House of Lords

Wednesday 18th December 2024 Lords Chamber

Wednesday 18 December 2024

15:00

Prayers—read by the Lord Bishop of Guildford.

Hammersmith Bridge

Wednesday 18th December 2024 Lords Chamber

Question

15:07

Asked by

[Lord Harries of Pentregarth]

To ask His Majesty’s Government what action they are taking to re-open Hammersmith Bridge to motor traffic.

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

My Lords, my department is working with the London Borough of Hammersmith and Fulham and Transport for London on the closure of Hammersmith Bridge to traffic. The Government have provided the borough with almost £13 million of funding to date, and my honourable friend the Minister for Local Transport will reconvene the Hammersmith Bridge taskforce in the new year.

[Lord Harries of Pentregarth (CB)]

I thank the Minister. It is good news that the taskforce is meeting on 30 January, but of course it does raise the question of why it has not met for more than three years. Hammersmith Bridge is a major entry point into London, and hundreds of thousands of commuters have been very badly inconvenienced for more than five years. During that time, Notre Dame was gutted by fire and rebuilt.

The other bit of good news is that this is a project to be considered in the spring spending review. Will the Minister use all his extensive experience and efforts to ensure that this project is adopted? At the moment, it is a stain on our national reputation as a country with the capacity and the will to get things done.

[Lord Hendy of Richmond Hill (Lab)]

The noble and right reverend Lord would not expect me to account for the time elapsed since the taskforce last met and July. It is now going to meet, and the good news is that the stabilisation work, which has been beset by delays and cost increases due to skill scarcity and inflation, should be finished by April 2025. The bridge is an iconic structure—perhaps not as iconic as Notre Dame, but it is certainly useful locally. It was built in 1887 from wrought iron; it has been bombed twice by the IRA, has not been properly maintained for decades, and nearly fell down five years ago.

Some noble Lords know that I can drive a public service vehicle. I must be the only person here who has driven one over Hammersmith Bridge in traffic, and I can tell noble Lords that the forward motion of the bus was accompanied by the lateral motion of the bridge —and the vertical motion of the bridge. It is the only time driving a bus I have nearly felt seasick.

[Baroness Blower (Lab)]

My Lords, as a resident of Hammersmith and Fulham I would like to say that, although there has been some inconvenience, there has also been much better air quality. I am interested in what the Minister has to say about the possibility of an electric shuttle service running across the bridge, to enable those who are unable to walk across it to cross with relative ease. That would be much better for the air quality for those of us in Barnes and Hammersmith and Fulham, and could be done reasonably quickly.

[Lord Hendy of Richmond Hill (Lab)]

It is a matter for the London Borough of Hammersmith and Fulham, and indeed for the neighbouring borough on the south side, of which I declare that I am a resident, to decide what they want to do with the bridge. The stabilisation work has stopped it from literally collapsing, but the capacity of the bridge to take traffic as well as pedestrians and cyclists will cost a lot more money, and the boroughs will have to work with Transport for London to decide how the bridge is going to be used. The other really important feature of the bridge is that at least once a year it is absolutely full of pedestrians. Therefore, a job that does not allow it to bear the weight of pedestrians for the boat race and other things will not be very satisfactory. However, it is for the boroughs to decide how to deal with that.

[Baroness Pidgeon (LD)]

My Lords, this is a sorry saga. The impact of the closure is significant for south-west London, particularly the London Borough of Richmond upon Thames. When will a full economic and environmental evaluation be carried out on the effect of the bridge’s closure for this whole area?

[Lord Hendy of Richmond Hill (Lab)]

As I say, it is primarily for the London Borough of Hammersmith and Fulham, which has the good fortune—or bad luck—to own this structure, and for the London Borough of Richmond upon Thames on the south side to decide between them what they want to do with this bridge in the future, bearing in mind the engineering evaluation about what the structure is capable of doing. It was designed and built for horse-drawn traffic; it has never been particularly strong. Therefore, the boroughs need to work with Transport for London to work out to what use it might be put. I agree that there needs to be an economic evaluation of the effects of whatever happens permanently, but first they need to work out what the bridge is capable of doing after it has been stabilised.

[Baroness Vere of Norbiton (Con)]

My Lords, I was the chair of the Hammersmith Bridge taskforce, alongside the current Transport Secretary, who was also a member. I said that the taskforce would reconvene whenever a project came forward from Hammersmith and Fulham. We have heard from the noble Baroness, Lady Blower, who says that there is some doubt as to whether it really should be reopened from the Hammersmith and Fulham side. I have sensed all along that this is why Hammersmith and Fulham council has been dragging its feet. The Liberal Democrats also cannot claim glory in this. because they are remarkably silent from the south of the river. Can the Minister tell the House whether full, complete and costed proposals have been forthcoming from Hammersmith and Fulham council?

[Lord Hendy of Richmond Hill (Lab)]

We know what the range of costs for a future renovation of the bridge should be. They are very significant—at least a quarter of a billion pounds. I cannot currently say how detailed that is, but I know that it is the order of magnitude of what would need to be done to move further than just stabilisation, which will be completed, as I say. It must have been quite a burden to both chair and be in those meetings, and I am interested to hear about that. I hope that my honourable friend the Minister for Local Transport, when he reconvenes the taskforce, quickly brings the meeting to a clear understanding of what the bridge is to be used for in the future, and therefore what needs to be done to it in the long term.

[Lord Moylan (Con)]

My Lords, the Greater London Authority Act explicitly transferred the responsibility previously held by the Government Office for London to fund capital transport projects by the boroughs to the Mayor of London. It is undoubtedly the Mayor of London’s responsibility to provide funding for this. Does the Minister not agree that what we are seeing here is a failure by two Labour-run authorities that, at the expense of members of the public, are engaged in a competition to show who can be more anti-motorist?

[Lord Hendy of Richmond Hill (Lab)]

I will say two things to the noble Lord. First, the bridge has got into its current state over decades, which have seen various changes of control by the owners, the London Borough of Hammersmith and Fulham. Secondly, he will know better than most that the level of settlement afforded to the Mayor of London for transport purposes by the previous Government was frankly derisory, and therefore the current Mayor of London has not been able to allocate money to all the things he would like to. We need to establish what the use of the bridge will be in future, which is a matter for the two boroughs. In other circumstances the noble Lord would defend fiercely the right of local authorities in London to decide what to do with their local roads. That has to be established. From that, it can be worked out what to do with the bridge, how much it will cost, how long it will take and, incidentally, who should pay for it.

[Lord Aberdare (CB)]

My Lords, I declare my interest as a Barnes resident. Hammersmith Bridge is a key Thames crossing point for motor traffic in London. Its closure for over five years has greatly increased traffic congestion, delays and pollution around neighbouring bridges in Kew, Chiswick and Putney. Even the idea of a community pedicab service across the bridge has apparently been shelved—although much good it would do for motorists. What reassurance can the Minister give that he will ensure there is at least a plan in place for reopening the bridge to motor traffic before the actual reopening of the far-larger Baltimore harbour bridge, scheduled for 2028? How will he clarify who is responsible for such a plan and how it will be funded?

[Lord Hendy of Richmond Hill (Lab)]

I am very clear that the bridge is owned by the London Borough of Hammersmith and Fulham. It is that borough’s job as the highway authority for the local road network, together with Richmond upon Thames on the other side, to decide how this bridge should be used. The mayor has responsibility for transport in London; he is part of this discussion, and the department is too, but those boroughs have to decide. They have to look at both how long it has taken and how much it has cost to stabilise the bridge, and decide what that structure is capable of doing in the future. It has never been able to take heavy vehicles of any description and, as I said, latterly it was pretty unsuitable for vehicles of seven and three-quarter tonnes. The boroughs need to decide on that, because the cost of doing it and the time it will take to finish depends on it. It is their collective job to do it, and that is why the taskforce will be reconvened.

Housing: Permitted Development Rights

Wednesday 18th December 2024 Lords Chamber

Question

15:19

Asked by

[Lord Crisp]

To ask His Majesty’s Government what is their policy on creating additional housing units through permitted development rights.

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

I thank the noble Lord, Lord Crisp, for his Question and for all the work he has done on healthy homes. Under nationally set permitted development rights, a wide range of commercial and other buildings are able to change use without the need for a planning application. The Government acknowledge the concerns that exist about the quality of residential units created through permitted development rights, particularly office-to-residential conversions. We will continue to keep permitted development rights under review, and we are grateful to the National Housing Federation and the TCPA for highlighting some of the issues arising from poor-quality PD schemes.

[Lord Crisp (CB)]

I thank the noble Baroness for that response and for the fact that this is being kept under review. I was also pleased to hear from a government spokesman last week that there is to be

“no trade-off between supply and quality”

in respect of housing. However, as the noble Baroness said, PDR has a poor record. Some very good conversions are made but a large number suffer from safety and other problems. I want to ask two questions. How will the noble Baroness ensure that that poor track record is not just continued into the future? Also, in reviewing it, will she meet some of the people who have already done so and come to conclusions about it to ensure that there is indeed no trade-off between housing supply and quality?

[Baroness Taylor of Stevenage (Lab)]

My Lords, the Government’s aim in the delivery of the 1.5 million homes is to deliver good quality, well-designed, sustainable homes and places that everyone can be proud of. I have already met both the TCPA and the National Housing Federation, which have been campaigning on this. I am very aware of some of the poor practice that has occurred, and we will continue to advocate for the principles of good design, as set out in the National Design Guide and the National Model Design Code. As I say, we keep permitted development under review.

[Lord Young of Cookham (Con)]

My Lords, it must make sense to use redundant buildings to provide good-quality accommodation for those in need, but is there not a loophole in the current fire safety regulations? These apply when a commercial building is converted into flats but not when industrial buildings or storage units are. Should we not use the Renters’ Rights Bill to close this loophole?

[Baroness Taylor of Stevenage (Lab)]

My Lords, the Planning Gateway One fire safety requirements apply to applications for planning permission for relevant buildings. To apply some of the principles to permitted development, there was a prior approval on fire safety impacts in 2021 that applies to class MA: commercial, business and services to residential. It is not, however, as detailed as the requirements for a planning application. For example, it does not require the completion of a fire safety form. We need to continue to look at these issues and to make sure that permitted development is completely safe from fire.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I congratulate the Government and my noble friend the Minister on the ambitious housing targets to meet housing need. What assessment has been made of mixed funding models using private, public, and banking and hedge fund sources to construct those houses in order to provide for the great housing need throughout the country?

[Baroness Taylor of Stevenage (Lab)]

My noble friend makes an excellent point about funding for affordable housing. Even in a very tight budget round, the Government have allocated an additional £500 million towards affordable housing, which brings the total up to around £3 billion altogether. But we need to consider all sources of funding. I spoke to a housing investment forum in the City of London just a few weeks ago, and there is great interest in this area; and of course, we still need to look at pension funds further for local investment to drive the housing market.

[Baroness Thornhill (LD)]

My Lords, surely it is the Government’s mission to create decent homes and not the slums of the future, and I am at a loss to know why the Government are procrastinating on this. Surely it is time to insist on full planning permission for the larger schemes, or at least to revert to the regulations that were in place before 2012.

[Baroness Taylor of Stevenage (Lab)]

I take the noble Baroness’s point; we need to keep this continually under review. Some of the permitted development homes have been of fair quality and have provided homes for people. But we need to continue to press that all new homes delivered through permitted development rights must provide adequate light, meet nationally described space standards and be decent, fit and safe for the people who live in them. We will continue to do that. Where there are bigger schemes, equally, they must meet those requirements.

[Lord Ravensdale (CB)]

My Lords, I declare my interest as listed in the register. Running through the creation of additional housing are upcoming policy decisions on regulating embodied carbon. Can the Minister update the House on the research under way in her department, when it will report and when the associated consultation will be published?

[Baroness Taylor of Stevenage (Lab)]

I am grateful to the noble Lord, and for his time in meeting with me to discuss embodied carbon. We have been talking to the construction industry and to developers across the board, and there are some complex issues involved. I know the noble Lord is doing work with stakeholders as well, and I look forward to working with him further in the new year. I believe we have a meeting scheduled for early in 2025 to discuss this further.

[Lord Jamieson (Con)]

My Lords, I declare my interest as a councillor in central Bedfordshire. To deliver the housing this country needs, we need to ensure that planning permissions and allocations are being built out in a timely manner. Yesterday, I asked the Minister whether the Government will provide local councils with adequate powers to ensure that allocated and permissioned sites actually get built, and she responded that there is a whole section on sanctions in the report. Can the Minister tell me which section that is in the NPPF, as I could find in it no meaningful additional tools being provided to councils to ensure build-out?

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord and apologise for misleading him yesterday: it is not in the NPPF but in the accompanying notes. There are powers that local government can use, including completion orders and so on, to encourage developers to build out when necessary. I will provide him with a detailed written response about all the powers that are available to local government to do that.

[The Lord Bishop of St Albans]

My Lords, can the Minister tell us what steps her department is taking to ensure that enough of the homes being built under the PDR are affordable for local people in rural areas?

[Baroness Taylor of Stevenage (Lab)]

I thank the right reverend Prelate for that question. PDR tends to apply where there are brownfield sites to be developed because they are conversions, usually, from existing buildings. There has been a change to introduce that principle for agricultural buildings as well. I will try to get back to him with a specific answer on whether the department knows how much take-up there has been of that provision. We have made provision in the new national planning policy framework for ensuring that planning policies and decisions are responsive to local circumstances in rural areas and support housing developments that reflect local needs. That is a more general requirement. I will get back to him on whether the agricultural permitted development has had any traction.

[Lord Taylor of Goss Moor (LD)]

My Lords, I refer the Minister to the issue of rural businesses—shops, in many villages, that are a vital part of the vibrancy of those communities and services—which are being converted through PDR without permission and against the will of local communities. Shops are not protected beyond one within a kilometre.

[Baroness Taylor of Stevenage (Lab)]

It is very important that we focus on the facilities in local areas, but this is a commercial market and where shops are not able to achieve the market they need, permitted development regulations will occur. In reviewing the PDRs, that is one of the issues we need to focus on—whether any further protections are necessary, particularly for assets such as rural assets.

[Lord Blunkett (Lab)]

Referring back to the original Question asked by the noble Lord, Lord Crisp, can my noble friend confirm that the code will include noise insulation as well as other measures that are crucial to good health, on the grounds that noise nuisance can be deeply detrimental to the well-being of individuals and lead to much anti-social behaviour?

[Baroness Taylor of Stevenage (Lab)]

There are a wide range of issues that we need to think about in terms of permitted development, and noise nuisance is one of them. All new homes are required to meet current building regulations, including on fire safety, irrespective of the route to planning permission. However, some building regulations differ or do not apply where homes are delivered through material change of use rather than new build. That applies whether homes are delivered through permitted development or following an application for planning permission. All these issues—noise, fire safety and so on—need to be considered in the light of permitted development regulations.

Independent Office for Police Conduct

Wednesday 18th December 2024 Lords Chamber

Question

15:30

Asked by

[Lord Lexden]

To ask His Majesty’s Government what assessment they have made of the work of the Independent Office for Police Conduct.

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

An independent watchdog is vital in ensuring the effective oversight of police complaints and investigating the most serious and sensitive cases involving the police. The Independent Office for Police Conduct is accountable to the Home Office and Parliament for the delivery of its statutory and non-statutory duties. It was independently reviewed in 2023-24 as part of the public bodies review programme. The Government are currently considering the recommendations.

[Lord Lexden (Con)]

My Lords, why, after 18 months, is there no sign of the outcome of this organisation’s gross misconduct proceedings against Mr Steve Rodhouse? Inexplicably, he was made director-general of operations at the National Crime Agency after leading the disastrous Operation Midland, which inflicted immense distress on two distinguished Members of your Lordships’ House—Lord Bramall and Lord Brittan—and many others. Mr Rodhouse is the only officer to be called to account over this catastrophic police operation. As it goes about its leisurely work, does this organisation have any conception of the feelings of Lady Brittan and others who have suffered as a result of Mr Rodhouse’s misconduct? Incidentally, it has not stopped him recently receiving a £10,000 pay rise. Finally, does it come as any surprise that having found Mr Rodhouse guilty on a separate misconduct charge of jeopardising police operations against organised crime, the IOPC kept its decision secret until the Daily Mail revealed it?

[Lord Hanson of Flint (Lab)]

As ever, I try to be helpful to the noble Lord on these matters, but he will know that there is an ongoing IOPC investigation into the police officer he has mentioned. I am not able from this Dispatch Box to give advice or commentary on that investigation until such time as it is complete.

[Baroness Chakrabarti (Lab)]

My Lords, I hope that I speak for the whole House in paying tribute to the noble Lord, Lord Lexden, for his campaigning in this area. Year-on-year, we see Bill after Bill to give greater powers over the public to the police, but not so many Bills to deal with police discipline. What plans do His Majesty’s Government have to put that right soon?

[Lord Hanson of Flint (Lab)]

My noble friend will know that in the King’s Speech there was a proposal to establish greater accountability for the police, improve standards and review the work of the College of Policing. That will be brought before this House in due course and within this Session of Parliament.

[Lord Davies of Gower (Con)]

My Lords, can the Minister elaborate on what steps the Government are taking to ensure that the appointments system for senior roles within the Independent Office for Police Conduct is transparent, robust and free from any perception of bias, so as to maintain the much-needed public confidence in its impartiality?

[Lord Hanson of Flint (Lab)]

The Independent Office for Police Conduct is accountable to Ministers, as it was when the Opposition were in Government. There has been a recommendation from a review of the Cabinet Office’s public bodies review programme. That review was published in March 2024, when the noble Lord’s Government were in office. It looked at the whole question of the IOPC’s governance, accountability, efficiency and efficacy. There were 93 recommendations in that report, 73 of which have been accepted by the IOPC. The remaining recommendations were in his Government’s in-tray. They are now being reviewed and will be implemented shortly by this Government. Included in them is the method by which the IOPC is accountable to Ministers and therefore to this House and the House of Commons.

[Baroness Doocey (LD)]

My Lords—

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords—

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

We will hear from the Lib Dem Benches next.

[Baroness Doocey (LD)]

My Lords, over the last year, the IOPC has made a range of recommendations to the police about things such as strip-searching children and suspicionless stop and search. All the recommendations have been accepted by the police. Who is responsible for making sure that the recommendations that were accepted will be implemented? Will the Government publish the information so that we can all be sure that when recommendations are accepted, they are carried out in practice? As the Minister will know, this is not always the case. A lot of recommendations are accepted and then totally ignored.

[Lord Hanson of Flint (Lab)]

It is the responsibility of police chiefs, police and crime commissioners, and mayors in areas where the mayors are responsible, such as the Mayor of Greater Manchester, the Mayor of London and others, to implement recommendations made by the IOPC. I assure the noble Baroness that, ultimately, the buck stops here.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, can the Minister confirm that one of the principal complaints about the IOPC from the police service itself is the length of time that investigations take? Clearly, this is causing some concern.

[Lord Hanson of Flint (Lab)]

I am grateful to the noble Lord for his question. It is absolutely vital—this goes back to the point made by the noble Lord, Lord Lexden—that investigations are done speedily and on time, are publicly accountable, and that their recommendations are implemented. It is no secret to this House that the Government intend to produce a police White Paper in the new year that will cover a range of issues, including the standards mentioned by the noble Baroness, Lady Doocey. The recommendations made about the IOPC, and how the Government will respond to them, will be included in that.

[Baroness Blackwood of North Oxford (Con)]

My Lords, a situation has arisen in Devon and Cornwall where not one but two chief constables have been suspended on full pay, pending investigation. I understand that the police and crime commissioner has made an application for a special grant in order to cover the costs of full pay for three chief constables. As we have just heard, the IOPC can take some time in its investigations. What approach does the Minister intend to take in this and similar situations in the future?

[Lord Hanson of Flint (Lab)]

I am grateful to the noble Baroness for her question. I must be honest, I do not have that information in front of me but I will report back to the police Minister. A police grant was published yesterday and is open for consultation. I am not aware of the particular request from the police and crime commissioner but I will follow up with my colleague and write to the noble Baroness with the detail of whether and how it is being progressed. Self-evidently, having three salaries for a chief constable is not a good use of public money.

[Baroness Meacher (CB)]

My Lords, having worked at the Police Complaints Authority for a number of years, I was impressed evermore by the extraordinary behaviour of the police officers who showed incredible restraint in the face of endless rudeness and offensiveness on the part of various members of the public. I wonder if the Minister has had similar experience of the police.

[Lord Hanson of Flint (Lab)]

As a Minister, my dealings with the police on a day-to-day basis are varied. I have found the police to be professional, forward-looking and aware of the need for accountability because they are exercising strong powers on behalf of the public at large. The purpose of the IOPC, its accountability to Ministers and the framework that we as Ministers set, is about making sure the police retain the confidence of the public they serve and maintain their security. Without that security and confidence, the police cannot operate in an effective way in policing our communities. That is part of the reason why the forthcoming White Paper will look at how we can improve standards, the management of standards and the level of accountability.

[Lord Deben (Con)]

The whole House owes a great debt of gratitude to the noble Lord, Lord Lexden, for his constant concern about these very big issues. But the thing that really matters to ordinary people to keep confidence in the police is, for example, the police answering complaints. That does not happen with the Metropolitan Police. If you send a complaint by email there seems to be no means of reply. The police ought surely always to be seen to be obeying the law that others obey. Every day, along the road from here, a long line of police cars are parked on double yellow lines. I do not mind it being designated as a police place, but on yellow lines, where ordinary motorists cannot stop, people just say that it is the police, again, not doing as police should do, which is to obey the law that everyone else has to obey.

[Lord Hanson of Flint (Lab)]

One of the proposals that the Government are bringing forward, which I hope will help the noble Lord, is the investment in 13,000 community police officers. As part of that community and neighbourhood policing offer, there will be in each council ward a named police officer who is the local liaison point. I absolutely take the noble Lord’s point; the level of response when a complaint is made is important. As for the operational issue of parking in front of this place, I will take that away but, ultimately, it is about the security of this building. There is a range of issues there which I think the noble Lord needs to look at. But I understand his point, and I will reflect on that.

Pension Review: Phase 2

Wednesday 18th December 2024 Lords Chamber

Question

15:40

Asked by

[Lord Davies of Brixton]

To ask His Majesty’s Government whether they have paused phase 2 of their pension review, and if so, why.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, this Government are committed to enabling tomorrow’s pensioners to have security in retirement, which is why we announced the landmark pensions review days after coming into office in July. The first phase will boost investment and economic growth, with two consultations live since November, and we are committed to a second phase focused on retirement adequacy, of which we will provide further details in due course.

[Lord Davies of Brixton (Lab)]

I very much welcome my noble friend the Minister’s reply, but of course she will be aware of how this works. Last weekend there was a series of stories in the national press, from the FT to the Sun, suggesting that the second phase had been put on hold, presumably to provide some assurance to those who are concerned about the high costs of employment. The problem is that without an urgent definition of an adequate pension on a clear and evidence-based basis, much of the debate that we can have on pensions is facile and empty of content. You cannot know which way to go unless you know where you are going. Does the Minister agree?

[Baroness Sherlock (Lab)]

I think I can agree with the last statement firmly. I will try to avoid being facile and empty of content; I cannot make permanent promises, but I will do my best. I understand the point my noble friend is making, but I can perhaps offer him some reassurance. The pensions review is going to be conducted in two phases, and it matters that they are structured in the right way. The first phase, which was launched by the Chancellor in July, is aiming to boost investment, so it offers a win-win. It will boost investment for the country and provide better saver outcomes, alongside economic growth.

Phase 1 launched two significant consultations: one about DC schemes and the other about the Local Government Pension Scheme. It is right that we focus on delivering the first phase before moving on to phase 2. But the second phase, my noble friend will be glad to know, will focus on pensions adequacy and further measures to improve outcomes for pensioners. I take his point about the need to be clear about what adequacy means, and I will take that back. The scope of the second phase will be announced in due course, but I will take that comment back to my colleagues as that is being developed.

[Baroness McIntosh of Pickering (Con)]

My Lords, will the Minister confirm that the pensions review will cover the ombudsman’s recommendations for WASPI women, on which subject I declare an interest?

[Baroness Sherlock (Lab)]

I fully accept that the noble Baroness may not be alone in this place in that declaration of interest. The ombudsman’s review is something to which the Government have already made their response. It was published yesterday, and I repeated a Statement in the House that was made by my right honourable friend the Secretary of State.

As noble Lords will be aware, the Government looked very carefully at the evidence that was provided to and by the ombudsman, and we concluded that while we accept the specific case of maladministration by allowing a 28-month delay in sending out personalised letters to women born in the 1950s, the Government could not accept that that created the impact the ombudsman had described and therefore could not accept the recommendation on injustice and remedy. I am also very aware of the widespread concern among many women who had hoped to retire at 60 and found that they could not, which is a mixture of the decision back in 1995 to equalise the state pension age and the decision of the coalition Government in 2011 to accelerate those changes. That was not a subject of the ombudsman’s review, and nor is it the subject of the pensions review.

[Lord Palmer of Childs Hill (LD)]

My Lords, the Minister talks about the two stages of the pensions review, which is very important. Can she confirm that the modelling by the Government Actuary—and I stress that—shows that the measures in stage 1 of the pensions review will, at best, only slightly improve member outcomes? Those are his words, not mine. Can she give me some reassurance that stage 2 will be given the priority it deserves? Can we get a timescale for when we will get to stage 2? I know the Minister cares about pensioners, and this review is necessary.

[Baroness Sherlock (Lab)]

I thank the noble Lord. We share that; we both care about pensioners. This Government are absolutely committed to making sure that outcomes for pensioners from private pension savings are as good as they can be. Both phases matter. It matters absolutely that we get the pensions market working properly the first time around. The noble Lord will be aware that measures have been announced for the pensions Bill, but there are live consultations on a range of measures that can enhance both growth for the UK and outcomes for savers.

It really matters. We want to end up, as our proposal suggests, with fewer, but better and bigger, pension schemes. All the international evidence suggests that consolidation and scale produce better results for savers. That, in the end, is what will drive private pension incomes. If we can get the market working well, we can try to get people saving as much into it as they need to.

[Viscount Younger of Leckie (Con)]

My Lords, I congratulate the noble Baroness on her promotion. I understand that stage 2 of the review, if it does go ahead, focusing on pensions adequacy, might recommend that pensions contributions increase from 8% to 12%, meaning that employees would continue to contribute 3%, but with employers increasing their contributions from 5% to 9%, which is a very heavy burden, especially on hard-pressed small businesses. In addition, for employees opting out of auto-enrolment, which is their right, the recommendation might be that employers would still pay their side of the contribution. Why did the Chancellor not think holistically about all the costs that businesses have to bear in employing staff when she made the decision in her Budget to raise the national insurance contributions?

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Viscount for his kind words. I am very grateful; it is very gracious of him. He is asking me to comment on speculation about something that might be recommended in the phase 2 review, which has not started yet, so I hope he will bear with me. We think that getting this the right way around really matters. Phase 1 is about trying to get the market working as well as it should, both the DC side and the consultation on the Local Government Pension Scheme. If we can get the market functioning well and drive more scale and consolidation, looking at what they are doing in Canada and Australia, we can then have a better-functioning market and better returns. At that point in stage 2, we can look at matters of adequacy and at what money is going into it.

[Lord Sikka (Lab)]

My Lords, we live in a country where 50% of the population own less than 5% of wealth and the poorest 10% own just 0.02%. What plans do the Government have to improve the share of wealth of a substantial part of the population to enable them to save for a private pension? Surely such things cannot be left to the market.

[Baroness Sherlock (Lab)]

I think that might be slightly above my pay grade. The Government want to make sure that everybody can save an appropriate amount for retirement. For that to work, one of the starting points is that people have to earn enough in their working lives to be able to have an option of saving anything. The measures that the Government have taken, in our plans for jobs and in looking at what we are doing with the national living wage and to try to drive good work, are about trying to drive economic growth, get more people into good jobs and help them to stay there and to grow in their careers. The work has been done around the Get Britain Working White Paper. All the plans around that are trying to get people to develop in their working life and to be more productive to drive economic growth. That is a win-win. It is good for the country and good for individuals and their families.

[Baroness Bennett of Manor Castle (GP)]

My Lords—

[Lord Bellingham (Con)]

My Lords—

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

My Lords, it is time to hear from the Green Benches now.

[Baroness Bennett of Manor Castle (GP)]

Returning to the case of the WASPI women and the Government’s ruling against them, can the Minister tell me whether the fact that the Government have overruled the evidence-based decision of the Parliamentary and Health Service Ombudsman is likely to be open to legal challenge? If there is a legal challenge, will the fact that the Labour Party campaigned for WASPI women during the election campaign have an impact on the case?

[Baroness Sherlock (Lab)]

My Lords, I think anything is open to legal challenge if one can find a lawyer to take a case. There have been legal challenges in the past on this decision. If there are again challenges, the Government will present their case. The noble Baroness mentioned that the ombudsman looked at the evidence —so did the Government. We looked very carefully at the evidence. One of the things we have been doing for the past six months is going through line by line every piece of evidence that the ombudsman offered, looking at the evidence we have and what we understand, and we reached evidence-driven conclusions. That is the basis on which we made the decision.

I recognise that it is not a decision that everybody is happy with. I recognise that there will be women born in the 1950s who are disappointed. But I am also convinced that most of the disappointment and, indeed, much of the campaigning and noise were actually about the change in the state pension age and its timing, rather than the very narrow decision that the ombudsman took. The ombudsman said that it was simply about the way DWP communicated with people about the state pension age. The ombudsman found that between 1995 and 2004 the communications were absolutely fine. There was a 28-month period when, although other communications were out there, such as campaigns, employer campaigns et cetera, those letters should have been sent earlier. We have accepted that, and if any legal case comes we will present our case in court, as we always do.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

1st reading
Wednesday 18th December 2024 Lords Chamber

First Reading

15:51

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

Liaison Committee

Wednesday 18th December 2024 Lords Chamber

Motion to Agree

15:52

Moved by

[The Senior Deputy Speaker]

That the Report from the Select Committee New committee activity in 2025 (3rd Report, HL Paper 56) be agreed to.

[The Senior Deputy Speaker (Lord Gardiner of Kimble)]

My Lords, at the start of this year, the House appointed four special inquiry committees on, respectively, the Modern Slavery Act 2015, preterm birth, statutory inquiries, and food, diet and obesity. All those committees have now published their reports. I give my considerable thanks to all Members who contributed to those inquiries and indeed to all our committee work during the year, particularly in light of the timetable changes due to the general election. I take this opportunity to place on record my considerable thanks—and, I believe, those on behalf of the House—to all officials who have supported the work of your Lordships’ Select Committees this year.

I turn to the proposed special inquiry committees for next year. The Liaison Committee received 45 high- quality suggestions from noble Lords, a record number of proposals, which illustrates well the range of interests and expertise across your Lordships’ House. All the proposals have been published on the committee’s website.

As ever, the Liaison Committee faced a difficult task. We assessed the proposals against our published criteria, which are that the committee should make best use of the knowledge and experience of Members, complement the work of existing Select Committees, including Commons departmental Select Committees, address areas of policy that cross departmental boundaries and be capable of being completed within 10 months. We also took into account wider factors, such as the overall balance of topics selected and work being undertaken by other committees and within government.

As our report sets out, we decided to propose four special inquiry committees on: home-based working, social mobility policy, UK engagement with space, and the Autism Act 2009. As is often the case, the proposed committee includes one post-legislative scrutiny topic and three general special inquiry topics. I hope noble Lords agree that the committee’s recommendations cover a wide range of subjects that will make a significant contribution to debate and policy-making and will make excellent use of Members’ backgrounds and expertise. I beg to move.

Motion agreed.

Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) (Extension to Switzerland etc.) Regulations 2024

Wednesday 18th December 2024 Lords Chamber

Information Sharing (Disclosure by the Registrar) Regulations 2024

Companies and Limited Liability Partnerships (Protection and Disclosure of Information and Consequential Amendments) Regulations 2024

Motions to Approve

15:55

Moved by

[Lord Leong]

That the draft regulations laid before the House on 22 May, 31 October and 4 November be approved. Considered in Grand Committee on 17 December.

Motions agreed.

Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2024

Wednesday 18th December 2024 Lords Chamber

Short Selling Regulations 2024

Financial Services and Markets Act 2000 (Ring-fenced Bodies, Core Activities, Excluded Activities and Prohibitions) (Amendment) Order 2024

Silicon Valley Bank UK Limited Compensation Scheme Order 2024

Motions to Approve

15:56

Moved by

[Lord Livermore]

That the draft regulations and orders laid before the House on 6 and 11 November be approved.

Relevant document: 9th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 17 December.

Motions agreed.

Football Governance Bill [HL]

Committee stage
Wednesday 18th December 2024 Lords Chamber

Committee (6th Day)

15:57

Relevant document: 8th Report from the Delegated Powers Committee

Clause 22: Scope of powers to attach or vary discretionary licence conditions

Amendment 172

Moved by

[Lord Markham]

172: Clause 22, page 15, line 3, leave out paragraph (c)
Member's explanatory statement
This amendment removes the ability of the IFR to restrict a club’s overall expenditure.

[Lord Markham (Con)]

My Lords, I shall speak also to Amendment 173A in the name of my noble friend Lord Moynihan and Amendment 173B in the name of my noble friend Lord Hayward.

The amendments in this first group carry on from our discussion on the licensing regime on the previous day of Committee. The amendments rightly deserve their own group since they relate to the specific financial conditions that clubs will be required to abide by as part of their licensing conditions. My Amendment 172, which is in the name also of my noble friend Lord Parkinson, would remove Clause 22(3)(c). That provision permits the regulator to restrict the overall expenditure of a regulated club. We do not believe the regulator should be able to attach a discretionary licence condition which places an overarching restriction on a club’s expenditure. This is surely an overreach of the regulator’s financial powers. The point has been made on many occasions, not least by the Minister, that the aim of this Bill is to ensure the financial sustainability and resilience of football clubs. How would telling a club how much money it may spend aid it in achieving that goal?

The key thing here is not expenditure but profit. Spending £50 million on a player might sound like a lot, but if that player is worth £60 million, I think we would all call that good business. An expenditure cap could stop that happening. If the goal is financial sustainability, surely the focus needs to be on profit or cash, not on expenditure. It is almost like a manager of a football club saying, “Look, it’s not just good enough that you go out and win today. We want you to score in the first half, then the other team can equalise and then we need you to score the winner in the last couple of minutes of the game”. It is trying to micromanage and overengineer. No one can ever do that.

16:00

In a similar way, we are trying to make sure that we are looking at cash and profit and not expenditure. By trying to restrict expenditure, we are trying to achieve a degree of control which is overbearing, hyper-restrictive and not necessary or workable—and actually it could be detrimental to the sound finances of a club.

This power to restrict overall expenditure—I am happy to be corrected by the Minister—is almost unique among regulators. As far as I am aware, the FCA does not have a blanket power to restrict expenditure. It can do so only if a firm is under investigation or has been found to have seriously breached FCA rules and is deemed a risk to the financial stability of a market.

This Bill does not contain any safeguards or guidance over how, when or under what circumstances the regulator may impose such expenditure limits. It could, if it wanted to, impose them at any time. This is a very specific concern that I hope the Minister will address. Even the possibility of the regulator imposing such expenditure limits would unnecessarily encroach on the ability of clubs to effectively manage their financial sustainability and resilience.

I will leave my noble friend Lord Moynihan to speak to his Amendment 173A, and may come back to that, but I will speak some more to Amendment 173B, because my noble friend Lord Hayward is unfortunately ill and not able to join us today. This is regarding the issue of capital buffers. I must start by thanking the Minister for a good discussion on this with the team. I think we all understand what we are trying to do here and there are good intentions behind it. At the same time, often noble Lords have a misunderstanding of this area.

I have heard noble Lords mention on a few occasions how bad it was that, for example, a club only had £25,000-worth of cash. That is not looking at the whole picture, because it does not matter how much cash there is; it is whether the club has assets to cover it. Most companies—nearly every company in the FTSE—will have net debt rather than cash. That is called an efficient use of your balance sheet. Anyone with a mortgage—which, let us face it, is a lot of people—will have net debt rather than overall cash. Again, I think most people would say that buying a home is a responsible thing to do. What matters is that you have the overall assets to cover your liabilities, and your overall balance sheet. This amendment seeks to require the regulator to look at the overall financial health of a club and look at all the assets—the players on their books, the stadium and all of them. I hope that noble Lords would agree that is very sensible.

That brings me to my final point. There is also a clause stand part notice in my name and that of my noble friend Lord Parkinson, looking to remove Clause 22 in its entirety. A concern has been brought to me by many clubs. When I say clubs, I mean the Brightons and Brentfords of the world, which I think we would all agree are model clubs and exactly the sorts of clubs we want to support so that they thrive. There is a stage in their life when they are like any start-up business; you are investing and your costs will be higher than your revenue. That is exactly what those clubs did. They invested in players and had a good plan behind it. You could say, at that stage, that they were unsustainable.

At that stage, they were totally dependent on their owners to bankroll them—in this case, Tony Bloom. A reasonable regulator could then say, “Ah, well, you’re dependent on your owner; what if they change their mind? How sustainable is that?” Or we could have unintended consequences. Matthew Harding, I think we would all agree, was a very reputable owner of Chelsea; he tragically died in a helicopter crash. Chelsea then were in severe financial difficulties. Again, I do not think any of us could have catered for that. Roman Abramovich, until the invasion of Ukraine, was seen as a pretty reputable owner. I do not think anyone could have predicted that, either.

The consequence in all those situations is that the regulator is likely to take into account those risks and say “Well, okay, we need a buffer, we need some sort of cash, some sort of liquidity ratio”, as in the case of the FCA—I have heard the shadow regulator mention this—which often deals with banks. This is exactly the concern of the Brentfords of the world. I was written to by their chairman, who said:

“This could create in effect a ‘closed shop’—where only a handful of clubs can genuinely compete for success and European qualification, more akin to other, less successful European leagues. This would be much less exciting for fans and would undermine the Premier League’s global appeal. For Brentford FC, a club that has risen against the odds to the Premier League, such restrictions risk stifling our ability to grow and compete with larger, established clubs. This could unintentionally entrench the dominance of the ‘big clubs’, reducing opportunities for ambitious teams and diminishing the league’s competitive integrity. Preserving a system that supports success stories like Brentford is vital to maintaining the Premier League’s unique excitement and global appeal.

I had the opportunity to meet with Paul Barber, the Brighton CEO, the other day, and he said very similar things as well. Those are precisely the sorts of clubs that had the plan, that invested early on, where their expenditure was higher than their cash, which would be restricted by these types of moves. That is the whole concern about Clause 22.

I do appreciate, as I mentioned before, the Minister and her team, and their good intentions in doing this, but I really fear that Clause 22 could have a massively damaging effect to aspiring clubs from the Premier league and the lower divisions. Remember that Brighton and Brentford came out of lower divisions; often, they were down in League One before they started their ascent. That will affect the overall attractiveness of not just the Premier League but of all the English Football League teams as well. That is why we are concerned and calling for the removal of the whole clause. I beg to move.

[Lord Moynihan (Con)]

My Lords, I rise to speak to Amendment 173A standing in my name on the Order Paper. Here, we are referring to Clause 32, and it is the Secretary of State who will be taking a power beyond this Bill, not even by positive resolution but by using a much lighter negative resolution procedure, to determine the time period for the approval of new owners and offices. I quote from the Government’s memorandum to the Delegated Powers and Regulatory Reform Committee, which states that

“the contents of the IFR’s suitability tests may likely change, compared to when the Bill is introduced … Once the contents of the IFR’s tests are set in statute, the Government will be better placed to set the time window in regulations”.

This is, after all, an important clause which addresses the scope of powers to attach or vary discretionary licence conditions. I would have thought that the consultation period should be very specific and placed on the face of the Bill. There is a risk here that the regulator may not consult the clubs in the leagues and just hurry the process through, which I am sure is not the intention, but why on earth not put it on the face of the Bill—not only which clubs and leagues are affected—which is not part of the Bill, as we have previously debated?

The very least the Government can do on this occasion is amend this clause, given the scale of these powers, and change the scope of the manifold discretionary licence conditions that the Government, not the regulators, are imposing on football clubs here. They must consult them. It seems eminently sensible that they should consult them, and I would have thought that the Minister would be the first to say that they will consult them. If they will, I cannot understand why we would not put that in the Bill.

My amendment says simply that, before submitting a request under subsection (6), the regulator must consult, first, the clubs; secondly, “each specified competition organiser”; and, thirdly, such other persons as the regulator considers appropriate. The consultation, as it stands, is not specific enough and risks the regulator not consulting the clubs and leagues on this issue. I really do believe that there would be every intention for the regulator to do so, so let us just clarify that in the Bill so that there is no danger that the regulator would avoid that possibility. I hope my amendment gains the approval of the Minister when she comes to wind up.

[Baroness Evans of Bowes Park (Con)]

My Lords, I speak in support of Amendment 173B, tabled by my noble friend Lord Hayward, who I hope feels better soon. It introduces a number of key principles for the governance of capital buffer requirements that the IFR could potentially impose. This amendment fills an important gap in the Bill. I am also supportive of other amendments encouraging the IFR to adopt an outcome-focused approach, allowing the leagues to develop detailed financial rules within the overall statutory framework, as this will help to preserve the competitive balance with the design of common rules for all clubs. I am sure that the Minister will agree that this approach reflects the light-touch model that she has been describing.

As we heard in our debate on Monday, the Bill allows for a more interventionist approach for the IFR with individual clubs, through its discretionary licence conditions. In these cases, it is important that some clear parameters are set out in the Bill to ensure that any capital buffer requirements that may be developed are workable, proportionate and reflective of football’s realities.

Football clubs operate in vastly different financial contexts, even within the same pyramid. At one end, a relatively modest capital buffer of, say, enough to cover six months of operating costs might have saved a club such as Bury, for instance. But, at the other end, the challenges faced by Premier League clubs are of an entirely different scale. For a Premier League club relegated to the Championship, or indeed a club expecting but then failing to qualify for the Champions League, I understand that the financial shock can amount to as much as £90 million to £100 million.

Crucially, the way these clubs manage such risks is fundamentally different from clubs in lower leagues. At this level, as we have heard, clubs do not rely on cash reserves alone. Instead, they utilise a range of financial tools, including player trading, which is a core part of football’s economic model, as well as secured credit facilities—often backed by guaranteed revenues—and parachute payments, which I know we will discuss later and which help with the transition on relegation.

Without explicit reference in the Bill, there is a danger that the IFR might impose overly rigid liquidity requirements that would privilege clubs with access to unlimited working capital—I am thinking, for instance, of those backed by sovereign wealth funds—while unfairly disadvantaging others. This amendment would ensure that capital buffers reflect the real-world financial tools that clubs use to manage risk, including non-cash assets, as I have just described.

The single most important liquid asset for football clubs towards the top of the pyramid is their players. As I am sure my noble friend Lady Brady can tell us, player trading is often one of the first mechanisms that they turn to when managing financial shocks—yet the Bill provides no clarity on how the IFR will treat these assets. Even when player liquidity is recognised, valuation of these assets is critical. Under current UEFA financial fair play rules, players developed through academies are often valued at zero, for instance, based on book value, rather than their actual market worth. The purpose of UEFA’s rules is different, but, if copied by the IFR for the purposes of capital buffers, for instance, this could penalise clubs such as Crystal Palace, Southampton, West Ham or Arsenal, which have brought through many talents into their first teams in recent years.

This amendment therefore seeks to ensure that the IFR adopts sophisticated valuation methodology, including proper independent valuation of players and, in particular, a proper recognition of the value of academy players. Without these safeguards, the IFR risks undervaluing clubs’ most significant assets, forcing them to meet capital buffer requirements that are, in practice, unnecessary.

We have heard many times in this Committee that the competitive balance is the lifeblood of football, but poorly designed capital buffer requirements could easily and accidentally disrupt this balance. We must avoid this outcome, so I hope that even if the Minister is unable to accept the level of specificity in Amendment 173B, she will recognise that this area of the Bill is a source of anxiety for clubs. I hope she will agree that the principles within this amendment are important and that it is the Government’s intention that the IFR pursues a tailored approach, informed by guidance, that will protect the competitive balance and investability of the English game.

16:15

[Lord Pannick (CB)]

My Lords, I declare again my interest as counsel for Manchester City Football Club in recent disciplinary proceedings brought by the Premier League. I offer my support to Amendment 173A from the noble Lord, Lord Moynihan. We discussed the principle of consultation on Monday evening. I repeat that, in my view, consultation with clubs and specified competition organisers is vital to ensure that they have confidence in the operations of the regulator. It is also vital to ensure that the regulator is operating, as he or she would want to do, in a fair manner. I very much hope that the Minister will give consideration to that and bring an amendment back on Report, in relation to Amendment 173A and earlier provisions of the Bill.

I am far less keen, I regret to say, on Amendment 172 from the noble Lord, Lord Markham, which seeks, as I understand it, to remove from the Bill the discretionary licence condition relating to restricting the clubs’ overall expenditure. I suggest that it is important to see the limits of that power of the regulator, because Clause 22(4) provides that this discretionary licence condition

“may not impose restrictions on expenditure of a particular kind or a particular transaction”.

As I understand it—the Minister will say whether or not this is correct—the regulator would therefore not have the power, using the example given by the noble Lord, Lord Markham, to say, “You can’t buy a particular player for £50 million”, as that would be outside the scope of Clause 22.

It is not difficult to see that there may be circumstances —one hopes that they would be very rare indeed—where the regulator takes the view that its objective under Clause 6

“to protect and promote the financial soundness of regulated clubs”,

which is what it is there for, would be damaged if it did not have a power to restrict in exceptional circumstances a club’s overall expenditure.

[Lord Addington (LD)]

My Lords, I am beginning to wish I had jumped up before the noble Lord, Lord Pannick, because I have come to a similar conclusion.

For every success story in football, if you look you will find a failure. It is often the case when people come forward and buy themselves the dream team, then something goes wrong. You will find that especially in the lower levels. There are stories of those clubs, with Bury et cetera copping out, that have more expenditure going out on wages than they have coming in from revenue. If the regulator does not have the power to stop that speculative spending in certain circumstances, it is being denied a basic power over one of the biggest problems that has led to instability, particularly in the lower parts of the game. After some of the discussions we had on this, I really cannot see how we can support the lead amendment here and still have the central thrust of the Bill.

How will the regulator assess the slightly strange finances of investing in people who are always one trip away from being worth nothing? One accident on a training field and your principal asset is worth nothing. How is that taken into account and balanced, which would require a level of expertise? Does the Minister have examples of where information will be gathered to make a sensible assessment on this?

On speculative purchases, we have heard about deals with agents, et cetera, on other parts of this Bill; it is important to bear in mind how these are done. If the Minister has information on how that information will be gathered and those assessments made, I would be very interested to hear it.

[Lord Moynihan of Chelsea (Con)]

My Lords, I hope the Minister will bear in mind that the repeated statements “For every winner there is a loser”, “The Premier League is in terrible danger” or “Football is in terrible danger” just ignore the fact that football is tremendously successful in this country. If for every winner there is a loser, there would have been no progress in the last 20 years. There has been progress and enormous success. We now have the greatest football league in the world. The statement that “Your biggest asset is only one accident on a training ground away from being worth nothing” completely ignores the fact that all football assets—all players—are insured. If, God forbid, your best player was injured irrevocably on the training ground, you would receive an enormous insurance payment, so it is just not true. The actual commercial realities of what is going on in football in this country seem to be completely mis-stated so often in this Chamber. I hope that the Minister will take heed of the tremendous success that private enterprise, unfettered by an onerous regulator, has created in the world of football in our country.

[Lord Markham (Con)]

I will sum up on a couple of new points. I always welcome comments from the noble Lord, Lord Pannick, because his forensic brain is really helpful in making sure we get to the bottom of what we are talking about. I have only just had a chance to look up Clause 22(4); this is about the regulator’s ability to restrict expenditure. It says that the regulator

“may not impose restrictions on expenditure of a particular kind or a particular transaction”.

That can be open-ended, unless the particular kind or particular transactions are defined somewhere; they could refer to anything. I do not know if the Lord, Lord Pannick, is aware of what they refer to, but perhaps the Minister could follow up on that, either now or in writing.

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

I thank the noble Lords, Lord Markham, Lord Moynihan and Lord Hayward, for tabling these amendments, and the noble Lords, Lord Markham and Lord Parkinson of Whitley Bay, for giving notice of their intention to oppose the question that Clause 22 stand part of the Bill. Like other noble Lords, I wish the noble Lord, Lord Hayward, a swift recovery and hope to see him back for the next day of consideration by this Committee.

I will start with Amendment 172 in the name of the noble Lord, Lord Markham. It is vital that the regulator has the appropriate tools to address systemic financial risks that might arise. Indeed, in recent years clubs have faced a number of systemic risks, such as during the Covid-19 pandemic, when many clubs faced financial difficulties, some of which are still felt by clubs today.

The ability to restrict clubs’ overall expenditure may be the most appropriate and effective tool in certain circumstances. The noble Lord, Lord Markham, asked about limiting expenditure, which is already used within football. Some leagues already have rules limiting expenditure on wages and limits on permissive losses. I reassure him that the regulator is further constrained when taking action here. First, we have made it absolutely clear that the regulator has the ability only to restrict overall expenditure. It cannot place restrictions around specific transactions or types of transactions, to micromanage spending in that way.

Furthermore, the regulatory principles enshrined in the Bill in Clause 8 include the principle that the regulator should act proportionately. We would expect this to be reflected in any discretionary licence condition that the regulator sets. Restricting overall expenditure might be the most proportionate and least interventionist or burdensome response to these risks. Without this tool, it might have to apply a different response that may be more restrictive or less effective.

I turn to Amendment 173A in the name of the noble Lord, Lord Moynihan, to which the noble Lords, Lord Pannick and Lord Addington, also spoke. While we appreciate the intent, we are confident that clubs and competition organisers would already be captured under the current wording in the Bill, of persons the regulator “considers appropriate”. As I have outlined in previous debates, the Government do not believe it is necessary or appropriate to put an exhaustive list of stakeholders in the Bill. I appreciate that the noble Lord, Lord Moynihan, has a different view, but we feel that the regulator will be best placed to determine which persons are appropriate to consult depending on the decision in question. However, I look forward to further discussions with him on this point.

The regulator is required to consult anyone it considers appropriate. Failing to do so would be a breach of its statutory obligations and could result in legal challenge—

[Lord Moynihan (Con)]

I was not for a minute suggesting that there should be an exhaustive list that should be consulted; I was simply highlighting three very specific groups of people who should be consulted, which I think the Minister agrees with. There should be no doubt in the minds of the Committee that if you simply list clubs and competition organisers and then say “such other persons as the regulator considers appropriate”, you capture everything she has just said and make it very clear that the regulator will approach and consult clubs and competition organisers—which is the whole purpose behind this clause and surely one that has her full support. Why not simply clarify it in a very simple additional nine words?

[Baroness Twycross (Lab)]

I hear what the noble Lord says and look forward to further discussions with him on that point, but we feel that the regulator will be best placed to determine which persons are appropriate to consult.

[Lord Pannick (CB)]

I am sorry to keep on at the Minister about this, but can she really think of any circumstances in which it would be appropriate for the regulator not to consult the competition organisers and the clubs in this context? If the answer to that is “Of course not”, let us put it in the Bill and make it clear.

[Baroness Twycross (Lab)]

I recognise the strength of feeling on this point and look forward to discussing this further as we proceed through the Bill’s progress in this House.

Amendment 173B is in the name of the noble Lord, Lord Hayward, and the noble Baroness, Lady Evans of Bowes Park, spoke to it in his absence. Its intention is to place procedural requirements around the regulator’s use of capital buffers as part of a liquidity requirement. First, I reassure noble Lords that the model of financial regulation is about making clubs more financially resilient.

The noble Lord, Lord Markham, raised an issue that has been discussed previously in this Committee, where owners tragically die and the issues this can cause clubs, which is that clubs will have to submit detailed financial plans, including contingency plans. This could include what the club would do in the event of a financial shock such as the sudden loss of an owner.

If the regulator has concerns about the level of financial risk exhibited in a range of scenarios, it can place discretionary licence conditions on clubs in limited areas. That does not necessarily mean that owners will have to put funding in up front. If the regulator does reach for liquidity requirements, there are already safeguards. Indeed, the amendment seeks to require the regulator to have regard to a number of considerations, but in each case the Bill already requires this.

When assessing whether to attach the discretionary licence conditions needed to meet the appropriate financial resources threshold condition, the regulator will already be fully informed of the club’s financial position because clubs have to submit a financial plan, which would already include detail of any existing liquidity buffers. Consideration of proportionality and existing financial rules is covered by the regulatory principles in Clause 8(c) and (d). Again, consideration of the impact on competitiveness and investment is covered by the regulator’s duties in Clause 7(2). Therefore, this is all already accounted for.

16:30

However, this amendment goes further, in a way that the Government do not feel is appropriate. It would also require further detail about what constitutes “liquidity” in the Bill. However, it must be for the regulator, with an in-depth understanding of clubs’ finances, to determine what tools are suitable. Remember, the purpose of liquidity buffers is not to be punitive but to ensure that clubs are resilient. We expect that the regulator will determine that liquidity buffers can take a range of forms, not just cash buffers. The Bill as drafted already allows for this.

The regulator may determine that player value constitutes liquidity, but we must caution against always mandating this in legislation. Players are not liquid assets. They require willing buyers, can be sold only within certain windows and, as the noble Lord, Lord Addington, made clear, can get injured and lose their entire value overnight. While I appreciate the view of the noble Lord, Lord Moynihan of Chelsea, that insurance would cover this, it remains the case that the regulator is best placed to determine what may constitute a suitable buffer and when. If player valuations contribute to liquidity, as they already can within the Bill, the regulator will of course need to determine their value. However, it would be wholly inappropriate to mandate that clubs and competition organisers determine the methodology for working out players’ fair market value. This would need to be objective.

On the intention of the Noble Lords, Lord Parkinson and Lord Markham, to oppose Clause 22 standing part of the Bill, Clause 21 outlines the use of discretionary licence conditions. These can be used to bring clubs up to the threshold requirements for a full operating licence, if necessary. They can also be applied to clubs with a full licence if there is a risk that they might drop below the threshold requirements.

Clause 22 sets out the scope of the powers that the regulator will have to attach or vary a discretionary licence condition. Under the financial resources threshold requirement, discretionary conditions may address only four areas: debt management, liquidity requirements, restricting a club’s overall expenditure and restricting a club’s ability to receive illicit finance. This fourth area, enabling the regulator to restrict the club’s ability to access funding that it has reasonable grounds to suspect is connected to serious criminal conduct, is integral. It will empower the regulator to limit illicit finance, which is inherently unsustainable for a club.

Under the non-financial resources threshold requirement, conditions may relate to only one of three areas: internal controls, risk management and financial reporting. As outlined in the previous clause, the regulator can also attach discretionary licence conditions to advance its systemic financial resilience objective, which is specifically to address systemic risks or structural issues by applying conditions to multiple clubs, or even to all licensed clubs. This clause limits the scope of that to only conditions that relate to debt management and liquidity requirements, and those restricting the club’s overall expenditure.

In order to future-proof the regulator’s regime, the Secretary of State will have the power to amend the areas that discretionary licence conditions may relate to. However, this can be done only if the regulator makes a request in writing to the Secretary of State explaining why an amendment is needed. Before doing this, the regulator must have carried out a consultation. This means that the Secretary of State cannot amend the regulator’s powers to attach discretionary conditions unilaterally, against the wishes of the regulator. This will limit the risk of unwanted, politically motivated scope creep in the future.

For those reasons, I hope noble Lords will not press their amendments or their intention to oppose Clause 22 standing part of the Bill.

[Lord Markham (Con)]

I thank the Minister for her response and thank noble Lords for all the contributions to the debate on this amendment.

On Amendment 172 and the expenditure cap, the Minister referred to league rules on permitted losses, and that is exactly the point I am trying to make: permitted losses are different from expenditure. I completely get why you might have rules trying to prevent permitted losses, but with permitted expenditure you can spend a lot and still make a profit, and that is a good thing. Maybe we can explore further whether Clause 22(4) allows clubs, despite everything, to still spend money on players. As per the example I gave earlier, I am not quite sure that it does, but again, it would be good to consult or work on that later.

On Amendment 173A, tabled by my noble friend Lord Moynihan, as pointed out by the noble Lord, Lord Pannick, I do not think any of us could envisage the regulator not consulting the clubs and the competitions, so it seems sensible to have that in the Bill. Again, I hope the Minister will be able to look at that.

On Amendment 173B and my noble friend Lord Hayward’s point about capital buffers, this really is an area of huge concern. The Minister said, “Well, if you’re reliant on an owner, maybe they need to provide more examples of how they could cater for that financial shock if they were to die”. The trouble is, as with so many clubs at that stage, that was exactly the Brighton and Brentford model—they were reliant at that stage on the owners bankrolling them behind what was a very sensible plan. But if, God forbid, something had happened to them during that stage, clearly, they would have gone, and if they had been asked to put aside some money as a buffer against that, that would have made their plan much harder to achieve. I know it is the view of both clubs that they may well never have embarked on those plans in the first place, because it was tough enough to begin with, and having to set some money aside makes the hurdle even higher. So again, I would appreciate it if we could return to that issue.

The last point about this clause overall, which goes right to the point the noble Lord, Lord Addington, made, is that there is a fundamental difference here. He said that for every success there is a failure, and that we have to stop that speculative spending. With Brighton and Brentford, it absolutely was speculative spending. With any team that invests in players ahead of their revenue, that is speculative spending. That is the excitement of the league and of the game: there are no guarantees of success behind any of that. But if we seek to restrict that, we are seeking to restrict the whole competitive element of the game we love: football.

The reality is that we cannot point to many failures; I think there have been two since the war. I do not want any failures, but are we really trying to prevent any club trying to embark on those success stories— I hope we are seeing it again now with Wrexham, who have come very far—because we want to protect against any failures whatsoever? That is the fundamental difference we are talking about here.

We have seen examples of asset stripping, and I absolutely agree that we want to guard against it. But owners wanting to put in a lot of money in order to really get behind a club, invest in players and gain promotion—to me, that is the fundamental spirit of the game we all love. I therefore hope that we will be able to return to that issue, but at this stage I beg leave to withdraw the amendment.

Amendment 172 withdrawn.

Amendments 173 and 173A not moved.

Clause 22 agreed.

Amendment 173B not moved.

Clause 23: Procedure for attaching or varying financial discretionary licence conditions

Amendments 174 to 174B not moved.

Clause 23 agreed.

Clause 24: Commitments in lieu of financial discretionary licence conditions

Amendment 175 not moved.

Clause 24 agreed.

Schedule 6 agreed.

Clause 25: Procedure for attaching or varying other discretionary licence conditions

Amendment 176 not moved.

Clause 25 agreed.

Clause 26: Part 4: overview and interpretation

Amendment 177 not moved.

Amendment 178

Moved by

[Lord Bassam of Brighton]

178: Clause 26, page 19, line 16, at end insert—
(c) respects and promotes the protection of human rights and prevents modern slavery (as set out in section (Human rights and modern slavery considerations)).”Member's explanatory statement
This amendment requires an individual to respect and promote the protection of human rights and prevent modern slavery in order to meet the individual ownership fitness criteria.

[Lord Bassam of Brighton (Lab)]

My Lords, our Benches at the back here have three amendments in this group. They cover modern slavery, human rights and slave ownership. The purpose behind the amendments is to flesh out from my noble friend the Minister how the independent football regulator may approach some of these issues.

As we have heard on a number of occasions during debates on the Bill, football clubs are more than just businesses. They are community institutions; they have values, and they have provided some of the best examples of taking on social issues over the last few decades. We are trying to establish whether there should be a test that mandates having robust human rights due diligence and the ways in which owners can be held to account and prevent harm. State ownership and those two issues are inevitably bound up. We will recall from the ownership debates that circulated around Newcastle United when it was taken over some years ago the considerable concern expressed.

In updating the individual ownership fitness criteria to include reference to human rights and modern slavery, we have taken account of Amnesty International’s proposed amendments to the previous Premier League test. The United Nations Guiding Principles on Business and Human Rights, which the UK was the first country in the world officially to implement through a national action plan, requires all states and businesses to prevent, address and remedy human rights abuses where they occur.

It is our contention in putting these amendments forward that we need to have a view on state ownership but also on the role that the IFR may play in trying to establish thresholds and principles around such issues as modern slavery and human rights, because these things are important. They are important to football fans; they are important to the moral and guiding principles behind our businesses, and, more generally, we should use the opportunity of having a regulator for football that has a view on these issues when it comes to judging the merits—or otherwise—of those who seek to own important institutions such as football clubs. I beg to move.

16:45

[Lord Jackson of Peterborough (Con)]

My Lords, there is no doubt that the amendment means well. It is laudable that we encourage football clubs and the football community to take seriously these important issues around human rights and modern slavery. My concern is about the wording, because I believe that the inclusion of such an amendment in the Bill in respect of the appropriateness of an owner will give rise to unnecessary litigation. Let us remember that the amendment does not distinguish between an individual and a football club. If it were to do so, it would be more sustainable in terms of developing policies around human rights and combating modern slavery. However, it does not do that. It is nebulous in its wording, and I think the drafting would cause grave difficulty because it references individuals—the owner, in essence—meaning that there will be problems down the line in how the amendment is interpreted.

It is a value judgment as to whether an individual respects human rights. What does that actually mean in primary legislation? How do you measure it? What is its objectivity? What does success look like in terms of respect? The wording is very loose and would be very difficult—

[Lord Bassam of Brighton (Lab)]

Our wording mirrors the wording in Clause 28, which says:

“A person may not become an owner of a particular regulated club unless”,


so I do not think that the wording is the point here.

[Lord Jackson of Peterborough (Con)]

I understand the point that the noble Lord makes, but I am reading the amendment that he has tabled. The third word is “promotes”. What does that mean in terms of an objective criterion for how an individual would promote human rights, and for how he or she would protect the human rights of those involved in football and the club that they were involved with? The amendment is an example of potential regulatory overreach. Seeking to enforce it would be a straightforward prima facie case of ultra vires actions, because it would be unenforceable.

Having said that, I have great sympathy with the noble Lord’s Amendment 200 on state ownership of football clubs. We will have a good debate on that. However, on Amendment 178, the noble Lord is gilding the lily. Although he has good intentions, it is not a workable amendment. It would damage the interests of football clubs and be difficult for the regulator properly to enforce.

[Baroness Butler-Sloss (CB)]

My Lords, I support Amendment 178. Indeed, I have come in specifically to speak on the issue of modern slavery and I declare an interest as a co-chair of the modern slavery parliamentary group and vice-chair of the Human Trafficking Foundation.

I profoundly disagree with what the previous noble Lord said about individual ownership fitness criteria in relation to modern slavery. Under the Modern Slavery Act 2015—Section 56, I think—it is wrong to have a supply chain that operates on the exploitation of those who provide the goods for a company. So, if you have an individual owning a company who makes his money on the exploitation of people in the supply chain, it should not be all that difficult to discover it. That is absolutely where the regulator should be promoting modern slavery issues when he looks at the individual fitness of a person who wants to take over a club.

I see the point on human rights, although we have the Human Rights Act and it is fairly clear under that Act what the rights are of various people that might be impinged by an individual who did not have appropriate fitness criteria. I can see—

[Lord Jackson of Peterborough (Con)]

I thank the noble and learned Baroness for most generously giving way. If we have statutory sanctions already in place to deal with this behaviour, whether it is the Human Rights Act or the Modern Slavery Act, surely she is proving my case that this is regulatory overreach. My point is that we do not need further legislation when it is already covered by the existing legislation.

[Baroness Butler-Sloss (CB)]

I do not want to deal with human rights. I have come here to deal with modern slavery. I disagree with the noble Lord. The problem is that Section 56 is voluntary and not mandatory. Consequently, companies are not obliged to follow what happens. In a 2019 review led by Lord Field of Birkenhead, of which I was a part, we picked up the fact that it was not mandatory. Consequently, if the regulator does not have to think about modern slavery, he would not have to look to see whether or not an individual taking over a club is making his money in a wholly inappropriate and extremely wicked way. Because it is not mandatory, it is important that someone else looks at it. If it were mandatory, I would entirely agree with the noble Lord.

[Lord Pannick (CB)]

Is it the case that the reason it is not mandatory is that Parliament did not think it should be? Therefore, the question is: why should it be imposed in this context and not generally?

[Baroness Butler-Sloss (CB)]

Section 56 says that it is utterly wrong to have companies that make money by exploiting people down the chain—consequently, it is wrong. But, for reasons I do not know but can guess, the last Government, who put in place this very good bit of legislation, presumably did not want to offend businesses. I understand that there are problems in making it mandatory but, if somebody is making money that they are going to put into a football club by exploiting other people down the chain, that is something we should not want our clubs to be involved in.

[Lord Scriven (LD)]

My Lords, I was unable to join your Lordships at Second Reading and have decided to add my name, and speak, only to amendments on areas where I have relevant knowledge. I speak as somebody who has for a number of years been a co-chair of the All-Party Parliamentary Group on Democracy and Human Rights in the Gulf, and also led the first ever debate on sportswashing in your Lordships’ House in March of this year. Therefore, I will speak in favour of the amendments I have added my name to—Amendment 185 and in particular Amendment 193 from my noble friend Lord McNally, who cannot be here in his place today. I also strongly support Amendment 200 on state entities.

It is interesting listening to the noble Lord, Lord Jackson of Peterborough, and other noble Lords talk about human rights and the Human Rights Act. Let us be clear. What the regulator will be doing here is having a statutory responsibility for ensuring that a takeover of a club takes into consideration human rights issues. Under the Human Rights Act an individual can bring a case based on their feeling that their human rights have been undermined. If you are in Saudi Arabia, Qatar or the UAE, you cannot bring that case as an individual whose human rights have been undermined, particularly when it comes to a state entity potentially taking over a football club. That is what these amendments are about. Rather than just financial issues, when it comes to a takeover of a club, as a statutory point of principle human rights should be looked at by the regulator independently to decide whether a potential director is a fit and proper person to be able to take over and manage an English football club. That is what this debate is about.

It is interesting that certain issues in the Bill are specific, such as money laundering, so the Government have accepted that the regulator can look at specific issues. These amendments ask that another area specified in the Bill should be human rights abuses carried out not just in the UK but elsewhere in the world, particularly when it is a state entity or an individual linked to a state entity. The reason why this is important is that the concept of sportswashing, where sports clubs are bought particularly to try to influence soft power, is really taking hold. The previous Government understood that when it came to taking over media in this country. There was an issue to do with how state-entity organisations, including their potential human rights abuses, actually stopped takeover of the media.

I am sure that the Minister, when it comes to arguing the Government’s case if they are not minded to do this, will look at the Global Human Rights Sanctions Regulations 2020 as the cloak of respectability, where the powers already exist for this to be looked at. Well, let us be clear. These were introduced with the aim of holding individuals and entities accountable for human rights abuses. However, these regulations are not proving efficient in stopping foreign Government entities from owning Premier League clubs, or any league club. The Newcastle deal, where the Saudi Public Investment Fund took over Newcastle, happened 15 months after these regulations came into force.

These regulations target individuals and specific entities, not entire Governments or sovereign wealth funds. This is a critical loophole which we can see in the case of Saudi Arabia’s Public Investment Fund, which now owns Newcastle United and operates a state-controlled entity that presents itself as independent of government. As a result, it evades direct scrutiny under the sanctions framework. There is also a lack of transparency with these regulations, because decisions about who we sanction are not clear and are at the whim of an individual Minister. That is why I believe there should be the provisions in the Bill laid down in Amendment 200 and the other amendments which I put my name to.

The Global Human Rights Sanctions Regulations lack the reach and enforcement power to prevent foreign state entities linked to human rights abuses owning English Premier League clubs. That is why these amendments are required. Otherwise, I believe that our national game, football, will potentially remain a platform for authoritarian regimes or individuals who have committed human rights abuses and will be used as a sportswashing exercise that will tarnish their own reputations and image and not defend our national game.

17:00

[Baroness Grey-Thompson (CB)]

My Lords, in speaking to Amendments 178, 185 and 199, I draw attention to my interests in the register. I thank my noble and learned friend Lady Butler-Sloss for her contribution to the debate this afternoon.

Among the detail of what a regulator may or may not look like, we spent some time noting para football and how it can change and improve lives, and almost change the world. I would imagine that modern slavery is something that we would want to try to impact. Major games, such as the Olympics and the Paralympics, have made strong commitments in this area, as well as around trafficking. Their success is up for debate, but surely football and sport should try to leave the world a better place, and so I believe that these amendments are important.

Briefly, Amendment 199 is about the ownership of clubs. We have debated Reading and Aston Villa at length. This amendment merely seeks to strengthen the owners’ and directors’ test.

[Lord Pannick (CB)]

My Lords, I think a very strong case has been made this afternoon by the noble Lords, Lord Bassam and Lord Scriven, the noble and learned Baroness, Lady Butler-Sloss, and my noble friend Lady Grey-Thompson to require the regulator to assess whether a prospective owner of a football club respects and promotes the protection of human rights and prevents modern slavery.

I am very sympathetic to the principle. I am just concerned about the practicality. Is it really practical to expect that the regulator is going to have the expertise, time or ability to conduct a general assessment of whether a particular person—who may, for all I know, be based abroad—is generally respecting human rights and preventing modern slavery? This is going to take an enormous amount of time and money, and I fear that it would distract the regulator from the more day-to-day, prosaic functions that Parliament will be asking it to perform. I would be pleased to hear from the noble Lord, Lord Bassam, how this is going to work in practice, because I am very sceptical.

[Lord Scriven (LD)]

Does the noble Lord accept that it already takes place for certain individuals and entities with regard to the regulations that I pointed out, and that the Government already have a system in place to do this for takeovers? The issue is that there are gaps, which is why it needs to be in this Bill, particularly around football and state entities.

[Lord Pannick (CB)]

I entirely accept that there are detailed regulations, in particular in relation to money laundering, but that is a far more specific area, where there is a government system and a whole army of people with expertise to assess those matters. The question is whether we wish to make it a function of the independent football regulator to have a whole department that is concerned with this. I see the force of the principle, but I remain sceptical about it in practice.

[Lord Moynihan (Con)]

My Lords, this is one of the best debates we have had in Committee to date. I am equally sympathetic to the points made by the noble and learned Baroness, Lady Butler-Sloss, and the interventions of the noble Lord, Lord Scriven, and the concern about the practicality of this, but none of that is covered in Amendment 200, which is in this group.

Let us just assume, hypothetically, that a state-owned entity acquiring a football club in England has an excellent human rights record and no problems with modern slavery. Under Amendment 200, it would be banned from owning a club in England because it is state-controlled. All the points that have been made are relevant and important, but Amendment 200, in the name of the noble Lord, Lord Bassam, is very specific and states that:

“No state-controlled club may be granted an operating licence”.


There is no reference to human rights abuses or to any of the important issues regarding the supply chain, which have been mentioned. It simply states that a foreign-owned, state-controlled company cannot own an English football club. If we pass this amendment, immediately we would then have to divest the Abu Dhabi United Group of its majority ownership of Manchester City and Saudi Arabia’s Public Investment Fund of its ownership of Newcastle United, to mention but two cases.

How have the Premier League and UEFA addressed this to date? They have focused on the word “control”. When the Premier League addressed the Newcastle ownership test, it received “legally binding guarantees” that the state of Saudi Arabia would not have control over Newcastle United in the event of any deal. However, the Bill goes much further. It grants powers to the regulator that are not just about control. An individual has to be considered who has

“a higher degree of influence”

over the ownership of a club. The control test that UEFA and the Premier League currently use, which is a tough test that takes up a lot of time and energy, is overridden by a requirement in this legislation—for the first time in sport—to test whether an individual has a higher degree of influence. There can be no doubt that the Crown Prince of Saudi Arabia, as chair of the PIF, has a very high degree of influence over that board —he appoints it. Indeed, a Minister from that board has been appointed to be chairman of Newcastle.

If we go forward and accept Amendment 200 as it stands, what would we be saying to football, to Newcastle, to the Qataris—who might want to acquire a company, which there has been much speculation about, not least in this Committee—and to Abu Dhabi in relation to Man City? It would drive a coach and horses through the current ownership of the Premier League. It would be a very serious decision by the Government to take state control over who owns the football clubs in this country.

I say that because it comes down to the degree of state influence that is behind the regulator. The Government have said:

“Regarding the scope of the tests, we recognise the trade-offs involved, and are aware of the range of corporate structures behind clubs”,


and they specifically mention here sovereign wealth funds. They go on to say:

“We are designing the legal scope of the tests with these challenges in mind”.


They call them challenges, to be faced down at the request of government. We would have an open back door in the Bill if we accepted the amendment in the name of the noble Lord, Lord Bassam, straying into foreign policy in a way that we do not currently do. We have plenty of legislation elsewhere on the statute book allowing the Government to intervene if they felt they needed to in a certain circumstance.

The Government have therefore further confirmed the scope of the regulator. To me, it is incredibly important that the regulator is not given so many powers as to require it to have direct influence. I lost an amendment on Monday night, when I asked for that at least to be defined and for consultation to go out to find out what “significant influence” means in this context. I think that is extremely important.

I have a question for the Minister. I cannot find an answer as a result of the debates we have had so far, but football needs an answer and probably needs it now. Is it the Government’s position that the Crown Prince, Mohammed bin Salman, should be able to own Newcastle United under the definition of ownership in the Bill? It is a very simple question, with a yes or no answer. If yes, why have Ministers deliberately constructed a Bill that will quickly put him through the ownership test of significant influence, and why did the Minister confirm on Monday that she wanted incumbent Heads of State to be tested? If no then surely the Government should say so, and we should have that as part of an open debate.

I hope that, if that question is answered this evening, there will be no doubt in future about what the Government intend, not least following the Prime Minister’s visit to Saudi Arabia last week and his offer to go to a football match with the Crown Prince. It is only reasonable for Saudi Arabia and the Crown Prince to know whether he is expected to divest himself of the interest in Newcastle United or not.

[Lord Addington (LD)]

My Lords, I welcome my noble friend Lord Scriven to this debate and congratulate him on making those points. When it comes to the modern slavery amendments—to take on the point from the noble Lord, Lord Pannick—if other people are looking at this, surely the regulator should be able to take their opinion. Surely that would be a reasonable step. If the Bill does not allow that, I am sure we could do that quite easily.

On state ownership, I put my name to Amendment 200 because I thought that at the very least we deserved an answer. The previous Government’s Back-Benchers did not like the Telegraph under control and, let us face it, more people have heard of Newcastle United than they have the Telegraph.

This is an important point. Are we happy with a cultural asset being in the hands of a foreign power, regardless of the fact that we have a reasonably good relationship with it on most things? It is not all things, as we do not like certain things about it. That is a real question, and the Minister is being asked a series of real questions. I hope that at the end of this we will know whether these points are worth pursuing at other stages of the Bill. These questions really should be answered, and I look forward to the Minister’s response.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, we have indeed touched on the matter of foreign ownership elsewhere in the Committee’s discussions. I am very glad we have had the opportunity to have a proper debate on it this afternoon, and I agree with my noble friend Lord Moynihan that it has been a very good one.

Of course, there are, and have long been, a number of clubs in English football with some element of foreign ownership, whether through individuals or investment vehicles. Many of them have been very generous funders of the sport and in certain cases have turned clubs around for the better, with huge benefits to their communities. But there is a fine line to tread here between maintaining that inward investment and openness to the world, and preventing malign interference.

I am glad that the noble Lord, Lord Scriven, has been able to join the Committee today. I enjoyed the debate he brought on sportswashing, to which I responded. We touched on some of these matters, and my view when speaking from the Dispatch Box opposite, which I still share, is that there is a distinction to be made between news organisations, which provide information to the populus, and sports organisations. As my noble friend Lord Moynihan has pointed out on previous groups, sport has always succeeded in rising above politics and has often been a forum in which people can raise complicated issues and foster dialogue between countries that may not be able to talk about things directly quite so easily.

The amendments in the names of the noble Lord, Lord Bassam, and the noble Baroness, Lady Taylor of Bolton, address modern slavery once again. I am conscious that we had Amendment 153 on modern slavery from the noble Lord, Lord Mann, in that rather strange miscellaneous group the other day, so I will not repeat what I said about the issue then. But I am interested in and broadly supportive of the issues they are raising and very glad to have heard the contribution of the noble and learned Baroness, Lady Butler-Sloss, who has done such important work in this area. I am glad we have been able to return to the issue of modern slavery and let other noble Lords add their voices to what we said when we were debating Amendment 153 on Monday.

As someone from Tyneside, I must add my concern about the implications of Amendment 200 from the noble Lord, Lord Bassam, which, among other things, would prevent clubs being owned by sovereign wealth funds. I think he accepts that if we were to accept his Amendment 200 the way he has worded it—he alluded to the Public Investment Fund of the Kingdom of Saudi Arabia’s investment in Newcastle United—it would have the consequence that Newcastle might not be granted an operating licence and so would have to withdraw from the Premier League. I have to say that he would not be very popular on Tyneside if that were the case.

It would be very helpful to have some clarity from the Minister about how the regulator will deal with clubs that currently have foreign owners or foreign sovereign wealth fund investment, and how it might approach prospective owners from abroad in the future. Like others, I would be very keen to hear her answer to the questions that my noble friend Lord Moynihan has raised and repeated so powerfully today.

During the course of this Committee, the Prime Minister has visited the Kingdom of Saudi Arabia. He was there just before it was announced as the host of the 2034 World Cup. He has invited the Crown Prince to come and watch a football match here in the UK when he next has the opportunity to visit. I would be interested to hear whether they discussed football and some of the issues we have discussed today, or indeed the thorny question of whether the Bill would bring the Crown Prince and the Public Investment Fund of Saudi Arabia into scope in the way that my noble friend Lord Moynihan has suggested.

17:15

[Baroness Twycross (Lab)]

I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, as well as the noble Lords, Lord McNally and Lord Scriven, and the noble Baroness, Lady Grey-Thompson, for the amendments in this group. It has been a really thoughtful discussion around issues of note.

I particularly welcomed the opportunity to hear from a number of noble Lords who have not spoken previously on the Bill but who have contributed their expertise, including the noble and learned Baroness, Lady Butler-Sloss, and the noble Lord, Lord Scriven. Their expertise led to a thoughtful debate. A number of noble Lords had interesting alternative perspectives as well. That included the perspective of the noble Lord, Lord Pannick. It is right that we discuss these significant issues as we discuss what the role of the regulator should be.

On Amendments 178, 185 and 193, it is absolutely right that clubs have suitable owners. That is why the new statutory owners’ and directors’ test is a key focus of the regulatory regime. A core part of this is the fitness test, which these amendments seek to expand. The individual ownership fitness test criteria are based on precedents specifically relevant to whether somebody is suitable to be an owner of a football club.

I would like to reassure my noble friend that much of what the amendments seek to achieve is already delivered within the current drafting. If an individual has had legal—whether civil or criminal—regulatory or disciplinary action of any kind brought against them, and that action has a bearing on their honesty or integrity, the regular must take that into account. This could then be used to find them unsuitable under the tests in this legislation.

The noble and learned Baroness, Lady Butler-Sloss, spoke specifically on modern slavery in relation to current legislation. I welcome the comments from the noble Lord, Lord Pannick, around keeping the regulator focused on issues that it can deal with effectively. Offences under the Modern Slavery Act are included in Schedule 1 to the Serious Crime Act, so the regulator will have to consider them in particular when determining whether an owner meets the fitness criteria.

If there are concerns about what is covered in the Modern Slavery Act, there are more appropriate places to discuss this, perhaps outside the Committee. I would be very happy to talk to noble Lords and the noble and learned Baroness outside the Committee to give them some reassurance on the points they have raised.

Any human rights violations that have given rise to legal, regulatory or disciplinary action against the owner in any forum can be considered, and so are egregious actions committed outside the UK that would have been criminal if carried out here. I assure noble Lords that these are things the regulator would—

[Lord Scriven (LD)]

There is a specific issue with the Gulf states. If people are potentially put to death for being gay in a state, would that debar a state entity or an individual in that Government from owning an English club? It is a clear question.

[Baroness Twycross (Lab)]

I am going to come on to state ownership later in my speech, if the noble Lord would be happy to wait.

[Lord Scriven (LD)]

No, I would like an answer to this specific question, because the Minister gave a specific commitment with regard to what is in the Bill. I put a specific question based on what could happen, and on the laws of the land of a Gulf state. I wish to know: if that takes place, would someone who is related to that state through a state entity not be able to own a Premier League club in this country?

[Baroness Twycross (Lab)]

I would be grateful if the noble Lord allowed me to take away that specific example. I will write to him and to the Committee and place a letter in the Library, so that they have a detailed response on that point.

These are all issues that the regulator will take very seriously. Where the amendments before us today go further than existing drafting, this introduces elements that we do not believe are necessarily relevant to an owner’s suitability. They would require the regulator to make a subjective and potentially speculative judgment on whether the individual has engaged in any activity that would risk bringing the game into disrepute. Where a potential dispute relates to things like criminal history, the regulator will already have to consider these things. But “disrepute” is a vague term; could it arise through an owner’s conduct in their personal life, or their political views? In the Government’s view, it would put the regulator in quite a difficult position, making a value judgment on what constitutes disrepute, which would undermine the principle of a reasoned, evidence-based test.

Turning to Amendment 199 in the name of the noble Baroness, Lady Grey-Thompson, the test is supported by the regulator’s information-gathering powers to ensure its determination is evidence-based. These powers will help the regulator tackle unco-operative individuals or organisations that do not provide the information. However, let me be clear: if the regulator does not have enough evidence to make its determination, the individual will be found unsuitable.

I understand the noble Baroness’s concerns about restrictions on an owner’s funds. I want to reassure her that the test requires an owner to submit financial plans and demonstrate sufficient financial resources to run the club. As part of this, we expect that the regulator will consider things such as the liquidity of those resources and their availability to actually be used to fund the club. The regulator will also need to be satisfied that the owner does not have wealth connected to illicit finance. To do this, it can conduct enhanced due diligence on the owner’s source of wealth. This would identify any links to criminality, corruption and money-laundering. We believe, therefore, that the intent of the noble Baroness’s amendment is delivered in the current drafting of the Bill. I hope she takes reassurance from this, but I am happy to meet her to discuss this if my explanation has not satisfied her.

I turn to amendment 200 from my noble friend Lord Bassam of Brighton, which the noble Lord, Lord Moynihan, also spoke to. This Government are not making a judgment on different forms of ownership. We recognise that good ownership can take many forms, and it is investment from responsible owners that has been a driving factor in the success of English football. Banning any one particular kind of ownership would not, in our view, be in keeping with the flexible and proportionate approach to regulation we are proposing. I believe that this approach has broad support across the Committee. Prospective owners with state backing will be assessed against the same set of criteria as any other prospective owner, on a case-by-case basis. I hope that answers the question about Newcastle from the noble Lord, Lord Parkinson.

[Lord Moynihan (Con)]

I apologise for intervening on the Minister’s speech, but I did ask a very specific question, which I think she has answered but I would be grateful if she could make it clear to the Committee. Through the higher degree of influence test, which we have debated and understand, and which is unique to this regulatory framework, will the Crown Prince of Saudi Arabia be subject to an ownership test—yes or no?

[Baroness Twycross (Lab)]

Any owner, with state backing or otherwise, will be assessed against the same set of criteria as any other prospective owner, on a case-by-case basis.

[Lord Moynihan (Con)]

So the answer is yes.

[Baroness Twycross (Lab)]

Yes. Prospective owners with state backing will be assessed against the same set of criteria and, by requiring new owners to undergo the regulator’s test, we better mitigate against harm to clubs by preventing unsuitable custodians ever becoming owners. Giving the regulator the power to test incumbent owners where there are concerns about their suitability ensures that any unsuitable owners can be removed.

The noble Lord, Lord Scriven, raised a comparison with the legal position on media organisations. Although football clubs up and down the country are vital community assets, they are not the cornerstone of our democracy that free media is. Investment from responsible owners has been a driving factor in the success of English football, which is why we are putting in place a stable regulatory environment that will continue to attract investors with a long-term prudent approach to growing football clubs as important community assets. What is important, in our view, is that owners are suitable, and the approach to testing owners set out in the Bill ensures just that.

This has been a hugely useful debate and, although I will have to come back on a number of points, I hope my response has provided some reassurance. But, for the reasons I have given, I would be grateful if my noble friends and other noble Lords would not press their amendments.

[Lord Bassam of Brighton (Lab)]

My Lords, I will of course happily withdraw the amendment in my name and that of my noble friend Lady Taylor and the noble Baroness, Lady Grey-Thompson. I have a few points to make in response. Generally, this has been a useful and valuable debate. We have had reassuring clarity from the Minister on the issues of concern.

The noble Lord, Lord Pannick, asked a practical question about how this would work. There is already an issue, in a sense, for the regulator to deal with. Under Clause 28(2)(a)(iv), the regulator will have to look for—and will certainly want to know—the source of funding. I can only assume that that is because we do not want the funding of our football clubs to be in any way under suspicion and/or linked to criminal activity, particularly human rights abuses and modern slavery. In Clause 28(2)(b), there is a fairly wide power for the independent football regulator to require information. Clearly, there are practical questions in carrying out inquiries and investigations into the source of funding that owners will offer up, but this is just one of those issues that will undoubtedly be tested over time.

I disagree with the noble Lord, Lord Jackson of Peterborough, that putting amendments forward like this is tantamount to regulatory overreach. If we were not concerned about issues such as modern slavery and human rights abuses, we would be selling the world of football short.

[Lord Jackson of Peterborough (Con)]

Surely the noble Lord will concede something. Proposed new paragraph (f) in Amendment 185, which he signed, mentions

“whether A has been complicit in … non-crime hate incidents”.

We are talking about the ownership of a football club. What does complicit in a non-crime hate incident even mean in the context of a strategy to deal with human rights and potentially preventing someone, via primary legislation, owning a football club?

[Lord Bassam of Brighton (Lab)]

I would hope that we would be concerned by things like hate incidents—those are important considerations. I certainly do not want my football club to be associated in any way with that, and I know the club itself does not. I am sure that goes for most clubs up and down the country.

I am grateful to the noble Lord, Lord Scriven, the noble and learned Baroness, Lady, Butler-Sloss, and the Lib Dem Front Bench for their support. I take most of the comments made by the noble Lord, Lord Moynihan, as being broadly positive, in terms of what we were trying to achieve with this little group. The issues are important, and I assure the noble Lord, Lord Parkinson, that I have no great desire to become massively unpopular with Newcastle United fans. I am probably a bit unpopular because Brighton seem to beat them regularly anyway.

[Noble Lords]

Oh!

[Lord Bassam of Brighton (Lab)]

But clearly, we should we look at these issues. State ownership is an issue we should keep under careful consideration. The Minister has said that all forms of ownership will be scrutinised in a similarly robust way, and we should be satisfied with that. So, having heard what was said, I am happy to withdraw my amendment.

Amendment 178 withdrawn.

Amendment 179 not moved.

Clause 26 agreed.

17:30

Clause 27: Duties to notify IFR of prospective new owner or officer

Amendment 180

Moved by

[Lord Markham]

180: Clause 27, page 20, line 18, leave out subsection (7)

[Lord Markham (Con)]

My Lords, I hope that Amendment 180 will be much simpler, because is a bit niche and, dare I say it, anoraky in nature, for which I apologise. It would amend Clause 27 by removing subsection (7).

This subsection states that where a prospective owner or officer does not inform the regulator of their intention to become an owner or an officer

“as soon as reasonably practicable”,

that person must inform the regulator as soon as it is reasonably practicable. We probably understand the issue there. Not to mince my words, it is a slight tongue- twister. It is a bit confusing and nonsensical. In essence, it says that if someone has not told the regulator in the period when they were meant to, they must do so later

“as soon as reasonably practicable”.

I hope that this provision is a fairly simple one to tidy up. Again, I think we all understand the good intentions here, but I would be grateful if the Minister could clear that up. I will leave it to my noble friend Lord Moynihan to raise his amendments.

[Lord Moynihan (Con)]

My Lords, I will be equally brief in proposing my Amendments 187ZA and 187ZB. The drafting of the Bill states that if the regulator takes too long to determine applications for new owners and officers, then the applicants are treated as not suitable under Clause 32(5), through absolutely no fault of their own. This is not aligned with practice in other regulated sectors. It could have an impact on that person wider than purely their involvement in the club and be detrimental to clubs that have only one potential new owner, who is deemed unsuitable purely because the regulator ran out of time.

The change that I propose to Clause 32(5) would reverse the consequence of excessive delay, addressing the inherent unfairness in the current drafting. This is aligned with how statutory time limits on mergers work, for example. If the CMA fails to make a decision within a specified timeline, the merger is automatically allowed. These are clarifying amendments; I very much hope that the Government will see benefit in improving the legislation by accepting them.

[Baroness Brady (Con)]

My Lords, I refer the Committee to my interests as detailed in the register. I support Amendments 187ZA and 187ZB, tabled by my noble friend Lord Moynihan, which propose a sensible and very necessary adjustment to the presumptions under- pinning the ownership test.

These amendments address an important issue in the Bill, ensuring that the ownership process is fair, reasonable and aligned with best practices in other regulated sectors. As my noble friend has said, as it stands, Clause 32(5) means that if the independent football regulator fails to determine an application for a new owner or officer within a set timeframe, the applicant will be automatically treated as unsuitable. This is a really problematic approach. It assumes that any delay is the fault of the applicant or reflective of their unsuitability when, in reality, delays can occur for many good reasons. Quite often, they are entirely outside the applicant’s control or, indeed, the control of the selling club.

Simple cases can, of course, be done quickly, but acquisitions of football clubs can be complex undertakings. Applications for ownership done well involve a detailed examination of financial records, governance structures and regulatory compliance. Imposing arbitrary deadlines does not speed things up; it just risks poor decisions being taken on very consequential issues without all the facts. Indeed, taking time to get it right is in the best interests of all involved: the club, the fans and the broader football ecosystem. To penalise an applicant simply because the IFR runs out of time is neither fair nor proportionate.

The Premier League allocates significant resources to operate its own owners’ and directors’ tests. I have spoken to it about this issue and, of course, so has DCMS. It has told me that the league sees no benefit whatever in arbitrary deadlines and has explicitly told the Government that unless this is staffed and resourced intensively, the IFR will almost definitely hit the deadline in a range of cases. Of course, this will be compounded by the fact that the Premier League will be running its own process without a statutory deadline, meaning the IFR would be ruling people to be unsuitable for no good reason while the league would still be performing its test. This is a recipe for chaos and, I am afraid to say, litigation.

This presumption of unfitness if a statutory deadline is not met could have significant unintended consequences. Let us imagine a scenario where a club is on the brink of critical ownership transfer—perhaps its survival depends on transferring the ownership—and the only prospective buyer is deemed unsuitable purely because the IFR failed to meet its deadline. In the last Committee debate, the Minister said:

“Although the risk of clubs going into administration will be greatly reduced, it may still happen”.—[Official Report, 16/12/24; col. 54.]


For a club to go into administration because the regulator has not met its deadline would be unfair, and catastrophic for its supporters. Even if it did not result in immediate administration, it could leave the club in limbo, unable to secure necessary investment and potentially sliding into financial difficulty or worse.

This issue is not confined to the immediate impact on clubs. There are also wider reputational and practical implications for prospective owners and officers. Being deemed “unsuitable” by default could carry consequences far beyond football, affecting their credibility and standing in other sectors. That is not how a fair and just regulatory process should operate.

The amendments before us propose a simple but important correction. By reversing the presumption, they would ensure that applicants were not unfairly penalised for delays that were outside their control. Instead, if the IFR fails to make a determination within the specified timeline, the applicant would be treated as suitable by default. As my noble friend Lord Moynihan said, that is much more aligned with practices in other regulated sectors. For example, in merger control, if the Competition and Markets Authority fails to make a decision within the statutory time limit, the merger is automatically allowed. That ensures that the time limits are meaningful but that regulatory delay does not create unnecessary barriers or unfair outcomes.

It is important to emphasise that this amendment does not undermine the integrity of the ownership test. The IFR will still be able to make a determination based on the suitability of the applicant, but it will no longer have the ability, in effect, to penalise applicants or clubs because of its own delays. It would, in truth, be far better not have a timeframe at all, for the reasons I have outlined. However, if there is to be one, we must reverse the presumption and place incentives in the right place.

I hope the Minister will recognise the value of these amendments, and the much greater fairness and reduced risk they would bring to the process. It is a small but crucial change that will help ensure the ownership process operates in way that is both reasonable and just. I urge the Government to give the amendments the consideration they warrant.

[Lord Pannick (CB)]

My Lords, I support the noble Lord, Lord Moynihan, and the noble Baroness, Lady Brady, in this matter. It cannot possibly be fair to have a regulatory system in which, if the regulator does not perform and reach a decision within the specified time, for reasons that are not the responsibility of the applicant, the application fails. That is plainly unjust and, as the noble Baroness, Lady Brady, says, it is contradictory to the approach adopted in competition law, where the regulator has short time limits and must comply with them. The alternative is to have a more open-ended system, whereby the regulator can take more time if it is necessary to do so in exceptional circumstances.

[Baroness Blake of Leeds (Lab)]

My Lords, I start by thanking the noble Lords, Lord Markham and Lord Moynihan, for tabling these amendments. I will start with Amendment 180, in the name of the noble Lord, Lord Markham. The regulator needs to know who a club’s prospective new owners and officers are before they can buy or join the club, so they can be tested.

Although clubs, owners and officers are required to pre-notify the regulator, there may be occasions where someone becomes an owner or officer of a club without having first notified the regulator. In these circumstances, it is vital that the regulator is notified after the event—precisely what this amendment would remove. That is because, if the regulator is not aware that someone has become an owner or officer, the regulator will not know to test them. This risks clubs having unsuitable owners or officers in place.

I turn now to Amendments 187ZA and 187ZB, in the name of the noble Lord, Lord Moynihan. I will not deviate to talk about Leeds United at this point, although we always find reasons to do so in our general conversations. I am grateful for his comments and for those of the noble Baroness, Lady Brady, and the noble Lord, Lord Pannick. Clearly, I think we come down to the issue of timely decision-making on the suitability of new owners and officers, and we recognise that this is important for clubs’ financial sustainability.

It is a fact that, without deadlines, we have seen league determinations drag on, unable to reach a decision. That is why the regulator will be subject to a statutory deadline when it tests the suitability of prospective new owners and officers.

We believe that Amendment 187ZA would undermine the regulator’s tests. It would require the regulator to deem an owner or officer suitable to take up a position at a club if the deadline had been met, and the regulator had otherwise been unable to make a determination. This means that it would have to approve an applicant it did not know was suitable.

Amendment 187ZB would then allow that owner or officer to remain at the club until such point as the regulator found them unsuitable. This creates very concerning outcomes. If the end of the time limit resulted in an automatic pass, this could incentivise prospective applicants to stall and withhold information. More worryingly, as I set out, it would also mean that new entrants were approved even if the regulator was not confident that they were suitable—which is something that we simply cannot have.

This risks owners and officers who should never have been allowed to take up positions at clubs in the first place to potentially do considerable harm to clubs, which is why the statutory deadline must result in an automatic negative determination if reached, because this is the only way to ensure that suitable owners and officers become custodians. If the end of the time limit resulted in an automatic affirmative determination, this would incentivise prospective applicants to stall, as I have already outlined. It would also mean that new entrants would be approved if the regulator was not confident, and I hope that noble Lords will understand that this is not an acceptable position to be in. That is why—

[Lord Pannick (CB)]

Does the Minister accept that the current wording of the clause means that the application fails even if the delay is due entirely to the incompetence of the regulator or the failure of the regulator to have an efficient system for dealing with applications? Surely that cannot be right.

[Baroness Blake of Leeds (Lab)]

I understand the noble Lord’s comment but I really believe we are covering our tracks in this. We are improving the situation where the regulator works to avoid the situations that he outlined. I will add that this also provides certainty to the industry and, most importantly, it will incentivise the prospective person to promptly provide information to the regulator to allow it to make its determination. With those comments, I hope that noble Lords will not press their amendments.

17:45

[Lord Markham (Con)]

I thank noble Lords for this debate and the Minister for her response. While my amendment was anoraky by nature, I think we would all agree that the other amendments tabled by my noble friend Lord Moynihan are quite serious. As the noble Lord, Lord Pannick, mentioned, this is something that happens in all other regulatory environments, and other regulators manage to cater for that in exactly the same situation.

What my noble friend Lord Moynihan is suggesting is not, if the deadline has passed, that an owner is deemed suitable for ever. They will be deemed suitable only until the regulator is able to get round and opine. It would be a pretty silly thing to do for an owner to drag their feet and be awkward, for them to be allowed to do it only to be removed a few months later. That would be a big waste of money for them, and it would be completely illogical for an owner to try to game the system in that way.

So I am afraid that do not quite understand, and I think other noble Lords share in this. I ask the Minister to go back and think more on that, because it has got to be the right case. As the noble Lord, Lord Pannick, pointed out, in a situation where the regulator is not able to pass judgement through their own incompetence, it is the owner, who might be perfectly suitable, who loses out. So I would be grateful if we could consider that further—but at this point I am happy to withdraw.

Amendment 180 withdrawn.

Clause 27 agreed.

Clause 28: Determination of suitability required for new owner

Amendments 181 to 184 not moved.

Clause 28 agreed.

Amendment 185 not moved.

Clauses 29 to 31 agreed.

Clause 32: Determinations under sections 28 and 29: time limits

Amendments 186 to 187ZB not moved.

Clause 32 agreed.

Amendment 187ZC not moved.

Clause 33: Duties to notify IFR of change in circumstances relating to incumbent owner or officer

Amendments 187A and 187B not moved.

Clause 33 agreed.

Clause 34: Incumbent owners

Amendment 188 not moved.

Clause 34 agreed.

Clause 35: Incumbent officers

Amendment 189 not moved.

Clause 35 agreed.

Clause 36 agreed.

Clause 37: Matters relevant to determinations

Amendment 190

Moved by

[Lord Parkinson of Whitley Bay]

190: Clause 37, page 28, line 9, at end insert—
“(1A) In making a determination under section 28 or 34, the IFR must also have regard to the foreign and trade policy objectives of His Majesty’s Government in the United Kingdom.”

[Lord Parkinson of Whitley Bay (Con)]

My Lords, in moving Amendment 190 I will speak to my further amendments in this group, Amendments 191, 195 and 198. I will also speak to Amendment 204, which is in the name of my noble friend Lord Markham, to which I have added my name as well.

The amendments in this group focus on the criteria that the regulator will take into consideration when determining the suitability of a potential owner of a regulated club. My Amendment 190 is intended as a probing amendment, to tease out the reasonings behind the Government’s removal of what was Clause 37(2) in the previous version of the Bill. While the wording of this amendment is exactly the same as that of the subsection that was taken out when the present Government introduced their version, I want to be clear that I am not necessarily arguing that I want to see it reinserted. My intention here is to use this opportunity to understand why the Government took it out, and to ask the Minister a few questions for the sake of the Committee to elaborate on the Government’s position.

The Government have said that the previous requirement for the regulator to have regard to the foreign and trade policy objectives of the United Kingdom and its Government was one of the main concerns that UEFA had with the previous version of the Bill, and that removing the provision has pacified it. But has it fully pacified UEFA? We have not yet had sight of the letter from UEFA to the Secretary of State, which the Committee has heard about a number of times. My noble friend Lady Brady sent her own correspondence to the noble Baroness, Lady Twycross, on 2 December, asking her to publish that letter and to place a copy in the Library so that the Committee can see it, but I do not believe my noble friend has yet received a response. It would be very helpful for the whole Committee to be able to see that letter, so we can be reassured about what exactly UEFA has said in that regard.

At present, it is not clear whether this provision was the only part of the previous Bill with which UEFA was not content or whether there are further parts of the Bill currently before us with which it is still unhappy. It would be useful to know how strong UEFA’s opposition was to the old provision on trade policy and so on. Did the Government remove it because UEFA threatened to exclude England from European competitions if, and only if, it remained in the Bill, or was UEFA’s opposition weaker and focused on other aspects of the Bill? I would be grateful if the Minister could elaborate on that for the Committee, and I hope that my noble friend Lady Brady will receive a response before Report.

My Amendment 191 would insert the word “relevant” to Clause 37(2)(c). This requires the regulator to consider whether a prospective owner or officer has been party to any civil proceedings in a court of law. The intent of including “relevant” here is to give a more precise wording, and indeed a bit of leeway. Our concern is that the current wording permits a wide range of court proceedings to be considered by the regulator—for example, divorce or child custody would surely be a civil proceeding. Making this simple change would focus the scope on civil proceedings which are directly related to somebody’s ability as an officer or owner of a regulated club.

I seek through Amendment 195 to prevent the regulator amending the considerations relevant to owner and officer determinations. This follows the theme that we have carried through this Committee of ensuring maximum clarity for clubs which are going to be regulated, and ensuring that the powers granted to the regulator by Parliament are not expanded in future. To allow that would be to grant the regulator a blank cheque to demand more and more requirements as it wishes.

The last amendment in my name in this group is Amendment 198, which would remove the provision stating that the regulator may not refuse ownership of a regulated club because of a prospective owner’s connection with the Government of a particular territory. I am sure we can all think of particular countries or territories at present which would indeed be grounds for immediate disqualification—this perhaps flows from the debate we had on group 2. For instance, at present, connection with the Government of the Russian Federation would surely be an open-and-shut case—would the Minister not agree? We want to ensure that the regulator is independent of our own Government, of course, but I do not see why the regulator should be prohibited in law from considering factors such as this in the determinations that it makes.

Amendment 204, in the name of my noble friend Lord Markham, prevents the regulator prohibiting multi-club ownership models. There are currently a large number of Premier League and English Football League clubs which are owned by individuals or consortia that own other clubs. There has been some controversy in this area, I gather, but we should be alive to the benefits of the model—one of which is a reduction in financial risk. It gives the ultimate owner of a club greater protection from one of their clubs being relegated or suffering a slump in revenue. Because there is a common owner, other clubs in the multi-club model can act as a buffer to absorb losses in one of the other clubs. There is, consequently, less risk of that owner facing difficulties and having to sell the club or, even worse, that club going into administration. Multi-club ownership models can absorb financial risk, thereby aiding the regulator to achieve the goals we want to see it achieve in regard to financial stability Surely the regulator should not prohibit this. I beg to move.

[Baroness Brady (Con)]

My Lords, I support Amendment 191, which seeks to add the word “relevant” to Clause 37(2)(c). This would be an important adjustment that would bring additional clarity and guidance to the IFR, as it develops its ownership test. The clause currently requires the independent football regulator to consider

“whether the individual is or has been a party to proceedings (other than criminal proceedings) in any court or tribunal”.

This is a strikingly broad provision. It would allow any civil proceedings, regardless of their nature or relevance, to count against someone in an ownership determination; it may even be that the individual in question seeking ownership has brought the civil action or tribunal that, as a result, is likely to disqualify them from owning a football club. It is a very concerning approach. Amendment 191 would provide a much-needed safeguard against unintended and disproportionate outcomes.

Let me take this opportunity to ask the Minister again the question I asked earlier in Committee—it is quite a fundamental question. Is the ownership test provided for in this Bill going to be subjective or objective? That was not made clear by the Minister when I asked the question before, so I would really like clarity—surely it cannot be both. Without this clarity, we risk creating an ownership framework that is open to arbitrary and inconsistent application, which would undermine investor confidence and, ultimately, the credibility of the regulator.

This concern is particularly acute when we consider the clause as it stands. Most successful businesspeople who have lived rich and varied commercial lives will have been involved in civil proceedings at some point, somewhere in the world. These could range from contractual disputes to regulatory disagreements or employment tribunals, and very often instances where they were not at fault whatever but had to defend their interests or bring such cases themselves. Are we seriously suggesting that such proceedings should disqualify them from passing an ownership test?

This is not a hypothetical concern. Civil proceedings can be entirely routine and, in many industries, reflect the complexity of modern business rather than any moral or professional failing. The absence of the word “relevant” means that such cases could be treated as a disqualifying factor, even when they have no bearing whatever on the individual's ability to responsibly own or direct a football club. This is not aligned with practice in any other regulatory sectors and will create an entirely unnecessary barrier to investment.

Clarity on the scope and purpose of the ownership test is essential for not just the regulator but the entire football ecosystem, including investors, leagues and clubs. Noble Lords have already highlighted serious issues with the current drafting, not least the lack of definition of “significant influence”. On the very unclear situation of Newcastle United, the Minister confirmed that the Crown Prince would be subject to the owners’ test, and the issue of significant influence would mean that this is the case. At least that situation was clarified and he knows where he stands.

Amendment 191 provides an opportunity to address at least one aspect of this mixture of problems by narrowing the scope of Clause 37(2) to focus only on what is genuinely relevant. This small change would provide greater clarity, fairness and confidence for all stakeholders in football. I encourage the Minister to reflect on this issue and the broader issues around this element of the Bill. As we move towards Report, it would be helpful to hear how the Government intend to address the now quite numerous concerns about the scope and application of the ownership test in the Bill.

18:00

[Baroness Taylor of Bolton (Lab)]

My Lords, I will say a few words about one of the amendments, but first want to follow up on what the noble Lord, Lord Parkinson, was saying about multi-club ownership. He was suggesting that multi-club ownership could alleviate risk. I see the point that he was making, but we have to be clear that it can also generate risk. This is an ongoing conversation that many people in football are having. We have to consider its prevalence and the fact that it is increasing, but there are questions about how it could distort competition and lead to complications with loan deals or the sale of players. This is a big question that will loom over us in the future. It is not just a one-way issue, as perhaps the noble Lord was suggesting.

I want to say a couple of words about Amendment 201. Clause 37 says very clearly that in determining whether it considers that an individual has the requisite honesty et cetera, the regulator should have regard to whether the individual has been convicted of a serious criminal offence. Amendment 201, in my name and that of my noble friend Lord Bassam, goes somewhat further and says:

“No individual with an unspent serious criminal conviction, whether or not in England and Wales, shall be permitted to own a controlling stake in, or serve as a director for, any regulated club”.


That is a clear statement of intent about the serious nature of some of the issues that have arisen about specific clubs in recent times. I ask the Minister to tighten up on this, take the prospect of owners with serious convictions very seriously and say that it should be a bar to ownership and not simply something that has to be taken into account.

[Lord Moynihan (Con)]

My Lords, I too will speak to Amendment 204 on multi-club ownership, as the noble Baroness, Lady Taylor, has made some important points and it would be helpful for the Committee to understand the position of the Government. It can alleviate risk. It is also highly complex and can make it very difficult, in terms of due diligence, for the regulator to look at an English club under this legislation without taking into account the financial exposure that a multi-club owner could have in another country with other clubs.

This is a growing trend; it is not new. A significant number of Premier League clubs and six EFL Championship clubs form part of a wider multi-club model, a structure first explored exclusively in Europe by ENIC, now the majority shareholder of Tottenham Hotspur. The rationale underpinning multi-club ownership aspirations, which underlines just how complex the situation can be, ranges from player recruitment and development efficiencies to knowledge sharing, resource synergies and brand penetration.

Furthermore, accruing interest in clubs that compete in the continent’s top leagues—those that hold higher bands and therefore score more points in the governing body endorsement system—is seen as a means for Premier League and EFL clubs to access a more eligible foreign pool of players. Having interests in multiple clubs is not a phenomenon unique to the UK; it pervades the European game. UEFA reports that clubs with cross-ownership relations account for more than a third of the top division in each of Belgium, France and Italy, in addition to England. Integrity of competition, reconciling the model with football’s rulebook, has become a complex issue for UEFA. At the centre of sport is competition, so if the same person, either a natural or a legally based entity, was to have control or influence over two rivals, there would be a risk to the integrity of competition whenever those rivals competed.

To mitigate that risk, football’s governing bodies have introduced rules to preserve the independence and integrity of competition between its clubs. At a domestic level, approximately two-thirds of European national football associations have rules directly limiting or restricting multi-club ownership. The famous article 5 of the regulations of the UEFA Champions League, on the integrity of the UEFA club competitions, stems from the governing body’s concern, which started back in the late 1990s. Article 5 regulates common ownership by prohibiting the same individual or legal entity having control or influence over more than one club playing in the same UEFA club competition. That notably includes the ability to exercise, by any means, a decisive influence on the decision-making of the club concerned.

With that brief explanation on top of the important points made by the noble Baroness, Lady Taylor, I would be very grateful if the Minister could confirm that she is completely comfortable with article 5 and will instruct the regulators not to impose any conflicting regulations in this area.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the noble Lords, Lord Parkinson of Whitley Bay, Lord Addington, Lord Markham and Lord McNally, who I am sorry to hear is not available today, and particularly my noble friend Lady Taylor of Bolton, for the amendments in this group.

Starting with Amendment 190 from the noble Lord, Lord Parkinson, I do not agree that the foreign and trade policy objectives of the Government have any bearing on suitability. Suitability should be based purely on an impartial assessment of the individual’s fitness, whether they have a source of wealth connected to serious criminal conduct, and their financial plans and resources.

[Lord Parkinson of Whitley Bay (Con)]

I am sorry to intervene so early, but the noble Baroness has said something quite stark. The policy of the United Kingdom is very clear in relation to the Russian Federation at the moment. Roman Abramovich was sanctioned because of the UK’s very clear position and the ownership of Chelsea was changed for a brief period. The Department for Culture, Media and Sport owned it on behalf of the nation and oversaw the sale. I understand the Government’s stated reasons for taking this out of the Bill, but should the regulator not be able to take into account the foreign policy issues of the day on something as important as this?

[Baroness Blake of Leeds (Lab)]

The noble Lord has pre-empted the further comments that I was going on to make. I can address this here. Clearly, in the example that is given regarding Russia, anyone connected to a state that is subject to sanctions would not pass the test. That is a straightforward way of picking up some of the concerns that he has raised.

The intention with all this is to ensure that the test can be applied consistently and remain fair, transparent, robust and focused on whether an individual is suitable to own a football club. Furthermore, the Government have been clear that the independence of the regulator is vital. That is the point I want to stress here and that is why the Government have removed the requirement for the regulator to have regard to His Majesty’s Government’s foreign and trade policy objectives when assessing an owner’s suitability, which is the precise requirement this amendment seeks to include.

Turning to Amendment 191, I thank the noble Lord, Lord Parkinson, and assure him that the intent of his amendment is already achieved in the Bill as drafted. The Bill sets out a number of matters the regulator must take into account when considering an owner or officer’s fitness as part of the owners’ and directors’ test. One of these is whether the owner or officer has been party to civil proceedings. As with all public bodies, the regulator must take into account all relevant matters and must disregard irrelevant matters when it comes to making decisions. That means that the things listed in Clause 37(2) will affect the regulator’s decision only if they are relevant in a specific case. That picks up on the issue of relevance.

In other words, the regulator must treat these things as potentially relevant to its decision, but it must consider the specific facts and context in every case. The noble Baroness, Lady Brady, also picked up on the issue of relevance. For example, the regulator will not be concerned with whether an owner or officer has contested a speeding ticket. However, it will be concerned if a civil court has found that an owner or officer has acted in a seriously dishonest way or if they have a track record of civil cases that cast significant doubt on their integrity. The test is designed to allow the regulator to make a holistic evidence-based assessment of suitability, taking the context into account, as I have mentioned previously.

I turn to Amendment 192, tabled by the noble Lord, Lord Addington, and Amendment 201 in the name of my noble friend Lady Taylor of Bolton. On the latter, I completely agree that an unspent serious criminal conviction is likely to affect whether an individual is suitable to be a club’s custodian. That is why the regulator is already required to take any criminal convictions into account when assessing an owner or officer’s suitability —it does not have a choice: it has to. I reassure my noble friend that we take her comments seriously and are grateful for the way in which she expressed them today.

The Bill does not set out exhaustive details on every element of the fitness test as to what constitutes a pass or fail. Instead, it allows the regulator to make a holistic assessment, which, crucially, is able to take into account any context and relevance. We believe this approach is key. If someone’s criminal history makes them unsuitable, the regulator can fail them on that basis. By comparison, the binary nature of the league’s current tests leads to a less sophisticated assessment of suitability. That is why this test takes a different approach. I reassure noble Lords that the Bill as drafted already requires the regulator to consider any unspent serious criminal convictions, and we fully expect the regulator to treat these as very significant factors in its assessment.

I turn now to Amendments 195 and 198 in the name of the noble Lord, Lord Parkinson—

[Lord Goddard of Stockport (LD)]

Can the Minister help me? She said she would comment on the amendments. What are her comments on Amendment 192, tabled by my noble friend Lord Addington, which would require the Bill’s propriety test to include equality, diversity and inclusion? We had a long and wide-ranging discussion on that the other night, and the Government made it clear that they supported including equality, diversity and inclusion in the Bill. I would like some clarity. The propriety test seems fixated on criminal charges and litigation.

18:15

[Baroness Blake of Leeds (Lab)]

I am sorry that we have not had a fuller discussion on that, but I thank the noble Lord, Lord Addington, for his amendment and I agree that equality, diversity and inclusion are significant factors which the regulator has a duty to highlight. Equality, diversity and inclusion are not named criteria in the fitness test, and I do not believe they should be. If an individual has behaved in a seriously discriminatory and harmful way that rises to the level of a criminal offence, and which results in a civil lawsuit or regulatory or disciplinary action, the existing test will capture this. We believe that this is the appropriate threshold. It would not be proportionate to require the regulator to assess individuals’ commitment to equality, diversity and inclusion.

I will return to the point the noble Lord, Lord Parkinson, made regarding a blank cheque, and pick up on his Amendments 195 and 198. The Bill sets out a list of matters the regulator must consider when assessing an owner or officer’s honesty and integrity as part of the fitness test. Those are the relevant matters when assessing an individual’s honesty and integrity, and they are based heavily on precedent—namely, the Financial Conduct Authority’s fit and proper person test. However, as we have discussed before, football is a changing industry and the regulator must be able to adapt to this. Matters may emerge in the future that are crucial to assessing an individual’s fitness.

The purpose of the owners’ and directors’ test is to ensure that clubs have suitable custodians. That is why it is vital that the regulator be able to consider other matters. This sort of discretion is well precedented; indeed, the FCA has more discretion when conducting its fit and proper tests. However, we want to make it explicitly clear that it would not be appropriate for the regulator to add any matters which would allow it to determine an individual’s suitability solely based on their connection with a Government. That should not be what determines whether an individual is suitable or not.

Turning to Amendment 204 from the noble Lord, Lord Parkinson, nothing in the Bill prohibits an owner owning more than one club. I thank the noble Lord, Lord Moynihan, for his comments on this issue. Concerns about multi-club ownership are to do with conflicts of interest and competition, which is why the leagues and UEFA have rules about multi-club ownership. Clubs competing in these competitions will be required to abide by any applicable rules.

Turning finally to Amendment 202, from the noble Lord, Lord McNally, I agree that it is crucial that clubs be protected from unsuitable officers, which is why the Bill gives the regulator the powers to disqualify any unsuitable officer from being an officer at any regulated club, up to and including for life. That, I am sure noble Lords will agree, is a very strong tool that has powerful ramifications. It means that all clubs will be better protected from unsuitable officers, but it should be used carefully.

There are scenarios where the regulator must find an officer unsuitable—for example, if an officer lacks the requisite qualification, experience or training to take up that specific officer role at the club—but it should not automatically follow that they are deemed unsuitable for any officer role at the club. Indeed, there may be other officer roles that they are suitable and qualified for, but this amendment would ban that. It would mean that the regulator would have to disqualify them from being an officer anywhere. This we cannot and should not accept. That is why it is important that the regulator has the power to disqualify unsuitable officers but is not always required to do so. For the reasons I have set out, I hope the noble Lord will be able to withdraw his amendment.

[Lord Pannick (CB)]

Could the noble Baroness say something about the UEFA letter which expresses its views on the Bill? Will she assure the Committee that a copy of this letter will speedily be sent to the noble Baroness, Lady Brady, and a copy put in the Library so that we know what it says?

[Baroness Blake of Leeds (Lab)]

My understanding is that we will not be sending it, but I am sure there will be further clarification on this point.

[Lord Pannick (CB)]

Can I ask why? This is a letter from the sports regulatory body that governs European football. Surely the Committee is entitled to know what its views are on the substance of the Bill we are debating.

[Baroness Blake of Leeds (Lab)]

We have already covered this point. We are talking about a private letter to the Government. That is my understanding of the situation. I do not feel qualified to comment further at this stage.

[Lord Parkinson of Whitley Bay (Con)]

It is a private letter that has convinced the Government to change the Bill in the way that we are debating here, so I hope the noble Baroness will take that away and hear the repeated request from the Committee to see this letter. It has persuaded them to take out the provision that I am probing with my Amendment 190 and every time we return to this matter, the Committee gets a bit more confused about why the Government have done it and what may or may not be in that letter. I appreciate what she says but I would be grateful if she could let us see it.

I apologise for intervening so early. What the noble Baroness said subsequently was very helpful. Also, the example I gave was not a helpful one because Roman Abramovich was sanctioned and if a person becomes sanctioned, as the noble Baroness went on to say, that individual would indeed be covered. To give her another, necessarily hypothetical example, if an unsanctioned citizen of the Russian Federation, connected to the Russian Government and supportive of their illegal war in Ukraine, wished to become an owner of a football club in this country, the combination of taking out this provision about allowing the regulator to have regard to the foreign policy objectives of the Government of the United Kingdom and the refusal to accept my Amendment 198, which covers links to foreign Governments, means that the regulator would not be able to prevent that person—a Russian citizen connected to the Government of the Russian Federation—becoming an owner of a club? Does she not think that is an unfortunate consequence of the changes the Government have made to the Bill because of this UEFA letter which we have not seen?

[Baroness Blake of Leeds (Lab)]

With regard to the UEFA letter, I refer noble Lords back to the comments that my noble friend Lady Twycross made previously. To clarify, we did not in fact say that the letter was the reason for changing the Bill; we said that UEFA’s views more generally were the reason for change. With that, I think I can leave that there. I also want to make the point again that anyone subject to sanctions would not pass the test.

[Lord Parkinson of Whitley Bay (Con)]

But somebody who is not subject to sanctions but who is connected to a Government whom the UK is in dispute with would not be covered because of the removal of this provision from the Bill. I am happy if the noble Baroness wants to write on this, but this is an important matter because this is a change to the Bill. I understand the Government’s stated reasons for changing it—we do not want to see football teams in this country unable to take part in international tournaments and we want to make sure that the regulator is independent of government—but I worry that by making the change in the way that we have and by not adding in the additional safeguard such as the one I am proposing through my Amendment 198, we open ourselves to a situation where somebody connected with a foreign Government cannot be taken into account by the regulator. If she is happy to commit to write on that, we would be grateful.

[Lord Addington (LD)]

We have gone through this several times. If there could at least be some private way in which those people involved in this could see this letter, it would be of assistance, because this is becoming a hardy perennial that is getting in the way of progress.

[Baroness Taylor of Bolton (Lab)]

I think everybody is thinking about the previous examples we have been given, but would not the example that the noble Lord, Lord Parkinson, just gave us of the non-sanctioned Russian individual be covered by the other considerations and the holistic attitude that my noble friend the Minister was telling us was the basis of the approach of the regulator?

[Baroness Blake of Leeds (Lab)]

I thank my noble friend for her helpful comments. I am not able to comment further at this moment. I think the detail is probably beyond this discussion and I recognise the comments about going round and over things again.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Baroness but it would be helpful if we could have something in writing on this. As I say, I gave a poor example in the case of Roman Abramovich, but the hypothetical example is one that I would be grateful for an answer to. That would be appreciated. But I am grateful to her for what she said and the reassurances she gave on some of the other amendments that I have tabled in this group on civil offences and so on. I take on board the points that the noble Baroness, Lady Taylor, raised about multi-club ownership. I recognise that this is a live and lively debate in the sport. What we were trying to test with Amendment 204 was that the regulator should not be restricted on that basis alone. But with gratitude to the noble Baroness and eagerly awaiting the letter that will follow, I beg leave to withdraw my amendment.

Amendment 190 withdrawn.

Amendments 191 to 199 not moved.

Clause 37 agreed.

Amendments 200 and 201 not moved.

Clause 38: Disqualification orders

Amendments 202 and 203 not moved.

Clause 38 agreed.

Clauses 39 to 44 agreed.

Amendment 204 not moved.

Clause 45: Duty not to operate a team in relation to a prohibited competition

Amendment 205 not moved.

Amendment 206

Moved by

[Lord Parkinson of Whitley Bay]

206: Clause 45, page 37, line 10, at end insert “, unless it has ceased to be a regulated club by virtue of being relegated from competitions specified by the Secretary of State under section 2(3) of this Act.”

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I will speak only briefly to Amendment 206 as it is quite simple. It seeks to prevent clubs which are relegated to a competition which is not regulated by the new independent football regulator being subject to the prohibitions of Clause 45.

Currently, any club that is relegated will have to continue to abide by these rules for a period of 10 years. Clause 45 has a similar provision applying the rules in that clause to relegated clubs for five years. It seems unfair that a club that is relegated to a league or competition below the scope of the new regulatory regime should have to abide by the rules set out in the Bill for such a long period. Surely a fairer approach would be either to shorten the period or, as my amendment suggests, to remove it altogether.

Clubs that no longer operate a team in a regulated league will, by virtue of their relegation, receive lower incomes and potentially lose players. The financial situation they face will not be commensurate with the duties placed on them by the Bill, and retaining these long time periods seems to render the principle of specifying competitions, as the Bill does elsewhere, less meaningful. Why specify certain competitions if clubs playing in leagues that are not specified would still be subject to duties in the Bill? I beg to move.

18:30

[Lord Addington (LD)]

My Lords, we need an answer about why these things are carried on for so long, because there are administrative burdens. If we want these clubs to survive and come back, we could probably make a case for two things. One would be an intermediate regulator, which I do not think would be terribly popular with certain sections of this Committee, and the other is deciding when you can come out of this, because there are duties that are probably an appropriate burden for a professional structure. A good few clubs have gone in and out of this structure, but there is a certain level at which you are not receiving income, you are not receiving support and you have become a part-time asset to the community. Surely there is some point at which there is a cut-off. A better definition of the Government’s thinking on this might be helpful.

[Baroness Taylor of Bolton (Lab)]

My Lords, I just want to say a word about Amendment 207. It talks about a club that is not a regulated club but bears a very similar resemblance to one that is in things such as the name, the shirt colours and things of that type—almost an imitation of another club in order to get some support, finance or whatever. It may seem that this is highly unlikely, but I have a nightmare scenario where the super leagues that are being proposed do not take off, and therefore people try to create an artificial super league by, for example, having a team called “Manchester Blues” or “Liverpool Reds” getting into competitions with clubs abroad as an imitation of the super league that has been proposed and rejected. I want some assurance that should that nightmare scenario come about, there is some provision for being strict about what can and cannot happen.

[Baroness Twycross (Lab)]

My Lords, before I speak to this group, I want to be clear about who the regulator will test and clarify an earlier point I made. I will ensure that all noble Lords who participated in the second group have their attention drawn to this clarification and apologise if I caused any confusion.

Schedule 1 to the Bill sets out details on who meets the definition of an owner. The Secretary of State will also set out guidance on one of the criteria for ownership, “significant influence or control”. An incumbent individual simply meeting the definition, including if they exert significant influence or control, does not mean that the regulator is required or obliged to test them. It may test an incumbent owner if there are grounds for concern about their suitability. The criteria for suitability are clearly set out in the Bill. This applies to any type of owner, be it a state owner or otherwise.

The key point I must stress—it goes for Newcastle United or any other club, although as someone who lived for a number of years in Newcastle I am particularly keen to reassure Geordies—is that the regulator will be operationally independent of government. It is not for the Government to prejudge the regulator’s assessment of who meets the definition of owner, whether there is concern about a particular owner or the outcome if the regulator tests a particular owner.

Finally, I want to reassure your Lordships’ Committee that this Government are unashamedly pro-investment, which will drive our growth mission. We want good, long-term investors into the UK, and foreign investment is key to this. I hope that noble Lords find this clarification helpful.

[Lord Moynihan (Con)]

I thank the Minister for that. I think it is self-evident from her comments that once you remove the foreign and trade policy objective and put in place the significant influence test, you have a massive problem in the Bill. That massive problem is that it is self-evident, as has been discussed many times during the proceedings, that the Crown Prince—as chair of and in control of the PIF, with significant influence over it—would automatically come within the scope of significant influence as defined so far in debate on a number of occasions. I have no problem with that, and I do not think that the noble Baroness, Lady Taylor, has any problem with that. If that is the case, so be it, and let us be honest about it. If it is not the case, “significant influence” is meaningless, and we should come back to it on Report and simply delete “significant influence”, which, incidentally, goes far further than any other regulator in Europe.

We have control tests that are applied by UEFA, by the Premier League and across football. We do not have this significant influence test, and that is what is causing the problem. You remove the foreign and trade policy objectives and apply a significant influence test. The Minister was very clear in response to me on Monday that the Crown Prince would be absolutely full and central in any clear interpretation of that test. For the first time, she has put the definition of significant influence into the long grass as she said that it would come back in secondary legislation, that the Government do not actually know what it means and that she cannot give an answer to that in Committee or when we return on Report. But it is critical, because it comes to the very hub of political influence: what is the status of the Crown Prince? What is the status of Abu Dhabi? What would be the status of the Qataris if they wanted to buy a club in the Premier League, or indeed in any other league? My recommendation is that, given the uncertainty in the response that the Minister has just given and the absolute clarity on Monday evening and earlier this afternoon on the yes/no answer, we leave it for the time being and return on Report and analyse this in depth.

[Baroness Twycross (Lab)]

I felt I was clear, but I accept that the noble Lord has a different view. I look forward to ongoing discussions with him before and on Report. My comments related to a previous group, so I apologise to noble Lords who were not there to hear the context of my comments.

I will now move on to my remarks on this group, which—

[Lord Moynihan (Con)]

I shall just say this, as it is so central to our proceedings this evening. Just for the record, on Monday evening the Minister said:

“Finally, on the amendment from the noble Lord, Lord Moynihan, the whole point of the owners’ and directors’ test, which has been carefully designed, is to ensure that club custodians are suitable for assessing an owner’s fitness—this is absolutely crucial. It is right that any owner passes the tests set out in the Bill, so it would not be fair, appropriate or responsible to exempt certain types of owners from testing … This amendment intends that owners with diplomatic status or who are Heads of State, Government Ministers or high-ranking officials of foreign Governments would not be tested”.


That was in response to my probing amendment. She went on:

“I do not need to tell noble Lords about some of the people this could exempt from testing. That means that the regulator could not consider any personal finances or criminal history, no matter how egregious. Instead, it would have to ignore these matters, so the regulator could be letting unsuitable owners in”.—[Official Report, 16/12/24; col. 140.]


In other words, all those people I have just mentioned are subject to the tests set out in the Bill, and that would include anybody who was chair of a sovereign wealth fund that had invested in football in this country. That is what we will return to on Report. I do not think it is appropriate to lengthen the discussion this evening, as it has been well aired, but it is fundamental to removing that clause from the legislation in terms of opening up a can of worms now for the Government in identifying exactly what the suitable ownership test means.

[Baroness Twycross (Lab)]

Like other noble Lords, I want to move on, but I shall repeat two sentences that I referred to earlier. Simply because an incumbent individual meets the definition, including if they exert significant influence or control, does not mean that the regulator is required to test them. It may test an incumbent owner if there are grounds for concern about their suitability. Now I think we should move on. I do not feel that is a can of worms, but I appreciate that the noble Lord has an alternative view.

Moving to the group under discussion, I thank the noble Lord, Lord Parkinson of Whitley Bay, and my noble friend Lady Taylor of Bolton for speaking to the amendments. On Amendment 206, in the name of the noble Lord, Lord Parkinson, the aim of the clause, as he knows, is to stop the possibility of clubs leaving to join a closed-shop breakaway competition, as several clubs attempted with the European Super League in 2021. While I appreciate the aim of the noble Lord’s amendment, the clause has been carefully drafted to ensure that there is no possibility of circumvention. That is why the duty also captures formerly regulated clubs, so an owner cannot remove a club from the specified competitions in favour of joining a new break- away competition.

It is unlikely that clubs in the sixth tier of English football or beyond will attempt to join a prohibited competition, so we do not think the risk that the amendment aims to cater for is a material one. What is more, if these clubs sought to join a competition that had been prohibited by the regulator, that would undermine the heritage and history of the club and should also be condemned—so it is no bad thing that the duty would capture them as well.

On Amendment 207, in the name of my noble friend Lord Bassam of Brighton, which my noble friend Lady Taylor spoke to, I acknowledge the intent to protect the clause from any risk of circumvention. However, we do not believe it is necessary to extend the scope of the clause to the new clubs or entities that are created to take on the identity and players of a formerly regulated club in order to participate in prohibited competitions. We believe this is a remote risk. Even if a club could convince its players to do this, convince its fan base to follow them and work through the legalities, the FA’s existing requirements around the registration of clubs and players would offer sufficient protection. For the reasons I have set out, I hope noble Lords will not press their amendments.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the Minister for her answers to the amendments in this group and for the clarification she gave on the comments on a previous group. I take what she says about breakaway clubs, but the point is for how long the provisions will still apply to clubs that drop out below the bottom level of this regulation through relegation, and why it lasts for so long. She has spoken before, rightly, about making sure that this is a proportionate regime. If you are a club that has been relegated to such a low tier and are unlikely to come back in, it feels like a very long time to have to continue to comply. That is the point that I was probing there. I might take that away and think about it further. If she has anything further to add on reflection, I would be very happy to receive that in a letter or pick it up in the discussions that we will have between now and Report—but that was part of the thinking there.

The noble Lord, Lord Addington, is right: the suggestion of another or an intermediate regulator would not be popular in all parts of this Committee, so I will let that issue rest.

My noble friend Lord Moynihan’s suggestion on the question of influence and foreign ownership is one that is perhaps better for us to talk about in our discussions between Committee and Report. I cannot be the only Geordie who is a bit confused and concerned about the implications for Newcastle United and I look forward to speaking to the Minister about that. But, for now, I beg leave to withdraw the amendment.

Amendment 206 withdrawn.

Amendments 207 to 218 not moved.

Clause 45 agreed.

Clause 46: Duty not to dispose etc of home ground without approval

18:45

Amendment 219

Moved by

[Baroness Taylor of Bolton]

219: Clause 46, page 38, line 26, leave out first “home ground” and insert “specified properties”
Member’s explanatory statement
This amendment expands the duty to notify the IFR of a potential disposal of a home ground to include a potential disposal of any specified properties.

[Baroness Taylor of Bolton (Lab)]

My Lords, Amendment 219 relates to Clause 46 and the question of the disposal of home grounds, and the kinds of approvals that are going to be required. I have just three points to make. First, are the words “home ground” sufficient? We suggest that we should say “specified properties”. This relates very much to what I was saying the other night about assets of community value. I said that when my own club, Bolton Wanderers, made its ground an asset of community value, it covered not just the ground itself, the pitch and the stands but the concourse. We have to talk about whether it should cover a training ground and even advertising hoardings, car parks and the fan zone. If we simply say “home ground”, will that cover an item such as a fan zone? That is why the amendment I have tabled suggests that we should have specified properties. They may be different in the case of different clubs, but a home ground is more than just what is on the pitch or even within the boundaries of the stadium. That is something that I hope the Minister will consider.

My second point is that this should relate to the assets of a club being used as security for a loan by the owner. There is clearly potential danger there if the loan is called in but the owner does not have the wherewithal to cough up the money that he has borrowed. Could that situation jeopardise the heritage of a club if it is vulnerable because it has been given as security? That is a valid consideration.

The third point is the need to make sure that fans are fully consulted and engaged in any discussion about the disposal of the specified properties. Often, when we are talking about which properties might be involved, it is the fans themselves, especially if there is a fan zone, who have a clear vested interest. We have talked on the Bill about moving five miles. In any circumstances, the fans have to be involved and, therefore, I hope the Government will consider the amendments that we have tabled.

[Lord Goddard of Stockport (LD)]

I support the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Bassam of Brighton, because I have walked this tightrope. When I was leader of Stockport Council, we had to financially advise and support Stockport County on several occasions. In the end, in 2013, we acquired the freehold and leased it back to the new owner of Stockport County, Mark Stott, for 250 years. That enabled him to get investment in and get the football club moving back into the league and climbing the divisions. That is where we start from: the position of the club and its value as a loan against something.

If we can get local authorities and other people to get hold of the freeholds, that will save Toys-R-Us from being built on certain football grounds on the south coast and give the clubs real opportunities to move forward. So we should support the amendments. We should also probably be thinking about how we can strengthen that in future. There is more involvement in the community value and the asset to a town and area of a football club, so we could be a bit more imaginative about how we protect that, rather than just arguing over how we should cover a loan against the ground.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I will say a few quick words about my amendment in this group. I am grateful to the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam, and other noble Lords for their amendments in this group. My Amendment 236 would introduce a new duty encouraging clubs to consult the Office for Place before making any decisions regarding their home ground or the construction of a new one.

I know that the Government have proposed to wind up the Office for Place, but I wanted to draw attention to its work, and in particular the excellent work of its interim chairman, Nicholas Boys Smith, and the board and staff who were working in Stoke-on-Trent. I think a lot of us share the disappointment, because we saw the Housing Minister after the election tell the BBC that the Office for Place would be kept. But, following the Budget, I understand that the Government are proposing not to keep it. I did think it could play an important role here, as it has in so many other areas of public policy.

My amendment offers a clear benefit in terms of promoting meaningful engagement and ensuring that football clubs consider the broader social and cultural impacts of their decisions. That is a theme that noble Lords touched on when introducing their amendments in this group. I think we all want to see clubs take a more holistic and responsible approach when planning changes to their home grounds, helping to preserve the heritage of these much-loved sites while ensuring that development is in the best interests of both the club and the community in which it is rooted.

In light of the need for more thoughtful and inclusive decision-making, my amendment tries to strike the right balance between promoting consultation with an expert body, fostering collaboration and ensuring that long-term planning for home grounds is done responsibly. I appreciate the points that noble Lords raised in their amendments and look forward to the noble Baroness’s response to them all.

[Lord Harlech (Con)]

My Lords, I rise briefly to support the amendments from the noble Baroness, Lady Taylor of Bolton. They sound very reasonable to me. We need to avoid the situation of groundless clubs. Coventry City come to mind. They had some very awkward years and some equally awkward ground sharing. We want to avoid groundless clubs and ground-sharing clubs. Avoiding stadiums being used as security for loans taken out by owners is incredibly helpful. I very much hope that the Minister will support that.

I also support the amendment from my noble friend Lord Parkinson of Whitley Bay. I declare that I am a member of Historic Houses and tend to bang the drum a little about heritage and aesthetics. To give a personal example, my local team are Shrewsbury Town. They had this amazing stadium, Gay Meadow, on the banks of the River Severn. They had a chap or chapette in a coracle who would go out into the river when the ball was kicked into it. Like many other clubs during the 1990s and 2000s, they moved to a sort of identikit shopping centre stadium. I guess it has some practical advantages, but it is pretty soulless and is like so many other stadiums. So I hope the Government can listen and take this into account. We have some amazing stadiums in this country. If we are going to get a club to move, let us move them to a better home, not a worse one.

[Lord Watson of Invergowrie (Lab)]

My Lords, I would like to say a few words in support of my noble friends Lady Taylor and Lord Bassam, some of whose amendments I have signed. I also want to pick up on the point that the noble Lord, Lord Harlech, has just made. He mentioned Coventry, who moved to Northampton, which is about 35 miles away and obviously not at all convenient for fans. My noble friend Lord Bassam’s club, Brighton, moved to Gillingham, which is, what, 70 miles away?

[Lord Bassam of Brighton (Lab)]

Seventy-two.

[Lord Watson of Invergowrie (Lab)]

Some 72 miles and a few chains, I am sure.

Even a club such as Bristol Rovers, who were obliged to move to Bath, which is only about 15 miles away, had to play there for 10 years until their new stadium was built—and even then, I think they ended up sharing with a rugby club.

Amendments 227 and 233 are really “the AFC Wimbledon amendments”, because they refer to that club in which I have an interest, which I have stated on a number of occasions in consideration of this Bill. On the figure of five miles, it may not surprise noble Lords to know that, when Wimbledon FC were obliged to move because their ground had been sold from underneath them, they went to Crystal Palace, which is about six and a half miles away. It still was not convenient for a lot of the fans.

It has been said that, when Wimbledon moved to Crystal Palace, the crowds increased. Factually, that is correct—and I see the noble Lord, Lord Moynihan, nodding—but they increased because there was a far greater ability for visiting fans to go to Crystal Palace. It was not at all unusual for Wimbledon FC to play home games where their own fans were very much in the minority. So that was not a benefit—okay, in financial terms for the club it was, but it is not a system that anybody would advocate.

My final point is to reinforce Amendment 234, about taking reasonable steps to ensure that the club’s fans do not consider arrangements for any change to be unsatisfactory. That should be a very basic consideration. I think it is in the Bill, but it is helpful to have that stated quite clearly and I hope that my noble friend will take that on board and, if she is not able to accept it today, which I would not expect, that we might come back to this to get something more solid on Report.

[Baroness Twycross (Lab)]

I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton and the noble Lord, Lord Parkinson of Whitley Bay, for tabling these amendments regarding home grounds. The noble Lords, Lord Harlech and Lord Goddard, gave powerful examples of why home grounds matter and what they mean to fans, as did my noble friend Lord Watson of Invergowrie, particularly in relation to relocation. As somebody who grew up within hearing distance of Oxford United’s Manor Ground, I can empathise with the feelings of fans when grounds move —although inevitably they do sometimes, and often successfully.

I will talk first to Amendments 219 to 223, 227 to 230 and 233 and 234 in the names of my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton. Starting with Amendments 219 to 222 and Amendment 230, home grounds are clearly often the most important asset of a club and that is why this legislation has carved out specific protections to safeguard against risky financial decisions or sales of the ground. This does not mean that other assets such as training grounds or office space are not also important to the club, but there is a specific consideration necessary for the home ground. I reassure my noble friends that there are protections in the Bill to safeguard against owners stripping a club of its assets or making reckless mortgage decisions against clubs. They include the enhanced owners’ and directors’ test, which will look to ensure that owners are prepared to be appropriate custodians of their club and its assets.

The regulator will also have oversight of the financial plans and balance sheets of the regulated clubs, ensuring that the club is not putting itself in a risky position unnecessarily. We would expect that this would include what assets remain in the club’s ownership and any plans to dispose of them. If it were to become evident that an owner was looking to asset strip the club or deliberately worsen its financial position, the licensing regime gives the regulator power to place licensing conditions on the club. The regulator could also take enforcement action if those conditions are breached or if the financial plan that the club has submitted has not been followed.

I turn to Amendment 227. I will not repeat the same points made previously as they are both similar to other amendments in this group. However, on the second sub-paragraph proposed by this amendment, with changes to the ownership or use of the home ground as collateral, the potential adverse outcomes are entirely financial. They do not impact the heritage of the club, nor would they necessarily relate to a relocation. If there is reasonable prospect of a change leading to relocation, Clause 48 sets out the parameters for any home ground relocation. The regulator would need to be satisfied that the move does not undermine the financial sustainability of the club or significantly harm the heritage of the club. This means that the regulator will be able to look at things such as location.

However, the Government have deliberately not set a fixed distance or considerations. This is to further allow for a bespoke approach to be taken at all clubs to make sure that the impact of a relocation can be mitigated if one is deemed necessary. Amendment 223 seeks to expand the scope of the duty to gain the regulator’s approval to include all substantial changes to specify properties or the club’s home ground. Given the addition of the specified properties, this amendment could include any significant changes to property, such as a hotel owned by the club. This is a significant expansion of scope and could be onerous and resource intensive on the regulator. In such a case as a hotel, the amendment could feasibly lead to a full consultation and approval process for substantial changes such as building an extension. This would not be an appropriate or efficient use of the regulator’s time or resources.

Instead, such substantial changes to either the home ground or other assets can be addressed via other areas in the Bill. For example, we expect all clubs to consult and have regard to the views of fans on the specified relevant matters. This includes home grounds and business priorities, among other issues. We would also expect any substantial changes to the home ground or other assets to be captured by the club’s financial plans. The regulator will therefore be able to have oversight and react to any concerns.

19:00

Amendment 228 would, first, introduce a test for the regulator to apply when considering whether to approve a significant change to a club’s home ground and other specified properties owned by a club. The requirement for clubs to seek prior approval of these changes is not in the Bill but is proposed by related amendments. I have already explained in addressing those amendments why the Government do not support this change, so I will not go through those arguments again. Secondly, the amendment would require the regulator to take reasonable steps to establish that the majority of the club’s fans agree before approving a disposal or change to the home ground or, based on the amendments, other specified properties belonging to the club. As I have said, we expect all clubs to consult and have regard to the views of fans on the specified relevant matters, including home grounds and business priorities, among other issues.

Regarding changes to the ownership of the home ground, the potential adverse outcomes are entirely financial; they do not impact the heritage of the club. If the change of the financial arrangements relating to the home ground were to lead to a relocation then heritage would rightfully be considered and fan consultation would be required, as per Clause 48. However, this amendment is in large part about the regulator considering fan approval of a home ground sale. The Government do not believe that this is justifiable, not just because it relates to a purely financial matter but because we would already expect the club to be consulting with fans on such changes.

Amendment 229 is largely similar to Amendment 228. However, it would require the regulator to carry out a full consultation with supporters of the club, representatives of the local community and the relevant competition organisers prior to making a decision on the financial impact of a sale or use as collateral. This would be an extensive requirement on the regulator that is likely to be overly burdensome. Given that there are further requirements to engage with supporters on any changes to heritage assets, including the home ground, this use of resources for consultation does not seem justifiable.

I turn to Amendments 233 and 234. The safeguarding of football heritage will be a key priority of the regulator and there are a number of provisions in the Bill to uphold this key objective. That is why, in the case of a home ground relocation, the Bill requires clubs to consult their fans and have regard to those views on a proposed relocation. It is also why the regulator will determine whether there is significant harm to club heritage. However, this is not a binary decision and, in a lot of cases, will require a holistic approach and for the regulator to consider a number of factors, not just the views of current fans. We would expect the regulator to engage and consult the fans of the club, as it would be necessary to do so to ascertain the impact on club heritage.

The regulator will be able to look at things such as location. However, the Government have deliberately not set a fixed distance or other considerations. This is to further allow for a bespoke approach to be taken at all clubs, to make sure that the impact of a relocation can be mitigated if one is deemed necessary. These amendments would risk not allowing the regulator to take the multifaceted approach that the Government think is best suited to the nuanced issue of club heritage and home ground relocations.

I turn to Amendment 236, in the name of the noble Lord, Lord Parkinson. As the noble Lord acknowledged, it has recently been announced that the Office for Place will be closed and absorbed by the Ministry of Housing, Communities and Local Government. I wish to reassure the noble Lord that all clubs will continue to be required to comply with local planning legislation and processes, including any asset of community value status or other protections.

Finally, I thank my eagle-eyed noble friend Lord Bassam for tabling Amendment 225, which seeks to align the drafting within Clause 46. I am sympathetic to the preference for language to be consistent where possible, but please be reassured that the intended policy is absolutely delivered within the current drafting. The Bill already ensures that any regulated or formerly regulated club will have to get the regulator’s approval before it can sell any part of the home ground or use it as security. The amendment would have no impact on this, but I recognise the intent to ensure consistency of drafting, so I will take this away to consider it further.

On that basis, and for the reasons I have set out, I would be grateful if the noble Baroness would withdraw her amendment.

[Baroness Taylor of Bolton (Lab)]

My Lords, I have listened very carefully to what the Minister said. I am very grateful to her for saying that she will consider some aspects further, because I think there is an issue here, especially in how we define a home ground. We may want to return to this at a later stage. In the meantime, it proves why every club should have its grounds designated as an asset of community value; we then would have the protection that we are seeking in this amendment. I am grateful to the Minister for what she has said and for saying she will consider parts of this again. On that basis, I am happy to beg leave to withdraw my amendment.

Amendment 219 withdrawn.

Amendments 220 to 230 not moved.

Clause 46 agreed.

Clause 47 agreed.

Clause 48: Duty not to relocate without approval

Amendments 231 to 234 not moved.

Amendment 235

Moved by

[Lord Wood of Anfield]

235: Leave out Clause 48 and insert the following new Clause—
“48 Duty on competition organiser not to arrange matches away from home grounds(1) A specified competition organiser must notify the IFR where the organiser considers that there is a reasonable prospect of the organiser entering into arrangements whereby a match between two teams operated by regulated clubs might be played at a ground that is not the home ground of either team.(2) A notification under subsection (1) must be given as soon as reasonably practicable after the organiser considers the duty under that subsection to have arisen.(3) The organiser must obtain the approval of the IFR before it enters into the arrangements mentioned in subsection (1).(4) The IFR must grant approval for the organiser entering into those arrangements if the IFR is satisfied that the arrangements—(a) would not harm the financial sustainability of the competition or of English football,(b) would not cause significant harm to the heritage of the competition or of English football, and (c) have the approval of UK-based supporters including those of the clubs involved.(5) The IFR may not grant approval in any other circumstances.(6) The IFR must, as soon as reasonably practicable after the organiser has sought approval, decide whether to grant approval under subsection (4).(7) The IFR must notify the organiser of its decision to grant, or not to grant, that approval and give reasons for its decision.(8) In this section “home ground”, in relation to a regulated club, has the meaning given by section 46(10)(a).”

[Lord Wood of Anfield (Lab)]

My Lords, I will be brief, partly because dinner is fast approaching and partly because this is an amendment to probe the Minister’s response to a good existing clause, Clause 48. This clause is about preventing home matches being relocated. The amendment is to probe whether the provision is sufficient to meet widespread fan concerns about possible exceptions.

There is increasing discussion about domestic football games being moved overseas. We have seen statements from the chairman of my own team, Liverpool, and broadcasters such as NBC are talking about relocating Premier League games abroad. The FIFA working group is reviewing its policies to allow this. There are all sorts of stories, rumours and plans afoot to possibly allow Latin American domestic games to be played in the United States. There is historical evidence showing that the Premier League once proposed an additional 39th game to the season, which would not be played at the ground of a Premier League club. We also see countries such as Saudia Arabia that have intervened—let us put it that way—in sports properties, buying them and moving them around, for golf and boxing. There is reason to think that this is not a very remote possibility.

The Bill sets out to prevent clubs relocating matches away from home stadia without the approval of the regulator. I hope that enjoys widespread support; it is welcome and important. The point of my amendment is to probe the idea that the clause is not quite as watertight as it should be. The concern is that the current wording is based on the relocation of matches which are already designated as home matches. What happens if the competition organiser allocates games directly, before the season’s fixtures are issued, to Riyadh, Los Angeles, Singapore, Paris or wherever? They could claim that no home game is being relocated and say, for example, that weeks 10 and 20 are weeks in which games are played elsewhere. What if the 39th game proposal, so widely reviled by fans, is revived? That is not about the relocation of a home game; it is an extra game.

The new clause addresses this by placing a requirement on the regulated competition organisers to seek approval from the regulator before moving a domestic game overseas. That way, there is no longer a need to define what a home game is to bring it in scope, and it ensures that as part of the assessment of this request to relocate a game, the regulator must specifically consult UK-based fans of the clubs involved in the relocation. Importantly, this does not rule out the relocation of a game; it requires any additional fixture that is part of a competition to be subject to consultation in the way specified in the Bill.

I would welcome the Minister’s observations on this amendment and her assessment of two questions. First, what happens if the competition organiser allocates games directly to an overseas location? How will the existing clause protect against that? Secondly, what happens if the competition organiser creates a new format, such as another 39th game that cannot easily be defined as a home game? The amendment tries to cover those extra, niche cases. With that in mind, I beg to move.

[Lord Addington (LD)]

My Lords, I am assuming that this is a probing amendment. Other sports—not British sports—do this, such as American football. Is it the Government’s intention that the regulator will make sure that such games are played at home? If the Minister can say that that is the intention, we are all comparatively happy; if not, we have a real problem.

[Lord Harlech (Con)]

My Lords, I rise in support of the amendment from the noble Lord, Lord Wood of Anfield. If all football fans were surveyed—more than the 20,000 to 30,000 that responded to Dame Tracey Crouch’s report—this would be one of the issues they cared about most. I hope the noble Lord, Lord Mann, will not mind me putting words in his mouth, but if he were here, I think he would say in his Yorkshire tones, “Home should mean home.” The Government must do everything they can to ensure that.

[Baroness Twycross (Lab)]

I thank my noble friend Lord Wood of Anfield for tabling Amendment 235. Clause 48 has been designed to prevent clubs unilaterally moving their home ground with no regard for the vital role it plays in the club’s history and identity, as well as its financial position. In essence, it is intended to capture instances such as Wimbledon’s move to Milton Keynes and is a really important protection in the legislation. The Government believe that this protection must remain in the Bill to enable the regulator to deliver its key objectives and ensure that home grounds have the appropriate safeguards in place. This amendment, however, seeks to address a slightly different but related issue of competition organisers relocating matches elsewhere. Many of the current instances of this are, for example, play-off matches at Wembley, which have become a key part of English football heritage in and of themselves.

However, I am aware that my noble friend wants this amendment to address situations in which a match could be moved outside England and Wales. Noble Lords will be aware that FIFA is currently reviewing its position on overseas league matches. I do recognise the point the noble Lord, Lord Harlech, made—although I would not presume to paraphrase my noble friend Lord Mann—and how significant this would be for supporters. FIFA has committed to looking at how it might impact supporters, as well as players and a number of other valuable considerations. While the industry is still considering its position on this matter, and many clubs have spoken against the proposals, we do not think the regulator should have a specific power to directly address this. However, the regulator will ensure that clubs consult fans on any changes to match days, including moving the location. The Government will remain in conversation with the relevant governing bodies on this developing issue.

I am happy to continue conversations with noble Lords who have a specific interest in this issue before we get to Report. But for the reasons I have laid out, I must ask my noble friend to withdraw his amendment.

[Lord Wood of Anfield (Lab)]

I thank the Minister for that reply. I also thank her—I did not before—and her officials for the generous way she has spared time not just for me but for lots of other Members of this House over the last few weeks. It is really appreciated.

I understand what the Minister says, and I also understand that FIFA is currently revising its proposals. We have spent a lot of time worrying about provoking FIFA, and I understand why there is sensitivity there. The requirement to consult fans on moving matches assumes that there is already a scheduled match that needs to be moved. My amendment is about two problems that there are in fact technical ways around. So, that issue is still a live one. There will be more discussion about this, and I know the Minister is going to be as generous with her time as she has been already, so with that in mind—

19:15

[Lord Bassam of Brighton (Lab)]

I urge the Minister to give this some more thought, because it is a pertinent and powerful core issue, and we should all be grateful to the noble Lord, Lord Wood of Anfield, for raising it. As the noble Lord, Lord Harlech, said, fans worry about these things; they do not want to see “home” meaning something completely different. That is why we should have something in the Bill on this topic.

[Lord Wood of Anfield (Lab)]

I thank the noble Lord, Lord Bassam, very much. My two teams are Liverpool and Tonbridge Angels of the National League South. One is an internationally competitive team—and the other is Tonbridge Angels; but place is crucial to both teams. If you are a fan of Liverpool from Los Angeles or Singapore, the place of Anfield and the locality and the community relationship are absolutely part of what it is you support. Home and away fixtures are a routine part of how the Premier League competition is conducted. That is why this is essential, not just to large clubs but to small clubs across the country.

[Lord Goddard of Stockport (LD)]

This issue has arisen before. The FA Cup is the oldest cup competition in the world, yet one club that held the title did not enter it the following season in order to play a match in the world championships in South America. Does the Minister think the regulator would have the power to prevent that happening in future? It is the kind of thing regulators should be looking at.

[Lord Wood of Anfield (Lab)]

I am grateful to the noble Lord. That is a very live issue as well, but I do not want to expand my amendment to that.

I am conscious of the time, so with those caveats, and with thanks to colleagues who have intervened, I beg leave to withdraw my amendment.

Amendment 235 withdrawn.

Clause 48 agreed.

Amendment 236 not moved.

Clause 49: Duty not to change crest, home shirt colours or name without approval

Amendments 237 to 241 not moved.

Clause 49 agreed.

Amendment 242 not moved.

Clause 50: Duty to notify of changes in circumstances relevant to the IFR’s functions

Amendment 242A not moved.

Clause 50 agreed.

Clause 51: Duty to keep fans informed of insolvency proceedings

Amendment 243 not moved.

Clause 51 agreed.

Amendments 244 to 248A not moved.

Clause 52 agreed.

Amendment 249 not moved.

Clause 53: Duty to pay a levy

Amendment 250

Moved by

[Lord Bassam of Brighton]

250: Clause 53, page 42, line 22, at end insert—
(f) the amount which the IFR estimates is necessary to fund appropriately for that period the Central Fund established pursuant to Section (Central Fund).”Member’s explanatory statement
This amendment adds another factor which must be considered (namely the amount required to fund the Central Fund - see amendment 254) when determining the amount of the levy.

[Lord Bassam of Brighton (Lab)]

My Lords, we can probably dispose of this one relatively quickly. All that we seek is some reassurance, on the record, that the levy raised by the IFR will not overburden smaller clubs. We are trying to get some assurance that the levy will be relative to the income of the clubs and that any other levy that the IFR might want to raise for a central fund of any sort would also closely reflect the ability of the clubs concerned to fund that. It has to be relative to their income, strength and viability. That is the purpose of the amendments in this group, and I am keen to get that on the record.

[Lord Maude of Horsham (Con)]

My Lords, I have some concerns about what the noble Lord advocates in this amendment. He advocates setting up a central fund in one of his other amendments, and the purpose of that is not clear, unless it is to provide a mechanism, in effect, for redistributing the levy funding the operation of the regulator, presumably from bigger and better-off clubs to smaller clubs. That will dilute the incentive that should exist for the regulator to constrain its size, cost and degree of interventionism because of the effect on smaller clubs.

This comes back to the sense that the rich, big or better-off clubs are somehow there to be plucked in terms of the redistribution of funds down through the pyramid—already, 16% of the revenues of the Premier League goes down into clubs through the pyramid. My concern throughout the consideration of the Bill has been that, if the regulator is set up in too large a manner and exercises its powers as regulators have an inbuilt tendency to do—they increase their scope and degree of intervention—that will have a cost.

A primary aim of the Bill and of setting up the regulator is to “improve” the distribution of money down through the pyramid, but the more the regulator does, the larger it is and the greater the extent of its activity, the less there is to distribute. If it is not strictly controlled, it will become self-defeating. If the purpose of the central fund that the noble Lord advocates is, in effect, to increase that degree of redistribution from bigger clubs to smaller clubs, as it seems to be, the effect would be to exacerbate the concerns that a number of us will have about the direction of travel and the inevitable tendency for a regulator of this kind to increase its scope, size, interventionism and, inevitably, cost.

I have given notice of my desire to oppose that Clause 53 stands part of the Bill, on the basis that the power to impose a levy will damage football. If the Government are so concerned to have this regulator, they should raise the money for it themselves and not have the regulator able, in a very uncontrolled way, to impose a levy—potentially very large amounts of money, as the impact assessment makes clear—on the very activity of the sport that we love, inflicting damage on it that would run counter to the intention of the Bill.

[Lord Bassam of Brighton (Lab)]

My Lords, I will try to put the noble Lord’s mind at rest. Most regulators are financed by the industries that they regulate, and the noble Lord knows that; he knows a lot about regulation. Given that there may be, from time to time, a need to strengthen the capacity of clubs lower down in the pyramid to operate, comply with regulations and all the rest of it, it is not unreasonable for the IFR to have the ability and capacity to exercise a levy.

The Premier League is generating considerably large sums of money and, although the distribution down the pyramid looks extremely generous in raw number terms, it is worth being reminded that some 92% of the revenue generated ends up being maintained by the Premier League and those five clubs in the Championship that receive parachute payments and the rest. There is a lot of money here, and we need to make sure that the regulator has the capacity to intervene in a way that is entirely fair. Later amendments deal with some of this issue, but we should have that at the front of our minds when we consider this.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, we look forward to hearing what the Minister says about the amendments in this group, although I think, as my friend Lord Maude of Horsham pointed out, we are all listening with different hopes and expectations about what she may say.

Briefly, my Amendment 256 in this group specifies that the regulator must consult the Chancellor of the Exchequer rather than His Majesty’s Treasury in the abstract. It seeks to ensure a clearer line of accountability and strengthen the governance structure for decisions relating to the levy. The Chancellor might well delegate this responsibility, but she should be accountable in law and the Bill ought to point to her as the Minister at the head of that department and not anyone else at the Treasury. I look forward to the noble Baroness’s responses to the amendments in this group.

[Lord Addington (LD)]

My Lords, very briefly, it is probably important to remember that a lot of this is about making sure that we preserve our football league. If a different Government had not intervened, we would have a European Super League and the Premier League would not be there. That is what happened.

We must remember that the preservation of those top five leagues is intrinsic to the Bill. If we want that to carry on, some money will occasionally have to be raised to support their structure so that it is more stable. The noble Lord’s amendment is reasonable. There may be a reasonable answer about why it does not have to go in, but I agree with the concept.

[Lord Maude of Horsham (Con)]

What the noble Lord says is simply not the case. When the European Super League was proposed, what stopped it from happening and what made the clubs drop it like a red-hot potato was the fact that the fans reacted with fury. Admittedly, the rather populist Prime Minister of the time responded to the fan fury by uttering threats, but it was not the politicians, the Government, your Lordships’ House, the other place or a fantasy regulator who stopped it; it was the fans who stopped it, and we should have absolutely no illusion about that.

[Lord Addington (LD)]

My Lords, that might be the noble Lord’s interpretation, but, ultimately, it is government that makes law.

[Lord Markham (Con)]

My Lords, just to be clear for the record, no law was passed in this instance. In a matter of days the clubs quickly withdrew from the competition because, as my noble friend mentioned, it went down like a lead balloon and fans were up in arms. The Government were nowhere near it. That was a perfect example of where the clubs and the fans regulated themselves.

[Lord Moynihan of Chelsea (Con)]

My Lords, I have a very strong recollection of this because I wrote an article the day after the proposal came, which was published, like many articles at the time, and I remember that the very next day the proposal was withdrawn. It had nothing to do with the Government. By the way, I was not a politician at the time; some would say I am not one now, but it had nothing to do with Governments or Parliaments.

19:30

[Lord Bach (Lab)]

My Lords, this is the first time I have spoken in Committee. I am rather late to it but I spoke at Second Reading. On this matter of history, it is not usual that I come out in support of a previous Conservative Prime Minister, but the truth is that once the fans showed their feelings—I agree that they did—the then Prime Minister, within a short number of hours or certainly days, quickly came up and took over the issue, as it were, on behalf of his Government. That was well done and, along with the fans’ disagreement, it had a profound effect on the clubs, some more reluctantly than others, which withdrew from that mad scheme.

[Lord Shamash (Lab)]

My Lords, I specifically remember this as it involved Manchester United. It is propitious that the noble Lord, Lord Johnson, has arrived as it was his brother, the then Prime Minister, who said “I would drop a legislative bomb on this proposal”. Do your Lordships remember the language? That is precisely what happened and it killed it dead.

[Baroness Blake of Leeds (Lab)]

We have interventions on interventions here and we should move on.

[Baroness Twycross (Lab)]

My Lords, before we have any further interventions, I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, as well as the noble Lord, Lord Parkinson of Whitley Bay, for their amendments. I also thank the noble Lord, Lord Maude of Horsham, for his contribution on this group, which sparked a lively debate, and for giving notice of his intention to oppose the Question that Clause 53 stand part of the Bill. It is useful to remember why we are here, but my comments will focus on the amendments in this group. It is imperative that the regulator can raise the funds necessary to deliver its regulatory functions, so I thank my noble friends and the noble Lords who have raised this important issue.

Turning first to Amendments 250 and 254 in the name of my noble friend Lord Bassam, I want to reassure him that the existing drafting in Clause 53(3) is comprehensive, in the Government’s view, and provides the necessary mechanism for raising these funds. Clause 53(3) also acts as an important constraint on what the regulator can charge clubs for. We believe that the amendment would risk bypassing this safeguard. We also want to be clear that, under the existing drafting, any such central fund could not be used as a form of lifeboat fund to prop up clubs in distress. It is the Government’s opinion that a zero-failure regulator, as implied, would create moral hazard and encourage the very risk-taking that the regulator is trying to address.

On Amendment 252 in the name of my noble friend Lady Taylor of Bolton, the Government acknowledge the importance of any charges on clubs being transparent and proportionate, and offering value for money. These values should be at the heart of any public body. This must be achieved while maintaining the regulator’s operational independence and flexibility, which is why it would not be appropriate to prescribe an exact methodology in legislation for charging the levy. Doing so would remove the regulator’s ability to explore other, possibly more effective and proportionate, methods of charging. The Bill already requires the regulator to have regard to clubs’ financial resources and position in the pyramid. I am confident that this will be sufficient to ensure that the levy is fair and proportionate. I hope this will give my noble friends reassurance that these costs will not be burdensome to clubs.

Amendment 256 in the name of the noble Lord, Lord Parkinson of Whitley Bay, would require the regulator to consult with the Chancellor of the Exchequer specifically, as opposed to the Treasury, when making, amending or replacing levy rules. Consulting with the Treasury on levy rules is standard practice for a regulator, and this approach has been agreed with the department. The Chancellor, as head of the Treasury, will have full oversight of the Treasury’s response to the consultation. The Chancellor is accountable for the decisions of the Treasury and any consultation with the Treasury is likely to have the approval of the Chancellor. Therefore, the Government’s view is that the existing requirement to consult with the Treasury is sufficient to ensure value for money.

Finally, on whether Clause 53 should stand part of the Bill, this clause will allow the regulator to charge a levy to licensed clubs that covers the regulator’s running costs. This follows the precedent of other regulators such as the FCA, the CMA and Ofcom.

[Baroness Brady (Con)]

I thank the Minister for allowing an intervention. Has there been any further development on the cost of the regulator? I know that we have asked the question on numerous occasions, but we have not had a reply. It would be very good for clubs to know what the Government expect the regulator to cost. The Minister mentioned the FCA; that costs £762 million a year. I hope it will not be that much.

[Baroness Twycross (Lab)]

I was going to come on to that. I anticipated that if the noble Lord, Lord Hayward, was here, he would ask me that question. If I can carry on through my speech, with the noble Baroness’s permission, I will address that later in my remarks.

We think it only fair that industry should cover the cost, as opposed to taxpayers. Football is a wealthy industry, and the cost of regulation would represent just a tiny fraction of its annual revenue of over £6 billion. However, this legislation puts robust checks and balances on the regulator. It will be limited to raising funds to meet a set of tightly defined costs that are necessary for regulatory activity only. The regulator will not have a blank cheque; it will be subject to numerous safeguards, including annual auditing by the National Audit Office, and its annual accounts will be laid before Parliament. This will provide the necessary transparency and scrutiny to deliver value for money.

Clause 53 also requires the regulator to have regard to a club’s individual financial position and the league it plays in when setting the levy charges that a club must pay. This should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. As noble Lords are aware, the regulator will be the one that decides on the methodology and, ultimately, the cost of the levy.

I understand, however, that there is a clear desire, as expressed by the noble Baroness, Lady Brady, the noble Lord, Lord Hayward, and other Members of your Lordships’ Committee, to have a much better understanding of how the costs may be borne at different levels of the game. I will endeavour to provide more clarity on this issue. Therefore, after further discussions with the shadow regulator, I will write to noble Lords to provide further clarity on costs ahead of Report. I will also place a copy of this letter in the Libraries of both Houses and would be happy to meet noble Lords or take any questions.

This is a complex issue and we cannot fetter the discretion of the regulator. The letter, when it comes, cannot therefore be considered a definite estimation of costs. It will merely be illustrative, in an attempt to be helpful to this Committee and provide your Lordships’ House—and the clubs that will be regulated—with some clarity and reassurance before we get to Report.

For the reasons I have set out, I am unable to accept the amendments in this group. I therefore hope that noble Lords will not press them.

[Lord Bassam of Brighton (Lab)]

My Lords, I am more than happy to withdraw my amendment and grateful to the Minister for the assurances that she has given about the levy. I just say to colleagues on the Opposition Benches: it is worth reminding ourselves that we are talking about the regulation of only 116 different football entities. This is a small regulator, at the end of the day, so we should not be overly worried about its eventual costs. I think the costs will be, in relative terms, small—nothing at all by comparison with the FCA. Some of the clubs regulated, such as Gateshead, employ only three staff. If you are an Ebbsfleet staffer, you are one of just six, whereas Arsenal employs more than 500 full-time backroom staff. That is why we need to be certain that the levy raised is proportionate to the size of the club. Proportionality should be at the core of the regulator’s consideration when setting its levy. Having said that, I beg leave to withdraw the amendment.

Amendment 250 withdrawn.

House resumed. Committee to begin again not before 8.40 pm.

Qualifications Reform Review

Wednesday 18th December 2024 Lords Chamber

Statement

The following Statement was made in the House of Commons on Thursday 12 December.

“With permission, Madam Deputy Speaker, I will now make a Statement on the outcomes of the review of qualifications reform at level 3.

The priority for this Government is to build a skills system that will drive forward opportunity and deliver the growth that our economy needs. The post-16 skills system in England that we inherited from the previous Government fails both of those tests. In particular, the qualifications landscape is too confusing and fails to provide the clear routes to success that is needed by learners and employers. We heard strong arguments that the previous Government’s plans to remove level 3 qualifications and to limit the flexibility for schools and colleges meant that they risked leaving students with too little choice and too few opportunities.

This year, we have paused the defunding of qualifications and have undertaken a review of the qualifications that are set to have their funding removed, to see where we need to retain alternative qualifications, such as applied general qualifications or BTECs, and to consider how long we need to keep them in place. We undertook extensive stakeholder engagement, delving into the detail of qualifications with employer representative bodies, colleges, practitioners, awarding organisations and industry experts.

We recognise that certainty is very important to education providers, to students and to their parents and guardians. I reassure the House that our decisions make the position clear up to 2027. We are clear that students deserve high-quality qualifications that meet their needs, and that we must continue to develop and improve qualifications, so that they provide for the needs of students and employers.

The curriculum and assessment review will take a view on qualifications in the long term, as part of its wider consideration of how we prepare all young people for life and work, but there are some areas where we need to act in advance of its recommendations. The first change that we will make is that we will not tell providers and students which types of qualifications they can and cannot mix together. It should be for colleges and sixth forms to work with students, employers, mayors and higher education to devise the best mix for each individual and deliver the skilled young people that their local economy needs.

We will therefore not be applying the previously proposed rules of combination. There are a confusing number of qualifications in the system, and through this review, we have already identified more than 200 qualifications with low or no enrolments. We will remove funding from these in line with already published dates. This gives students and employers a simpler range of qualifications to choose from.

T-levels provide an excellent qualification option, which should be available to more learners. We introduced three new T-levels this September, and a further T-level in marketing is to be introduced from September 2025. It was fantastic to see the energy generated by this year’s T-levels Week, which highlighted the huge benefits that young people are gaining from T-levels, and their enthusiasm for the qualification. The unique industry placement aspect of T-levels is a real draw for students and is all too often not offered by other qualifications.

We have recently introduced new flexibilities to support industry placement delivery, to enable more young people to benefit from the opportunities that T-levels provide. It follows, therefore, that where learners wish to study a large qualification in a T-level route, the T-level should be the main option for them. We have moved away from blanket restrictions, such as automatically defunding any qualification that overlaps with a T-level. Instead, we have taken a practical, evidence-led approach, looking at the qualifications route by route. This will ensure that we can be confident that students have high-level choices.

On this basis, we have concluded that we will not proceed with defunding qualifications on published lists in agriculture, environment and animal care; legal, finance and accounting; business and administration; and creative and design before 2027. Following our review, we will retain funding for 157 qualifications that were due to be defunded by 31 July 2025.

In engineering and manufacturing, we will keep funding for the qualifications that were previously identified for defunding until 2027. This will allow time to update the occupational standards that are designed by employers and that underpin this large and complex route, and to establish new qualifications that meet the needs of learners, providers and employers.

In the digital sector, we are working with the T-level awarding organisation to make assessments more manageable, and plan to have the necessary changes in place for the next academic year. We are also making T-level placements more flexible, expanding the option for remote learning. This will be particularly important in the digital route. We will keep funding for the six existing large digital qualifications until 2026, to allow time to embed these key improvements. Beyond that, we will also keep funding for 13 smaller digital qualifications, so that learners have a range of choices until reformed alternatives are available.

On health, science and social care, the previous decision to defund social care qualifications left a gap, as there was a heavy T-level focus on health and science, rather than on social care. We will therefore keep funding for nine qualifications in health and social care until new qualifications in the care services route have been developed. We expect that to happen in 2026-27. We are also keeping funding beyond that for 11 qualifications in science-related subjects to give learners even more options.

On education and early years, we have heard strong support for the T-level, so we will remove funding from existing large and medium qualifications as planned in 2025. This will direct learners who want to study a large qualification to the T-level as the highest-quality option. We are also retaining funding for six smaller qualifications to support specific occupations, such as teaching assistants, giving learners a smaller alternative.

Construction is a key part of this Government’s mission, and I am delighted to report that two of the construction T-levels continue to grow and offer high-quality options for learners. The on-site construction T-level is also providing valuable education, industry experience and a positive route into employment for those who wish to take it. However, its success has been limited because of a lack of overall demand for a larger qualification at level 3. We have, as a result, concluded that the needs of learners and the economy are best met through apprenticeships and other classroom provision, and decided to cease taking new enrolments for the on-site construction T-level. Those already taking it will be able to complete it as planned and progress into positive destinations post-graduation.

To meet the economic needs of this important sector and to ensure that we can support our missions around high-quality housing, we are also keeping one large qualification in site carpentry, and in 11 other medium and small qualifications.

We must continue to improve opportunities and the quality of qualifications. We will keep qualifications only until they are no longer needed, so that learners can do the T-levels that they need to do. We will invite awarding organisations to submit further new level 3 qualifications in the spring, to continue the process of reform.

We are currently considering whether proposed T-levels in catering and beauty therapy meet the needs of learners and the economy, and we will update the sector in due course. I can confirm that any new T-level in these areas will not be rolled out until at least 2026.

These changes are a fair reflection of what we have heard, and offer a balanced approach that supports our missions of spreading opportunity and supporting economic growth. We want high-quality options, strong choices and a simpler system that is easier for learners to navigate. The approach and timescales that I have set out today represent a pragmatic and achievable journey to where we want to be. We are putting the needs of learners and our economy at the heart of how we move forward. I commend this Statement to the House.”

19:40

[Baroness Barran (Con)]

My Lords, I thank the Minister for the Statement, which, she will be aware, has been broadly welcomed by the sector. There has been considerable uncertainty while the Government put the previous Government’s decisions on hold, particularly as the terms of reference of the review have not been published. The decisions bring some short-term certainty to the sector, but they raise longer-term questions.

A significant number of qualifications have been extended to 2027, so before very long there will be more hesitancy among providers about what happens beyond that. The Minister understands far better than I how much the sector needs certainty. I would be grateful if she could set out the Government’s vision for the technical education landscape. If she is not able to do that today, perhaps she can give a sense of when the Government will be ready to do that.

The Statement talks about keeping a mix of T-levels and other qualifications, but it is not clear—if I have missed something, maybe the Minister can clarify for the benefit of the House—what the Government see as the end point in their aspirations. It would be really helpful to have a sense of that. The Minister is acutely aware of the concerns across the House regarding the IfATE Bill and the risk that momentum is lost on delivering the skills strategy, which the Government rightly talks about as a key priority. I hope very much that, in considering this issue, she will take seriously the concerns raised all around the House, including on her own Benches.

In the Statement, the Secretary of State talks about keeping funding for engineering and manufacturing qualifications that had previously been identified for defunding, and keeping those qualifications until 2027. Can the Minister add anything more about the Government’s plans for new qualifications in these areas, which are obviously critical for our economic growth?

Finally, there are real concerns among providers about the recent increase in employers’ national insurance and the negative impact that that may have on colleges, which risks negating the very welcome £300 million uplift in funding which the Government announced. Can the Minister give the House an estimate of the impact of those changes?

[Lord Storey (LD)]

On these Benches, we very much welcome this Statement. We got a flavour of what was to come when the Minister, in a recent opinion piece in Further Education Week, struck a more conciliatory tone and indicated that the Labour Government now see a bigger role for applied general and other qualifications, alongside A-levels and T-levels.

We on these Benches have consistently opposed the scrapping of BTECs. While there is always some value in rationalising qualifications from time to time, forcing students into a choice between A-levels and T-levels will narrow the choices of the students at a time when we need a range of ways for them to gain the transferable skills needed in future careers. BTECs are popular with students, respected by employers and provide a well-established route to higher education or employment, so it is hard to understand why the Government wanted to scrap most of them and force young people to choose between studying A-levels or T-levels from the age of 16. We are concerned that removing the option of BTEC qualifications will adversely affect poorer students in particular.

I have two questions for the Minister. First, a particular difficulty for schools and colleges has been uncertainty. It is impossible to plan for a course, have the right staff on hand and have timetables planned if you are unsure whether a course will actually run. For many students, this is very unsettling. Will the Government undertake to provide certainty for colleges, schools and pupils? Secondly, we can all recognise the teething problems that T-levels have had, with low student satisfaction, complex assessments and major work experience requirements. What will the Government be doing to tackle these issues moving forward?

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

I thank noble Lords for their response to the Statement. As the noble Baroness, Lady Barran, says, we have been clear, in making this Statement, that we are providing certainty for colleges and sixth forms up to 2027, which was certainly one of the sector’s requests.

The noble Baroness asked about the future vision for technical education and the skills system, which I have been able to expound at some length in the consideration of the IfATE Bill. Fundamentally, our view is that skills are essential to this Government, particularly given their mission-led approach. The skills system has a crucial role to play in training the workforce needed to deliver our missions of greening the energy system, rebuilding the health service and delivering safer streets, and is a core component of growing the economy and ensuring that everybody has opportunities to succeed throughout their lives.

We are in the process of developing a comprehensive strategy for post-16 education and skills, to break down barriers to opportunities, support the development of a skilled workforce and drive economic growth through our industrial strategy. At the Association of Colleges conference at the beginning of November, I was able to outline some of the key principles that will apply to that strategy. I hope that we will be in a position to publish more information about the principles and vision of the strategy soon, and then work collaboratively with noble Lords, and, importantly, the sector, to bring forward the details of that.

One of the reasons for providing certainty on qualifications to 2027 is to enable the Government’s curriculum and assessment review to carry out its work, and to do so in a way that will inform further consideration of ensuring that the qualification options for level 3 students—those between 16 and 19—deliver on the fundamental need for appropriate choice and high-quality qualifications, with support from employers and others to ensure that the qualifications, particularly in the technical and vocational area, deliver the skills needed to grow the economy.

I am looking forward to Report stage of the IfATE Bill after our Christmas break, when we will all come back refreshed and ready to re-engage in this important legislation. I have been reflecting hard on the points made by noble Lords in Committee about clarity on the role of Skills England, and the ability for noble Lords to see more clearly how the functions transferred to the Secretary of State to be invested in Skills England will be implemented. I look forward to sharing those views and bringing forward what I hope will be helpful changes to provide assurance to noble Lords when that Bill comes back.

The noble Baroness asked in particular about engineering and manufacturing. It is probably worth while saying that one of the new ways that we have approached the qualifications review is to take a route-by-route look at the options available to students. The reason for the decision to keep the applied qualifications in engineering and manufacturing is precisely that the occupational standards in this area—where employers play a crucial role in identifying what those are—are in the process of being updated. We want to make further decisions and invite reform to qualifications in the light of those improved and updated occupational standards when they emerge.

On national insurance contributions, the Chancellor announced at the Budget that public bodies will receive support to help with the costs of the employer national insurance contribution increase, and we will set out in due course what support will be available to colleges.

In addition to asking about certainty, the noble Lord, Lord Storey, asked about T-levels. As we made clear in the Statement, T-levels are high-quality qualifications, and we want to extend the opportunity they provide to as many young people as possible. We acknowledge that T-levels are large programmes of study and cannot always meet the needs of all learners who want to study in the occupations that they cover, which is the argument for leaving alternatives. However, where a student wants to study a large qualification equivalent to three A-levels’ worth of study in the routes that T-levels cover, T-levels should be the qualification that is offered to them.

We have already taken specific action on one key issue with respect to T-levels, the industrial placements, which are enormously popular with students. When I talk to T-level students, I find that they are enormously enthusiastic about the opportunity to carry out a 45-day placement, but to grow T-levels, we need to ensure that those placements are in place. That is why we have introduced flexibilities around the way in which the placements can be offered, to enable the continued growth of T-levels.

In certain T-levels, of which digital is a good example, the awarding bodies are now looking at the assessment within the T-level to ensure that, while it remains the rigorous qualification that it should be, it is more manageable for those providing it and for students, while enabling students to demonstrate what they have learnt.

I thank noble Lords opposite for their questions. I hope that we now have a period of certainty where students will be able to benefit from the choice of a range of qualifications, with an assurance that this Government will continue to ensure that they will be as high-quality as possible in order to support students’ opportunities throughout life and to meet the need for skills to help us grow the economy.

19:53

[Baroness Morris of Yardley (Lab)]

I also welcome the Statement and thank the Minister for the way in which she has carried out this review. It has been open- minded and consultative, and I know that not only colleagues in the House but, beyond that, those across the sector have appreciated it. That gives us a very good foundation on which to work, so I thank her for that.

I take the point about the 2027 date, which the noble Baroness, Lady Barran, raised. I absolutely see the rationale for rolling it into the curriculum review, so that they are not seen as separate and competing but part of a whole. That is just one of those things, and it is manageable.

I want to raise two points, if the Minister could respond to them. First, of course, we are talking about qualifications and learning in an area that is never set in stone. I seek some reassurance that, as we move forward and review the qualifications, we do not slip into looking only at content but that we always bear in mind that we are looking for a variety of teaching and learning styles to give children real choice over what they want to do.

The second point is about work experience. I take the point about the importance of work experience for T-levels, but they are not the only qualification for which it is important. It is important for BTECs, and, as the Government said, they hope it will be important for key stage 4 as well. Does the Minister have any reflections, or might she be able to come back to us in the future to let us know how we can manage that interface between the world of work and the world of education, so that all children get equal access and opportunities to do work experience where it is appropriate?

[Baroness Smith of Malvern (Lab)]

I thank my noble friend for those comments. I suspect that she—like me—has taught these qualifications. I introduced a general vocational qualification into a high school where I taught, so I very much take her point about the different teaching and learning styles from which students can benefit. I know she agrees that we must ensure that we do not lower the quality of qualifications for students who perhaps need different teaching and learning styles. We continue to review to ensure that qualifications are of a high standard.

From my experience of visiting colleges offering T-levels, I have to say that there are some very innovative approaches to the ways in which they are delivered. That is why there has been a steady growth in the number of young people undertaking T-levels. Of course, we have introduced three new areas this year, and there will be another new one next year.

I also take my noble friend’s point about extensive engagement. The process of the review involved consulting more than 250 individuals, including principals of FE and sixth form colleges, senior and curriculum leaders, teachers and subject specialists in FE, employer representative bodies, industry leaders, awarding organisations, mayoral combined authorities and other government departments. That is one reason why it has received broad support: it was, in essence, co-designed with those who will be responsible for delivering the qualifications process.

On the point about work experience, my noble friend is of course right that while industry placements are a key element of T-levels, they also play an important role both post and pre-16. That is where we need to ensure that placements maintain rigour, are of quality and enable employers to step forward to do that. That is what we have sought to achieve with the flexibilities we have introduced into T-levels.

We need to continue working with employers by providing reassurance and the flexibility necessary to enable them to offer a range of placements. That is one of the things we do with our T-level and apprenticeship ambassadors, who work with employers to encourage them to offer the sorts of placements that will be beneficial for students in whatever course they are taking—whether it is one of those placements or work experience. We will continue to do that.

[Lord Willetts (Con)]

My Lords, I welcome this Statement. T-levels are a very useful part of the qualifications landscape, but it was never realistic to think that T-levels and A-levels between them could somehow dominate all the options available for 16 to 18 year-olds. Many former Ministers on both sides of this House took that view—I see my noble friend Lord Johnson sitting beside me. Although they are not present, I would like to say that it was good to work with the noble Lords, Lord Blunkett, Lord Baker and Lord Adonis, in arguing for a pause. It is welcome that we have now secured a rather better future, at least for some time, for BTECs.

I am sure the Minister will be aware of the recent report from the independent Education Policy Institute, which said that

“T levels are currently unsuitable for many Level 3 learners”.


That message from independent research is one that we all need to take to heart. I have two specific questions for the Minister. First, will she confirm that T-levels cannot do everything, alongside A-levels? They are a very useful qualification for a route to a post as a technician, but it is not clear that they can do everything, and so BTECs and NVQs have a lasting role in the vocational qualification landscape. On eliminating uncertainty, which my noble friend Lady Barran raised, a statement recognising that T-Levels cannot do it all would be very welcome.

My second question concerns the cost of T-levels. It has always been noticeable that in the DfE there is no money in some areas but in other areas money pours out to fund new initiatives. The Minister referred to the value of the 45-day placements. However, can she tell the House how much the funding of these 45-day placements is costing? Given that spreading access to work experience is so important, does she have any concerns that this very substantial funding for one specific way of accessing work experience is having the effect of diminishing opportunities for work experience for other students not on the T-level route?

[Baroness Smith of Malvern (Lab)]

The noble Lord is right that, when faced with a positive phalanx—I do not know what the collective noun is for former Education Ministers—it is probably wise to realise that there is some wisdom there. That has been demonstrated by the results of the review that we have undertaken.

I agree with the noble Lord that T-levels and A-levels would be an insufficient option on their own for all students. To reiterate, where T-levels exist in a route, they are the most appropriate large qualification. One of the other things that we have done is to remove the previously proposed rules of combination, which would have prevented colleges building appropriate courses for their students, in consultation with those students and others. That will provide more flexibility.

I will write to the noble Lord specifically about the cost of T-level placements, but it is right when introducing a new qualification that, as we have done, there is an uplift in revenue funding for T-level students, as well as some capital provision. Any new qualification will need a period of time to scale itself to a position where the normal level of revenue funding would be adequate to deliver it.

[Lord Watson of Invergowrie (Lab)]

My Lords, I too very much welcome the Government’s Statement. I say that on behalf of my noble friends Lord Blunkett, Lady Blower and Lord Knight, who, together with the noble Baroness, Lady Morris, have been campaigning for some time, as my noble friend the Minister knows, to halt the process instigated by the previous Government, who were ditching in a reckless manner far too many other qualifications in favour of T-levels. I am glad to see that it is a Labour Government who have supported BTEC and AGQ students in a way that will not constrain the rollout of T-Levels but will open up more pathways for learners.

I found it rather ironic to hear the noble Baroness, Lady Barran, say that this Statement has been broadly welcomed by the sector. That is not something that could have been said about the proposals she made when she was in government. This goes right back to the time of the skills Bill, as noble Lords on the opposite Benches will recall. We did think that we had had some assurances from the Minister, which subsequently did not materialise, to our considerable annoyance. Many of the applied general qualifications in BTECs, the ending of which was proposed, will now be extended. Those of us who have campaigned to defend rather than defund those qualifications will take some solace from that and welcome the actions of the Government.

The Government’s curriculum and assessment review, led by Becky Francis, is under way and will report shortly. Can my noble friend the Minister say a bit about the way in which the level 3 qualifications set out in the Statement will dovetail with the curriculum and assessment review next year?

[Baroness Smith of Malvern (Lab)]

I thank my noble friend. He is right that there is something very arresting for a new Member of the House of Lords and a returned Education Minister to attend a meeting with my noble friends Lord Blunkett, Lady Morris, Lady Blower and Lord Knight, all of whom are very expert in this area. I am glad that he thinks I at least listened and understood what they said to me.

My noble friend is right that of the qualifications that we started looking at, of which about 460 were due for defunding by 2026, about 200 had very low enrolments: 100 or fewer students. We have largely managed to remove those from the qualifications landscape. It is probably still the case that that landscape is overly complex for students to be able to work their way through, but we kept 157 of the qualifications that were previously proposed to be defunded.

On the point about the curriculum and assessment review, as I touched on earlier, that review has within its remit the consideration of the assessment routes for 16 to 19 year-olds, and—responding to a point made by the noble Lord, Lord Willetts, which perhaps I did not address previously—a particular emphasis on ensuring that our curriculum and assessment routes enable everybody to succeed, including those who are disadvantaged and those with special educational needs and disabilities. For that reason, it will focus carefully on bringing forward recommendations about what the assessment route should look like for students post 16, and we will reflect on those and use them as the basis for further decisions about how to ensure that our qualifications for 16 to 19 year-olds are suitably rigorous, suitably accessible and provide appropriate choice for students.

[Lord Johnson of Marylebone (Con)]

My Lords, like others on all sides of the House, I very much welcome the Government’s rapid work to lift much of the uncertainty over the defunding of applied general qualifications. It would be hugely beneficial if the Government went a little further and were absolutely explicit that this is not just a stay of execution until 2027 but that there is a long-term place for these qualifications in our education system. That is my first point. The second point is: can the Minister show similar rapid work in lifting the uncertainty over how the growth and skills levy will interact with the lifelong learning entitlement, and if not now, say when the Government will do so?

[Baroness Smith of Malvern (Lab)]

I do not think it is appropriate for anybody—I do not think the noble Lord would have done it—to say that there would never be any development or new qualifications introduced into the 16 to 19 landscape or that there should ever be any ending of any qualification. So the qualifications landscape should not be set in stone. However, I can repeat, as I said to his noble friend, that the Government do not envisage a qualifications landscape in which there is only a choice of T-levels or A-levels. That is one of the reasons why the work of the curriculum and assessment review in setting out its views on what should remain in order to provide appropriate routes for young people will be the basis for any future decisions made there. It is my view that there will always need to be qualifications that are neither A-levels or T-levels, but they need to be of sufficiently high quality to ensure that we are not selling short the young people who take that route.

No sooner have we solved one problem than the noble Lord quite rightly pushes us to get on to the next one. Skills England is currently consulting on some of the current flexibilities that we will be introducing to develop the growth and skills levy, and of course we are also working hard on the implementation of the lifelong learning entitlement. I hope it will not be too long before we will be able to say more about both of those and, as the noble Lord also suggested, how they will link together. But I will just have a little break over Christmas before we come back to do that, and I hope all noble Lords also have a very restful break when it comes.

20:11

Sitting suspended.

Football Governance Bill [HL]

Committee stage
Wednesday 18th December 2024 Lords Chamber

Committee (6th Day) (Continued)

20:40

Amendment 251

Moved by

[Lord Markham]

251: Clause 53, page 43, line 19, at end insert—
“(c) any interest charged under paragraph (b) may not exceed the rate of inflation, as measured by the Retail Price Index, plus 2 per cent.”Member's explanatory statement
This amendment limits the rate of interest the Regulator may charge on unpaid levies.

[Lord Markham (Con)]

My Lords, I rise to move Amendment 251 in my name and to speak to Amendments 257 and 258 from my noble friend Lord Parkinson.

Amendment 251 seeks to place a limit on the rate of interest the regulator may charge on any unpaid levies. I think all noble Lords have agreed that we want to keep the regulator fees and cost burden on clubs as low as possible, so having a reasonable rate of interest seems helpful. The proposal is that we take the formula the Government currently use for tuition fees, and which is proposed for the tobacco levy, which is the RPI rate plus 2%. I am not absolutely wedded to that figure, but we believe there should be a figure we can all agree on.

Amendment 257 from my noble friend Lord Parkinson would remove the provision whereby the regulator does not have to consult on changing the levy if it considers the change to be minor. We understand the intent behind that provision, but all sorts of discussions could then be got into about what is minor and what is not, so it is probably easier just to establish that it be properly consulted on if there is a change.

Amendment 258 is pretty straightforward. It seeks to establish that if the regulator plans to change the levy rules, it gives six months’ notice before the chargeable period begins. We have said a number of times that we want clubs to improve their financial budgeting and planning, and this would help them to do that. With those simple changes, I beg to move.

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

I thank the noble Lords, Lord Markham and Lord Parkinson of Whitley Bay, for their amendments concerning the levy. On Amendment 251 from the noble Lord, Lord Markham, setting the rate of interest charged on non-payment of the levy is an operational decision for the regulator, which needs the flexibility to charge interest at a rate that deters non-payment. A rate that is too low could increase the incentive for non-payment and jeopardise the regulator’s ability to carry out its functions. The level of interest charged would be subject to the same consultation requirements as the levy itself. This will ensure a firm but fair level of interest.

Amendment 257, in the name of the noble Lord, Lord Parkinson of Whitley Bay, would require the regulator to consult every regulated club and others such as the Secretary of State and the Treasury on minor changes to the levy rules. These would be immaterial amendments or replacements to levy rules, such as correcting mistakes. Going out to gather the views of all clubs feels like it would be a disproportionate burden on clubs and on the regulator. For material changes, the Bill already requires the regulator to consult as appropriate. No club, especially those in the National League, wants the administrative burden of unnecessary consultation.

Finally, on Amendment 258 in the name of the noble Lord, Lord Markham, requiring the regulator to publish its levy charge six months before the chargeable period would create an operational challenge. The regulator would have to estimate a levy charge having only half a year’s costs to base it on. This could lead to inaccurate levy charges, which could see the regulator underfunded or clubs needlessly burdened. The current requirement of charges being publicised as soon as reasonably practicable strikes the right balance, we feel, between adequate notice for clubs and operational flexibility for the regulator to ensure an accurate and appropriate levy charge.

I therefore hope that the noble Lord will withdraw his amendment.

20:45

[Lord Markham (Con)]

I thank the Minister for her reply. As I say, these are not major things, but I must admit, I am a little surprised. The Government rightly see fit to set interest rates on all sorts of other things they deal with, such as student loans, tobacco and vapes, so it seems strange that they do not have a view on what should be an appropriate rate for the regulator to charge. I am not aware of that happening in other parts of the government network.

On the final amendment, this is about the regulator behaving responsibly if it is going to change things. Here, there seems to be a pattern. We had a debate earlier about what happens if the regulator does not approve someone as being fit and proper within the right time period. Again, the Government were saying the regulator might not be able to do it, so that person is automatically deemed not fit and proper. All noble Lords would probably agree that we need the regulator to be a bit more on its game than this. We should be a bit tougher and say that there is no reason why it cannot work out its rules on a change to the levy and give clubs six months’ notice. If the regulator is asking clubs to be financially disciplined, it should be doing the same.

I pose those as things for the Minister to consider but at this point, I will happily withdraw my amendment.

Amendment 251 withdrawn.

Amendments 252 and 253 not moved.

Clause 53 agreed.

Amendments 254 and 255 not moved.

Clause 54: Section 53: consultation and publication

Amendments 256 to 258 not moved.

Clause 54 agreed.

Amendment 258A not moved.

Clause 55: Duties to notify and consult the IFR

Amendment 259 not moved.

Clause 55 agreed.

Clause 56: Part 6: overview and interpretation

Amendment 260

Moved by

[Lord Bassam of Brighton]

260: Clause 56, page 45, line 25, leave out “a specified competition organiser to apply to the IFR for”
Member's explanatory statement
This amendment is one of a series of amendments which mean that it is not only a specified competition organiser which can trigger the mediation process regarding the distribution of revenue.

[Lord Bassam of Brighton (Lab)]

My Lords, this is the first of a number of amendments in a very large group—enormous, in fact—but they all have at their core an impact on the way in which the independent football regulator could make financial distribution decisions.

I will run through some of the more important ones briefly. Amendment 260 would mean that it is not only a specified competition organiser that can trigger the mediation process. Amendment 261 would provide for competition organisers to obtain consent before determining the distribution of revenue and would require the IFR to be satisfied that the distribution proposals comply with its general principles which are contained in Section 62(2).

Amendment 267 would oblige the Secretary of State to consult people who represent the views of regulated clubs and the views of fans of regulated clubs before making regulations which specify the source or description of relevant revenue. Amendment 268 would amend the definition of distribution agreement. Amendment 269 is also part of this series and would mean that it is not only a specified competition organiser which can trigger the mediation process regarding the distribution of revenue.

Amendment 276 seeks to provide that a competition organiser can apply to the IFR to trigger the resolution process if there has been a change to rather than any reduction in the revenue received by a competition organiser. Amendment 284 would require any notification that a competition organiser gives to trigger the resolution process regarding distribution revenues. Amendment 293 would insert an amendment to trigger the resolution process. Amendment 318 would narrow the circumstances in which the independent football regulator may revoke a distribution order where the competition organisers have agreed a distribution agreement to circumstances where that distribution order complies with Section 62(1)(a) or (b) or Section 62(4)(a) on the principles in general set out in that section.

Why are these amendments necessary? It is principally because we require a degree of flexibility for the regulator. We want to ensure that the regulator can trigger a mediation process and impose its own deal if the parties fail to reach agreement by mediation. Currently, it seems to me that the regulator will be presented with a binary choice, and neither of those choices might be perfect.

At the moment, the deal is primarily controlled by the Premier League. Overall, 88% of broadcast revenue goes to the Premier League and 7% of the remainder goes to clubs who get parachute payments, meaning that the remaining 5% is split between the next 138 clubs in the pyramid. I accept the case that has been powerfully made by the noble Baroness, Lady Brady, that the Premier League is a great league, that it produces incredible and impressive revenues and that those revenues have worked to solidify the excellence of the league and improve the quality of the clubs, the entertainment on offer and the players who are available to it.

However, it seems to me that we ignore at our peril the rest of the pyramid. Currently, for every £1,000 that goes to a Premier League club, just £313 goes to a Championship club and, if you take it down to a National League South club, it gets just 14p. Yet, if you look at the attendance figures, 45% of football fans, roughly speaking, go to a Premier League match and the remaining 55% go to games in the Championship, League One, League Two, National League, National League North and National League South, so there is a case for better distribution. I am not saying what that distribution should be—that is obviously a matter for which the regulator will be responsible—but the regulator needs to be able to make that decision based on the best possible circumstances. So these amendments are designed to facilitate that and to allow the regulator to act freely, working with football industry bodies and ensuring that they have the best possible information.

That is why my amendments seek to generate some flexibility and why a distribution deal must pass parameters set by the regulator, so that the gap between the various levels of football can perhaps be narrowed. It was never intended to be as wide as it is today. Initially, the gap between the Premier League and the Championship level was a lot narrower, and then again between the Championship and Leagues One and Two. It is the important development of football TV rights that has allowed the Premier League to become as rich as it has and to pay the wages that it can pay. International comparisons put the Premier League way ahead of any similar leading leagues.

We have a strange situation where some 64 clubs in the top four divisions have gone into administration since the start of the Premier League. That is clearly an unhealthy situation and a better distribution deal that is properly regulated would begin to address some of the gaps and some of the disparities. That is the spirit behind these amendments.

[Baroness Evans of Bowes Park (Con)]

The noble Lord will be well aware that the EFL has just signed a very great deal with Sky, with revenue coming in, and I do not believe that that money is distributed down the pyramid either. One hopes that the Championship and the EFL will continue to improve and get better deals. Does his amendment include the fact that perhaps that league needs to start looking to distribute and that if its income starts to increase, as we all hope it will do—we have heard that it is the sixth-richest league anyway—it is not just the Premier League that needs to be involved in this but the EFL itself? At the moment, it does not distribute any of the income from the money that it gets in from broadcasting. Perhaps it needs to look at distributing some of its income down the leagues as much as the Premier League does.

[Lord Bassam of Brighton (Lab)]

My Lords, the noble Baroness makes a compelling point. It is the case that the EFL is dominated by the Championship clubs. The noble Baroness is absolutely right that the EFL has secured a beneficial deal. It is not for me, her or anyone else in this Committee to say what the right sum of money is. I am merely pointing out that the distribution has changed over time. The available money for distribution has grown as the game has become more successful as a product unique to England and Wales, and it is for the IFR to get the distribution right. The point that the noble Baroness makes is that we should not be arguing the case for either the EFL or the Premier League; we should be arguing the case for football, because it is all of football that we want to see benefit, so that the pyramid truly acts as a pyramid and acts well in strengthening the national game.

[Lord Markham (Con)]

My Lords, before I address the amendments in this group, I want to echo the comments made by the noble Lord, Lord Bassam. With 44 amendments in this group, it really is hard to get your head around them all. Although they are given the broad title of “Regulatory powers”, I do not think that is conducive to good debate.

21:00

We had a similar situation on Monday night with a miscellaneous group and a similarly large number of amendments. I hope all noble Lords would agree that the very point of Committee is to scrutinise and grouping so many amendments together is not conducive to that.

[Lord Bassam of Brighton (Lab)]

Many of the amendments are consequential. I have highlighted the main points for the benefit of the Committee and that was my objective so that it would get the message.

[Lord Markham (Con)]

I appreciate the noble Lord’s efforts to do that. It was not specific to this group. There have been a number of examples which have been unwieldy, to say the least.

I turn to Amendments 260, 269 and 293 in the name of the noble Baroness, Lady Taylor. They alter the backstop method to enable the regulator to trigger the resolution process. The current drafting permits only the competition organisers to trigger it. That is quite a profound change, if you think about it. To date, we have been saying that the regulator should step in only as a last resort if the competitions cannot reach an agreement among themselves. What we are saying here is that the regulator can step in—I guess, in theory even if the competition organisers have agreed—if it feels for some reason it is not quite happy with the agreement. That seems quite a shift away from the principles we were talking about earlier. Our concern would be that we are suddenly setting up a role for a quite muscular regulator which can interfere maybe not at breakfast, lunch and tea but quite a bit of the time, to say the least.

Amendment 276 in the name of the noble Lord, Lord Bassam, states that the leagues can trigger the resolution process if there has been a change to revenue received by other leagues, as mentioned. Again, I think we could get into situations where a five-year deal has been put in place and a league is suddenly trying to reopen the deal. I am delighted that the Championship has a good Sky deal. Do we think that gives cause to reopen the deal? That would be a concern there. I am always a great believer that a deal is a deal is a deal. You live by that deal for that time and when it comes up again, that is the time to negotiate. Amendment 264 from the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam, again makes provision for multiple competition organisers to trigger the backstop and mediation process.

In all of these, there is a general concern that instead of the backstop being the backstop, as it is called, it becomes almost the first stop and the first resort. It goes to the concern that noble Lords have mentioned many times that while we start with the principle of a light-touch regulator, very quickly we get into a scenario of a pretty heavy-touch, muscular regulator. That would be our concern.

Amendment 261 provides that competition organisers must obtain the regulator’s consent before entering into a distribution agreement. Again, this adds another level of complexity. If the competitions have agreed between them, why do they need to get the consent of the regulator? It goes far beyond the original intentions of the backstop per the Dame Tracey Crouch report, in which she referred to it as the nuclear option, and how that would be the only case it would come up in. Instead, through these amendments, we would be setting up a lot of situations in which it would be the first resort.

While I understand that the intentions of the noble Lord, Lord Bassam, are noble—as ever—I feel that this is another circumstance of mission creep and unintended consequences, where we would end up with a very muscular regulator. Those are our concerns.

[Lord Addington (LD)]

My Lords, I am not very bothered by having a muscular regulator; I want an efficient one that gets things done and looks after the lower clubs. There is a disagreement between us that has been there all through this Committee.

I regard the series of amendments from the noble Lord, Lord Bassam, as a smorgasbord from which we should select something that is actually going to get us to have a look at what is going on. There are lots of options and I have put my name to one of them. Making sure that we get the regulator right and get money going down to preserve something we regard as good is the primary objective. It is not just to take money off the Premier League; it is to make sure that the structures below survive.

If the Government think these amendments are not the right way to progress, hearing why from the Minister would be sensible. Nobody is quite happy with the backstop power in the regulation structure at the moment. Everybody is a little bit upset about it. People who were happy are now not happy. The Premier League and EFL are having great fun not talking to each other or disagreeing. I have no real objection to a slightly more muscular approach. I do not think it is a light touch that is required; it should be efficient.

[Baroness Brady (Con)]

My Lords, the amendments in this group cover a wide range of issues relating to the backstop. While I understand the intentions behind many of these amendments, I fear that they collectively risk making an already contentious and divisive mechanism even more complex and counterproductive.

I respect that Ministers believe they have designed a balanced mechanism that places incentives in the right place, but I think what we will come to unpack is that that is wholly mistaken. I believe this Committee will see that this backstop has not and will not incentivise industry-led agreements, which is supposedly its overreaching policy purpose. I believe we will see that it will not result in a balanced, pragmatic solution that will be good for football.

It will instead drive posturing, game playing and the development of extreme and damaging solutions. We will see that this backstop is legally untested and uncertain, and it could sink football and the regulator into a legal and political quagmire that could drag on for years. Worst of all, we will see that this backstop has already poisoned, and will continue to poison, the well of football bodies’ relationships, when we all need to work together for our continued collective success.

I will briefly address some of the amendments in this group. The proposal to expand the scope of the backstop to include multiple parties all at once—for example, the National League, or potentially the FA and, even in the future, the women’s game—is concerning. This risks creating division where none currently exists. The Premier League, far from being at odds with these stakeholders, has made intensive and carefully considered efforts to support them, just as it has with the EFL.

Just a few months ago, the Premier League announced a £12.6 million package for the National League system over three years, a substantial increase on previous arrangements. For the women’s game, the Premier League has provided significant financial assistance, including a £20 million interest-free loan to help the new Women’s Professional Leagues Limited in its formative years.

These are examples of proactive, voluntary agreements that demonstrate collaboration rather than conflict. This set of amendments would encourage all stakeholders to start competing, simultaneously claiming the Premier League’s revenues, fracturing relationships and introducing adversarial dynamics where none currently exist.

This is not the way to build a sustainable and co-operative football ecosystem. Indeed, I will make a prediction: it is far more likely that the National League will seek to trigger the backstop in relation to the EFL, which does not provide any financial support to the leagues below it. The idea of the IFR triggering the backstop mechanism independently is particularly troubling. The purpose of the backstop, as described in the Bill, is to act as a last resort when the parties fail to reach an agreement; it is not supposed to be a front- stop. Allowing the IFR to bypass this voluntary process would undermine its very purpose and disincentivise genuine negotiation.

The idea that any change—not even a reduction—in revenue received by one party could automatically trigger the backstop is, frankly, unworkable. Revenue distributions in football are dynamic and fluctuate according to complex interrelationships. The amounts change every year, almost always upwards. A mechanism that automatically treats any change as a potential trigger would, with the greatest of respect to the noble Lord, Lord Bassam, be absurd. It would trigger perpetual uncertainty, which is the last thing that football needs.

Finally, and more positively, the suggestion that the IFR could impose its own settlement deserves careful scrutiny. I have tabled my own, slightly different amendments to that effect, which will be debated in a later group. I fully agree with noble Lords that the binary mechanism in the Bill is unworkable for football. However, with respect, I am not sure that this particular amendment would place incentives in the right place. To allow the IFR to impose its own settlement only where both parties’ proposals are inconsistent with the IFR’s objectives would allow parties to offer unrealistic proposals. It would mean they could anchor with a very extreme demand, knowing that the IFR would be forced to step in and create a compromise. This would further entrench division.

What is striking about the amendments in this group is that they demonstrate a fundamental dissatisfaction with the mechanism in the Bill from all sides of the House, as well as the main competition parties involved. The Premier League has raised serious concerns about the divisive nature of the backstop, while the EFL has, I believe, inspired the amendments in this group. It too sees significant flaws in the process as designed. This really should give the Government significant pause for thought.

Let us not forget that English football’s success has been built on collaboration and solidarity. UEFA has made this very point about the deficiencies of the current Bill’s mechanism. A backstop requires thoughtful, proportionate regulation that respects the autonomy of its stakeholders. These amendments, and indeed the existing backstop mechanism, would disrupt that delicate balance. I urge the Government to reflect carefully on whether the backstop as designed is fit for purpose. It should be fostering co-operation, not driving division. If that requires revisiting the mechanism, we should do so without hesitation. Football’s future really does depend on getting this right.

[Lord Maude of Horsham (Con)]

My Lords, I want to pick up one particular word that my noble friend Lady Brady raised: divisive. There is no doubt that this Bill has turned what was intended to be a backstop—a last resort or nuclear option, however it was described—into something that can be used pre-emptively. Some of the amendments proposed tonight—which would make it more aggressive and interventionist, and more able to be used pre-emptively—have behind them the sense that this is bound to be aggressive, antagonistic and adversarial. I want to contest that.

The truth is that, wherever a club is in the pyramid of English football, it has an interest in the whole pyramid being strong. There is no benefit to the Premier League in keeping lots more money to itself and weakening the rest of the pyramid, because it depends on the pyramid; its strength is drawn from all the way through the pyramid. It is really important that we try to take ourselves away from the sense that there is a finite pie of limited size and so we should work out how to enable different parts of it to get more for themselves.

English football—the whole pyramid—has seen tremendous growth. It had the huge challenges of the pandemic, but it survived and came out strong. As we have repeatedly said, the Premier League is not just the most successful football league in the world but the most successful sporting league in the world. The Championship is the sixth most successful and richest league in Europe. It is strong and it will grow more, but it will not do so if the whole mindset behind how this is constructed just puts one set of interests against another. The aim should be to ask how we grow the pyramid further and encourage the different parts of it to work together and see the mutual benefit, to make two plus two add up to five, rather than—as I fear the danger is in how this is constructed—add up to three. I urge the Government to take this away and look again at how it is constructed.

21:15

When Dame Tracey completed her review, she talked about the backstop as being a genuine last-resort backstop. We have already seen how the prospect of a much more interventionist approach has enabled parts of the pyramid to start to game the process in a way, hoping that, as a result of a deadlock, the 7th cavalry will ride over the hill to change the outcome. I hope that the Government will take this away. This is at the heart of so many of the concerns around what the Bill is about. To be frank, my dread is that we are doing something that will make less of this amazing thing—English football—instead of what should be the outcome, which is making more of it.

[Lord Goodman of Wycombe (Con)]

My Lords, it is relatively late in the evening and we have debated a lot of clauses and amendments, but I agree with my noble friend Lord Maude that this debate is at the heart of the Bill, at least as far as the Premier League, the Football League and the clubs themselves are concerned, I suspect. What will really get them going in relation to the Bill is not, for better or worse, net zero, diversity or any of those things but the money; it is what happens to the money and the success or failure of their clubs.

When the Minister responds, she will make the best case she can for what is in the Bill—for the backstop—and I understand that. However, when we finish Committee and go on to Report, and when eventually the Bill passes, the debate will not be over; it is just beginning. Once the Bill is passed, as I assume it will be, my noble friend Lady Brady will continue to make her case broadly for the present arrangements and the noble Lord, Lord Bassam, will be back to make his case for what my noble friend Lord Markham called the front-stop, while the Government will defend the backstop—and so the debate will go on.

One of the lobby groups that has an interest in the Bill said of it that the debate is over. I found that a remarkable statement, given that this House presumably has a duty to scrutinise legislation and the Bill has not even been down to the other place yet. My point at this stage is that the debate is not over. It will not be over in Committee, on Report or after Third Reading; it will just be beginning. I ask noble Lords to bear this in mind when we come back, later in Committee, to consider clauses that seek to review the Bill as a whole.

[Baroness Twycross (Lab)]

I thank my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton for their amendments on this important topic. I thank my noble friend for outlining why distributions are so important to the football pyramid. I will aim to take the amendments in a sensible order, with logical grouping where possible. In appreciating comments on the size of the group, I note that there is a logic to this, as outlined by my noble friend, and I say to the noble Lord, Lord Markham, that I do not think we have skimped on debate during Committee—though I agree with the noble Lord, Lord Goodman, both that the hour is getting late and that it does not feel like the debate has finished or will finish any time soon.

I acknowledge the probing intent of the amendments and it is really helpful to have this debate. I know that subsequent groups will go into this a bit more as well. I agree with the noble Lord, Lord Addington, that it is important that we do our absolute best to work through the issues that noble Lords have raised and to get the regulator right, which was the point that he made.

I reassure my noble friends that we agree on the importance of regulatory intervention on distributions— I appreciate that not all noble Lords have exactly the same view of this. Amendments 260, 269, 270, 293, 295 and 288 would broaden the powers that the regulator has to intervene by allowing it to trigger the back- stop process. I understand the intention behind the amendments, but we must maintain the backstop process as a last resort, to be triggered by the leagues only if they cannot come to an agreement themselves.

[Baroness Evans of Bowes Park (Con)]

The noble Baroness keeps saying that, and I understand that it is what we hoped was going to happen, but I do not think that anyone in this Committee believes that it will be a last resort. From the briefings that all noble Lords—including, I am sure, the Minister—have had from all sides, we know that the backstop is likely to be triggered very early on by the regulator. I really hope the Minister can move from what we hoped might be the position to where I think we are, whether we like it or not, and look at these processes on the basis of what is likely to happen. This could be one of the first things that the regulator has to deal with.

We have heard concerns about the nature of the conversations and the way that those might set up leagues against one another. I know that the Minister would hope that it was a last resort, as I think we all did, but I urge her to accept that if we are being genuinely honest—and other noble Lords may have heard differently from the various leagues we have all been speaking to—it seems to be a view that this is likely to happen. It would be much more helpful for our discussions if we could stop saying, “It’s a last resort”, and accept that it is very likely to happen quicker than we all wanted.

[Baroness Twycross (Lab)]

I appreciate that the noble Baroness, Lady Evans, may take a different view and I completely understand people’s concerns that it will be a front-stop—as a spoiler alert, and with apologies to my noble friend, I am not going to accept these amendments; we will come to that in a moment. However, we genuinely think that the model we have established is very similar, apart from the possible inclusion of the parachute payment—for want of a better word; it is not the phrase used in the Bill, but that escapes me for a moment—should the “state of the game” report suggest to the regulator that it needs to allow that to be taken into account.

My view is that the model we have presented should incentivise the leagues and the parties to come to an agreement themselves, and that opportunity to do so does not go away once the regulator is established. That is the design of the model and an essential part of it, as it was in the previous iteration of the Bill, so this is absolutely intended as a backstop process. We can go on to debate that in later groups as well as in this group. I am happy to do that and to meet people individually to go through why we think this will be a backstop and not a front-stop whereby the minute the regulator sets off in motion, everybody will claim that they want to have the backstop triggered.

However, there are things that the regulator will need to take into account if somebody asks for the backstop process to be triggered. It is not the necessarily the case that the regulator would have to accept that that process was set in motion. The whole model is designed around the principle of trying to get people to come to an agreement themselves. It is really important to ensure—

[Baroness Brady (Con)]

I thank the Minister for giving way. If she was right, we would have a deal in place by now. This has been the model for two years, so it is definitely a barrier to conversations. There is a view that whatever the Premier League agrees with the Football League, that, in effect, becomes its insurance policy. It then triggers the backstop and goes straight to the regulator, knowing that it will never get less than it has been offered and could get more. We will be in a perpetually revolving door of triggering mechanisms that will never give any club any certainty of its income, which will be very dangerous and very bad for football.

[Baroness Twycross (Lab)]

It is important for us to go through how the regulator’s backstop powers and power of last resort would work. I appreciate that the noble Baroness is entirely right that an agreement has not come into place, and that might be—or might not be—because of people waiting to see what form the regulator takes and the exact iteration of the wide range of views we have heard tonight and on previous occasions.

If, under the Government’s intended model for the backstop, the relevant leagues cannot reach an agreement, they can apply to trigger the backstop—the noble Baroness is quite right on that. If certain high thresholds are met, of which the regulator must be satisfied, the backstop can be triggered, but let me go through what would happen first: the relevant leagues would enter a period of mediation and, if there was still no agreement, they would move to a final proposal stage.

[Baroness Brady (Con)]

I thank the Minister for allowing me to intervene. Rick Parry went before the Select Committee and said he would trigger the backstop in any event—even if he got more money from the Premier League in the meantime—because there is no risk to the EFL in the backstop.

[Baroness Twycross (Lab)]

I am not going to comment on what people did or did not say in that committee meeting at this point. The backstop would be applied only if certain high thresholds were met. The regulator will be an independent regulator and it will have strict measures to meet—high thresholds which it must be satisfied of if the backstop is to be triggered. If there is still no agreement, the parties will move to a final proposal stage and, at that point, the regulator would convene an independent expert panel and invite final proposals from both relevant leagues with accompanying analysis, and the independent expert panel would choose the most appropriate proposal. This model incentivises both parties to compromise, as unreasonable proposals would not be chosen.

The whole model, which is almost identical in every detail to how the previous Government were planning to do this, is intended—

[Baroness Evans of Bowes Park (Con)]

The Minister keeps coming back to the previous model. I think most of us here thought the previous model was nuts, and we still think it is nuts. We never discussed this in the House, so to keep saying that is quite insulting to quite a lot of us who always thought this was a bad idea. We are trying to engage with the Minister now about why we think it is a bad idea, and we would really like her to talk about the detail rather than keep saying, “Well, it was your Government”. Honestly, I would never have voted for this beforehand and, in my ex-position, that would have probably been quite a bad thing, but I am sorry, I would not have done so. I would like the Minister to focus on what we are talking about rather than keep using those issues to deflect from getting into the detail.

[Baroness Twycross (Lab)]

I am not sure how many times I have said that this evening, but it is really not very many. I am trying to establish that this model has been worked on and discussed for some time. I appreciate that noble Lords in this House did not get the opportunity to discuss it under the previous Government. It is a model that has been worked through, with examples from different organisations. It encourages compromise and tries to get people to reach a deal that everybody can work through and which meets the criteria of the regulator.

[Lord Moynihan (Con)]

A model which creates tension does not get it right. We have already heard from Rick Parry that he would trigger it immediately. This is a model that does not work. We are trying to say to the Minister that Committee is an opportunity to take it away and rethink it. It really does not stack up to be a successful model for the future of English football.

21:30

I would really appreciate it if the Minister could take that away, think about it and come back to us with her reflections on everything she has heard this evening, from many people who are very knowledgeable about the future of English football and, indeed, its existence. I have real concerns that what is being proposed would be deeply damaging not only to English football but to the investment future of the game in England. Surely, she should take that into account.

[Baroness Twycross (Lab)]

Simply because one individual says that they would want to trigger it does not mean that the regulator would view the condition as being met.

[Lord Maude of Horsham (Con)]

With respect to the Minister, it was not just a random individual; it was a really significant player in the whole scheme of what we are talking about here.

[Baroness Twycross (Lab)]

I appreciate the noble Lord’s point, but if the EFL triggers the backstop or makes a proposal in bad faith, it could end up worse off if the Premier League’s proposal is more reasonable, so this does not encourage the EFL or Premier League to be confrontation or divisive. I am sure we will come back to this at a later stage, probably this evening, but definitely when we come back in the new year on Report.

I am really happy to sit down with noble Lords and talk this through, but I will continue to use my speaking notes for some time and then, I hope, give some reassurance that we are considering this carefully. I am always happy to meet with noble Lords, as is the team that has been working on this. As noble Lords are aware, a number of the officials working on this have been doing so right the way through from the fan-led review, so this is a really good example of the consistency of advice both to this Government and the previous Government, notwithstanding the fact that not everybody here liked the Bill’s previous iteration.

To return to my speaking notes—although I am fairly sure I have got slightly out of order now—we think that this approach encourages future collaboration. We might need to agree to disagree on that point and come back to that debate.

[Baroness Brady (Con)]

The Minister says that she believes that the mechanism will deliver collaboration. For my benefit, please could she name a single example of a binding final offer process working in UK regulatory terms, and its use in the UK to deliver the outcomes she is talking about?

[Baroness Twycross (Lab)]

The Competition and Markets Authority has used it.

The process proposed by this group of amendments, excluding Amendment 260, would allow the regulator to intervene at its discretion and would require it to take into account the potential use of any revenue distributed. It is the Government’s view that this is regulatory overreach and a fundamental change to the intent of the process as drafted.

The other amendments from my noble friends Lord Bassam and Lady Taylor seek to change the structure of the backstop process from a two-party mediation and final proposal/order process to one that could apply to any number of relevant parties. I understand the overall intent of these amendments and have chosen to address them as a group to ensure that that intent is understood comprehensively, and that the Government’s position is in turn communicated coherently.

To clarify, the Premier League, the English Football League and the National League can all apply to trigger the backstop process. Any of the specified competition organisers can submit an application to trigger the process, and simultaneous instances of the backstop process could be triggered to cover the relationships between each of the leagues. The process is inherently designed as a two-party process. Fundamentally, distribution agreements are agreed between two individual leagues and the process is designed to facilitate these agreements. As the final offer process is set up and designed between two parties to facilitate a decision between two proposals on the basis of relevant principles, it would not be effective for the regulator to engage in this process with more than two parties. This is also, in part, why it would not be appropriate for the regulator to make a third offer. Without the incentive of the two-proposal process, parties are likely to stay at polarised positions, rather than find areas for compromise. However, when the two proposals submitted are the only choices, the pragmatic decision is to submit the most reasonable proposal possible. This is the incentive we wish to create.

I now turn to Amendments 292, 296 and 314, tabled by my noble friends Lord Bassam and Lady Taylor of Bolton. While there is a slight difference between “special” and “compelling”, we are satisfied that the bar is set sufficiently high with the use of “special”, which is the more usual terminology in these sorts of provisions. There is likely to be no tangible difference in outcomes, and therefore these amendments would be minor, insignificant changes to the wording of the Bill. As such, the Government believe the current drafting is sufficient. This is also the case for Amendment 264. While we understand the intent behind this amendment, we are content that the current drafting in the Bill sufficiently captures all revenue relevant for consideration during the backstop process. The proposed drafting change would not capture any revenue sources not already captured by the existing wording.

I turn now to Amendments 261, 262, 276 and 315. Amendment 276 seeks to significantly broaden one of the conditions by which the backstop process could be triggered. Condition 2 is specifically designed to be triggered by a material reduction in relevant revenue, as this poses a significant threat to the financial sustainability of the pyramid. Amendment 315 would, if the distribution process was ended due to incomplete or inconsistent proposals, require the regulator to issue a distribution order based on its expert panel’s own proposal, rather than ending the process. This would prevent the regulator ending the final proposal stage without an order, even if both leagues have chosen not to submit proposals.

These amendments, and the others referenced, would increase the likelihood of an enforced rather than an agreed solution. The Government’s preference is for an industry-led solution. It is our view that the regulator should have a role in facilitating the final proposal process only where no agreement can be reached on distribution, and that the process should be the least interventionist it can be while remaining effective. This approach encourages future collaboration and prevents the leagues relying too heavily on the regulator in the future.

I turn now to Amendments 284 and 286. While I agree that the state of the game report is a usual source of information to be considered as part of the distribution agreement process, it is our position that these amendments are unnecessarily prescriptive. As it stands, the Bill does not make specific reference to the report being included as a potential question for consideration. However, the existing drafting does not in any way exclude consideration of the state of the game report, and the regulator must have regard to it as part of its general duties. I would expect the state of the game report to be considered by both the leagues applying to trigger the backstop process, and the regulator, given its relevance. However, to include this expectation beyond what is already set out in primary legislation would be inflexible.

Turning to Amendment 267, while the Government understand the broader intention to involve fans in as many areas of the Bill as possible, it would not be appropriate for the regulator to be mandated to consult a group which is neither directly financially involved nor a governing body. This is not to say that fans should not make their views known to the regulator, and there will be many instances, such as in the state of the game consultation, where we expect the regulator to be able to consider a number of perspectives. This includes the views of fans on the financial situation in English football. Furthermore, the proposed drafting requiring consultation with representatives of regulated clubs is duplicative, given that the Bill as drafted already requires the consultation of the leagues.

Finally, Amendment 319 seeks to remove the provision that explicitly outlines that leagues can come to an alternative agreement at any time in the backstop process. The ability of leagues to come to an agreement independently has been protected in the legislation itself intentionally, to highlight that an industry-led solution is both preferred and encouraged. We believe this explicit protection will encourage the leagues to reconsider at every step of the process whether regulatory intervention is necessary, ideally bringing them closer to an independent agreement that works for all of football.

I hope that my responses have reassured my noble friends and other noble Lords that the Government’s approach is appropriate and provides the necessary protections, and that my noble friends will not press their amendments.

[Lord Bassam of Brighton (Lab)]

My Lords, the noble Lord, Lord Markham, rumbled me early on in his comments when he worked out that these were probing amendments; that is what they were intended to be. The group is disparate—I did not author it; it was what we were handed. It has been useful because it has enabled me to hear from the Minister how she sees the regulatory arrangements working as far as distribution is concerned, and the extent of the regulator’s flexibility.

I did not make this observation in my opening remarks but I think—the Minister covered this point—that the “state of the game” report will be critical when the regulator gets to grips with the distribution. The distribution of the revenues will be most important, because that is designed to make the game sustainable, to make sure that clubs do not go into administration, that we do not have clubs paying more than they actually earn in revenues, and so that clubs do not get to the point where they cannot properly trade. That is the most important thing for me.

Although I appreciate that my amendments would appear to some to be a bit of regulatory overkill, I think the point was made that we need to make sure that the regulator can do its job properly. The Premier League should not be at all threatened by the powers that the regulator has. Given the amount of money there is in the game and the continuing success of the Premier League—and, for that matter, the Championship —the regulator should be able to get our national game to the point where it is much more financially in balance and there are not the big gaps and distortions in revenue distribution throughout the pyramid.

I thank the Minister for what she said. Obviously, I shall study it very carefully. I think it unlikely that I shall return to these issues on Report, but obviously I will look at it very carefully before we come to that point. I beg leave to withdraw the amendment.

Amendment 260 withdrawn.

Amendments 261 to 262 not moved.

Amendment 263

Moved by

[Lord Markham]

263: Clause 56, page 45, line 32, leave out subsection (2) and insert—
“(2) In this Part, revenue received by a specified competition organiser is “relevant revenue” if—(a) it is revenue received as a result of the sale or acquisition of rights to exploit the broadcasting of football matches included in a competition organised by the specified competition organiser, and(b) it is not revenue that the specified competition organiser distributes to a club by virtue of a team operated by the club being relegated from a competition organised by the specified competition organiser.”Member’s explanatory statement
The amendment prohibits parachute payments from being included in the distributions of revenue resolution procedure.

[Lord Markham (Con)]

Amendment 263 is in my name and that of my noble friend Lord Parkinson. Going on from the last debate, it talks about probably one of the most important elements in the whole make-up of the financial payment system: parachute payments. The amendment seeks to remove from the regulator the powers to impact or change those parachute payments.

The reason for that is that parachute payments are a very common feature—I understand that just about all European leagues have parachute payments—and that is for a very simple reason. Any club that gets promoted is automatically in a situation where financially, it has a lot less money than other clubs in the Premier League or whichever higher division it is—parachute payments happen right the way through the pyramid—and they need to invest. They need to do that if they are to have any opportunity, any chance, to compete. If they do not invest, it is pretty likely that they will get relegated again straightaway, and any games that they take part in will be pretty uncompetitive and not very interesting to watch. But how do you get them to invest when they know that there is a decent chance that they will get relegated straightaway and go back to a situation where they have a lot less income?

Of course, as I say, the common mechanism that all the leagues across Europe seek to put in place is the safety net of a parachute payment, so that clubs know that for a period of time—three years—they have that safety net, particularly in years one or two, because in the third year it falls away quite quickly from that.

However, it is not just as a key measure for promoted clubs. Right now, if you are a Wolves fan and you are sitting second from bottom, what do you want them to do? You want them to sack their manager—they have done that; it cost them quite a bit to do that in terms of pay-offs and attracting a new manager—and you want them to invest in the January transfer window to get more players, to give them a chance of staying up for the rest of the season. That is the absolutely normal thing that you would expect them to do.

That is what you want the whole Premier League to be doing: you want the teams to be really fighting to survive and competing in every game. That is what makes the game so interesting to watch. A lot of the fun towards the end of the season, when you know—maybe not this season—that Man City is going to win it again, or whatever, it gets really interesting around the bottom of the league. Why is it interesting? It is because those clubs still invest. So Wolves will no doubt invest in this window and a lot of the bottom clubs, which might be looking over their shoulder, worried about relegation, will invest. They will do that because they have the safety net of the parachute payments.

21:45

If you remove that, instead of investing more in players, they will be doing the opposite. They will be thinking, “My goodness, I had better get rid of some of these players. I had better make sure, because if I get relegated, I am absolutely stuck; my income is going to dramatically decrease and the responsible thing for me to do now is to offload players instead”. The net effect of that is, suddenly, we get a whole lot of games that become uncompetitive. They become walkovers. Those teams are now playing teams with a lot more financial resources, and they become much less attractive to watch. What does the whole game depend on? It is the attractiveness of all the games. That is what the TV companies all around the world pay for. That is why we get more money in the Premier League—double the amount that the other divisions in Spain, Italy, France, et cetera, are getting—because all the games are competitive, unlike in these other countries, where you get a few top teams and then a lot of teams that are not nearly so competitive.

All this will do is make those games less attractive to watch. It will mean that the TV rights for those games will go down, and all clubs will lose out. We will have exactly what my noble friend Lord Maude feared: less money to distribute, rather than more. I feel very strongly that removing the parachute payments will be counterproductive.

Again, I know the Minister understands this. Like all of us, she has the good of the game at heart. I know her team understand this as well. I look forward to hearing her on this very important issue. I beg to move.

[Baroness Brady (Con)]

My Lords, I support Amendment 263 in the name of my noble friend Lord Markham, which seeks to exclude parachute payments—the financial lifeline provided to relegated clubs—from the definition of “relevant revenue” under the backstop. This amendment is essential to addressing the profound risk created by the current drafting of the Bill.

Parachute payments are not just a feature of football finance, they are a key part of the scaffolding that delivers the competitiveness, the investability and the financial sustainability of the English football ecosystem. Without them, relegation would become a financial free-for-all—a cliff edge that would devastate many clubs and their communities. Parachute payments are designed to manage the significant financial shock of relegation, where clubs can lose enormous amounts of revenue almost overnight, yet their overheads stay the same.

I speak from some personal experience here. At West Ham United, we have known the daunting realities of relegation. Without parachute payments, the response in 2011 would have been wholesale disinvestment, a disorderly fire sale of players, job cuts, and a complete halt to critical investments in infrastructure. That is exactly how clubs start to spiral. Parachute payments do not come close to eliminating the pain of relegation but they provide some breathing space to make difficult but measured adjustments.

Yet this Bill places the very existence of parachute payments on the table, making them a part of the binary backstop process that pits two competing visions of football finance against one another. This is an intolerable risk. The EFL has been explicit that its proposal in this process would be for massive reductions in parachute payments, based on the argument that the financial gap between the Premier League and the Championship should be closed. But this argument fundamentally misunderstands the problem. The central issue here is not the gap itself, which reflects the commercial realities of two very different leagues, but whether clubs can transition effectively between those levels, between those two leagues.

Here the evidence is clear. Parachute payments work. If they did not exist, you would simply have to invent them. Crucially, parachute payments do not lock up promotion opportunities. Look no further than the examples of Luton Town and Ipswich Town from each of the last two years. Well-run, innovative clubs have every chance of success in the Championship, which is a highly competitive and appealing league.

Parachutes are not a significant distortion but a significant stabiliser, providing clubs with the tools to manage transition responsibly and sustainably. The EFL’s proposal is essentially to level down the Premier League to meet the Championship; to stretch out the bottom half of the Premier League. But that would destroy the top-to-bottom competitiveness that makes the Premier League the most watched and admired league in the world. Enabling such a proposal, as this Bill now does, expressly privileges the Championship over the Premier League. That is an astonishing position to take. It risks reducing the quality of the game at the top of the pyramid and undermining the ability of clubs to compete both domestically and internationally.

Let us also consider the impact on investment. Investors are rational. They are drawn to football because of its structures, parachute payments central among them, that provide clear pathways for responsible investment and sustainable growth. Without parachute payments, the Championship clubs become less investable. Why would anyone seriously invest in a club that cannot make the financial journey to the Premier League without risking complete collapse on relegation? The logic of the previous Bill was that, if there are challenges with parachute payments—challenges that the Government’s state of the game review may or may not identify—these can be addressed through increased solidarity payments. The exclusion of parachute payments in the previous Bill meant that the very existence of parachute payments was not placed at risk. It recognised the critical value of parachute payments to protect their role in managing these vital transitions. But now parachute payments are suddenly on the table. It is a hugely significant change of policy.

I know that the Minister would prefer that I should refrain from pointing this out, but the process by which this expanded backstop mechanism has been introduced has been alarmingly inadequate. As we know, the Secretary of State held just one 30-minute meeting with seven hand-picked Premier League clubs between July and October. The backstop was one of the many things that were discussed at the meeting, but at no time during the meeting were we given any warning that this decision was even being considered, let alone added to the Bill. Those seven clubs wrote to the Secretary of State following the meeting, which was five or six months ago, and we still have not had a reply. We also know that UEFA explicitly advised Ministers to reconsider the previous mechanism before parachute payments were even included. But, instead of narrowing the scope, the Government have significantly broadened it. I ask again: why? Parachute payments do not create financial irresponsibility. They are its enemy. They do not distort competitiveness; they enable it.

If you are Championship club newly promoted into the Premier League, you need to know that you can invest in your team to give you any chance to be competitive and to stay there. Clubs invest when they are promoted only because they know that they can rely on the parachute payment to cover some of the investments they have made in order to be competitive in the Premier league. Those investments are almost always in transfer fees and players’ wages. Clubs need that parachute to cover those things if they are relegated. If you do not have a parachute payment to soften the blow, you know that you cannot make the necessary investment in your team and in transfer fees when you get into the Premier League to try to stay there. You know your team will not be competitive enough, because you know that, if you are relegated without a parachute payment, you will face the real risk of administration.

Parachute payments help soften the blow. Without them, you cannot cut your overheads in any way, because there is no cause to terminate players’ contracts—that is part of the PFA agreement. So this means that, if you get promoted into the Premier League knowing you cannot contribute to the competitiveness of the Premier League—the idea that on any day any club can beat any other—you are going to affect the competitiveness and the global appeal of the Premier League, as my noble friend Lord Markham said, but, most of all, you are going to damage your own club.

Parachute payments do not reward failure. They allow clubs to recover, rebuild and stay financially sustainable. Frankly, I think that is the whole purpose of Bill. So I urge the Government to reconsider and to protect the stability of the football ecosystem, protect the ability of clubs to manage the transition between leagues responsibly, and protect the investment in both the Premier League and the Championship, which make English football the global success story that it is today.

[Lord Maude of Horsham (Con)]

My Lords, it is a pleasure to follow my noble friend Lady Brady, who speaks with passion and deep expertise. I support this amendment.

I suspect I am not the only football supporter sitting in your Lordships’ House who had never heard of parachute payments until I started to get my head around the Bill. It took me a little time to get my head around the concept. I have listened very carefully to, and interrogated, the arguments for it, and understand them. The essence seems to me that it is simply a fact—an irrefutable fact and not readily to be changed—that there is a huge gulf in the financial rewards that come to a club in the Premier League compared with one that is in the Championship. One might regret that, but the only way you could possibly change it would be, as my noble friend said, by levelling down and reducing the competitive tension that there is in the Premier League.

The arguments that my noble friends Lord Markham and Lady Brady made about how parachute payments can narrow the gulf between Premier League and Championship are powerful and compelling. But the truth is that, without the ability for clubs that have been promoted to invest to become competitive, you would not have the competitive tension within the Premier League that is part of what makes it so successful. We have said repeatedly, but it bears repeating, that the Premier League is the goose that lays the golden eggs that reward the rest of the pyramid. If we damage that, we inflict damage not just on the Premier League but on the whole of English football, and that is what we have to be incredibly careful of.

There is a high degree of mobility within the Premier League. I say this with regret as a supporter of a club that is always regarded as in the top six but is languishing —temporarily, I hasten to say—in 10th. It is, as we know, the hope that kills you, not the despair. Nottingham Forest were promoted two or three seasons ago and are now fourth in the Premier League, in a Champions League spot—there is strong mobility. Could they have done that without the confidence to be able to invest and to grow the team and the players? This is part of the magic of it, and to suggest that this is somehow a game and a racket and that it should be put in jeopardy is not to understand the magic of a degree of competitiveness that exists in English football all the way through the pyramid.

This is something that the clubs and leagues have themselves come up with, and it is something that works. The idea—frankly, this thought applies to quite a lot of what the Bill is about—that what has worked and been proven to work will somehow suddenly be improved by the introduction of a state regulator might turn out to be true, but all the evidence of history suggests that it will not.

22:00

The noble Baroness and others now sadly absent on the Government Benches have constantly said that we cannot really complain about this because it is basically the same Bill that our Government came up with. In the last group of amendments, we were talking about another way in which the Bill has been significantly changed and, from where I stand, made considerably worse. Turning the backstop into a front-stop, effectively —an aggressive, interventionist approach—and bringing parachute payments within the ambit of the regulator are two crucial approaches capable of inflicting grave damage on what we are trying to protect, support, sustain and help to grow.

So, for all that the Minister maintains that it is somehow improper for us to be questioning this, we have the Government bang to rights on this one. I therefore hope that she will take this away and give it careful consideration, because she is playing with something quite dangerous here. I am no longer a politician—I sit in your Lordships’ House—but I am still alert enough to the political dangers of getting something like this badly wrong, and I have to say to the Minister and her colleagues in the Government that, if this goes badly wrong, they are going to own it.

[Baroness Evans of Bowes Park (Con)]

I support Amendment 263 and declare an interest as a supporter of Norwich City, who, over a number of seasons, endured the pain of relegation and then the joy of promotion on a regular basis. So, unlike my noble friend Lord Maude, I am well aware of the benefits of parachute payments, although unfortunately not for a few seasons now.

As we have heard, parachute payments are a critical foundation for the competitiveness of the Premier League. They help clubs manage the financial impact relegation from the Premier League can cause and give a degree of stability at a time of significant challenge to allow them to adjust to their new financial and footballing reality. That is true of all clubs. Well-run clubs like Norwich City could not have survived, even with the benevolent owners they had, without the benefit of a parachute payment. A parachute payment does not, however, in any way ensure that clubs continually go up to the Premier League, as, unfortunately, the last few seasons for Norwich City have shown.

I am sure a number of noble Lords will have seen the letter from Cliff Crown, chairman of Brentford FC, who said:

“For Brentford FC the parachute payment model provided an essential safety net, enabling us to invest in the team and infrastructure when we secured promotion. This support was pivotal in ensuring we could compete effectively and establish ourselves in the Premier League.”.


Like other noble Lords, I am concerned that the Bill as it stands may inadvertently incentivise bottom-half Premier League clubs and Championship clubs seeking promotion to significantly curb their investment over time, given the greater risk relegation would undoubtedly present. As my noble friend Lady Brady said, relegation would become a real financial cliff edge that would see clubs lose enormous amounts of revenue overnight, while having to continue to cover the costs predicated on their involvement in the Premier League. If that were to happen, the competitiveness of the Premier League would be severely weakened, and I believe the Championship would be significantly weakened too, undermining the very attributes that attract the revenues that sustain the game.

I urge the Minister to look again at this issue and to carefully consider the concerns raised in our discussions today. In particular, if she has not already done so, I urge her to talk to the clubs whose first-hand experience of the stabilising effects of parachute payments surely must be central to any discussion of this issue. I really hope that their experience will not be dismissed out of hand.

[Baroness Twycross (Lab)]

I thank the noble Lord, Lord Markham, for this amendment and all noble Lords who have taken part with a degree of passion that shows their commitment to the game and to the legislative scrutiny process.

First, I acknowledge that all noble Lords—I include myself in this—agree that parachute payments are a significant part of football’s financial landscape. I reassure noble Lords that the Government recognise that they play an important role in supporting the survival of relegated clubs. I agree with the noble Baroness, Lady Brady, that they can provide a lifeline. However, the regulator needs to be able to consider all relevant revenue sources as part of the backstop process to get an accurate picture of the proposal’s impact on financial sustainability. That is why parachute payments have not been excluded in this Bill’s definition of relevant revenue.

We believe that allowing the regulator to make a more informed decision, rather than restricting what it can consider, will only help to achieve the best possible outcome for the future of the game. Notably, parachute payments will be reviewed as part of the process only if the regulator deems them a relevant consideration. The current drafting does not require that parachute payments be considered; it allows them to be so only if they are deemed relevant by the regulator. So, if it agrees with the point made by the noble Lord, Lord Markham, based on the state of the game report, it will act accordingly. What that means in practice—

[Baroness Evans of Bowes Park (Con)]

The Minister talks about the state of the game report, which I completely agree is going to be extremely important, but the fact of the matter is that the backstop could be triggered before the state of the game report is published. From what I remember, it is quite a long time before it needs to be published. It could be that both leagues—the EFL and the Premier League, or whoever—will trigger the backstop before that, so parachute payments will be included. Unfortunately, the state of the game report may have no impact whatever on an initial decision by the regulator. The timescales simply do not work. I am not expecting a particular answer today, as the Minister can well say that she is not in charge of the regulator, but it is important to note that the timing of these things does not necessarily tie up, so unfortunately, reassurances like that are not really reassurances.

[Baroness Twycross (Lab)]

Clearly, it does not need to wait for the state of the game report to decide whether they are relevant. The approach we have adopted in the Bill means in practice that if the regulator has clear evidence, whether from a different source or from the state of the game report, that parachute payments are causing sustainability issues to the wider pyramid, it will now be able to address them. In our view, this was a potentially serious gap in the legislation that we feel has now been rectified. I stress “potential”.

[Baroness Brady (Con)]

What the Minister said would be fine if the regulator was making a balanced determination, but because the Government have created a binary process whereby one proposal can be accepted, it could choose to abolish them. The Government have created that risk, and it is an intolerable risk.

[Baroness Twycross (Lab)]

We went through in quite a lot of detail how the backstop mechanism would be triggered. I know we have more to come, as the noble Lord, Lord Maude, said, but in my view, it is not unreasonable for the regulator to be able to consider them. However, the regulator does not need to consider them.

On the point raised by the noble Baroness, Lady Brady —clubs and planning, and how they can deal with their financial future if parachute payments could change as part of the backstop process—while the Government understand the desire to ensure that regulated clubs have as much time to adjust to change as possible, we acknowledge that significant time has already passed without a financial distribution agreement. Ensuring a timely and satisfactory agreement is in the interests of football and the wider public. The backstop process is a built-in transition period specifying that parachute payments cannot be reduced within one year of the distribution order coming into effect.

We understand concerns around the future of clubs that may already have factored parachute payments into their forward-looking financial planning before a potential order that could lower payments had been issued. We would expect the leagues to maintain effective communication with clubs throughout the backstop process, which, alongside the built-in transitory provision, will mean that clubs should have ample time to adjust if parachute payments are deemed in scope. There will not be any sudden reduction in payments without warning. I feel that that should provide some reassurance to noble Lords and to the clubs.

On the definition of relevant revenue, football is a fast-paced industry, so it would be erroneous to assume that the definition of relevant revenue might not need to change. If broadcast revenue ceases to be the primary source of revenue stream in the game, the definition would need to be amended to ensure the process remained a viable regulatory intervention. Furthermore, there are already significant safeguards in place to ensure that this power is not used incorrectly. For example, consultation with the regulator, the Football Association and specified competition organisations is required before the power can be utilised.

With noble Lords’ indulgence, I want to say a bit about the consultation process. On a number of occasions it has been stated in your Lordships’ House that there has been insufficient consultation. Particularly in response to a point raised by the noble Baroness, Lady Brady, I want to put on the record that this Football Governance Bill is the culmination of years of work, including a huge amount of consultation. During that time, there has been extensive regular engagement with key stakeholders, including clubs that will be subject to the regulation. All clubs have been provided with a number of formal opportunities to share their views, particularly as part of the fan-led review and the formal consultation process on the football governance White Paper, where all 116 clubs in the top five leagues at the time were invited to give their views on the proposals. Over that period, DCMS Ministers and officials have had many hundreds of meetings with clubs, leagues, fan groups and other stakeholders from across football, and we continue to engage with the industry now, so this number is constantly growing.

Clubs have had five years to write to or meet DCMS to make their position known. No club that has requested a meeting has not had one. Indeed, some Premier League clubs were recently invited to meet officials and turned down the invitation, which I stress is their right. We have met and continue to meet a range of clubs, at all levels of the football pyramid, that will be subject to regulation.

The leagues have a role to play here. We would expect them to support their clubs in their understanding of the development of the regime and in their engagement with the Government, as well as to keep their clubs updated on any engagement that the leagues have had with the Government. Indeed, this is what has been explicitly asked of us at times by some of the leagues. Richard Masters, the CEO of the Premier League, Rick Parry, chair of the EFL, and Kevin Miles, CEO of the Football Supporters’ Association, have all praised the Government’s constructive approach to engagement with the clubs and the leagues.

This is not the end of the process or of the consultation. There are still lots of opportunities for clubs to have their say as the legislation passes through Parliament and work continues to establish the regulator. Even once the regulator is established, its approach will be advocacy first, aiming to work constructively with clubs on an ongoing basis to resolve issues wherever it can.

I have asked for an answer to the noble Baroness’s question about the response to the letter, and I will have to revert to her after the debate. Given the lateness of the evening, I have not been able to get a response on that.

[Baroness Brady (Con)]

Is that the letter I sent on 2 December about UEFA or the letter that the seven clubs sent to the Secretary of State to which she is going to reply? Maybe the Minister can tell me that afterwards.

It is a statement of fact that the Secretary of State has met only seven clubs for half an hour. I am not talking about other officials. I have to say that there was zero consultation on including parachute payments in the Bill. There may have been other meetings, but between the two Bills that was a significant change that has caused lots of difficult conversations within the leagues.

The Minister said that there was no deal in place. There is a deal; it has been in place between the Premier League and the EFL since 2018, and it has a three-year notice period—just so she knows.

22:15

[Baroness Twycross (Lab)]

I will have to get back to the noble Baroness on the letter she said was sent by the Premier League following that meeting. Officials have not been able to get in touch with the correspondence team given the lateness of the evening, but we will endeavour to chase that up tomorrow.

I am aware that there is a deal in place. One of the issues raised during the debate this evening has been the inability to reach a new deal. I hope that, at some point soon, the various parties will come to an agreement without us having to trigger the backstop. My main point was that simply referring to one meeting maybe gave the wrong impression of the extent of the consultation. I have spoken to officials who themselves have had more than 100 meetings with the Premier League. To me, that sounds like ongoing dialogue rather than consultation. However, we may need to pick that up outside this Committee.

[Lord Jackson of Peterborough (Con)]

In the spirit of trying to be helpful, and given that Clause 56 is a Henry VIII clause, would the Minister look favourably, potentially on Report, at bringing forward a government amendment which tightens up the wording of Clause 56(2)? Very strong feelings have been enunciated today by my noble friends around parachute payments. It is incumbent on the Minister to acknowledge that and perhaps come back on Report with government amendments that reflect that.

[Baroness Twycross (Lab)]

The noble Lord may not be surprised to know that I am not going to commit to doing that. We believe that the model in the Bill is the correct one. I am happy to meet the noble Lord and others to discuss this before Report, However, on the basis of the arguments I have made this evening, I urge the noble Lord, Lord Markham, to withdraw his amendment.

[Lord Markham (Con)]

I thank all noble Lords for their contributions. We can all agree that everyone spoke with passion on this point. We are passionate because we know it really matters.

I am grateful to the Minister for her acknowledgement of the importance of parachute payments. They really are critical. I echo the point made by my noble friend Lady Brady that, since parachute payments were brought into this, my understanding is that there has been only a 30-minute meeting with the clubs, where this was barely brought up. I urge the Minister to consult more with the clubs.

[Baroness Twycross (Lab)]

I asked officials to draw up the words that I said on consultation because, night after night, group after group, it has been said to me that there has been insufficient consultation on the Bill. I went back and asked whether I could stand up and say that there has been sufficient consultation on the Bill. What consultation happened? When has it happened? How has it happened? Who has it been with? I am confident there has been a huge amount of consultation on the Bill and I will continue to state that when I am asked. I will follow up things that people feel have not been followed up, but any club that wanted to have a meeting has had one, and some have said they did not want one. I will sit down and allow the noble Lord to finish, but I am not going to accept that there has not been sufficient consultation.

[Baroness Brady (Con)]

I am sorry to intervene, but I want to say again that on the specific issue of parachute payments there was no consultation with either the Premier League officials or the Premier League clubs that attended that meeting before this went into the Bill. I am not saying that there was not consultation on other areas, but this is a significant change to the Bill that had zero consultation with the Premier League or Premier League officials.

[Lord Markham (Con)]

It may be that it should be a matter of fact and we can find out one way or the other. The question is: how much consultation has happened specifically on the parachute payments? Obviously, they have been a recent introduction. My understanding from my noble friend is that there was just that 30-minute meeting, at which this was barely raised. I would be grateful if the Minister could ask her officials directly.

[Baroness Twycross (Lab)]

I will intervene again, and I thank the noble Lord for giving way. Labour tabled an amendment on this in opposition, so I am surprised that there seems to be so much surprise that the Government have now put this in the legislation. I accept that perhaps it was not noted at the time.

[Baroness Evans of Bowes Park (Con)]

The Minister will also know that Labour tabled a lot of amendments, many of which we are also now pushing, but are told they are not going to be considered. So, yes, but equally perhaps the Minister might like to look through all the amendments tabled by her colleagues in the Labour Party in the other House and see whether she is now prepared to accept them all.

[Lord Markham (Con)]

I hope we can move constructively on this point. I welcome the Minister’s undertaking to give clubs as much time as they request. I appreciate the amount of time the Minister has given all of us in all this. It feels that that may be a point worth taking forward, particularly on parachute payments.

To my mind, the biggest proof on all of this is the fact that 51 of the 92 clubs in the whole pyramid have been in the Premier League at some point. That is way over half. That speaks to how fluid the system is and how much it is working. Over half the clubs have spent some time in the Premier League. To me that speaks volumes. That is the biggest concern I have. We have a system that works; we have competition throughout the pyramid. The real fear from all my noble friends who have spoken on this, and why we speak with such passion, is the fact that we endanger all of that. I will withdraw my amendment.

Amendment 263 withdrawn.

Amendments 264 to 270 not moved.

Debate on whether Clause 56 should stand part of the Bill.

[Lord Markham (Con)]

This goes to the principle of the redistribution amendments in the group. We have had two debates on this; I hope this will be the hat trick, so to speak, because it is talking about the general principle of whether the regulator should be involved in the redistribution of revenue. This goes to the whole of Part 6—Clauses 56 to 60—and stands in my name and that of my noble friend Lord Parkinson.

As noble Lords have heard me say before, what it comes down to is that no other regulator—and I am still ready to stand corrected—is given powers to take money from one part of the system and give it to another. The FCA cannot take money from Barclays and give it to NatWest; Ofwat cannot take it from Severn Trent to go to Thames; Ofcom cannot move money from ITV to Channel 4. No other regulator can do that. It is unheard of. But that is what we are proposing here.

[Lord Addington (LD)]

That is the point of the Bill.

[Lord Markham (Con)]

No, I do not agree that is the point of the Bill. That is the fundamental difference. I would totally agree that there are certain protections about the European super league, about moving home grounds, as in the case of MK Dons, and about fit and proper owner tests. I would agree they are very good roles for a regulator to play. What I do not agree with is giving a regulator unparallelled power to take money from one part of the sector and give it to another.

What are we trying to do here? Is the English Football League impoverished? Does it have so little money it cannot run itself? We know the answer to that is no. It recently had a very good Sky deal. The Championship is the sixth-richest league in the world. That point has been made before. We are saying that Belgium, the Netherlands and Portugal, which are very good footballing nations, and all the other leagues in the world apart from the top six, all manage to live on less money than the Championship. But we are saying we need to fix that. That is what I do not understand. We are trying to say we will give unparallelled power to try to fix a situation that has had unparallelled success and makes the Championship the sixth-richest league in the world. We cannot argue that is because clubs do not have enough money to be viable in that. If that was the case in the Championship, how do the Portuguese league, the Belgian league, the Netherlands league and all the other leagues cope? This is not an area I believe the regulator should be intervening in. There is no market failure there.

What I have heard noble Lords speak about a lot is fairness or narrowing the gap. Well, I am sorry, but competition and sport are not about fairness, not about trying to narrow the gap or level down. We are not trying to equalise. The whole point of sport is that it is the most competitive thing out there. There is nothing more competitive than a game of sport. That is the whole lesson. It is not about trying to equalise. It is about winning and losing. What football has done is create that very successfully, with great fluidity. As I mentioned in the last debate, over half of clubs at some stage have succeeded in getting into the Premier League. This is something that is working. I do not see any evidence of market failure. So why are we asking the regulator to get involved in all this?

I truly believe we will endanger the whole game and the whole income. Noble Lords have heard me say before: let us maximise the size of the cake before we argue how we distribute it. I fear here that by trying to equalise and level down, all we will do is make the games less interesting, the league less competitive, which will mean fewer people watching, less TV rights money and the result being less money to distribute. That is why I do not believe this is the role of the regulator to take, and this is why I feel strongly that all those clauses that seek to give this unprecedented power should be removed.

22:30

[Lord Maude of Horsham (Con)]

My Lords, I find my noble friend’s arguments very persuasive, and I will ask just one question. I do not know what the answer is, so others who know much more about this will correct me if I am wrong. My understanding is that no one made the Premier League make the already unprecedentedly large distribution from it down to the EFL. There was no regulator or Prime Minister threatening legislation that forced that to happen. It was because the Premier League saw it as in its interest to have a strong pyramid. It did not see this as “us against them”; it wanted competition within the pyramid but not between the segments and the different layers. I therefore question the idea that you somehow have to force a better distribution when it is plainly in the Premier League’s interest—and the way it has historically behaved illustrates that it understands that it is—to commit, through a voluntary agreed distribution, to the money trickling and cascading down through the pyramid. That illustrates that this is not necessary.

The danger is that the money that is creamed off by the regulator to sustain it—and is drained off from the clubs to comply with its demands—will mean that there is less to distribute. That money is already efficiently and pretty fairly distributed by agreement, so I am persuaded by my noble friend’s arguments that this part of the Bill is not only unnecessary but potentially very harmful.

[Baroness Brady (Con)]

My Lords, I rise to speak to Amendments 271, 307 and 316 in this group. My noble friend Lord Maude is right: the Premier League’s distribution outside our ecosystem is the highest amount of money of any other sporting competition in the world, and no regulator has forced the Premier League to do that.

My amendments seek to embed principles into the backstop mechanism. My aim in doing so is to ensure that it operates in a way that is proportionate, legally defensible and fit for purpose. At the heart of the amendments lies a simple but critical idea: any intervention by the IFR on this issue must be guided by clear, fair and transparent principles.

The backstop mechanism in its current form lacks sufficient criteria to direct the IFR in exercising its powers. It dictates that the IFR must choose the proposal that is “more consistent” with its principles. But what are those principles? The first is to “advance the IFR’s objectives”, and we have already discussed at great length how nebulous those objectives are. The second is not to place any “undue burden” on the parties’ commercial interests. The third is to ensure that relegated clubs have a one-year transition for any changes to parachute payments. That is it. There is no other guidance for the regulator in making this enormous and binary choice. This is quite incredible, and it creates huge risks, not only for the clubs and the leagues but, more importantly, for the very integrity of the regulatory process itself.

Let me begin with a fundamental principle of protecting property and contractual rights. It is vital to understand that the revenues subject to redistribution under the backstop are not collective funds but revenues generated solely by the Premier League and the Premier League clubs. So the backstop is not a neutral act; it is interference in the property rights of Premier League clubs only.

Under Article 1 of Protocol 1 in the Human Rights Act—A1P1—any interference with those rights must therefore be justified on clear and compelling public policy grounds, and adhere to principles of proportionality and necessity. There are concerns that this crude mechanism, with so few transparent criteria, is legally challengeable under A1P1, even more so now as a result of parachute payments being included, and that is not a good thing; it is in everybody’s interests for this backstop to be legally defensible. But without robust principles to guide the IFR’s decision-making, any determination risks being challenged, leaving the IFR open to judicial review and the entire system mired in uncertainty and delay.

A1P1 case law also emphasises the principle that less intrusive measures must be considered before more significant interventions are imposed, so this is also enshrined in my proposed amendment. The backstop mechanism, as drafted, establishes a binary process that compels the IFR to choose between two competing proposals, but it provides no framework for the IFR to tend towards the least intrusive option, particularly in relation to respecting the Premier League’s property rights as the sole funder of financial redistribution. That is a very dangerous oversight.

Without explicit guidance to the IFR that it should tend towards the least intrusive measure, particularly in its treatment of Premier League revenues, there is a real risk that the backstop could lead to legal overreach. Including this principle in the Bill would provide the IFR with a clear steer, reflect the unique role of the Premier League as the funder of any distribution order and ensure that the mechanism operated in a way that respected property rights.

The principle of good faith is another cornerstone of these amendments. The binary nature of the backstop mechanism incentivises brinkmanship rather than genuine negotiation. These amendments seek to create a framework that rewards constructive engagement and discourages posturing. Without this principle, the backstop risks becoming a tool for division rather than collaboration.

Another critical safeguard in the amendments is the requirement that any backstop decision must not force clubs into breaching their own league’s or UEFA’s existing financial rules and covenants, including profit and sustainability rules or the IFR’s own licence. A sudden and drastic redistribution could reduce Premier League clubs’ revenues, which in turn could destabilise their own business plans, which in turn leads them to breach the profitability and sustainability rules in their own leagues. That would lead to fines, sanctions or even points deductions for Premier League clubs. It would be a remarkable irony if a mechanism intended to promote sustainability instead penalised clubs for failing to meet their own financial obligations.

Finally, let me address the amendment tabled by my noble friend Lord Maude, which would ensure that the backstop could not be used as a first resort. The IFR must first regulate clubs in the EFL to ensure that they are financially responsible and not conveniently reach for the Premier League’s revenues before it has even sought to impose those controls. If the IFR cannot deliver sustainability through its own regulatory tools, what confidence can we have in its ability to manage a redistributive mechanism fairly or effectively? My noble friend’s amendment rightly prioritises the use of all other tools before triggering the backstop.

These amendments would provide the IFR with the steers that it will desperately need to navigate one of the most consequential issues in football. Without these amendments, or something very similar, the backstop risks sinking into a legal and political quagmire. We should all be aligned in preventing that outcome, so I hope the Minister will listen carefully and sympathetically to these arguments.

[Baroness Twycross (Lab)]

I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Maude of Horsham, for these amendments, and the noble Lord, Lord Parkinson of Whitley Bay, for giving notice of his intention to oppose that Clauses 56 to 60 stand part of the Bill.

I will start with Amendments 271 and 316, from the noble Baroness, Lady Brady. I thank her for clearly stating some of her core concerns about the backstop process through these amendments and hope to reassure her that the existing drafting of the Bill already addresses her concerns without the need for this additional clause. First, I will cover her concern regarding the explanation of suitable alternative regulatory solutions when I address subsequent amendments. On her other concerns, current drafting of the Bill already requires the regulator to trigger the process only if its ability to advance its objectives would be threatened if it did not. Final proposals are already required to advance the regulator’s objective of ensuring financial sustainability and resilience. They also have to ensure that they do not place an undue burden on the commercial interests of either league. We have been mindful of property rights when designing the backstop, which is why the process can be triggered only in specific circumstances and why, even when the high threshold for triggering the process is met, commercial interests must still be considered. We consider this to be a suitably high bar to ensure that the regulator takes adequate consideration of regulated clubs’ property rights and commercial interests.

I understand that the noble Baroness is especially concerned about the issuing of a distribution order that may force clubs into non-compliance with the league’s own internal rules. We would expect the regulator’s decisions to be internally consistent in terms of advancing its objectives, so we cannot see a scenario where the regulator would issue a distribution order that required a club to become non-compliant with its licence conditions. However, there may need to be some adaptation by regulated clubs and competition organisers to renew the regulatory landscape.

If a distribution order issued to ensure the financial sustainability of football put a club at risk of breaching a league’s rules, we would expect competition organisers to work with the club in question and the regulator to understand the decision and its impact. Just as we may expect adaptation by clubs transitioning from unregulated to regulated, we may also expect to see the adaptation of competition organisers.

The amendment implies a scenario where a distribution order results in clubs becoming non-compliant with existing financial regulations. The regulator is already required, as part of its decision on whether to trigger the process, to consider whether the lack of arrangement has arisen as a result of bad faith. Therefore, we are confident that the existing drafting of the backstop proposal process is sufficient to ensure that the regulator already considers the factors outlined in this amendment.

I turn to Amendment 307. While I understand the desire to ensure the proposals chosen at the final proposal stage of the backstop process meet the objectives of the regulator, I believe that the existing drafting already suitably addresses this concern. Final proposals are already required to advance the financial sustainability and resilience of the football pyramid, under existing Clause 62(2)(a). I do not think that the proposed change in wording would lead to significant altered proposals or subsequent distribution orders; therefore, I do not consider that the change is necessary.

I turn to Amendment 288A, from the noble Lord, Lord Maude of Horsham. I understand the desire to ensure that the backstop process is triggered only as a last resort, as this is how the process has been designed and is intended to be used. However, one of the existing conditions that must be met for the regulator to trigger the process in response to an application is that its ability to deliver at least one of its objectives would be jeopardised if the backstop was not triggered. We would expect that, as part of the assessment under this condition, the regulator would review whether existing financial regulations and other regulatory tools could be utilised to better effect instead.

While in service of the same goal, the wording of this amendment is unnecessarily restrictive, requiring the regulator to exhaust all possible other regulatory approaches, and it adds a regulatory burden by requiring the consideration of an expansive array of approaches without prioritisation. This forces the regulator to spend additional time and resources considering options unlikely to resolve the conflict in question. We believe that the current wording already allows the regulator to make its own considered assessment of relevant options before triggering the process.

I now turn to the clause stand part debates and will respond to the noble Lord, Lord Markham. Part 6, of which Clause 56 is the first clause, relates to financial distributions and the backstop mechanism in its totality. I understand the desire on both sides to apply appropriate scrutiny to a part of the Bill that could significantly impact the future financial landscape of football. I hope that, throughout the debate on the backstop process on this and future Committee days, I will be able to demonstrate that the approach taken in Part 6 is the most proportionate and effective approach possible.

These backstop powers have been introduced to help ensure that an agreement can be reached between the leagues in regard to the distribution of revenues from the selling of TV broadcast rights. An agreement of this nature is vital to ensure the future financial sustainability of the football pyramid. The process has been designed to incentivise reasonableness, encourage industry solutions and tackle any bargaining imbalance between leagues. The design of the process is a final offer mechanism, a process that has been shown to incentivise negotiation. It achieves this by removing the ability of the negotiating parties to rely on the third party, in this case the regulator, to design a solution for them. We do not want football to become reliant on the regulator to decide its agreements.

22:45

The clause sets out an overview of the backstop powers and outlines some key definitions which are important for setting out clearly the scope of these powers. Relevant revenue is one of the key terms defined in this clause. It expressly includes broadcast revenue, because this is the predominant source of revenue for the relevant leagues and of any redistribution. This clause allows the Secretary of State to specify other kinds of revenue to be included as relevant revenue. This is to future-proof the policy—for instance, if broadcast revenue is no longer the main source of income for the leagues. However, there are safeguards on the use of this power. The Secretary of State must consult the regulator, the FA and the relevant leagues. Critically, they can use this power only where there has been a material change of circumstances.

Previously, the Bill explicitly excluded parachute payments from the definition of relevant revenue, as noble Lords are aware. This version of the Bill no longer makes that distinction, allowing the inclusion of parachute payments where relevant. This change was made to ensure that the regulator can consider all aspects of revenue as it makes a financial assessment of the game. However, it is important to note that this new inclusion is proportionate, as parachute payments will be assessed only if the regulator considers them to be of systemic risk to the game’s financial sustainability.

Clause 58 outlines the process by which the backstop mechanism will be triggered. Only the relevant leagues will be able to apply to trigger the backstop. While we understand concerns that this regime is perceived as interventionist, it is important to acknowledge that the regulator cannot trigger the process itself without receiving an application. This is similar to the approach used in other jurisdictions—for example, with news publishers and big tech in Australia. The clause sets out that a relevant league can apply to trigger the process if they cannot agree privately on any specific issues relating to distributions.

In order to apply to trigger the backstop, at least one of the four conditions outlined in this clause must be met. For example, one of the outlined conditions is that a specified five-year period has passed since the last distribution agreement came into force. This prevents the industry going for an extended period without a deal. Each of the conditions is designed to mitigate a specific risk to the sustainability of the pyramid in this way, whether it be a reduction in distributed revenue or a significant change in circumstance. We think these conditions present a suitably high threshold for triggering the process, ensuring that it is used as a last resort and the leagues are encouraged to find a football-led solution in the first instance.

Clause 58 sets out a clear process for relevant leagues to follow when making an application. Before making an application, the relevant league must first notify the other relevant league and the regulator of their intention. This prevents either league being blindsided by the process being triggered. As part of this, they must set out the issues they wish to be resolved, explain why one of the relevant conditions in Clause 57 is met, and invite representations from the other specified competition organiser. This act in itself may help trigger useful discussion between the leagues, as clearly outlining the issues preventing an agreement moving forward will bring the leagues closer to compromise.

After the other relevant league has had a chance to make any representations, the relevant league may apply to the regulator to trigger the process.

[Lord Moynihan (Con)]

I have listened very carefully to the debate and to what the Minister has said. I understand that UEFA asked the Government to carefully reconsider the backstop mechanism, since when it has become much wider in scope and more likely to lead to the most extreme outcomes. I wonder whether she has discussed it with UEFA. Can the Minister update the Committee on the outcome of those discussions?

[Baroness Twycross (Lab)]

I have had no direct meetings with UEFA, but the Minister for Sport in the other place has. I cannot confirm what was said in the meeting, but I will endeavour to establish whether this was part of the discussion. What did or did not happen at that meeting has not been part of my conversations with people, but I will endeavour to find out. I suspect I will not get an answer to the noble Lord tonight.

[Lord Moynihan (Con)]

Will the Minister kindly write to the Committee? This is very important indeed. The backstop has been introduced into the Bill and UEFA has expressed very serious concerns about it. Unless this can be resolved, it could threaten the existence of English clubs playing in UEFA competitions. I hope that this has been high on the agenda of discussions between UEFA and the Government. Having listened carefully to what the Minister has said, all I ask is that she write to the Committee, or early in January inform the Committee, on how UEFA has responded to this significant expansion of the effect of the backstop, which it was originally very concerned about.

[Baroness Twycross (Lab)]

To be clear, I do not speak for UEFA. It is an international organisation that is able to speak for itself. I am not aware that UEFA raised issues about the backstop specifically in the meeting with the Minister for Sport, but I will endeavour to find out. I understand from the expression of the noble Lord, Lord Moynihan, that he may have more information about UEFA’s concerns than I do. However, without expecting this to be an ongoing dialogue, I will endeavour to establish the information that he requested.

[Lord Moynihan (Con)]

I asked whether it was raised in the letter from UEFA, which sadly the Committee cannot because it is private correspondence, but it is right at the heart of this legislation. If it was raised in the letter, or in subsequent correspondence, would my friend the Minister kindly confirm that to the Committee? It would help us in our deliberations moving forward.

[Baroness Twycross (Lab)]

UEFA raised no concerns about the backstop in its most recent meetings with DCMS and the Minister for Sport, including those held since the Bill has been introduced. I hope that reassures the noble Lord on this point. As I say, I do not speak, will not speak and cannot speak for UEFA; I speak for the Government.

Ultimately, the clause is about creating transparency, which sets the tone for the rest of the backstop process. Clause 59 introduces high statutory thresholds that must be met in order for the backstop to be triggered. In particular, it sets out that the regulator must have reasonable grounds to suspect that its ability to advance at least one of its objectives would be jeopardised if the backstop was not triggered. As stated, an implicit part of this consideration would include an assessment of whether other regulatory tools could be utilised to better effect instead.

The regulator can consider what the distributed revenues will be used for and, if the basis for the backstop application is that there is no distribution agreement in place, whether this has arisen as a result of bad faith. This helps to incentivise the leagues to try to reach an agreement in good faith before turning to the regulator, and ensures that the backstop is used only where absolutely necessary. The regulator must make its decision within 28 days, although it can extend this by a further 28 days if absolutely necessary. Once the regulator has made its decision, it must notify the relevant leagues of its decision to ensure transparency throughout the process.

As we have made clear, the Government’s strong preference is for a football-led solution to issues around financial distributions. As such, the mediation stage outlined in Clause 60 grants the relevant leagues an opportunity to reach an agreement before the regulator delivers a solution as part of the final proposal stage. The mediation stage has been designed to facilitate meaningful negotiation and compromise between the parties. To this end, it encourages the leagues to appoint a mediator they both agree on, but ensures that the regulator will appoint somebody with the appropriate skills and experience if they cannot. The leagues can end the mediation process for multiple reasons, most notably if an alternative agreement is reached. However, the mediator can also end the process if it is not producing meaningful good-faith negotiations or if it reaches the 28-day deadline.

I thank noble Lords for their amendments and the well-natured debate on this important part of the Bill. I hope my reasons have reassured noble Lords and that they will not press their amendments. I ask that these clauses stand part of the Bill.

[Lord Markham (Con)]

I thank noble Lords for their contribution to this debate, and again I thank the Minister for her response. I noticed that she went into the detail of the backstop mechanism but I did not hear in that the more fundamental point about why she believes that the regulator needs to be bestowed these unparalleled powers to redistribute income where there are no examples of market failure. In fact, there are the examples of the very healthy Premier League and Championship, which are respectively the first and sixth richest leagues in the world—and all the result, as my noble friends pointed out, of a voluntary agreement and distribution between them all.

However, the whole prospect of the backstop happening is creating the reverse. As I understand it, those negotiations have stopped. Of course, it is entirely rational from the EFL’s point of view to stop them, because why reach an agreement when suddenly you are going to have more negotiating leverage because you have a regulator which will come in? So, again, it is perfectly rational behaviour on the part of the EFL to reach the best agreement it can with the Premier League but then instead of finally agreeing with it, appeal to the regulator in case it can get more because it has already banked what it has got from the Premier League and there is only an upside to doing that. So I am afraid that I believe this whole mechanism will actually create more friction and more disputes, rather than less, and will mean that it is less likely to reach a voluntary agreement. In addition, as I mentioned before, I still have not heard why we feel that the regulator needs these powers in the first place when we have a successful situation in place already.

As a result of that, I believe that these powers will endanger the whole size of the cake that is available for distribution. It will endanger the success and the revenue gained from that, which will result in a loss to everyone. We will definitely return to this on Report but at this stage I beg leave to withdraw.

Clause 56 agreed.

Amendment 271 not moved.

Clause 57: Applications for resolution process to be triggered

Amendments 272 to 279 not moved.

Amendment 280

Moved by

[Baroness Brady]

280: Clause 57, page 47, line 32, leave out “five years” and insert “the applicable period (see subsections (7) and (8))”

[Baroness Brady (Con)]

My Lords, Amendments 280 and 281 in my name seek to reinsert the ability for the Premier League and the EFL to agree distribution arrangements for longer than five years without triggering the automatic availability of the backstop mechanism. These amendments are essential to restoring common sense, legal certainty, aligned incentives and, crucially, to restoring trust between football’s governing bodies.

When I first read the revised Bill, I thought I must be mistaken. “Surely”, I thought, “no Government would propose that two consenting parties mutually agreeing a long-term financial arrangement should be actively disincentivised from doing so by the automatic availability of a dispute mechanism”—and yet, astonishingly, here we are. Removing the freedom of football stakeholders to agree arrangements for more than five years by mutual consent cannot possibly be about fairness, transparency or sustainability. This is purely a device enabled by an active decision of the Government to turn the backstop into a ratchet. It ensures that no long-term agreement between the Premier League and the EFL, no matter how mutually beneficial, can ever provide genuine stability or be truly relied upon.

23:00

English football’s success is built on its ability to plan strategically for the long term. From collective solidarity arrangements to investments in youth academies, stadiums and infrastructure, this success depends on stability. The current arrangements, which have a three-year notice period for either party, are products of long-term frameworks that give clubs across the pyramid the confidence to invest. By explicitly restricting the duration of those agreements, the Government are not incentivising the continued success of English football; they are actively undermining it.

Let me put this into context. Throughout 2023, both the Premier League and the EFL were engaged in serious discussions about a transformative generational settlement. Those negotiations were centred on an ambitious and innovative plan, one that incorporated many of the EFL’s own ideas. It would have permanently aligned the incentives of both leagues, including through the joint selling of international broadcast rights, pooling each other’s organisation, revenues and costs, and creating a long-term framework to permanently share in each other’s collective success for the long term. With this revised Bill, I am sorry to say, that vision is now dead. How could the Premier League even consider such a long-term commitment under a system whereby any agreement lasting more than five years risked triggering the backstop? This change has not just disincentivised ambition; I am afraid that it has sabotaged it. It delivers permanent short-termism and senseless destabilisation within the financial ecosystem of English football.

I do not blame the EFL; its rationale is plain enough. This restriction makes the backstop mechanism more accessible, increasing its leverage in negotiations with the Premier League. I am sure that its approach would be that any new deal offered to it, in effect, becomes, as I said previously, its insurance policy. After all, if it accepts a new, better deal and then triggers the backstop—as Rick Parry said in committee he would do in any event—it will presume that the regulator will not give it less than it has agreed, so it can result only in a new improved deal being further improved. For the Government to acquiesce in this and endorse this approach is to take sides in football’s internal politics. It is extraordinary. It is the privileging of one stakeholder at the expense of the pyramid as a whole—and it has happened with no consultation whatever.

This decision risks undermining trust between leagues and stifling innovation and long-term thinking, and it erodes the very relationship that English football needs to thrive. The consequences will be predictable: investors will hesitate; clubs will lose confidence in their financial arrangements; and negotiations will become ever more fractious, as both sides prepare for the inevitability of regulatory intervention.

If the Premier League and the EFL wish to agree on a 10-year or even 12-year distribution arrangement, and both parties believe it is a positive deal, why should the backstop mechanism interfere? This is an unjustifiable intrusion into football’s financial affairs, where the Government simply do not belong.

The Premier League and the EFL are equal stakeholders and not adversaries, yet this version of the backstop recasts them as combatants, ensuring that every negotiation becomes a proxy battle for regulatory intervention. I urge the Government to reconsider and restore the ability of football stakeholders to agree long-term solutions without the unnecessary intrusion of the backstop. Let us not see the Premier League as a magic money tree to be shaken for short-term redistribution, but instead empower it to remain a driver of sustainable investment for the entire football ecosystem.

We cannot afford to risk the stability of English football at the altar of short-term considerations and political convenience. We will live to regret it. We should think again. I beg to move.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I rise to speak to Amendments 280 and 281, which my noble friend Lady Brady has set out admirably. She established the case for her amendments very well and raised a number of points that I hope the Minister will answer.

These amendments work in tandem to allow competition organisers to contract out of the backstop. Under this amendment, leagues would be able to agree a period for which a distribution agreement would last. Of course, they may not reach such a deal. In that case, the applicable period would be five years—the period that is currently the default in the Bill. Allowing leagues to have a greater flexibility to negotiate the length of time for which an agreement has to be in place before it can be renegotiated would establish better principles in the backstop. Surely, we should not preclude leagues from acting cordially, if they are able to, and agreeing a period for distributions. I fear that the Bill, as the Government have presented it, might discourage constructive working relationships where they may arise.

I am conscious that this is the last opportunity I will have to intervene on this final group before the Christmas Recess and I want to thank noble Lords across the Committee for the hard work they have put in. I know that noble friends on my side of the House are missing Christmas parties and wedding anniversaries this evening, and noble Lords across the House have been doing similar. Everyone is here because they care very deeply about the future of football—even if, like football fans, they disagree volubly on some of the details.

In particular I thank the Minister, who has responded to pretty much every group. Today was the first day that she did not, and even then she had only a brief time off the pitch. She has taken many interventions, she has been generous with her time outside the Chamber as well and she has written us a number of letters. I know we have asked her a few more questions and she will be writing to us further, but, in the meantime, I wish her and all noble Lords across the Committee a very merry Christmas and express my thanks to everyone for their work in scrutinising the Bill.

[Baroness Twycross (Lab)]

I thank the noble Baroness, Lady Brady, for her amendments and for her introduction to what was, thankfully, at this time of the night, with apologies, a very short debate—so far.

These amendments are intended to allow leagues to reach an agreement to extend the time that must pass before the backstop can be triggered. While I entirely understand the desire for negotiations to be a league-led process, the timeframe outlined in the Bill has been chosen to ensure that the regulator can intervene in cases where an agreement has not been reached for a significant period. We believe that it is the correct amount of time to get a good view of how potential agreements have affected sustainability, while ensuring that a new agreement is reached in a timely manner. Crucially, many noble Lords have talked about certainty in the regime. We consider that five years provides enough certainty to all parties.

Finally, we have concerns that allowing industry to come to a different timeframe could lead to an element of coercion towards much longer agreements, nulling the presence of the power. The Government’s view is that the five-year timeframe is critical to the effective functioning of the backstop as a regulatory intervention.

For the reasons I have set out, I am unable to accept the amendments and hope that the noble Baroness will withdraw Amendment 280. But, first, I also wish all noble Lords a very happy Recess. I genuinely look forward to continuing the debate in the new year and thank the noble Lord, Lord Parkinson, for his kind words.

[Baroness Brady (Con)]

My Lords, I thank the Minister for her response and for engaging with the points raised in this debate. However, it will not surprise her that I remain completely unconvinced.

This decision does not deliver certainty: quite the opposite. It enshrines short-term thinking and locks football in a perpetual cycle of instability, with both sides forever negotiating under the shadow of the backstop. As I said, it is a recipe not for certainty but for fractiousness and mistrust.

The Minister also referenced the nature of football’s landscape as the reason to limit agreements, but I am not sure that can be right. I urge her to think again. This new backstop is the Government’s gamble that the Premier League has achieved escape velocity and can absorb anything that even its own Government can throw at it. However, the Premier League is not a cow to be milked. It is a national treasure to be protected. English football deserves much better. I am sure that we will be discussing this issue again on Report, but, for now, I beg leave to withdraw my amendment.

Amendment 280 withdrawn.

Amendment 281 not moved.

Clause 57 agreed.

Clause 58: Applications under section 57: procedural and other requirements

Amendments 282 to 288 not moved.

Clause 58 agreed.

Clause 59: Decisions by the IFR on applications under section 57

Amendments 288A to 292 not moved.

Clause 59 agreed.

Amendment 293 not moved.

Clause 60: The mediation stage

Amendments 294 and 295 not moved.

House resumed.

House adjourned at 11.11 pm.