturally—for example, through their compliance with the industry’s existing rules—then the regulator will not need to apply discretionary licence conditions. There is also the more formal
“Commitments in lieu of … discretionary licence conditions”
mechanism, where leagues will be given an opportunity to address specific identified financial problems so that the regulator does not need to attach a licence condition.
Beyond this, however, we do not believe that the regulator should delegate functions to the leagues—there would be a significant issue of accountability. In a case where a function was delegated and serious failings happened, accountability would then be hard to ascertain. We also do not think that a power for the Secretary of State to direct the regulator would be appropriate. Not only could that constitute undue political influence on the regulator but it would also open the door to continuous lobbying by competition organisers for regulation to be delegated to them. What is more, the amendment would allow the Secretary of State to give this direction and for regulation to be delegated back to the industry without any prior parliamentary scrutiny.
On the points raised by the noble Baroness, Lady Brady, about the FA’s willingness to take on delegated functions, my department continues to have discussions with all stakeholders, including the FA, on a range of issues. It is encouraging that there is willingness in the industry to tackle the problems of financial sustainability. However, as the fan-led review clearly showed, the industry has not proved able to take forward the reforms needed at this time due to the governance and constitutional arrangements in place, as well as lacking the expertise required to deliver the regime we have been discussing. An independent body free of industry influence is needed; now is not the time to delegate functions. However, as with all aspects of the Bill, the Government will keep under review the effectiveness of the regime to deliver regulation. For these reasons, I am unable to accept the amendment, and I hope the noble Lord will withdraw it.
Lord Parkinson of Whitley Bay (Con)
I thank the noble Baroness. Is she saying therefore that we are, in essence, past the point of no return in relation to some of the competition organisers? I take what she says about the discretionary licence conditions that are available to the regulator that give it a bit of leeway with those that get their house in order, but if football were to get its act together, does she not foresee a circumstance in which some of the functions that are going to be given to the new regulator could be given to organisers, whether at the direction of Secretary of State, or by the choice of the regulator?
Baroness Twycross (Lab)
I agree that statutory regulation should exist only where it is necessary. In our view, the regulatory system is already designed to be proportionate so that intervention can automatically scale up and down as needed. Clubs that are already well run and are lower risk should not face additional requirements. We want standards in the industry to improve, and if this were to happen and the market was derisked, I would expect the regulator to be less involved and less noticeable. I want also to stress that the regulator will not stop the leagues imposing their own competition rules so long as they do not conflict with the regulator’s regime. However, this is not an amendment which we feel would serve the sector well, and that was why I asked the noble Lord to withdraw it.
Lord Markham (Con)
I thank noble Lords; it has been a genuine exchange of views. I am also glad that it gave an opportunity for the noble Lord, Lord Hayward, to make a positive point about Spurs over the weekend—and that there was a positive point available to be made about Spurs.
I genuinely appreciate the constructive challenge that we have had in this debate. I feel that there has been a bit of a misunderstanding, however. When we say that we are asking for delegation, as in contracting out the function, it is not abdication, because the independent regulator will always be ultimately responsible for that decision. It always has the final say. It is just trying to adopt the policy, which I think many of us believe in, in terms of devolution or subsidiarity—call it what you want—but it is another form of trying to make sure that the power is as close to the coalface as possible, at the same time always giving the opportunity for the regulator ultimately to make the decision. As my noble friend Lady Brady said, this point was absolutely envisaged in the White Paper. The FA and UEFA welcome it, and I must admit that I cannot see why we would not want those who are closest to it to have responsibility first.
Again, I want to clear up that I am not talking about the clubs; they are different from the competition organisers. The clubs and the Premier League, for instance, have very different views, as we have seen recently on financial fair play. The amendment is about giving those regulatory bodies—such as the FA, the Premier League and the EFL—an opportunity, where they are best placed to do it, to make those decisions themselves. If the regulator does not agree with that, ultimately it always has the final say.
I hope we will be able to return to this, because I hope it would demonstrate the collaborative approach that all noble Lords and the Government are trying to bring. I know that it is what we have all said many a time in this debate as well. At this stage, I beg leave to withdraw the amendment.
Lord Parkinson of Whitley Bay (Con)
My Lords, I rise to oppose the question that Clause 15 stand part of the Bill—and, indeed, Clauses 15 to 25. I do that not because I disagree wholeheartedly with this huge swathe of the Bill but because it provides opportunity to ask some questions about the nature of the licensing regime, which these clauses relate to. I hope that the Minister will be able to answer those questions and assuage some of the concerns that lie behind them.
I want particularly to discuss how the Government plan to deal with the possibility of clubs seeking to leave the licensing regime en masse. What would be their response if football clubs simply wished to be unlicensed? If several clubs opted out of the regime and established a rival competition, how would that work in practice?
We have touched on this a little but not in great depth and, when we have, the Minister has said that the Government’s solution and the design of the Bill for clubs that attempt to skirt around the legislation and operate in an unregulated competition would simply be to use the delegated powers in Clause 2(3) to make such a competition a specified and regulated one. There would be a sort of game of cat and mouse if that scenario played out. The Minister has argued that allowing this to happen in delegated powers allows for greater agility, but it is worth pondering just how much agility it really can deliver. A statutory instrument made under Clause 2(3) is subject to the affirmative procedure as per Clause 91. It therefore must be laid before both Houses of Parliament and approved by a resolution of both Houses. There is therefore a limit on how swiftly the Government would be able to make such regulations and have them approved by Parliament.
It is worth also drawing attention to how this new licensing regime will interact with the existing licensing requirements from league organisers and UEFA. How do the Government envisage the regulator working with those bodies, which already license clubs, to prevent duplication of regulations and unnecessary further burdens?
Amendment 173 in this group, which stands in the name of my noble friend Lord Markham, would remove the power of the Secretary of State to amend discretionary licence conditions by statutory instrument. This provision of the Bill is yet another example of where we do not have sufficient clarity or certainty for clubs and of the open-ended powers for the Secretary of State. Once again, we see a scenario in which the clubs will have to abide by rules but without the requisite certainty to enable them to plan effectively for the future. Today, we are debating the discretionary licence conditions in the Bill, but allowing the Secretary of State to amend the conditions specified in the Bill on a whim, if he or she wishes, surely defeats the purpose of putting them in the Bill in the first place.
Lord Bassam of Brighton (Lab)
My Lords, I will speak to Amendment 128, which gets to the nub of what the licensing regime should be looking at. It would require a personal statement to identify a club’s ultimate owner and that owner’s source of funds. It is really quite an important amendment because clubs, and fans in particular, have the right to know where the club’s money is coming from.
This is prompted by things that have happened to clubs in the past, when it has been quite clear to the outside world that clubs do not have the means—because their owners have failed to provide any detail or background on their own finances, despite having given assurances—to identify where their funding is coming from. I cite the case of Dr Tony Xia, who became the owner of Aston Villa back in 2016. He was approved as an owner by the football authorities, yet it later turned out that he had neither the money nor the resources. The club ended up just a week away from being unable to meet its tax liabilities.
Following the 2021-22 season, a survey of 92 clubs looking at data on wages and cash reserves revealed that many clubs, up to a senior level, were very close to not having the reserves that would ensure that they could meet their liabilities, pay wages and so on. Some clubs are very good at this—West Ham United is one of them and, apparently, Plymouth Argyle was one of the most financially secure that season, along with AFC Wimbledon and Tottenham Hotspur.
If we are seeking transparency through the licensing regime, it is clear that we will need to understand who the owner is, where their funding is coming from and how much that will kick in to ensure the safety and security of clubs for the benefit of their fans.
Lord Maude of Horsham (Con)
My Lords, I have a concern with the whole of this part of the Bill and the way in which operating licences will be required and the adjudication made upon them. This part of the Bill is nine very dense pages of text, backed by three or four schedules. At various stages, it includes such dark phrases as:
“An application must be accompanied by … such other information and documents as may be specified by the IFR in rules”.
I used to be a lawyer, a long time ago, and I am reasonably accustomed to reading Bills and Acts, but when I start to read through this part of the Bill I can feel my lifeblood draining away. What of the owner or board of a small club looking at what will be required of them?
I noted that in the Minister’s winding up of the last debate she said that well-run clubs have nothing to worry about, which was meant to be reassuring. It does not matter how well-run a club is; it will have to comply with all this, and it will have to set itself up with lawyers, consultants and accountants to draw up a strategic business plan. A lot of clubs will not have a strategic business plan. That does not mean that they are badly run, but they will have to prepare such a plan. A strategic business plan is a document containing the proposed operation of a club: its estimated costs, how those costs are to be funded, the source of such funding and other information as may be specified by the IFR. That does not get done spontaneously or arise automatically.
The reality is that this is a very demanding regime intended to be put into law and enforced by the new regulator. I wonder whether there has been sufficient consideration given to putting in place a halfway-house system of regulation. Think about how companies are regulated: it is a requirement that, if you set up a limited company, designed to limit the personal liability of owners of the company, it is registered with Companies House. By law, certain listings are required and a certain amount of information has to be made public, including the filing of accounts. However, you do not have to get consent from a regulator to set up a company; you just have to register that it is in existence and subject to the laws that apply to it.
As we know, the state of football is pretty strong, stable, vigorous and successful compared with football in other, similar jurisdictions to ours. Have we given sufficient consideration to whether it might be good to take time, before we require small clubs up and down the country—which are not necessarily finding it easy to get through from week to week, month to month and year to year—to submit to this horrendous set of requirements just to get a licence to get on to the field of play in the first place, before they even set about winning a match, to go back to the drawing board and construct a regime that would require clubs to register in the same way that a company is registered, subject to rules and requirements for disclosure and transparency, and to changes being registered. That would reduce hugely the burden on clubs and would start to introduce the kind of consistency which, for reasons that I totally understand, is being sought.
I oppose the whole of Part 3 and its accompanying schedules—I am not even going to think about the plethora of regulations, guidance and further verbiage that will come out of it—standing part of the Bill.
Lord Addington (LD)
My Lords, it might be convenient for me to say a few words on this. Primarily, I am drawn to the amendment from the noble Lord, Lord Bassam, for the reasons he gave. We have heard that this is a wonderful, successful league. Bits of it are but, unfortunately, those are the bits at the top. Most of the cultural capital, I am afraid, is in the less glamorous clubs with less successful balance sheets.
We have a situation where we want to maintain the whole of the football structure: five leagues. This has proven to have—let us say—attracted financial irregularity; I think it was described as “chancers and fantasists”. We have to do something to stop this or we will start to have more disasters that mean something to the fan base.
The amendment from the noble Lord, Lord Bassam, starts to address this. I hope that the Government are far more in tune with that amendment than with some of the others in this group.
Baroness Grey-Thompson (CB)
My Lords, I rise briefly to speak to Amendment 128. We are getting to the crux of what this regulator should be about: making sure that there are sensible financial decisions, and that risks are mitigated so that they do not jeopardise clubs’ futures.
Clubs in the EFL are expected to lose around £450 million this season and are reliant on owners to fund the shortfall. If this funding is not forthcoming, it can lead to financial trauma. Only 66 of the 92 clubs that filed accounts for the 2021-22 season included data on wages and cash reserves. Nottingham Forest spent £58,606,000 on wages but had just £25,000 in cash reserves—five hours’ worth of reserves. Surely that cannot be acceptable.
Lord Moynihan (Con)
My Lords, I will speak to the amendments standing in my name in this group. I apologise to my noble friend Lord Maude if I address some of the plethora of regulations, conditions and verbiage concerned. I am proposing a number of amendments that I hope will facilitate and ease the position that the Government face in this context.
I turn to my Amendment 169A. It is unclear from my reading of the licensing section of the Bill whether the IFR is expected to produce a detailed and granular set of financial rules that would be applied in a blanket way to a large class of clubs or leagues; examples include the specific liquidity ratios, the debt-to-equity ratios, operating cash-flow metrics and size of financial buffers. Or will the IFR take an entirely bespoke approach, where every club will have DLCs—discretionary licence conditions—applied according to their own circumstances? That would drive a coach and horses through the competition organiser’s ability to provide a level playing field and maintain competitive balance. The third option is that the IFR could take an outcomes-based approach whereby it produces some high-level guidance with clear outcomes that clubs must achieve and league rules sitting underneath, giving effect to these principles and outcomes. For example, the IFR could have a series of outcomes relating to working capital, transitionally financed balance sheet health, resilience, protection of assets, et cetera. Leagues could colour in these outcomes into rules.
My own strong preference is for the third option. This amendment, which characterises the third option, is designed to create space for that conversation and, hopefully, allow the Minister to say that, where existing sustainability rules are in place and working, there will be an opportunity for that kind of league-led approach at all levels within an overall regulatory framework. Therefore, my recommendation is an outcome-focused, light-touch regulation, with step-in powers where issues are identified. That is why I have drafted Amendment 169A.
I turn to my Amendments 167A, 168A and 168B. The current test for attaching and varying a discretionary licence condition sets an extremely low bar for the IFR. For example, it seems to me that the test could be met in the case of a club that is already meeting the threshold requirement, on the basis that a discretionary licence condition somehow contributes to the club continuing to meet it.
The DLC test is even vaguer as regards the systemic financial resilience objective. The DLC needs only to advance that objective. While not necessarily the intention, this risks a very unpredictable, wide-ranging and open-ended power that could have a serious impact on club finances. It is also an issue that can be easily mitigated, while still allowing the IFR to meet its objectives. Again, I seek simplicity on behalf of the clubs. I am really concerned that here the detail is so great that it will swamp some clubs.
In the current drafting, potentially the only check on endless interventions, by way of DLCs relating to the systemic financial resilience objective, will be either the IFR’s discretion—in other words, the IFR deciding it has done enough for now—or the IFR being forced to have regard to avoiding adverse effects building up as a result of excessive intervention. Neither of those seems adequate to mitigate the significant risk to English football at all levels. I acknowledge that there is discretion for the IFR to not act in this way. However, I do not think there should be an option to do so, given the very significant risks to English football that would come with the powers being used in this way.
Lord Bassam of Brighton (Lab)
I listened carefully to the noble Lord and, bizarrely, in preparing for the Bill, I looked at the accounts of a number of the small league clubs the noble Lord seeks to protect with this. They all have to have properly audited accounts. The clubs I looked at—they are in the National League, the National League South and the National League North—have turnovers that vary between roughly £10 million a year and £400,000 to £500,000. They are properly set-up companies that have to file reports with Companies House, et cetera, and they all go through an audit process. It seems to me that, in any event, they will supply to their auditors many of the things the noble Lord seeks and asks for. If they did not, they would not be complying with a proper audit.
Lord Moynihan (Con)
The noble Lord, Lord Bassam, has made some important points and, of course, everything I have said is based on the fact that those clubs will be following that. They are basic conditions that any organisation, not least a football club, should follow. All my amendments—I have studied them carefully—seek to make it easier to ensure that the clubs follow those procedures and that the uncertainties and vagaries in the current drafting of the Bill are clarified, making it easier and more efficient for clubs to meet their obligations as companies and football clubs in the professional leagues.
Lord Pannick (CB)
The noble Lord, Lord Parkinson, posed a number of questions about the operation of Part 3 in relation to licensing functions. I will add one further question, to which I do not necessarily expect an answer today. Pursuant to UEFA regulations and delegation from the FA, the Premier League currently licenses clubs for the purposes of their participation in UEFA club competitions. I declare an interest as a season ticket holder at Arsenal Football Club—I realise that some of the other clubs supported by noble Lords would not have an interest in this matter for various reasons. My question is: will this function of the Premier League be affected by Clause 15 or any of the other clauses in Part 3?
Lord Wood of Anfield (Lab)
My Lords, I will speak to my Amendments 168 and 169, which connect with some of the themes raised by the noble Lords, Lord Pannick and Lord Moynihan. One of the most sensitive areas of this regime is the imposition of discretionary licence conditions on clubs. The purpose of my Amendment 169 is to say that the regulator can introduce such conditions only after being satisfied that the conditions would
“not be met by the club complying with all rules, requirements and restrictions which … will be imposed by a competition organiser”.
Essentially, this does not go as far as full delegation to leagues such as the Premier League—I agree with the noble Lord, Lord Pannick, on the broad criticism of that—but would introduce in one specific area what might be thought of as a limited principle of subsidiarity for the imposition of discretionary licence conditions.
The main purpose is to ensure that the regulator observes the norm of good regulatory co-operation—with not just the Premier League but all the leagues—by looking first to the adequacy of league arrangements in response to specific problems that will be the most politically and competitively sensitive, before stepping in and intervening with club-specific conditions attached. Why? It is because subsidiarity is a good principle of regulation where it is not inconsistent with the application of the intent of the law; also, I believe that it will foster the habit of regulatory co-operation more generally—not just on discretionary licence conditions. It will avoid duplication and confusion in regimes, and it will equip the regulator with a bit more political protection when it comes to the charge of political interference, because it can say, “We’ve looked to the leagues to step in first before stepping in”.
In the case of the Premier League specifically—let us face it, that is where the rubber hits the road on this issue most of all—it gives it, first, a chance to maintain system-wide and league-wide governance integrity before club-specific rules arrive, rather than risking the intervention of the regulator, leading to fragmentation between clubs. Secondly, it allows differences in application, inside the Premier League, of the general IFR rules in ways that account for differences in risk, finance and strategy, which we have heard discussed many times in Committee.
An example is capital buffers. The regulator will want to require cash reserves, and in the case of the Premier League, you want to take account of those areas where there are genuine differences from lower league clubs—differences in player registration rights, meaning players are more liquid assets, for example. The Premier League could design league-wide rules that are sensitive to these different conditions. The amendment does not say that Premier League rules would trump regulator rules, but where there are concerns, the regulator would look first to the Premier League to modify league-wide rules that respond to the concerns before the regulator directly intervenes.
Another scenario might be an issue of liquidity management inside a Premier League club. This amendment would point to the regulator first looking to the Premier League to take steps such as enhancing its monitoring systems, developing new metrics, et cetera, before it goes to individual licence conditions. This, again, would ensure that the league could retain the integrity of league-wide rules, rather than Premier League clubs having individual regimes as and when they trip up over certain rules.
What if the regulator wanted to intervene with a specific club as a matter of urgency? It could still do this. What if the regulator thought Premier League rules were inadequate to the task and insisted on imposing a licence condition that cut across and undermined league rules? Ultimately, it could still do that too; in fact, it may think that was the right thing to do. But what the amendment would do is introduce a prior stage that looks to the leagues to make league-wide governance adjustment first. In the name of good regulation, that seems to me a sensible, limited amendment.
Baroness Brady (Con)
My Lords, I rise to offer my support to the amendments tabled by the noble Lord, Lord Wood, and by my noble friend Lord Moynihan. These amendments take quite different approaches, but they seem to be driving at the same thing: a desire to clarify and improve the financial licensing section of the Bill. In my view, they highlight a really important principle—that the IFR should adopt an outcomes-focused, light-touch approach to developing its regulatory framework, and that it should work closely with football to do that.
These amendments would, in my view, be a vital step towards achieving a good balance in football regulation, one that safeguards financial sustainability by targeting clubs that have problems, which are clearly critical, while also respecting the unique responsibilities and expertise of the competition organisers. The current drafting of the Bill leaves critical questions unanswered about the regulators’ approach to financial regulation.
It is currently unclear whether the IFR will take a blanket, rule-driven approach that imposes granular financial requirements such as specific liquidity ratios or debt-to-equity thresholds across all clubs or, alternatively, whether it will adopt an entirely bespoke approach, applying discretionary licence conditions to every single club—all 116 of them—according to their unique circumstances and business models. If the IFR did the latter—it is entirely open to the IFR, because that is how ambiguous the Bill is—it would significantly undermine competition organisers’ ability to maintain a level playing field. Those licence conditions would necessarily need to be confidential to protect commercially sensitive information. For example, my club, West Ham United, would have no idea whether other comparable clubs were operating under similar conditions or not. That is a recipe for competitive chaos.
These amendments would mean that the IFR would need to take a far more balanced path to an outcomes-based approach, setting high-level principles and objectives while allowing leagues to implement their own rules to achieve those outcomes. Of course, they would be able, and must be able, to take a targeted approach to clubs getting into difficulties, stepping in at any time if those rules were deemed systemically not to be working, or if there was urgent concern about a single club or group of clubs. A more outcomes-based approach would ensure that the IFR focuses on the “what” rather than the “how”. By defining clear financial outcomes such as on balance sheet health, resilience, transitionary finance and asset protection, the IFR could establish a framework that addresses financial risks while avoiding unnecessary micro-management of clubs.
There is no reason why financial licensing should not follow this proportionate, targeted model, particularly as competition organisers such as the Premier League and the EFL already have sophisticated financial sustainability rules in place. If another competition organiser, perhaps one that has had less success in enforcing financial rules, wishes to give up this area completely to the IFR, that would be its right, but let us not forget that competition organisers have a deep understanding of their clubs’ financial dynamics. They already operate robust systems to monitor and enforce financial sustainability; for example, the Premier League has detailed profitability and sustainability rules, which are strictly adhered to, while the EFL has its own financial monitoring requirements tailored to the unique challenges faced by its clubs.
Lord Jackson of Peterborough (Con)
My Lords, it is a pleasure to comment on this part of the Bill. I rise to support the amendments in the name of my noble friend Lord Moynihan and the clause stand part notice of my noble friend Lord Parkinson of Whitley Bay, and to develop some of the points raised by my noble friend Lady Brady.
I begin with Amendment 128 in the names of the noble Lord, Lord Bassam, and the noble Baroness, Lady Taylor. I feel that there is no balance in it; that it creates an imbalance in terms of its impact on smaller clubs. While I have problems with the whole clause, I think this is the most difficult and onerous part, in its capacity for gold-plating and regulatory overreach. I also think it cuts across existing primary legislation, such as the Proceeds of Crime Act. What we are potentially seeing in these very loosely worded and wide-ranging powers—
Lord Bassam of Brighton (Lab)
Is the noble Lord really saying that it is onerous for the regulator to know from a club who the owner of that club is, what the source of the funds might be or that the owner has funds that enable them to properly operate a football club?
Lord Jackson of Peterborough (Con)
I think that is a fair question, but the amendment that the noble Lord is inviting the Committee to support today is what I might call a dangerous dogs amendment. It is basically reacting—legislation by anecdote or by the lowest common denominator. You find one bad apple in a barrel and you smash the barrel up and throw the apples everywhere. This will have a big impact on clubs.
I pray in aid the financial guidelines 17/6 that the Financial Conduct Authority put out in 2017 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The road to hell is paved with good intentions. That was about stopping people laundering money—fair enough. What it has actually resulted in is dozens of people in prominent positions, such as local councillors, Members of Parliament, judges, chief executives of local authorities—even Members of your Lordships’ House—not being able to open bank accounts, and their sisters, their wives, their husbands and their brothers not being able to open bank accounts, because of onerous, overzealous regulation.
I am not saying that the IFR would necessarily develop in that way, but some of the most innocuous wording in primary legislation can sometimes give rise to that kind of gold-plating. It began, of course, under the anti-money laundering and counterterrorism regulations that we all supported. My point is that the sins of some clubs should not be visited on all clubs. My noble friend Lady Brady is absolutely right that if we do not have an objectives-based strategy, if we do not have a focused strategy for dealing with the most egregious issues, we will have a universalist approach of assuming that all clubs will be owned by dodgy owners—drug traffickers, people smugglers; I exaggerate for effect. There is the perception that that is the case and, of course, it is not the case at all. I say to noble Lords: be careful what you wish for.
On Amendment 173 in the name of my noble friend Lord Markham, I have very serious issues with this clause, because it fails on its own merits, in many respects, because it is not commercially flexible. If we are going to give a power, under Clause 22(5), for the Secretary of State to vary the licence conditions—and I have big problems with “add”—which are already settled, we will want to do that quickly and in an efficacious manner. We will not be able to do that using the affirmative resolution in this House and the other place, because we cannot move quickly or make decisions quickly to respond to commercial change.
I am also very worried about the limited sanctions available in terms of mission creep. Clause 22(6) says:
“The Secretary of State may make regulations under subsection (5) only if requested in writing to do so by the IFR”.
Again, mission creep is almost built in there. Then, in Clause 22(7):
“A request under subsection (6) must explain why the IFR considers that the making of regulations under this section is compatible with the purpose of this Act”.
The question is: is a Secretary of State likely to refuse that? Probably not. There is not really a built-in self-policing mechanism in the Bill, and it is because of the wide-ranging powers and the permissive nature of this wording that I have problems.
The provision fails because it is too onerous and too draconian. However, it also fails on the other side, in that it cannot work quickly enough to address the specific club-based issues that the licencing condition variation is needed for. For those reasons, I ask the Minister to consider Amendment 128 carefully. This is a sledgehammer to crack a nut, and it invites the independent football regulator to exercise its powers ultra vires, which is not in the best interests particularly of smaller clubs.
Lord Markham (Con)
I rise to speak to my Amendment 173, but first I echo the words of many other noble Lords. I support the outcomes-based approach the noble Lord, Lord Wood, is trying to achieve with his amendment, and I think there is broad support for that.
To pick up on the debate between the noble Lords, Lord Maude and Lord Bassam, on strategic business plans, and to give a bit of detail by way of background, the information one needs to provide for an audit is necessarily backward-looking, looking at the last year for which accounts have been provided. A strategic business plan, by its very nature, is forward-looking. I would be very surprised if smaller clubs with, say, a turnover of £500,000, do that as a matter of course. Lots of small businesses and shops have that sort of turnover, and I am sure they are not doing it either. I am not saying it is not desirable, but it could quite quickly turn into a consultant’s paradise if every single club, including the small ones, suddenly had to produce three-year or five-year business plans. They would have to resort to consultants to do that, which would become burdensome.
This brings us to another problem that we have talked about a number of times. Noble Lords have heard me talk about liquidity issues. By trying to solve the sins of one or two clubs, we are in danger of putting a burden on all of them, particularly if we are asking clubs to deposit money as part of a liquidity ratio to ensure they have a safety net. That will inevitably take money out of football. I had a meeting with the Minister and her team last week, and I thank her for that. We had a very good conversation about exactly this point, and what she promised was a proportionate, sensible approach.
That brings me to my Amendment 173. We are having very sensible conversations, in general, based on the desire of all noble Lords to do what is best for football. However, the problem is that whatever happens here, the Secretary of State has the ability quite easily to change everything. So, in response to everything we discuss, such as ensuring that the licences required are proportionate, the Secretary of State can easily say, “Well actually, we want a more muscular approach”. All the debates over the last five days and counting, the meetings and the various consultations could quickly be set aside because a different approach is wanted. That is my concern.
It does not matter where we have got to in the conversations we have had over the past few days: they will suddenly count for nothing if the Secretary of State can completely change the rules, raise the bar and change the discretionary licensing conditions. I would like assurances from the Minister. How do we safeguard against the fact that these—in my opinion, very good—debates could suddenly be set aside because in a few years’ time, a Secretary of State wants to take a completely new approach, which could be entirely disproportionate?
This has been a rigorous and constructive “two plus two equals five” process, as I call it, as we try to agree on an approach to checks and balances. None of us will be totally happy with how it turns out, but we have all had constructive input into to it. However, all of that could be quickly set aside by a future Secretary of State being able to change the approach.
Lord Pannick (CB)
Under Clause 22(6), the Secretary of State may make the regulations the noble Lord is concerned about only if requested in writing to do so by the IFR, so the Secretary of State does not have complete discretion. We would be creating a new system which may reveal defects and omissions in its operation, so surely it is sensible to have a power to amend it if defects become manifest.
Lord Markham (Con)
I thank the noble Lord. Of course, we want to have the flexibility to react to such situations. This issue comes up in various other contexts, such as government statements. There are lots of points where the Secretary of State can vary the approach. The question is: how do we get the checks and balances right? However, I think there is basic agreement on this issue, and I would like to hear the Minister’s views.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Markham, Lord Parkinson of Whitley Bay and Lord Moynihan, and my noble friends Lady Taylor of Bolton, Lord Wood of Anfield and Lord Mann for tabling the amendments in this group. I also thank all noble Lords for their contributions. I will take each of the amendments in turn before responding to the noble Lords, Lord Markham and Lord Parkinson, and their opposition to the entire licensing regime standing part of the Bill. I will endeavour to get the noble Lord, Lord Pannick, a response to his question in the near future; I do not have the detail he requested today.
Amendment 128, from my noble friend Lady Taylor of Bolton, and Amendment 129A from the noble Lord, Lord Moynihan, relate to owners. The first seeks to make identifying an owner’s source of funds a prerequisite for a provisional licence. I absolutely agree that it is crucial that the regulator has oversight of an owner’s funding, so it knows how a club expects to fund its activity and the source of this funding. I hope my noble friend will be reassured that this is why a club is already required to provide such detail as part of its application for a provisional operating licence.
When a club submits its application for a provisional operating licence, this must include a strategic business plan. Among other things, this must contain detail about the club’s operating costs, how these costs are to be funded and, crucially, the source of such funding. This will enable the regulator to scrutinise the source of the funds. On the point made by the noble Baroness, Lady Grey-Thompson, importantly, a club must set out how much it plans to spend and how it will fund that cost. Furthermore, if the regulator has concerns at any time—even before it has received its provisional operating licence—about the source of an owner’s wealth, it can test that owner. Should it find that an owner’s source of wealth is connected to illicit finance, that owner will be found unsuitable.
I also agree that it is important that the industry has certainty as to what the regulator will consider “significant influence” by owners. Of course, what is meant by “significant influence and control” would need to have been set out in guidance before clubs and the regulator can consider who meets this definition. That is why I can assure noble Lords that the Secretary of State’s guidance will be produced in good time, in order to give this clarity.
Noble Lords should note that the provisions in Clause 3 and Schedule 1 that define “owner” come into force on the day the Bill becomes an Act. That means that the obligation on the Secretary of State to produce this guidance comes into force on that day, whereas the licensing provisions and other provisions which rely on the definition of “owner” will be commenced later, by regulations.
I turn to Amendment 132, from my noble friend Lord Mann. Although the risk of clubs going into administration will be greatly reduced, it may still happen. The regulator revoking a licence would be the ultimate punishment and would be used only in the most extreme of circumstances. I assure my noble friend that the regime is designed to avoid the situation his amendment aims to provide for, and that ensuring that a club has a plan for adverse shocks is at the heart of the regulator’s financial regulation regime. This might include a plan to keep the club going if, for example, an owner can no longer continue to fund it. We have spoken to many football clubs while developing the Bill, and know that the well-run clubs already do this.
Turning to Amendments 167A and 168A to 168C, from the noble Lord, Lord Moynihan, I understand his intention that the regulator should identify a clear risk before acting. The amendments are not necessary to achieve the aim in relation to his points on discretionary licence conditions, as was explained to the Premier League when it suggested these exact amendments prior to introduction. The regulator can attach discretionary licence conditions only if the conditions contribute to a club meeting the threshold requirements, or if the conditions advance systemic financial resilience.
The regulator is bound by its general duties, meaning that it must have regard to its regulatory principles and must act reasonably and proportionately. In effect, that means that the regulator can attach a discretionary licence condition only to address a risk it has identified. I assure the noble Lord that the regulator cannot take any action that is meaningless or does not advance its objectives. If a club feels the regulator is doing that, it can appeal any action through the appeals regime.
Ultimately, these four amendments all seek to raise the threshold for intervention and limit when and how the regulator can act. For every discretionary condition, the regulator would have to demonstrate that there was no possible alternative to achieve the aim than to impose that specific condition. This would be an unacceptably high bar, fettering when the regulator can act. In practice, we think the risk of legal challenge could lead to an excessively risk-averse regulator, afraid to act swiftly or at all.
I thank my noble friend Lord Wood for Amendments 168 and 169 and for his genuinely constructive approach to scrutinising the Bill, which I very much appreciate. I note that the noble Baroness, Lady Brady, also expressed concern on the points he raised. My noble friend has met with officials and me regarding these amendments and I hope that those meetings were useful. We believe these amendments would severely limit the regulator’s flexibility to meet its objectives and ensure clubs reach their threshold requirements. The regulator should not take its lead from the competition organisers. Of most concern is the blurred accountability that this approach would introduce. The fan-led review laid bare the significant issues with self-regulation, and that is why we are introducing an independent regulator.
That said, the system is designed so that the regulator should not need to intervene if the required standards are being met. If clubs meet their threshold requirements naturally—for example, through their compliance with the industry’s own existing rules—the regulator should not need to apply discretionary licence conditions. The model in this legislation is the right one, with clear accountability, and where discretionary licence conditions are not applied in a one-size-fits-all way but reflect each club’s specific circumstances.
My noble friend Lord Bassam raised the basic requirement for clubs to have a sustainable business plan. I agree with him that that is important. That basic requirement, as well as the requirement for clubs to engage with their fans and ensure that their owners and officers are suitable custodians, are light-touch, appropriate measures that should already have been in place.
On Amendment 169A, from the noble Lord, Lord Moynihan, the regulator is already required to publish guidance about how it will use discretionary licence conditions, including the outcomes it seeks to achieve. That will give upfront clarity to clubs and competition organisers. However, the Government do not believe that the level of detail in the noble Lord’s amendment is appropriate for the Bill. He and I would agree that we are not in-depth experts on football finances—had I looked ahead in my speech, I perhaps would not have said that, and I apologise. I am not an in-depth expert on football finances, the inner workings of football clubs or how football clubs operate; I will allow the noble Lord to make his own conclusions on the extent to which he is. The regulator will employ experts in this sector who will have far more knowledge of these areas than we do. They will also have a stronger evidence base on which to base their actions, informed by things such as the “state of the game” study and consultation with the industry itself. That is why we have required the regulator to publish guidance on discretionary licence conditions and why we think it should be left to do this independently. We do not want to unintentionally hamstring the regulator with overly prescriptive requirements for the guidance it must produce.
In response to the point made by the noble Lord, Lord Moynihan, if the regulator agrees with him that it should include detail on financial shocks, liquidity and debt management, it will include this.
I turn next to Amendment 173, from the noble Lord, Lord Markham. The Bill outlines the specific types of discretionary licence conditions that the regulator may attach to a club’s licence to address its financial or non-financial resources or to improve systemic financial resilience. It is possible that, as the industry evolves, these types of conditions might not remain adequate to address the new or different financial risks faced by clubs, and there might be more effective ways to address them. That is why it is crucial that there is a mechanism in the Bill to enable the types of conditions available to the regulator to be updated. This amendment would deny the regulator this flexibility and potentially make the regime unable to adapt to changing economic circumstances. It is vital that the regulator has appropriate the tools to regulate football effectively, both now and in the future.
I reassure the noble Lord, Lord Markham, that the Bill does not give the regulator or the Secretary of State free rein to make changes. The Secretary of State can amend the types of discretionary licence conditions that can be attached only if requested in writing to do so by the regulator—a point highlighted by the noble Lord, Lord Pannick. The regulator would have to provide clear reasons and consult stakeholders ahead of making a request.
Lord Jackson of Peterborough (Con)
On that specific point, in Clause 22(8), the language is quite permissive and wide-ranging regarding who the IFR considers it appropriate to consult in respect of wide-ranging powers, particularly those to add or remove an item from primary legislation. Can the Minister confirm that the guidance that the Government will publish will tidy that up and make it tighter on who the IFR has to consult before it would write to the Minister seeking to vary the licence conditions?
Baroness Twycross (Lab)
We discussed in one of the previous groups why the legislation does not currently have specific people that have to be consulted every time. I commit to write to the noble Lord to clarify the specific point he raises. The regulator would have to provide clear reasons and consult stakeholders ahead of making such a request. The Bill has not stated every single person the regulator would have to consult every single time, but there are principles at play around how the consultation would need to take place.
Lord Jackson of Peterborough (Con)
I thank the Minister but she will agree that the guidance could, for instance, include groupings of particular types of people who would be key stakeholders and would need to be consulted, because this would obviously be quite a wide-ranging intervention by the IFR.
Baroness Twycross (Lab)
I will write to the noble Lord on that point. I hope it will give noble Lords some reassurance that Parliament would also be able to scrutinise any change, as regulations would need to be made by the affirmative procedure.
We do not believe that Amendments 174A and 174B, in the name of the noble Lord, Lord Moynihan, would be helpful to the regulator, as we explained to the Premier League prior to introduction. The addition of a minimum six-week period would mean a total minimum of eight weeks once you include the minimum period for making representations or giving a commitment in lieu. That would mean an eight-week delay, during which the regulator would not be able to impose a financial condition, which might mean that the regulator would have no choice but to sit idly by while the issue identified at the club gets worse. That would be contrary to the regulator’s objectives and principles and is therefore not considered acceptable by the Government. Slow action has been a common feature of industry self-regulation. We will not allow it to become a feature of the independent regulator’s regime.
The regulator already has a regulatory principle to proactively and constructively engage with the regulated industry, including competition organisers. This means that regulatory intervention at one of their clubs should never come as a shock to a competition organiser. Once the regulator has given notice of its intention to attach a financial discretionary licence condition, the competition organiser will have a minimum of 14 days to propose a commitment in lieu. To be clear, this is a minimum; the regulator may well decide to specify a longer period, but, equally, if the situation was sufficiently serious and urgent, the regulator should not be prevented from acting without delay. The minimum period of 14 days therefore strikes the right balance.
Amendment 174B only adds further burden and confusion to the process of applying financial discretionary licence conditions. The regulator is required to follow the procedure set out in Clause 23, except in very limited circumstances. This includes urgent circumstances where the regulator considers that the issues are so significant and urgent that the condition needs to be imposed immediately. Under those circumstances, burdening the regulator with a requirement to go through the process of commitments in lieu when it has already acted under urgency and has its own regulation in place is not acceptable. This would also leave clubs in an ongoing state of uncertainty, where an existing financial licence condition might be replaced with a different competition organiser requirement. This would be unnecessarily complicated, confusing and burdensome.
Lord Parkinson of Whitley Bay (Con)
My Lords, this has been a fruitful and helpful debate on what will be one of the key issues with which we will all have to grapple once the regulator is established. I thank the Minister for engaging with the questions I raised in the spirit of the probing nature of my amendments that began this group.
The answer that the Minister gave was that the agility and speed in the system comes from the ability to seek an injunction in the courts, at least in the first instance, then from the secondary powers and the designation that the Secretary of State allows. That might be more welcome to the ears of the noble Lord, Lord Pannick, and the rest of his profession than it might be to football clubs, but it is a helpful clarification, and I am grateful to the Minister for giving it.
This underlines the importance of getting the regulatory regime right and making sure that the regulator does its work in a way that commands the confidence of football clubs, so that they do not seek to get around the law or wish that there were ways for them to do so. With gratitude to the Minister and to the noble Lords for speaking to their amendments in this group, I will not oppose the clause standing part.
Lord Markham
Member's explanatory statement
This amendment requires the Regulator to set out its rules regarding licences no later than one month after passage of the Act.
Lord Markham (Con)
I shall speak to Amendments 125, 133 and 135. Hopefully, this will be a fairly uncontroversial, simple set of amendments, which try and set out clear expectations on timing.
I am very aware that, while there is uncertainty as to what the discretionary licensing regime may be, that has an unsettling effect on both clubs and potential investors into the sector. We would all agree that this is not something that we want. We want everyone to know what the rules of the game are, so they can either get on with doing whatever they need to do to apply to those licensing conditions and/or, if they are looking to invest in the game, so they can have that degree of certainty as to what the rules of the game are going to be, so as not to have that potential chilling effect on any new investment.
Amendment 125 tries to give the regulator a time limit of one month from the passage of the Act. I am very aware that there is a shadow regulator in place at the moment, so I hope that this is something that the shadow regulator is working on in the meantime. That is why I think that a one-month deadline is quite doable in that sense.
Related to that is Amendment 135, which says that once a club has put a discretionary licence application in, it will receive a reply from the regulator within one month. Again, I am very much assuming that these things are not a binary process. I would expect the club to be in liaison with the regulator as it put this application in and be receiving advice as it did so—so a one-month timeline at the end of that is quite relevant.
It is for us to set some expectations on the regulator in the Bill. In Clause 17(9), the regulator gets to set its own timing for it all, so it is quite appropriate that we are saying that, given the uncertainties placed on clubs, we expect these sorts of reasonable timeframes. Again, I am quite happy that we decide what those appropriate timeframes might be through our discussions on this, and there may be arguments to vary that slightly—but one way or the other, it is quite important that we set out what those timings and expectations should be.
Finally, Amendment 133 tries to give more time for how long provisional licences last. We want to try and avoid a cliff-edge situation whereby clubs are suddenly in the provisional licensing regime and then do not get beyond that. We would all then have a set of circumstances which I do not think any of us have really planned for, in terms of what would happen and whether the club would have to stop taking part in the competition at that point. Amendment 133 tries to give a bit more time around the provisional licence, increasing it from three years to four.
The main reason for these amendments is to make sure that these things are considered and that there is a good debate on what the appropriate timeframes are. It is reasonable that we put down what those timeframes should be, so clubs get as much certainty as possible in this. I beg to move.
Lord Pannick (CB)
My Lords, I am very sympathetic to the purpose of the noble Lord, Lord Markham, in relation to his Amendments 125 and 135. Perhaps I may respectfully suggest to him and to the Minister what may be more palatable than what his amendments suggest. Amendment 125 is rightly concerned that the rules for a provisional operating licence should be made speedily. Everybody must know what the rules are. The amendment would require that these rules be made no later than the period of one month beginning with the day that this Act is passed. If the noble Lord is going to bring the amendment back on Report, I respectfully suggest that it would be more acceptable to say within one month from the date when the Act is brought into effect. The noble Lord will know that under Clause 99(1) and (2), Part 3—with which we are concerned—comes into effect not when the Act is passed but at a later date when regulations are made.
In relation to Amendment 135, the noble Lord is rightly concerned that the IFR should make the decision whether to grant a regulated club a provisional operating licence speedily. He lays down a period of one month from when the application is made. The amendment would allow for an extension of only two weeks. It is an absolute rule, subject to a two-week extension period. I respectfully suggest that that is far too confined. It is normal in a provision of this sort to allow for the period to be extended if there are exceptional circumstances. It is not difficult to envisage cases where, rightly, the IFR cannot take the decision within a period of one month plus two weeks.
For example, the IFR might reasonably take the view that it needs answers from the club to questions of detail, which it puts to the club, and the club may not provide those answers, or be able to provide them, within the period of six weeks for which the noble Lord’s amendment allows. I understand and I share the concerns at the root of Amendment 135, but it really needs to have an exceptional circumstances provision.
Lord Addington (LD)
My Lords, looking at these amendments, I think that a little bit of agreement is breaking out that certainty and getting things done quickly are required in the Bill. The noble Lord, Lord Pannick, may have made drafting suggestions on the hoof, and we are lucky to have him to fulfil that function for us, but something that clarifies and addresses the issues raised here would probably be helpful. If there is something that we have all missed and it is hiding somewhere, that is great, but we need those answers.
Lord Parkinson of Whitley Bay (Con)
My Lords, I have added my name to the amendments in this group, and I certainly agree with what the noble Lord, Lord Pannick, has suggested in relation to Amendment 125. We are grateful to him. The noble Lord, Lord Addington, is right that we are seeking to make sure that we get the right balance with this group of amendments. We are keen to close the unfortunate gap that the Bill currently poses, which is that, if it passes without amendment, nobody will know what rules the regulator might yet specify or the period in which it might specify them. We need a bit more clarity for those preparing to be regulated and wanting to do so in this way would be useful. With gratitude to the noble Lords who have done the work of the Committee and suggested ways in which to improve on this ahead of Report, I look forward to hearing what the Minister thinks.
Baroness Twycross (Lab)
My Lords, I thank the noble Lord, Lord Markham, for tabling these amendments, and the noble Lords, Lord Pannick, Lord Addington and Lord Parkinson of Whitley Bay, for what has been a short but constructive debate. If the noble Lord, Lord Pannick, was, as was suggested by the noble Lord, Lord Addington, making changes on the hoof, I hope that he will accept that I am not going come up with a response on the hoof, but I will endeavour to look into the points that he raised and will get back to the whole Committee subsequently.
Starting with Amendment 125, I understand the desire for quick implementation, and the desire to make sure that clubs are given clarity on what is required of them as soon as possible. However, we believe that the regulator should not have an arbitrary deadline imposed on it to make rules relating to the application of provisional operating licences. The regulator should be able to conduct an effective consultation with clubs regarding the rules around this clause, and that should not be rushed. The regulator is already encouraged to be expedient, including in its regulatory principles, though I note that in a previous debate the noble Lord, Lord Parkinson of Whitley Bay, raised some concerns around the definition of “expedient”, which we are still looking into. Beyond this principle of being time-efficient, the regulator should not be subject to arbitrary, tight deadlines that would serve only to limit its operational flexibility.
Lord Markham (Con)
My Lords, I thank noble Lords for their contribution, including the noble Lord, Lord Pannick, for his helpful suggestions. Having some certainty on the timeframe is quite valuable; the major concern is that while uncertainty is out there, you will get clubs and potential investors holding back on investment. Addressing that is the main intention behind these amendments. I hope that, as we progress further, we can look at some of those helpful suggestions so we can get the balance right. I beg leave to withdraw the amendment.
Lord Mann
“(e) setting out all financial arrangements with external agents or other intermediaries involved in contacts or recruitment, or both.”
Lord Mann (Lab)
My Lords, I again refer noble Lords to my interests in the register relating to this debate. I was in a meeting with the chair of the supervisory board of one of the more successful German football clubs discussing regulation. I asked him if there was one thing that could be done to improve football from regulation inside England what it would be. His advice was that the best thing that could be done—which is not actually available to us in this House as an amendment—would be to tax football agents in the UK through the British tax system.
Why might the head of a major football club—a competitor—wish to see that happen? If that happened—or if anything else threw into question the transparency of football finances, particularly in relation to the acquisition and departure of the key asset players—behaviour would be modified. I recall discussions with people who gave graphic detail of how, in the olden days—but not old enough for me not to have seen it happen—there was the notion of “cash in the boot”. A player would be signed to a team, suddenly and unexpectedly, and would play a few games. In doing so, cash would be handed over. I do not think that; I know that. I will not cite examples even though I could—it would not be fair to do so—but that was not uncommon.
In the modern game—today’s game—the amounts of money are much greater. One has seen situations where football clubs get into financial problems, usually because of relegation from the Premier League, and do not seem to know who owns their assets. There is a myriad of situations. That includes contract details—I can think of some in the recent past, where the fans, sponsors and others were rather bemused to find that certain players were able to go, at no fee, to play for other teams because of a clause in the contract that most people were unaware of.
My Amendments 129 and 248 seek to deal with the specific problem of how agents behave. There are examples I could cite where, pre transfer, players have been sold or bought for significant amounts of money and, literally at the very last moment, they suddenly change agents. I will give a hypothetical example, rather than shine too much specific light. Let us say that a player is sold for many tens of millions, and they have a single agent. The day before their transfer documents are signed, they then change agency. The agent then sues the player for their loss—for the cut that they would have got—even though the agents’ fees are very significantly higher than the worth of the individual agent. Why would anyone choose to do that? If you are a purchasing club and you are competing with others for a prized asset, you might well be prepared to pay more money and whatever requirements there are. But why would a selling club do that? What would the advantage be? The answer is there is zero advantage to a selling club—none—or, potentially, a disadvantage. If there are £15 million or £20 million in agents’ fees, that amount of money might come in to your club. So what is the motivation?
One of the things that has bedevilled football across the world, not just English football, has been people taking a percentage. I have spoken to people who have been offered money to give statistics on 12 and 13 year-olds in their own club—a cash-based suggestion that would accumulate over time, should the player get to a level of being worth lots of money. That is the minutia, but the major cases will involve major financial transactions. Fans are often perplexed by certain purchases and the amounts of money spent on players. They say, “What is going on here? This player does not appear to be worth quite that amount of money, or indeed anything near it. It must be because of bad football decisions”.
I put it to the Committee that perhaps the transactions are determined not always by football decisions but by loans. Most fans can cite times they have been bemused when their club has loaned a player in and paid a very large amount of money to do so, even though no one has ever heard of them before. The player then disappears a year on, and no one ever hears of them again. Why would you pay £1 million or £2 million to loan a player who no one has heard of, who has no track record and who then has no future track record?
The taxman has an interest, which is why, if I were able to do so and it would have been within the rules of this Committee, I would have proposed that taxing agents via the UK tax system would be the best answer. While that does not give public transparency, it seems that it would mediate behaviour. However, these two amendments seek to allow the regulator—not the general public—to be able to see and assess what is being paid and what is in the contracts. That would not be in a public way, but in a private way—and that would modify such behaviour.
If we are interested in competition in the sport, taking out externalities that have nothing to do with the business of the sport is in the interests—including the business interests—of the industry and the sport. Shining a light so that people do not feel it would be appropriate to do their decision-making based on how much they receive as a reward for their wisdom in, say, selling a player would be to the health of the game. Anyone in the Committee who thinks that does not happen, and has not happened, is being extremely naive. Anyone who thinks that this happens only at the lower end—the non-league, with a bit of cash in a back pocket—is also being naive.
Because of the way the football business has worked, there is a lot of money to be made, and people have managed to find ways—legally—of making additional profits for themselves, particularly out of the movement of the key asset players. These two amendments seek to allow at least the regulator to see exactly what is going on. Indeed, this is important in the critical situation where, say, a club does not own the assets that everyone thinks it has, because it has managed to sell them off in advance to some third party and therefore cannot cash in on them. There are examples that I am very familiar with, where clubs have gone insolvent because of that. In some way, this power needs to be in the Bill, unless the Government could be persuaded that HMRC would be a better decision-making body and have all football agents’ transactions in this country taxed through the UK tax system. I beg to move.
Lord Goddard of Stockport (LD)
My Lords, I was getting overexcited listening to the noble Lord, Lord Mann, because we have lives outside this Chamber, and for my sins, I go in the Dog and Duck every now and again, where, somehow, people find out that I am involved with this Bill. My pint goes flat before I have had a chance to drink it, because they ask, “Well, why do you not get this sorted?”
One of the main questions that comes across is: “What are you going to do about the agents?” I did not think that that was really grating with supporters, but it is—from the top right to the bottom. I know because I support Manchester City, which used to be at the top, and I look after, where I can, Stockport County, who are reasonably not near the bottom any more.
Supporters are human beings. They work hard and pay their money to go to watch the football. Nothing grates more than when they find out how much agents get for doing these deals. As has been said, there is confusion about player ownership. Do two or three people own a player? Does a company own a third of that player? If we wish to sell that player, does that mean we need the permission of those other people before we can sell him? Is that value for the club? Those issues need teasing out.
I am attracted to the idea of an agent having to pay UK tax, which would really add some clarity to the Bill. To be honest, supporters do not quite get it. I am not saying that I am above them or anything like that, but they see it as nebulous. They want to know what practical things the regulator can do for them as football supporters. If the Government were fleet of foot, they would put agents’ fees at the front of the Bill and say that any agent of a UK footballer should pay tax in the UK. That would be universally supported by all supporters.
Baroness Taylor of Bolton (Lab)
My Lords, I agree that many of us who are concerned about football could talk all night about football agents and the concerns that many people have about them.
I want to talk about another amendment in this group. The Marshalled List says that this grouping is miscellaneous. The combination of topics that we are discussing in this section is rather strange. I want to say a word about Amendment 150 in my name, which concerns the concept and practicality of assets of community value. We would like to make this a condition of the licensing system. It is really important that fans have the reassurance that their ground is not going to be sold underneath them and all the assets of the club traded by someone who does not have the footballing interests of the club at heart. I am always surprised that more clubs’ grounds and assets of this kind are not deemed to be assets of community value. That would be part of the protection of clubs’ heritage but also—perhaps as importantly—significant in protecting clubs from rogue owners.
I have a particular interest in this because of what happened to Bolton Wanderers a few years ago. Thankfully, because of the actions of the fans and the supporters’ trust, the stadium, the pitch, the circulation area, the seats, the stands, the Premier Suite, our car park and the fan zone were protected when the local authority accepted that they should be assets of community value. It meant that those assets were protected. It was particularly important at the time because we had gone through the experience of having an owner whose main concern was not the footballing future of Bolton Wanderers but the assets. A rogue owner of that kind can do immense damage, so this protection is extremely important. I urge that consideration be given to making it a condition of the licensing that football assets are designated as assets of community value.
Lord Bassam of Brighton (Lab)
My Lords, I will speak to two groups of amendments within this group. Amendment 167 in my name and that of my noble friend Lady Taylor is about the removal of rogue owners. In a sense, this amendment poses the question: what is the point of a regulator that identifies bad practice and rogue owners but does not have clear powers and mechanisms to replace them? Our amendment seeks to incorporate within articles of association provisions that would oblige owners to give up their shares and make sure that those shares were given over to a new beneficial owner, subject, of course, to the usual checks.
Our argument is that the Bill must adequately address enforcement of the fit and proper owner test to enable the regulator to force an owner to sell their shares or force a director to resign from the board. In doing that, the regulator would be able to ensure that clubs have sufficient reserves to meet ongoing operational costs if an owner is disqualified.
At some point, it might be advantageous to consider having a central sinking fund in place to help cover interim costs. In the licence criteria, the regulator might also want to insist that clubs include in their articles of association a mechanism for the resignation of a director in those circumstances. That is important because we do not want situations such as Aston Villa found in 2016. In the mid-1990s Brighton & Hove Albion had owners not only who were deeply unpopular but who were not there because they had the best interests of that club at heart. More accurately, they were asset-strippers who eventually, without providing an alternative, sold the ground to a series of companies that set up a retail park. One of the saddest moments of my life was going to the last game there. We all knew what was going to happen to that site. It was going to end up as a Toys “R” Us. I have nothing against Toys “R” Us, but there were plenty of other sites in Brighton where it could have happily located.
I turn to Amendments 205, 208, 210 and 259, which are about protecting domestic competitions. Currently, the Bill does not require clubs to prioritise domestic over European or worldwide competitions. We feel that clubs should be property consulted before changes are made to competitions. The Bill should ensure that the regulator can designate European or worldwide competitions as restricted and not to be prioritised above domestic competitions. This would prevent clubs establishing a new entity to inherit the existing club’s identity and players—for example, the Man Cities of this world leaving the Premier League and calling themselves City Blues for the purposes of entering a restricted competition.
This is important because the ecosystem of competitions has been under pressure in the last few years. For instance, earlier this year moves were made to prevent replays in FA Cup matches. I think it would be fair to summarise that that was against the will of most clubs and largely for the convenience of the bigger clubs playing in European competitions. There is nothing wrong with them playing in Europe; it is very welcome and important for the success of our Premier League. We want to make sure that this carries on being the case, but the abolition of FA Cup replays went against the vast majority of clubs’ interests and has undermined the beauty of the competition in the sense that, periodically, replays provided much-needed funds for clubs in the lower leagues. It has also restricted the opportunity for lower-league supporters to see the bigger clubs when they enter the competition. It is important that the regulator has an interest in this and that we provide clubs with the certainty and security that they will be consulted about competition changes.
Lord Evans of Rainow (Con)
My Lords, I will speak briefly on Amendment 129 in the name of the noble Lord, Lord Mann. It is relevant to Amendment 93 which, your Lordships may recall, requires the new regulator to regulate football agents. My motivation for that amendment was to try to keep transfer fees within football. As I mentioned, it is very important that the grass-roots clubs that develop the players of the future get their fair share.
The amendment tabled by the noble Lord, Lord Mann, setting out all financial arrangements with external agents and other intermediaries involved in contracts, recruitment or both is an interesting one. My only question is: how will this work in practice? How will the regulator deal with highly confidential multi-million-pound transfers? The noble Lord mentions it being private and confidential and therefore not public, but potential leaks could affect these deals. What would the regulator do? How would he operate? How would he stop or block those transfers? The Premier League still has the best players. We still want to attract the best players. It is vital that we get this right to avoid the trap of unintended consequences. It is so important to protect the international reputation of the Premier League.
My amendment was tabled to ensure that no matter where the transfer comes from, that money stays within football. However, we would have to be careful about how that happened in practice.
Baroness Grey-Thompson (CB)
My Lords, regarding Amendments 150, 152 and 164, I will not repeat what has already been said about community assets. I will speak just to my Amendment 248A, which probably counts as a miscellaneous amendment. It is a probing amendment, strong concerns having been raised by the Supporters Trust at Reading. It seeks to insert a new clause, after Clause 51, on ticket pricing, meaning that regulated clubs would have to adhere to the following rules: dynamic pricing strategies being prohibited, concessionary tickets being mandatory and ticket prices for away fans being kept at the level set out in regulations by the Secretary of State. It is a simple amendment, but I suspect that it will not be universally supported.
I understand why clubs want to use dynamic pricing and how it can be used very successfully, but this amendment seeks a more fan-inclusive approach. The Supporters Trust at Reading quoted the Early Day Motion tabled in September 2024, when 19 of the 20 2024-25 Premier League clubs increased their ticket pricing. Abolishing or reducing concessionary tickets would be very bad news for older or younger fans who felt the effects of the cost of living crisis harder than most. Also, Fair Game has said that the constant rise in ticket prices has priced long-standing fans out of the game and that there should be proper consultation with supporters to address their concerns.
I do not seek to open the debate on what a fan is, but this amendment is about giving consideration to how fans can be engaged in discussions about ticket pricing. I am expecting many noble Lords to tell me that this is too interventionist and that it will limit clubs too much, but I am interested to hear the Minister’s response.
Lord Addington (LD)
My Lords, going through this long list of amendments, I think that we can all agree that “miscellaneous” is a good description of this group. On what is a competition, I added my name to one of the amendments, but probably should have added my name to the one about heritage. Is it a ground part of the heritage, is it part of the structure, is it what is going on? I should have put my name to this and look forward to the Minister’s reply. If we do not include this, we are missing an important part of why this Bill is justifiable.
Lord Moynihan (Con)
My Lords, I support the probing amendment tabled by the noble Baroness, Lady Grey-Thompson, although not necessarily the wording of it or the outcome. It is related to something that the noble Baroness and I have worked on for a long time and which is covered in my miscellaneous Amendment 258A. It binds the noble Lord, Lord Bassam, and me to the same cause. There is still a major problem of abuse in the ticket market for football, not least for membership cards. Last season alone, in February one club had to cancel more than 30,000 membership cards. They were all in the hands of the touts. This is a massive problem now.
When we started to campaign to sort out the secondary ticket market, it was much smaller. Fifteen years ago there were some 120 professional touts. Now there are subscription groups which get together using bots to get hold of tickets, place those tickets on the secondary market and sell them illegally. Viagogo is, regrettably, used as a speculator—a ticketing lobby. From that, those tickets are sold abroad illegally with, quite often, information hidden behind the icons. This goes against the terms and conditions set by the clubs, which do a huge amount of work across football to make sure, especially at sold-out matches, that tickets do not get into the wrong hands.
Lord Markham (Con)
In speaking to my Amendment 332, I will follow the words of some other noble Lords and say that I find it quite confusing that we have so many disparate amendments grouped together.
My Amendment 332 would stop the Secretary of State being able to define a season. I hope that someone—maybe the Minister or the noble Lord, Lord Pannick—will tell me that I have read this wrong somehow, or that it is not the intention at all, but I think we would all agree that, when it comes to regulatory or government overreach, trying to define a season and when it should start and end is not the role of government or a regulator. I hope that this is quite an easy one to clear up, because I would be very surprised if that is the intention behind it. The relevant Clause 92(3)(a) says that:
“The Secretary of State may by regulations amend this section so as to change … the definition of ‘football season’”.
It would be very welcome if that could be clarified; otherwise, I suggest that we might want to delete it.
Lord Pannick (CB)
My Lords, I will comment very briefly on the subject of football agents, which was raised by the noble Lord, Lord Mann, and supported by the noble Lord, Lord Goddard. I declare an interest: my son Joel Pannick is a football agent—I am very proud of my son—who works at Base. My perspective of football agents is that there are still abuses; they need to be regulated and they are regulated. The era of unregulated bungs no longer exists to the extent so vividly described by the noble Lord, Lord Mann.
Let me say why I want, in the interests of balance, to inform this Committee of what the position is. Football agents are now licensed and they have to pass a demanding examination. They are regulated by FIFA and the FA. I should mention that the scope of the regulations was the subject of legal challenges in the last year, and those legal challenges partially were successful. It is the case that HMRC adopts a far more vigorous approach to this topic than it used to, and rightly so; it keeps a close eye on payments and receipts. The noble Lord, Lord Mann, is absolutely right that there are many agents who are not subject to HMRC because they are based abroad, but those based in this country certainly pay tax, and in many cases a great deal of tax. I thought I would just mention those factors in the interests of balance.
Lord Parkinson of Whitley Bay (Con)
My Lords, like the noble Baroness, Lady Taylor of Bolton, I always balk when I see a group described as miscellaneous, or even worse in this case, “misc”. On the failure to give new names to the groups that have been degrouped, it is always helpful to have a go at giving us a theme. But I am grateful to the noble Lords who have covered a wide range of very important issues in this group.
I wanted to say a few words about my noble friend Lord Markham’s Amendment 332, to which I have added my name. A number of noble Lords raised in previous debates the concerning example of the delegated power for the Secretary of State to decide what and when a season is. I am glad we have had opportunity to discuss that on its own. This delegated power seems to be egregious. I am not quite clear why the Secretary of State should have a say on what constitutes a football season. I am not even sure why this delegated power is necessary—apart from granting the Secretary of State more powers over the game, there does not seem to be any particular advantage to her in granting herself this rather curious power. I would be interested to hear the Minister’s response. I wonder whether UEFA has a view on this measure. Would it not regard the Secretary of State being able to intervene in the definition of a season as political interference? If the Government have had discussions with UEFA on this point, I would be grateful to know.
I do not think the noble Lord, Lord Mann, actually got round to speaking to his Amendment 153 in this group, which relates to modern slavery—such are the pitfalls of a miscellany—but I wanted to highlight that one and congratulate him on bringing it forward. I am sure all noble Lords would agree that everyone has a duty to prevent this abhorrent crime. I was very proud to work at the Home Office when my noble friend Lady May of Maidenhead brought through the Modern Slavery Act 2015, which has made large headway into cracking down on this abhorrent behaviour. Since then, both the Premier League and the English Football League have released an annual anti-slavery and human trafficking statement, as have all the participating clubs. As the Minister knows, I am wary of increasing the scope of the regulator, but I would be interested in hearing how she thinks this new regulatory regime will operate within the law that we already have to tackle modern slavery and what she thinks of the amendment from the noble Lord, Lord Mann.
I am grateful to the noble Lord, Lord Pannick, for his comments on football agents. Whether they are more or less popular than lawyers, I will leave to others to decide—and indeed whether the existing regulation that is brought about by UEFA and others he mentions is, in this case, sufficient and not a requirement for further regulation, as we see in some of the other behaviours in football. I leave all these, and the miscellaneous other issues that noble Lords have raised, to the Minister to respond to.
Baroness Twycross (Lab)
I thank noble Lords across the Committee for the thorough debate on this group. If the group is called misc or miscellaneous, that does not diminish the significance of the concerns raised.
I will take each amendment in turn. First, I thank my noble friend Lord Mann for his Amendment 129. While it is right that the regulator should have all relevant details of the club’s finances when assessing it for an operating licence, we do not believe this detail is required to be provided in the Bill. The personnel statement should detail any key individuals working specifically at the club in question and should not include external individuals. However, any relevant financial arrangements can be included within the strategic business plan, or the financial plan, if the regulator deems this necessary.
My noble friend Lord Mann and the noble Lords, Lord Goddard of Stockport and Lord Evans of Rainow, raised concerns about agents and their fees. A different perspective—it is always helpful to get a rounded perspective—was raised by the noble Lord, Lord Pannick. In response to the broader point regarding agents, as was noted, FIFA has recognised the need for the better international regulation of agents and has proposed reforms. FIFA’s member associations, such as the FA, will retain the ability to introduce stricter requirements on agents than those stipulated in FIFA’s regulations. The DCMS will work closely with the FA to ensure that any national regulations for agents are fit for purpose. The Government are working with the FA and FIFA to track the implementation of these regulatory reforms, which are due to begin next year.
Amendments 150 and 164, in the names of my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton respectively, concern assets of community value. Home grounds are often the most important assets that a club owns. That is why the Bill has prioritised key protections to prevent them being sold, used as collateral or relocated without the necessary considerations. “Asset of community value” status is another mechanism that a number of clubs and supporters’ groups have obtained for their home grounds.
Lord Bassam of Brighton (Lab)
My Lords, if I may ask the Minister to give way very briefly, I raised the issue of the abolition of FA Cup replays in the context of consultation. Had that been in the future, would there have been an obligation on the FA to consult which the regulator could have enforced? The shape of that competition is very germane and important to football fans across England and Wales, and it seems to me that it is a significant issue that ought at least to be part of the regulator’s consideration.
Baroness Twycross (Lab)
My noble friend raises an interesting point. The issue of the FA Cup replays would rightly be outside the scope of this regulator. The sporting calendar and the rules of specific competitions are matters for the football authorities to manage in consultation with the appropriate stakeholders. I am not sure whether that reassures my noble friend, but we can maybe have a longer discussion about it at another point.
On Amendment 242A from the noble Lord, Lord Moynihan—apologies if I am going over paragraphs that I have already covered—the intention behind this amendment is to make sure that clubs are not overburdened with requirements to notify the regulator of every event that ever happens. We do not want this either, nor is it in the regulator’s interest to receive a flood of unnecessary information. As the clause sets out, the notification requirement relates to material changes in circumstances. It will be up to the regulator to set out what it considers to be material in guidance, which we expect it will produce on this. The regulator will already have burdens in mind when setting its guidance and enforcing this duty on clubs, given public law principles and its regulatory principles. We want the regulator to receive the information and updates it needs to regulate effectively. By raising the bar for when clubs are required to notify the regulator of changes, the proposed amendment risks doing just that.
Amendment 248, from my noble friend Lord Mann, would introduce a new requirement for regulated clubs to register with the regulator all player contracts, transfer fees and other fees annually for the previous 12 months. I reassure my noble friend that, where this information is relevant for the regulator to understand a club’s finances, it can already obtain it. All clubs will be required to submit financial plans which detail, among other things, their revenues and expenses. These plans should capture details about player contracts and transactions where this information is relevant to the regulator understanding a club’s finances. Furthermore, the regulator has extensive information-gathering powers. Should it need greater oversight of the detail set out in this amendment, the regulator can already request this information, and it would not have to wait 12 months to get it. Therefore, I am confident that the Bill already delivers the intent of the amendment.
I am also grateful to the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Moynihan, for Amendments 248A and 258A respectively, which focus on ticket prices. I understand that the noble Baroness intends to address the recent rise in clubs removing concession pricing on tickets and other such changes that have left some fans priced out of match attendance, and she highlighted concerns raised by fans from Reading. Fans are justifiably concerned, and I am exceptionally sympathetic to that. I am equally grateful for the attention by the noble Lord, Lord Moynihan, to ticketing and the issue of resale. These are huge issues that matter to fans, which is exactly why the Government have made it explicit that clubs must consult their fans on ticket pricing as part of their fan engagement. This also includes engagement on other operational issues, which is intended to capture many of the issues the noble Lord has made in his amendment. It is also important to note that any unauthorised resale of tickets for designated football matches is already addressed in the Criminal Justice and Public Order Act 1994. Many clubs take this exceptionally seriously and work with police and relevant authorities on it. However, the regulator should not be seen as a vehicle to fix all of football’s woes, especially those that are well within the gifts of clubs, leagues and the FA to address. On the noble Baroness’s amendment in particular, it would also not be appropriate for the Government to dictate prices or concession categories, and there is limited precedent for such an interventionist approach on commercial decisions.
Lord Moynihan (Con)
Before the Minister leaves that amendment, could she very kindly advise the Committee whether the Government intend to meet their expected deadline of a consultation exercise on the abuse of the secondary ticketing market by the end of this year?
Baroness Twycross (Lab)
If I may, I will clarify that in writing after this session to ensure I give the right response. I am not trying to avoid it; I will ensure I give the Committee a response.
Amendment 332 is from the noble Lord, Lord Markham, and the noble Lord, Lord Parkinson of Whitley Bay, also spoke to it. I appreciate that noble Lords may not welcome the use of delegated powers to amend the definition of “football season” in the Bill. However, to future-proof the Bill against any changes to the footballing calendar, we feel that the Secretary of State needs this power.
It is unlikely, but possible, that a specified competition might be organised in a unique way in the future, for which the current definition may not be suitable. For example, I am sure that noble Lords remember the impact of the 2022 World Cup on the domestic calendar. It is not beyond the realms of possibility that similar changes may occur in the future that impact the efficacy of this definition.
Lord Moynihan (Con)
I am now trying to be helpful, especially in the presence of the noble Lord, Lord Pannick, who will be able to opine on this suggestion. The reason why the Secretary of State has this power, as set out on page 46 of the memorandum to the Delegated Powers and Regulatory Reform Committee, is that a specific competition may be played over two calendar years. That is the current definition. If it were not to be played over two calendar years, we would not be able to proceed with the definition of “football season” set out in the Bill.
We have been looking for simplicity here. Instead of Clause 92(1) defining a “football season” as
“beginning with the day in a particular year on which the first match of any specified competition is played, and … ending with the day in the following year on which the final match of any specified competition is played”,
a simpler way would simply be to delete “in a particular year” and “in the following year”. Then we would all understand that we begin on the day on which the first match is played and end on the day on which the final match is played. We thus would not need secondary legislation through a draft affirmative resolution for the Secretary of State to come back to both Houses of Parliament, as this simple amendment could clarify it all and remove the Secretary of State from this onerous task.
Baroness Twycross (Lab)
I am not sure that the Secretary of State would find it onerous, because it is not intended to be used very often. However, the noble Lord makes an interesting point and I appreciate that he made it in the spirit of being helpful.
This is not a power for the Secretary of State to dictate to the industry what a season is; it is the opposite. The power as currently defined in the Bill will ensure that the definition can flex to changes in the industry. It will also be subject to the affirmative parliamentary procedure, so I hope noble Lords will rest assured that the House will be able to scrutinise any changes. I am happy to continue to discuss that further with noble Lords after Committee.
Lord Parkinson of Whitley Bay (Con)
I think it would be helpful if the Minister took this away, discussed it and maybe checked whether a solution like the helpful one my noble friend Lord Moynihan suggested might be possible. That would remove one of the delegated powers that the Delegated Powers Committee has raised concerns about.
I was struck by the answer the Minister gave to the intervention from the noble Lord, Lord Bassam, reassuring him about various matters of gameplay that are not within the scope of this regulator. The timing of the season seems to sit closer to things that she reassured him are not the job of the new independent football regulator to look at than to delegated powers for the Secretary of State. I hope she will take this away and continue discussions ahead of Report, because that feels like a very straightforward and sensible suggestion.
Baroness Twycross (Lab)
I was getting to the point where I was offering to take it away, so I think we are in violent danger of agreeing. On the question of the House being able to scrutinise any changes, I think we will return to this issue later, before Report.
Amendment 259 is from my noble friend Lady Taylor of Bolton. I understand that concerns have been raised about the ways in which rules are made in the industry today, including in recent legal cases. However, the Government’s view is that the amendment as drafted is not appropriate. The scenarios listed in Clause 55(6) could well be time sensitive and urgent. They may require immediate action from both competition organisers and the regulator. It would not be right to burden the competition organiser with a requirement to consult every member club for the purpose of informing the regulator of changes to the regime on an issue that may not affect them all. We would, of course, expect competition organisers to be carrying out appropriate consultation on their own rules. However, we are wary of the regulator mandating and prescribing how the leagues develop their rules.
I will finish on the two government amendments, Amendments 320 and 330. They both correct erroneous cross-references and make no change to the content of the Bill.
For the reasons I have set out, I hope that the noble Lord will withdraw his amendment.
Lord Mann (Lab)
My Lords, I am very reassured by the Minister’s clear words about the powers of and information from agents. Despite the valiant efforts of the noble Lord, Lord Pannick, we may be on the same side here, because I am in defence of British agents. With the complexities of football, there is nothing to stop anybody getting a legal cut from a transfer fee. The more transparency that is thrown on that, the more money is kept in the game.
The irony is that probably the main source of my information is agents. A second source is players and a third is owners and investors. The power of the agencies is often greater than that of the clubs themselves. That is the direction of travel. Therefore, it will be beholden on the regulator to ensure that at least there is maximum transparency. If a club wishes to give £1 million to another club in, say, Sicily for a player no one has ever heard of and who has played for two or three minutes, that is obviously a good business decision. The more out in the open that is, the healthier future the game has.
After that genuinely helpful reassurance from the Minister on my amendments, I seek the leave of the Committee to withdraw Amendment 129.
Lord Markham
Lord Markham (Con)
My Lords, I hope this will be a nice, quick and simple group ahead of dinner break business. Clause 17 refers to awarding or refusing a provisional licence. I think we all agree that, if a provisional licence were not agreed, it would have serious consequences for a club, which would not be able to carry on playing or start a season, for example. That would have serious consequences on the fans, as well. All this amendment seeks is to give clubs sufficient time to respond. Generally, in serious situations, 14 days is not enough time to respond fully, so the suggestion is to give clubs a month in these circumstances. I beg to move.
Baroness Twycross (Lab)
I thank the noble Lords, Lord Markham and Lord Parkinson of Whitley Bay, for their amendments. Apart from Amendment 148, which I will turn to shortly, they all seek to extend to a month the minimum period for clubs, individuals and competition organisers to make representations to the regulator on a number of issues—far longer than the 14 days that the Bill sets out.
The 14 days set out in the Bill for representations is the minimum to ensure that the individual concerned has a fair amount of time to prepare and present any representations to the regulator, though it is not an absolute. The regulator may choose to specify a longer period if it thinks it is appropriate. However, the 14-day minimum also means the regulator can respond quickly to urgent issues without an extended delay if necessary. We do not think it is appropriate to introduce unnecessary delays into the regulator’s regime that would slow down decision-making and leave clubs in an extended period of uncertainty. A 14-day period for representations is not uncommon among other regulators such as the FCA and CMA.
Turning to Amendment 148 specifically, I understand that the intention of the noble Lord, Lord Markham, is to ensure that, if the regulator is looking to revoke a club’s provisional licence, the club will have an opportunity to make representations. I reassure the noble Lord that this is already captured by Clause 18(4), which says that, if the regulator considers that a club has not met the full licence test, it needs to give the club notice. This must include
“inviting the club to make representations about the proposed action”,
be that to extend the provisional licence period or to revoke the provisional licence. To be clear, the regulator would look to revoke a provisional licence only if the club had persistently and without excuse failed to take reasonable steps to meet the requirements for a full licence. This is a high bar. Therefore, the club will have had sufficient opportunities to take remedial action even before the opportunity to make representations under Clause 18(4). The club will also be able to appeal a decision to revoke a provisional licence if it believes the regulator has acted unfairly. This is yet another way in which the regulator can be held to account and decisions can be scrutinised.
I will close with the question that Clause 18 stand part of the Bill. I understand that the rationale of the noble Lord, Lord Parkinson, in tabling the clause stand part notice is the same as that which we already discussed in relation to the earlier group on licensing. I am happy to provide further detail on Clause 18 in writing if the noble Lord wishes it, but, as I set out earlier, we do not believe there is a credible risk that clubs will refuse en masse to participate in the regime. Clubs at all levels of the game have welcomed this regime.
Lord Markham (Con)
I thank the Minister for her response. The main thing is not only having a sensible conversation but making sure that the regulator is aware that, where there are circumstances in which more than 14 days are required, it demonstrates that flexibility. I beg leave to withdraw the amendment.
Lord Bassam of Brighton
(d) the home ground threshold requirement (see paragraph 6).”Member's explanatory statement
This amendment makes it a threshold requirement (which a club must comply with to obtain a full licence) to meet certain requirements (as inserted by amendment 147) relating to the club’s home ground.
Lord Bassam of Brighton (Lab)
My Lords, I hope I can deal with this group of amendments fairly quickly. It is again a disparate group, but the main theme is fan consultation and the requirements on a club. The amendments seek to alter the fan engagement threshold requirement by requiring a club to have structures and processes for effective engagement with their fans.
It is vital that there are proper requirements to ensure that a club applying for a licence, for instance, has a suitable home ground for a minimum period of 20 years. This would help prevent owners using much-adored home grounds as bargaining chips and collateral to strengthen their financial muscle against the wishes of fans. The clauses that we seek to insert would incentivise clubs to protect their home grounds as part of their heritage and their history.
Amendment 142 concerns ticket prices. This is important because we are in a situation where clubs pretty much have a free hand in raising ticket prices. Let us take the recent example of Manchester United, which has, in effect, doubled the price of some tickets and removed discretionary or reduced ticket prices for younger supporters—my noble friend Lord Shamash could say more about that than me. The amendment would insert ticketing prices as a relevant matter for consideration in the process of regulation.
That is the spirit and intent of the amendments. I am looking for some reassurance from the Minister that fans will be properly engaged in clubs’ consideration of these issues, that there will be proper processes and ways of ensuring that their voices are heard and that issues such as ticket pricing in particular, and playing in prohibited competitions and so on, will be something the IFR can look at, comment on and, in some situations, determine.
Baroness Brady (Con)
My Lords, I rise to speak in response to these important amendments, all of which seek to strengthen the Bill’s provisions for consulting fans. We should pay tribute to noble Lords who have long championed the role of supporters in football, particularly those who have been involved in supporter trusts and similar bodies for many years. Their passion and their advocacy are no doubt one of the reasons that fan voices are becoming even more central to the governance of our national game.
I support the intent behind these amendments. Fans are the lifeblood of football. They invest not just their money and time but their hearts and identities into their clubs. Ensuring that their voices are properly heard, and heard with respect, is not just a moral imperative but essential for the long-term sustainability and integrity of football. The Premier League clubs recognise this too. In recent years, they have made significant progress in embedding fan engagement into their governance structures. Through its fan engagement standard—the first of any league to introduce such a standard—clubs are held to account for how they involve their supporters in decisions that matter to them. Fan advisory boards are now mandatory at every Premier League club and provide supporters with direct access to senior executives, enabling meaningful input on issues such as ticketing, matchday operations, club identity and community programmes. These initiatives represent a significant cultural shift. They create a platform for genuine dialogue between clubs and their supporters, ensuring that fans’ perspectives are considered at the highest levels of decision-making.
While I support the principles underpinning many of these amendments, I also feel it is important to raise a note of caution. Specifically, I want to raise the risks of the IFR being overly prescriptive when it comes to fan engagement and consultation. Clubs are not one-size-fits-all entities; each has its own unique character, fanbase and operating environment. For example, the dynamics of a global club with millions of international fans will differ significantly from those of smaller community clubs, many of whose supporters live within a few miles of the ground. Let us take, for instance, the idea proposed in some amendments that clubs must prove that a majority of their fans support certain decisions. While the intent is admirable and builds on the FA’s and many clubs’ approach to heritage assets already, we must acknowledge the practical difficulties of legally mandating such approaches.
How does a club definitively determine what constitutes a majority? Should a global fanbase have the same weight as local season ticket holders? What happens when opinions are divided? Would the IFR reverse a decision if, down the track, it was found that the wrong methodology had been used? These are complex questions without any easy answers. We should be careful not to create a compliance culture that detracts from the spirit of good engagement. It is really good to make this aspirational on both sides. For fan engagement to work well, the club has to feel confident, be open and get out of its comfort zone; the fans must enter into the debate in a constructive and open-minded spirit too. The difficulty will come if the IFR is drawn into micromanaging fan consultation and adjudicating on individual decisions, therefore inadvertently feeding an adversarial approach between fans, groups and clubs.
Now that might sometimes be appropriate, but I strongly believe the IFR will often be best to focus on ensuring that principles are upheld, leaving the specifics to clubs and their supporters. I also want to make the point that many of these new structures and processes for engaging fans, such as the fan engagement standard and fan advisory boards, are still new; they need time to bed in.
There are some brilliant examples of good practice already; for example, clubs bringing fan advisory board members into their clubs and having them spend time with football, commercial and operational teams so that they can understand the realities of life inside the club. But it is too early to say what the best approaches or designs of these processes will be. We should encourage more thoughtful approaches that allow these structures to mature and evolve, with periodic reviews to assess their effectiveness. A rush to codify overly detailed requirements risks stifling this organic progress and creating unintended consequences.
Lord Shamash (Lab)
My Lords, I am a very happy Manchester United fan. The last few minutes of yesterday’s game were bliss; they reminded us of what happened in 1999 when we won the treble.
I rise to talk again in relation to supporters’ trusts. I have been pressing this; I pressed it in debate the last week and, indeed, at Second Reading. The supporters’ trusts should be there on the face of the Bill. As I mentioned last week, there are 149 supporters’ trusts in the pyramid. Nearly all of them are recognised by the FCA and they operate under the Co-operative and Community Benefit Societies Act.
I ask my noble friend the Minister: why reinvent the wheel? We have a structure that works; it works very well indeed. I would ask that my amendment, “including supporters’ trusts”, be accepted. We understand—we are not trying to be prescriptive—that there will be other fan groups and people who might like to become involved in communicating with the club, but, having supporters’ trusts that exist throughout the UK, it would be a very sensible and easy move to make. I hope this amendment will be accepted.
Lord Mann (Lab)
My Lords, there is nothing wrong with supporters’ trusts, but working-class fans have other models as well, historically and currently; that voice also needs to be heard. Supporters’ trusts are one model and should be empowered, but they are only one model for football.
I have eight amendments here more or less doing the same thing. There is an issue here, which the noble Baroness, Lady Brady, alluded to and spoke to, with the fan advisory boards. There is a fundamental choice here, and I would advise the Government to be careful with the politics of this. Some clubs are choosing the fans to go on their fan advisory board; it is not the fans choosing the representation but the clubs. That is one model, but it is many miles away from the Crouch review. It is the total opposite of what fans would hope to see. The fans in this country have not gone for the German model and demanded comparative boards, 50% et cetera, supervisory boards, and that kind of power in relation to the clubs.
I have helped to establish a range of Jewish supporters’ groups. These are Jewish supporters who want no more than to be meeting up with other Jewish supporters of their club—full stop. But they do hope as well to be able to give the occasional bit of advice, sometimes very productively and positively, to their club—if the club does not refuse, as one has, to recognise a large group of Jewish supporters who simply want to be themselves—and, if there are any issues, they want to be listened to. It might be about the provision of kosher food, or ticketing policy, or that there are a lot of fixtures on a Friday night and people are finding it difficult to be religiously observant and still be able to go. It might be to do with giving advice on issues relating to racism within the stadium. On issues like these, this is a group that should be listened to; it is not a group that should have the power to tell a club what to do.
But the idea that fan advisory boards should be chosen by the club is anathema to fans. Fans are perfectly capable of choosing their own representatives. Let us think about what will happen if this Bill goes forward and the regulator has powers, but clubs can still say to fans, “No, we will choose who the fan voices will be. We will pick persons 1, 2, 3, 4 and 5. They will be there under our criteria. You, the fans, will have no say”. What will happen is that conflict will emerge, and the Government will not come out of the conflict well. The perception will be that the Government had the chance to ensure this.
Let us think about a supporters’ trust, made up of people giving of their free time to organise. As a member, you elect whoever to be your representatives, and they are then your representative; it is not the club coming in and saying, “No, we will pick Lord Shamash because we love Lord Shamash. If he is elected, that is all well and good because he represents what we would like to see in Manchester United”. That would be an invidious position for anyone to be in. I hope the Minister can give some reassurance that the fan voice on those big issues—moving the ground, changing the colour, changing the name—will actually be a fan voice. If it is not, then government and Parliament will become unpopular at some stage.
Lord Jackson of Peterborough (Con)
My Lords, I want to respond very briefly to Amendment 224 in the name of the noble Lord, Lord Mann. He made a wonderful peroration, but I am not sure it bore much relation to the amendment that he has laid down. Of course, none of us wants clubs to hand-pick fans who will be nodding dogs— ersatz fans who will go along with the corporate line of the football club. We do not want that.
I am not sure if this is a probing amendment for Ministers to consider before we get to Report, but it is a lock. It locks in and fetters the discretion of football clubs to make decisions that might be existential for the future of that club; in other words, diversifying activities, and not just in terms of the freehold. Clause 46 specifically mentions—
Lord Mann (Lab)
I thank the noble Lord for giving way. If it was proposed that Peterborough was to be moved to King’s Lynn, or to Norwich, should not the Peterborough fans have the right of veto on moving their club out of their town?
Lord Jackson of Peterborough (Con)
Perish the thought. There are many Peterborough fans who do not live in the city of Peterborough but in the Fens; they may not be too displeased at going to King’s Lynn—not that I am in any sense proposing that. He alludes to the Posh. The Posh have been able to develop a number of commercial activities over the last few years. Darragh MacAnthony, the owner, started out in 2007 as a very rich man. Now he is just a rich man, because of his love for Peterborough United.
The point is that that club has been able to stay afloat financially because the board of the club, backed—disproportionately I would say—by the fan base, has supported the diversity of activities. The noble Lord’s amendment and Clause 46 as written would lock out the possibility of many clubs and boards making decisions to protect their long-term financial sustainability.
I respectfully say to the noble Lord, for whom, as he knows, I have huge respect—particularly for the great work he has done on kicking out anti-Semitism in football—that that is a different issue from regulated fans and setting up fan organisations. This amendment would be quite prescriptive for clubs, and it would not be in their long-term interests, particularly those teetering on the edge of financial instability and unsustainability. For that reason, I hope the Minister will consider these issues when she responds to the noble Lord’s amendment and others.
Lord Watson of Invergowrie (Lab)
My Lords, I will speak to my Amendment 138A on what consultation means. The wording—
“leave out ‘consults’ and insert ‘meets regularly with’”—
is taken from the Explanatory Notes. On page 44, paragraph 271, under the heading “fan consultation”, they say the following:
“This mandatory licence condition … requires clubs to regularly meet with a group which the IFR considers representative of the club’s fans, which could be a group elected by the club’s fans”.
Throughout these debates, many noble Lords have quoted the Fair Game document, which refers to fan engagement as a communication process, and to a range of formal and informal face-to-face processes being part of that. That is what I am trying to get across here. It is important that clubs meet regularly with the fans and do not just consult. To consult could mean anything. It is not exclusive—of course, it could take various forms—but they must meet regularly. I hope that ultimately, the Government will accept that. It remains to be seen, but I will return to this issue on Report because it is very important.
I will comment on some other issues that noble Lords have raised, particularly my noble friend Lord Mann, who I usually agree with. I did not really take to his dismissive comment in response to my noble friend Lord Shamash. My noble friend Lord Mann said that it is all very well having supporters’ trusts, but you need organisations with working-class members. I do not know much about the Manchester United Supporters Trust, but I am sure it has working-class members.
I am a member of two trusts and have been for some 20 years. One is in Scotland—my old club, Dundee United; I pay £15 per year for that. I am also a member of the AFC Wimbledon trust, called the Dons Trust. I pay the princely sum of £10 per year for that. For that reason, I think there are more than a few working-class fans. I think that my noble friend Lord Mann was suggesting that supporters’ trusts price some fans out. I do not know if that is the case, but I would not have thought so. By definition, you would think that would be rather pointless.
Lord Mann (Lab)
My noble friend has misinterpreted my comments. Supporters’ trusts—I have been heavily involved in one as well—have all sorts of members, but there are other kinds of organisations that have never had the objective that supporters’ trusts have. That is the point: there are different types of organisations. Some purely want to go and watch football and not take on the more significant interests and structures that supporters’ trusts have.
Lord Watson of Invergowrie (Lab)
I thank my noble friend, and I fully accept that point; I have misinterpreted what he said. He seemed to be suggesting that trusts were different from other supporters’ groups. There are a wide range of groups and that is exactly the way it should be.
I am afraid I cannot go along with my noble friend’s Amendments 139 and 140. I am not opposed to them per se, but he seems to be distinguishing between fans and elected representatives of club supporters’ groups. Surely, these are the same people: you cannot be an elected representative of a supporters’ group if you are not a fan.
Lord Addington (LD)
It is nice to have a little fan club.
My amendment may be making the ultimate pedant’s point, but the Bill says that a relevant thing that cannot be interfered with is the name of a team operated by a club. My amendment refers to the name of the club itself. Is my point covered by this? I do not know. If it is, tell me where and I will be terribly happy.
The main point is that we will be still talking about who a fan is this time next year unless the Government make a decision and come up with something solid. It affects how the regulator operates and who they exclude. The Government may well have to decide who they are going to offend, but please let us do it, because otherwise fan involvement will mean nothing.
Lord Maude of Horsham (Con)
I would like to make a short point, but it is an important one that has barely got a mention. Football clubs have a very strong interest in consulting their fans. The fans are their customers. The truth is that, if you look across the gamut of clubs all the way down the pyramid, the composition of those fan bases will be very different. Broadly speaking, the higher up the pyramid you go, the more dispersed the fan base will be. Famously, almost none of Manchester United’s fans actually live in Manchester.
Lord Maude of Horsham (Con)
I am sorry that we did not have a proper exchange, because I was looking forward to that.
The reality is that the revenue that local community clubs get is predominantly gate money—match day revenue. As you go up the pyramid, a greater proportion comes from commercial sponsorship and merchandise; and then, when you get to the Premier League, pretty much half or more is broadcasting revenue.
I am indebted to my noble friend Lady Brady for this. More than half of the Premier League’s revenue from broadcasting is international—that took me by surprise. The next-largest part is commercial—sponsorship, merchandise and so on—and the smallest part is the matchday revenue. The point is that all this comes from the good will of fans, either directly from their pockets or because of their engagement and commitment. Tottenham happens to have a very large fan base in South Korea because our captain is South Korean. Our biggest sponsor is an Asian insurance company. Why is it supporting Tottenham? It is because there is a huge fan base in Asia.
After all, as we know—although we are sometimes shy of saying this in these debates—the Premier League is the goose that lays the golden eggs that then cascade down through the pyramid, to a much greater extent than in any of the football pyramids in other European countries. Therefore, the way in which clubs consult will be very different—but the suggestion that they need a regulator to enforce upon them the duty to consult their fans is to ignore this really important point: it is in their interest to keep their fans, wherever they are, on board. If ever there were a vivid illustration of that, it is when the European super league proposal came up. It was killed not by politicians, a regulator, your Lordships’ House or the other place but by fans.
Lord Markham (Con)
I will speak briefly to my Amendments 238 and 241. I agree with noble friend Lord Maude that it is absolutely in the clubs’ best interests to make sure that they are consulting their fans on this. If we are going to put things down, though, I will speak to two essential points.
A football club shirt is more than just the colours; it is the design as well. Any football supporter would know that the blue and white hoops of QPR are quite different from the stripes of Brighton—fans could maybe be involved in that. I remember with some humour that one Brighton design was a bit like a Tesco bag and the fans used to wear an actual Tesco bag. That probably cost the club a lot of money in lost shirt sales. But, generally, the fans have a role in that and in the name of the club—my Amendment 241 is on this—which I think most people would agree is fundamental.
Lord Parkinson of Whitley Bay (Con)
I am glad that the Government Chief Whip has been here to see the lively debate on all sides of the Committee, including on his own Benches, on this group. He will have noted that only two of the 19 amendments come from the Opposition Benches. So I am very glad that he has been able to join us for this lively discussion as we head into dinner.
I will not elaborate on the points that my noble friend Lord Markham made on his two amendments, to which I added my name, other than to say that I wholeheartedly agree. Given that the Government are already looking at club colours, I am interested in why this is not extended to home shirt design, which my noble friend mentions in his Amendment 238.
On my noble friend’s Amendment 241, the name of a club is hugely important. It is not uncommon for clubs to change names. I gather that Bournemouth began life as Boscombe St John’s Lads’ Institute and Arsenal started as Dial Square, in the Dial Square workshop, and then became Royal Arsenal, I think because of a local pub called the Royal Oak, and Woolwich Arsenal—
Lord Parkinson of Whitley Bay (Con)
I think that is an informal one from fans of other north London clubs. But clearly the names of clubs do matter, and we would be interested in whether the Government agree with that.
Given the time, I will address the other amendments in this group as a whole. They attempt to require clubs to consult a whole host of different supporters’ organisations, community trusts and fan groups. I share the concerns raised by my noble friend Lord Jackson of Peterborough that, if clubs are required to consult numerous different groups—chosen through various methods and representing countless, and often competing, interests—it will be difficult for clubs to know to whom they are to listen. What opinions will they have to take on board and whose interests will win out? There is also a concern about whether this could lead to divisions forming among supporters’ groups of differing views, as they seek to influence the activities of a club in a manner that they would like.
I am concerned by what the noble Lord, Lord Mann, said about football clubs picking the people who sit on their fan groups. That sounds like having a House of Parliament entirely dominated by the Executive—but that is for another Bill. The concern about this one is the old adage that too many cooks spoil the broth; that is, if we tried to have too many people vying to influence the views of a club, it would be difficult to differentiate the differing sounds and, perversely, fans’ voices would be drowned out in that cacophony. So a simpler approach might be required for fan engagement.
Trying to have a better answer to the question of who fans are, as we have said previously, runs to the heart of all this. But I agree with what my noble friend Lord Maude said: clubs are well advised to take on board the views of fans. They listen to them because they are the lifeblood of the clubs, and they make their views known pretty volubly.
Baroness Twycross (Lab)
I thank noble Lords for their continued engagement on these important provisions of the Bill. I appreciate that I am one of the very few things standing between noble Lords and the dinner break, but I want to give a proper response and, I hope, the reassurance that my noble friend Lord Bassam of Brighton is looking for. We must not forget that, at the heart of all of this, it is the fans who matter the most. Football is nothing without them, and the fan engagement threshold requirement has been designed to reflect this. As the noble Baroness, Lady Brady, said, fans are the lifeblood of the game.
My noble friend Lord Bassam’s Amendment 138 seeks to make it explicit that clubs must have the appropriate structures in place to engage effectively with fans. I hope noble Lords can take comfort that this is already implicit in the Bill. The Bill already asks for all clubs, in order to meet their fan engagement threshold requirement, to have adequate and effective means to consult and take the views of fans into account. It would therefore not be possible for a club to meet this bar without also having the appropriate structures and processes for effective engagement with its fans.
On my noble friend Lord Watson of Invergowrie’s Amendment 138A, it is important to avoid fan engagement becoming a box-ticking exercise for clubs. The intent is to ensure that dialogue can be constructive for both parties. This is why the threshold requirement requires a club to consult fans on the relevant matters. Consultation goes beyond just a meeting, which might lead fans to have only a passive role at their clubs. Instead, we expect clubs to seek input from fans on issues, with that input directly feeding into the decision-making or a club’s understanding of an issue.
I do, however, reassure my noble friend that the expectations on clubs will be proportionate to club resources and the demographics of the fan base. I hope that other noble Lords, including the noble Baroness, Lady Brady, also feel reassured by that point. This will not be the same as the statutory consultation, and we expect that the regulator will provide more detail about what consultation should look like in practice. This will allow for a bespoke approach to be taken across clubs.
My noble friend Lord Watson raised points around making fan engagement more explicit. The intention of the regulatory principle is not to list every possible stakeholder the regulator should ever engage with during the course of regulation, however important that stakeholder might be. That could be a slippery slope to an enormous list that risks—
Lord Watson of Invergowrie (Lab)
I understand my noble friend’s point about every stakeholder, but can she name a stakeholder more important than the fans?
Baroness Twycross (Lab)
My noble friend is quite clear, as are we, that the fans are central—I made that point earlier. However, making an explicit list for every single type of consultation that the regulator should have could mean that an unintended consequence would be that we missed off important stakeholders. The intention of the principle within the legislation is to encode a participative approach into the regulator’s regime. We believe that the regulator will be more effective if those being regulated participate constructively; that is to say, they are brought in and are pulling in the same direction. It is already clear from the very purpose of the Bill and its origin that the regulator will be regulating in the interest of fans and communities. As part of this, it should of course engage with them and representative groups, as appropriate.
On Amendments 160 and 163, from my noble friend Lady Taylor of Bolton, I reassure her that, where there are concerns that a club is not meeting the fan engagement standards, the regulator is empowered to gather information and look further into the situation. As it is a licensing condition, a breach of these requirements will qualify as a relevant infringement; if deemed necessary, the regulator can take enforcement action. The regulator will have the ability to receive evidence from fans when considering whether a club is meeting its licence condition or any other concerns in the regulator’s remit, but it will not adjudicate all consultations.
Lord Bassam of Brighton (Lab)
My Lords, I think this has been one of the better debates on the football regulator. It is about one of its core purposes and, as the Minister has just said, it all flows from the fan-led review and putting fans at the heart of our football business.
I thank the noble Baroness, Lady Brady, for her contribution. I well understand the mix of commercial pressures and the way in which that can collide with what might be seen on the face of it as being fan interests. It is a difficult balance that one has to try to secure in this legislation. I think the legislation does that, but who or what is a fan or a supporter is a difficult question, and they may not be the same thing all the way through. The noble Baroness raised the question of who it is relevant to consult over some of the issues. I think we are heading in the right direction with further clarity. I hope that the regulator can try to work its way through some very difficult issues here.
I am very happy with the responses that the Minister has given, and I think other noble Lords will share that sentiment. I beg leave to withdraw my amendment.