Football Governance Bill [HL]

Report stage
Monday 17th March 2025 Lords Chamber

Report (2nd Day)

Relevant documents: 8th and 16th Reports from the Delegated Powers Committee

15:22

Schedule 5: Mandatory licence conditions

Amendment 31

Moved by

[Lord Jackson of Peterborough]

31: Schedule 5, page 99, line 11, leave out paragraph (ii)
Member’s explanatory statement
This amendment, along with the other amendment in the name of Lord Jackson of Peterborough to Schedule 5, is intended to remove the equality, diversity and inclusion provisions of the Bill.

[Lord Jackson of Peterborough (Con)]

My Lords, I rise to move Amendment 31 and to support Amendment 33 in my name and that of the noble Baroness, Lady Fox of Buckley. The amendment seeks to remove the explicit reference to EDI—equality, diversity and inclusion—in the Bill by way of a compulsory obligation in the independent football regulator’s corporate governance statement.

I do not wish to rehearse the arguments made in Committee, when the Minister, I gently suggest, did not fully engage on this issue. I am nevertheless grateful that her letter of 15 January to my noble friend Lord Moynihan of Chelsea—who, incidentally, has done excellent work on this issue—was more helpful and at least tried to put forward a partial rationale for this part of the Bill. As your Lordships will know, this is an additional duty and encumbrance from the Bill put forward in the last Parliament. To that extent, it does not have the support of His Majesty’s loyal Opposition.

I want to say at the outset that it is important to treat everyone in football with fairness and equity; I believe that is good business as well as morally the correct thing to do. That is why we have a strong existing regulatory and legislative regime in this country, to ensure compliance with the basic tenets of decency, fairness and equality. But I oppose the compulsory and draconian imposition of an EDI obligation on football clubs for a number of reasons. It is heavy-handed and diverts resources from excellent existing community engagement initiatives that have developed organically over the last few years in grass-roots football. It is costly, bureaucratic and divisive, and I believe it under- mines community cohesion. It will impose unnecessary costs on a majority of smaller clubs whose financial health is precarious, and on which the onerous provisions will weigh heavily.

It will encourage diverse and divisive litigation and the intervention of third-party groups such as Stonewall, and will result in cases such as that of the football fan Linzi Smith, banished from Newcastle United Football Club for expressing her own lawful and reasonable gender- critical views online and questioned, in my opinion, in a disgraceful Orwellian fashion by Northumbria Police, for which it was forced to issue a belated and grudging apology. These proposals will chill free speech, cause the proliferation of ideological training schemes and undermine women’s sex-based rights in their workplace.

The Minister prays in aid a study by McKinsey into EDI and improved corporate decision-making but, as she knows, McKinsey’s 2018 study Delivering Through Diversity has been comprehensively critiqued and discredited by Green and Hand’s March 2024 paper published in Econ Journal Watch, which demolished its empirical evidence base and methodological assumptions, specifically on reverse causality, narrow focus, opaque data, quartile bias and global versus US scope of the research. Other academics, such as Alex Edmans of the London Business School, have similarly echoed Green and Hand’s robust and rigorous refutation of McKinsey’s studies. It is noteworthy that the Minister does not in her letter, or previously in this House, reference any other generic EDI research in respect of its efficacy, nor any on football specifically or wider sport. Perhaps she will address this issue in her later remarks.

There is a reason. Green and Hand’s headline finding was that EDI policies did not harm profitability, but there was no evidence that it helps it either—a rather important issue, given that the Wall Street Journal estimates that, globally, businesses will spend $15.4 billion on EDI next year. Where is the evidence that an EDI duty will, as the Minister has stated, “make clubs more sustainable” and ensure “good corporate decision-making”? Really?

The penny is finally dropping. Last week, the Financial Conduct Authority and the Prudential Regulation Authority ditched their plans to impose costly and bureaucratic diversity and inclusion regulations on the financial services sector, which the FCA’s own impact assessment estimated would cost £561 million to set up and £317 million in recurring annual expenditure. The fans and wider public agree. In May last year, Policy Exchange found that, by 50% to 14%, people agree that businesses have become too concerned with taking political positions on contested issues, while 75% of people believe that companies should prioritise hiring on merit, regardless of race or gender, rather than hiring to create a diverse team. Of course, they are right: 40% of Premier League footballers are non-white—on merit.

I assume that both the Prime Minister and his adviser, Morgan McSweeney, read those polls and media coverage too. I am heartened by reports today that the most senior leaders in government are considering prioritising growth and economic prosperity rather than overregulation and virtue signalling, and are giving serious thought to ditching the IFR. Perhaps the Minister will offer her views on that issue.

Does anyone really believe that fans clamoured for the mandatory reporting of data on race, gender and sexuality when Bury FC went bust in 2019? The proposition is ridiculous. We need to trust our football clubs to do the right thing within our current laws. Regulation for regulation’s sake will only hasten the demise of our world-beating football success story. For those reasons, I beg to move.

[Lord Pannick (CB)]

My Lords, the noble Lord, Lord Jackson, puts his case very high. He says that this is draconian and heavy-handed, will lead to ideological training schemes and is even Orwellian. His case is simply not made out. The EFL in its briefing to noble Lords says on corporate governance:

“The EFL supports the inclusion of equality, diversity and inclusion provisions within the corporate governance code of the Bill. The EFL’s equality code of practice is already mandatory for member clubs and this approach is a logical extension of existing arrangements that will ensure high standards are maintained”.

15:30

It therefore appears that EFL clubs do not have the same concerns that the noble Lord, Lord Jackson, has expressed to us. I simply point out that the corporate governance statement requires no more than that the club explains what action it is taking to improve equality, diversity and inclusion. As I understand it—and the Minister will say if I am wrong—it imposes no substantive requirements of any sort. It is a provision purely intended to provide information as to what a club is doing, if anything. I, for one, would be very interested to know—and I am sure many other people would be, particularly the supporters of particular clubs —what they are doing. This amendment is inappropriate, unnecessary and has no basis whatever.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I support the noble Lord, Lord Jackson, in his amendment and speak to my own in this sphere. These amendments aim to remove the requirement for clubs to submit EDI statements to the independent football regulator detailing their plans to improve, as we have heard, equality, diversity and inclusion policies. This requirement was added to the original Bill by the Government and, in my view, is unnecessary and burdensome and could act as a Trojan horse for politicising clubs in ways that would be divisive.

As the noble Lord, Lord Pannick, has just explained, it is a duplication of work that is already done by many clubs. The Premier League and the EFL already require their clubs to do work in this space to comply with the EDI standards of those leagues. Can the Minister therefore explain whether the expectation is that they need to more or to do EDI differently and what does “improve” comprise? Perhaps the Minister can elaborate on what she envisages will trigger sanctions for non-compliance. What would non-compliance look like?

This especially matters for all those clubs that this Bill will regulate beyond the Premier League and the EFL—all those National League clubs that operate on the tightest of margins with very small staff and volunteer teams. Think of the sanctions: clubs could face the IFR publication of a censure statement and/or the requirement to appoint an external EDI professional, and they do not come cheap. Clubs could face financial penalties or, ultimately, suspension or revocation of their operating licence, so there is a cost to pay and a lot of pressure to comply that could well generate substantial financial and time burdens on clubs.

All the evidence shows, across a multiple of institutions, that EDI regulatory regimes often divert scarce time, attention and resources away from the core mission and priorities of organisations. They also tend to expand their remit because one of the most obvious ways that regulated organisations prove their EDI credentials is through ever-more elaborate, flashy guidance documents, mandated training programmes, unconscious bias workshops and so on. It is a perfect example of a well-meaning policy that grows and proliferates, an exemplar of self-fulfilling mission creep. It was recently revealed, for instance, that Oxford University now employs 59 staff in EDI roles—a 20% increase since 2022—at a cost of £2.5 million a year before pensions and benefits. This seems baffling, given the dire state of university finances.

However, such concerns about EDI’s bureaucratic and financial burdens are not confined to a few of us here. As we have heard, last week, two regulators made similar points. The Financial Conduct Authority and Prudential Regulation Authority announced their decision to abandon plans to impose diversity and inclusion rules on financial firms. Surely this must give the Minister pause for thought. It is surely not too late to consider deferring this section of the Bill to consider such adverse outcomes, and to consult on specifically this issue with stakeholders, fans and so on.

If we listen to the debate within the financial services sector, it is instructive. Wendy Saunders, a partner and head of financial services at Lewis Silkin, said that it was a huge relief that the FCA was no longer proceeding with its diversity and inclusion proposals, which she said

“would have imposed unwarranted costs on firms without delivering clear benefits”.

Instead, the regulators in financial services will limit their role to voluntary industry initiatives—I am not opposed to that. Surely such a voluntary approach is appropriate for football too. Requiring the new football regulator to impose what other regulators admit is too burdensome is not proportionate.

My key question to the Minister is still: what problem is this measure as a solution to? We heard in Committee and since that there is a concern about the lack of diversity at clubs’ senior management level. There is little evidence, however, that EDI—whatever its good intentions as a theory—will resolve this problem in practice. I would be reassured if the Government elaborated on how they envisage that EDI policies will operate in relation to HR and employment in individual clubs, because EDI has a very poor track record of improving workplace culture—the opposite is often true.

Last week, Trevor Phillips wrote an insightful comment piece in the Times entitled:

“There’s a better way than DEI to fix prejudice”.


In it, he warns of the way that EDI policies can stir up resentment and competitive victimhood that will do little but cause conflict in workplaces. He says that DEI programmes

“increasingly appear not to be aimed at making the workplace a better, more productive environment but a modern-day inquisition dedicated to damning white men merely for their existence”.

Meanwhile, at King’s College, members of staff were told that they could not get promoted unless they signed up to the whole of the university’s EDI initiatives, including taking part in activities run by Stonewall, an organisation now considered so controversial that it has been largely ejected from activities in Parliament and Whitehall. EDI training at Imperial College includes:

“How to be a White ally”.


Staff have been asked to agree that they have white privilege. I just want to know whether the Minister envisages that as a productive thing if it happened in clubs. Is that what she thinks EDI in clubs will look like? It certainly looks like that in many organisations. Does the Minister see the dangers of this introducing a contentious and politicised agenda into clubs’ culture? Although EDI is often framed as fostering better decision-making, in reality it often reinforces groupthink in workplaces.

I am just worried that this seemingly small part of the Bill will unintentionally drag football clubs into murky political territory. I note that there is a judicial minefield here. For example, if clubs chose to set quotas to fulfil their EDI requirements based on people’s protected characteristics, would that not open up the gate to biological males who identify as women being able to play in women’s sports? This is such a political and ethical topic, and noble Lords see all the controversies that the FA is involved in here—the noble Lord, Lord Triesman, spoke so passionately about this in Committee.

I am not suggesting that noble Lords have to agree with my sex-realist gender-critical views on this, but I urge the Government at least to wait for the judgment by the Supreme Court in For Women Scotland v The Scottish Ministers, which relates to the definition of a woman and how a trans woman fits in under the Equality Act. Is there a danger that EDI provisions could unintentionally open clubs up to being challenged in the courts and make them subject to spurious litigation in this area?

In fact, over the weekend, we found out that one of the biggest girls’ football leagues in the country, West Riding Girls Football League, is being threatened by the Football Association with being shut down for refusing to allow boys to play in its matches. Last week, an emergency meeting was held by organisers of the league, which has at least 6,000 under-18 girls playing across more than 300 teams by the way—fantastic progress with girls in football.

At that meeting, managers voiced their concerns that allowing boys to play would open the floodgates and was a massive threat to the girls’ game. Parents are looking to take their daughters out of the league, with girls themselves saying that they will give up if boys join, and the FA’s response is that “this is part of our inclusion and diversity strategy”.

Your Lordships do not have to agree with me. The Minister may dismiss these concerns as all a bit culture wars-y, even a bit Trump-ite. Nothing could be further from the truth. So to reassure the Minister, I would like to call on one of her Cabinet colleagues as an ally. Wes Streeting told a Macmillan Cancer Support event: “There are sometimes some really daft things being done in the name of EDI, which undermine the case. For example, there was one member of NHS staff who was merrily tweeting a job ad online, saying that part of her practise was anti-whiteness”. As Wes Streeting said, “What the hell does that say to the bloke up in Wigan who is more likely to die earlier than his more affluent white counterpart in London?” He concluded that the real issue of inequality that affects working-class people is not addressed here, and called for the ideological hobby horse of EDI to go. I agree. I think we should drop it from the Bill, which does not mean that we should not fight tooth and nail for equality and fairness in all walks of life.

[Lord Addington (LD)]

My Lords, this is rather an odd one. Apparently, we are in favour of equality but not in favour of doing much about it. A reporting strategy on what we are doing to improve equality and diversity does not strike me as terribly onerous. Indeed, if we are doing something that comes under the “expletive silly” category, we will know if it is reported. I suggest that we are trying to build a little monster here—build it up so as to have something to knock down. There are real battles to fight; let us wait for those.

[Lord Markham (Con)]

I shall speak to Amendment 34 in my name and that of my noble friend Lord Parkinson. This was the subject of much debate in Committee, where there was a united feeling that we want clubs that are well run, with good governance, and that are sustainable. Wherever possible, we want a regulator to be light touch.

My amendment would encourage the use of independent non-executive directors to help in that regard and put it in the code of practice. I freely admit that having independent non-executive directors is not a guarantee of good governance, but most of us would agree that having impartial experts as part of a board is generally a good and sensible thing to do in any organisation. Members on all sides of the House supported this in Committee. I know that the Government are generally supportive of this proposal, and I look forward to hearing the Minister’s views on how we can best help to make it happen. I believe that this would be a sensible move towards good governance.

[Lord Bassam of Brighton (Lab)]

My Lords, I should like to counter some of the nonsense that we have heard from the noble Baroness, Lady Fox, and from the noble Lord, Lord Jackson of Peterborough, who moved the amendment against equality, diversity and inclusion.

The EFL, which represents 72 of the clubs affected by the Football Governance Bill simply says this:

“Our equality code of practice is already mandatory for member clubs, and this approach is a logical extension of existing arrangements that will ensure high standards are maintained”.


That says a lot. If you go to any football ground on most weekends, as I try to do, you will find messages of persuasion and inclusion to ensure that football plays its part in guaranteeing that the game becomes more inclusive and that its workforce is diverse.

During the early debates in Committee, I suggested that the business of football, outside the players on the pitch, could do with looking at this issue some more, because the workforce more broadly is not as diverse as it should be, certainly at senior management levels and director level. We need to encourage that better, and in some ways the amendment proposed by the noble Lord, Lord Markham, about independent football directors, may play a role in that as well, because that provides some flexibility within the senior echelons of management.

Only 4% of managers in the professional game are from non-white backgrounds. Given that some 45% of the workforce—the players on the pitch—are black or from a minority group, something is clearly not working in how the business is developing, and we should do all that we can to address that. I agree with the noble Lord, Lord Pannick: this is a non-sensible amendment that we should rigorously oppose.

15:45

[Lord Parkinson of Whitley Bay (Con)]

My Lords, although I am mindful of the rules of debate on Report, I am sure that noble Lords will understand if I preface my remarks with a short, two-hour encomium to Newcastle United, congratulating them on their victory in the Carabao Cup, their first domestic trophy in 70 years—that is longer than the living memory of any of my relatives. That is an area on which I know the Minister and I are in full agreement. I am mindful that other noble Lords were present at Wembley yesterday and hoping for a different result, so I shall not go on about it, other than to say that I hope that anyone who had the pleasure of being on the London Underground yesterday was as delighted as I was to see all the lads and lasses there with smiling faces and will join me in sending hearty congratulations to the Newcastle fans, who have waited so very long for this moment.

The Government’s new corporate governance provisions have, I think it is safe to say, received considerable attention during our debates on this Bill. My noble friend Lord Jackson of Peterborough has just set out the concerns of many on these Benches very powerfully, and the noble Baroness, Lady Fox of Buckley, has echoed them and added her own concerns.

I have been very clear throughout the passage of the Bill that we on the Opposition Benches are not persuaded by the changes the Government have made to the Bill, compared to the version we put forward in the last Parliament. As I said in Committee, we do not believe that the additions the Government have made in this area are necessary either. The Bill already has strong corporate governance requirements, mandating a corporate governance statement as part of the licensing process, and that is in addition to the rules already enforced by the Football Association and competition organisers.

Regardless of whether one believes that prescribed EDI policies would improve the operation of clubs and football in this country—and as we can see from the short debate we have had again today, that is by no means a settled view—clubs already have to comply with similar rules and, in many cases, voluntarily go further. The noble Lord, Lord Bassam, alluded to some of the work they do, and my noble friend Lady Brady mentioned it in more detail in our debate in Committee. Mandating further policies and action to promote equality, diversity and inclusion is, therefore, a clear example—we think—of unduly onerous regulation which has little to do with financial stability. The Minister has been clear throughout our scrutiny that this is intended to be a sustainability regulator.

Our concern is that placing new EDI duties in the Bill and, therefore, tasking the regulator with concocting rules to that end would increase the risk of mission creep, which we have all been very concerned about. We are clear that this will end up meaning more, not less, regulation. At a time when the Prime Minister is promising to clear out the regulatory weeds, and the Chancellor is writing letters to regulators asking them to promote economic growth, we should be aiming for fewer regulatory burdens, not more.

I shall say a few words about Amendment 34, which my noble friend Lord Markham outlined the case for, which relates to independent non-executive directors. We had a strong cross-party exchange on this topic in Committee, when amendments to the same effect were tabled by the noble Lords, Lord Knight of Weymouth and Lord Blunkett. They were evidently satisfied with the Minister’s response, so they have not brought them back, but I am glad that my noble friend Lord Markham has tabled his. I am very grateful to the Minister for taking the time to discuss this issue with both of us, as I believe she also did with a number of other noble Lords who raised it in Committee. She kindly copied us in to the letter she sent to the noble Lord, Lord Knight of Weymouth, about it, but I look forward to any further reassurances she is able to give on Amendment 34.

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

I join the noble Lord, Lord Parkinson of Whitley Bay, in his congratulations to Newcastle United, and I offer commiserations to Liverpool and its supporters. Good football is always a joy to watch, but only one side can win; I feel for those who put in all their effort and did not go away smiley-faced.

I want to address one of the points raised by the noble Lord, Lord Jackson of Peterborough, in relation to reports in the media this morning. The noble Lord should be mindful of the old adage that you should not believe everything you read in the newspapers. Your Lordships’ House has heard at length during the Bill’s passage that too many football fans have been left with nowhere to turn when faced with reckless owners, financial mismanagement and threats to their club’s very existence. That is why the Government remain absolutely committed to introducing an independent football regulator to put fans back at the heart of the game.

We had extensive discussion on the topic of equality, diversity and inclusion in Committee, when a number of noble Lords opposite aired their considerable concern over what is a very standard addition to almost all corporate governance codes. I am sure that the noble Lord, Lord Jackson of Peterborough, and the noble Baroness, Lady Fox of Buckley, will not be surprised to know that I do not agree with them. The Government have not changed our view that equality, diversity and inclusion is a key part of good corporate governance. Research has shown that diversity on boards and in organisations promotes better governance, decision-making and transparency, all of which in turn contribute to improved financial sustainability.

We heard in Committee about the vital work that the industry is already undertaking in this area. The regulator will look to work co-operatively with other stakeholders, to draw on the expertise of the sector and to add to industry initiatives through the code. As with fan engagement, this will be a statutory baseline.

The noble Lord, Lord Jackson, referred to the Green and Hand report, which was forwarded to me —I am very grateful to the noble Lord, Lord Moynihan of Chelsea, for that. I appreciate that the noble Lord, Lord Jackson of Peterborough, noted the findings of Green and Hand regarding McKinsey studies into the relationship between EDI and corporate performance. I recognise that the assessment refutes the link between ethnic diversity and financial performance. However, it remains my view that the relationship between diversity and improved corporate performance is well established and accepted beyond the studies of McKinsey alone. For example, both the Financial Reporting Council and the Association of Chartered Certified Accountants acknowledge this relationship. Clubs that already champion equality, diversity and inclusion will not have an additional burden placed on them, other than having to periodically report on these things.

My noble friend Lord Bassam of Brighton outlined a number of issues that remain within the game. Under the corporate governance code, clubs will simply be required to explain how they are applying the code and what action they are taking on equality, diversity and inclusion—nothing more. As suggested by the noble Lord, Lord Addington, that does not feel onerous, but it is a helpful and transparent measure, in the Government’s view, and I refer noble Lords to the points made by the noble Lord, Lord Pannick. As I have said previously, the regulator is not going to prescriptively micromanage each club’s board, or set targets and quotas on EDI. That is not the role of the regulator, and would be a significant burden on both the regulator and clubs.

Turning to Amendment 34, in the name of the noble Lord, Lord Markham, I thank the noble Lord for this amendment and for his engagement on this, along with a number of other noble Lords. I particularly thank my noble friend Lord Knight, who has been a strong advocate on this issue and has met me to discuss it. I wrote to him about it, as the noble Lord, Lord Parkinson of Whitley Bay, mentioned, and I would be happy to lay a copy of this letter in the Library of the House.

As I outlined in the letter, we are fully in agreement with the principle of independent non-exec directors. We recognise that they can greatly improve decision-making, provide independent scrutiny and drive up corporate governance standards. This supports the regulator’s objective of better financial soundness, stability and decision-making for football clubs. However, while we agree with the principle, we do not feel it is right to include this detail in the Bill. We do not believe that the Government should be writing the corporate governance code, or making detailed recommendations on how a club’s board should operate. Indeed, no corporate governance code is written in primary legislation; this helps ensure flexibility and future-proofing.

We are setting up an independent, specialist football regulator, which will have in-depth knowledge of the unique challenges of football club governance. It will be for the regulator to then develop, consult on and ultimately publish this code. This approach enables consultation with industry, including clubs, which is essential to ensure that it is appropriate for the football industry and that it can be adapted in the future to reflect best practice. However, I again assure noble Lords that we fully expect the regulator’s code to include detail and guidance on independent directors. This is the norm for all corporate governance codes, and we do not expect the regulator’s code to be any different.

I think there is broad agreement on the importance of independent non-exec directors, and I thank noble Lords across the House for the interest shown in this issue. I hope that the reassurance I have provided will satisfy any concerns that INEDs will not be included in the corporate governance code. I therefore hope that noble Lords will not press their amendments for the reasons I have given.

[Lord Jackson of Peterborough (Con)]

My Lords, I thank all noble Lords for their contributions to this short debate, particularly the thoughtful remarks from the noble Baroness, Lady Fox of Buckley. I will briefly correct the assertion made by the noble Lord, Lord Bassam. I have not tabled an amendment that is against EDI; it is against a compulsory and costly duty enshrined by the corporate governance document in the Bill. That is a separate thing. I am disappointed that no noble Lords, except the Minister, actually engaged with the evidence that both the noble Baroness, Lady Fox of Buckley, and I have put forward.

There is one point that I would challenge the Minister on. Once again, despite being challenged in the letter from my noble friend Lord Moynihan of Chelsea, and by me today, she has yet to come forward with any alternative to the McKinsey study showing evidence that EDI improves the bottom line in business, let alone the football world. That is a very important issue.

The Minister was right when she said we have had a good and lengthy debate on this issue over many weeks, both before Christmas and this year. Notwithstanding that, I do not think she has answered the specific questions we have raised. On that basis, I would like to test the opinion of the House.

15:57

Division 1

Ayes: 182

Noes: 237

16:08

Amendment 32

Moved by

[Baroness Twycross]

32: Schedule 5, page 99, line 36, at end insert—
“(ca) how the club contributes to the economic and social well-being of the local community with which it is associated,”Member’s explanatory statement
This amendment makes a club’s contribution to the economic and social well-being of its local community part of its corporate governance.

Amendment 32 agreed.

Amendments 33 and 34 not moved.

Clause 21: Discretionary licence conditions

Amendment 35

Moved by

[Lord Grantchester]

35: Clause 21, page 14, line 6, at end insert “, and
(ii) if the club has a women’s team, ensure the club will meet, or will continue to meet, any licensing criteria applicable to the women’s team and its relevant competitions.”

[Lord Grantchester (Lab)]

My Lords, I propose Amendment 35 in the name in the noble Baroness, Lady Grey-Thompson, to which I have added my name. I declare my interests as a former director of Everton Football Club. I am now chair of its memorabilia trust and a small shareholder.

The noble Baroness, Lady Grey-Thompson, apologises to the House that she cannot be here to move her amendment, as she is chairing a three-day social care conference. The dates and timings of commitments can present difficulties with the scheduling of legislation. If she were here, she would have reflected that the women’s game has come a long way and now has a recognised pathway for women and girls to progress beyond recreational football enjoyment to elite participation. The pathway now crosses national structures to successful European clubs, where there will be more opportunities to progress for less football-friendly nations.

The success of the Lionesses in recent years has been a great, positive beacon in the sport, encouraged by the FA’s strategies Inspiring Positive Change and Reaching Higher. There has been a 56% increase in women and girls playing football and a 14% increase in schools offering equal access in sport and PE for girls. There is so much more that is needed in schools to improve female health and well-being through sport.

This Bill has been a long time coming to fruition. I have not spoken much on the Bill as I am in total agreement with this improved version that will tackle, from a fan’s perspective, all the shortcomings in the top leagues, rather than leaving problems exposed, as would have occurred in the previous Conservative Government’s legislation.

This amendment is simple. It is correct that there are powers in the Bill for the Secretary of State to expand the remit of the IFR into the women’s game. Right now, the focus needs to be on embedding the IFR into the men’s game appropriately. However, the women’s game remains vulnerable. Kaz Carney’s report, Raising the Bar, achieved an agreement that the women’s game would like to develop on its own terms separate from the men’s, but that it needs protection. Separate, yes, as audiences differ, and it is more diverse and family-focused, with a different culture and even refreshments at games, but it needs protections, as women’s football needs so much investment in standards and facilities.

This season, for the first time in the WSL, all the teams are teams with a men’s Premier League club providing that investment. Kaz Carney’s report understood that if the top clubs do not believe in women’s football, it will not thrive. However, dependence on the men’s team is fundamentally problematic. When Reading was in financial trouble, it made a decision to cut support for the women’s team and disbanded it, leaving all its female players without their club. The noble Baroness, Lady Grey-Thompson, provides the example of Thornaby FC, which also disbanded the women’s team, which was saved after a public outcry, with an indignant Lily, then aged seven, declaring:

“If girls want to play football, you can’t just not let them”.


I applaud the restructure of the FA-controlled competitions into two top divisions, with a separate league structure under the leadership of Nikki Doucet. The Premier League has come forward with a £20 million interest-free loan to nurture this development. With the simple Amendment 35, women’s football development, while dependent on funding from the men’s game, will be independent in its operations and protected from the vagaries of the men’s game. Whether it develops along US lines, where there are independent funders and stand-alone teams, is to be seen, but the point is that women’s football can develop how it wishes to.

Can my noble friend the Minister give assurances that women’s football will be protected in this legislation? Can she confirm that the women’s football game will be assessed in all “state of the game” reports so that the Secretary of State may be advised whether problems are emerging that could require the scope of the IFR to be expanded? Is my noble friend the Minister able to give any indication of what conditions or circumstances might give rise to such considerations? How can this come about so that, should there arise concerns and problems in the development of and outcomes in women’s football, there would be a recourse of referral to the IFR? I beg to move.

[Lord Moynihan (Con)]

I rise to support the noble Lord, Lord Grantchester, and thank him and the noble Baroness, Lady Grey-Thompson, for their hard work on this issue and for highlighting its importance. I have just one question that I would like to put to the Minister. In looking at the regulator’s remit, it is vital that care should be taken that there are no unintended consequences for the women’s game, such as clubs disinvesting in their women’s teams as a method of meeting sustainability obligations when alternative measures are available. I should be very grateful when she comes to summing up if the Minister could answer that point.

16:15

[Lord Goddard of Stockport (LD)]

We support the amendment from the noble Baroness, Lady Grey-Thompson. I have had a long conversation with her around the state of the women’s game and the lighter touch in the Bill on aspects of women’s football. In essence, it runs parallel and there needs to be some cognisance of that. There needs to be an understanding of that in the Bill. It may come through the reviews that are going to come forward, but I would just like it acknowledged somewhere that women’s football is emerging, developing and encouraging young girls and young women to play football and sport, which helps the NHS and everything else. There should really be some cognisance from the Government that there should be a line in this Bill that acknowledges and supports the noble Baroness’s objectives.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I agree with what the noble Lord, Lord Goddard of Stockport, has just said, and we are grateful to the noble Baroness, Lady Grey-Thompson, who has spoken up for the women’s game from Second Reading all the way through the Bill. I am grateful to the noble Lord, Lord Grantchester, for moving the amendment today on her behalf. We touched on this a little when we were looking at the thorny question of putting in the Bill the types of competitions, leagues and so on that would be covered, where we ran into the problem of not wanting to make this a hybrid Bill, but we were interested in the consultation that would be needed if the women’s game were to come under the scope of the Bill and the regulator. So I am grateful to the noble Lord—and the noble Baroness, in her absence—for returning to this today.

I shall speak to my Amendments 36 and 95, which have been put in this group. My Amendment 36 seeks to ensure that the regulator has power to restrict funding from sources that it deems

“harmful to the interests of the United Kingdom”.

This is intended as a slightly softer approach to the duty now removed from the Bill to have regard to the foreign and trade policy of His Majesty’s Government, which we discussed during our first day on Report. Rather than providing for the regulator to consider the Government’s foreign and trade policy, my amendment focuses on conduct it considers harmful to our national interest, allowing the regulator to interpret that as it wishes and, crucially, independently from the Government of the day, as we know that UEFA and others are very anxious that it should.

My Amendment 95 reflects some discussions that we had in Committee in which there was cross-party support. The noble Lords, Lord Addington and Watson of Invergowrie, spoke at that point in favour of the suggestion that the Secretary of State might make regulations for Part 3 to come into effect only at the end of a relevant football season, rather than partway through. Clearly, there will be burdens on clubs that will have to comply with the new regulatory regime and it would be easier and simpler for them if they were able to do so at the start of a season. So I have brought this matter back in the hope that again it will receive some cross-party support. It is intended as a constructive suggestion and I look forward to the Minister’s reply.

[Lord Pannick (CB)]

I will add just two comments, the first on Amendment 35 on the women’s game. It is plainly at a very sensitive stage of development and we would all wish to encourage that development. My concern is that including Amendment 35 might perversely deter some clubs from investing in women’s football, and that would be most unfortunate indeed.

In relation to Amendment 36, to which the noble Lord, Lord Parkinson, just spoke, this is an exceptionally vague provision: the idea that the regulator should have power in relation to discretionary licence conditions where there is

“conduct which it reasonably suspects to be harmful to the interests of the United Kingdom”.

This would be very difficult to apply and would lead to all sorts of probably legal arguments on what this means. In any event, it is a power that would be given on the basis of reasonable suspicion. That is most unfair to the clubs concerned, because there might be a reasonable suspicion that is not justified. As always, I declare my interest as a practising lawyer, partly in sports law, acting in particular for Manchester City in current disciplinary proceedings.

[Baroness Twycross (Lab)]

I thank the noble Lords, Lord Parkinson, Lord Goddard of Stockport and Lord Moynihan, and the noble Baroness, Lady Grey-Thompson, for tabling amendments, and my noble friend Lord Grantchester for moving, in her unavoidable absence, the amendment tabled by the noble Baroness, Lady Grey-Thompson.

I welcome in particular the opportunity to discuss the women’s game and to set out the Government’s position on it, not least in relation to this Bill. I know that the noble Baroness, Lady Grey-Thompson, was keen to have a debate on the women’s game and frustrated that we did not have one at earlier stages, so I am sorry that she could not join us. However, I hope that I can give all noble Lords who have spoken in support of the women’s game the assurance that the Government really do want to see women’s football in this country thrive.

Recent years have seen incredible growth in the sport, catalysed by the amazing success of our Lionesses. I know that all noble Lords are hugely proud of their achievements. We understand why there is an interest in ensuring that women’s football is accorded some of the same protections that the Bill would deliver for the men’s game. As someone who was not allowed to play football at school, I am delighted that my nieces take it absolutely for granted that they are, so this is an area that I personally want to see grow and thrive.

My noble friend Lord Grantchester spoke passionately in favour of the women’s game. We agree with the independent review of women’s football that he noted, and which was expertly chaired by Karen Carney. As my noble friend stated, that review recommended that the women’s game should be given the time, space and opportunity to grow and govern itself. So, while there are some shared features, the problems facing women’s football and men’s football are not the same. The Government are in regular contact with the Women’s Professional Leagues Ltd. We are confident that it will be able to implement the structures, processes and regulations to drive the sport forward. Where appropriate, this can involve taking learnings from the men’s game and the regulator.

I reassure my noble friend that, as with all regulation, the scope of the regulator will be kept under review. As it is not intended in the first instance for the regulator to cover the women’s game, the “state of the game” report will consider only matters in scope of the regulator. However, if appropriate in the future and following proper consultation, the regulator’s remit could be extended to include women’s competitions via secondary legislation.

To expand slightly on why we are not at this point intending to regulate the women’s game, it is by its own admission at a different stage from the men’s game. It is still in a start-up phase, needing significant investment and growth to achieve its potential. The men’s game, by virtue of being a more mature commercial product, has no issue with growth or investment. Its issue is that it spends unsustainably, accumulates debt and cannot keep the massive revenues that it raises within the game. Therefore, neither the Government nor the women’s football industry believes that statutory regulation is the correct approach to helping women’s football at this stage.

The noble Lord, Lord Moynihan, alluded to issues that might be prevented. I will refer to the specific example of Reading Football Club. I do not want to assume that the noble Lord was referring to it as an example of where the regulator might have helped. Currently, the women’s game is not intended to fall within the regulator’s initial scope, so the regulator could not have directly prevented funding to Reading Football Club Women being cut. However, importantly, it would have been able to address financial problems at the men’s club, which may have averted the issue. So it is an indirect benefit, potentially. It would also have had access to information that it could have shared, only in certain specific circumstances, with the authorities in the women’s game. This might have allowed them to identify and react earlier to an issue and protect the women’s team. So we are confident that the authorities responsible for governing the women’s game will be able to implement the appropriate protections to prevent a future similar scenario to that which happened in Reading.

Amendment 36 would allow the regulator to stop a club accepting funding that it reasonably suspects to be harmful to the interests of the United Kingdom. I know that protecting football from wider harms is important to the noble Lord, Lord Parkinson of Whitley Bay, as it is for us all. I agree with the intent and thank him for his engagement on this. However, it is not for a football regulator to judge what is harmful to the interests of this country; indeed, this is what the UK’s financial sanctions regime is for. If there is an oligarch or bad actor with connections to a hostile state acting against UK interests, they can be sanctioned. That would automatically stop a club receiving funding from the party in question. Sanctions can be imposed for a whole range of reasons, including in the interests of national security.

Beyond this, the Bill already provides protections against wider harms. The owners’ and directors’ test, for example, will look at the fitness of a club’s owners and officers, including sanctions, and whether the individual has been prevented from entering the UK. This seeks to protect English clubs from unsuitable owners or officers. In conjunction with the power to restrict funds suspected to be connected to serious criminal conduct, this will help to ensure that clubs are protected from harm.

I thank the noble Lord, Lord Goddard of Stockport, for his Amendments 38 to 41 and his continued engagement on the Bill. I have written to the noble Lord on some of the points he raised on discretionary licence conditions and the commitments in lieu process, and I am happy to lay a copy of this letter in the House Library for other Members of your Lordships’ House to access as well. As I outlined in that letter, we feel that it is appropriate for competition organisers to have a formal opportunity to intervene on a financial issue if they could achieve the same goal in a more effective and less burdensome way. This commitments in lieu process encodes the light-touch and collaborative approach that we have discussed at great length in your Lordships’ House.

The Bill as drafted allows clubs ample opportunity to make representations about proposed financial discretionary licence conditions. As part of ongoing supervision by the regulator, clubs will be made aware of what potential action the regulator may take to improve the clubs’ standards. However, if a competition organiser proposes a commitment that the regulator believes would solve the issue in a quicker, more effective or more proportionate manner than the regulator’s proposed licence condition, the club should not be able to veto this.

I turn to Amendment 95 in the name of the noble Lord, Lord Parkinson. We understand the intention of this amendment, and we agree that the regulator should avoid any burdens or disruptions that may be associated with mid-season licensing of clubs, including the risk, albeit remote, that licences are refused mid-season. As currently envisaged, once the regulator is set up, it will make rules around how and when clubs need to submit their applications. The noble Lord’s amendment would prevent the entirety of Part 3 being commenced until the period between seasons. For example, if the regulator were ready to start preparing clubs for licensing in September in a given year, it would have to wait until the following May before it could do so. We want clubs to be able to prepare their application and engage with the licensing process early to avoid a rush and high burdens in the relatively short window between seasons. This amendment would prevent that.

By contrast, if commenced properly, there will be a substantial onboarding time for clubs, and the regulator will not have to process 116 applications in a short space of time. The noble Lord’s intention of avoiding mid-season disruption can be achieved through a careful commencement of Part 3. We intend to delay commencing the Clause 15(1) requirement on clubs to have a licence until all clubs have had the necessary opportunity to obtain one.

On Amendment 96 in the name of the noble Lord, Lord Moynihan, I understand that the noble Lord’s view is that the Secretary of State guidance on significant influence and control is integral in providing certainty for the industry, and that it must be produced in a timely manner. That is why, last week on Report, I committed

“that the Secretary of State’s guidance will be produced before clubs are required to identify their owners who meet the definition of having significant influence or control”.—[Official Report, 11/3/25; cols. 626-27.]

I would like to reiterate this commitment and reassure the noble Lord that it would be superfluous in this instance to make this amendment. Additionally, I remind the noble Lord that the House made its view on the definition very clear when it voted against Amendment 7. I hope he will agree that it would be an inefficient use of the House’s time to discuss this issue any further and will take reassurance from the commitment I have already made.

I turn finally to government Amendment 37. A number of noble Lords have raised concerns regarding consultation requirements and discretionary licence conditions. We are making a change to the consultation requirement that the regulator must satisfy before submitting a request to the Secretary of State, to amend the scope of discretionary licence conditions. We were confident that the previous drafting would have captured clubs and competition organisers, but we have listened to concerns across the House about this not being stated explicitly. Therefore, we have brought forward this amendment to put this beyond all doubt and address those concerns. As a result of this amendment, the regulator will now be required in legislation to consult all regulated clubs and each specified competition organiser in this process.

For the reasons I have set out, I hope the noble Lords will not press their amendments.

[Lord Grantchester (Lab)]

I thank all noble Lords who have spoken in this little debate on this group of amendments. Although I would have welcomed a little further development from my noble friend, I certainly understand her response. I also understand the comment from the noble Lord, Lord Pannick, to which I respond merely that if a men’s club does not believe in women’s football, it certainly should not invest in it. With that, I beg leave to withdraw the amendment.

Amendment 35 withdrawn.

16:30

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

Amendment 36 not moved.

Amendment 37

Moved by

[Baroness Twycross]

37: Clause 22, page 15, line 14, leave out “such persons as the IFR considers appropriate” and insert “—
(a) all regulated clubs,(b) each specified competition organiser, and(c) such other persons as the IFR considers appropriate.”Member’s explanatory statement
This amendment requires the IFR to consult clubs and competition organisers, in addition to other persons it considers appropriate, before making a request to the Secretary of State to make regulations amending the types of discretionary licence condition set out in clause 22(1), (2) and (3).

Amendment 37 agreed.

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

Amendments 38 to 40 not moved.

Clause 24: Commitments in lieu of financial discretionary licence conditions

Amendment 41 not moved.

Clause 26: Part 4: overview and interpretation

Amendments 42 to 44 not moved.

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

Amendment 45 not moved.

Clause 37: Matters relevant to determinations

Amendments 46 and 47 not moved.

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

Amendment 48

Moved by

[Baroness Twycross]

48: Clause 46, page 38, line 39, leave out “carries on an activity” and insert “takes any step”
Member’s explanatory statement
This amendment corrects a drafting inconsistency in clause 46.

Amendment 48 agreed.

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

Amendment 49

Moved by

[Baroness Twycross]

49: Clause 49, page 40, line 27, leave out from “to” to end of line 28 and insert—
“(a) any emblem or crest of a relevant team operated by the club, or(b) the predominant home shirt colours of such a team,”Member’s explanatory statement
This amendment adds a reference to a team’s “emblem” alongside “crest”, to avoid confusion with the heraldic use of the term “crest”.

Amendment 49 agreed.

Amendment 50 not moved.

Clause 53: Duty to pay a levy

Amendment 51

Moved by

[Baroness Twycross]

51: Clause 53, page 43, line 19, at end insert—
“(8A) If levy rules make the provision mentioned in subsection (8)(b), they must provide—(a) for the rate at which interest is charged not to exceed an annual percentage rate of 5% plus the Bank of England base rate,(b) that the IFR may charge interest at a rate determined by the IFR that is lower than the rate that would otherwise be applicable under the rules, where the IFR considers that appropriate, and(c) that the IFR may disapply a requirement for interest to be charged, where the IFR considers that appropriate.”Member’s explanatory statement
This amendment caps the rate of interest on late levy payments that the IFR may provide for in the levy rules at an annual percentage rate of 5% plus Bank of England base rate and gives the IFR discretion to charge a lower rate of interest or no interest in particular cases.

[Baroness Twycross (Lab)]

My Lords, I rise to speak to a package of government amendments: Amendments 51, 78, 86 and 88. I will speak to other amendments in this group in my closing remarks. The government amendments follow constructive discussions with the noble Lord, Lord Markham, who proposed an upper limit on interest that can be charged by the regulator on missed levy payments. Our amendments will impose a limit of the Bank of England base plus 5%. We believe this strikes the right balance between deterring non-payment and preventing undue burden. It also provides greater internal consistency within the Bill; the rate used for this upper limit is the same applied to missed financial penalty payments. With this amendment the regulator will maintain the discretion to set the interest for missed levy payments and could therefore set it lower than this cap or disapply it entirely. I hope this satisfies the noble Lord’s concerns on this issue, and I beg to move.

[Lord Markham (Con)]

My Lords, Amendment 52 seeks to reverse one of the more surprising changes to the Bill. The previous Conservative version stated that the regulator must consult on all changes to the levy rules. This seemed fair and proportionate. If the regulator is to change how it charges the levy or how much it wishes to charge, it seems pretty reasonable that those who will bear the burden of that charge are consulted.

The changes introduced by the Government provide that the regulator does not have to consult if it considers those changes to be minor. The issue is that the definition of “minor” is to be determined by the regulator. What would happen if the regulator tries to claim that somehow a change is “minor”, but other interested parties do not agree? Is there not the possibility here for the regulator to skirt around important consultations by simply claiming that the changes it is proposing are not significant enough to warrant discussion? The problem here is that this could create endless discussions about what warrants being termed “minor”. Surely it would be far simpler for the regulator just to consult on all changes, as was the case in the previous Bill.

Separately, it is welcome that the Government have accepted the principle that interest charged by the regulator on unpaid levy charges should be capped by the legislation. This was an amendment that my noble friend Lord Parkinson and I tabled in Committee. At the time, the Minister said that

“setting the rate of interest charged on non-payment of the levy is an operational decision for the regulator, which needs the flexibility to charge interest at a rate that deters non-payment”.—[Official Report, 18/12/24; col. 337.]

We disagreed with this assessment at the time. Although it is right that some flexibility is needed, it is not right that the regulator should be the one that sees fit to charge whatever it thinks is right. I am therefore very pleased that the Minister has changed her mind on that matter and brought a government amendment to this effect.

[Lord Goddard of Stockport (LD)]

My Lords, I will speak to my Amendments 55 and 56. I received a satisfactory reply on the four amendments from the previous group, which I submitted to the Government and the Minister. I also submitted Amendments 55 and 56, but I did not quite get such a full support for them, so I think it is worth explaining to the House what they are—plus a slight history lesson.

The Minister’s statement in the debate on 16 December 2024 set down the clear intent that the regulator should have primacy ahead of all competition organisers:

“I want also to stress that the regulator will not stop the leagues imposing their own competition rules so long as they do not conflict with the regulator’s regime”.—[Official Report, 16/12/24; col. 40.]


The then Government’s consultation response document noted:

“The Regulator will set the legal baseline for regulation in areas within its remit. There may be scope for industry bodies to layer on top, but the Regulator would coordinate with these bodies to ensure that any additional rules were supportive of the regulatory approach and objectives. This means that industry bodies will need to be receptive to working with the Regulator to potentially streamline and adapt their existing rules, to allow for a coherent regulatory landscape that minimises burdens on clubs”.


However, this is not reflected in Clause 55(6), which requires only that the competition organisers “consult” with the regulator. That is not what was previously said.

Through discussions on the Bill, we have seen that the level of co-operation of competition organisers has varied, so it is not satisfactory to rely on their good will to resolve regulatory conflicts. Indeed, recent Premier League consultations have resulted in a legal spat with the Professional Footballers’ Association, the EFL, the Government and FIFA, and various disputes with the Premier League executive. The proposed amendments aim to ensure that the regulatory system is clear and coherent and avoids the confusing overregulation of rules. The IFR can act as an important safeguard.

We have seen a number of recent legal cases that have demonstrated deep flaws in some of the competition organisers’ approach. For example, the Premier League lost a case to Leicester City, where Leicester was held to be a member of neither the Premier League nor the EFL, due to poor and contradictory drafting of Premier League rules. That was a report from the Appeal Board.

Of even greater concern, the Premier League rules on associated party transactions were found to have been illegally introduced to advantage one set of clubs over another, and to have abused a dominant market position. As a result, three years of those rules were held to be void, as though they never existed, and there are more damages claims to come. These rules came about because of rushed processes. The panel noted that they had not been subject to proper analysis or examination before introduction:

“There does not appear to have been any discussion or analysis as to how such an exclusion would affect the effectiveness of the PSR, and the principle of sustainability of club finance which underlies the PSR”—


the profit and sustainability rules in competitions. That was from a judgment in favour of Manchester City, which additionally found that:

“Nor was there any evidence that the PL had in fact carried out any analysis as to the impact of the shareholder exclusion on different clubs and to seek to justify such an exclusion”.


Many of these difficulties have come about because of the inherent conflict in the regulated entities—the clubs—being the ones that set the rules. Clearly, the independent regulator will be able to act on that. It will act effectively to regulate the financial sustainability of English football and undermine its entitlement.

The proposed amendment is targeted at financial and business regulations; it leaves sporting regulations completely untouched. It is of no benefit to anyone in the game for there to be rushed, ill thought-through or illegal market regulations, from whatever source. It will benefit all to ensure that the IFR can act with quality checks on future attempts by competition organisers when they attempt economic market regulation. The Premier League has clearly demonstrated that it is not good at economic market regulation; in doing so, it has ended up costing the Premier League and its constituent clubs tens of millions of pounds in legal fees and dislocated activities.

[Lord Pannick (CB)]

My Lords, I support the noble Lord, Lord Markham, in relation to Amendment 52 on consultation. As noble Lords will know, Clause 54 requires the regulator to consult persons including all regulated clubs before making, amending or replacing levy rules, and consultation is a vital component of fairness. However, Clause 54(2) says that this obligation

“does not apply in relation to amendments to or replacements of levy rules if the IFR considers the changes to be minor”.

The noble Lord, Lord Markham, is absolutely right: it is not for the regulator to determine whether changes are minor; it is for those who are potentially adversely affected. Consultation on matters that the regulator may consider to be minor is no great impediment. If the changes are in truth minor, as perceived by the regulated clubs, the consultation will not take very long and will not involve any great effort by the regulator. I hope that the Government will accept Amendment 52 in the names of the noble Lords, Lord Parkinson and Lord Markham.

[Baroness Twycross (Lab)]

I thank the noble Lords, Lord Parkinson of Whitley Bay and Lord Goddard of Stockport, for their amendments.

Amendment 52 from the noble Lord, Lord Parkinson, would require the regulator to consult every regulated club, as well as the Secretary of State, the Treasury and others that the regulator considers appropriate, for minor changes to the levy rules. As noted by the noble Lord, Lord Pannick, the Bill is currently written so that consultation is not needed for minor changes to levy rules. This is intended to allow the regulator to make immaterial amendments or corrections without excessive bureaucratic burden. In the Government’s view, the amendment would add a layer of unnecessary process.

There is no need—and, I imagine, no great desire—for clubs to be made aware of every typographical or grammatical error that the regulator wishes to correct. I note the points raised by the noble Lord, Lord Markham, in his support for the amendment, and I can assure noble Lords that clubs will be properly consulted on matters that affect them. For all changes to the levy rules that constitute material changes, the Bill already requires the regulator to consult, amongst others, every regulated club.

Moving to Amendments 55 and 56 from the noble Lord, Lord Goddard, I completely understand the intention behind these amendments. A right of approval for the regulator over relevant competition organiser rules would enable the regulator to clearly maintain authority on matters within its remit and to manage any potential duplication or conflicts. However, the Government are firmly of the view that competition organisers should be free to implement their own rules autonomously. As membership organisations, they should be free to set rules on their members in pursuit of their own objectives, which are likely to be broader than the regulator’s.

Overreach by the regulator into the rules of competition organisers risks the kind of scope creep that UEFA has warned against. We are confident that the regulator will be able to work with competition organisers to manage any interactions between their rules and its own regulatory system without the need for an approval or veto power. As a result, we do not think the regulator needs the power to require additional information from competition organisers here either.

On the specific points raised by the noble Lord, Lord Goddard, the regulator will put in place the necessary minimum standards for all clubs in scope with statutory powers to enforce and maintain these standards. This would be business regulation of football clubs setting the statutory baseline they must meet to operate as football clubs in this country. Beyond this, competition organisers are free to set membership requirements on their member clubs. If they wish to layer additional requirements or processes on top of the regulated statutory baseline, they will be free to do so, providing that they are consistent with the law. Of course, it would be in no one’s interests to have unnecessary duplication, so we would perhaps expect the competition organisers to focus on other objectives and leave sustainability in this regard to the regulator.

In light of these points, and others, raised, I hope that the noble Lords will recognise the risks associated with their amendments and will be content not to press them as well as to support the government amendments.

[Lord Hayward (Con)]

Before the Minister sits down, I refer her back to the answer that she gave to my noble friend Lord Markham and the noble Lord, Lord Pannick. When I was chief executive of the British Beer and Pub Association, I had notification from the Treasury about a change on tax rules that it considered minor. The Treasury expected it to go through with no contest, but the brewing industry went berserk because the Treasury was unaware of the implications of what it was proposing. That is precisely what appears to be the case regarding the comments from my noble friend and the noble Lord, Lord Pannick: it cannot be for the regulator to judge whether something is minor or major, because it may well be unaware of the implication of what it is doing for one club or another, or for a group of clubs in one form or another. I find the Minister’s answer surprisingly inadequate.

16:45

[Baroness Twycross (Lab)]

I am sorry that the noble Lord finds my answer inadequate. I am happy to give further reassurance to noble Lords by asking the shadow regulator for some examples of what type of change it may see as minor.

[Lord Markham (Con)]

I thank the Minister for her comments, but I think it is the feeling of a number of noble Lords, particularly the noble Lord, Lord Pannick, and my noble friend Lord Hayward, that it cannot be right in principle that the regulator gets to be judge and jury on what is or is not consequential, particularly as it does not have the full knowledge that the clubs might have. The regulator might think it is minor, but it might make a real difference to the clubs. Therefore, at this point, we are minded to test the opinion of the House when we come to Amendment 52.

Amendment 51 agreed.

Clause 54: Section 53: consultation and publication

Amendment 52

Moved by

[Lord Parkinson of Whitley Bay]

52: Clause 54, page 43, line 38, leave out subsection (2)
Member's explanatory statement
This amendment requires the regulator to consult on all changes to levy rules.

16:47

Division 2

Ayes: 196

Noes: 229

17:00

Amendment 53

Moved by

[Lord Addington]

53: After Clause 54, insert the following new Clause—
“Duty to prevent advertising and sponsorship related to gambling in English footballEnglish football must not promote or engage in advertising or sponsorship related to gambling.” Member's explanatory statement
This amendment prevents regulated clubs and competitions from promoting or engaging in gambling advertising or sponsorship.

[Lord Addington (LD)]

My Lords, we debated this amendment on the previous day on Report, and I should like to press it to a Division.

17:00

Division 3

Ayes: 74

Noes: 339

17:14

Amendment 54 not moved.

Clause 55: Duties to notify and consult the IFR

Amendments 55 and 56 not moved.

Amendment 57

Moved by

[Lord Markham]

57: 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
This amendment, and the other amendments to clause 62 in the name of Lord Parkinson of Whitley Bay, prohibit parachute payments from being included in the distributions of revenue resolution procedure.

[Lord Markham (Con)]

My Lords, Amendment 57 is in my name and that of my noble friend Lord Parkinson, and I will speak also to Amendment 70. In Committee, we talked at some length about the importance of parachute payments, with my noble friend Lady Brady really bringing home how important they are to clubs. For promoted clubs that know that there is a big threat of being relegated for the next season, they give them the confidence to invest in new players and build the strength of the club. They are able to make that financial commitment only because they have the security of parachute payments behind them. Likewise, any clubs in the bottom half of the table, when we get to this stage of the year, are looking over their shoulders: were it not for parachute payments they would not be looking to make investments in the January window but thinking more about selling rather than recruiting players.

As mentioned on previous occasions, the fundamental reason that the Premier League is the most popular and richest league in the world is because every game is competitive. If we look at other leagues, whether it be in Italy, Spain, Germany or France, we tend to find two or three good teams and a lot of other teams which are, if it is not too unkind to say so, also-rans. A lot of games, as a result of that, are just not competitive in the same way, whereas we know that in the Premier League, every single game is competitive and capable of a surprise. That is because the bottom clubs invest in players to make it competitive, knowing that they have that safety net there. It is that that ultimately brings in the big bucks, in terms of the rights bids that fund the whole game: broadcasters around the world want to know that they will have good games week in, week out, and that is what parachute payments allow.

It is probably put best by Paul Barber, the well-respected Brighton & Hove CEO and deputy chairman: the relative comfort that parachute payments provide to Premier League clubs, especially those newly promoted, means that owners are more willing to commit funds, knowing that if the worst happens and relegation occurs, clubs have support to adjust to a very different reality.

I am aware that the Bill does not require the regulator to consider parachute payments. I know the Minister has made this point before, and we understand it, but the fact does not negate the risks. That is not to say that the current system of parachute payments is not without faults—no one is saying it is perfect—but it is true that every major league club has a similar parachute-type mechanism in some shape or form. That is why we feel the need to ensure that parachute payments are not part of the regulator’s remit, as in the original Bill put forward by the Conservative Government. It is very important.

On the tiny chance that the Minister does not accept Amendment 57, I have also tabled Amendment 70 as a compromise. Amendment 70 states that if the regulator does include parachute payments within the scope of revenue distribution, a final proposal cannot abolish them entirely. The intent is to give a greater degree of certainty that parachute payments will not be disregarded in their entirety. It acknowledges the regulator’s right to consider them if it believes it is necessary, while also ensuring some level of security.

Competition organisers would be able to propose a reduction in parachute payments if they so wish, but could not do away with them altogether. This is fundamentally important to clubs, which often invest with three-, four- or five-year business plans. That is of course exactly what we would want reputable, well-run clubs to do. We want them to invest on the back of a certain set of circumstances and economic conditions and not expect some major parts of that—namely, the parachute payments—to be potentially withdrawn mid-way through.

I believe that this is in keeping with the Government’s stated intentions and I know the Minister does not envisage parachute payments to be abolished. If that is the intent, why not give us greater guarantee of the fact by putting it in the Bill? Although I would prefer parachute payments not to be considered at all, I am under no illusions as to the parliamentary arithmetic. Therefore, in the likely event that they are to be included in the Bill, we have tabled Amendment 70 as a sensible and measured compromise that does not deviate from the Government’s stated policy.

On the small chance that the Minister does not accept my Amendment 57, I hope that she will find herself able to accept the compromise that we have put forward in Amendment 70. I strongly urge her to look favourably on such an amendment in the spirit of consensus, which I know noble Lords in this House respect. If she is able to accept Amendment 70 or give an undertaking for Third Reading, I will not divide the House on Amendment 57 but, unfortunately, if she does not accept what we think is a very sensible compromise, we will have no option but to divide. I beg to move.

[Lord Addington (LD)]

My Lords, it might be convenient to give our opinion on this matter, which is very straightforward. Parachute payments are a system that is in place for today and not set in stone. This is an ongoing process, and the situation will change with the Bill. There is the suggestion that parachute payments are a great drop down and land with a heavy thump. Hopefully, we will raise the ground up a bit or have some cushioning in place. Having one system built in for ever goes against the purpose of the Bill.

[Baroness Brady (Con)]

My Lords, I refer the House to my interests, as declared in the register. I support my noble friend’s amendments, which would remove parachute payments from the backstop.

I hope it will assist the House if I explain why I am so concerned about the inclusion of parachute payments within the definition of relevant revenue. It is not because I believe that the parachute system is perfect—I really do not. It is not because I believe that the precise level or design of parachutes should be fixed forever or protected from scrutiny—I do not. Nor is it because Premier League clubs are insensitive to the aspirations of clubs throughout the pyramid—we are not. We all share the same common goal: a thriving, dynamic, sustainable football ecosystem from top to bottom. It is because the backstop mechanism as it has been designed is so fundamentally unsuited to addressing the issues of parachutes.

The previous Government’s backstop was badly flawed, enabling a binary choice between two proposals, one of which must be selected in its entirety. That was highly unusual and posed significant risks. However, that mechanism could have just about been tolerable because, by isolating solidarity or voluntary payments as the sole issue for resolution, the backstop at least delivered a binary choice between two numbers. That is a judgment the regulator could reasonably make. I remind noble Lords that the levels of solidarity are explicitly linked to parachute payments in the existing distribution agreement between the Premier League and the EFL. One can be used to smooth the potential rough edges of the other, which is what the previous Bill correctly recognised.

However, the expansion of the Bill’s scope to include parachute payments transforms the backstop entirely. It is no longer about determining quantum, but now forces a judgment on the wholesale redesign of football’s financial architecture. It has become a choice, not between two numbers but two fundamentally different systems and it is substantially more legally and financially risky as a result.

The crucial thing to appreciate is the connection between the now systemic nature of the backstop and the position of the EFL. The EFL’s chair has called parachute payments

“an evil that needs to be eradicated”

—not reformed or adjusted, but eradicated. When we combine that system, a binary process, with the open agenda of one of the two parties, we create an absolutely intolerable risk. The backstop offers no capacity for careful calibration or fine tuning, which I would be wholly supportive of.

There is no part of this Bill that allows the regulator to make a reasoned, balanced judgment. It creates a binary, “winner takes all” approach, with no room for nuance but plenty of room for poison pills and final damage. It enables a proposal from the EFL that would level down the bottom half of the Premier League, rather than genuinely elevate the entire football pyramid. Surely, we want a mechanism that delivers both a strong Premier League and a strong EFL, rather than a zero-sum game.

The Government have made their political choice on the backstop, but I believe that they did so without the full understanding of its implications for the delicate ecosystem that sustains football at all levels. If we are to avoid serious, legal and economic consequences for football over the next few years, the Government would be well advised to now address the serious problem they have created. If they are not prepared to revisit the decision on parachutes, my amendments on how the IFR should make its final decision offer a constructive path forward that would benefit the entire pyramid. The proposal from the noble Lord, Lord Birt, offers an alternative. There can be no doubt that change is needed.

We all want the same thing—financial sustainability throughout English football—but the starting point must surely be a shared recognition that we cannot achieve this by dismantling the very mechanisms that have made English football, from the Premier League to the National League and beyond, the world’s most successful ecosystem.

[Baroness Taylor of Bolton (Lab)]

My Lords, I start by reminding the House that the Bill will not abolish parachute payments or change the architecture in the way that has just been suggested. When the noble Lord, Lord Markham, talked about the need to have confidence, so that clubs can invest in new players and have confidence in the strong club structure and financial position, he mentioned only the Premier League. He did not refer at all to the rest of the football pyramid. The Bill needs to make sure that we have sustainability, not just of those clubs in the Premier League, but of the whole English football pyramid. It is important to bear that in mind because, while parachute payments may have a place—as most people have acknowledged, certainly at the moment—there is no doubt that the level of parachute payments is such that it distorts competition in the Championship. I asked the noble Baroness, Lady Brady, when we were in Committee, whether she would acknowledge that, and she declined to comment.

If we look at the actual figures involved, there is no doubt that the current arrangements distort competition. At the moment, clubs that are relegated receive, in year one, £48.9 million. Other clubs receive £5.3 million. The redistribution that is often talked about from the Premier League to the EFL does not help all the clubs in the EFL equally. It distorts competition, which is something we should bear in mind when we are talking about parachute payments. Although they may help a few, they do not help the sustainability of the whole pyramid, as they could—and should—if we had a fairer system of distribution.

[Lord Goddard of Stockport (LD)]

I support the noble Baroness, Lady Taylor of Bolton, especially after Saturday’s result between Bolton and Stockport County—thereby hangs a tale.

I was following the thread from the noble Lord, Lord Markham, really well until he mentioned that every game is competitive. Ipswich Town supporters would not agree with that this season. The evidence suggests that is not the case. If we look at leagues across Europe, they have jeopardy. There are last games of the season where relegation and promotion come to the edge. It is not the be-all and end-all.

It is right that you need a fairer distribution than this endless three up, two down, three down, and that money needs to go further down the pyramid to encourage further clubs to be able to compete. It looks as if the three that came up this season are going to go down. If that continues to happen, it will have a detrimental effect on the Premier League—it must have. It gets more and more difficult every year to sustain. The Brightons and the Bournemouths have burst through, as have other teams, and they are managed really well. But there are unintended consequences if we do not look at these things in totality and just isolate them. If we say, “Leave the parachute payments alone—everything is all right with it”, that is not making progress, and we need to make progress. That is why we need to look at this within the bigger picture. It is not in the Bill but it needs looking at.

17:30

[Lord Bassam of Brighton (Lab)]

My Lords, I will add just a couple of comments to those from my noble friend Lady Taylor. The issue for me is the distortion of competition. In each of the last seven seasons, two of the three clubs promoted from the Championship have been in receipt of parachute payments. This year it could easily be three: Burnley, Sheffield United and Leeds.

Its meaning in the longer term is that the Premier League becomes a closed shop. Clearly, parachute payments are having an impact, because this process has been going on for a long time and it has got worse. I am not saying we should get rid of parachute payments —far from it—and neither does the legislation. Nobody on our Benches wants to see that. But, clearly, the “state of the game” report will have things to say about the impact of parachute payments.

Any sort of fair and reasonable assessment of where parachute payments have been made in the last decade and more would suggest that competition is being badly distorted. The noble Lord, Lord Goddard, is right: they are affecting the shape of our game, and that means that the Brightons and Bournemouths of this world will find it harder to break through the glass ceiling that is there at the moment. For that reason, we should continue to include parachute payments within the remit of the independent football regulator.

[Baroness Brady (Con)]

My Lords, let me make one final point to the noble Lord, Lord Bassam—

[Noble Lords]

The noble Baroness cannot speak again on Report.

[Baroness Twycross (Lab)]

I thank the noble Lords, Lord Parkinson of Whitley Bay and Lord Markham, for tabling these amendments, and the noble Lord, Lord Markham, for speaking to them.

As discussed in Committee, the Government fully acknowledge that parachute payments are a significant part of football’s financial landscape. As the noble Lord, Lord Addington, made clear, this is part of the current landscape. However, it is precisely because of this importance that the regulator must be able to consider them as relevant revenue for the purposes of the backstop, especially if they are proven to be destabilising. How else could the regulator possibly make a fully informed and effective decision without a complete picture of football’s finances?

Amendments 57, 75, 76 and 84 all attempt to remove parachute payments from consideration under the backstop. They also remove the power for the Secretary of State to amend the definition of relevant revenue, preventing them ever being included in the definition of relevant revenue in the future.

In our view, these amendments are fundamentally short-sighted. I hear the concerns from the noble Baroness, Lady Brady, but we heard a very different alternative view from my noble friends Lady Taylor of Bolton and Lord Bassam of Brighton and the noble Lord, Lord Goddard of Stockport. Clearly, it is disputed within your Lordships’ House. If the effects of parachute payments are risking the sustainability of the wider pyramid, the regulator must have a lever to address the issue.

These amendments make the definition of relevant revenue less flexible, less able to address the changing landscape of football’s finances and, overall, less effective. The current power in the Bill allowing the Secretary of State to amend the definition of relevant revenue is balanced, requiring substantial consultation with the relevant leagues. Removing this instead leaves us with a static definition that is likely to become outdated over time. For the reasons I have set out, I ask the noble Lords not to press these amendments.

[Lord Markham (Con)]

I thank the Minister and all noble Lords for their comments. It has become clear in this heavily truncated debate, but taking on the major points that we spoke about in Committee, that all noble Lords care passionately about what we are trying to do here, and that between us we are all trying to find what we think will be the best solution for football overall.

My concern and the concern of my noble friends and many others is that if you damage the competitiveness of a lot of those Premier League games, it will result in less money being paid in media rights to the Premier League, which will mean less money to all the clubs in the pyramid. That is the real danger that we are talking about here.

To directly address the points made by the noble Lord, Lord Bassam, around the closed-shop nature of the Premier League, only five clubs have been in the Premier League for the whole of its existence, so that is not a closed shop, and 55% of all the clubs have been in the Premier League at some point.

Although the Minister’s comments were not unexpected, I believe that the previous version of the Bill that was presented by the then Conservative Government was better than the one before us today, and one of the major reasons for that is the changes around parachute payments.

I regret that, although the Minister understands the importance of all the amendments, she is not minded to accept our Amendment 70 as a genuine attempt to reach compromise and consensus on this issue. That means that the regulator can still, if it considers it correct, abolish those parachute payments in their entirety, which I truly believe would have a significant impact on the game and damage all 92 clubs. As a result, I am afraid that I am not satisfied by Minister’s response and, as I indicated earlier, I would like to test the opinion of the House on Amendment 57.

17:37

Division 4

Ayes: 183

Noes: 234

17:48

Clause 57: Applications for resolution process to be triggered

Amendment 58

Moved by

[Lord Birt]

58: Clause 57, page 47, line 5, leave out “following conditions” and insert “conditions in subsections (3) to (6)”

[Lord Birt (CB)]

My Lords, in truth, my family, unlike that of the noble Lord, Lord Parkinson, does not have to look back 70 years to find any trace of silverware, but I congratulate him and Newcastle on a thoroughly deserved victory yesterday.

If anybody doubts the intensity of fans’ feelings about their clubs, they should have been with me last night on a Tube train, where we were packed like sardines. For some reason, all the Liverpool supporters had gone home and I found myself in a carriage completely composed of Newcastle supporters. The sheer joy was manifest, as well as the sweetness and kindness of the Geordie nature, including taking pity on a disappointed Scouser.

Amendments 58, 59, 64, 65, 67, 72 and 77 in my name, and in the names of the noble Lords, Lord Burns and Lord Pannick, and the noble and learned Lord, Lord Thomas of Cwmgiedd, together define a wholly new process for determining fund flow from the Premier League down to the EFL in the event that the backstop measure is triggered. A wholly new approach is needed because the current process defined in the Bill is in almost every respect unfit for purpose. I will touch on why as I explain the alternative proposal that I and my colleagues place before your Lordships today.

Step 1 in the negotiation process that we have designed is the amassing of evidence in the “state of the game” report to inform the negotiation about every material aspect of the English game, including evidence about all the circumstances affecting the health and effectiveness of clubs in the major English leagues, including: a breakdown of their sources of revenue; how they invest and manage their finances; the balance between their equity and their debt; and evidence of how the English league performs financially and on the pitch compared with other European leagues. This is not an exhaustive list. Evidence should be the first building block of a sophisticated fund flow negotiation. Yet the Bill as it stands does not mandate an up-to-date “state of the game” report to begin, or to form part of, the backstop process.

Step 2 in our design is the appointment of a panel of three, experienced in mediation and arbitration, to manage the negotiation between the Premier League and the EFL. With all parties in the room, the panel would interrogate proposals and ensure that all relevant issues are surfaced, explored and bottomed out.

Step 3 would establish clear criteria against which the panel can assess the proposals coming from each league. The criteria that we lay out in our amendments include: maintaining the global appeal and competitiveness of English football; ensuring competitive balance within individual leagues; enabling well- managed clubs to rise up the football pyramid without risking financial instability; and ensuring long-term investment in stadium and facilities. Remarkably, the Bill as it stands is all but devoid of criteria to apply to determining the appropriate level of fund flow down the English leagues.

Step 4 is a process of binding arbitration spread over 100 days, with proposals from both leagues presented in defined stages. For example, after 75 days both sides table their final offers. If no agreement is reached by day 85, the panel makes the determination and announces it before day 100. In the original Bill, negotiation was planned to last only 28 days, a wholly inadequate timeframe for such a complex and critical negotiation. Also, in the current Bill, if the two sides fail to agree, a completely different group, the so-called expert panel—uninvolved in the process up to that point and with no exposure to the dialogue and debate thus far—must choose between one of the two deals; this is the so-called binary mechanism.

The expert panel cannot amend, adjust or find middle ground. In practice, for both leagues it is a game of Russian roulette. I guarantee that the binary mechanism in the Bill will incentivise gaming, not collaboration, compromise and the building of consensus. Seasoned professionals steeped in mediation and arbitration shake their heads in disbelief when this process is explained to them, not least because this is not a negotiation between two remote monoliths; rather, it is between two sides of the same family, where each year, in the top two leagues, six clubs out of 44 move from one side of the family to the other.

Our proposal for the backstop process is based on up-to-date evidence, the application of clear criteria, pro-longed dialogue and challenge, and a final determination by wholly engaged mediators if agreement is not reached. None of these factors is present in the current Bill.

We can applaud the remarkable success of the Premier League but I am not blind to the problems in English football. I trust that regulation will address them. For example, there are strong arguments for parachute payments. We have just heard some of them. However, the competition within the Championship needs to be assessed. There are good arguments for increasing the quantum of solidarity payments flowing down from the Premier League to the Championship but how those funds will be invested—in stadia, for instance—needs to be identified. Fund flow also needs to be considered in the context of how the Championship is managed.

In the last season for which data are available, the top club in the Championship had revenues five times greater than the bottom club—not a recipe for fair competition. In 2021, Championship clubs spent 125% of their revenues on wages, which is not a sign of good management. One-third of the teams that are currently in the Premier League were promoted from the Championship in the past 10 years. This is evidence of the system working. However, Burnley has been promoted to and relegated from the Premier League three times in the same period. The reasons for the recent yo-yoing of clubs up and down between the two leagues need to be understood.

I cite these examples to illuminate the complexity of the issues that the regulator will have to address, and which should be an integral part of that process for determining fund flow down the leagues. I hope that these examples also illustrate that a far more sophisticated backstop process is needed to address them than is contained in the Bill.

The fingerprints of both main parties are on the design of the backstop process. I hope that both will recognise that there is a far better way. I beg to move.

[Lord Burns (CB)]

My Lords, I congratulate the noble Lord, Lord Parkinson, on Newcastle’s win yesterday. As a season ticket holder of Sunderland in the late 1950s, I had to live through the humiliation of Newcastle winning three cup finals, in 1951, 1952 and 1955. I got my own back when I got to Wembley for the finals in 1973 and 1974. In 1973 Sunderland beat Leeds and in 1974 Liverpool beat Newcastle—rather convincingly. Putting aside my advancing years, I have to say that yesterday I was supporting Newcastle and delighted with them, probably for the first time in my life.

The noble Lord, Lord Birt, has explained some of the problems in the proposed final offer mechanism in the Bill and has presented an alternative proposal. I do not propose to go into the details but want to make some general points and emphasise the extent to which the criteria for any decisions on the distribution of revenues must be much broader than has been indicated so far.

During the debate, many noble Lords have reminded us how our integrated football pyramid is a very important part of our football arrangements; hence it is essential that the leagues work closely together. This is crucial. It is crucial when it comes to negotiation, particularly about the distribution of revenue. As the noble Lord, Lord Birt, said, we are dealing with two parts of the football family. Indeed, over time, many teams will move between the leagues. We therefore need a constructive mechanism to resolve differences that will work over several periods in the future.

The main point I want to make is that whatever process is in place, the criteria for making the choice between final offers should be as clear as possible and it should be relevant to the issues facing the football pyramid. Amendment 72 seeks to provide additional clarity on this. I too am grateful to the noble Baroness, Lady Twycross, for the number of meetings that we had to discuss this, at which she listened very carefully.

18:00

Given the commercial success of English football, it is inevitable that deciding on the distribution of revenue will be difficult and complex. There are many factors that are relevant to this decision, and, generally, they are interrelated. It is not easy to simply state one or two factors upon which decisions can be taken. Clearly, the distribution should protect the overall financial soundness of clubs. Much of that task of maintaining financial stability is down to the risk appetite of the clubs themselves, taking account of their access to capital. It is right that well-managed clubs should prosper. The likelihood of financial failure increases when organisations take excessive risks, and I welcome the emphasis in the Bill on prudential management.

However, I doubt that this can be achieved simply by passing more money down the pyramid. It has to be done in a much more structured way. We need to see competitive balance within and between the leagues, so that fans can watch attractive and competitive football. We want the Premier League to continue to thrive financially and for its clubs to be successful in international competition, but a successful pyramid surely means that clubs should also be able to move successfully between divisions without creating life-threatening financial crises.

As we have seen in recent years, an additional source of risk is that when there is too great a disparity between the financial rewards in one league relative to another, one gets strains and stresses. Getting the right balance between the leagues will be crucial in reducing risk. Decisions of the panel will have to be analytical, balanced and well argued. As the noble Lord, Lord Birt, pointed out, they need a good database from which to work and to interrogate this really closely.

My own experience both as a regulator and being on the receiving end of regulatory decisions is that clarity of the regulator’s remit is crucial, particularly when it comes to decisions on issues that can be challenged in the courts or tribunals. My worry is that, as it stands, the Bill is not sufficiently clear about the criteria to be used, particularly if the panel is eventually forced to decide between two final offers. In the amendment, we have tried to set out more clearly some of the factors that we suggest should be considered and the data that should be monitored over time.

For many of us, it is evident that there are issues to be debated about the present state of the game. Without being dragged too far into the detail, there are some stresses and strains in the pyramid today. On the positive side, several smaller clubs with limited spectator revenues are now performing well in the Premier League, and we continue to see remarkable attendance rates at matches and television viewing figures. Matches, as has been said today, are generally finely balanced. Despite this, it remains very difficult for all but a few Premier League clubs to make an impact on the top six positions of the league. For the second season in a row, it is likely that the three promoted teams will be relegated after one season in the Premier League; and, as last year, the combined number of points of the bottom three teams could be heading very close to a record low. These are signs that the competitive balance is moving in the wrong direction with regard to individual leagues and the Premier League as relative to the Championship.

In the Championship, there are concerns about increased dominance of clubs which are in receipt of parachute payments. These are clearly designed to protect relegated clubs financially, but they also give the appearance of the Premier League favouring its own members. The consequence is that parachute payments are harming the competitive balance of the Championship and making it more difficult for other Championship clubs to be promoted. In addition, the high wages in the Premier League—the consequence of the League’s commercial success—are putting additional strain on the finances of Championship clubs which are not receiving parachute payments but find themselves competing in the same labour market.

None of this is easy to correct without the risk of creating adverse consequences elsewhere. The expert panel, or whoever will make this decision, will require all the analytical help it can muster, along with very clear criteria. This is a complex challenge. The amendments, which I support, are seeking changes to the mechanism for finding agreement on financial distributions that are less adversarial, less combative and based on clear criteria that can be monitored over time.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, it is a privilege to add my name to this amendment. I am not going to venture into the world of football, coming from the nation from which I do. But I want to draw on my experience of dispute resolution, where I have spent most of my life.

I do not need to add to what has been said about two of the essentials of dispute resolution criteria: principles and evidence. That has been done by the noble Lords, Lord Burns and Lord Birt. I will make five points, drawn from my experience and that of many others, about a dispute resolution process.

First, and most important, is the examination of the subject matter of the dispute that will arise if there is no settlement. If one looks at what is in the Bill and the process that has been selected, I accept that it is seen to work in the context in which it is used for settling a baseball player’s salary, a tariff rate or some kind of price or rate, but it is not fit for the purpose of what this is designed to deal with, which is a careful, calibrated and, above all, fair evaluation of the distribution of substantial sums of money. Everyone has said so far that this has to be fair and careful; the final offer resolution system used in the context I described does not do that.

Secondly, experience has shown that the best panel for dispute resolution is where one party chooses one arbitrator, another party chooses the other arbitrator or member of the panel, and the experienced lawyer chairs it. There are two reasons for that. First, the ability of a party to appoint gives that party confidence in the tribunal—it is constituted by that party’s assent. Secondly, I fear that there may be a misapprehension as to the role of a lawyer. The point of having a lawyer as chair is that he is experienced in guiding a dispute resolution process; it is not legalistic, though some may think so. I can assure noble Lords that if you have a highly contested dispute overseen by someone without experience—as I regret is likely to be the case if one gets to dispute resolution in this—disaster ensues.

Thirdly, it is important to bear in mind one other point. Even if after expert mediation you cannot reach a resolution that is acceptable to both, you must recall that there will be a loser and a winner; and the loser has to live, in this particular context, in a good long-term relationship with the victor. That is particularly important where the dispute is not the price of something, or who is right and who is wrong, but what is a fair distribution. For a decision to be seen as fair by the loser, which is particularly important if you are a decision-maker because you want the loser to feel he has had a fair process, the panel must be able to reach its own independent judgment and not be bound by one or other of the offers that are on the table; and ex hypothesi, it will be the offer of the winner that has triumphed, and that will not be seen as fair.

Fourthly, experience of businesses where there is outside investment shows how important it is for a dispute resolution process that affects the business to be seen—and it is perception here that matters—to be based on a fair process and the independent judgment of the panel that resolves the dispute, and not the kind of Russian roulette process, as I think it has been described, in the Bill. Applying that experience, it seems to me that the procedure for dispute resolution, in the context we are talking about, will encourage investment.

Finally, there must be a safeguard. The Bill has a safeguard in one sense: there are the procedures in Clause 81 and 82 and Schedule 10 for a review. However, what this amendment has is a fine-tuned procedure, which is must more precise and very limited.

It seems to me that, if you look at those five highlighted points, the only conclusion you can come to is that the procedure in the Bill as a matter of dispute resolution is not fit for purpose, whereas that which is in the amendment is.

[Baroness Evans of Bowes Park (Con)]

My Lords, I support the amendment from the noble Lord, Lord Birt. As I said in Committee, I believe that the binding arbitration model that his amendments set out is unquestionably better than the proposed backstop mechanism in the Bill currently. In particular, Amendment 72 fills a glaring hole in the current process: that is a transparent and clear set of criteria against which the expert panel in this process will make its decision.

It is clear that the noble Lord and his colleagues have thought very deeply about their proposals and have tabled a comprehensive package of amendments. Indeed, their contributions have shown a breadth of experience and expertise that they have brought in developing them. Therefore, I very much hope that, even at this late stage, the Minister will accept these amendments, and her colleagues in the other place can use the passage of the Bill to finesse and improve them if the Government are concerned, for instance, about certain elements of drafting. I commend these amendments to the Minister and hope she will look on them favourably.

[Baroness Brady (Con)]

My Lords, I offer support for the broad approach of the noble Lords led by the noble Lord, Lord Birt, who have tabled the amendments in this group. I do not agree with every element of the proposed new process, but I appreciate that this idea, to replace the current mechanism with a structured commercial arbitration process, would be a substantial improvement on the current flawed and high-risk process —a process designed largely by the previous Government and not a mechanism recommended by the fan-led review. I believe these amendments would deliver a better process for the EFL as well as for the Premier League—better for all of football—because they would make the backstop process more transparent, more predictable and therefore lower risk.

In Committee, the noble Lord, Lord Birt, made an incisive and compelling case for change, as did the noble Lord, Lord Burns. He has done so again today, demonstrating the virtues of balance, nuance and good sense—all qualities that are excluded from the operation of the existing backstop process. The current backstop mechanism is fundamentally flawed. For example, the 28-day mediation process amounts to little more than mandating a conversation between parties, and of course then the parties have to go back and discuss those conversations with their clubs, which takes a lot longer than 28 days. It also creates no structure to identify areas of compromise, nor does it establish proper incentives for genuine negotiation. It does not even require both parties actually to make a proposal, so neither party’s position is flushed out. In practical terms, it means we might as well jut skip directly to the final decision.

The current process will leave the expert panel examining two highly divergent proposals, which will come out of the blue, with no arguments properly aired ahead of that decision. By contrast, the amendment before us introduces significant advantages. First, the three-person panel, with two representatives selected by both the Premier League and the EFL alongside an independent chair, mirrors successful approaches used throughout football arbitration. Crucially, the same panel would make the final decision, having heard all the arguments throughout. Secondly, an extended 90-day arbitration period would allow for proper engagement rather than the perfunctory approach currently proposed. Thirdly, and crucially in my view, the requirement for structured offers to be put forward, scrutinised and then defined, introduces a dynamic entirely absent from the current model.

18:15

By identifying areas of compromise and providing feedback, the panel would progressively narrow the scope of disagreement. By the time you reach the final decision point, many contentious issues will have already been resolved and taken off the table. What is particularly attractive about that stronger structure is that, even if the Government retained a binary final offer process, it would already have significantly de-risked such a decision by narrowing down the points of contention.

This would address one of my major concerns with the current backstop: that it could enable wholesale changes to financial structures that sustain the entire football pyramid, against the will and the interests of one of the parties. Clearly, to maintain the growth and success of English football, we need a system that delivers evolution, not revolution.

I do have some reservations. For example, the criteria for making the final decision are too prescriptive in my view. Similarly, I do not agree with some of the revisions to the “state of the game” process, and I do not believe it should be up to the regulator to decide how long the parties should be able to contract for. However, in the end, the current process is so flawed that we should not let the perfect be the enemy of the good. The core process outlined by the noble Lords’ amendments would represent a substantial overall improvement. It is a proven, knowable process; it is fairer and would reduce legal, political and economic risks.

The health of the entire pyramid matters profoundly to all of us, which is why we need a mechanism that respects its complexity, not one that is reductive, crude and intolerably risky for both sides. I hope these amendments and the debate they are encouraging can be an important step in creating a process that is fairer for all sides, more balanced in the outcomes it delivers, and more respectful of football’s intricate financial architecture, as well as the rights and interests of all parties.

[Lord O'Donnell (CB)]

My Lords, I support this amendment. I should declare my interest: I am passionate about football. Wembley has been mentioned, and I remember my first trip there was in 1968 to see my team, Manchester United, win the European Cup—alas, that may not happen again for a while. Like the noble Lord, Lord Birt, my former boss, I was at Wembley in 1973 and 1974; unlike him, I was playing, but it was not quite the same crowd, because it was the Oxford v Cambridge match, but I was there.

I will not repeat all the excellent arguments of the noble Lords, Lord Birt and Lord Burns, and the noble and learned Lord, Lord Thomas, but I support them all. We are now observing the Government having issues with regulators, saying they are not taking due account of growth. I think this tells you, when setting up a new regulator, to think very carefully about what you want them to consider. These amendments go into detail about that; that is absolutely important, because the current process has this absurd system where there are two numbers and you have to choose one. When they are trying to work out the right balance, they need to take account of these factors, and these factors should be made clear.

There are two aspects to this. The first is to make things clear. The second is: if you want fairness and competitiveness to be really important, you also need guidance about trade-offs. In my experience dealing with regulators, those are some of the most difficult issues—that is where politics gets involved—so we need to be clear what we are asking the regulators to do, what they should be doing and what they should be referring to others.

We need clarity on the role of the regulator, guidance on inevitable trade-offs and, ultimately—I agree with many here—we need fairness. We must keep the Premier League at the pinnacle of the global game. If we succeed in that, then Premier League clubs will repeat Manchester United’s 1968 performance and win the European competitions.

[Lord Hayward (Con)]

My Lords, I begin by asking the Minister, when she responds to this debate, to identify specifically whether she intends to accept the amendments in the names of the noble Lord, Lord Birt, and others now or to change anything for Third Reading. I believe that we need absolute clarity of the position both for this and future debates.

I suggest that the Minister should look at the people proposing this amendment. This is not some party operation: we have a former head of broadcasting organisations who, as he identified, spent his time negotiating the original football broadcasting rights; a former Lord Chief Justice; a former senior civil servant; and a current senior lawyer. It is important that the Minister asks herself why it is impossible for her and her team to accept the carefully considered and detailed amendments that we are debating.

When I spoke at Second Reading, I identified a willingness to consider the proposal as it is in the Bill because, unlike the noble and learned Lord, Lord Thomas, I have faith in people, other than just lawyers, able to take an impartial decision. I speak, as I have identified previously, as somebody who has spent many years negotiating with trade unions—and I use the word “with” deliberately, as I was across the table from them. I always regarded it as a failure if we did not get to an agreement between management and the trade unions.

I have considered what we are talking about carefully. I have not discussed it with my colleagues, but have looked at my industrial experience and asked myself whether the proposal put forward by the Government or that put forward by the noble Lord, Lord Birt, is better. There is an inherent misunderstanding of what we are talking about here. As the noble and learned Lord, Lord Thomas, identified, we are not talking about two sides. Earlier today, the noble Baroness, Lady Taylor, referred to the different levels of the competition—the Premier League, the Championship and the lower leagues—so it is not a question of one versus the other because, as sure as eggs are eggs, once you get into the discussion about allocation of resources, you discover that there are not two sides and a pendulum that swings from one direction to the other. There is a series of different interests all the way up the league table to the absolute top. Therefore, you cannot ask us to accept a process that awards to one side or the other, when there are not in fact two sides but several sides, which will respond very differently depending on where they are in the league structure in any season.

I started by asking the Minister a very serious question, which I will repeat: can she please give a very clear indication to the Chamber of what the Government’s view is of the very serious, excellently drafted and well-debated proposal from the noble Lord, Lord Birt, and others?

[Baroness Taylor of Bolton (Lab)]

My Lords, I want to say a few words, because the whole House acknowledges that the noble Lord, Lord Birt, is trying to be constructive here. He, with his colleagues, has produced some incredibly detailed amendments, and that is partly what concerns me. I am not saying that there is no merit in his approach, but I think that some of the conditions are potentially overburdensome.

Will the Minister remind the House of the purpose behind the backstop? As I understand it, the backstop was there to encourage parties to come together, discuss the situation and try to reach agreement. That is so important, because we have had the absence of agreement in recent years because, I think, of the stubbornness of one party.

I therefore worry that the amendments from the noble Lord, Lord Birt, and his colleagues are overprescriptive. He mentioned several of the problems that exist in football today, such as the level and unsustainability of players’ wages and the need for stadium improvements. All are relevant and important to those of us who are concerned about the future of football but, if we are going to be prescriptive about what comes in at that last stage, we may get into difficulties. I hope that the “state of the game” report, which he mentioned and which is extremely important going forward, will deal with some of these issues.

I would like to agree with the noble Lord that all of football is two sides of the same family, but I am not sure that that has been the experience of the last few years in the negotiations between the Premier League and the EFL. It certainly is not a balanced debate or discussion in terms of their powers. I understand the noble Lord’s wish to have levels of arbitration, but we must be careful not to cause delays or take the pressure off parties to come to an agreement between themselves.

[Lord Pannick (CB)]

My Lords, I added my name to my noble friend Lord Birt’s series of amendments and thank him for the time and effort that he has devoted to producing them. I also thank the Minister, the Bill team and the Secretary of State herself for the amount of time that they have devoted to discussions with me and many other noble Lords on this complex topic of the distribution of revenue and the resolution process.

I entirely support what has been said today by my noble friends Lord Birt and Lord Burns and by my noble and learned friend Lord Thomas: a formidable forward line—the Pelé, Messi and Bobby Charlton of this debate. I will add a response to the concerns that some noble Lords and perhaps the Minister have about these amendments, which have been expressed by the noble Baroness, Lady Taylor, and are in the briefing to noble Lords from the EFL. There are two main concerns that need to be addressed.

First, there is a concern that we have agreed that the Bill is to be light-touch regulation when we have a complex series of amendments here—and they are complex. My response is that the distribution of revenue and the resolution process are complex matters. We are addressing the distribution of millions of pounds, which is vital to the financial stability of clubs outside the Premier League, and this money is to be extracted from Premier League clubs. The mechanisms for that process have to be effective and fair. They need to set out how this is to occur in detail and by reference to what substantive principles. As has been said, with all due respect to those who drafted this Bill, the current provisions lack proper detail on evidential basis and procedures that are adequate to ensure a fair result, and they do not contain the substantive criteria that are required. Yes, we could regulate this important matter in a much simpler manner, but the detail is absolutely vital in this context to ensure efficacy and fairness.

The second criticism that has been made is that expressed by the EFL in its briefing document. The EFL is worried that the Birt amendments will result in an invasion of lawyers—as they put it, “in particular, expensive lawyers”, God forbid—who will be briefed by the Premier League. The EFL says that it will not be able to compete. As the EFL has expressed this concern, it needs to be addressed in this debate.

18:30

I of course declare my interest as a lawyer and, on a good day, an expensive lawyer. Speaking from 45 years of experience as a practising barrister, I would say to the EFL that expensive lawyers are not necessarily the most effective lawyers in a particular context; other counsel are available. It is also important to note that the issues in dispute in the present context are not legal issues. We are concerned with an assessment of the appropriate sum—based on the football factors set out by the noble Lord, Lord Birt, in his Amendment 72 —if the mediation phase, where lawyers are completely useless, does not produce a result. That result will depend less on legal expertise than on solid football experience: in particular, the needs of the non-Premier League clubs. This is a context where expensive strikers will be less effective on such a muddy pitch than experienced defenders.

If the noble Lord, Lord Birt, is going to press his amendments to a Division today, he will certainly have my support—but, like the noble Lord, Lord Hayward, who made what I thought was a very wise intervention, I hope that we will not get to that stage. I hope that the Minister, having thought about this matter and having listened to this debate—she has always engaged with what has been said on this Bill during the course of these debates—will feel able to tell us today that this is a topic on which she and her officials would like to think again. I hope she will tell us that, as it is such a difficult and important topic, she wants to see whether the Government, on reflecting further on the amendments from the noble Lord, Lord Birt, might wish to improve the Bill by incorporating at least some of those amendments and bringing back a further amendment at Third Reading.

In light of the debate that we have had, I hope the Minister will think that that is an appropriate step to take today. In my view, that would be in the interests of what we are all seeking to promote: the interests of football.

[Lord Sentamu (CB)]

My Lords, I will just add a penny’s worth. In the Bill, there is a backstop. Let us remember the history: the backstop was brought in to sort out the trade agreements after Brexit, and how Brexit would operate in Northern Ireland. Few people understood what a backstop was, and that was part of the trouble. We had to find a better way than what the backstop suggested.

Listening to the wonderful words of the noble Lord, Lord Birt, as well as the noble and learned Lord, Lord Thomas, and the noble Lords, Lord Pannick and Lord Burns, I hope noble Lords will forgive me for saying that they sounded to me very much like what Saint Paul writes in his letter to the Corinthians, chapter 13. The Corinthians were fighting among themselves. Who was better? Who had more gifts? “I’m for Paul”. “I’m for Apollos”. “No, I’m better than you are”. And Paul says, “Okay, fine. Let me show you a better way”. He talks about love. He talks about faith. He talks about hope. That was the better way.

What is being proposed by these noble Lords is a better way—a better way of resolving disputes that have to do with football. As I said before, football clubs are tribes. They think theirs is the best. Of course, we have to congratulate Newcastle. I live in that part of the world. I shouted a lot, even though I was watching on television, and lost my voice in the process. Football clubs have a tradition and a history; they are tribes. If you give them a backstop, you may be there for I do not know how long. The dispute resolution that has been recommended would be a better way of doing it.

Since we are doing regulation as a new thing, which has not happened in this country before, people need to have confidence that what you have written is not another sham rock on which this ship will find itself broken apart. A backstop sounds good but, in practice, I am afraid it has not worked so far, because everybody abandoned it.

So, I urge the noble Lord the Minister—she may feel “No, I haven’t got the authority to oppose this”—that it would be much better, when you come to respond, to say that you will take this amendment away and bring it back again at Third Reading. She may still reject it then, but it would be worth giving this some thought. It would help the House not to go through a system of rejecting every amendment. I have voted against some amendments because I was not sure they were helping the Bill—but if this one is pressed to a vote, I will definitely vote for it. But I agree with the noble Lord, Lord Pannick, that that is not the better way. The better way would be for the Minister to take it away and have a think about it so that, at Third Reading, it will come back.

[Lord Addington (LD)]

My Lords, we have heard a great deal of eloquence. This is a subject where there has been an almost seductive charm coming at me. There has also been the novelty of the noble Lord, Lord Pannick, applying for a pay cut; that is beyond belief.

What has always struck me is that this is a complicated process, where you have a big beast and a smaller one. The Government’s attempt has been to bring this forward. It may not be the most elegant solution but, let us remember, it is supposed to stop you getting there.

We have had years of this. Anybody who has been following this Bill, waiting for it to come forward, has had years of people not agreeing. We have had years of entrenched positions, of people thinking, “Oh, you have to have us as the greatest league in the world, otherwise it doesn’t work”. No—you have to be profitable. You cannot guarantee that the Premier League will be in a dominant position. That is what competition is. You have to have something that works, where people have to come together and talk.

Is the Government’s solution better than the one from the noble Lord, Lord Birt? I think the thump of hard reality is something we need. I will quote the noble Baroness back to her. I said that all sport tends to suffer from people sitting in darkened rooms, talking about themselves to themselves. The Minister said, “No, in this case, it’s people sitting in darkened rooms refusing to talk to each other”.

That is something I have carried through on. We have had people defending entrenched positions and people saying, “It is not fair”. They have changed over the course of this long debate. The first people to really irritate me were those in the EFL, two or so years ago, when they started on this. There has been no compromise here, no movement and no understanding of the family. If it is a family, it is in a soap opera somewhere.

So the Government’s position is the one that I would prefer, although I would not say that I am terribly happy with either. I look forward to what the Minister has to say. At the moment, I am slightly more in favour of what the Government are bringing forward.

[Lord Stern of Brentford (CB)]

My Lords, I rise as a supporter of AFC Wimbledon, a noble club, the great romantic story of the 20th century in British football—a club that was stolen, and a club that restarted and reinvented itself. That is the spirit that football is all about: the local clubs, with local supporters. Those clubs need protection, and they need to have it explicitly stated that they and their interests will be carefully considered. That is why I support this amendment. I draw noble Lords’ attention to the criteria set out in proposed new subsection (3) in Amendment 72. That is what would give the lower-league clubs the protection that they need. The people who hire the young people we train are dependent on those revenues and on support in this kind of way. I urge noble Lords to support this amendment.

[Lord Markham (Con)]

Over many days and probably 300-plus amendments we have discussed many points, but in my opinion this is probably the most important and significant of them all. Unlike any other regulator, this set of clauses gives this regulator the power to take money from one part of the organisation and give to another. You do not see a regulator being able to take from Severn Trent and give to Thames in the water industry, or from Barclays to NatWest in the banking space. Without doubt, this is the most important thing that we are talking about here: giving power to a regulator that is unheard of in any other domain.

I must admit that I was taken aback by the Government’s suggestion. Again, in all this there is no doubt that everyone is trying to get the best approach and that we all sincerely want what is best for football, but I hear the point made by the noble Lord, Lord Birt, that the pendulum mechanism really is untried in this domain. There is a real risk of gaming and, as mentioned, Russian roulette.

Instead, as an alternative, we have here a very thoughtful approach—maybe not put forward by a Pelé, a Bobby Charlton or a Messi, but put forward by a former BBC director-general who dealt with many media sports rights; a former Lord Chief Justice; a former head of Ofcom; a former head of the Civil Service; a former Archbishop of York; a distinguished economist; and a distinguished and sometimes expensive sports lawyer. I think we would all agree that we probably have a Pelé, a Messi and a Charlton of this subject matter before us today, and that we would be very wise to take on board all the comments, knowledge and vast experience that they bring.

That is why for me the key question was put by my noble friend Lord Hayward: whether the Minister is willing to consider this further. I know that she has spent a lot of time on this subject, as have the Secretary of State and other Ministers, and we are grateful for that, but it is worthy of further time, given the importance of what is before us today. I request that this be brought back as a commitment at Third Reading.

I am nervous that we will just get an undertaking that this will be considered, because of course it still needs to go through the other place, and we know that the other place has a large government majority without the benefit of the learned Cross-Bench Peers we have heard from today. I will listen carefully to the Minister’s words and the response to them from the noble Lord, Lord Birt, but I note that any Peer is able to divide the House. From our side, if we do not feel we have the undertaking that this will be brought back at Third Reading, we will seriously consider dividing the House.

18:45

[Baroness Twycross (Lab)]

My Lords, I thank the noble Lords, Lord Birt, Lord Pannick and Lord Burns, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling the amendments in this group. It is indeed an impressive team, as the noble Lord, Lord Pannick, stated. I particularly thank the noble Lord, Lord Birt, for his considered engagement and persistence, and for the time he spent considering ways in which we could improve the backstop process for the good of football, which is what the Bill is intended to provide.

I am grateful for the contributions from other noble Lords co-sponsoring the amendments and other noble Lords from across your Lordships’ House who have contributed to debates and engaged constructively during discussions and during this debate. We have had a series of productive meetings exploring some of the aspects of the model that were not discussed in detail in Committee.

If I may give a personal view, as someone who has learned a huge amount through the passage of the Bill and been on an incredibly steep learning curve, I think it is unfortunate that the tone and nature of the debate in Committee at times prevented these sensible discussions taking place on the Floor of your Lordships’ House. However, I am grateful to the noble Lord, Lord Birt, and others, as they have raised a series of important questions that have helped to inform our government amendments in this area. I genuinely appreciate his and other noble Lords’ time and expertise. I particularly appreciated how the noble Lords, Lord Birt and Lord Burns, viewed the draft legislation with the regulator and the regulated in mind, using their considerable relevant experience to provide fascinating and useful insights.

We have heard the view of the noble and learned Lord, Lord Thomas, with his experience in dispute resolution. The IFR needs effective tools and, as the noble and learned Lord said, the tools and the approach should be fair and careful. I add to his point that they also need to be seen to be fair.

The noble Lord, Lord Hayward, asked for a specific commitment. While I recognise his concerns, we do not think it would be possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that, while we are sympathetic to the intent of the amendments tabled by the noble Lords and the constructive way in which they have engaged, their approach differs significantly from existing drafting. We therefore do not think there is enough time to conclude discussions on these important differences at this stage or before Third Reading. We kept the model—

[Lord Hayward (Con)]

I thank the Minister for answering as she has, but implicit in what she said is that the Government might find a way to introduce amendments when the Bill goes to the other place. Can I please seek clarification as to whether that is what she intended to say, or whether that was just something that would take it further down the road?

[Baroness Twycross (Lab)]

The only commitment I will give is the one I have in my speech. We do not think it is possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that while we are sympathetic to the intent of the amendments, they differ significantly from the existing drafting.

As I started to say, we kept the model chosen by the previous Government. This model is intended to create the right incentives. A number of noble Lords, including my noble friend Lady Taylor, spoke of the intention behind the current model. The final offer mechanism is designed specifically to address unequal negotiations between parties with power imbalances such as those that naturally arise in the football industry. The noble Lord, Lord Addington, said it was designed for people not to get there. It is actually designed not to be used.

The process as it stands in the existing legislation heavily incentivises reasonable proposals, since an unreasonable proposal has a very high chance of rejection when compared to a more sensible competing offer. We must maintain this incentive—

[Lord Markham (Con)]

My Lords—

[Baroness Twycross (Lab)]

If I may, I will get through the points and finish; I am happy to give way if I do not answer the noble Lord’s point.

Our objective is to ensure that the backstop effectively pushes leagues to co-operate—the point that I think my noble friend Lady Taylor of Bolton was driving at. This was, and remains, the rationale for the existing drafting and model adapted by the previous Government, and in the Bill brought back by this Government to your Lordships’ House.

Alongside this, we want to ensure that the model is light touch—to echo a point made by the noble Lord, Lord Pannick—low cost, flexible and has a clear process. In considering strengthening the model, we must also ensure due consideration, and that appropriate engagement with the relevant stakeholders takes place.

We recognise the intent of the proposed amendments in supporting these objectives, including how the process is triggered, how mediation is conducted and how a final decision is made, including the criteria for a decision. I know that the noble Lords’ proposals have the best interests of football at heart and are based on the huge amount of experience of all those who have signed the amendments. The department will continue working to ensure that the backstop delivers the right balance and the right result for football. This is our shared goal.

I understand that the noble Lord may still wish to divide the House, given that I cannot give a firm commitment at this stage or commit to bringing something back before Third Reading. But throughout the Bill’s passage and consideration of amendments in the Commons, we are very happy to engage with the noble Lord, Lord Birt, and noble Lords who have signed up to his amendments, as well as with other noble Lords with an interest in this area, with the hope of reaching a more amenable compromise before Royal Assent. With that in mind, I ask the noble Lord to withdraw the amendment.

[Lord Markham (Con)]

If I may, I will make what I hope is a helpful suggestion. The Minister mentioned the lack of time ahead of Third Reading. It is my understanding that it is within the Government’s power to delay Third Reading in order to give sufficient time for this. Given that one of the previous amendments said that we would not put forward measures that would have an impact during a season, and given that we all accept that this legislation will not be passed before the beginning of the new season, there is no practical difference in terms of timing and what that will mean. We have a real opportunity here, which will not have any timing impact on football but will give us the opportunity to seek the better way mentioned before.

[Baroness Twycross (Lab)]

There are currently no plans to move the timing of Third Reading in your Lordships’ House, but I commit to ongoing discussions with the noble Lord, Lord Birt, and others, who have been extremely considerate in the time they spent discussing their concerns about the current model with me, the Bill team and others. We wish to continue those discussions in the spirit I described previously.

[Lord Birt (CB)]

St Paul, Messi—the compliments have been flying around. For the avoidance of any doubt, despite having two of the leading lawyers in the country on the team, no fees were paid during the preparation of these amendments.

I have to say that if was not a party to this debate, I would have been sitting listening with my jaw dropping open at the quality of the contributions from right across the House. I am genuinely grateful to everybody who spoke—without exception. Forgive me if I particularly mention my noble and learned friend Lord Thomas. If I had been the Minister, I would have said, “I am going to give up straight away”, because his arguments were so completely devastating and convincing.

I am surprised and disappointed by the Minister’s response, which I had not expected. As she knows, I had no desire to divide the House. I had hoped, given the strength of the arguments she has heard, that she would adopt a more conciliatory and supportive line. I ask her, if she does not mind, recognising that time is not on our side and the Bill is going to go to another place: is she willing to accept my colleagues and I and others from around this House having a meaningful debate about the re-engineering of the backstop, in line with the arguments heard from all over the House today? It is possible that I am not clear on what it is that she is saying.

[Baroness Twycross (Lab)]

I apologise to the noble Lord if I was not clear. I am very keen to continue to have ongoing debate and dialogue with the noble Lord and his co-sponsors of the amendment, in a similar vein to the conversations we have had up until now. I apologise if I did not make that clear in my speech. That is absolutely the intention, but unfortunately, I cannot commit to bringing something back before Third Reading.

[Lord Birt (CB)]

Obviously, I do not expect the Minister to commit, but she has always been very generous in the past at inviting people in for talks. Let us be honest, there have been some changes to the Bill, although not many. Does she think there is a reasonable chance that we can fundamentally re-engineer the backstop process?

[Baroness Twycross (Lab)]

I am really sorry but I cannot commit to that, but I can commit to the ongoing discussions.

[Lord Birt (CB)]

I am afraid that I do not think the Minister gives me any choice. I will test the opinion of the House.

18:56

Division 5

Ayes: 175

Noes: 207

19:07

Amendment 59 not moved.

Amendment 60

Moved by

[Lord Markham]

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

[Lord Markham (Con)]

My Lords, I must admit that this group of amendments feels a bit “after the Lord Mayor’s Show”. I rise to move Amendment 60 in my name and that of my noble friend Lord Parkinson of Whitley Bay. This amendment reintroduces the ability of a competition organiser to contract out of the backstop. This was in the previous version of the Bill, introduced by the last Government. It permitted the leagues the opportunity to come to a mutual agreement to opt out of the backstop mechanism for a longer period of time. To me, this seems entirely sensible, because of course the whole point of a backstop agreement is for it to be a backstop. Clearly, if the leagues have already reached an agreement—and clearly both want to opt out of it all—by definition you do not need a backstop, because an agreement has been reached. So my question is: why should the leagues not be allowed to do that?

Our Amendments 60 and 61 would also remove the short-termism introduced in this version of the Bill, allowing for a flexibly and mutually agreed opt-out mechanism that would be longer term—beyond the five years, if need be—to create the stability required for long-term partnerships. Again, it is commonly known that clubs, leagues and commercial organisations can often decide and come to better deals over a longer- term period, because often the people paying the money are prepared to pay more to get the certainty that a longer period of time gives. So allowing a period such as 10 years instead of five can often lead to mutually beneficial outcomes.

Again, I do not know why we would want to be prescriptive in all this and not allow competition organisers—in this case the Premier League and the EFL—to have the flexibility to come mutually to those agreements. Clearly, they will do so only if they think it is in the interests of both parties, so I do not know why we would wish to deny them the opportunity to reach such a long-term partnership agreement. To me, that is what we should all be about: trying to encourage co-operation between the leagues, instead of being prescriptive, setting out things they cannot do and saying, “No, we’re not going to let you reach an agreement between yourselves”. For those reasons, we propose our amendments, which hopefully are very sensible. I will listen with interest to the Minister’s response.

[Baroness Brady (Con)]

My Lords, I rise to speak to a number of amendments in my name in this group, but first I lend my support to the amendment tabled by my noble friend Lord Parkinson, which would allow the parties to contract for longer than a five-year period. I remain surprised that the Government believe that two consenting parties should be actively disincentivised from ever contracting for the long term by the automatic availability of a dispute mechanism. This cannot be about fairness, transparency or sustainability; it is about turning the backstop into a ratchet, ensuring 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 on.

The EFL, in its briefing for today, says that it would oppose these amendments because they would

“incentivise a larger league to try to coerce a smaller league into a longer agreement that suits its strategic objective over those of the other league, using its financial muscle”.

In one sense, that is right. Basic commercial logic means that the Premier League would be prepared to pay more, to be more ambitious, to do things like selling the EFL’s international rights, which it has asked us to do, and to offer a fixed percentage of pooled revenues, which is the EFL’s big idea, if it enabled long-term certainty. The same basic logic suggests that shorter-term deals will therefore be less ambitious, result in less of a partnership, deliver less regulatory certainty, offer less in subsidy and therefore be less beneficial to both sides. Let us be in no doubt as to the EFL’s positioning. The Government’s support for its agenda is delivering for the EFL clubs in communities and constituencies across the country.

My Amendment 73 introduces what I would call a new “funder assurance principle” into the backstop process. Unless there were compelling reasons not to, this principle would require the regulator to select the Premier League’s proposal if—and only if—that proposal fully meets the IFR’s objectives. This is not about giving the Premier League what it wants; in this scenario, the league would be giving away billions of pounds of revenue in a forced redistribution process. No one could describe that as a win for the Premier League. This principle creates powerful incentives for the league to continue to step up to the plate, but it does so while offering some security and certainty, reducing the intolerable risk of a disruptive, damaging and extreme proposal being selected. That is what is so difficult—legally, financially and political—about the crude and binary backstop process.

My Amendment 74, which could be seen as an alternative position, would place property rights at the heart of the decision criteria. It would simply require the regulator to recognise, and have particular regard to, the fact that mandating the distribution of revenue constitutes an interference with property rights. This is not a controversial principle; it is the cornerstone of our legal system. It is, in fact, language taken directly from the Secretary of State’s ECHR memorandum to the Bill.

I hope that, given how extraordinary this backstop process is, the Minister will not object to putting the most ordinary of safeguards as a statement of existing law into the Bill. It is surely important for the IFR to be reminded of the public law principles that it must have in mind when taking property from one party and transferring it to another.

19:15

My third amendment introduces essential conditionality into the process. This is where I ask all noble Lords to reflect particularly carefully on the implications of the backstop mechanism. The amendment would require recipient clubs to demonstrate how any funds received would directly further the primary principle of the IFR—protecting and promoting the sustainability of English football. The amendment highlights a critical reality that has been largely overlooked in our debates. Any funds transferred through the backstop will inevitably come with strings attached.

Taken together, these amendments would create a backstop that respects fundamental property rights while ensuring football’s sustainability. They will provide certainty that when the funder fully meets regulatory objectives, their rights and interests are respected. They would ensure that any redistribution of funds serves its intended purpose through proper accountability mechanisms. I believe that they would deliver fair, effective and sustainable outcomes for the entire football pyramid.

[Baroness Twycross (Lab)]

I thank the noble Lord, Lord Parkinson of Whitley Bay, and the noble Baroness, Lady Brady, for tabling these amendments, and the noble Lord, Lord Markham, for speaking to this group.

On Amendments 60 and 61 in the name of the noble Lord, Lord Parkinson, the five-year timeframe is critical to the effective functioning of the backstop. A set timeframe gives the industry certainty that the regulator can intervene to end the deadlock between the leagues if they cannot agree for an extended period. In addition to this, due to the imbalance in bargaining power between the parties in this case, we do not want to allow a situation in which a league could be coerced into a much longer agreement that essentially renders the backstop unusable.

On Amendment 69 in the name of the noble Baroness, Lady Brady, Clause 61(5) is intended to function as a protection for the interests of relegated clubs, ensuring that final proposals take into account the disproportionate impact that removing or reducing parachute payments will have on them. The amendment would broaden the provision out so that final proposals consider the financial sustainability of all effective clubs, not only relegated clubs, but that change is unnecessary. Final proposals must already address the financial soundness of clubs and the financial resilience of English football as a whole. To be chosen, a proposal must advance the regulator’s objective. Of course, parachute payments may affect the overall balance of leagues, but relegated clubs are the most directly affected. That is why they need the specific protection that the current clause offers.

On Amendment 71, as the House will know from our debates over the past months, the sustainability of English football is at the heart of the Bill. I understand the noble Baroness’s intent, but the sustainability of English football and advancing the regulator’s objective are already explicitly at the heart of the backstop. Clause 7 already requires that, as far as reasonably practicable, the regulator must exercise all its statutory functions in a way that is compatible with the purpose of the Bill. Of course that includes the backstop, and it would not be appropriate to require leagues to set out how their clubs would spend the disputed funds, nor to implicitly require the regulator to approve exactly how clubs spend funds. That would be overly prescriptive and disproportionate.

As I have set out before, concerns surrounding potentially reckless spending by clubs are already addressed in the financial regulation provisions in the Bill. These measures will ensure that clubs have appropriate resources and controls in place to manage their financial risk. For example, clubs will be required to provide up-to-date financial plans, backed by appropriate financial resources, which will be stress tested. This is the most appropriate way to address how clubs spend their money.

The noble Baroness’s Amendment 73 would require the funder’s proposal to be chosen by default, as long as it met a minimum level of consistency with the principles in Clause 62. However, the fundamental aim of the backstop process is to bring balance to a negotiation between two parties where one has significantly more bargaining power than the other. That means impartiality is key and no party can, or should, be favoured.

On Amendment 74, we understand the concerns regarding property rights, and I take this opportunity to reassure the House. The provisions relating to distributions allow for interference with property rights, but that interference is lawful; it is proportionate and in accordance with the law. Most importantly, any interference would also be in the public interest. The backstop can be used only in limited circumstances where a clear issue has been identified. For a proposal to be chosen, it has to be in line with the regulator’s objectives; there is, therefore, no situation where the proposal chosen is not in the public interest. This is set out in more detail in the ECHR memorandum that accompanies the Bill. We are confident that the current drafting of the Bill, as well as the requirements of the Human Rights Act, ensure that property rights must be respected.

I move on to the government amendments in this group, Amendments 68 and 89. We have listened to the concerns raised by the noble Baroness, Lady Brady, and fellow Peers that it is imperative that financial sustainability of relegated clubs is protected under the backstop. We argued in Committee that this protection was already implicit in the Bill, but these amendments put it beyond doubt. If the backstop is used to resolve questions relating to parachute payments, the leagues must address the sustainability of relegated clubs’ finances in their final proposals. We hope that that clarity will ease the concerns of clubs that face relegation.

With regard to Amendment 62, we want to ensure that our policy intention is clear. The backstop is intended to be a last-resort power, only to be used if another regulatory intervention would not achieve the same result. We have therefore tabled an amendment adding a requirement to the list outlined in Clause 59(2) covering the considerations that the regulator must take into account before triggering the backstop process. This new requirement ensures that the regulator must consider whether any of its other functions would achieve a similar result before approving an application to trigger the backstop process. This change demonstrates clearly that the backstop will be used only if other regulatory interventions would not solve the problem.

Amendment 63 requires the regulator to outline any findings in its most recent “state of the game” report that it considers relevant to the question or questions for resolution. The regulator must outline this in its notice to trigger the backstop process. We have always been clear that we expect that the “state of the game” report will play a crucial role in the decision-making process for the backstop. However, by tabling this amendment we have made this commitment explicit in legislation. This will give clarity to the leagues as to how the findings of the report could shape the backstop process. It will also provide reassurance in the Bill that the “state of the game” report will be published before the backstop process can be triggered. The findings of the “state of the game” report will be crucial evidence to inform the regulator’s decisions, including those made as part of the backstop process.

Finally, on Amendment 66, we acknowledge the concerns raised by Peers, most notably the noble Lords, Lord Birt and Lord Burns, both in your Lordships’ House and in meetings since Committee, that the current drafting of the Bill has a hard deadline that puts an automatic end to the mediation phase. While it is important that the backstop process comes to a timely conclusion, we understand the concern that parties may be timed out due to the statutory deadline for the mediation phase being triggered. To be clear, we do not want the mediation phase to come to an arbitrary conclusion if further useful discussion could take place. The Government would strongly prefer an industry-led solution, and we hope the mediation phase will facilitate this, so we have tabled an amendment to allow the mediator to request a single extension of the mediation process, up to 28 more days. This will allow for productive discussion without extending the process unreasonably.

For these reasons, I urge the noble Lord to withdraw his amendment, and I ask for your Lordships’ House’s support on the government amendments in this group.

[Lord Markham (Con)]

First, I thank the Minister for the points that she has made, and particularly the government amendments, which show in a number of places that the Government have been listening to the points raised in Committee. We are grateful, as all those things help to progress and make it a better Bill.

At the same time, it is a shame that the Minister is unable to accept Amendment 60. It still seems strange to me that, when the Premier League and the English Football League have mutually reached an agreement, we are saying that they are not allowed to do it—because the word “backstop” implies that a backstop should come in force only when the Premier League and the English Football League have not agreed. Here we are saying that we are going to set preconditions on what the EFL and the Premier League are able to agree. That all remains strange to me, and a mystery as to why the Government should not be supportive of allowing the Premier League and the English Football League to come to an agreement.

I turn to Amendments 69 and 71, spoken to by my noble friend Lady Brady. It seems entirely reasonable to ask clubs to put down what they plan to spend the money on. Again, it seems entirely reasonable that, when we are talking about wanting to ensure sustainability, the clubs receiving or making the bids for large amounts of money as part of redistribution should need to make a case that the things that they intend to spend the money on are towards a long-term sustainable model in terms of investment in the club and the infrastructure of the facilities there. Again, it seems strange to me that it is not something that the Government or the Minister would say was entirely in keeping with the intention of what we want to try to do on this. As a result, I believe that the Bill would be better off for the inclusion of these amendments, but I regrettably withdraw my amendment at this stage.

Amendment 60 withdrawn.

Amendment 61 not moved.

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

Amendments 62 and 63

Moved by

[Baroness Twycross]

62: Clause 59, page 48, line 34, at end insert “, and
(c) considers that the question or questions for resolution could not be resolved within a reasonable period of time by the IFR exercising any of its other functions under this Act.”Member's explanatory statement
This amendment requires the IFR to consider whether the question or questions for resolution could be resolved by the IFR exercising any of its other functions before deciding to trigger the resolution process.

63: Clause 59, page 49, line 8, at end insert “, and
(iii) any findings in the IFR’s most recent state of the game report that the IFR considers relevant to the question or questions for resolution.”Member's explanatory statement
This amendment requires the IFR to include in the notice under clause 59(5) the findings in its most recent state of the game report that it considers relevant to the question or questions for resolution.

Amendments 62 and 63 agreed.

Amendments 64 and 65 not moved.

Clause 60: The mediation stage

Amendment 66

Moved by

[Baroness Twycross]

66: Clause 60, page 50, line 6, at end insert—
“(6A) The IFR must extend the period in subsection (6)(b)—(a) if requested in writing to do so by the mediator, and(b) by such period as is set out in the request, which may be up to a further 28 days.(6B) The period in subsection (6)(b) may only be extended once.” Member's explanatory statement
This amendment requires the IFR to extend the mediation period by up to a further 28 days if requested to do so by the mediator.

Amendment 66 agreed.

Amendment 67 not moved.

Clause 61: Final proposal stage

Amendment 68

Moved by

[Baroness Twycross]

68: Clause 61, page 50, line 27, leave out from beginning to “require” in line 28 and insert “Where a notice under subsection (3) sets out a question for resolution that relates to relegation revenue (within the meaning given by section 62(3)), the notice must”
Member's explanatory statement
This amendment requires specified competition organisers to include in their final proposal the explanation described in clause 61(5) where there is a question for resolution that relates to relegation revenue.

Amendment 68 agreed.

Amendments 69 to 72 not moved.

Clause 62: Distribution orders

Amendments 73 to 77 not moved.

Schedule 9: Sanctions

Amendment 78

Moved by

[Baroness Twycross]

78: Schedule 9, page 116, line 13, leave out sub-paragraph (3)
Member's explanatory statement
This amendment removes the definition of “Bank of England base rate” in order for it to be moved to the definitions clause.

Amendment 78 agreed.

Schedule 10: Reviews

Amendment 79

Moved by

[Baroness Twycross]

79: Schedule 10, page 117, line 36, column 1, leave out from “the” to “mentioned” in line 37 and insert “taking of any step”
Member's explanatory statement
This amendment is consequential on the amendment to clause 46 at line 39.

Amendment 79 agreed.

Amendment 80

Moved by

[Lord Parkinson of Whitley Bay]

80: After Clause 85, insert the following new Clause—
“Armorial bearingsNothing in this Act is to be read with prejudice to the powers of the Kings of Arms in regard to armorial bearings.”

[Lord Parkinson of Whitley Bay (Con)]

My Lords, Amendment 80, which relates to my favourite topic of heraldry, has already been debated. At the end of that debate on the first day on Report, the Minister very kindly agreed to a further meeting with me and with the College of Arms, which took place this morning. I am going to move my amendment in order to allow the Minister to say what she took from that meeting. On the basis of what I expect her to say, I will not be pressing this to a Division, but I look forward to hearing her.

[Baroness Twycross (Lab)]

I thank the noble Lord, Lord Parkinson of Whitley Bay, for sharing his expertise and enthusiasm on this topic in your Lordships’ House, and for the opportunity to respond on this point. I thank him and the College of Arms for their time earlier today. Before he confirms whether he is going to divide the House, I reiterate that it is the Government’s intention that nothing in the Bill is to be read as superseding or impairing any prerogative powers of the Crown in relation to coats of arms, whether exercised directly by the King or on his behalf by the Kings of Arms. I guarantee that something to this effect will be added to the Explanatory Notes to this clause.

[Lord Parkinson of Whitley Bay]

My Lords, I am very grateful to the noble Baroness, particularly for all the time that she has spent on this niche but important issue. I am also grateful to the Bill team for their meetings, including the one we had today with Norroy and Ulster King of Arms. With gratitude, I beg leave to withdraw my amendment.

Amendment 80 withdrawn.

19:30

Amendment 81

Moved by

[Lord Goodman of Wycombe]

81: After Clause 89, insert the following new Clause—
“Review: cost of complianceWithin one year of the day on which section 15 of this Act comes into force, the Secretary of State must lay before Parliament a review of the financial impact on regulated clubs of complying with the provisions in this Act.”

[Lord Goodman of Wycombe (Con)]

My Lords, I beg leave to move this amendment on behalf of my noble friend Lord Maude. I will also speak to my own amendments, Amendments 91 to 93, 94A and 94B, which are consequential on the Government’s Amendment 90. What all these amendments have in common is that they are all about post-legislative review. To explain them, I go back very briefly to when, in Committee, I tabled a sunset clause suggesting an independent review that would report to the House, with a power to recommend that the regulator either continue, continue under certain conditions or cease to operate. While I am not at all sure that there was a consensus for the sunset clause, there was very clearly a consensus across the Committee for better post-legislative review.

On that score, I am delighted to see government Amendment 90, because it contains, to my mind, some of the key objectives I was seeking to put forward in the sunset clause. If noble Lords read the clause that the Government have tabled, they will see that it sets out a review, it sets out that the objectives of the regulator will be reviewed, and it will even be seen whether the regulator’s objectives remain necessary. This is a very big concession by the Government. If the tone of debate on Report has been better than in Committee, I think it is partly because the Government have moved on several very important elements, one being growth and another being this. I gather that it is extremely rare to put a post-legislative review of this kind into a Bill, and I think the Government should be congratulated on that. I read it as an escape clause for the Government. In the event of the regulator going wrong, there will be this fundamental review, so I think the Government are being prudent in so doing.

My amendments to government Amendment 90 simply seek to ensure that the review is carried out by independent persons—the same sort of independent people I named in the sunset clause—who would then report to the House. My noble friend Lord Maude’s amendment specifically proposes an examination of the financial effects of the regulator on clubs, because he fears they will be damaging. Once again, I am very grateful to the Government for their Amendment 90 and I wait with interest to see what the Minister will say in response to these amendments.

[Lord Addington (LD)]

My Lords, I rise briefly to thank the Government for Amendment 90. It is the sort of thing that improves a Bill, improves the ongoing process of a Bill and means that it is not just dead when it finishes going through its parliamentary life. There probably should be far more of these in legislation, so I thank the Government.

[Lord Moynihan (Con)]

My Lords, I will speak to Amendment 94D and in so doing echo the welcome that the House has given to the Minister on introducing Amendment 90. Amendment 94D focuses on the role of the FA and recognises that when the 2023 White Paper was written and supported by both sides, it expressly backed delegation as a good idea. We understand that the shadow regulator would also welcome the ability to both formally and informally delegate functions to competition organisers, especially around first-line areas such as monitoring and administrative elements of licensing.

My amendment does not require the Government to do more at this stage than recognise that, following the review of the Act, if that report concludes that the regulator’s objectives could be achieved more effectively by delegating an IFR function to the Football Association, at least on the face of the legislation, that would be possible. As I say, it recognises that in the White Paper the Government saw merit in sharing or delegating regulatory responsibilities in certain circumstances. It also begins to address the current complete severance of the umbilical cord between the role of the FA, as the national governing body of football in this country, and the contents of this legislation, and goes at least one step towards addressing the fact that it is imperative to protect and preserve the independence of the FA, not least in accordance with the FIFA and UEFA statutes. We know that legislation that compromises the FA’s autonomy as the primary regulator of football in England would be non-compliant with these statutes. This amendment at least opens the door a little to the FA undertaking its role as the sole regulator of football, which has otherwise been stripped bare by the other clauses.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I rise, rather unusually, to congratulate the Minister. I think this amendment is very important. I am not going to congratulate the shadow Minister, the noble Lord, Lord Parkinson, only because he has been congratulated all night on Newcastle’s win, and I think, “Do me a favour; it’s not him that did it”. Anyway, I wanted to get that out and about.

We have heard some genuinely fine speeches in Committee and even on Report—some of the best I have heard since I have been in the Lords. Just today, the speeches by the noble Lord, Lord Birt, and his colleagues, by the noble Baroness, Lady Brady, and by so many others were passionate and reasoned, with oodles of evidence, and so convincing. But sometimes the speeches have felt a bit more desperate, as though we were banging our head against a brick wall, tearing our hair out, with a tone of, “Is anyone listening? Do the Government understand the genuine concerns about this Bill? This is not just people messing around for sectarian reasons”. So I think it is important to acknowledge a couple of glimmers of hope.

Government Amendment 18 from the other day, saying that the IFR needs to have regard before it imposes any restriction and must consider whether it is necessary and whether a similar outcome could be achieved by less burdensome means, defangs a lot of the things that worry me about the Bill. It at least gives the regulator pause. Yet some of us, especially after today’s debate, are still very nervous about unintended consequences, anticipate trouble ahead and genuinely worry about what is going to happen to a game that has all the jokes about Newcastle and its fans and what it means to them. Imagine a whole nation being disappointed by this Bill if it does not deliver as they think it will and, not only that, damages the game that they are so passionate about.

Amendment 90 is very important. It is important to assess the extent to which the objectives intended have been achieved. I think, though, that it is important that the Government are not just allowed to mark their own homework there. It is one thing saying that there is a review, but who the reviewers are and the form of that review seem rather key questions.

It really is incredible that in the Bill we have a review that is going to ask whether the objectives remain appropriate after a few years; in other words, the objectives of the regulator can be completely changed. What is more, it asks whether those objectives could be achieved more effectively in another way. My answer now—before a review—is yes, which is why we do not really need the regulator in the first place. At least someone somewhere is asking that question.

This matters, and I think it shows that the Government and the Minister have been listening. I therefore urge the Minister to listen now to the smaller amendments in this group that enhance what the Government are trying to do with a little bit more detail. Will she accept this amendment as we finish Report and say, “Yes, I have listened, and we are not going to be an overbearing, overweening supporter of a regulator that will destroy football. We are going to do our best not to do that and will accept these amendments”?

[Lord Norton of Louth (Con)]

My Lords, I will stick to what I know about, and for that reason I will make no comment on football. I too commend the Minister for bringing forward Amendment 90 in response to the debate in Committee. This is a wholly positive development.

As I said then, the House of Lords Constitution Committee in its 2004 report Parliament and the Legislative Process recommended that Bills, once enacted, should be subject to post-legislative scrutiny—a recommendation endorsed by the Law Commission. In 2008, the Government accepted that Acts should normally be reviewed three to five years after enactment, with reviews sent to the relevant departmental Select Committees in the House of Commons.

Since then, not all Acts have been reviewed. Practice in recent years has been somewhat patchy. Some departments have been good at reviewing Acts, others not so. I commend those departments that have undertaken thorough post-legislative reviews and have made Written Ministerial Statements when they have done so.

The Minister said in a recent Answer that some Acts were not reviewed following correspondence with the chairs of the relevant Select Committees. I am not sure how the chairs will know whether or not a review is necessary if they have not carried out a review. This is something I may pursue. However, I am keen to commend those departments that do undertake post-legislative reviews, and I especially welcome this amendment that puts the review on a statutory basis. There are precedents, but not many—as my noble friend Lord Goodman indicated—so I am delighted that we have another.

In essence, the amendment reproduces the normal practice for a review, although it goes a little further in prescribing a draft report and stipulating bodies to be consulted, which constitutes a significant concession. Given that, the amendment is to be welcomed, and I hope it will be emulated by other departments.

I have sympathy with the amendments tabled by my noble friend Lord Goodman; I can see why he wishes to commission a report by an independent body. I suspect the Minister will point out that bodies can carry out reviews if they wish to anyway and doubtless will.

As far as the amendment goes, I think it is to be wholly welcomed. It is a very good development, and it is very positive in showing how the Government have responded to the debate in Committee, which shows the value of this place. I hope the message will go out to other departments to follow suit.

[Baroness Taylor of Bolton (Lab)]

My Lords, I have tabled amendments asking that Parliament should fulfil its role of scrutinising regulators across the board. I am glad that, in this one respect, my noble friend the Minister has taken that on board with this particular regulator in terms of the review that the noble Lord, Lord Norton, has just referred to. Very often, the problem has been that Parliament itself has not been proactive enough. This amendment ensures that Parliament will have to take some notice.

[Lord Hayward (Con)]

My Lords, I will briefly touch on a subject I raised at length in Committee and which we have not touched on at Report: costs and compliance. The Minister, very helpfully—I say “very helpfully”, but I am going to add a “but”—wrote to all relevant noble Lords on 6 March. I have a feeling that this is just the sort of thing that will come up for review once the IFR is in operation.

19:45

On costs, I know that what is identified in the letter of 6 March is merely an indicative possible route. But in itself I can see the potential for costs of any number of hours of legal time being employed to argue what proportion should be allocated to what division, particularly the indication that the six highest-revenue Premier League clubs will be charged more than other Premier League clubs. That is an interesting concept.

There are two other elements I will touch on. First, on page 2 of the letter, it says:

“The IFR is expected to take a club’s specific circumstances into account to relieve potential burdens where possible”.

That regulators will take specific circumstances into account is a new concept to me. Surely the broad principle of a regulator that it will treat people in one category in exactly the same way. I realise that it may vary from the Premiership to the Championship and down to the National League, but the letter implies that there will be specific circumstances taken into consideration. I will be amazed if that is actually the case.

Secondly, I do not understand the distribution of full-time equivalent burdens for the larger clubs and smaller clubs. I think it will come back in one form or another.

My final comment is on the observation in relation to the burden. On the third page, the 6 March letter says

“we anticipate these additional activities are expected to be shared across several roles and levels of seniority”

in the higher levels of the pyramid. However,

“further down the pyramid, a club secretary is most likely to undertake these tasks associated with compliance”.

It seems to me that it is the same burden but there is no difference in terms of the size of the club. It says that work will be taken away from a group of people in the larger clubs, but they are already doing work. It is not as though you are dealing with it by moving the problem to somewhere else. It does not happen like that in business, and I am seriously concerned about the approach that appears to be implied: that the compliance costs and burden will be put on somebody who can do it because they have the time. In business, if you do not have the time to do it, it is an extra cost and an extra burden.

When we come to the operation of the IFR, I have no doubt—as I indicated in my comments in my previous contribution—that the views of clubs will vary enormously depending on their level. At that point, they really will start fighting and employing lawyers.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the noble Baroness, Lady Fox, is right that the congratulations that have been coming my way for Newcastle are entirely misplaced. However, I am sure that the cross-party support the noble Baroness and I gave them on the first day of Report buoyed the team and their success, but it had nothing to do with me. But I can reassure noble Lords that my uncle Barry was probably the person cheering the most loudly at Wembley last night.

I also agree with all those who have welcomed the Government tabling Amendment 90. In Committee, there was cross-party support for looking at how this will all work in practice, from those who are keen to see the regulator up and running swiftly to those who are more sceptical. We had support from the chairman of the Hansard Society and my noble friend Lord Norton of Louth, who watches legislation very carefully. I join the welcome expressed to the Government for bringing forward Amendment 90.

My noble friend Lord Goodman of Wycombe has argued throughout the passage of the Bill, from Second Reading onwards, that greater oversight and post-legislative scrutiny would be needed. I therefore hope that the Minister will look at the further helpful amendments that the noble Lord has tabled today, arguing that it would be better for an independent body to conduct the review of this independent regulator. Again, my noble friend has been very constructive in the points that he has raised.

Amendment 81, tabled by my noble friend Lord Maude of Horsham, which leads this group, covers the same area that my noble friend Lord Hayward has just touched on in his contribution: the cost of compliance with the new regulatory regime. Clearly, since the Bill that was brought forward in the last Parliament, we have seen new things such as increased employer national insurance contributions, the increase in the minimum wage and the further costs to business that will be coming through the Employment Rights Bill. The financial position of smaller clubs takes place in an even more difficult economic environment. We on this side of the House remain concerned that imposing a levy and further regulatory costs on top of these will likely make clubs less financially sustainable, not more.

My noble friend Lord Hayward points once again to the impact assessment, which does not account for the increased costs of hiring. It says that clubs will have to hire more staff to comply with the extra regulation but does not consider that those extra employees will cost more now than they would have done even when we first looked at the Bill. This is particularly severe when it comes to the smallest clubs in the National League. The general manager of the National League, Mark Ives, and the chief executive of Dagenham and Redbridge, Stephen Thompson, have both warned of the potential for the Bill to create onerous consequences for National League clubs which are not only financial but bureaucratic. Mr Ives said:

“We are concerned about the costs … The expectation of how much it is going to cost clubs at a National League level is a huge concern—it may be a small amount of money, but it is a lot to the clubs”.


National League clubs operate with a very small number of staff, with many in Mr Thompson’s words working on only

“two or three people and some volunteers”.

There is a real risk that some of these smallest clubs will struggle with the further burdens that are placed upon them, so I hope the Minister will look at these amendments.

My Amendment 94, which is in this final group, seeks to ensure that the review takes into account the effect of the regulator’s activity on ticket prices. We had a good debate on this during our first day on Report and indeed a Division which was very conclusive, so I will not say anything further about that issue other than to thank the Minister for all the engagement that she has given during and since Committee, ahead of Report and during our two days on Report. We are all very grateful.

[Baroness Twycross (Lab)]

I thank the noble Lord, Lord Goodman, for his amendments and for speaking to the amendment in the name of the noble Lord, Lord Maude of Horsham, and other noble Lords who have spoken during this short debate.

In Committee, Peers across the House raised the topic of evaluating the impacts, efficacy and success of the regulator. I thank the noble Lord, Lord Norton, in particular, for his expertise and time in discussing the topic despite his complete lack of interest in football. I have sometimes found that those noble Lords who have an interest in the details relating to legislation or a regulator come at this topic with a slightly different perspective, which is really helpful, and I welcome his contribution tonight. I am keen to continue discussions on this and other topics with noble Lords across your Lordships’ House—although I must admit that I am quite pleased to be reaching the end of Report.

We agree that it is good practice for the impact of regulation to be monitored and evaluated post-implementation. I am grateful to noble Lords across the House for welcoming government Amendment 90, which will require the Secretary of State to carry out a review of the operation of the Act and its impact on the industry. This must be completed no later than five years after the full commencement of the licensing regime. Among other things, the review will look into whether the regulator has been effectively achieving its objectives or whether they might be better achieved in a different way. This includes explicitly considering whether delegation might be appropriate, for example, to an independent industry body.

As part of looking into the impacts of the regulator on the market, the review will also consider interactions with industry rules and any resulting burdens. It will also be a set opportunity for the Secretary of State to formally consider and set out whether the competitions in scope of the regulation remain appropriate. The report will be laid before Parliament and will lay long-term scrutiny of this regime by this House and the other place.

The noble Lord, Lord Hayward, has been a champion of clubs in relation to costs throughout. In relation to compliance costs and the statutory review proposed, a separate review of compliance costs alone might be unnecessary, duplicating the work of the post-implementation review and creating additional costs. The statutory review will offer an opportunity for a more complete and detailed view of the regulator’s performance, per se, and will therefore be more useful in understanding the costs and benefits of regulation to clubs. It will also capture compliance costs that are more reflective of ongoing costs instead of the initial costs of the first year of familiarisation, although we expect that, in its annual report, the independent football regulator will have due regard to these issues.

I thank the noble Lord, Lord Goodman of Wycombe, for tabling his amendments. I completely understand their intent—namely to introduce more independent scrutiny of the legislation and its effects—but, unfortunately, we do not think it is appropriate for an external third party to carry out this review of the Act. As is common practice, it should be carried out by the Government, particularly because the review may inform future government policy and because its conclusions may include recommendations to add, amend or repeal primary legislation. The Government introduced this legislation, and, in our view, it should be the Government which review whether it has achieved what it intended. However, we completely agree that there should be additional scrutiny, and the intention is that this review will facilitate that scrutiny, for example, by a relevant committee of Parliament. However, it is not for this Act or the Government to direct Parliament to undertake that scrutiny.

On Amendment 92, we have not taken the approach anywhere in the Bill of prescribing specifically where publication must be done. Clearly, the norm these days is for publication online. However, there is no need to mandate where online, as to do so would risk the legislation becoming outdated.

I appreciate the intention of Amendment 81, tabled by the noble Lord, Lord Maude of Horsham: to ensure the regulator is offering value for money and not unduly burdening clubs financially. Ensuring efficiency and avoiding unnecessary costs have been at the heart of the Bill’s development, but the proposed amendment would duplicate the Government’s statutory review amendment and would therefore impose unnecessary additional costs and burdens on the regulator.

On Amendment 94, in the name of the noble Lord, Lord Parkinson, we are acutely aware that ticket prices are a key issue for fans. That is why the Bill explicitly requires clubs to consult their fans on this point. It may well be that the regulator also chooses to look at ticket pricing as part of the “state of the game” report. However, as it is a commercial decision, the regulator will not intervene beyond this. I again reassure the House: we do not believe that an increase in ticket prices would be a proportionate reaction to the cost of the regulator. The levy will be distributed proportionately, and no club will be asked to pay more than is fair and affordable.

An industry that earns over £6 billion a year in revenue and spends hundreds of millions of pounds on player transfers every year cannot legitimately say that it has no choice but to pass the cost of regulation on to fans, particularly since the cost faced by any one club will be relatively low and proportionate to their financial resources. However, if the regulator were to lead to higher ticket prices, this in our view would be captured within the review, which must look at the impacts of the regulator on football in England and Wales.

I turn finally to Amendment 94D in the name of the noble Lord, Lord Moynihan. As I have set out, one aspect of the statutory review will be to consider whether delegation might be beneficial. However, we do not believe that the power to delegate should be provided for in the legislation at this stage. We should not pre-empt the findings of the review, particularly as there is no way of predicting what delegation might need to look like or to whom that delegation might be. We have been clear, as the previous Government were clear, that independent regulation is needed in English football because the industry has shown itself to be incapable. Any decision to delegate back to the industry is not a decision that should be taken lightly, nor should powers established by an Act of Parliament be transferred to private third parties without proper parliamentary process. I am surprised that the noble Lord has tabled this amendment, given the concerns that he has raised repeatedly on delegated powers.

For these reasons, I hope that noble Lords will not press their amendments, and will accept government Amendment 90 when we come to it.

20:00

[Lord Goodman of Wycombe (Con)]

My Lords, I am grateful to the Minister. This has been an extremely positive debate. The noble Baroness, Lady Fox, was right to point out in detail that the Government prepared, in Clause 90, a potential line of retreat. Whether they have or have not, the Government have certainly listened to calls across the House for greater post-legislative scrutiny. I particularly enjoyed the distinguished contribution of my noble friend Lord Norton, who has long displayed a great interest in these matters. Given what the Minister said, I have no intention of pressing Amendment 81 —or the other amendments—to a vote this evening.

Amendment 81 withdrawn.

Clause 91: Regulations

Amendments 82 to 85 not moved.

Clause 92: Minor definitions etc

Amendments 86 and 87

Moved by

[Baroness Twycross]

86: Clause 92, page 74, line 19, at end insert—
““Bank of England base rate” means— (a) the percentage rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets, or(b) where an order under section 19 of the Bank of England Act 1998 is in force, any equivalent percentage rate determined by the Treasury under that section;”Member’s explanatory statement
This amendment, together with an amendment to paragraph 13 of Schedule 9, moves the definition of “Bank of England base rate” into the overarching definitions clause from Schedule 9.

87: Clause 92, page 75, line 15, leave out paragraph (a)
Member’s explanatory statement
This amendment removes the Secretary of State’s power to amend the definition of “football season”.

Amendments 86 and 87 agreed.

Schedule 11: Index of defined terms

Amendments 88 and 89

Moved by

[Baroness Twycross]

88: Schedule 11, page 119, line 8, at end insert—

“Bank of England base rate

Section 92(1)”

Member’s explanatory statement
This amendment inserts a cross-reference to the definition of “Bank of England base rate” into the table in Schedule 11 of defined terms used in more than one place.

89: Schedule 11, page 120, line 30, at end insert—

“relegation revenue

Section 62(3)”

Member’s explanatory statement
This amendment is consequential on the amendment to clause 61 at line 27 and it adds the defined term “relegation revenue” to the table in Schedule 11 of defined terms used in more than one place.

Amendments 88 and 89 agreed.

Amendment 90

Moved by

[Baroness Twycross]

90: After Clause 95, insert the following new Clause—
“Review of Act(1) The Secretary of State must—(a) carry out a review of the operation and effect of this Act,(b) set out the conclusions of the review in a report,(c) publish the report, and(d) lay a copy of the report before Parliament.(2) The report must be published before the end of the period of five years beginning with the day on which section 15 comes fully into force.(3) The report must, in particular—(a) assess the extent to which the objectives intended to be achieved by this Act have been achieved,(b) assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved more effectively in any other way (for example if the IFR could delegate its functions to persons other than those listed in paragraph 17(1) of Schedule 2), (c) assess the impact of this Act and the IFR’s actions on football in England and Wales,(d) assess the interaction between this Act and the rules, requirements and restrictions imposed by competition organisers and whether that interaction is appropriate, and(e) assess whether the appropriate competitions are specified under section 2(3), including whether a competition that is not specified should be specified.(4) In carrying out the review, the Secretary of State must have regard to—(a) the purpose of the Act (see section 1);(b) the IFR’s objectives (see section 6);(c) the IFR’s general duties (see section 7);(d) the IFR’s regulatory principles (see section 8);(e) any state of the game report published by the IFR (see section 10);(f) any annual report submitted to the Secretary of State by the IFR (see section 14).(5) Before publishing the report, the Secretary of State must prepare a draft report and consult the following about the draft report—(a) the IFR,(b) the Football Association,(c) each specified competition organiser, and(d) such other persons as the Secretary of State considers appropriate.”Member’s explanatory statement
The amendment requires the Secretary of State to carry out a review of the Act and publish and lay before Parliament a report setting out the conclusions of that review.

[Baroness Twycross (Lab)]

I beg to move.

Amendments 91 to 94D (to Amendment 90) not moved.

Amendment 90 agreed.

Clause 99:Commencement

Amendments 95 and 96 not moved.