Football Governance Bill [ Lords ] (Seventh sitting)
Thursday 12th June 2025
(3 days ago)
Public Bill CommitteesFootball Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2025 - (12 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Chair
Before we begin, I remind Members to switch all electronic devices to silent. We will now continue our line-by-line consideration of the Bill.
Clause 37
Matters relevant to determinations
Mr Louie French (Old Bexley and Sidcup) (Con)
I beg to move amendment 110, in clause 37, page 28, line 28, at end insert—
“(fa) whether the individual is a member of a proscribed organisation as per section (3) and schedule (2) of the Terrorism Act 2000.”
This amendment requires that IFR, in determining whether an owner or officer has the requisite honesty or integrity, to consider whether the person is a member of an organisation proscribed under the Terrorism Act 2000.
It is a pleasure to serve under your chairship again, Ms Butler. I welcome all Committee members back for day four. Amendment 110, tabled in my name, requires this Government’s regulator, in determining whether an owner or officer has the requisite honesty or integrity, to consider whether the person is a member of an organisation proscribed under the Terrorism Act 2000.
Clause 37 sets out the framework under which the Government’s football regulator must assess whether an owner or officer of a football club meets the required standards of honesty, integrity and competence. This is an important part of the Bill. Football clubs are not like ordinary businesses, as we have discussed; they are institutions rooted in community, tradition and even national identity. Those who control them must be held to the highest standards and supporters quite rightly expect that clubs should be fit to uphold those responsibilities.
The Government’s regulator’s task in clause 37 is to ensure that persons in positions of influence over our national game are financially sound and professionally competent. However, the clause as currently drafted leaves the test for honesty and integrity open to interpretation—arguably too open. That is why we have tabled amendment 110, which provides a clear and unambiguous requirement that, in determining whether a person has the requisite honesty or integrity, the regulator must take into account whether that person is or has been a member of an organisation proscribed under the Terrorism Act 2000.
Let me be clear: this is not about political views, past associations or guilt by implication, but about having a national minimum standard of moral fitness. It should be inconceivable that a person with demonstrable ties to a terrorist organisation could pass the fit and proper person test to own or operate a football club in this country. Football clubs are part of the fabric of British civil society. They are symbols of local pride and national values, and they have international reputations. To allow a person associated with a proscribed group, many of which pose active threats to our national security, public order and democratic way of life, to take a controlling interest in such an institution would be not only morally indefensible, but deeply dangerous.
This is not a hypothetical concern. We live in an increasingly globalised football economy and genuine questions have been raised in recent years about the sources of funding, ownership and political influence across the game. My amendment does not attempt to legislate morality in broad terms; it simply anchors the Government’s regulator’s assessment in existing law, specifically the Terrorism Act 2000, which provides a clear, publicly available list of proscribed organisations that Parliament has already determined pose an unacceptable risk to our way of life.
By incorporating that into clause 37, we do two things. First, we clarify the threshold for what constitutes a failure of the honesty and integrity test, giving both clubs and the regulator a clear reference point. Secondly, we send a signal to not just fans and communities here at home, but investors and foreign Governments abroad, that English football will not be compromised by individuals whose allegiances lie with organisations committed to violence, extremism or the subversion of our national interest.
Football is a global sport, but it must still reflect and uphold our national values. It is not alarmist or over-zealous to say that those who control our clubs must have a character as close to unimpeachable as possible. We are asking them not to be saints—unless, perhaps, they own Southampton FC—but to be the pillars of the community that we already expect them to be.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
That was so bad.
Mr French
I have woken everyone up there.
Clause 37 is an important safeguard, but without amendment 110, it lacks a clear and necessary line in the sand. Parliament has already determined that proscribed organisations represent a threat to public safety and national order. That same logic must apply here. I urge the Government to accept this modest but essential amendment and, in doing so, to help to ensure that our clubs are not just well run and financially sustainable, but led by people whose values are consistent with the country, communities and traditions that they are entrusted to serve.
Lincoln Jopp (Spelthorne) (Con)
It is a pleasure to serve under your chairmanship, Ms Butler. I rise to support amendment 110. I suspect the Minister might say that we do not need to cover everything and that there is a general catch-all measure in the clause, so we do not need to make this amendment.
I will draw the Committee’s attention to a similar case in my own constituency, however, where a member of the public wrote to ask if I could please hurry up his EU settlement scheme application. When we checked with the visas and immigration service, it turned out that he had been subject to a deportation order in 2017, and had indeed been deported in 2017. He had somehow managed to get back into this country illegally and make an EUSS application. He is still subject to that deportation order, yet for some crazy reason, the Home Office still have to go through his application. That is the sort of thing that we should not have to legislate for and that we should not have to state, but sadly we do.
Joe Robertson (Isle of Wight East) (Con)
It is a pleasure to serve under your chairship, Ms Butler. I rise to add my support to the amendment that the shadow Minister discussed very well and clearly.
The point is that the list set out in clause 37(2)(a) to (f), which gives examples of things that would prevent a potential owner from having the requisite honesty and integrity to own a football club, is missing a provision about their being a member of a proscribed organisation such as a terrorist organisation. In football, which is the most international sport and which has very international ownership, it seems particularly sensible to have that provision.
I do not think a terrorist offence is captured by someone being
“convicted of a criminal offence”,
because, as we know, the Terrorism Act 2000 was put in place to introduce various provisions relating to terrorism where it had not necessarily been identified that a perpetrator had committed a criminal offence. The provision in the amendment would therefore be a fair addition to that list.
Of course, clause 37(2)(g) is a catch-all measure that refers to “such other matters”. Nevertheless, the point is that this matter is particularly important and we do not want to leave it to be swept up in a catch-all measure. Of course, if it is argued that it could be swept up in a catch-all measure such as clause 37(2)(g), why have the list in clause 37(2)(a) to (f) at all? I support the sensible and non-controversial amendment.
Stephanie Peacock
It is a pleasure to serve once again under your chairship, Ms Butler. I echo the welcome back from the shadow Minister, the hon. Member for Old Bexley and Sidcup, to Committee members.
I will respond to amendment 110. I reassure the shadow Minister that the intent of his amendment is already achieved within the current drafting of clause 37, which lists the matters that the regulator must take into account when it conducts its owners and directors test. We will discuss that in more detail when we consider the next group of amendments, but I will summarise briefly now.
When assessing an owner or officer’s fitness, the regulator must have regard to any criminal convictions and proceedings, in particular those included in schedule 1 to the Serious Crime Act 2007. Membership of a proscribed organisation is an offence under the Terrorism Act 2000, and that offence is included in paragraph 2A of schedule 1 to the Serious Crime Act 2007.
The regulator will seek information and expertise from relevant organisations to help it to stay alive to both national and international concerns. The shadow regulator is already building a strong relationship with the National Crime Agency and law enforcement in general to ensure that the regulator is in a strong position to gather the information it needs.
I also reassure Members that the regulator and its staff will have the requisite measures and security clearance to be able to receive information relevant to their functions. Consequently, the current provisions in the Bill deliver the intent of the amendment. On that basis, I would be grateful if the shadow Minister would withdraw it.
Mr French
I appreciate the Minister’s comments with regard to amendment 110, which I tabled. I have listened carefully to her arguments, but it is still unclear to those of us on this side of the Committee why consideration of the Terrorism Act 2000 was not included in the list of factors set out in clause 37. We believe that is an oversight and, consequently, that the clause lacks the clarity that the amendment seeks to deliver in the Bill and that those who refer to it will seek going forward—in other words, the regulator. We will therefore press the amendment to a vote.
Question put, That the amendment be made.
Stephanie Peacock
Clause 37 lists the matters the regulator must take into account when it conducts an owners and directors test. That includes what it must consider when determining whether an individual is financially sound, has the requisite honesty and integrity and, for officers only, has the competence needed to do their role—ultimately, to determine whether they are suitable. The matters listed in the clause draw heavily on existing fit and proper person tests applied by other regulators, such as the Financial Conduct Authority and Bar Standards Board.
For financial soundness, the clause includes past bankruptcies and the financial situation of companies and other bodies they have been responsible for. For honesty and integrity, it includes an individual’s criminal history, legal cases they have been involved in, regulatory or disciplinary action, and whether they are banned from entering the UK or sanctioned by the UK Government. When assessing officers’ competency, it includes qualifications, experience and training.
Those factors are specified because they have a bearing on whether the owner or officer could have a significant detrimental impact on a club’s financial sustainability. That is why the legislation requires that they are taken into account when the regulator is considering someone’s suitability. Listing specific matters also provides greater clarity to the industry about what will be tested, and it constrains the regulator, as the matters listed in the clause are the only things it will take into account when considering their fitness. To future-proof the test, the regulator has the power to use its rules to add further matters it will take into account. That will ensure that the list of matters for fitness tests continues to be relevant over time.
Before using the power, the regulator must consult with the leagues. Suitability should be based purely on an impartial assessment of the individual’s fitness, their source of wealth, and their financial plans and resources. The Government have been clear that the independence of the regulator is vital, which is why they have removed the requirement for the regulator to have regard to His Majesty’s Government’s foreign and trade policy objectives when assessing an owner’s suitability. The clause will ensure that the test can be applied consistently and that it remains fair, transparent and robust and focused on whether the individual is a suitable person to own a football club.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Clause 38
Disqualification orders
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The financial distress experienced by some of English football’s most historic clubs was partly down to unsuitable owners and directors. As we have already discussed, the regulator will be able to conduct strengthened owners and directors tests to tackle that and to help to ensure that each club has suitable custodians. I previously set out what powers the Bill gives the regulator to disqualify a person it finds unsuitable, what happens when an individual is found unsuitable, how they can be removed, how they can be prevented from causing further harm to the club, and the tools the regulator needs to ensure the continued effective operation of the club.
Where the regulator finds someone to be unsuitable to be an owner or an officer at a particular club, clause 38 gives the regulator the power to disqualify that person from being an owner or an officer at any regulated club in the future. In order to ensure that sufficient protections are in place, relevant parties will be allowed to express their views before the regulator makes its decision. Once a decision has been made that takes those views into account, the regulator must publish a notice of that decision, including the rationale behind it. That will help to ensure that those key community assets have suitable custodians who run the club properly.
When the regulator finds an incumbent owner unsuitable, the regulator must begin the process of removing them from the club. Clause 39 therefore gives the regulator the power to direct an unsuitable owner to relinquish ownership of the club. This is the first step in removing an unsuitable owner. They are directed to leave by the regulator and given a deadline, but they have a chance to take steps to leave the club on their own terms before the regulator takes direct action to remove them. For instance, those steps could include selling their stake in the club.
To ensure that sufficient protections are in place, the regulator must consult the unsuitable owner, the relevant club and the relevant league before issuing the direction. If an owner does not comply with such a direction, the regulator can escalate to the next stage of making a removal order under clause 43, which we will discuss in the debate on the next group.
Mr French
Clause 38 is one of the most consequential provisions in the entire Bill. It gives the Government’s football regulator the power to disqualify an individual not only from being an owner or an officer of a specific club, but from holding such a position in any regulated club going forward. That is an extraordinarily wide-ranging power, which amounts to a professional ban from participation in the administration or ownership of an English football club. That power must be exercised with the utmost care on the basis of clear evidence, robust procedural safeguards and fair opportunities for representation.
Under subsection (1), the regulator may issue a disqualification order if it is determined that a person is not suitable to be an owner of a particular regulated club. Subsection (2) extends that same power to issue a disqualification order against officers. The clause in effect makes the Government’s regulator the gatekeeper of who may or may not participate in the leadership of English football. While the Opposition accept the rationale, particularly in the light of past controversies and failures of governance, we must be careful about vesting that level of authority in a politically appointed body.
Three concerns arise. First, there is the question of proportionality. Not every failure of suitability in one club ought to trigger an automatic blanket ban from the entire football pyramid. A disqualification order is not a light matter in itself; it carries reputational consequences that may extend far beyond football. Will the Minister confirm what thresholds of seriousness must be met before a disqualification order is considered appropriate? How will the regulator ensure that such orders are not used disproportionately, particularly in cases where suitability determinations may be contested or borderline?
Secondly, there is the question of due process. The clause appears to allow the regulator to act not only in determinations it makes directly, but on decisions it is deemed to have made by operation of law. That introduces a grey area where someone might find themselves disqualified without ever having had a clear and fair hearing. There must be a full right to representation, explanation and appeal before such a decision takes effect. Will there be an express duty on the regulator to provide reasons in writing to allow for full and fair challenge after a decision has been made? Will the affected individual have the right to appeal to a genuinely independent body—one that is outside the Government’s regulator’s own structure?
Thirdly, there is a concern about consistency and transparency. The risk is of regulatory opacity. If a disqualification order is issued without published reasoning, or if standards vary from case to case, we will quickly see a collapse of confidence in the regulator’s impartiality. Will the Minister consider introducing a requirement for an annual report to Parliament listing the disqualification orders that have been issued in the preceding year, and for a publicly accessible register of disqualified individuals, with anonymised or redacted reasoning where appropriate, for transparency? Crucially, will the Minister confirm that this power cannot be used retroactively—that is, to punish individuals for matters known and previously tolerated under prior regimes, should there be a change of chairman, deputy chairman, chief executive or board members?
English football needs good owners—as a Charlton fan, I can say that with a great deal of confidence and with sympathy for other clubs that have been in similar situations. It needs competent, honest and engaged officers, and there must be consequences when individuals fall short of the standards we all expect, but clause 38 must not become a tool of regulatory vengeance, nor of political interference. The power must be used sparingly, lawfully and accountably.
Jon Pearce (High Peak) (Lab)
I declare that I am a member, and former chair, of the RamsTrust. Does the shadow Minister agree, on his point about Charlton, that we would want the use of this clause to err on the side of caution? As Rams fans, we went through a situation where an American businessman was passed by the EFL on the fit and proper person test, and the only reason he did not buy the club was because the money never turned up. This was after he had been approved as a fit and proper person. It turned out that he was a fraudster, and he is now serving 20 years in prison in the US, having passed the fit and proper person test. Contrary to the shadow Minister’s argument, it would be better if the provision was used quite strictly, because we only want the best people to be running our football clubs, which are so precious to communities across the country.
Mr French
I thank the hon. Member for that valuable contribution and for telling us his experiences as a Derby fan. There are many examples that have been drawn on in various aspects of the Committee’s debates, and I suspect that there will be more going forward. Just to be clear, we are not seeking to press the provision to a Division. The point we are making is that we want the strongest owners and fittest people to run clubs, but we also want to ensure that the regulator is seen to be acting lawfully and in a balanced way at all times, to avoid any issues of impartiality. I understand the point the hon. Member makes, which is why I have always supported strengthening ownership tests, even in the previous Parliament.
We do not believe that exclusion based on reputational judgment or politics should come into these kinds of judgment. The Government must not forget that they are regulating not just football clubs, but people’s lives, reputations and livelihoods. That demands humility, caution and a presumption in favour of freedom and innocence, unless the case for restriction is absolutely clear and overwhelming. Where there is doubt, the Government’s regulator must not fill in the blanks with its own qualifications or prejudices.
The Opposition support the need for disqualification in serious cases, but we continue to press the Government to ensure that the clause is not open to abuse, and that football remains a competitive, plural and fair environment, rather than one policed by the regulator, acting as judge, jury and executioner in uncertain circumstances.
Clause 39 empowers the regulator to give a removal direction in requiring an unsuitable owner to take all reasonable steps to cease being an owner by the end of a specified period. The exception to this requirement is when an owner did not have prior regulatory approval, and the regulator can exercise its power to make an ownership removal order within three months, starting from the determination day. The clause requires the football regulator to inform the owner of the club and relevant competition organiser before giving a removal direction. It also requires the football regulator to notify the owner and the club of the possible enforcement action for not complying with the direction.
It is because of powers such as these that the regulator must be seen as independent. If a Government regulator is to order the removal of incumbent owners, this could be seen by competition organisations as clear interference, which as we have discussed at length, and could cause many issues for English clubs, especially when competing in UEFA and FIFA competitions. I would be interested to hear some assurances from the Minister about how that might work in practice. If the Government’s regulator is to tell clubs that they must change ownership, how confident is the Minister that that will not breach the rules that we have discussed?
This goes back to a point I made in a previous sitting about something that is a theme of the clauses in this group. Giving the owner or officer of a club notice of a regulatory action that is coming will hopefully allow them the rights of representation and challenge, if they feel that they have been handled wrongfully, but it also opens up issues around insider information, particularly with regard to a club’s valuation. I suspect that all hon. Members appreciate that such a change, particularly at the top levels of ownership, will have a dramatic impact on the valuation of a club. We want to understand how the regulator will deal with that issue to ensure that insider dealing, in particular, does not become a widespread issue where the regulator is trying to enforce its actions, as provided for by these clauses. We want to understand how that will work in practice, to ensure that these clauses do not have unintended consequences.
Clause 40 empowers the regulator either to issue a removal direction to an unsuitable officer, requiring them to take all reasonable steps to cease being an officer by the end of a specified period, or to give such a direction to the relevant club, or both. It requires the independent football regulator to inform the owner, club, and relevant competition organiser before giving a removal direction. It also requires the IFR to notify the owner and the club of the possible enforcement action for not complying with the direction. I have the same question about this clause as for the previous one: how will the risk of inside information be managed?
Clause 41 empowers the regulator to prohibit an unsuitable owner or officer from carrying out specified activities or exercising specific rights and/or to issue a direction to the club requiring it to ensure that the unsuitable owner or officer does not exercise specified activities or rights. The clause provides a non-exhaustive list of such activities and rights, including any right
“to vote on any matter relating to the…club’s activities”;
appointing, terminating or changing the terms of appointment or responsibilities of any officer or employee; changing the corporate structure; and undertaking any specified actions without obtaining prior approval from the independent regulator.
Clause 41 also requires the IFR to notify the owner and the club of the possible enforcement action for not complying with the direction. Such action could seriously impair the ability of a club to function while it seeks a new owner or officers, as ordered by the regulator. As we all know, it takes a significant amount of time to find a new owner, and many may be deterred by perceived interference in English football, compared with other nations without a state regulator. Clause 41 may cause more damage to a football club than the owner, who the regulator cannot dismiss. How will the Minister ensure that the regulator uses these powers only if and when deemed strictly necessary?
Clause 42 relates to situations where directions under clause 41 would impede a club’s ability to operate effectively or comply with regulatory requirements. It empowers the IFR to temporarily appoint an officer to carry out a specified function, or redistribute functions among existing officers. It stipulates that those functions must be specified, must be for a specified amount of time, and can be revoked or varied by another order. It specifies that an interim officer is not subject to the duties and requirements placed on officers by the Bill. It also requires the IFR to notify the owner and club of the possible enforcement action for not complying with the direction.
Clause 42 adds to the fear that the regulator could erode the independence of English clubs and how they operate. It empowers the regulator to effectively govern a club while seeking to remove unsuitable officers or owners. Given the time that it takes to find new ownership, that situation could last for a considerable period and cause massive issues on the pitch with regards to investment and transfers—as we discussed in a previous sitting—and how the club functions. It would also leave the regulator wide open to criticism if its actions lead to relegation, for example, for a particular club. Does the Minister think that there is a risk that such a club could be barred from international competitions—as I suggested earlier—or that the Government’s regulator could be left wide open to legal challenge if it directly impacts a club’s performance on the pitch, or its financial performance off the pitch while such considerations, or changes of ownership, take place?
Stephanie Peacock
I thank the shadow Minister for his points, to which I will respond briefly. There are no changes in the bit of the Bill that we are talking about compared with the previous Bill, other than—as I referenced in my previous contribution—the removal of the requirement for the regulator to
“have regard to the foreign and trade policy”
of the Government. We think that removal strengthens the independence of the regulator, and I reiterate that we do not have any concerns in relation to UEFA.
The shadow Minister asked some specific questions. There are no thresholds in the Bill, but the regulator will need to act fairly and proportionately. There are robust appeals processes through the Competition Appeal Tribunal. The shadow Minister made points about the publication of information. In order to ensure that sufficient protections are in place, relevant parties will be able to express their views before the regulator makes a decision. Once the decision is made, it will take these views into account, and the regulator must publish a notice of that decision, including the rationale behind it.
Question put and agreed to.
Clause 38 accordingly ordered to stand part of the Bill.
Clauses 39 to 42 ordered to stand part of the Bill.
Clause 43
Ownership removal orders
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 94, in clause 43, page 34, line 38, at end insert—
“(e) following the revocation by the IFR of the club’s operating licence under clause 19 or under paragraph 9 of Part 1 of Schedule 9.”
I am pleased to see you in the Chair again, Ms Butler; it is a pleasure to have you presiding over us. The amendment is fairly simple, and I hope the Minister will consider it. Clause 43 is quite an important clause, because it deals with the removal of ownership. Ownership, in the end, is of a private asset. A club is a public good for the fan base, but in the end, it is owned by an individual or a corporate entity. The clause provides the regulator with a power, not a duty, to remove owners in certain circumstances if appropriate. All my amendment would do is add the revocation of a club’s operating licence to the circumstances in which the regulator can act. In other words, if the club does not have an operating licence, should not that be a factor that allows, but not forces, the regulator to deal with the ownership of the club?
Stephanie Peacock
I thank my hon. Friend for his amendment. We have seen far too many examples of the damage that can be caused by unsuitable custodians of clubs, and that is why the Bill introduces a strengthened owners and directors test.
I believe that my hon. Friend hopes that the amendment will give reassurance to fans that, where a club fails to comply with regulation and loses its licence as a result, the regulator will be able to remove the owner. The aim is to hold those responsible to account. Let me reassure my hon. Friend that the regulator is already empowered to hold individuals to account for their actions. If the club’s non-compliance or its financial situation gives the regulator concern about the owner’s suitability, it can test them, and they could be failed on that basis. If they are found to be unsuitable, the regulator will have the power to remove them. That ability to isolate and remove unsuitable owners and officers should mean that a club never has to have its licence suspended or revoked on the basis of poor ownership. That means that a club’s fans should not have to suffer the consequences of bad leadership.
The revocation of a club’s licence is the very last resort. We hope the regulator will never have to do that, but I reassure my hon. Friend that if a club is so seriously and consistently non-compliant that the regulator has no choice but to revoke its licence, we would expect the regulator to consider very carefully whether any responsibility for that failure can be laid at the owner’s door, and if the owner is tested and found unsuitable, they can be removed on that basis. We believe that the Bill’s provisions are sufficient to protect fans and hold owners to account where necessary. We hope that they will ensure that a licence is never revoked.
Lincoln Jopp
If a club has lost its licence, has it not therefore been taken beyond the purview of the regulator? How is the regulator still empowered to pursue the owner?
Stephanie Peacock
I will address that point in just a moment.
As a club’s licence is separate from its owners, the licence is held directly by the club itself, not its owners. The removal of an owner will not impact the club’s licence status. This ability to isolate and remove unsuitable and owners and officers should mean that a club never has to have its licence suspended or revoked because of its owner, which means that a club’s fans should not have to suffer the consequences of bad leadership.
We hope that a club losing its licence will be the very last resort, and an unsuitable owner will have to follow the removal order made by the regulator. It will be in the best interests of an unsuitable owner to sell their stake in a club before the regulator has to step in to force divestment and a sale at no minimum price. If the owner fails to comply with this order, the regulator will have enforcement powers that it can use to ensure compliance.
These powers will include a variety of sanctions against the individuals calling shots at the club and, where necessary, directly against the club itself. Where appropriate, the regulator will also be able to seek an injunction from the courts. Having this broad range of tools of escalating severity at its disposal will allow the regulator to take strong action as and when required. For those reasons, I hope that my hon. Friend the Member for Sheffield South East will withdraw his amendment.
Stephanie Peacock
As set out previously in the debate on clauses 38 to 42, the regulator will be able to direct an unsuitable owner to leave the club in a specified timeframe and to prohibit them from undertaking certain activities at the club in the interim. However, there is a risk that an unsuitable owner does not comply with these directions. For instance, they may refuse to leave the club or continue to use their position as an owner to damage the club. In these situations, the regulator will need sufficient powers to directly remove the unsuitable owner from the club. That is why clause 43 gives the regulator broad discretion in such cases.
The regulator can make an order containing such provision as the regulator considers appropriate to secure the unsuitable owner’s removal. For example, that could include appointing trustees, empowering the trustees to sell the club and requiring the unsuitable owner, or any other person, to comply with the trustees’ directions. However, the regulator can use this power only against unsuitable owners who have demonstrated that they are willing to flout regulatory requirements, or if they fail to comply with the directions that the regulator has made to protect the club from harm. As set out previously, in certain situations the regulator will have the power to make an ownership removal order containing whatever provision is appropriate to ensure that an unsuitable owner leaves a club.
To ensure that there are sufficient safeguards in place, clause 44 sets out the process that needs to be followed by the regulator. In particular, before issuing an ownership removal order, the regulator must publish a notice that it intends to issue the order and allow a period for interested parties to express their views. After this, the regulator must decide whether to make the order, and must publish a notice of its decision including its rationale. This helps to ensure that the views of those affected are taken into account in the decision-making process. Separately, the regulator may make rules requiring unsuitable owners to pay costs associated with an ownership removal order, such as costs incurred by a trustee appointed by an order. This power helps to ensure that the costs are borne by the unsuitable owner.
Mr French
Clauses 43 and 44 set out how ownership removal orders are to be made, and the legal consequences of non-compliance. Clause 43 matters hugely because it allows the regulator to force an individual to sell their ownership stake in a club. That is a serious and intrusive power, so we must ensure that it is used sparingly, lawfully and with robust safeguards. On process and fairness, we welcome the requirement in clause 44 to notify the person and allow representations to be made before an order is issued. However, is that enough? Will representations be meaningful, or will this just be a procedural tick-box exercise?
I have some questions for the Minister. Will the regulator be required to give full written reasons for the proposed removal? Will the owner have access to the evidence relied upon? Is there a statutory right of appeal or review, and if not, why? Secondly, on liability and legal exposure, clause 44(6) imposes the liability for costs incurred by non-compliance with an order on to an owner. What types of loss are envisaged for owners? Are they just financial, or reputational and contractual? Who decides whether a loss is caused by the non-compliance, and is causation clearly defined? Could this lead to vexatious or opportunistic claims in the future? How will this work with ownership groups, when there are multiple owners of a club?
On commercial realities, forcing the sale of a football club is not simple; in most cases, these are not liquid assets. The value depends on market conditions, the timing of the economy and sale, and obviously buyer availability and demand to purchase a football club. I therefore ask the Minister: will the regulator have a duty to ensure fair market value is preserved during a forced sale? What happens if the regulator’s actions or any delays cause the value of a club to fall? Could we see a situation where the regulator is frequently appearing in court on such claims? Fourthly, on the broader principle, the clause is in effect a power to force the sale of a privately-owned business. That is a major constitutional step. Property rights in this country matter, due process matters, and so does the rule of law. We need real safeguards, not just procedural gestures.
We want to keep football in safe hands, but the clause needs to be clearer, fairer and more restrained in its use. It must not give the regulator quasi-judicial power without necessary oversight of Parliament. That is not regulation; we believe it would be overreach. I would be interested to hear the Minister’s comments on my questions.
Stephanie Peacock
I echo the shadow Minister’s comments about the power being used clearly, robustly and fairly. I think all of us on the Committee can agree that that is absolutely right. On his question about whether the reasons would have to be written, the regulator will have to give the owner enough reasons for its decision to enable them to understand why it has been taken. That has one of the strongest appeal routes in the Bill; it can go directly to the Competition Appeals Tribunal and be heard on its merits. We think there are robust protections in place here already.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44 ordered to stand part of the Bill.
Clause 45
Duty not to operate a team in relation to a prohibited competition
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause is the first in part 5 of the Bill, which deals with duties on clubs and competition organisers. It prevents all regulated clubs and clubs that have been regulated in the previous 10 years from having a relevant team participate in a prohibited competition.
The European super league proposed in 2021 posed an existential threat to the English football pyramid. It was an attempt by a small number of clubs to set up a closed-shop league to benefit themselves at the expense of all other clubs and against the wishes of fans. Ultimately, the European super league was stopped by the sheer will of fans around the country and the then Government’s promise to consider legislation. However, the risk of a similar breakaway competition rearing its head in the future remains, which is why we are now bringing forward statutory protections.
The clause will prevent a regulated club, or a club that has been regulated in the previous 10 years, from entering a team into a competition that the regulator has prohibited. The extension to clubs regulated in the past 10 years will stop clubs circumventing the rules by withdrawing from existing competitions to join a new breakaway competition. Similar safeguards against circumvention are found in clauses 46 and 47, which require clubs to gain the approval of the regulator for the disposal of the home ground or the appointment of an administrator. I will speak to them later.
On clause 45, the regulator is expected to prohibit competitions on the basis of a predetermined, proportionate and transparent framework based on the prescribed factors set out in legislation. That will provide up-front clarity to the industry and mean that new competitions will not just be prohibited outright. That is important to ensure that the regulator does not unduly stand in the way of innovation in the market, such as when the old First Division became the Premier League in 1992.
The clause requires the regulator, when deciding whether to prohibit a competition, to consider several factors, including whether the competition is merit-based, operates on the basis of fair and open competition, jeopardises the suitability of English football’s existing competitions or the clubs in those competitions, or harms the heritage of English football. Football belongs to its fans, so the regulator will also determine and consider the views of fans in England and Wales before prohibiting a competition.
As the national governing body for football, the FA will be consulted before the regulator prohibits any competition, and the regulator will also consult anyone else it considers appropriate. For example, we might reasonably expect that to include other competition organisers, clubs and players who might have been involved in the competition that the regulator is considering prohibiting.
Mr Betts
I want to raise one small point with the Minister. Some time ago, when we debated clause 6, I raised the ability of the regulator to take a view about the impact of new competitions, particularly the world club championship, on the legacy of important domestic competitions like the FA cup. Those competitions will now be constrained for time, with replays being abolished, because a few clubs had to go and do more things in Europe, depriving the majority of clubs of their traditional way of playing in competitions. The Minister’s answer at the time was that a regulator cannot deal with competition matters.
The headings for part 5 and clause 45 include the word “competition”. Indeed, the fan-led review came about because of the European super league, and the then Prime Minister deciding it was so awful that we needed to do something about it. Given that competition can be looked at by the regulator, does the Minister want to have another think, perhaps before Report, about whether, without putting this in the Bill, the regulator should be able to consider such matters, when clubs’ finances and their fanbases’ enjoyment are particularly affected by a competition for a few that prevents more competition for the many?
Mr French
The hon. Member for Sheffield South East has stolen some of my lines. As always, he picked up the ball and put it in the net, as would be expected of the chair of the football all-party parliamentary group. There are inconsistencies in what is being discussed, and he was right to highlight them.
Clause 45 introduces a legal duty on clubs not to enter or operate a team in a competition deemed to be prohibited by the regulator. As has been discussed, the clause is clearly a response to the threat posed by breakaway leagues such as the attempted European super league a few seasons ago. While the intention behind the duty is understandable—to protect the structure and integrity of English football—the mechanism raises serious questions about competition and proportionality, as the hon. Gentleman just touched on.
First, on the principle, we agree that the pyramid structure of English football must be preserved wherever possible. Promotion and relegation are sacred principles of our game, and competition on and off the pitch must be upheld. The competitive nature of English football is what makes it so great. This season, certainly in the Premier League, has probably been slightly dimmer because it has been perceived to have not such great competition for the Championship and in relegation, as things were determined quite early in the season.
The Opposition have some sympathy with, in particular, the National League’s 3UP campaign, which has sought to close the gap between the National League and League Two. If we are looking at how to close the gap between the Premier League and the Championship, which has been the main argument from proponents of the Bill, we must also look at the bottom half of the pyramid to see how that competition can also be improved. That is a principle of fairness and competition for which I have a lot of sympathy.
Lincoln Jopp
Does my hon. Friend agree with the analogy that, although we are all very proud of having the Special Air Service as our elite forces, the SAS cannot be created without a very large Army underneath? While the Premier League is the jewel in the crown, it simply cannot exist on its own; it absolutely needs the game beneath it.
Mr French
I will not question the experience of my hon. Friend, whose military background is far greater than one I could even dream of on a PlayStation, let alone in practice. He makes a valid point that English football is much more than just the Premier League. We take enormous pride in all the leagues in our country, as we do for British football more broadly. They are some of the most watched leagues in the world, with amazing clubs and competition. Competition across the pyramid is what we seek to promote and preserve going forward.
The proposed European super league rightly provoked outrage from fans, clubs and Parliament itself, and rightly collapsed after pressure from all those groups, but we must be cautious about giving a regulator the power to prohibit competitions on open-ended grounds. As the Minister has said, the Premier League probably would not exist in its current form if we had sought to prohibit it around 30 years ago.
James Naish (Rushcliffe) (Lab)
Does the hon. Gentleman recognise that, as there is not a level of regulation, there is increasingly a welfare issue around the amount by which players are required to shrink their off-season to continue to play football? The commercial imperatives of clubs will potentially have a detrimental impact on the quality of the game.
Mr French
I completely agree with the hon. Member’s sentiment. We will seek to debate that when we come to our player welfare amendment, because we are concerned about increasing the length of the season to generate further revenues. The tournament in America and the Asia tour that has just taken place at Man United are probably the prime examples of the impact that can have on players. The English team, in their performance the other night, sadly looked quite tired. There is an issue around player welfare that we must all acknowledge, particularly given the demands to generate more revenues for the financial fair play rules. I thank the hon. Member for making that point; I am sure we will come back to it when we reach the player welfare amendment.
On definitions and discretions in the clause, the Bill defines a prohibited competition in quite vague terms, and it is ultimately left to the discretion of the regulator. The explanatory notes state that subsection (5) sets out some factors that the IFR must consider when deciding whether to specify a competition as prohibited. What are the criteria for a competition to be deemed prohibited? Will they be set in primary legislation, by guidance from the Secretary of State or by the regulator? Is there a right of appeal if a competition is believed to have been unfairly designated as prohibited?
On international alignment, there is another issue that we must highlight. We must accept that football operates in a global ecosystem, as we have discussed. English clubs routinely participate in international and cross-border competitions, whether that be the Champions League, the Europa League or the Club World Cup, as does the national team. How does the clause interact with UEFA and FIFA competition rules? What happens if, for example, a competition is sanctioned by UEFA but deemed prohibited by the football regulator, or vice versa? This is a real issue for the regulation. We would like some clarity from the Minister on how such a conflict would be resolved, because it would put clubs in a very confusing situation.
On enforcement and penalties, clause 45 creates a legal duty not to participate, but what are the sanctions if a club does so? One assumes that it would lead to licence revocation, but what else? Would there be fines or points deductions? What penalties will the regulator look to enforce? Will they be proportionate? Will clubs be given prior notice and the chance to make representations?
On unintended consequences, we must avoid stifling innovation and competitive evolution in the sport. Not every new competition is a threat; some may bring financial or structural benefits, or benefits for fans. As I and the Minister have highlighted, we must remember that the Premier League was technically a breakaway league from the old First Division. If that happened today, we believe that the Bill and the regulator would be responsible for preventing that league, and all the attributes and characteristics that we celebrate in this country, from existing. We have to look at innovation carefully, and the answer must not always be no if there are clear benefits to the country and to the game of football itself.
We support the aim of preserving the integrity of English football, but the clause must be clearly defined, tightly drawn and fairly enforced. A law designed to stop the next European super league must not become a tool for bureaucratic overreach or political intervention by the regulator. The game belongs to its fans and its communities, not to the regulator or the governing body. I am interested to hear the Minister’s comments on my questions, particularly those about how the international system would interact with a prohibited competition.
Lincoln Jopp
I wish to build on my hon. Friend’s themes. Football has the unfortunate concept of the friendly; frequently, they are not very friendly at all. When I read the Bill, it was clear to me that the drafters had in mind the prevention of another flyaway European super league, which we have debated.
I would like the Minister to look at look at the example of a one-off friendly match. Many of our teams tour in the far east and in America, in their off-season, to generate additional revenues and expand their fan base and brand. Let us envisage a set of circumstances in which a North Korean has somehow managed to purchase an English football team, and they have the bright idea that they would like to play a “friendly” match in North Korea. It is a one-off match, but the Government in North Korea decide that they want to make a big deal of it, so it becomes the Pyongyang cup—a one-off match between the English team and the North Korean team. In the Minister’s view, would the regulator be justified in considering whether such a one-off match was a competition and therefore within the purview of the regulator?
Mr Lee Dillon (Newbury) (LD)
It is a pleasure to serve under your chairmanship, Ms Butler. Pre-season friendlies constitute cup competitions all the time. There is the Audi cup; any major brand we could name will have sponsored friendly cups. When the Minister gives the hon. Gentleman assurance on the Pyongyang cup, perhaps she might also cover the friendly cups that actually exist.
Lincoln Jopp
The hon. Member makes a pertinent point. As I said, the word “competition” seems to refer to the sort of flyaway league we have discussed; are one-off friendlies competitions under the terms of the Bill?
Stephanie Peacock
I am grateful to Members for their contributions and will take their points in turn.
The clause applies both to existing and to new competitions. If any competition breaches the criteria, it can be prohibited, but matters such as scheduling are for competition organisers.
On shadow Minister’s points, we will come on to player welfare, to which we are all very sympathetic, just as we are sympathetic to the 3UP campaign, but it is outside the Bill’s scope and is for organisers. He asked some specific questions on the criteria; that will be for the regulator to determine. It is expected to do so based on a predetermined, proportionate, objective and transparent framework based on factors listed in the clause. For example, if a competition is not merit-based, jeopardises the sustainability of existing domestic competitions, and is not supported by the fans, we would expect it to be prohibited.
Mr French
My hon. Friend the Member for Spelthorne and the hon. Member for Newbury highlighted the issue of friendlies. The Minister has indicated that she will come to that, but I do think we need some clarity as to what that might look like in practice. The end-of-season competitions are normally internationally designed, and although they may be endorsed by UEFA or FIFA, they would breach some of the conditions under the definition the Minister just gave. We need clarity about how this will work, because we do not want to put English football on a collision course with international football.
Stephanie Peacock
No, of course we do not. I totally agree. I was coming to that point. As I understand it, friendlies would be out of scope, but I am happy to write to Committee members if they would like greater clarity.
We have discussed the appeals and representations several times. The relevant competition organiser will be given a period in which they can make representations. If the organiser has concerns about the regulator’s decision to prohibit the competition, it will be able to appeal the decision. As has been discussed, the organiser can also appeal to the competition appeal tribunal.
Mr French
I thank the Minister for those remarks. I suspect that a letter of clarity would be helpful for all Members. There is a risk that FIFA, or UEFA, as we have seen with the Nations League in recent years, looks to introduce a new competition, whether at club or international level, that would contradict the regulator. As we have spoken about at length, and as the hon. Member for Sheffield South East has described, the different governing bodies of UEFA and FIFA are often in competition with our national competitions. We have to ensure that clubs are not forced to choose between a licence in the English game and partaking in international competitions. We fear that could drive acceleration toward a breakaway league, rather than prevent one.
Stephanie Peacock
I completely appreciate the shadow Minister’s comments. As I said in my opening remarks, we do not ban all international competitions automatically. We are mindful of enabling innovation in the market. I am happy to supplement my comments with a letter to Committee members.
Question put and agreed to.
Clause 45 accordingly ordered to stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 88, in clause 46, page 38, line 26, leave out second “home ground” and insert “specified properties”.
Amendment 89, in clause 46, page 38, line 27, leave out “home ground” and insert “specified properties”.
Amendment 90, in clause 46, page 38, line 28, leave out “home ground” and insert “specified properties”.
Amendment 86, in clause 46, page 39, line 11, leave out subsection (10) and insert—
“(10) In this section, ‘specified properties’—
(a) in relation to a body that is a regulated club, means the ground at which a relevant team operated by it customarily plays its home matches, the property at which a relevant team customarily trains and any other properties that make up a more than negligible part of the relevant team’s operations;
(b) in relation to a body that is a formerly regulated club, means (immediately before it ceased to be a regulated club) the ground at which a relevant team operated by it customarily played its home matches, the property at which a relevant team customarily trained and any other properties that make or made up a more than negligible part of the relevant team’s operations.”
Mr Betts
The purpose of this group of amendments is to introduce a wider definition of a club’s home ground that includes the training ground, which is how the different amendments link together. Amendment 86 sets out the wider definition that is then used in the other amendments. In the end, in this day and age, most professional clubs cannot survive with just a home ground and need additional facilities. If those additional facilities are sold off, the club can become unviable. That is what some unscrupulous owners will seek to do, because sometimes the training ground is the most valuable asset in potential for development.
Mr Dillon
The hon. Gentleman’s amendments find support from the Liberal Democrats. He referenced training grounds, and Reading football club’s training ground, Bearwood Park, was actually in that exact position. The owner tried to sell it off because it was prime land for residential development. However, without that training facility, the club would clearly struggle to continue. There was even the potential to sell the training ground to rivals Wycombe Wanderers, so that they could then have an enhanced training ground. The hon. Gentleman will be aware that the Liberal Democrats have tabled new clause 11, which seeks to protect various assets of a football club, including the training ground, so he has our support.
Mr Betts
I hope the Minister can take this seriously; it is a worry that the Bill does not quite go far enough at present. The reality is that this legislation tries to deal with bad owners and anticipate how they might behave. The more restrictions that we can build around bad behaviour, and possibilities for controlling it, the better.
Lincoln Jopp
I appreciate the desire to legislate for bad owners, but is the hon. Gentleman not concerned about good owners who might find money very tight? They have assets beyond the home ground and team itself that they might have to consider selling, including a training ground, to remain financially viable and therefore be on the right side of the regulator in their business plan. Is he not concerned that, by extending even further the regulator’s purview into all properties, he might overly constrain good owners from doing what they want to save their clubs?
Mr Betts
I do not believe that is the case. I understand the hon. Gentleman’s concern, but I think what we are saying here is that this gives the regulator the power to look at that situation. The worry is that some owners will try to exploit not for good football purposes but because they can see themselves making a profit on the side. That can damage the competitive ability of the clubs that they own. Unfortunately, some owners take that capricious view, and it is for them that we must legislate. I do not believe my amendments would adversely affect good owners, as I do not think the Bill does either.
Mr French
I am intrigued by the hon. Gentleman’s amendments. Similar sympathies apply to the situation at Reading, which is also still the case at Charlton’s Sparrows Lane training ground, which is owned not by the current owners but by two owners ago, as is the stadium. How would the hon. Gentleman’s amendments work with regards to the Everton example, where Goodison is now to be used for the women’s game? How would his amendments cover those kinds of properties? An owner might want to sell the women’s ground, even though the women’s game is technically outside the scope of the regulator.
Mr Betts
At this stage, my amendments cover the facilities that are within the scope of the regulator, so I do not think they apply to any properties that are outside the scope of the regulator. Obviously, the regulator cannot deal with things outside its scope.
I hope the Minister might give some consideration, even if the wording of my amendments are not absolutely right, to how the Bill can be better drafted to cover the point. Straying slightly on to amendment 83, there is a similar point about trying to ensure that, where there is a sale of certain assets, before they are sold, suitable alternatives are in place so that the club does not potentially lose its licence, as it has nowhere to play and train. I appreciate that I have strayed there; you have been very considerate, Ms Butler, in helping me to do that. I just thought it would help move proceedings along.
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East for tabling his amendments. Prior to speaking to them, I would like to let him know that I have raised his points on a similar issue—on assets of community value—with the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Nottingham North and Kimberley (Alex Norris). I spoke to him following our Committee session on Tuesday, and he has committed to write to my hon. Friend as swiftly as possible, so I will follow up with him in a timely fashion.
Turning to my hon. Friend’s amendments, I hope I will be able to reassure him on the development of the reform. I understand the intention of his amendments, but I will explain why we intend to resist the changes to include specified properties. On extending the scope of clause 46 to include training grounds, among other properties, the legislation has carved out specific protections to safeguard home grounds against risky financial decisions or sales of the grounds. I will speak specifically to the mechanism of clause 46 and the approval process later, but the focus on the home ground is to reflect that it is often the most financially significant asset at the club. That does not mean that other assets such as training grounds or office space are not also important to the club, but that there is a specific consideration necessary for the home ground.
I understand that my hon. Friend’s amendments are likely in response to instances where owners have intended to asset strip or make reckless decisions. Members on the Committee have shared some examples, and we are all familiar with recent ones. I wish to reassure all that there are protections elsewhere in the Bill to safeguard against this. That includes an enhanced owners and directors test that will ensure that owners are prepared to be appropriate custodians of their club and its assets, as we discussed on part 4 of the Bill. If it were to become evident that an owner’s actions were likely to worsen the financial position of the club, the licensing regime gives the regulator power to place licensing conditions on the club. The regulator can also take enforcement action where such a condition has been breached or the financial plan has not been followed. Additionally, the regulator will have oversight of the financial plans and balance sheets of the regulated clubs, ensuring that the club is not putting itself in a risky position unnecessarily.
Mr French
On the point about risky situations and the risk-averse nature the Minister is describing, the Bill is clearer on disposable home grounds. I am intrigued to see how the regulator would deem a club either selling its freehold and then having a leaseback option, which we have heard has happened, or looking to move to a ground or stadium that it did not own and pay rent going forward. Would that be seen as a bad financial move or a good one by the regulator? It is not quite clear how it would work for non-disposable treatment of assets.
Stephanie Peacock
I do not want to get drawn into hypotheticals. As we previously discussed, there might be a perfectly legitimate reason for a club to move—or to move temporarily, such as for flooding. It is not an absolute power. We want to give the regulator discretion when clubs may need that for legitimate reasons. The amendment speaks to where we think clubs are asset stripping or acting in bad faith.
We would expect the power to include assets remaining in the club’s ownership and any plans to change its financial arrangements. It would be at odds with the sustainability of a football club for there to be no home ground or location to train. It is therefore implicit that the regulator would address that.
Stephanie Peacock
Yes, I believe that there is provision in the Bill to do that. For those reasons, I ask my hon. Friend to withdraw the amendment.
Lincoln Jopp
The Minister knows—I have approached her about this—that a club in my constituency of Spelthorne has gone into administration. It has no home ground, but it does have a training ground, which is a community asset. I am intrigued to know whether, in the potential conflict between the purview of the regulator and the enactment of companies law in dealing with the administration of the company, the provisions in the clause give the regulator power to influence the administrator on the manner of the administration and whether clubs’ training grounds can be bought or sold. What is the hierarchy of legislative authority between companies law and the clause?
Mr Betts
I beg to move amendment 83, in clause 46, page 39, line 2, at end insert—
“(ii) in the case of the home ground and training ground, it is satisfied that there are suitable plans in place to ensure the club’s continued long-term use of the home ground or training ground or to secure an alternative home ground or training ground for the next football season;
(iii) in the case of a home ground, it is satisfied that any alternative under sub-paragraph (ii) will have been actively approved by the club’s fans domiciled in England and Wales if any of the following non-exhaustive factors represent a significant upheaval of the connection between the fans of a club and the club: proximity to home ground, proximity to other clubs' grounds, journey time for fans and any other factors that the Regulator deems relevant;”
I have a simple question for the Minister. If the regulator decides that a sale can go ahead, is the power there to allow it to be satisfied that there are suitable plans to ensure that the club will have long-term use of a home ground and training ground? That may not be the ground it had before, but there must at least be a replacement. Does the regulator have the power to ensure that?
Stephanie Peacock
I thank my hon. Friend tabling the amendment. It seeks a number of things: extending the clause to include training grounds; guaranteeing long-term use of home grounds and/or training grounds; and introducing parameters for home ground relocation. If it is helpful, I will address those briefly, but I appreciate that this debate is similar to the one we just had.
On extending the scope of the clause to include training grounds, the Bill has carved out specific protections to safeguard home grounds against risky financial decisions or the sale of grounds. As I said in the previous debate, that is to reflect the home ground being the club’s most important asset. It does not mean that other assets, such as training grounds or office space, are not important.
I understand that, as we have discussed, the amendment is really focused on asset stripping. As I have alluded to—I will be a bit clearer and perhaps more explicit—the regulator has the power to attach discretionary licence conditions. Therefore, on the point about needing a training ground, I believe that the regulator could apply a temporary or particular licence condition on a club.
Mr French
I will not dwell on this point too much, but the implications of this amendment and the ones that we were just discussing are not hypothetical; we have seen real-life examples of where this issue has become a real one for football clubs. So, we seek some clarity from the Minister about how the regulator would act in such scenarios in the future.
As I said in my previous comments, I think the disposal of a ground is probably slightly clearer than the relocation of a ground. However, I will use the example of Coventry City football club. When they moved to the Ricoh Arena, I believe that the stadium was jointly owned by the local council and another group. I assumed that the club moved to a new stadium with the best interests of the club at heart. I had the pleasure of going to Coventry’s old stadium when Charlton played Coventry in the FA Cup, but that is a bit by the by. It was in need of improvements; most people would have thought that.
How would this measure work? We know that Coventry ran into a number of issues with the Ricoh Arena, which I believe is now owned by the Frasers Group. At that point in time, when the club moved, would that move have been deemed to be in the regulator’s purview of an inappropriate action by the previous owners? I ask that question because this is a real-life example of where it is not clear how this legislation would apply. As Parliament, we have to be clear how we intend the regulator to behave in such situations, because, as I say, that was a real-life example of how football clubs might seek to improve their stadia when they do not have the assets to do so themselves.
Stephanie Peacock
I am grateful to the hon. Gentleman for his comments. I draw his attention to the discretionary licensing addition that I have referred to: the regulator can react to different situations. I do not want to be drawn on individual cases, nor do I want to pre-empt the actions of the regulator.
The Chair
With this, it will be convenient to discuss amendment 85, page 39, line 5, at end insert—
“(6A) Before the IFR grants an approval under subsection 6 it must—
(a) consult the supporters of the body in question, the relevant competition organisers and persons representing the local community with which the body is associated, and
(b) have regard to the views expressed by those consulted.”
Mr Betts
I really do not understand the way in which the Bill is written at present; perhaps the Minister can help me with that.
We will come on to clause 48, which is about the relocation of a club; of course, that means moving grounds. As set out in clause 48 4(c) and (d), there is a specific requirement on the club to consult with fans. We can have another discussion at some point—we may do—about consultation with which fans and which groups. I still think that this is a challenging issue that we need more clarity about.
Clause 46 is about the disposal of a ground, which is a very emotive subject for fans. It may not be the wrong decision to relocate, and clubs can relocate and take their fans with them, with proper involvement; the Everton example is probably in that category. However, there is no requirement at all to consult the fans on the potential sale of a ground. That seems to be a big omission in the Bill. Fans would not have a veto, because it is understood that sometimes there are very good commercial reasons as to why a club needs to move, which can be accepted and explained to the regulator.
Therefore, I am not saying that the disposal of a ground has to get the full approval of the fans, but surely there should be a measure whereby the fans are at least consulted and their views taken into account before the home ground of a club, where the club may have played for 100 years, is disposed of. That would not be inappropriate.
Stephanie Peacock
I thank my hon. Friend for tabling the amendments. Home grounds are a vital asset for all clubs, so I do understand his intent.
Regarding changes to the ownership of a home ground, the potential adverse outcomes are entirely financial. We do not believe that they impact the heritage of the club, which is why clause 46 does not require any heritage consideration or fan engagement. Additionally, decisions about the financial arrangements of a home ground are commercial decisions and therefore we do not think it is appropriate to legislate on them. However, I will reassure my hon. Friend that if the sale of a club’s home ground would result in the relocation of the club, fans absolutely have to be consulted about that, as per clause 48, which we will discuss later. We know how much home grounds matter to fans and communities, but this clause is purely about protecting a club’s financial position.
Mr Dillon
I seek some clarity on the relocation of a ground. White Hart Lane was demolished and rebuilt on a similar, but bigger footprint. Obviously, at Old Trafford, Manchester United’s owners are talking about building on land next to the stadium. Personally, I would not class either of those moves as the relocation of a ground. However, in the Bill would they count as relocation, because those new stadia are not on the same footprint as the original stadium?
Stephanie Peacock
I will double-check that point, but I believe they would. I also refer to the points we discussed earlier in the Committee: clubs may want to move for a particular, legitimate reason—to improve their ground, or because they have to due to flooding in adverse weather, for example. We appreciate that these are not all bad actors and it is not all bad faith, but I will double-check that point and come back to the hon. Gentleman. We know how much home grounds matter to fans and communities; this clause, together with the owners and directors test, is about protecting the club’s financial position and its balance sheet from asset stripping by bad actors.
Mr Betts
Is the Minister saying, then, that a club owner could sell the ground without even consulting the fans—just present it as a fait accompli—and then, because there would not be a home ground to play on and the club might have to relocate, at that point they could say to the fans, “Well, the ground’s gone; we’re now going to ask you whether you want to move.”? There seems to be a gap in the thinking somewhere.
Stephanie Peacock
I appreciate that point, but the sale of home grounds is a primarily financial decision, separate from the decision about where the club actually plays its games. That is why there is currently no requirement to consult or obtain approval. If the club has not actually relocated, it would be caught in clause 48 and would be required to consult fans. We will come on to discuss that later.
Mr French
I must admit that—like other members of the Committee, to judge from their facial expressions—I am slightly confused by the reasoning the Minister has given in response to the hon. Member for Sheffield South East on this clause, and where the distinction lies between the ultimate decision to relocate the ground and the sale of the ground. The decisions are clearly interlinked, and I would argue that fans would have strong concerns if a club owner was seeking to sell the ground, which would in a number of instances lead to either a relocation or an impact on the club’s heritage. The sale, for example, could lead to the renaming of a stadium, and the fans would clearly have a view on how that would impact their support for the club.
I ask the Minister to reflect on the hon. Gentleman’s points, because the clause seems to lack clarity on how that distinction is being made. I understand the point she is making about the financial considerations of owners, but the Government should reflect carefully on the argument against this clause, because it is not very clear to members of the Committee.
Stephanie Peacock
I appreciate the comments that have been made, and I will take them away and reflect on them, but I ask my hon. Friend the Member for Sheffield South East at this point to withdraw his amendment.
Mr Betts
The Minister has taken a very sensible approach. I accept that accepting an amendment here and now, out of the blue, is not how Government operate; but there is a lack of consistency between the two clauses, so I appreciate her agreeing to go and have a look at them. She has not committed to a change, but she has agreed to have a look, and that is very helpful. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
As discussed during the debate on the previous amendments, clause 46 serves as an important protection for the home ground of a club. It requires clubs to gain the approval of the regulator prior to any sale or use of the home ground as collateral. A home ground is often one of the most vital and valuable assets a club can own. If it is used as collateral for debt or sold off, that can impact a club’s financial position by weakening the balance sheet. Not owning the stadium may also threaten a club’s long-term financial sustainability.
This clause requires clubs who own their ground to obtain the approval of the regulator prior to any sale or use as collateral. The regulator will consider the risk to the financial sustainability of the proposed transaction and block any potentially financially damaging sale of a club’s home ground. This applies to regulated clubs and also to any club regulated within the last five years, which prevents bad actors from being able to circumvent regulation by leaving regulated leagues in order to skirt protections and strip assets. It recognises the important role that football grounds play in the financial sustainability of clubs and adds protections against bad actors.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Clause 47
Duty not to appoint administrator without approval
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
This clause sets out the duty on regulated and formally regulated clubs not to appoint an administrator without approval from the regulator. This is to ensure that administration is transparent, acts in the best interests of the club and its creditors and avoids any perceived or actual conflicts of interest. This will give all stakeholders, especially fans, confidence in the administration process.
As with clause 46, this applies to regulated and formally regulated clubs to avoid any risk of circumvention of the rules. The regulatory framework is not a zero-failure regime, so it is possible that football clubs may enter administration despite the best efforts of the regulator. There is already a legal framework for companies, including football clubs, to enter into administration, which is detailed in the Insolvency Act 1986. In many cases, the existing framework has enabled clubs to go into administration and re-emerge as solvent.
However, there are occasions where the administration of a club is not initiated by the creditors but the club itself, so it does not require a court to sanction the appointment in advance. In these circumstances, there have been occasions when some have had cause to question a relationship between the insolvency practitioner appointed as administrator and the football club. This is why, in specific circumstances, the appointment of an administrator requires the regulator’s approval to ensure that the process is transparent, and to avoid conflicts of interests or perceived bias in the appointment. By doing so, all stakeholders, particularly fans, should have more confidence that the outcome is the best one available in the circumstances for the individual club.
Mr French
Clause 47, as the Minister has just outlined, creates a new legal duty on clubs not to enter administration without the prior approval of the regulator. This is an unprecedented intervention: a regulator potentially blocking access to what is, in most sectors, a standard insolvency mechanism. We understand the intent to prevent abuse of administration as a means of dodging financial responsibility and to help protect club continuity. However, this clause raises serious concerns about the balance between corporate law and football regulation going forward.
As drafted, subsection (1) says,
“as soon as reasonably practicable after the body considers that there is a reasonable prospect of an administrator of the body being appointed”.
I would therefore naturally ask the Minister: what constitutes “reasonably practicable” and “a reasonable prospect”? We all appreciate that, in most examples, an owner’s wealth is generated not by the club itself but other business interests. It may become very difficult to determine what is “a reasonable prospect” if we are looking at business interests far from football.
Administration is recognised as part of UK insolvency law, which the Minister referred to, and it exists to help distressed businesses rescue viable parts and protect creditors where possible. Blocking access to administration could make things worse, not better, specifically if it delays actions or deters future buyers. Why are the Government confident that the regulator is better placed than insolvency professionals to determine when administration is appropriate?
On some of the practical risks, insolvency situations often develop quickly, and clubs may need to act fast to avoid a complete liquidation of assets. A duty to obtain the regulator’s approval would therefore add delay and could risk total collapse where speed might be essential. We have seen that in a number of club takeovers over the years. Will there be an emergency approval process for an administrator? Within what timeframe does the Minister expect the regulator to respond? Is there a default route if it does not respond in a quick enough time?
On consistency with company law, clause 47 effectively overrides the Companies Act 2006, creating a two-tier insolvency regime for football clubs. That is not a small step. It sets a precedent for sector-specific interference into commercial law. What discussions has the Minister’s Department had with the Insolvency Service and the Department for Business and Trade on this specific clause and mechanism going forward? Are there any comparable sectors in the UK where companies would be forbidden from entering administration without the regulator’s consent?
Lastly, on unintended consequences, could this provision make distressed clubs less attractive to investors who fear regulatory delays? I fear that it may. It may also push clubs to delay taking action, making outcomes worse for creditors, fans and staff in the longer term. It could also expose clubs to legal risks, if creditors challenge a failure to act promptly to directors. The Opposition support strong oversight, but clause 47 must not become a regulatory roadblock in moments of crisis. Football clubs must be able to act swiftly to protect their future. The football regulator should be a safeguard, not a barrier to survival. We urge the Minister to have a close look at some of those questions and hopefully provide some answers today. We fear that this clause, as drafted, may have a number of unintended consequences.
Ordered, That the debate be now adjourned.—(Vicky Foxcroft.)
Mental Health Bill [ Lords ] (Third sitting)
Thursday 12th June 2025
(3 days ago)
Public Bill CommitteesMental Health Bill [HL] 2024-26 View all Mental Health Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2025 - (12 Jun 2025)
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Committee divided: - Ayes: 11 / Noes: 4 - Question accordingly agreed to.
The Minister for Care (Stephen Kinnock)
I beg to move amendment 26, in clause 5, page 11, line 22, leave out—
“by a constable or other authorised person”.
One of the tests for detaining a person under the mental health legislation is that harm may be caused, or that treatment is not possible, without detention. This amendment and amendments 27, 28 and 29 remove wording stipulating that the detention that is necessary must be detention by a constable or other authorised person (as defined).
The Chair
With this it will be convenient to discuss the following:
Government amendments 27 to 29.
Clause stand part.
Stephen Kinnock
It is a pleasure to serve under your chairship, Ms Furniss.
Government amendments 26 to 29 seek to remove previous amendments to the clause tabled by Lord Kamall, Earl Howe and Baroness May of Maidenhead, which added police and other authorised persons to sections 2, 3 and 5 of the Mental Health Act 1983, giving the police additional powers to detain people under the Act where they currently have no powers to intervene. We do not support extending police powers in that way, and we understand that the police do not support an extension either. It would not be appropriate to involve police officers in clinical decision making about whether a person meets the criteria for detention for assessment or treatment under the Act, or to involve them unnecessarily in the temporary detention of patients who are already in hospital to enable a Mental Health Act assessment to take place. We also seek to remove clause 50 from the Bill; we look forward to discussing that at the appropriate time on a future day in Committee.
I will now move on to clause 5 in its entirety. The grounds for detention provide decision makers with criteria that must be applied when deciding whether it is appropriate to detain, or to continue to detain, a person under the relevant sections of part II of the Mental Health Act, covering civil patients. The clause will replace the existing criteria, which the independent review of the Mental Health Act found were too vague, and will take forward changes recommended by the review. It will strengthen and clarify the criteria to require a risk of “serious harm” to justify detention. Consideration must also be given to the nature, degree and likelihood of the harm. For a patient to be detained for treatment under section 3, there must be a “reasonable prospect” of therapeutic benefit.
The code of practice already directs clinicians to consider the “nature”, “likelihood” and “severity” of harm. We believe it is right to formalise those considerations by putting them in primary legislation. We have not defined serious harm in the Bill. We will work with stakeholders to provide guidance on that in the code of practice. We are not seeking to raise the bar on detention, which could put patients and the public at risk. However, we think that when the serious decision is taken to deprive someone of their liberty, and potentially to treat them against their wishes, there needs to be consistent consideration of the potential risk of harm to a person or to others to justify that.
The revised risk criteria will not apply to part 3 patients. There are already tailored risk criteria for patients in the criminal justice system. Those are considered by the court and the Secretary of State for Justice, and allow for all relevant factors, including public protection, to be considered on a case-by-case basis. For those reasons, I commend Government amendments 26 to 29 and clause 5 to the Committee.
Dr Luke Evans (Hinckley and Bosworth) (Con)
It is a pleasure to be here on day two in Committee. I will first address clause 5 and then the Government amendments.
The clause marks significant reform to the legal foundations of mental health detention in this country. At its core, the clause seeks to update the grounds for detaining individuals under the Mental Health Act. It will amend several critical sections—sections 2, 3, 5, 20 and 145—to ensure that detention is used only when absolutely necessary and in line with the principle of least restriction, which was put forward in the Wessely review and is now in the Bill.
Let me outline what the changes will do in practical terms, as the Opposition see it. Under section 2 of the Mental Health Act, “Admission for assessment”, detention will now be justified only if “serious harm” may occur to the “health or safety” of patients or others. The decision must weigh the “nature, degree and likelihood” of that harm, a much more structured and risk-based framework than previously existed. Under section 3, “Admission for treatment”, we will see a clearer threshold. Detention will be permitted only if “serious harm” may occur without treatment, if the treatment is necessary, if the treatment cannot be provided unless the individual is detained and, crucially, if appropriate treatment is available.
Section 5(4), on emergency hospital detention, will be updated to align with the same “serious harm” test, recognising that even urgent situations demand clear legal justification. Section 20, which governs the renewal of detention process, will be brought in line with the same standards, such that they apply not just once but every time detention is extended. That is an important safeguard. A statutory definition of “authorised person”, those empowered to detain, will be introduced in section 145, ensuring that such persons are appropriately trained and regulated.
Those changes respond to real and long-standing concerns. The 2018 independent review of the Mental Health Act warned that our current criteria are too broad and that they allow for detention that is often unnecessary, sometimes prolonged and, in too many cases, distressing for patients and families. Clause 5 seeks to change that by grounding detentions in a clear, evidence-based assessment of risk and necessity.
The clause has significant advantages. It will introduce stronger safeguards against inappropriate detention and will shift the focus away from diagnosis alone and towards the actual risk of serious harm. It will offer greater clarity for professionals, giving them structured criteria for making decisions that are ethically and legally sound. It will enhance patients’ rights by aligning the law more closely with the principles of autonomy and proportionate care.
However, with every reform there are challenges, and we must not ignore them. The terms “serious harm” and “likelihood”, although essential, remain open to interpretation. We must ensure that the forthcoming code of practice offers clear, detailed guidance that minimises subjectivity and inconsistency in their application.
Furthermore, there is a question mark over public safety, which the Minister seemed to point to but which I want to explore a bit further. We have not tabled an amendment, but I am keen to understand how this works. Given that the definition is potentially ambiguous and in practice quite difficult to judge, has the Minister considered inserting the words “cumulative” or “escalating”? To be clear, this is a call not to water down those safeguards, but to shore them up with a safety net, so that this reform does not inadvertently trade off liberty against safety, especially in communities.
We need to ensure that we are not inadvertently introducing a real risk that someone, particularly someone on the margins of eligibility, may fall through the cracks. There are individuals whose behaviour is escalating and whose pattern of deterioration is known to services, but who do not yet meet the “serious harm” threshold at the time of assessment. I have seen this at first hand as a clinician—a picture that goes round and round. These are some of the most complex situations that one will ever have to deal with in one’s clinical career. The words “escalating” or “cumulative” may help to give further clarification to clinicians on the frontline.
For those on the margins, what consideration have the Government given to the notion of a duty for professionals to produce a risk management plan in any case in which detention is considered but not authorised, so that we do not simply assess and walk away, but assess and act in a community setting? That would not lower the threshold, but contextualise it. It would ensure that detention remains a measure of last resort, but not too late a resort.
Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)
My hon. Friend is making a powerful point about some of the challenges around the interpretation of the Bill. Does he agree that there needs to be a clear plan for the training of professionals so that there is consistency across the board?
Dr Evans
My hon. Friend is spot on about training. It is one thing to enshrine these measures in primary legislation; it is another thing to have the training and interpretation that go with them. One of the reasons that we have not tabled an amendment on the matter, as yet, is that there could be some concerns about what “cumulative” or “escalating” behaviour looks like. Ask any clinician and they will say that they have seen patients who are on the borderline and are struggling. It can be unclear whether they are within or outside the definition; they could be wavering between the two, given the state of their mental health. That is a real concern, but the broader pattern of identifying the picture of what is happening could be helpful and important.
One way to address the issue would be to review the data and legislation. Would the Government consider carrying out a review two years after the implementation of the Bill, specifically to look at the working of the legislation through the lens of public safety? I hope that there will be no concerns, but that would provide a backstop and a legal safety net. We do not want to wait another 40 years if there are changes that need to be made.
Gregory Stafford (Farnham and Bordon) (Con)
I entirely agree with my hon. Friend’s request to the Government for a review two years after implementation. Does he agree that it needs to be cross-governmental? The Home Office and other bodies such as the Ministry of Housing, Communities and Local Government and the NHS will need to be involved.
Dr Evans
My hon. Friend makes an incredibly important point. We heard on day one how these services interact, and that is completely correct. We need to look through the lens of public safety, because while we are quite rightly enshrining the autonomous nature of the patient as an individual, there is also the question of what we look at as a society. It includes the likes of local councils, mental health care and NHS care. Schooling could also be involved, as well as the judiciary and the Home Office. I think it is reasonable to ask the Government to look at that, in the light of recent high-profile cases, and say, “What are we doing? Does the legislation really do what we think it does?”
Clause 5 is a good step forward, but we must make sure that it is fit for purpose and that we have a review mechanism in place. I do not think that it necessarily needs to be in statute yet, but it will be interesting to hear the Minister’s response. Conducting a review on such a change, through the lens of patient safety, would be very useful.
There is also the matter of resources, which we keep coming back to. Change in detention criteria will rightly push us towards community-based alternatives—that is the whole point of what we are doing—but unless those alternatives are properly resourced with staffing, crisis services, housing and follow-up care, we will risk replacing one form of system failure with another. I appreciate that the Secretary of State is committed to reporting each year to the House, but will the Government publish a timetable and framework to support the implementation?
As we heard from my hon. Friend the Member for Solihull West and Shirley, training is also critical. Professionals need the tools and time to learn the framework. They need support, implemented in real time, often under pressure and in complex, high- stakes circumstances.
Clause 5 is a welcome and thoughtful step in modernising mental health law. It will strengthens patients’ rights, sharpen clinical practice and bring us closer to a system that balances safety, liberty and humanity. However, we must be mindful about the risk of delayed intervention. In borderline cases in which the threshold is not clearly met but concerns remain high, we must ensure that there is still a route to timely, compassionate support. Otherwise, we may swing the pendulum too far in the opposite direction, from the overuse of detention to the underuse of care.
On Second Reading, I said:
“There is little greater moral burden than deciding for someone who cannot decide for themselves where care ends and control begins.”
Clause 5 typifies that burden: we are deciding who should be detained and why. I said:
“Make no mistake, this is what this House is grappling with”,
and indeed it is what our Committee is now looking at in detail. I also said:
“Involuntary care should never be the first instinct or answer, but a resort to prevent harm to both the individual and those around them.”
I said that compassionate care demands precision not only in its delivery, but in its design. I concluded:
“Without precision, we simply have sentiment.”
I promised then, as I promise now, that
“we will endeavour to ensure that the Government’s sentiment becomes a commitment.”—[Official Report, 19 May 2025; Vol. 767, c. 850-851.]
That neatly sets the scene for discussing Government amendments 26 to 29.
Gregory Stafford
Before my hon. Friend moves on to the amendments, I want to press him on the point about training, which my hon. Friend the Member for Solihull West and Shirley brought up. I support the change to the thresholds for detention but, given that it is potentially quite a significant change, what level of training will be required? Does my hon. Friend the Member for Hinckley and Bosworth have any suggestion about how long it will take to train the relevant professionals so that there is consistency when the Bill becomes law? Does he feel that there should be a period of cooling off or training time before this part of the Bill is implemented, so that the training can catch up?
Dr Evans
My hon. Friend makes an important and poignant point. The Government have rightly stated that this change could take up to 10 years to implement, but we need to ensure that the most important safeguards are set out. Elsewhere, the Government have suggested that they will be in the code of practice. When we were discussing section 5 of the Mental Health Act and other issues, I said to the Minister that we need a constructive timetable, not only to know what the roll-out will look like but so that we can consult with the professions and ensure that they are able to deal with it.
Later, we will again discuss the interface between the Mental Capacity Act 2005 and the changes that bring in new tests. That will be really important. We will also discuss the change of statutory safeguards for electroconvulsive therapy and changes to the statutory safeguards around who the second clinician will be—there is quite a feast of movements through this legislation. Make no mistake: that is what the country wants, but the Government must clearly set out some rationale for the timetable.
Unfortunately, the Opposition’s proposal for a costed plan was defeated. We wanted to set out some kind of concrete timetable over 18 months to ensure that we do not slip back, and to give the Government the flexibility to make the necessary cultural and legal changes. I hope that that addresses some of my hon. Friend’s concerns, but he was right to put that point to the Minister.
I oppose Government amendments 26 to 29, which would remove the reference to detention
“by a constable or other authorised person”,
and to delete the proposed definition of “authorised person”. I support the argument advanced powerfully in the other place by Baroness May, whose experience as a former Home Secretary gives her deep insight into the interaction between policing and mental health. Of course, it was under her premiership that the entirety of this discussion was progressed. I thank her for everything she has done, although I am not quite so thankful for the workload that it has created for me in my evenings and weekends. Her central message was clear: we must stop treating mental health as a policing issue and start delivering the right care from the right person in the right place. I wholeheartedly agree, as I am sure the Committee does.
I understand what the Government are trying to achieve. On the face of it, the amendments are technical. They seek to ensure that detention under the Bill is solely based on necessity where there is a risk of serious harm or the need for urgent treatment, and that it is not tied to who is doing the detaining. On paper that sounds reasonable, but in practice those changes will remove vital clarity and will risk baking in a system that has already failed too many people in mental health crisis.
Let us look at the problem with removing “authorised person”. The Bill, as amended in the Lords, wisely recognises the need to broaden the group of people who can respond to mental health incidents so that they include not just police officers, but trained and equipped professionals, mental health nurses, paramedics and approved mental practitioners—people who are qualified to care, not just to detain. The definition of “authorised person” in clause 5(7) ensures that only those with training competence and safety considerations are empowered to act, so it provides a framework for accountability, not a free-for-all. By removing the framework, the Government amendment would create a legal vacuum: it tells us that someone must be detained, but not by whom. In doing so, it would leave NHS trusts, police forces and local authorities with a lack of legal guidance and with a risk-averse default to the police.
I think we agree that the police should not be the first responders. As Baroness May has reminded us, and as many officers have told me, the police are routinely called out to mental health incidents, not because they are best placed to respond but because there is no one else available or authorised. That is neither fair to the police nor fair to the individuals in crisis. A police uniform can escalate distress. A custody cell is not a place of recovery. An officer guarding a patient in accident and emergency for 29 hours, as the Metropolitan police have reported, helps no one—not the patient, not the police and not the public. The 2019 College of Policing snapshot found that 95% of mental health-related calls did not require a police response. That is staggering. It underlines why we must build up the capacity and legal authority of clinical professionals, not erase them from the statute.
I turn to the Government’s argument and why it falls short. The Government’s case is that removing the phrase
“by a constable or other authorised person”
will de-emphasise the police and make the law more flexible. Ironically, however, removing the clarity about who may act risks re-entrenching police dominance in these scenarios, simply because no one else will feel legally empowered to intervene. The Government argue that the definition is unnecessary or potentially restrictive, but I say the opposite: a well-drafted enabling definition gives confidence, clarity and a lawful mandate for healthcare-led responses. This is not about excluding the police altogether. There will always be situations in which an immediate threat to life or serious violence requires a police presence, but that should be the exception, not the structure around which our mental health law is designed.
Gregory Stafford
I think, from what my hon. Friend has said and what the Minister said at the outset, that Members on both sides of the Committee want the same thing, which as far as possible is to keep the police out of the making of these decisions, unless of course—I made this point on Second Reading and was intervened on by the hon. Member for Ashford—someone with a mental health issue has a firearm or something like that. The clear point of dispute is about whether the phrase that was placed in the Bill in the other place achieves that. Would my hon. Friend not agree that someone who has served as Home Secretary and Prime Minister and the noble Lords, who have vast experience in healthcare over many years, have probably got the definition right, which is why the Government should support the wording currently in clause 5?
Dr Evans
My hon. Friend is right: we agree that this is not a place for the police unless there is an absolute sign of criminal intent. The problem is that what happens is a member of the public sees something, reports it to the police and, naturally, it is the police, the fire service or the paramedics who come forward. If a person is unsure about someone behaving in an irrational manner, which by definition someone with a mental health issue could well be doing, the likelihood is that they will call the police and the police will be the first responders. We know that they tend to be the fastest to respond.
Slightly widening and refining the definition of who can respond would allow us to build a framework and culture that might encourage a first responder—we often say that the AA is the fourth emergency service; it may well be that mental health services would be the fifth emergency service and could respond. That is what we need for service provision. The idea behind this is to try to crowbar the police out of that position, unless absolutely necessary, as my hon. Friend rightly says. Allowing a new framework would be good for safety and good for the police, because they would be freed up to do other stuff. More importantly, it would get the care as quickly as possible to the people who need it the most.
Anna Dixon (Shipley) (Lab)
I think there is some agreement between us, in the sense that obviously a police officer is not necessarily best placed to deal with those who are in mental distress. Having spoken to my local police team, I know that they would much rather there were frontline mental health professionals with the capability to take a person to a place of safety that is not a police station. We will come on to that in relation to later clauses, but does the hon. Gentleman agree that we already have some highly skilled professionals who are closely involved in these decisions in the form of approved mental health professionals? The vast majority of them—95%—are social workers. They play a very strong and excellent role, particularly to counterbalance the narrower clinical health perspective that there may sometimes be. Does he agree that, in a way, we already have in place some highly skilled individuals who are closely involved in making sure that these decisions are made in the best interests of the patient and the public, but also with clinical input?
Dr Evans
The hon. Lady makes an incredibly important point about the range of people who can and do respond in such cases. The Opposition are not saying that is a problem; we want to support them by giving them the legal backing and framework to step up to be the first port of call. Unfortunately, by default it is always the police, because they are the only ones whose ability to deal with such situations is covered. The amendment aims to create a culture so that the people she mentions have the confidence to deal with them, and the accountability so that we can say, “The police should not be there first; it should be the first responders that we have.” We are starting to see cross-fertilisation; we are simply providing a legal framework that says that this should be the way forward by default and design, not an exception where people are working around the system.
I think we are on the same page here. It is about the nuances of how we do this, and whether it requires primary legislation. The House of Lords voted that it requires primary legislation, and the Opposition share that belief. That is why I am asking Government Members to reconsider when the amendment comes to a vote whether the balance is right because we would give people the security, legal certainty and ability to do exactly what they want to do, which is to care for patients, not worry about whether there will be some criminal side to the situation, and what the police interaction could be.
Anna Dixon
Obviously, the Lords amendment puts the role of the police into law. I think we agree that we do not want to have the police’s role enshrined in legislation. Over the implementation period for this important Bill, the idea is that community health services will be in place, including urgent response for those who find themselves in crisis. We need to remove this provision to make sure that the default position remains for community support.
Dr Evans
The hon. Lady points to the fact that the police are named, as they should be. Imagine if we took out the police completely—whowould then have the power to restrain, restrict and detain people under the Mental Health Act? That is the whole point of having the provision. What we are trying to do is refine and constrict the definition to make it clear for everyone in this country exactly who is entitled to do what. Emergency incidents could happen outside this House—would the police and mental health responder be there? That will come down to the clinical judgment of the 999 responder, the call handler and the clinician there, so I do not want to make it too restrictive. At the same time, we have to consider the evidence that is right under our nose, which is that 95% of the time the police are being called out inappropriately for mental health conditions. I guess that is the rub of what we are trying to sort out.
Our responsibility in this House is not only to write good law, but to enable better systems of care. That means ensuring that the law empowers the right professionals to act at the right time, and centring the needs of the individuals in crisis, not just managing risk from the top down. I therefore ask the Minister to reconsider the amendments. Instead of deleting the definition of “authorised person”, let us work to try to strengthen and clarify it to support a wider, safer and compassionate response to mental health crises. Let us seize this opportunity to reset the balance between policing and care, which the police themselves are asking for and our continents desperately need.
Much was made of the amendment in the other place, and I am grateful to the Lords Minister, Baroness Merron, for writing to Baroness May with an explanation of her concerns about the changes. The letter is dated 3 June and a copy was kindly laid before this House and the Committee. It is worth working our way through some of the issues raised. I fully recognise the Government’s concerns within it, and I agree with the need for extreme care when legislating on the deprivation of liberty, but I express reservations about the Government’s decision to overturn the amendment.
According to the letter, the Government’s central concern seems to be the unintended extension of police powers. The Government argue in the letter:
“Your amendments to clause 5 would give the police additional powers under the Mental Health Act. We do not support extending police powers in this way, and we understand that the police do not support this extension either.”
That is also what the Minister has said in Committee. Respectfully, that is a mischaracterisation of the amendments. The original Lords amendments do not extend the powers of the police; they reflect current practice where the police are often involved in detaining individuals in mental health crises.
Sojan Joseph (Ashford) (Lab)
Does the hon. Member agree that, since detentions under sections 2, 3 and 5(4) of the Act often happen in clinical settings, are completed by consultants, psychiatrists and social workers, and do not involve police, we do not actually need police presence on these occasions?
Dr Evans
I bow to the hon. Member’s expertise on this; the problem is that all the evidence shows that the police are the first there. I would like to see much more of him and his colleagues being able to respond and carry this out. We are giving them the legal certainty to do so. That is the argument for making sure that we have codified safeguards around who is and is not able to make such decisions. At the moment, it is purely the police who are called out to these situations, but this gives us another legal weapon with which we could fight this inappropriate use.
The aim is to codify the safeguards around who can exercise detention, ensure accountability and, importantly, enable health-led alternatives to police detention. Are the Government confident that the decision does not leave a legal grey area around which profession or agency has the statutory power to detain, especially during urgent community or hospital-based crises?
On the authorised person category in the section 135 and 136 powers, the Government say in their letter:
“Extending these powers to ‘authorised persons’…could potentially lead to staff, patient and public safety issues.
That is precisely why the Lords amendment included a tightly defined category of authorised person, subject to the Secretary of State’s regulation, mandatory training and safety provision. The intent is to ensure that when a professional, such as a trained mental health nurse, is better placed to respond than the police, they can do so lawfully and appropriately.
The Government say:
“Section 135 and 136 powers have been designed for police officers who have specific training, equipment and access to rapid support”.
Many frontline NHS and social care professionals, including AMHPs, crisis team members and community psychiatric nurses, already respond to acutely distressed patients in highly volatile environments. They lack the police powers, but not the clinical expertise. The amendments would bring clarity and lawful backing to the situations they already manage. Take, for example, a mental health nurse in a community who arrives at a person’s home to conduct an urgent assessment. The individual is clearly experiencing psychosis, and is at immediate risk of self-harm. Under the current law, the nurse must call the police, delaying the care and potentially escalating the situation. Under the amendment, they could lawfully detain, provided they are authorised and trained.
There are also confusions over the emergency response roles. The Government letter states:
“There is a very real risk of confusion over who should respond in an emergency if multiple agencies have the same powers, which could lead to delays.”
That concern is valid, but confusion is far more likely under the current law, where roles are unclear and NHS professionals must sometimes act unlawfully or wait for overstretched police. A regulated and accountable authorised person category, established in law and detailed in the code of practice, would clarify responsibilities, not blur them. Have the Government done any modelling of the delays and safety risk caused by not empowering suitably trained healthcare professionals to act in urgent situations?
The letter also highlights concerns from stakeholders that this is
“a radical proposal with a number of serious and potentially dangerous consequences and should not be pushed through without proper consideration”.
These proposals were not developed in isolation; they were advanced in the House of Lords, where the former Mental Health Act reviewers, legal experts and mental health professionals carefully considered their scope. They are also consistent with the direction of the 2018 independent review, which emphasised reducing coercion, racial disparity and the overuse of police powers.
The “right care, right person” initiative already expects health professionals to step in, but—unless I stand corrected—the initiative is not underpinned by any legal reform. Without amending the Act, health staff are still expected to take on crisis care without the powers of protection that they need to safely or lawfully do so. How can we expect health-led responses to mental health crises without giving health professionals the power in law to act?
Turning to guidance and the code of practice, the Government say that they will issue further guidance on police handover protocols and the legal frameworks. While guidance is welcome, it is not a substitute for statutory reform. Guidance cannot grant powers to detain or protect professionals from liability. We can have legal clarity with this framework.
If the Government want to push ahead with removing the amendments, will the Minister consider committing to a formal consultation with NHS England, the AMHP leads, frontline staff and patients on creating a legally robust authorised persons role? Would he consider piloting models of community-based urgent response teams that include AMHPs and trained nurses with delegated powers? Would he legislate for police exit strategies in A&E and community crisis responses that are enforceable, not just guidance based? Given our discussion about new clause 24, there is clearly scope for a sensible piece of work in the grey area to improve the interface for patients, clinicians and police. I think that is one we can all agree on.
Gregory Stafford
I agree with my hon. Friend. I think we agree on both sides of the Committee that, where appropriate, police should not be the first responders to this issue, although, obviously, there will be situations where they should be. If the Government push ahead with removing the amendments, is there any indication in the Bill, or indeed elsewhere from the Government, of what they will do to achieve what Members on both sides of the Committee seem to want, which is to avoid, as far as possible, having the police as the detainers and responders? If there is nothing else, I cannot see why the Government would want to remove the amendments made by the noble Lords in the other place.
Dr Evans
My hon. Friend is absolutely right. Under the last Government, the “right care, right person” initiative was launched with the Humberside police force to try to ensure appropriate care, but that is an example in isolation.
One solution would be to include guidance in the codes of practice, but it would not have the statutory footing to allow that legal certainty, which is the concern. Another would be to include something in the annual statement that we will receive from the Government. We should work collaboratively to try to find a decent piece of work to look for the evidence base and build a delivery plan to help the police extract themselves from situations, when appropriate, and care givers to insert themselves. It is admirable to share a problem that is difficult not just in England but in Wales, Scotland and Northern Ireland.
I agree that the Government are right to proceed with caution, but caution is not the same as inaction, especially when lives are at stake and the law no longer reflects the reality of mental health care. The amendments are not about expanding police powers; they are about reducing the need for police involvement by giving others the lawful authority to act. Although maths may not be my strong point, I am not blind to the make-up of this Committee; I realise that the change will inevitably happen. I want to press the Minister on how he proposes to reduce the burden on the police to safeguard them from thousands of hours spent dealing with mental health crisis issues. In extreme cases, they are not appropriate responders.
This is the key issue to improve so many aspects of our society. We could improve the working life of the police, allowing them to do what they are paid to do, trained to do and passionate about: policing and protecting their communities. We could improve life for the public, because it would free up the police to tackle crime and keep them safe. Most importantly, we could provide the correct care to those patients at their biggest time of need. I hope the Minister will set out how the Government plan to achieve that.
Sojan Joseph
I rise to support the Government amendments, which will simply remove the words
“by a constable or other organised person”.
On Second Reading, I highlighted my concern about the amendments made to the Bill in the other place that sought to extend police powers of detention under sections 135 and 136 of the Mental Health Act to other organised persons, including medical practitioners, approved mental health professionals, mental health nurses or doctors and further healthcare and social care professionals.
I know that the noble Lords who introduced the amendments intended to remove the need for the police to be present at mental health incidents in the absence of any risk. However, they would grant the police greater powers; as an unintended consequence, they would also apply to detentions under sections 2, 3 and 5 of the Mental Health Act, where the police currently do not have power to intervene.
A section 2 application is completed by two doctors and a social worker, and the patient may already be in a clinical setting. Section 3 relates to somebody who is already receiving treatment or already has a known diagnosis in a clinical setting. Doctors’ powers extend to that section; the police currently do not have any role in completing a section 3 application. Section 5(4) provides nurses with a holding power for a patient who is already in the clinical setting, where the nurse believes that the patient is at immediate risk; again, the police have no role.
If we did not make the Government amendments, we would give more power to the police to get involved under those sections of the Mental Health Act and put more pressure on police services.
Gregory Stafford
I am interested in the hon. Member’s argument, but it seems to be entirely the opposite of the one he made when he intervened on me on Second Reading. He said then:
“Sections 135 and 136 of the current Mental Health Act give the police the power to break into someone’s property or detain somebody in a public place where there is the possibility of the involvement of weapons. Does the hon. Member think that health professionals would be able to manage those kinds of situations? Would the police not be the best people to deal with those situations?”—[Official Report, 19 May 2025; Vol. 767, c. 815.]
In that intervention, the hon. Member was pressing for police involvement; now, he seems to be arguing that he wants to take the police out of these settings. I am a little confused by his stance.
Sojan Joseph
What the hon. Member read is absolutely right. I was talking about sections 135 and 136. I am talking here about sections 2, 3 and 5. I absolutely stand by what I said about sections 135 and 136, and I am happy to come to that. As a former mental health nurse, I certainly would not support giving the police greater powers under sections 2, 3 and 5 of the Mental Health Act.
I am also opposed to the amendments passed in the other place because I believe that the extension of legal powers held by the police to other healthcare professionals would represent a major shift in the roles and responsibilities of healthcare and care professionals, placing significant additional pressure on the NHS and social care providers.
The Royal College of Psychiatrists, the Royal College of Nursing and the British Medical Association are among the health and social care organisations that have warned against such an extension, saying that it is
“a radical proposal with a number of serious and potentially dangerous consequences”.
Those organisations also point out that the proposed extension has not been properly tested with relevant health and social care professionals and has been given minimal serious consideration during the eight years in which reform of the Mental Health Act has been under discussion.
The majority of assessment under the Mental Health Act already happens without police involvement. However, where the police may be required to make a detention, I know from my experience working in mental health that the presence of officers can often ensure that an otherwise risky situation remains contained and everyone remains safe.
Entering someone’s home without permission is fraught with huge risk and currently is done only with the assistance of police intelligence. Under section 135, health professionals ask the court for an order to remove somebody forcefully from their residence and the police use that order to do so; sometimes, they have to break in. That is the power that the hon. Member for Hinckley and Bosworth spoke to earlier. Without it, health and social care professionals would be expected to enter homes without police help, and without crucial intelligence that could ensure their safety. As Dr Lade Smith, the president of the Royal College of Psychiatrists, said:
“It is well known that at times, people experiencing a mental health crisis cannot be safely reached and cared for without the assistance of the police. Delegating police powers without proper consultation or planning is likely to disproportionately affect those from minoritised backgrounds and would increase risk to patients and compromise the safety of others. It sets a dangerous precedent.”
I am also concerned that the amendments passed in the other place granting police powers to authorised persons risk damaging their therapeutic relationships with patients. They would have the effect of lessening clinicians’ ability to treat patients, and I fear that patients would be less likely to attend an appointment if they thought they might be forcibly detained by the clinician.
Aphra Brandreth (Chester South and Eddisbury) (Con)
It is a pleasure to serve under your chairship, Ms Furniss.
Government amendments 26 to 29 risk undoing some of the good work done in the other place, where careful improvements were made to strengthen the Bill and ensure a more compassionate and effective response to mental health crises. I am concerned that by removing the words
“by a constable or other authorised person”
and deleting clause 5(7), which provides a clear definition of who the authorised persons are, we will open up ambiguity about who is permitted to detain someone under the Mental Health Act. This is not just a technical or drafting issue; it has very real consequences for the people involved.
I understand and support the principle of enabling more flexible and clinically led responses to mental health incidents. We all recognise that the police should not be the default option in every case. The amendments made in the Lords acknowledged that and broadened the group of people who could respond to mental health crises beyond police officers to trained and equipped professionals: mental health nurses, approved mental health professionals, paramedics and, crucially, someone trained and equipped to carry out detentions under the Act and who would not be put at unnecessary risk by doing so. “Trained and equipped”—that is the key point.
The definition of “authorised person” in the Bill as it stands makes it clear that those given such a serious responsibility must have the appropriate training and experience and must not be “put at unnecessary risk” when carrying out that role. That wording is important. As the shadow Minister, my hon. Friend the Member for Hinckley and Bosworth, said, it provides a framework of accountability, not a free-for-all. By removing that structure, the Government’s amendments will leave a legal vacuum. The law will say that someone must be detained, but not by whom. That uncertainty will create a risk that services will simply revert to defaulting to the police.
I stress again that that is not fair on the police, who are already under immense pressure. Yes, they are used to seeing people at their most vulnerable, but dealing with someone in a mental health crisis is a very particular challenge, and one that they might not be fully trained to manage. The College of Policing’s 2019 mental health snapshot found that almost 95% of police call-outs flagged as involving mental health did not actually require a police response, yet police officers continue to be sent out because the system lacks clarity and capacity elsewhere.
Baroness May, speaking from real experience as a former Home Secretary, made that very point in the other place. She said that police officers were being sent to mental health incidents for which they had no training or clinical expertise, and were being asked to make judgments that they simply were not equipped to make. She went on to say that
“the very essence of a police presence—somebody in the uniform coming to deal with them—could actually exacerbate their mental health situation”.—[Official Report, House of Lords, 20 January 2025; Vol. 842, c. 1525.]
I would add that, for the individual experiencing a mental health crisis, being approached by the police may feel criminalising rather than supportive. It reinforces a justice-led response rather than a health-led one. That is not the direction in which we should be going.
Although I welcome the Government’s intention to offer more flexibility in emergency and clinical settings, we have to be careful about how we achieve that. Removing the wording inserted into the Bill will not create clarity; it will create confusion. In a system already under pressure, confusion tends to mean delay, risk aversion and inappropriate responses. Removing the specification will not free professionals; it will expose them, and it will expose patients to the possibility of being handled by someone without the right qualifications, which may worsen their condition or create a longer-term distrust of mental health services.
I hope that the Minister can offer some reassurances, both about who will be expected to carry out these detentions and about how we can ensure that they have the proper training, resourcing and protection. Without a clear definition of “authorised person”, we cannot be confident that those involved will have the right expertise to support extremely vulnerable individuals at times of acute need.
I want to touch briefly on the importance of early intervention and de-escalation. Situations involving mental health crises can often be tense, and support in the early moments can be critical. De-escalation is a vital skill; the presence of a calm, trained mental health nurse, for example, in those early moments can change the outcome of a person’s crisis. Having the right professional present—someone who can act without waiting for the police to attend—can be the difference between escalation and calm. The identity of the responder matters.
This is not just about outcomes, but about the experience of the individual. Removing the criminal justice framing from the outset is essential to delivering dignity and the right kind of care.
Jen Craft (Thurrock) (Lab)
There seems to be some circular talk about the level of risk that clinicians and medical professionals can be expected to shoulder. I notice that clause 5(7), inserted in the other place, specifies that they would
“not be put at unnecessary risk”.
Is there not an inherent risk involved in detaining people who need to be detained under the Mental Health Act? Those people are not in a position to give consent and quite often do not wish to be detained. By stipulating that the police will not be involved in situations or by making medical professionals the first responders, is there not a risk of putting them in harm’s way?
Aphra Brandreth
It is extremely important that people are not put at risk, and that is exactly the point I have been making. People need to be properly trained, and we need to set out who those individuals can be, rather than leaving ambiguity in the wording. The Government amendment will undo exactly the protection that the hon. Lady rightly points out.
Gregory Stafford
My hon. Friend is making a clear point, but I want to add that there are clearly places and situations in which non-police professionals, such as mental health professionals, deal with extremely dangerous and violent patients. They are appropriately trained to do so. It is not in isolation that non-police public professionals are dealing with dangerous people. It is about the right situation, the right place and the right training.
Aphra Brandreth
My hon. Friend helpfully expands on the points that I and other Opposition Members have been making. If we are not careful, the Government amendments will move us further away from the aim of a person-centred approach.
I urge the Minister to reconsider the amendments. The wording inserted in the other place struck a thoughtful balance. The wording inserted in the other place struck a thoughtful balance. It allowed flexibility, but grounded it in clear criteria of training, safety and competence. Removing that definition will weaken the Bill. It will make it harder, not easier, to ensure that the right person is supporting someone at their moment of greatest need. We owe it to patients, professionals and the police themselves to get this right.
Gregory Stafford
The clause is a necessary reset—[Interruption.] Goodness, what a background noise! If only I had such a response to everything I said.
The clause is rooted in the central recommendation of the 2018 independent review of the Mental Health Act, that the criteria for detention are too broad and being applied too inconsistently. Too often we hear stories of people being detained not because they pose a real and present danger, but because services are stretched, community alternatives are not available, or there is simply a lack of clarity on when detention is justified.
This clause is necessarily corrective. It raises the bar by introducing a clear and structured risk threshold that requires the possibility of serious harm to health or safety, rather than vague concerns or subjective impressions. The inclusion of terms such as “likelihood” and the focus on actual risk mark a clear move towards the evidence-based practice that we want to see and away from overreach.
For me, the key strengths of the clause include, first, a higher threshold for detention. Under section 2 of the Mental Health Act, detention for assessment is permitted only if serious harm may occur. That means that professionals must assess the nature and the degree of harm, as well as the likelihood, injecting rigour and proportionality into decision making.
The clause also clarifies the treatment criteria. Under section 3 of the Act, detention for treatment is allowed only if serious harm may occur without it and if treatment is necessary, and, crucially, it must be available. That prevents people from being detained without any therapeutic benefit, a concern that has long plagued the system. The clause also aligns measures across the Mental Health Act: the new threshold applies not only to the initial decision to detain, but to emergency detentions and renewals. That brings consistency and coherence across the different parts of the legislation.
The final key point among the strengths of the clause is the definition of the authorised person, which is vital. It ensures that those tasked with detention powers are properly trained and equipped to deal with the complex and often volatile realities of mental health crises. Whether a doctor, an approved mental health professional or a specially trained nurse, the provision ensures that detention is exercised by someone with relevant expertise, not by default by the police. Taken together, the changes significantly strengthen the legal framework around detention, reduce the risk of misuse and reaffirm the principle of least restriction, the idea that coercive care should be used only when no other alternative exists.
The problems I have with Government amendments 26 to 29 are as follows. The Minister proposes to delete references to
“a constable or other authorised person”
from the clause. On the surface, that may appear to be technical, but in fact I think it is a profound and problematic shift. The amendments would weaken the very safeguards that the clause is trying to strengthen. We must be careful about how we frame this.
The amendments risk undoing the clarity and purpose of the clause by making it ambiguous who can lawfully detain someone under the Mental Health Act. Instead of defining the responsibility clearly and ensuring that it is held by trained professionals, the amendments will strip the clause back to vague flexibility, with no guarantee that the right expertise is present in real-time decisions.
The power to detain and to move individuals to a place of safety, in particular under sections 135 and 136 of the Act, is largely restricted and falls under the responsibility of police officers. These provisions, while designed to protect the public, can often result in the criminalisation of people in acute mental health crises, even when there is no threat of violence or risk to others.
Furthermore, the clause as passed by the House of Lords would relieve police officers of responsibilities that fall outside their core expertise, while also reducing the stigma and trauma associated with police-led interventions. It would streamline the process, ensure that individuals are supported by professionals trained specifically in mental health care, and maintain police involvement only where there is a clear and present risk to safety. In doing so, it would significantly strengthen the system and place mental health crises more firmly within the domain of health rather than law enforcement.
Let me set out the key problems with Government amendments 26 to 29. First, I think that they will blur the lines of responsibility. The clause rightly states that detention must be carried out by a constable or other authorised person, namely someone who has been designated and trained to carry out this high-stakes task. The Government amendments will remove that requirement. In doing so, they risk creating confusion on the ground about who is permitted to act. In a moment of crisis, ambiguity costs time, and time costs lives.
Jen Craft
On clause 5(4), the amendment in the other place inserted the phrase
“by a constable or other authorised person”
which relates specifically to the phrase
“unless the patient is immediately restrained from leaving the hospital”.
What the hon. Gentleman describes as a level of ambiguity in the subsection allows that to be done by people who are not necessarily listed as an authorised person, such as a medical practitioner. I think we would all agree that we would not expect to see a nurse, doctor or other clinician immediately and physically restraining a patient, and that when a police constable is not available, other people, such as hospital security staff, can carry out the task. The clause says, “immediately restrained”. The specification in the list of words proposed in the other place can leave people at risk of harm, particularly clinicians.
Gregory Stafford
I confess that I do not entirely follow the hon. Lady’s argument. My understanding is that the people she has listed—for example, hospital security staff—are not covered at the moment, so I do not think that that is the case. As I said in response to my hon. Friend the Member for Hinckley and Bosworth, there are situations, in a number of settings, in which mental health professionals act in the capacity of restraining. With the correct and appropriate training, which is what I think all Opposition Members want, I do not think that the issue that the hon. Member for Thurrock is raising would necessarily arise. Having said that, if she really feels that the wording needs to be tweaked, I look forward to seeing and potentially supporting her amendment to the subsection, and I hope she tables it.
The second key problem is the risk of returning the burden to police officers. We have heard from Members on both sides of the House in the debate, and from police forces up and down the country for years, that the police do not have the expertise, training or capacity to be the first responders to mental health emergencies. Clause 5 finally reflects that reality, helping to move the response from law enforcement to healthcare. The Government amendments would muddy that distinction. They would result in the police once again becoming the default responders—not because it is right but because it is unclear who else is meant to act.
Thirdly, the amendments introduce legal and safe-guarding risks. Without a clear definition of who can detain, one risks inconsistency, poor practice and potentially unlawful deprivation of liberty. The amendments offer no alternative safeguards—just the deletion of the existing ones. That is not reform; it is abdication of responsibility. Finally, they undermine the spirit of the Bill. The Bill aims to modernise mental health legislation by making it more humane and effective, and more rooted in health than enforcement. The amendments point in the opposite direction. They strip away clarity, increase reliance on the police and risk compounding trauma for those already in crisis.
It is not just about legislative precision; it is about protecting people. When someone is in acute mental health crisis, they are at their most vulnerable. Turning up with police officers, sirens and handcuffs does not calm the situation; it escalates it. It creates trauma, damages trust and can lead to long-term disengagement from mental health services. Clause 5 offers us a path out of that pattern. It allows approved professionals—such as paramedics, mental health nurses and crisis practitioners —to intervene early, with care and dignity. It does not exclude the police, where there is a genuine risk to safety, but it rightly repositions them as the last resort, not the first response. The Government amendments may be well intentioned, but they threaten to unravel that balance. We cannot allow vague flexibility to become a smokescreen for inadequate planning or under-resourced services.
If the Minister pushes his amendments to a vote, and, as the parliamentary maths suggests they will, those amendments pass, what will he do to sort out the problem that we, on both sides of the House, have talked about today? He is currently planning to keep the status quo, which we all seem to agree is not appropriate. At least we and our noble Friends in the other place have attempted to improve the situation. What will he and his Department do?
The clause is part of a broader rethinking of how we response to mental health need. It supports community-based care. It pushes for better training. It honours patient autonomy and it places the right people—clinicians, not constables—at the centre of care delivery. We all want a system where people in distress are met with compassion, not criminalisation. Clause 5 helps us to get there. The Government’s amendments drag us backwards. Clause 5 is one of the most thoughtful and necessary parts of the Bill. It raises standards, reduces harm and finally begins to close the gap between what the Mental Health Act allows and what good mental health care demands.
Stephen Kinnock
I will touch on the questions that have been asked on cumulative and escalating behaviour, on having a review of public safety and on the training plan. The details will be provided for in a mixture of the code of practice and the annual written ministerial statement.
The code of practice will be based on consulting both those who use the new criteria, such as clinicians, approved mental health professionals and members of the tribunal and, then, of course, on the other side, those with lived experience, service users, families and carers. It will be shaped and drafted on that basis. It will then go out to public consultation and will be laid before Parliament so that Parliament will have an opportunity to debate it. It will be a comprehensive and detailed development of the code of practice, and will address the issues around cumulative and escalating behaviour, the public safety issues and training.
On cumulative and escalating, it is worth noting that under the reforms in both the Bill and the current Act, clinicians have the power to detain on the basis of a risk of harm that may occur, not that already has or is happening at the time. That power already exists.
Dr Evans
Maybe it is my clunky naivety as someone stepping into the legal statutory framework, but I was hoping the Minister would guarantee he could take that away to look at with the team. I know from my clinical experience and from speaking to colleagues that it is one of the hardest things to measure and look for. Later, we will discuss areas where there are good case examples of people who have shown the problem of escalating behaviour that is missed by the authorities. This might be a clumsy and clunky way of trying to highlight that point, which is why we have not yet come up with amendments, but I would appreciate the commitment to look further at that when the Government takes the point away. It is really important to make sure we can give clinicians more certainty around what this looks like.
Stephen Kinnock
I thank the hon. Member for the intervention, but I simply repeat that under both the Act and this Bill, which will reform that Act, clinicians have the power to detain on the basis of a risk of harm that may occur, not one that has already or is happening at the same time, so, in my opinion, this power already exists. What is the point of over-embroidering and adding more questions and considerations when those questions and considerations are already answered? Let us just try and streamline things, please, and make things simple rather than complicated.
We had a lengthy debate on the amendment. Let us just boil this point down to its essence: the majority of mental health incidents are managed without police involvement. Approved mental health professionals have powers under section 115, section 6 and section 137 to enter a person’s home and to assess and convey said person to a hospital. That is the first point: all the concerns that have been raised by the Opposition are very clearly addressed by the powers that already exist for AMHPs.
We support “right care, right person”. Policing is of course operationally independent, and those “right care, right person” arrangements are planned and developed through detailed multi-agency partnerships on the ground. We need to be pragmatic and recognise that “right care, right person” is the right way forward. The Government are committed to it, so let us let the practitioners, the experts and the police on the ground work in a practical and pragmatic way to address these incidents as they occur. In many cases, it is simply impossible to legislate for these incidents. By definition, every person experiencing trauma experiences it for different reasons, and it manifests itself in different ways, so top-down micromanagement of that would be deeply counterproductive and unhelpful.
Officials in the Department of Health and Social Care and in the Home Office have engaged with senior representatives of the police on these amendments in great detail. I can give the Committee an 100% assurance that the police do not support an extension of their powers to sections 2, 3 and 5. I am therefore baffled by the fact that Opposition Members appear to be claiming that they know better than the police whether their powers should be extended.
Let us stop trying to pretend that we have the police’s expertise. Let us please take a pragmatic approach to this. The police do not want an extension of these powers, and the Home Office is clear that that is the case. There seems to be a fundamental misunderstanding at the heart of the lengthy debate that we have just had. On that basis, I thank hon. Members for their interventions and I commend the amendments to the Committee.
Question put, That the amendment be made.
Zöe Franklin (Guildford) (LD)
I beg to move amendment 11, in clause 6, page 13, line 6, at end insert—
“(c) after subsection (6) insert—
‘(6A) Any person subject to a community treatment order must be informed orally and in writing at the time of the making of the order of their right to an independent mental health advocate under section 130A of this Act.’”
The amendment would ensure that people who are to be subject to a community treatment order would receive information about their right to advocacy.
The Chair
With this it will be convenient to discuss the following:
Government amendment 30.
Clause stand part.
Zöe Franklin
It is a pleasure to serve under your chairmanship, Ms Furniss. Our amendment would ensure that people who are subject to community treatment orders receive information about their right to advocacy. People under CTOs should not miss out on advocacy because they were not aware. CTOs can have a significant impact on how people are able to live their lives, and ensuring that those who are subject to them are effectively represented is crucial. I am delighted that advocacy is a crucial part of the Bill, but this seems something of an oversight.
Not being aware of mental health advocacy could lead to a damaging lack of autonomy and voice for an individual. This simple change would ensure that people receive the support to which they are entitled. People in this situation are in acute mental distress, so the idea that they must actively seek out information on advocacy seems an unfair burden that will make the welcome provisions around mental health advocates far less effective.
We also need to be aware that CTOs have consistently been shown to be a point of disparity in care for black and minority ethnic groups. Clearly pointing towards an advocate may help to alleviate that and ensure that the patient is adequately supported on leaving the hospital.
Is the Minister satisfied that people subject to CTOs will have adequate access to advocacy under the Bill? Is he satisfied that information on rights to mental health advocates will be clear enough? My Liberal Democrat colleagues and I are concerned that the answer to those questions is no, which is why we tabled the amendment.
Dr Evans
I rise to speak to clause 6 and Government amendment 30. Clause 6 will make important amendments to conditions for community treatment orders under the Mental Health Act. CTOs are a tool that allows certain detained patients to receive ongoing treatment in the community rather than in hospital, providing continuity of care and supporting recovery outside institutional settings. Since their introduction in 2007, they have offered a mechanism to maintain contact with mental health services and prevent relapse while balancing the patient’s right to live more freely.
However, CTOs have not been without controversy. There is concern about their overuse and their disproportionate effect on black and ethnic minority patients. There are also a number of questions about the evidence for their effectiveness in reducing relapse or readmission. Moreover, concerns about coercion and the infringement of patient autonomy have been raised repeatedly. The 2018 independent review recommended tightening their use. Some also argue for going further by abolishing them completely.
Clause 6 seeks to address many of those concerns. It will introduce stronger safeguards, clear risk-based criteria and a maximum 12-month duration to prevent indefinite or inappropriate use. It will mandate patient involvement through consultation and regular review, promoting shared decision making. Accountability is enhanced by aligning CTOs with a code of practice and introducing external oversight. Crucially, CTOs will now be used only when there is a clear and necessary risk, focusing on clinical need and safety.
Challenges remain. The new requirements bring complex administration and an increasing workload for clinicians. Despite reforms, CTOs remain a form of compulsory treatment, raising concerns about ongoing coercion. Their success depends heavily on the availability of community services, which are not always adequately resourced. Finally, terms such as “serious harm” may be open to interpretation, risking inconsistency. To unpack all that, we must take a closer look.
Clause 6 rightly seeks to update and clarify the legal framework governing CTOs to ensure that their use is proportionate, justified and consistent with evolving standards of care and risk management. It does so primarily by aligning the grounds for making and renewing a CTO with the new, more precise risk criteria for detention. It specifies that a CTO should be made only if there is real risk that
“serious harm may be caused to the health or safety”
of a patient or others without treatment, and if that treatment is necessary given
“the nature, degree and likelihood of the harm”.
Again, there is an argument about the definition of “serious harm”, and the same discussion as the one we had under clause 5 about escalation of behaviour or cumulative concerns applies here.
In the light of that discussion, it might be helpful if the Minister clarified the interface between CTOs and grounds for detention. Is there scope for the code of conduct to cover the management of risk, both to the public and to patients themselves, across both? Given the emphasis placed on real risk of serious harm, clause 6 aligns CTOs more clearly with the threshold for detention, with the aim of reducing the inappropriate use or overuse of CTOs, which is much more welcome. It will help to safeguard and protect patients from unnecessary restrictions on their liberty, while maintaining the ability of a responsible clinician to act decisively when there is genuine risk.
Sojan Joseph
Does the hon. Gentleman agree that CTOs help to keep people out of hospital so that rather than having long-term admissions, they can live in the community and in their own house, and that clinicians can recall patients to hospital if they are not complying with the agreed treatment?
Dr Evans
Spot on. The hon. Gentleman will have used them far more than I ever have, and that was exactly the point of them when they were brought in in 2008. The reason they have been so contentious is their misuse, misapplication and ongoing use. That is what we are trying to highlight. With clause 6 the Government are trying to streamline their use.
That leads me neatly on to why the Lords introduced clause 6(3), which Government amendment 30 would remove. It is about how to ensure that there is adequate oversight so that people do not remain on CTOs in perpetuity or, more likely, have them applied inappropriately. Concerns have been raised about racial disparities in the use of CTOs—particularly for black men, but there is also work to be done on those from other communities who find themselves on CTOs. The hon. Gentleman is right: that is the ethos behind ensuring that we push people to community care. The problem is how to set that against the legislation on CTOs and how to provide the resources to enable an appropriate setting for that care.
Sojan Joseph
Does the hon. Gentleman agree that this is more an issue of practice than of the law itself?
Dr Evans
Yes. As the Minister pointed out on the Committee’s first day, legislation sets the culture. One the main reasons for the Wessely report was the racial disparities that had been found. We still have to look into the cause and effect of that, but one of the big markers was that CTOs were increasing indefinitely and seemed to hit certain communities disproportionately, without there being a full understanding of why. That was why in the House of Lords some argued that we should get rid of CTOs completely. The Opposition do not agree with that; we agree that clause 6 is important and that CTOs serve a purpose, for the reason that the hon. Gentleman explains so eloquently. The emphasis is on getting people into community treatment where we think it will be better for them, but ensuring that CTOs are not an undue burden on clinicians or patients and are not used inappropriately.
Clause 6(3), introduced in the Lords, sets out a maximum duration of 12 months for CTOs, after which an extension would require thorough review. That process would demand consultation with the patient, their nominated persons and relevant mental health professionals, and the written agreement of a qualified psychiatrist. That multi-layered review process is vital to ensure that any extension is based on clear therapeutic benefit and necessity rather than routine or bureaucratic inertia. Moreover, the requirement of regular reviews every six months to extend CTOs would further strengthen oversight and accountability. The involvement of tribunals, which may recommend variations or terminations, would add yet another layer of protection for patients’ rights, as the Government and Opposition both acknowledge.
While the reforms are, on the whole, positive, we must remain vigilant. The consideration of risks must be applied carefully and consistently to avoid unintended consequences such as deterring clinicians from using CTOs when they are genuinely needed.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Football Governance Bill [ Lords ] (Eighth sitting)
Thursday 12th June 2025
(3 days, 1 hour ago)
Public Bill CommitteesFootball Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 June 2025 - (12 Jun 2025)
The Committee divided: - Ayes: 2 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
Lincoln Jopp (Spelthorne) (Con)
It continues to be a pleasure to serve under your chairship, Ms Butler. I do not know whether the Minister has ever run a company that was approaching either administration or insolvency, but had she, she would know that a number of incredibly onerous and important duties are placed on the directors of such companies, which are literally minute by minute, in terms of them being shown to be acting responsibly. That can include, potentially, having multiple board meetings during a day, which are minuted, in order to revisit the “going concern” statement that the company does indeed have sufficient resources to meet its obligations as they fall due.
The penalties for failing to act responsibly and in accordance with the Insolvency Act 1986 in such circumstances can include being barred as a director of any company by the Secretary of State for a number of years, whereas the jeopardy in this Bill is possibly losing the ability to own a football club or to be an officer thereof. On the basis that we can all become millionaires or start-up billionaires and buy a football club, it is very concerning that we are putting in law the ability to override the directors of said companies’ obligations under the Insolvency Act. I would be grateful if the Minister could tell us whether the Government have taken any legal advice on the specific question about the potential conflict between obligations on directors under the Insolvency Act and obligations on owners and officers under the Bill.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
I will respond to the points made by the shadow Minister and then come to those from the hon. Member for Spelthorne. The appointment of an administrator would not delay a club entering administration, as that is a separate process from the appointment of a specific administrator. My officials have met both relevant teams in the Insolvency Service and the Department for Business and Trade to ensure that the provisions in the Bill do not impinge on the existing insolvency processes. That speaks to the point made by the hon. Member for Spelthorne.
As for the shadow Minister’s other questions on precedent, special administration regimes exist for various purposes, such as the water utilities or energy suppliers. They have distinct processes for entering administration. The provision in the Bill does not go as far as that. Ideally, the provision will not need to be used frequently, if at all, but if it is, it will look to ensure that fans can feel more confident than they do now. It works alongside the requirements but it still stands alone, so I commend the clause to the Committee.
Question put and agreed to.
Clause 47 ordered to stand part of the Bill.
Clause 48
Duty not to relocate without approval
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 91, in clause 48, page 40, line 18, at end insert—
“(e) if the arrangements would represent a significant upheaval of the connection between the fans of a club domiciled in England and Wales and the club (taking into account the following non-exhaustive factors: proximity to home ground, proximity to other clubs’ grounds, journey time for fans and any other factors that the IFR deems relevant) the club’s fans have actively approved the arrangements.
(4A) In order for the Regulator to be satisfied with subsection (4)(b), a regulated club must take reasonable steps to establish that the majority of the club’s fans domiciled in England and Wales do not consider the arrangements to constitute significant harm to the heritage of the club.”
The Chair
With this it will be convenient to discuss new clause 14—Incorporation of heritage restrictions in Articles of Association—
“(1) A regulated club must, within the time limit, ensure that the requirements in sections 48(4A) and 49(1) are incorporated into its Articles of Association.
(2) For the purposes of subsection (1), the time limit is the period of one year from the day on which this section comes into force, or such other period of time as the Regulator may direct in relation to a particular regulated club.
(3) Subsection (1) is fulfilled if the club’s Articles of Association provide for even greater fan consultation than sections 48(4A) and 49(1) require.”
Mr Betts
It is good to have you back in the Chair with us this afternoon, Ms Butler—I am sure you are happy to be here. We are moving to further deliberation on the issue of consultation, in connection with the movement of grounds and the importance of the fans’ views. One issue is around not the desire or intention to stop clubs moving grounds at all costs, but ensuring that if ground movement happens, the fans’ interests are clearly taken into account. It is not to stop the Everton move, a little way down the road in Liverpool; it is to stop the Wimbledon move to Milton Keynes. That is what this is about—the fact that a club could be uprooted.
I have wandered around parts of London for many years, seeing Wimbledon play at various grounds. I think they played at Charlton for a time, and probably also at West Ham—they certainly moved to different places. I think Brighton played in Gillingham for a time as well. Those were temporary moves, but they should have been stopped in the first instance by not letting the club owner sell the ground. For Wimbledon, it was simply a move that took no account of where fans live or their loyalty to the club. It operated a bit like an American franchise system: “I’ve got the ownership of the club. I can move it where I want.” That is what happens in football in the States. We do not want it to happen here.
Amendment 91 is an attempt to add certain criteria when the regulator is looking at the potential to approve a transfer of grounds, including the proximity to the current home ground and the club’s other grounds, where fans live and how far they have to travel. I suppose Manchester United could locate almost anywhere because they have fans, they would claim, all over the world, and Man City fans would claim that there are more Man United fans outside Manchester than in it. But those are internal rivalries that we should not get into here. The reality for most clubs is that they have a local fanbase, and that should be taken into account before any move is deemed acceptable.
Even if the Minister cannot accept the amendment’s wording, I hope she might recognise that in reaching those decisions, the regulator must seriously take account of fans’ views—not just the view, “We don’t want to move; we’ve always been here,” but, “We don’t want to move because they’re trying to locate us 100 miles away and we simply can’t get to home games on that basis.” I hope that the Minister might think about that.
New clause 14 aims to get clubs to write into their articles of association the issues in the Bill that they have to take account of—the heritage restrictions—to ensure that they are firmly embedded in how the club operates.
Mr Louie French (Old Bexley and Sidcup) (Con)
I hope that everyone is appropriately refreshed after the lunch break. I will not seek to go to VAR to rehash any of the debates we had before lunch, but we have great sympathy with the points made by the hon. Member for Sheffield South East. We also believe that fans should have a strong say if clubs seek to move ground, as we have debated. The obvious questions, which we will come to in the next set of debates, are about what fan consultation and approval would look like. I know that that will be part of our heritage discussion in a moment, so I will not proceed on that now.
In thinking about some of the hon. Gentleman’s examples—Wimbledon being the most obvious one—I recall that as a teenager, or a bit younger, I would watch Wimbledon play at Crystal Palace, at Selhurst Park. They were the Crazy Gang in south London at that point, and they would often play there. So I understand his point, especially about the move to Milton Keynes and the controversy that that caused. As he highlighted, thankfully, we have not had too many examples that are similar to the American franchise system, where, in the National Football League, the Raiders have moved a number of times over the years, to different cities, depending on the financial attraction of each state.
Beyond the Man United and Everton examples, which we have discussed, there are other clubs who have moved. The one I first think of, which is closest to where I am from, is the Arsenal move a number of years ago from Woolwich Arsenal in south-east London to Islington. It is an interesting point, because a lot of the fans in south-east London are still strong supporters of Arsenal because of their generational links. For example, my brother-in-law’s grandfather was an Arsenal fan, so he is an Arsenal fan. The London example is probably not the best one, because it is simple to argue that fans can get across London fairly easily. It would be more dramatic if a club were being moved to the other end of the country, which is the point he is making—he is nodding in agreement.
I will be interested to know how the Minister and the Government view the amendments and how this issue might impact the regulator’s operations. I have a lot of sympathy for the amendments, and I will listen carefully to the Minister’s response.
Stephanie Peacock
Welcome back to the Committee after lunch, Ms Butler. I thank my hon. Friend the Member for Sheffield South East for tabling the proposals, which seek to strengthen the protections on club heritage. The safeguarding of football heritage will be a key priority for the regulator, and there are a number of provisions in the Bill to uphold that key objective. It is vital that fans can have their voices heard at their clubs, especially regarding key heritage assets that can play a significant role in community identity and history.
That is why, as we will discuss in relation to clause stand part, clause 48 requires clubs to consult their fans and have regard to their views on a proposed relocation of a home ground. It is also why the regulator will determine whether the relocation will result in significant harm to a club’s heritage. This is not a binary decision, however, and in lots of cases will require a holistic approach and for the regulator to consider a number of factors, including not just the views of current fans, but the club’s history and the ability of fans to get to the ground. We would expect the regulator to engage and consult fans of the club, because it would be necessary to do so to ascertain the impact on club heritage. As the shadow Minister touched on, we will discuss this further in a little bit.
Amendment 91 would require the club to take reasonable steps to establish the views of the majority of supporters, rather than allowing the regulator to take the multifaceted approach that the Government think is best suited to the nuanced issue of club heritage. The importance of fan voices being heard is why the regulator spells out a number of protections for heritage assets, such as the home brand and home shirt colours, among others. Any breach of these duties would qualify as a relevant infringement by the club. Although we expect that the regulator will take an advocacy-first approach, a range of sanctions will be available.
Although the Government understand that the intention behind new clause 14 is to further entrench these duties, this legislation has been designed so that the duties apply across the clubs, with the regulator ensuring compliance. Amending articles of association can be resource-heavy and require shareholder agreement. It also does not guarantee that there will be compliance. This is not something that the Government see as an appropriate or necessary step to require all clubs to take. Instead, the Bill will protect fan consultation through other means. For those reasons, I am unable to accept the amendments.
Mr Betts
I thank the Minister for the reply—I think. That was a bit of a reply about new clause 14 but she did not really address amendment 91 and the regulator being required to take account of factors such as relocation over distance and where fans live. In some ways, I think that is the strongest part of this discussion, because it is the thing that worries fans the most.
Stephanie Peacock
I talked about taking a holistic approach, and I said that the regulator must consider a number of factors—not just the current views of fans but the club’s history and how fans get to the ground. I acknowledge some of the examples that my hon. Friend has given, and I was really pleased to visit the new Everton stadium a few months ago. We obviously recognise that sometimes it is very legitimate, and other times it is not. That is why we have gone for the holistic approach.
Stephanie Peacock
Yes, and I have obviously drawn attention to some of them in my remarks. That is why we do not want to be prescriptive; we want the regulator to be able to take a holistic, case-by-case approach.
Stephanie Peacock
It was. I gave some examples in my contribution about history—
Mr Betts
I think we just about got there with some assurance that the regulator would take these factors, and others, into account in reaching a decision. As the Minister said, it is a holistic decision, but one that needs to respect the interests of fans. The idea that fans can travel 100 miles to watch a home game is nonsense, but unfortunately, that nonsense has come to pass in some cases.
On that basis, I will not push the amendment to a vote, but it is crucial that we never get to a position where the wording in the Bill is not sufficient to ensure that the regulator takes the interests of fans into account in this respect. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
Clause 48 places a duty on clubs not to relocate from their home ground without approval from the regulator. As we just discussed, home grounds play an important role in the history of a club and are often the club’s most valuable asset. These grounds are where many thousands of fans watch their teams play every weekend. Relocating them to areas that have no connection to the heritage and history of a club can have a significant impact on those supporters and the local area, as we saw when Wimbledon moved to Milton Keynes, which my hon. Friend the Member for Sheffield South East just spoke about.
The impact of a home ground relocation on fans and the club is why we are legislating for the regulator to pre-approve any proposal in that regard. As subsection (4) of the clause sets out, the regulator must be satisfied that the proposed relocation would not “undermine the financial sustainability” and significantly harm the heritage of the club. This Government have added a requirement for the regulator to be satisfied that the club has taken
“reasonable steps to determine the views of… fans”
and taken those views into account.
The Government do not want to stifle development where it brings value and aligns with the heritage of the club. The clause makes the important and necessary recognition of the vital role that home grounds play in communities and adds an extra layer of protection to them while leaving room for clubs to evolve and continue to develop. I commend the clause to the Committee.
Question put and agreed to.
Clause 48 accordingly ordered to stand part of the Bill.
Clause 49
Duty not to change crest, home shirt colours or name without approval
Mr Lee Dillon (Newbury) (LD)
I beg to move amendment 140, in clause 49, page 40, line 31, at end insert—
“(1A) A regulated club must notify the IFR if it is considering making any material changes under subsection (1) and the IFR must monitor the reasonable steps taken to independently establish that the changes are supported by a majority of the club’s fans.”.
This amendment would require the IFR to take steps to independently oversee a club’s fan consultation process on the material changes specified.
The Chair
With this it will be convenient to discuss the following:
Amendment 92, in clause 49, page 40, line 33, leave out
“approved by the Football Association”
and insert
“supported by a majority of the club’s fans domiciled in England and Wales.”.
Amendment 111, in clause 49, page 40, line 33, at end insert
“and a majority of the club’s fans”.
Mr Dillon
It is a pleasure to serve under your chairmanship, Ms Butler. Clause 49 is an important part of the Bill, particularly if we look at recent history. We saw Cardiff City unilaterally changing the colour of their kit and the Leeds United club badge redesigned using something similar to Microsoft Paint. All that was done without consultation or agreement with fans. Both those decisions were met with overwhelming negative reaction from football fans.
Our amendment would allow for fans to be properly consulted before such irresponsible and poorly supported changes even see the light of day. The regulator should be responsible for ensuring that the consultation of fans on such changes is independently observed in a fair and transparent process. In this morning’s debate, the hon. Member for Sheffield South East raised the point about what consultation and fan engagement mean. This amendment tries to get to that in some respect.
It would be all too easy for some clubs to hand-pick a small group of fans that they know will agree with them and make an announcement claiming overwhelming support for a change. If the regulator is able to observe the process, fans can be reassured in the knowledge that the proposals will be given proper scrutiny and challenging views will be heard and considered.
Joe Robertson (Isle of Wight East) (Con)
Can the hon. Member explain what the process the football regulator should go through would look like? The amendment does not specify any standards for what acceptable oversight of the consultation process would be.
Mr Dillon
We are happy to put the onus on the regulator to create a process by which it can reassure itself that a full consultation process has been undertaken. That consultation process could look different for different teams. A Premier League club has a country-wide fan base and a large amount of fans to engage with, whereas a smaller club might have a regional fan base and a smaller number of fans to engage with, so a different consultation method may be appropriate. We would be happy for the regulator to have that in its purview.
Mr Betts
I just want to ask a simple question: why has “the Football Association” suddenly appeared at this point in the Bill? It has not been part of the requirements on the regulator until now. If I am right, it was not in previous iterations of the Bill—I may be wrong. I would have thought that the view of fans is most important. The FA does excellent work on many issues in football, not least trying to engage with England fans, but in this respect, are the fans of the club not more important?
Mr French
Clause 49 introduces a duty on regulated clubs to safeguard key aspects of what the Bill defines as club heritage. This specifically relates to changes in a club’s name, its badge and its home shirt colours—things that may seem cosmetic to the outsider, but which football fans know are part of the heart and soul of a club.
Whether it is the famous black and white of Newcastle United or the immense history of Deepdale in Preston, these things mean more than just the colour of the top or where people watch football. They are integral parts of footballing communities. They symbolise membership of something bigger than oneself. The club colours, the club badge and the home ground are all ways in which fans identify themselves as being part of a footballing family. They must be protected.
This clause is an important recognition in statute that football clubs are not just commercial entities, but cultural institutions, symbols of community identity and civic pride. As such, changes to these heritage elements should not be made casually or without due regard to those whose lifelong support gives clubs their very meaning, often across generations.
We welcome the inclusion of clause 49, which we believe is essential, but we do not believe it goes far enough. That is why we tabled amendment 111.
Mr French
Yes, I am happy to and will come on to that point. Amendment 111 would require the majority of fans to approve any such changes to a club’s official name, its badge or its home shirt colours, not just to support them. “Support” can be vaguely defined. It can be skewed by a few loud voices or specific interest groups, rather than being a genuine exercise in democracy. While consultation is important, it is ultimately no substitute for consent.
Football clubs are, by their very nature, multi-generational institutions. Most are older than the companies or corporate vehicles that now own them and some are even older than the Labour party that now seeks to impose this regulator. They existed before many of their current directors were born and will, we hope, outlast all of us.
The badge on the shirt is not simply a badge: it is a symbol of place, of pride, of glory and heartbreak, of a historic past and a hopeful future. The name of a club is not simply branding: it is geography, history and memory all in one. And the home shirt, whether it is red, claret, blue or black and white, is more than a colour scheme—I apologise if I missed any; orange for Wolves, maybe, but I am sure hon. Members get the point. It is part of the club’s identity, part of the community’s fabric.
When clubs change these things, particularly when they do so without the blessing of their supporters, they do more than upset tradition. They erode trust and sever the cultural connection that keeps that team and the English game alive. Let us not forget that when Cardiff City’s owner unilaterally changed their home shirt from blue to red, the backlash was enormous, because it was not Cardiff’s colour. Cardiff’s owners, much like the electorate, came to regret switching from blue to red pretty darn quickly. Will the Minister confirm whether clause 49 would prevent what happened at Cardiff or whether such a change could still be pushed through after a period of consultation, however superficial?
The clause imposes a duty on clubs to consult fans before making changes to heritage elements. That is better than nothing, but is quite a low bar. We have all seen what consultation can look like in practice—a web form, a vague email or a one-off survey. Then the changes proceed regardless of overwhelming opposition, with clubs claiming that consultation has been completed.
I think most hon. Members would agree that that is not meaningful engagement and it certainly does not reflect the degree of ownership that supporters rightly feel over the identity of their home club. That is why we support the amendment to move the requirement from consultation to majority fan approval—that is, in other words, a vote, or a similarly binding expression of fan will, overseen through whatever supporter representation structure the club has in place. Will the Minister set out what the Bill actually means when it states,
“the club has taken reasonable steps to establish that the changes are supported by a majority of the club’s fans in England and Wales.”?
Lincoln Jopp
The shadow Minister is making a completely reasonable amendment. We have the emblem, colours and name. Does he agree that it would be helpful if the Minister explained why the name has been taken out for different treatment from the emblem and the colours?
Mr French
I am sure that the Minister will have heard that contribution from my hon. Friend and will be able to pick up on that in her comments. He is right to identify that such a distinction has been made in the Bill.
What does this mean? For example, will an hour-long Twitter poll on what a club should do be sufficient? We have seen how clubs have sought to use X in some quite funny ways at times, but on something as serious as this, we need proper consultation. Instead, does the Minister expect that clubs will engage in a full, proper and open consultation with their fans, such as one that includes a call for evidence, votes on different proposals and genuine engagement from the clubs themselves? Otherwise, this all risks just being for show, rather than real consultation.
Why stop at just consultation? If a proposed change is sensible, justifiable and supported by a club’s reasoning, why would the club not be able to win over the majority of its fans, if the fans agree it is in the best interests of the club? Why are the Government, in this Bill’s drafting, afraid of allowing fans to have a real and final say on these matters? This is not about allowing fans to micro-manage a club; it is about recognising that the symbols, colours and names of clubs are all held in trust, not owned in a transactional sense.
Football club owners are, in truth, temporary stewards. Their role is not to reshape the soul of a club but to protect it and hopefully strengthen it before passing it on. Far too often we have seen the reverse: owners who arrive with branding ideas and marketing consultants, determined to reshape the club’s visual identity to fit a certain commercial strategy, often with little or no understanding of the local footballing tradition in that community. Supporters have had to campaign, protest and plead to get what should have been theirs almost by birthright: a say in the symbols of their club. Does the Minister agree that clause 49, if limited to just consultation, risks becoming just a tick-box exercise, particularly in clubs without strong fan representation models in place?
There is a precedent for this kind of requirement. In Germany, the so-called 50+1 rule ensures that fans retain majority voting rights over key aspects of club identity and operation. In Spain, the socios model does so too. To be clear, we are not calling for full fan ownership, but we are saying that, on issues of identity, the final word should ultimately rest with the fans. Let us remember that this amendment would apply only to three specific heritage areas: the club’s official name, the badge—or crest, depending on how we want to describe it—and the home shirt colours. This is not about banning innovation or marketing altogether. It is simply saying that, when it comes to fundamentals, supporters should have a say.
Max Wilkinson (Cheltenham) (LD)
We have seen in the past things such as the renaming of St James’ Park in Newcastle to the Sports Direct Arena, and other fans groups around the country have been furious when historic stadium names have been changed to sponsors’ names. Would the shadow Minister extend the sentiment that he is now expressing to those circumstances as well?
Mr French
I appreciate the hon. Gentleman’s contribution, and that is the point that we were discussing earlier with the hon. Member for Sheffield South East. We were seeking clarification from the Government on how that would affect the consultation of fans on the relocation of stadiums or a change in their ownership. I agree that it is crucial that fans have a say in the naming and history of their ground.
Max Wilkinson
The hon. Member for Great Yarmouth (Rupert Lowe) once fell foul of this when he attempted to change the name of the Dell to the Friends Provident stadium. Perhaps we might consult him on his learnings from that experience after we have completed this Committee.
Mr French
I am not sure how to answer that. How Members decide to use their time is a decision for them, but the hon. Gentleman has made the point well. Without wishing to put off Government Members, the argument behind my amendment is deeply Conservative in some ways; it is about tradition, continuity and community. It is about respecting the past while also securing the future. It is about recognising that football is strongest when it listens to the people who love it most.
The clause is a step forward, and we think its inclusion in the Bill is important. Without our amendment, however, we are concerned that the clause will lack the legal bite required to safeguard the symbols that matter most to supporters. In truth, clubs that respect their fans would already seek that approval; the amendment would simply ensure that those who do not are held to the same standard. To be clear, no one should be able to change the name of Barnsley FC, the badge of Wigan Athletic or the home colours of Aston Villa without the backing of the very people who built the stands and carry the soul of the club every single week across multiple seasons.
I urge the Minister and colleagues across the Committee to back the amendment. Football’s future must be modern and well run, yes, but it must also be anchored in tradition, and the tradition belongs to the fans.
Stephanie Peacock
I thank hon. Members for tabling the amendments to clause 49. We will discuss the clause in more detail in the clause stand part debate, so I will reserve some of my comments until then. To summarise, however, the clause places a duty on regulated clubs not to make changes to key items of club heritage without the support of the majority of the club’s fans and approval by the Football Association.
As set out in clause 7(4), the regulator is already required to monitor compliance with obligations. However, we do not think it appropriate for the regulator to be directly involved in every instance of a heritage change. As a light-touch regulator, we do not expect it to intervene where clubs are already meeting what is required of them. Instead, it will be able to have a wide view, and intervene where there are concerns.
Any change to heritage assets will necessarily come under significant scrutiny by fans and the public, as well as the FA through its existing fan engagement standards. Additionally, in any case of non-compliance, the regulator will have sufficient enforcement options at its disposal. The process is therefore appropriately safeguarded without the need for direct regulatory involvement each time.
Turning to amendments 111 and 92, club names are a vital part of the club’s heritage. The legislation therefore introduces legal protections for that heritage asset. The FA has a long track record of being able to take a considered approach to name changes, listening to fans and heritage concerns, and taking appropriate action. That was demonstrated in the case of Hull City: the FA blocked multiple attempts to change the name to “Hull Tigers”. The FA, with oversight of all levels of football, is also in a good position to ensure that name changes do not have unintended implications for clubs that are outside the regulator’s scope.
The Government therefore believe that the FA is in the best position to take into account fan opinions and all the other relevant considerations, with the regulator acting as an enforcement backstop. That is in addition to any mandatory licensing requirement for clubs to consult their fans on any matters relating to the club’s name, among other heritage assets.
The shadow Minister asked which fans will be consulted. For the most part, clubs will be in the best position to understand the demographics of their fans. The regulator will be able to provide guidance for clubs for on how best to consult fans. Clubs in the lower leagues will tend to have a more local fanbase, whereas larger clubs will have fanbases from across the world, as the hon. Member for Sheffield South East pointed out. That is why we want to implement proportional and flexible proposals.
Mr Betts
We all feel concerned about this issue. It is not about the clubs that already consult well; it is about those that do not consult, but will be compelled to consult by the legislation, and will not really want to—they will find ways around it. The regulator can give guidance, but if a club does not follow that guidance, what will the regulator’s likely course of action be?
Stephanie Peacock
We will come on to enforcement, but a range of enforcement options will be available to the regulator, if it feels that a club is not doing what it asked the club to do.
Mr French
To add to the point made by the hon. Member for Sheffield South East, if a club—the Minister gave the example of Hull—decided that it wanted to go ahead and change its name to “Hull Tigers”, but the regulator felt that the fans had not been consulted thoroughly enough, could the regulator deduct points from a club?
Stephanie Peacock
No, there are no sporting sanctions in the Bill. Those are not in scope. To take the point about the FA further, it has a long track record of being able to take a considered approach to name changes, to listening to fans and heritage concerns, and to taking appropriate action.
Lincoln Jopp
I welcome the fact that the Minister is saying, “Let’s trust existing organisations to do it”, rather than bringing it within the purview of a higher regulator. On the basis that the FA has exercised such responsibilities when it comes to names, why cannot it be trusted to have the same consideration for emblems and colours?
Stephanie Peacock
As I said, the FA, with oversight of the levels of football, is in a good position to ensure that name changes do not have unintended implications for clubs that are outside the regulator’s scope. It has done that point on names well. That is why we want to leave it to do the good job it is doing.
Mr Dillon
I thank the Minister for her response. Although the Bill tackles financial sustainability, it has a real ability to rebuild trust between fans and football clubs. I feel that all three amendments are still worthy of being pressed to a vote, and I commend amendment 140 to the Committee.
Question put, That the amendment be made.
Stephanie Peacock
Clause 49 requires a club to establish that a majority of domestic supporters approve any material change to its emblem, crest or predominant home shirt colours. A club’s name, home shirt colours and emblem are intrinsic parts of its heritage, intertwined with decades of club and supporter history. The decision to materially change any of them therefore requires considered thought and consultation. The clause means that changes can still be made, but only if, and once, fans have voiced their support. In practice, we expect that could take place through a formal survey of fan opinion, as we saw last season with Bristol Rovers, where supporters opposed the final proposal that was put to them, resulting in the club halting the redesign of their emblem.
The clause also requires clubs to get FA approval prior to changing the name that the club’s team plays under. The view of supporters is a significant factor in the FA’s decision making. However, the FA may also need to balance wider considerations regarding to a name change. That might include whether there would be any adverse effects on other clubs throughout the pyramid. The existing FA rule has been used to prevent name changes, which have been proposed in the past against the wishes of fans, as I mentioned with the example with Hull City. Codifying this as a legal duty will mean there are additional powers to ensure clubs do not make changes without proper approval and allow the regulator to respond to instances of non-compliance. The clause serves one of the key objectives of the regulator: protecting the heritage of English football. I commend it to the Committee.
Mr Betts
I am still a bit uneasy about those clubs that are not going to enter into the spirit of the really important part of the Bill: proper fan consultation. I come back to Sheffield Wednesday and its owner, who thinks sitting down for 10 hours of deliberation with hand-picked fan groups and not answering any questions amounts to a consultation—it does not.
I was interested in what the Minister said about how the regulator will have the right to issue guidance about how consultation should happen, and then there can be enforcement if the guidance is not followed, which means the guidance effectively becomes a requirement. I hope that we can elaborate on that later in the Committee’s discussions, as she indicated we would, because, without those backstop powers, there will be some club owners who regard the club as their personal possession and believe that no one has a right to interfere in how they run it.
Lincoln Jopp
I am intrigued to know whether, with all his experience, his chairmanship of the football all-party parliamentary group and his background with the Bill, the hon. Gentleman thinks he has yet received an adequate explanation from the Minister on why emblems and colours are treated differently from the names of clubs.
Stephanie Peacock
Names interact with other clubs in the pyramid, which is not the case with shirts and colours, and we think there are strong provisions in the Bill for fan consultation.
Mr Betts
I hear what the Minister said, but I want to think about that. I know what her good intentions are, but I also know there may be some people out there with bad intentions; it is about making sure that they come in line with the Minister’s good intentions. I am holding back to see what further discussions we have, but this is really important. It is a wider issue: there are so many clubs with so many disparate fan groups, and owners will pick and choose if there is not certainty. That is why I raised the issue, which I think we ought to come back to, of a clear role for the Football Supporters’ Association, the body that oversees fan groups in this country. It has a neutral view of which groups are the most important and relevant in different clubs, and it can help the regulator enormously in what, in some cases, will be a challenging process of trying to identify the fan groups who really speak for fans in those clubs.
Mr French
I will not put the hon. Member for Sheffield South East at risk with his own side by talking too fondly about the comments he just made—I will not make it sound like we are trying to do a double act—but we have heard a lot of concern in our debates on the clause, and the amendments tabled to it, about how it will work. The hon. Member mentioned that some club owners—one would hope only a minority of them—would seek to expose loopholes in the Bill. That is why we tabled amendment 111, which would introduce a safeguard by requiring a clear vote and the approval of the majority of fans.
There are a number of risks for the Government with this Bill, but one of the biggest is this: if it does not protect the things it is designed to protect—in this case, the heritage of a football club and a say for fans—what is its purpose at all? If one of the examples we have discussed plays out in future, that question will be asked of the Government. In our future debates on the Bill, perhaps they can provide more clarity about their thinking, and perhaps they will incorporate some of the arguments we have made today.
Stephanie Peacock
I am grateful to hon. Members for their contributions. We believe that we have strengthened measures in the Bill to put fans and communities back at the heart of the game and to protect football heritage. All regulated clubs will now be required to have an effective framework in place to meet and consult regularly a representative group of fans on the specified relevant matters, including any proposal to relocate the home ground and some of the issues we have just discussed. We expect that the regulator will be best placed to understand the circumstances of individual clubs across the country. It will produce guidance to support clubs in meeting its requirements, and it will take into account things like precedent and ensuring proportionality.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Clause 50
Duty to notify of changes in circumstances relevant to the IFR’s functions
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause places a duty on all regulated clubs to notify the regulator of any material change in circumstances that is relevant to the regulator’s functions, as soon as reasonably practicable. The regulator will need a complete picture of each club in order to effectively regulate. Full transparency and timely updates will allow the regulator to stay up to date on any relevant changes in real time.
The duty to notify in the clause is an ongoing duty on regulated clubs. By contrast, the annual declaration mandatory licence condition applies to licensed clubs only. The annual declaration is about creating an annual touchpoint for clubs as part of the licensing regime, rather than requiring an annual licence renewal. It will allow clubs to declare a summary of any matters that they notified, or should have notified, over the past year.
Mr French
I will not rehash the Minister’s description of the clause, but it raises a number of questions about the interpretation of the clause and the requirements on clubs. What guidance will be provided to clubs to determine what constitutes a “relevant” change in circumstances, because that is very open to interpretation? What might such a change look like? We are not trying to micromanage, but we think clubs might find it helpful to understand, even if it is via a list of frequently asked questions from the regulator, what constitutes a change of circumstances so that they do not accidently fall foul of well-intentioned drafting.
Could the duty to notify a change in circumstances be accidentally disproportionate to lower league clubs? We have discussed at length that those clubs generally do not have the same administrative resources as the big clubs. Will the regulator look to have a more flexible approach to clubs lower down the pyramid that may not have the ability to notify as quickly as those at the top?
Stephanie Peacock
We expect the regulator to look at this on a case-by-case basis. As we have said throughout, we very much intend for the regulator to be proportionate depending on where a club sits in the pyramid.
Question put and agreed to.
Clause 50 accordingly ordered to stand part of the Bill.
Clause 51
Duty to keep fans informed of insolvency proceedings
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause places a duty on all regulated clubs in relevant insolvency proceedings to keep fans informed of the progress of the proceedings. Any fan that has experienced their club going into administration can attest that it is a worrying and often confusing time. Although the regime will look to best protect clubs, it cannot be zero-failure. However, the clause is intended to make the process more transparent for fans when the worst happens. The duty will apply only as far as is reasonable and will not fall on the administrators or any body not regulated by the football regulator. The clause was added to the Bill in order to mitigate unnecessary worry and confusion for fans.
Mr French
I have a few questions. How will the regulator assess whether a club has sufficiently fulfilled its duty to keep fans informed? Could the requirement to disclose information during insolvency proceedings create additional reputational or financial risks for clubs? How will the clause be applied consistently while respecting confidential obligations to creditors? We have spoken a lot about insider information. If the Minister does not have the answers today, it would be helpful to get them in writing in order to understand how some of these complex legal matters might work.
Stephanie Peacock
I am happy to write to the shadow Minister. I appreciate that we added this clause; it was not in the previous iteration of the Bill. That is why I was keen to talk about reasonability. We appreciate that insolvency is a complex, fast-paced, changing and challenging situation, but we also appreciate—Members have talked about different clubs that have gone into administration—the worry for fans, so we want to keep them as informed as reasonably possible. The shadow Minister asked me for something further in writing and I am very happy to provide that.
Lincoln Jopp
Again, I am concerned about the clash of duties. The Minister has already told us that her team and the insolvency team have met and considered this issue. In a period of liquidation, not putting additional debt into a company, or indeed spending cash, is one of the directors’ responsibilities, but this will undoubtedly cost the club. Has the Minister sought and received reassurances that this approach is consistent with the Insolvency Act?
Stephanie Peacock
Perhaps I will add the answer to that question to my letter to the shadow Minister, and I will copy it to the hon. Member for Spelthorne. The clause is clear that the duty will apply only as far as possible, because we do not want to add a burden at an already difficult time. As this is quite a complex but important point, I am happy to write to both hon. Gentlemen.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Clause 52
Duty to publish a personnel statement
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The clause requires licensed clubs to prepare a personnel statement and submit it to the regulator for approval. Alongside the statement, clubs must provide an explanation as to why they consider it to be accurate. The owners and officers who control and run football clubs are vital to their sustainability. Therefore, the regulator needs to know who is running the show behind the scenes in order to implement its regime effectively.
A personnel statement must outline each of the club’s owners and its ultimate owner, as we have discussed; its officers, with a job description for each; and its senior managers and their roles. Once the statement has been submitted, the regulator will review it and decide either to approve it or to modify it. Any modification to the statement must be made in consultation with the relevant club to ensure that the statement is accurate. Once the statement is approved by the regulator, the club must publish it online, increasing transparency and accountability in football. Subsequent statements must be submitted to the regulator if an old statement becomes out of date—for example, after the departure or hiring of an officer.
Let me also highlight the role of the Secretary of State’s guidance in providing clarity to owners about who meets the definition of someone who exercises significant influence or control. We committed in the other House to producing the Secretary of State’s guidance before clubs are required to identify owners who meet that definition to the regulator. I commend the clause to the Committee.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clause 53
Duty to pay a levy
Mr French
I beg to move amendment 133, in clause 53, page 42, line 3, at end insert—
“(1A) But the IFR may not require a club with fewer than 10 full time equivalent employees to pay the IFR a levy in respect of a chargeable period during which the club is a licensed club.”
This amendment would exempt clubs with fewer than 10 full time equivalent employees from having to pay the levy.
The Chair
With this it will be convenient to discuss the following:
New clause 5—Opportunity for levy exemption for clubs below the Football League—
“(1) The Secretary of State must by regulations make provision for a process whereby a licensed club may apply for a full or partial exemption from the levy established under section 53 if—
(a) the club’s first men’s team competes in the National League or any lower tier of the English football pyramid, and
(b) the club demonstrates, to the satisfaction of the IFR, that paying the levy would pose a significant risk to its financial sustainability.
(2) The IFR must report annually on the number of exemptions granted and the rationale for each decision.”
This new clause allows clubs in National League North and National League South to apply for a levy exemption under specific circumstances.
New clause 24—Levy exemption procedure for clubs in administration—
“(1) The Secretary of State must make regulations establishing a procedure under which a regulated club that has entered administration may apply for an exemption from the levy provided for by section 53.
(2) The regulations under subsection (1) must include provision for the IFR to determine whether an exemption from the levy should be granted.
(3) Provision under subsection (2) must require the IFR—
(a) to take account of the circumstances under which the club entered administration, and
(b) only to grant an exemption from the levy if the IFR is satisfied that the owners of the club have not taken a decision to enter administration in order to secure an exemption from the levy.
(4) In this section, a club has ‘entered administration’ if an administrator of the club has been appointed under paragraph 22 of Schedule B1 to the Insolvency Act 1986.”
This new clause requires the Secretary of State to establish a procedure for clubs in administration to apply for an exemption from the levy. The IFR would only be able to grant an exemption if satisfied that the club had not deliberately entered administration as a means of securing the exemption.
Mr French
It is my pleasure to speak to amendment 133. Clause 53 introduces a duty on regulated clubs to pay a statutory levy to the Government’s new regulator—a mechanism intended to fund its operations and ensure its independence from Government and industry influence. The principle is not unreasonable. If clubs are to be regulated, one could argue that it is fair that they should contribute to the costs of said regulation.
However, we have two initial concerns. First, as the initial costs incurred are to be borne by the taxpayer, that does not ensure independence from Government—quite the opposite; it creates a reliance on the Government for funding and therefore for direction and sponsorship of activities. According to the Government’s own impact assessment, the regulator will cost taxpayers around £106 million until the levy provided for by the clause is up and running.
To put that in context, that money could fund the Lionesses futures fund, which the Government have scrapped, more than three times over. In what should be a fantastic and inspirational year for women’s sport, the Government are choosing to spend money on regulating men’s football instead of investing in the growth of the women’s game. I make that comparison with quite a lot of regret because I believe that it is the wrong decision by the Government, but I will stick to the Bill.
Secondly, many clubs have not asked to be regulated, and they might ask why they should pay for a regulator that seeks to stifle their operations or interfere with their performance and make them uncompetitive in the competitive world of sport. I have asked the question the Minister in previous sittings what would happen if a club chose not to apply for a licence. I am a bit unclear how that would look. According to the Government’s own impact assessment, the yearly cost to all regulated clubs in the English football pyramid will be up to around £142 million, with up to £1.2 million in one-off familiarisation costs, ongoing compliance costs of up to £35.8 million every year following the first year, and operational costs, which will be incurred every year. As I mentioned earlier, the operational costs will be funded initially by the taxpayer, before an industry levy is introduced.
That is an extraordinary amount of money to be leaving the game, especially as the Minister has recognised that money leaving the game in agents’ fees, for example, is detrimental to the sustainability of English football. The costs that the Government are imposing on clubs through the regulator clearly threaten the sustainability of some clubs, as a stand-alone issue. Moreover, as the Minister’s own impact assessment states, the costs are not expected to fall equally on each club; proportionately, they will be greater, and felt more greatly, further down the pyramid.
The impact assessment also states that factors such as
“existing levels of compliance impact the level of activity required”
by the regulator. We all know that that means more work and higher costs for lower-level clubs over the wealthiest. They will have more catching up to do than the big clubs in most instances, leaving them to bear the brunt of the Government’s regulator. It is vital that, as Opposition Members have said throughout this Committee, the regulator is not captured either financially or politically by any one interest group. However, that will now prove difficult with the appointment that the Government have made.
Although we support the broad purpose of clause 53, we must interrogate its fairness, proportionality and impact on smaller clubs. That is why I tabled amendment 133, which would exempt clubs with fewer than 10 full-time equivalent employees from the statutory levy. Regulators do not run on good will alone, and this one certainly will be no different. They need staff systems and legal support, but costs must be borne fairly and in a way that does not threaten the institutions that the Bill seeks to protect.
Clause 53 allows the regulator to determine how much is paid, by whom and how often, subject to regulations approved by the Secretary of State. It is a wide power and an open-ended one. As it is drafted, the Bill does not place any cap on the amount or impose any statutory criteria on proportionality. Will the Minister confirm whether the Government intend to introduce guidance or a statutory cap on the total amount that might be levied by the regulator, either per club or across the sector?
Given that the proposed appointee to the role of chair donated to the Secretary of State, can the Minister confirm that the Secretary of State will not make any decision on how much money can be levied in the future? As it stands, the clause effectively allows the Secretary of State to write a blank cheque to a regulator run by a person who donated directly to her leadership campaign. That alone creates the perception of a conflict of interest, for which the current Secretary of State, as we all know, is under independent investigation.
Although some Premier League clubs might be able to absorb the costs, the same cannot be said for smaller, lower-league or community-based clubs such as Barnsley, Bromley or Wigan. My amendment would create a simple, fair exemption. Any club with fewer than 10 full-time equivalent employees would not be required to pay the levy. That is not just an administrative fix; it is a recognition of football’s diversity and, in true footballing spirit, would champion the underdogs by allowing them to focus on their squads or stadium improvements that would benefit fans. A club with eight employees is not in the same universe, financially or structurally, as a Premier League club with a commercial team, global brand and multimillion-pound payroll.
Mr French
That is a fair challenge. To be clear, we are not talking about five-a-side teams. To give a straight answer, we are talking about backroom staff affected by the administration. We can see that in the wage bill at opposite ends of the pyramid in 2022-23, with the Premier League’s wage bill running at more than £4 billion and League Two’s wage bill sitting at just £96 million, or 2.4% of the Premier League’s total.
Mr French
To be completely up front, I do not have that answer in front of me, but I will find out—the team has drafted this amendment.
Without this amendment, clubs in both the Premier League and League Two could find themselves subject to the same regulatory levy. This risks creating a two-tier burden, where the most vulnerable clubs are saddled with costs that they cannot pay for a regulator that many of them do not want.
Why have the Government chosen not to introduce an automatic exemption for the very smallest clubs, and has an exemption based on staffing levels or turnover been considered? We already accept differential treatment in other areas of public policy—for example, small businesses are treated differently from large corporations, and community amateur sports clubs benefit from separate tax and regulatory frameworks. We believe that the same logic could apply here.
James Naish (Rushcliffe) (Lab)
I am sure the shadow Minister is aware that many top-flight footballers are effectively self-employed through independent companies that they set up. Does he not recognise that this amendment would create a loophole that enables football clubs to split into multiple organisations to fall short of having 10 full-time employees?
Mr French
I understand the hon. Gentleman’s point, and I know that certain players have sought to do that through advertising and other financial arrangements. We are talking about clubs at the lowest level, and we do not believe that is a particular risk of this amendment.
One of the key failings of the football system in recent years has been the concentration of financial risk at the lower levels of the pyramid. Clubs overextend themselves chasing promotion, owners gamble recklessly to stay afloat, and supporters ultimately bear the costs when that does not work and when clubs collapse. The last thing we believe we should be doing is introducing a new statutory cost that could tip the balance for smaller clubs already running on the thinnest margins. This amendment is not about letting anyone off the hook; it is about recognising scale, and recognising the difference of scale in the football pyramid.
Will the Minister please commit to publishing a full impact assessment of the levy’s distribution before regulations are laid? Without that, how can Parliament be sure that the burden will not fall disproportionately on those least able to bear it? One of the justifications for the levy is to secure the regulator’s operational independence, which is a principle that we support, but independence should never mean insulation from scrutiny. If clubs are paying the regulator’s bill, they should at least know where the money is going and have confidence that it is not being wasted.
The Minister has maintained that football regulation cannot be one size fits all, and we understand that is her reason for leaving the wording of the Bill quite open-ended in places. Clause 53 is sound in many ways, but in practice it risks imposing an undue burden on the very clubs that the Bill is supposed to help—those rooted in their communities, run on small budgets and kept alive, more often than not, by volunteers, not venture capitalists. In that spirit, I will be pressing this amendment to a vote.
Max Wilkinson
It is a pleasure to serve under your chairship, Ms Butler. Earlier in our deliberations—I cannot remember how many sittings ago—the Liberal Democrats made the case for extending the Bill’s scope to the sixth tier, the National Leagues. Effectively, we feel that helping those clubs up the pyramid would be useful, and on a cross-party basis, we have discussed support for the National League’s 3UP campaign, which we can take forward after Committee as a group of Members who are interested in football.
This amendment is quite simple, as it is about extending the Bill’s scope to the sixth tier. It would give clubs in National League North and National League South the opportunity to apply for an exemption from the levy, were it to be extended to that level. Clubs at that level may well not have the capacity to take on the administration associated with regulation. Such increased financial protections for lower-league clubs—those in the National League and National Leagues North and South—would align with the principles of the Bill.
Mr Dillon
It is a privilege to serve under your chairship, Ms Butler. New clause 24, tabled in my name, seeks to introduce a fair and transparent exemption procedure for football clubs in administration. When a football club enters administration, it is not merely a financial event; it is often a crisis that rocks the entire community, as we saw in Bury. Supporters, many of whom have been lifelong followers, are left facing uncertainty and fear for the future of their club, which is often the heartbeat of their town or city.
New clause 24 seeks to strike a vital balance by maintaining the integrity of the levy while allowing compassionate and evidence-based interventions when a club is on its knees. It would ensure that exemptions are not handed out indiscriminately, and that the regulator must assess each case on its merits and satisfy itself that the club’s financial difficulties are not a calculated move to evade its levy responsibilities. Most importantly, the new clause would give clubs a chance.
Stephanie Peacock
I thank the shadow Minister for his amendment, and I thank the hon. Members for Cheltenham and for Newbury for their new clauses. I acknowledge the intent behind them.
We will shortly discuss the levy in more detail when I speak to clauses 53 and 54, but in short, the Bill gives the regulator the power to collect a levy to recover its running costs from football clubs that hold an operating licence. I will outline why the Government intend to resist this amendment and these new clauses before directly answering some of the specific points that hon. Members have put to me.
The levy arrangement follows the precedent of other regulators, such as the Financial Conduct Authority, the Competition and Markets Authority and Ofcom. As the regulator is designed to improve the financial sustainability of English football, it is vital that the associated costs do not burden clubs, especially those further down the pyramid.
Amendment 133 and new clause 5 seek to address similar issues relating to ensuring that small or lower-league clubs are not burdened by unaffordable costs as a result of this regulation. I assure the Committee that the Bill is already designed with National League clubs in mind. The regulator will be tasked with improving the financial sustainability of football, and placing an undue burden on small clubs would be completely contradictory to that aim.
Clause 53(10) introduces a statutory requirement for the regulator to have regard to each club’s individual financial circumstances, and the league in which it plays, when setting the levy. Given that requirement, we expect that the levy will be proportionate, with the Premier League—specifically the six clubs with the highest revenues—covering the majority of the cost. That solidarity will reduce the burden on clubs lower down the pyramid. No club should be charged more than it can afford.
Through its levy rules, the regulator will also have the power to exempt clubs from paying the levy. That power, provided by clause 53(8), ensures that there is a mechanism to avoid burdening clubs. If certain conditions set by the regulator through rules are met, the regulator has the discretion to exempt clubs from paying the levy—that answers the shadow Minister’s question. The power will work in conjunction with the requirement on the regulator to consider each individual club’s financial resources, and the competition in which it plays, when setting the levy, as well as the requirement to consult all regulated clubs on its levy rules.
On new clause 24, I agree wholeheartedly that the regulator should not place an undue burden on a club that has already entered administration. I reassure the hon. Member for Newbury that the regulator will set out its levy methodology, including the discretion to set the levy according to a club’s individual circumstances, and to exempt a club completely if specified conditions are met.
The regulator has a core objective of improving the financial sustainability of English football, and I am confident that it will be cognisant of the impact that the levy could have on any club, and especially a club in administration or other financial distress. The Bill’s provisions, such as the regulator’s discretion to exempt certain clubs from the levy, if necessary, account for that core objective.
In response to the shadow Minister, I note that there is no cap, but the regulator can set costs related only to its functions. As I have just outlined, under the powers granted to the regulator by the Bill, it could exempt small clubs from the levy, if that is deemed necessary. However, we do not think that mandating a complete exemption in legislation is appropriate. Exempting a whole league before an assessment has been made of whether clubs in that league can afford the levy would be disproportionate.
Lincoln Jopp
I want to clarify whether the Minister is entirely comfortable that the Government are in no way able to control the amount of money spent by the regulator. If, in fulfilling its duties, the regulator decided it was important to fly business class to meet UEFA and FIFA once a month—if I were the regulator, I could probably make the case that I was fulfilling my duties by doing that—it would create a huge cost and involve hiring additional staff. Are the Government really prepared to give the regulator a blank cheque?
Stephanie Peacock
There is no cap. However, I draw the hon. Gentleman’s attention to the regulatory principles we addressed earlier in the Bill. Obviously, the regulator needs to be proportionate and reasonable. The regulator will guide its operations according to those principles.
Stephanie Peacock
I am grateful to the hon. Gentleman for taking the words out of my mouth, because I was going to conclude by drawing the Committee’s attention to a letter placed in the Libraries of both Houses when the Bill was in the other place. The letter, dated 6 March, was sent by Baroness Twycross, who took the Bill through the Lords. I will not detain the Committee by reading out the letter—Members can look at it—but it breaks down the proportions. Obviously, costs are based on the impact assessment and are indicative, so they are not meant to be prescriptive; it is meant to be an indicator. The letter may be helpful if the Committee would like more detail.
Mr French
I have listened carefully to the Minister’s arguments, and she has made some helpful clarifications. However, due to the lack of a cap, as my hon. Friend the Member for Spelthorne said, it is difficult to rely on the letter for what club certainty might look like in the future. We have discussed at length how well-intentioned plans can easily spiral, which is why we believe amendment 133 is important in helping to safeguard the clubs with the smallest means and those lowest down the pyramid.
Question put, That the amendment be made.
The Chair
Decisions on the new clauses will be made at the end of the Committee’s considerations.
Stephanie Peacock
I beg to move amendment 18, in clause 53, page 42, line 8, leave out “leviable functions” and insert “functions under this Act”.
This amendment is consequential on Amendment 22.
Stephanie Peacock
These amendments will make all regulatory functions under the Bill fundable through the levy. As drafted, the Bill sets out the specific functions that will be funded through the levy, making a distinction between the funding of leviable and non-leviable functions—I will discuss those concepts in greater detail shortly. Currently, the former would be funded via the levy and the latter via rules set by the regulator.
These amendments would make the funding mechanism simpler and more reliable by clarifying and ensuring that the regulator will be able to recover litigation costs related to non-leviable functions. If the regulator were unable to recover those costs, there is a risk that it would either be unable to use some of its powers or have to seek Government financial assistance to fund them. That is why we propose these changes.
Mr French
I listened very carefully to the Minister’s explanation of these amendments, which have been introduced at a fairly late stage. I hope she can provide some clarity on a number of questions.
First, was it always the Government’s intention to have these separate streams of funding, as she has described, or is this a way of expanding the IFR’s powers to charge the levy? I am unclear about why the change has happened now, because we have obviously been through a lot of consultation and the Bill has been in the other place for some time. It is not necessarily clear why these changes have come about at this stage, so I would appreciate an answer.
Lastly, when the Minister described the charges as non-leviable, the natural question was, “Who picks up the bill?” Are we talking about taxpayers, and if we are, what are those costs? Exposure to risk would obviously be a major concern for taxpayers and, I suspect, a number of Government Departments following the spending review. I appreciate her comments about how the Government believe that the functions may not be used or required, but there needs to be an answer about the risk of those non-leviable payments and what that might look like in the future.
Stephanie Peacock
I am grateful to the shadow Minister. First, it is certainly not about expanding, and we have been very clear that we do not want scope creep. He asks “Why now?” We have always maintained that we want the best legislation and the best outcome. We very much listened to the debate in the other place. We reflected on that, and we believe that this is just a simpler, less complex way of going about it.
On his last question, I can very much assure him that it is quite the opposite. By making these changes, the costs will not have an impact on taxpayers. We are clear about that.
Mr French
I am still unclear on that point, but I am happy to have the answer in writing. Who will pick up the bill when the levy cannot be charged to clubs, and what will that bill look like? I am not at all clear about how that will play out in practice. I am not sure whether I am misunderstanding the Minister, and I am happy to have it in writing, but I am not clear what it means.
Stephanie Peacock
I say gently that I think the shadow Minister is misunderstanding, and I am happy to write to him. The amendment means that all functions can now be covered by the levy, whereas previously there were two funding mechanisms in the Bill. It is a technical change.
Lincoln Jopp
I agree with the Minister—my understanding of what she just said is the same—but that leaves a tiny bit of clarity still to be given. Will all the normal running costs of the regulator be met by the levy, and none by the taxpayer?
Stephanie Peacock
Yes, that is the intention.
Amendment 18 agreed to.
Amendments made: 19, in clause 53, page 42, line 13, leave out “leviable functions” and insert “functions under this Act”.
This amendment is consequential on Amendment 22.
Amendment 20, in clause 53, page 42, line 14, leave out “leviable functions” and insert “functions under this Act”.
This amendment is consequential on Amendment 22.
Amendment 21, in clause 53, page 42, line 19, leave out “leviable”.
This amendment is consequential on Amendment 22.
Amendment 22, in clause 53, page 42, line 26, leave out subsection (4).—(Stephanie Peacock.)
This amendment removes the definition of “leviable functions” so that the IFR may charge a levy for all of its functions under the Act.
Mr French
I beg to move amendment 105, in clause 53, page 42, line 42, at end insert—
“(6A) Once the IFR has established a levy under subsection (1) and made the required payments under section 96, the IFR must only fund its functions under this Act through its own revenue streams.
(6B) For the purposes of subsection (6A) the IFR’s ‘own revenue streams’ are any amounts payable to the IFR from regulated clubs under subsection (1).”
This amendment requires the IFR to be self-funding through the industry levy, but after it has paid its initial costs and the Secretary of State’s establishment costs to the Treasury.
The amendment would require the Government’s new regulator to be self-funding through the industry levy, but after it has paid its initial costs and the Secretary of State’s establishment costs to the Treasury, so that it is entirely self-sustaining. That is not unreasonable; taxpayers are already being squeezed by this Government, so it would be ludicrous to suggest that they should foot the bill for the Labour Government’s regulator. That is why I tabled the amendment, which seeks to place a clear financial obligation on the regulator to ensure that, after covering its start-up and establishment costs, it becomes entirely self-funding through the industry levy.
The principle behind the amendment is simple: if we are to create an independent regulator for football, its independence must extend beyond structure to include financial independence from the taxpayer. The clause gives the Secretary of State discretion to determine the mechanics of the levy, but it leaves unanswered an essential question: who ultimately pays—we have had a bit of discussion about that—and for how long? The amendment provides a clear and reasonable answer: the taxpayer may support the regulator’s launch, as might be expected, but once that is done, the regulator should stand on its own two feet.
Let us not forget the purpose of the Bill: the regulator is intended to be arm’s length, neutral and shielded from political interference. However, the Government have gone to great lengths to compromise that independence through their appointment, as we have discussed, and the principle would be fully compromised if the regulator remained financially reliant on the Department for Culture, Media and Sport, or the Treasury for that matter. Independence is not just about who makes the appointments, but about who signs the cheques.
If the regulator is to carry out its duties credibly—overseeing financial discipline, enforcing ownership standards and planning across the football pyramid for the long term—it must operate free from any perception of ministerial influence. That means being self-funding. The idea that the British taxpayer should continue to fund the ongoing operations of this new body is simply not justifiable, particularly at a time when families are feeling the squeeze and public services are under pressure. If clubs need a regulator—and the Government have decided that they do—then clubs, not pensioners in Bexley or shop workers in Barnsley, should pay for that regulator.
The amendment would also introduce discipline into the regulatory model. It would ensure that the Government’s regulator lives within its means, plans sustainably and operates efficiently, just as it will expect clubs to. We must avoid the slow drift we have seen with other public bodies, where what begins as temporary state support gradually hardens into permanent public subsidy with no sunset clause or accountability.
By requiring the regulator to repay its start-up costs and then operate independently, we would make a clear distinction between initial public investment and long-term industry responsibility. It is not unreasonable to ask that football, having accepted the need for regulatory oversight, for which many have lobbied, now contributes to that oversight on a permanent and self-sustaining basis.
That gives rise to a number of questions for the Minister. Is there a timeline for when the regulator is expected to be self-funding, or will it continue to draw on the public purse for a number of years? What provision, if any, has been made to recover the taxpayers’ outlay once the regulator begins to collect levy income? I would be grateful, as would taxpayers across the country, for reassurances from the Minister that those issues are being addressed, and that the taxpayer will not be left to subsidise the industry without a clear exit plan.
My amendment would protect the principle of independence. It would safeguard the public purse and ensure that those who arguably benefit from oversight are the ones who pay for it. Football is told that it will get a strong, credible and financially sound regulator, but taxpayers deserve clarity, discipline and fairness in how that regulator is funded. I therefore urge the Committee to support the amendment and make the regulator accountable to the industry it oversees, not dependent on the Government that created it. Let us build something that is self-sustaining, responsible, and fit for the future.
Stephanie Peacock
During our debate on the technical changes proposed by the Government, we discussed the removal of the non-leviable functions. That means that everything will be levy-funded, so there will be no cost to the taxpayer. We absolutely agree with the hon. Gentleman’s points about the regulator being self-sustaining and self-funding. The Government also agree that the regulator should not be able to borrow money at its own discretion, which is why it is already prevented from doing so in paragraph 37(2) of schedule 2, which sets out that the regulator cannot borrow money unless explicitly permitted to as part of the financial assistance from the Secretary of State. We expect that that would occur only if absolutely necessary and in extreme circumstances, and would be provided only subject to conditions set by the Secretary of State.
There is no need for the restriction to be duplicated. We absolutely agree that the regulator should be fully funded through the levy, and that is exactly what the levy is designed to do. I will come on to that in more detail when we discuss the levy under clause 53 stand part. The Bill ensures that the regulator’s source of funding for all regulatory functions is the levy. Any financial penalties it imposes through enforcement action can also be used to offset any litigation costs and reduce the burden on compliant clubs.
Mr French
I appreciate that the Minister said that she will come on to that subject in a later debate, but can she be clear about start-up costs and their recovery for taxpayers? How is it envisaged that those costs will be repaid? I appreciate the point she makes about levy contributions, but how will the start-up costs that have been incurred now, along with the cost of the shadow football regulator, be recovered, if at all?
Stephanie Peacock
I would like to address that later, if possible. I have heard the question, and will make sure the hon. Gentleman gets an answer. For the reasons I have set out, I hope he will withdraw his amendment.
Mr Betts
I beg to move amendment 6, in clause 53, page 43, line 35, after “club” insert
“and in particular that the starting point for calculation of the levy payment applicable to a particular club should be a percentage of annual revenue”.
This amendment would require the IFR to have regard to a football club’s percentage of annual revenue when calculating a levy payment.
I encourage the Minister to say whether she thinks that the levy payment should relate to the income of clubs. Some clubs are clearly mega-rich—multi-million pound businesses, every year—but other clubs’ income is down in the few thousands of pounds. My amendment is probing, really, but will the Minister confirm whether clubs’ income is the basic building block on which the levy will be formulated?
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East for tabling his amendment. The Government completely understand the importance of any charges on clubs being transparent and proportionate and offering value for money. That must be achieved while maintaining the regulator’s operational independence and flexibility to respond to industry developments in the future. I will come on to discuss the levy in detail, but I will set out the key points now for clarity, in relation both to this amendment and to how the Bill ensures the levy is affordable for clubs.
The regulator must set out in levy rules how the annual levy payments will be calculated. The Bill explicitly requires the regulator to have regard to the club’s financial resources and position in the pyramid. That would include revenue. It should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. Premier League clubs are expected to shoulder the majority of costs, reducing the financial burden on smaller clubs.
It would not be appropriate to prescribe an exact methodology for charging the levy in legislation, as doing so would remove the regulator’s ability to explore other possibly more effective and proportionate methods of charging. That would be counter to the agile and independent regulator we want to create. For example, a club might have a relatively low organic revenue, but its owners might have very deep pockets. The regulator might want to take that into account to ensure that charges are fair, proportionate and relative to circumstances.
I also want to highlight that there is a statutory requirement for the regulator to consult industry on the levy. Every regulated club will be consulted. That transparency means that no club will be surprised by the changes asked of them. That will be sufficient to ensure the levy is fair and proportionate. For the reasons I have set out, I am unable to accept the amendment.
Stephanie Peacock
Before I speak on clause 53, I draw the Committee’s attention to a procedural matter. In preparing for the debate, officials identified some inconsistencies in the impact assessment published on the Bill’s parliamentary web page and gov.uk. It appears that as figures were updated during the development of the impact assessment, they were not reflected in the summary of costs on one page at the beginning of the paper, which was related to the compliance cost and operational cost. The figures are correct in the main body of the impact assessment, and the total cost that those figures added up to is still correct. The inconsistencies also featured in the version submitted by the previous Government. For full accuracy and transparency, we have now corrected it, and the impact assessment on gov.uk was updated last night. We have notified the Public Bill Office to ensure the parliamentary website is updated as soon as possible, and there will be an updated version in the Library shortly.
Having provided that clarification, I will now discuss clause 53, which enables the regulator to charge a levy to licensed clubs that covers the regulator’s running cost. That follows the precedent of other regulators such as the Financial Conduct Authority, the Competition and Markets Authority and Ofcom. The levy methodology is an operational assessment that the regulator is best placed to make independently. By making football clubs more sustainable in the long term, the regulator will be providing a service to the industry. It is only fair that as a wealthy industry, football, as opposed to the taxpayer, should cover the cost of regulation, as has been well discussed by the Committee this afternoon.
The cost of regulation would represent just a tiny fraction of football’s more than £6 billion annual revenue. The industry will also benefit from regulation, which will deliver a more stable pyramid of sustainable and resilient clubs, and so help protect the commercial value of English football. The legislation puts robust checks and balances on the regulator. It will be limited to raising funds to meet a set of tightly defined costs that are necessary for regulatory activity only. It is clear in the clause what the levy covers and how the money will be used, ensuring the regulator’s transparency. As I alluded to in the discussion on Government amendments 18 to 26, all costs can now be funded through the levy.
However, the regulator will not have a blank cheque. It will be subject to numerous safeguards including annual auditing by the National Audit Office, and its annual accounts will be laid before Parliament. That and other safeguards, such as the Department for Culture, Media and Sport’s responsibility as a sponsor, will provide the necessary transparency and scrutiny to deliver value for money.
In addition, as I set out when we discussed the previous group of amendments, the clause also requires the regulator to have regard to a club’s individual financial position when setting the levy charge. Specifically, that covers the financial resources of a club and the league in which it plays. That should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. That will be aided by the requirement for the regulator to consult all licensed clubs, which I will speak to in more detail in the debate on the next group of amendments. In addition, once operational, the regulator will have a legal requirement to set out its levy charges annually and consult all regulated clubs on its methodology.
Question put and agreed to.
Clause 53, as amended, accordingly ordered to stand part of the Bill.
Clause 54
Section 53: consultation and publication
The Chair
With this it will be convenient to discuss amendment 103, in clause 54, page 44, line 10, leave out
“As soon as is reasonably practicable”
and insert “Six months”.
The amendment requires the IFR to publish levy rules six months before the chargeable period.
Mr French
The clause sets out the consultation process that the Government’s new regulator must follow before introducing or amending the rules governing the industry levy that clubs will pay to fund the regulator’s operations, as we discussed on clause 53. The clause is designed to ensure that any such changes are not made in a vacuum and that the regulator consults the right people, provides a draft of the rules and gathers feedback before finalising anything. On the face of it, this is a welcome safeguard, but, as is so often the case with this Bill, the detail deserves much closer scrutiny.
Let us be clear: the industry levy is not a trivial matter. It is the mechanism by which clubs will fund the regulator, and the amount of levy and the method by which it is calculated or collected could have serious financial consequences, especially for clubs operating on tight margins, as we have discussed. We are talking about a compulsory statutory payment, not a voluntary contribution or a negotiated fee. Any change to the rules governing the levy must therefore be subject to robust scrutiny, proper stakeholder input and full transparency.
The clause requires the regulator to consult a named list of stakeholders as well as any others it considers appropriate. It also requires a draft version of the proposed levy rules to be published as part of the consultation. So far, so good. But—this is a significant but—the clause also includes a major loophole.
The clause states that the Government’s regulator does not need to consult at all if it considers the proposed changes to the levy rules to be “minor”. Crucially, the regulator itself is to determine whether such a change is minor. Why is the regulator being permitted to define what counts as minor without any external check, threshold or approval? That creates a dangerous conflict of interest where the Minister’s regulator becomes the judge and jury in its own process. What is minor to the Government’s regulator may be highly significant to lower league clubs, such as a League Two or National League club trying to manage a tight budget.
Once again, the Bill has a significant risk of regulatory mission creep. We must consider the cumulative effect of so-called minor changes: one small rule adjustment may seem harmless, but several such changes made without consultation could over time significantly alter the levy framework, placing new burdens on clubs without ever facing proper scrutiny. That is how regulatory creep begins, and that is precisely what the clause should be guarding against, but, as drafted, it does not.
Would the Minister consider amending the clause to define “minor” changes more clearly, perhaps by setting out objective criteria or requiring approval from the Secretary of State, Parliament or an independent panel? Alternatively, would she consider a threshold mechanism where changes with a financial impact above a certain level must trigger consultation regardless of her own regulator’s view?
I suspect that the answer to those questions will be no, which is why I tabled amendment 102, which would remove the regulator’s power to skip consultation when it determines a change to be minor. The intent behind the exemption may be practical and be—to avoid unnecessary bureaucracy—but in reality it gives the Government’s regulator unilateral power to decide whether stakeholders should be consulted on changes that could have material financial consequences.
Crucially, the definition of “minor” is left entirely to the regulator’s own judgment, as I have said. There is no objective test, no threshold and no review. Will the Minister explain why the Government believe it is acceptable for a statutory regulator to decide, on its own authority, when it is allowed to bypass the requirement to consult clubs and stakeholders that will be legislated for by Parliament? In every other walk of regulated life, such exemptions would be expected to come with clear limits or external oversight, yet in this instance we are effectively giving the Government’s regulator the ability to mark its own homework.
Let us not forget that the levy is not an optional contribution but a statutory obligation. Clubs will have no choice but to pay whatever is set, which means that even small changes could have big consequences, particularly for those lower down the pyramid. What may seem minor to the regulator may not seem so minor to a National League club balancing its books.
Does the Minister recognise that cumulative so-called minor changes could, over time, significantly increase the regulatory burden on clubs without ever triggering a formal consultation? That is the risk of leaving this loophole in the Bill. It is not just about what the Government’s regulator might do today; it is also about what a future regulator—possibly a more activist regulator, although I hope not—might decide in years to come. We need to close the door now before that risk becomes reality.
If clubs are to have confidence in the new regulatory regime, they must feel that major financial decisions will not be made without their involvement. Even the perception that the Government’s regulator could tweak the levy regime unilaterally using the exemption for minor changes could erode trust, particularly among the smaller clubs that are already concerned. Consultation must not be seen as optional; it must be the default, not the exception.
That leads me to amendment 103, which aims to improve the clarity of the Government’s regulator’s approach to any levy that it seeks to impose. The specific issue that it seeks to correct is that, under the Bill as drafted, the regulator must publish details of the levy as soon as is reasonably practicable before the start of a chargeable period. My amendment would require the Government’s new regulator to publish the levy rules at least six months before the beginning of the chargeable period to which they apply. It is about financial certainty, about clubs being able to plan and about not changing the rules on the eve of a new season.
We know that many clubs, especially further down the pyramid, operate on tight annual budgets. They finalise player contracts, ticketing strategies and community programmes months in advance. A late change to the levy rate or calculation method could throw all that into confusion. The amendment would help to give English football clubs the clarity that they need to prepare. It would ensure that levy changes are not imposed at short notice and it would enforce a principle that reasonable regulators should provide advance notice of costs.
What safeguards, if any, will the Government establish to ensure that levy changes are communicated to the affected clubs in good time? If the answer is that it will be left to guidance or good practice, that will simply be not good enough. Good intentions are no substitute for legislative certainty. Both amendments are modest, reasonable and—we believe—entirely consistent with the Government’s stated ambition to build a trusted and transparent regulator that works with clubs, not over them. We must get the process right.
Clubs must know when a charge is coming and how much it will cost them and their fans, and they must be given a chance to respond. That is what the amendments would provide—nothing more and nothing less. Removing the minor change loophole would ensure that no future regulator could bypass scrutiny at its own convenience, and the requirement to provide six months’ notice would guarantee that clubs are not left scrambling to deal with cost changes with no time to prepare. This is about good governance, fair process and fiscal discipline.
Clause 54 provides the procedural backbone for how the Government’s regulator will engage with the industry when amending leverage rules.
Lincoln Jopp
Let me provide some context. I will not name the team, but there is a team in the National League whose cash at hand in 2020 was £25,000, and by 2022 that had reduced to £9,802. We are talking about clubs with an incredibly tight financial structure. I completely agree with my hon. Friend the shadow Minister that changes may be minor to the regulator, but they will not be minor to such teams.
Mr French
I thank my hon. Friend for that valuable contribution, which gets to the heart of the amendments and what we are seeking to do. As I have said, they are designed not to undermine the regulator but to give transparency and fairness to clubs, so they can prepare their finances accordingly.
As I was saying, clause 54 leaves too much discretion in the hands of the regulator, particularly through the vague and undefined minor change exemption. We cannot create a system in which financial rules that affect the entire English game can be altered without oversight simply because the Government’s regulator says that the change is small or minor. If we want confidence, we need consistency. If we want accountability, we need clarity. Let us ensure that the Government’s regulator consults not just when it wants to, but when it needs to.
Stephanie Peacock
I thank the shadow Minister for tabling his amendments. Amendment 102 would require the regulator to consult every regulated club, the Secretary of State, the Treasury and others that the regulator considers appropriate, for minor changes to the levy rules. Clause 54 imposes a statutory duty on the regulator to consult the Secretary of State, His Majesty’s Treasury and regulated clubs, as well as other appropriate stakeholders, on its levy rules. However, clause 54(2) sets out that consultation is not needed for minor changes to the levy rules. This is intended to allow the regulator to make immaterial amendments or corrections such as typos or minor rewording without excessive bureaucratic burden.
The amendment would add a layer of unnecessary process that is unjustified given the extensive consultation requirements on substantial changes. It is not in anyone’s interest, especially the regulator’s, to stretch the definition of minor, which is a well-recognised legal term. If the regulator does not consult on a change that has made a material impact on a club, it could face a legal challenge through a judicial review. That will ensure that the regulator is accountable for what it considers minor.
Lincoln Jopp
I do not know whether the Minister has ever conducted a judicial review, but we could not get one done for £9,000.
Stephanie Peacock
I appreciate the hon. Gentleman’s point, but refer gently to my earlier comments. We are talking about typos and very minor changes. I give that example to show that the regulator is accountable for what it considers minor.
On amendment 103, requiring the regulator to publish the information on costs laid out in clause 54(4) six months before the chargeable period would create an operational challenge and would simply not work in practice. The regulator would have to estimate its costs for a chargeable period, having only half a year’s costs to base it on. That could lead to inaccurate levy charges, which could see the regulator underfunded or clubs needlessly burdened. The current requirement to publicise charges as soon as reasonably practicable strikes the right balance between adequate notice for clubs and operational flexibility for the regulator to ensure an accurate and appropriate levy charge.
For the reasons I have set out, I cannot accept the amendments.
Mr French
I listened carefully to the Minister’s response, which was fairly limited. I do not have enough confidence in her replies to withdraw the amendments. We are concerned about the impact on clubs and about the loophole in the interpretation of minor changes. I am not clear on the regulator’s accountability to stop scope creep. I suggested a number of options that the Government might look to adopt instead and did not hear any response to them. On that basis, and linked to some of the comments made by my hon. Friend the Member for Spelthorne, I wish to press the amendments to a Division.
Question put, That the amendment be made.
Stephanie Peacock
Clause 54 imposes a statutory duty on the regulator to consult the Secretary of State, His Majesty’s Treasury and regulated clubs, as well as other appropriate stakeholders, on its levy rules. This requirement to consult on draft levy rules will ensure that the views of clubs are considered as the regulator determines its charging methodology.
The statutory requirement in the clause to consult the Secretary of State and the Treasury will provide further scrutiny and assurance that the regulator’s proposed methodology is fair and proportionate. Allowing the regulator to propose its own charging structure within the strict safeguards outlined in clause 53, and with consultation requirements, enhances its independence and allows for greater scrutiny and accountability of the regulator.
The regulator can be held directly accountable for its charging decisions and the outcomes they produce. The levy is of course an operational matter that should be determined independently by the regulator, in consultation with those it will affect. The regulator will have the necessary information to design a levy based on a robust financial assessment of clubs to ensure that charges are fair and evidence-based. Giving the regulator the discretion to set charges reinforces operational independence and mirrors the approach of other regulators, such as Ofcom and the Financial Conduct Authority.
Question put and agreed to.
Clause 54, as amended, ordered to stand part of the Bill.
Clause 55
Duties to notify and consult the IFR
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
To achieve its objectives, which include a club financial soundness objective, a systemic financial resilience objective and a heritage objective, the regulator will need information from the relevant competition organisers. The clause places a duty on the competition organisers to provide that information, and in the event that they do not, they would be liable to be sanctioned.
A competition organiser must notify the regulator if there is a risk that the regulator may not fulfil its objectives. That is with regard to the club financial soundness objective or the regulator’s systemic resilience objective. In addition, the organiser will need to notify the regulator if it is in breach of a commitment it made as an alternative to a financial discretionary licence condition, or if a club has breached the rules of a specific competition run by the organiser.
The organiser will also have to consult the regulator if it proposes to change its own rules. That is necessary given the interaction between the regulator’s regulation and that of a specified competition organiser. The regulator wants its own regulation to be necessary and proportionate and not to overburden the clubs. It is therefore important to understand any changes in other rules that clubs need to abide by, given that they may increase or decrease the financial risk of clubs.
In all cases, the relevant information will act as an additional source of data to inform the regulator of risks within the industry and whether the regulator needs to impose additional regulation or proceed to enforcement and sanction to ensure the long-term financial sustainability of the industry. I commend the clause to the Committee.
Mr French
The clause sets out a series of duties that require various football stakeholders, including leagues and governing bodies, to notify and consult the Government’s new regulator in certain circumstances. At its core, the clause is intended to improve co-ordination and to prevent regulatory surprises, which in principle is reasonable. We all agree that where the governance of the game affects financial sustainability or club integrity, the Government’s regulator should be aware and engaged.
I will focus on subsection (6), which is a far more consequential provision than it might first appear. I believe it strikes at the very heart of one of the most sensitive and important issues in football governance: the independence of sport from Government control. Subsection (6) imposes a statutory duty on specified competition organisers to consult the regulator when they either add or remove a relevant rule of a specified competition, or vary a relevant rule of a specified competition. I note the comments of the hon. Member for Sheffield South East about when the regulator is involved in a competition and when it is not, with regard to the FA Cup. Some clarity on that would be much appreciated.
In short, the provision means that competitions such as the Premier League, the EFL and the FA Cup would be required—based on the wording of this part of the Bill—to consult the Government’s football regulator every time they change or amend a rule deemed to be relevant by the regulator itself. That might sound innocuous, but let us be clear about what it means in practice: for the first time, a politically appointed regulator, accountable to the Secretary of State, who has received donations from that regulator, would be given a formal, statutory role in the internal rule-making processes of English football competitions.
This is not a light-touch oversight mechanism; we fear it might end up being a direct institutional influence. As we know, it is not compatible with UEFA’s requirements on the non-interference of Government. UEFA statutes are clear that national football associations and their affiliated leagues and competitions must be free from political or Government control. The relevant rule is article 7bis (2) of the UEFA statutes, which states:
“Member Associations shall manage their affairs independently and with no undue influence from third parties.”
Article 9 goes on to state:
“A Member Association may in particular be suspended if state authorities interfere in its affairs in such a significant way that...it may no longer be considered as fully responsible for the organisation of football-related matters in its territory”.
It is pretty clear that the FA will no longer be considered fully responsible for the organisation of football-related matters in its territory should the Bill pass with this provision. Moreover, FIFA echoes that approach in its regulations, particularly in article 14 of the FIFA statutes, which ensures that member associations, such as the FA, remain autonomous and free from governmental or political influence. Article 15 of the FIFA statutes further requires members to be neutral in matters of politics and religion, to be independent, and to avoid any forms of political interference.
Subsection (6) brings us dangerously close to the line, if not across it. Unfortunately for the Minister, the Government seem to be on the wrong side of that line. I will press the Minister on that point, because however carefully the clause may have been worded in terms of consultation, in reality it inserts the Government’s new regulator into the core rule-making processes of the football pyramid. Once that principle is established, the scope can grow.
We know that there are international concerns about scope creep, as I mentioned when speaking to amendment 97.
“UEFA is concerned about the potential for scope creep within the IFR. While the initial intent of the IFR is to oversee the long-term financial sustainability of clubs and heritage assets, there is always a risk that, once established, the IFR may expand its mandate beyond these areas”.
Those are not my words.
Will the Minister confirm whether UEFA has been consulted on the drafting of the clause, and whether the Government have received written assurances that this level of regulatory involvement is compatible with UEFA’s independence rules? If she has, will she place a copy in the Library? If she has received any correspondence to the contrary, will she also place that in the Library so that the Committee has confidence ahead of Third Reading and can scrutinise the provision properly? What safeguards are in place to prevent this from being interpreted—either in Brussels or somewhere else—as a breach of sporting autonomy?
This is not theoretical—it is a real and dangerous risk for English football. Let us remember, in recent years, that other countries have faced disciplinary threats or warnings for perceived interference in football. We have seen federations sanctioned before. National teams and clubs have been threatened with exclusion from competitions. For example, Greece was briefly suspended from international football in 2006 after the Greek Government passed a law that interfered—that was the term used—with the autonomy of the Greek football federation, in violation of UEFA and FIFA regulations. In 1999, Moldova’s clubs and national team faced a ban from UEFA competitions, after it was deemed that there was political interference in the running of its football federation. In 2002, FIFA suspended Zimbabwe and Kenya from international competitions due to perceived Government interference in the football administrations of those countries.
Stephanie Peacock
I thank the shadow Minister for his points. Clubs will be subject to a number of rules from different football authorities. Failure to comply with them may indicate that the club is in some financial difficulty and may prompt the regulator to assess the risk profile of the club. Changes in a competition’s rules may lead to clubs taking additional risks or may threaten the financial soundness of the system. The regulator therefore needs to be aware of such changes so that it is in a position to reassess the long-term financial sustainability of clubs and whether, as a result of the rule change, additional regulation is needed.
The shadow Minister did accept that there is no veto in the clause. I reiterate once again that UEFA are happy with the Bill as drafted. He drew the Committee’s attention to a specific line in the Bill, but I remind him that it has not been changed from the previous iteration of the Bill.
Question put and agreed to.
Clause 55 accordingly ordered to stand part of the Bill.
Clause 56
Part 6: overview and interpretation
Max Wilkinson
I beg to move amendment 76, in clause 56, page 45, line 39, after “organisers” insert
“or by a regulated club”.
The Chair
With this it will be convenient to discuss the following:
Amendment 77, in clause 56, page 46, line 4, after “organiser” insert
“or directly received by a regulated club”.
Amendment 78, in clause 56, page 46, line 17, after “organiser” insert “or a regulated club”.
Amendment 79, in clause 56, page 46, line 24, after “organisers” insert
“or by any club participating in a competition organised by one of those organisers”.
Amendment 80, in clause 57, page 47, line 9, after “organisers” insert
“or by a regulated club”.
Amendment 81, in clause 57, page 47, line 19, leave out from “revenue” to “in” in line 21 and insert
“received by one specified competition organiser or regulated club in or in respect of that season compared to the relevant revenue received by that specified competition organiser or regulated club”.
Amendment 82, in clause 57, page 47, line 29, after “organisers” insert
“, or by any regulated club participating in a competition organised by one of those organisers,”.
Max Wilkinson
Clubs in the English football pyramid currently barter as a collective for funding from broadcasters, but it is not hard to imagine a future in which Liverpool, Manchester City, Arsenal, Chelsea—the hon. Member for Spelthorne has now gone so I can say that—or other big clubs decide that they are going to barter alone. That has happened in other European countries. In fact, Spain had to legislate to stop Barcelona and Real Madrid cashing in on their massive marketable machine that massively distorted the Spanish game.
These amendments are fairly simple. They build in a future failsafe to stop the threat of that happening. If it does happen, the revenue gained by those clubs will be taken into account in the redistribution of funds in the game. It seems like a logical failsafe to introduce to the Bill, which we hope will be accepted.
Stephanie Peacock
I thank the hon. Member for his amendments. We understand the intent behind them but believe that the drafting of the Bill sufficiently captures the current primary sources of revenue in the game. We will discuss clause 56 more fully during the clause stand part debate, but to summarise briefly, among other things, it defines which revenue streams are in scope of the backstop process. Revenue in scope is called “relevant revenue” and is limited in the Bill to revenue received by a league for broadcast rights to league matches.
Broadcast revenue is undisputedly the main source of revenue in English football, but we acknowledge that that may not always be the case. Football’s financial landscape is dynamic and its economic model may not remain static. That is why the Bill already allows for the definition of “relevant revenue” to be amended if necessary. The Secretary of State can amend the definition by making regulations, but only after consultation with the leagues, the regulator and the FA. That flexibility future-proofs the definition of “relevant revenue” against potential changes in the structure of the industry while ensuring that the definition remains firmly rooted in the current reality.
We expect that, throughout the distributions process, the leagues will effectively represent the interests of their constituent clubs. However, the backstop process, including the final proposal stage, is ultimately about resolving distributions between the leagues. It is about how money earned by the leagues flows from one league to another, not between individual clubs. It is therefore right that, given how finances currently flow, it is revenue received by the leagues as a whole, not individual clubs, that should be considered. I am therefore unable to accept the amendments.
Max Wilkinson
We recognise the numbers—although we Liberal Democrats now outnumber the official Opposition—so we will not press this to a vote. However, it is worth considering that, in future, we might end up in a situation where some of our bigger clubs start to try to negotiate on their own for their broadcast revenue. The Minister did not reassure me that that could not happen. As I understand it, we do not have legislation that would stop that. There is nothing in the game to stop that apart from Arsenal, Manchester United, Chelsea and Manchester City deciding to play together nicely.
Although we are not reassured, there is no point in forcing this to a vote. But we hope that the comments may be taken forward and taken into account by the regulator in future, and perhaps we will have this discussion again as and when those big clubs decide that they are going to kick up a stink and try to ruin the rest of football for everyone else. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr French
I beg to move amendment 124, in clause 56, page 46, line 3, 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.”
Clause 56 introduces the framework for the resolution process, which is a formal mechanism through which the Government’s new regulator may intervene to help to resolve disputes between football authorities, competitions and clubs in certain prescribed areas. The clause is important because it sets the boundaries of when and how the Government’s new regulator may be invited, or, in some cases, compelled to step into the room on issues that until now have been managed internally within the football pyramid.
We understand the intention behind this process. It reflects years of unresolved tensions in the game between different tiers of the pyramid, between governing bodies, and, most notably, between the Premier League and the EFL. Clause 56 and the following clauses in part 6 provide the bones of a system for dispute resolution, in the hope of reaching consensus where negotiation has failed. In principle, that has merit. However, we believe that the clause as drafted risks crossing a line—not into oversight, but into interventionism. It risks turning the regulator from a referee into a participant, and that risk becomes very real when we consider what types of decisions might fall within that process.
That is why I have tabled amendment 124, which would exclude parachute payments to the regulated clubs from the scope of the resolution process, as was the case in the Bill that the Minister supported during the previous Parliament. Clause 56 is not procedural, but foundational. It defines who can apply to trigger the resolution process, namely certain governing bodies and competition organisers, and what is meant by the term “relevant revenue”. In subsection (2), this 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, or…from any other source specified, or of a description specified, in regulations made by the Secretary of State.”
In essence, the provisions allow disputes over financial redistribution to be brought before the Government’s new regulator, which may then facilitate a resolution or, in some cases, take further steps to impose one. The specific issue we have with the clause, which was introduced by the Government, relates to the parachute payments of financial support offered by the Premier League to clubs that are relegated to the EFL to help them adjust to the significant drop in broadcasting and commercial income. This is obviously an important point, given the wage bills and so on when clubs go down, but it is never far from being controversial. Some see the payments as being necessary to ensure financial continuity and competition in the Premier League on the way up, while others argue that they distort competition in the Championship on the way down, solidifying clubs as so-called yo-yo clubs that go up and down regularly.
Bringing parachute payments within the scope of the regulator’s resolution process, as clause 56 does, takes a significant step towards Government involvement in revenue redistribution among private members of the competition. That is not regulation; it is reallocation. In our view, it is an inappropriate function for a state-backed regulator.
The amendment does not oppose the resolution process in principle; it supports it, and in fact returns the Bill to what the Minister previously supported. Can she tell us what has changed, and why she felt the need to make the change when she previously had no issue with this part of the Bill? My amendment seeks to make sure that the Government’s regulator does not intervene in areas that are already managed by mutual agreement between competitions.
Parachute payments are, by their nature, a Premier League solution to what is often a Premier League problem. They are not imposed on the EFL or funded by it, and although their knock-on effects may be debated—I have my own views on that—they should not be subject to arbitration by a third party.
If we allow the Government’s regulator to adjudicate disputes over parachute payments, we risk setting a precedent that any form of commercial agreement, no matter how internal, can be referred for outside resolution. We believe that that would be a mistake, and would likely undermine the willingness of top-flight clubs to continue sharing revenue in any form at all. If the Minister starts this process off on the wrong foot with clubs and this is not done in the right way, we fear that resentment would set in from day one. With the top flight already questioning—
Jon Pearce
Does the shadow Minister agree that parachute payments are a very important financial factor in the EFL? From my experience as a Derby County fan—many things go back to this—I know that we ended up in administration because we chased and tried to compete with clubs that had parachute payments, and ultimately could not stay within the financial fair play regime. How does the shadow Minister see that being tackled? It is a fundamental flaw and it is driving clubs much closer to administration, and to the wall, in many cases.
Mr French
I recognise the hon. Gentleman’s experience with Derby, and I understand his point. That is why I said there are a number of opinions, and this a very controversial subject. I have engaged with EFL clubs as part of this process, and we get a variety of opinions, even before we get to asking the Premier League clubs for their opinion, so I absolutely understand his point. This amendment is about trying to exclude parachute payments from this part of the Bill, rather than trying to take a decision on what parachute payment levels should be in any shape or form. That is the distinction we seek to make with the amendment, and I commend it to the Committee.
Stephanie Peacock
I thank the shadow Minister for the amendment, as it gives me the opportunity to speak to one of the key changes made in the new version of the Bill that this Government introduced. The amendment would take parachute payments out of the scope of the backstop, as they were in the previous Government’s Bill. The regulator needs to be able to consider all relevant revenue sources as part of the backstop process to get an accurate picture of any proposal’s impact on financial sustainability. That is why it was right to amend the definition of “relevant revenue” to ensure parachute payments could be considered as part of the backstop if necessary.
The shadow Minister pointed out that I supported the Bill when in Opposition, but I draw his attention to an amendment I put down then to this effect. We have had a clear and consistent view on this issue throughout the passage of both Bills through Parliament. We believe that allowing the regulator to make more informed decisions, rather than restricting what it can consider, will help to achieve the best possible outcome for the future of the game.
Mr Betts
This amendment would drive a coach and horses through the whole part of the Bill that deals with the proper distribution of football revenues. The shadow Minister is saying that it is quite reasonable that 80% of the money that the Premier League gives to other clubs should go to the handful of clubs who get parachute payments. It completely destroys competition in the Championship, and means that the clubs coming down often end up with multiples of the solidarity payments that the clubs who do not get parachute payments received. It is against the whole purpose and spirit of the legislation and the clause.
I know the previous Government would not listen to the idea of parachute payments being included; I thank my hon. Friend the Minister for listening to the concerns that have been raised by the majority of clubs, particularly in the EFL, and I hope that she resists any attempt to undermine the stand she has taken.
Question put, That the amendment be made.
Stephanie Peacock
I beg to move amendment 27, in clause 56, page 46, line 27, leave out
“means an order under section 62(1) or (3)”
and insert
“has the meaning given by section (Distribution orders)(6)”.
This amendment is consequential on the insertion of NC4.
The amendment is consequential on Government new clause 4, which we will debate later. Although it depends on that later change, the amendment would change clause 56, which is why we are discussing it now. We will also discuss clause 56 in more detail later, but one of the things it does is set out key definitions of key terms used throughout the backstop provisions. One of those defined terms is “distribution order”, which is the order made by the regulator at the end of the backstop process. It is designed to resolve the questions for resolution if the leagues have not managed to do so during mediation. Currently, the Bill’s definition of “distribution order” refers to clause 62, but we propose to remove clause 62 and replace it with new clause 4. New clause 4 completely changes the final stage of the backstop process. I met the shadow Minister and the Liberal Democrat spokesperson, the hon. Member for Cheltenham, to discuss this ahead of the Bill Committee. It moves the backstop away from a binary, winner-takes-all model, and allows the regulator discretion to design a solution to distribution issues.
We will have a chance to debate that fully when we debate clause 62, so I will withhold some of my comments until we get to that point. This simple amendment just updates the definition of “distribution order”, so that it appropriately refers to new clause 4 instead of clause 62. It is vital that we make these sorts of consequential changes, to ensure that the legislation remains coherent. Therefore I hope that Members will support this amendment.
Mr Betts
As the Minister said, we will come on to debate these issues later, but again, I just want to place it on the record that she has been really listening to concerns that have been raised about the pendulum nature of the previous backstop. This is a much better process, which we will come on to discuss in more detail. Thanks to the Minister, we will discuss it further, but it is a much better framework that we will now be putting in place for the regulator to decide on any disputes or failures to agree between the leagues.
Amendment 27 agreed to.
Stephanie Peacock
I beg to move amendment 28, in clause 56, page 46, line 42, leave out subsection (7).
This amendment removes the definition of “the question or questions for resolution” which is now superfluous.
Stephanie Peacock
I begin by acknowledging the comments from my hon. Friend the Member for Sheffield South East. I appreciate him putting that on the record. Of course, we will have a fuller debate on the broader change later, so as I said, I will reserve my wider comments till we get to that point.
The backstop aims to ensure that where the industry cannot resolve the issue, revenue is distributed between the leagues in a sustainable way that furthers the regulator’s objectives. As I will set out in more detail when we debate clauses 57 and 58, it allows the leagues to apply to the regulator to intervene and help them to resolve specific issues that are in dispute between them. The issues that need resolving are referred to in the Bill as the “questions for resolution”. We will further discuss the process for triggering the backstop when we come on to debate clauses 57 to 59.
Put briefly, the triggering process requires a league applying to the regulator, showing that certain conditions listed in clause 57 are met, and putting forward a set of proposed “questions for resolution”. The other relevant league has a chance to respond to that proposal. The regulator will then consider the application and the response, and will decide whether to trigger the process. If it decides to trigger, it also decides exactly which questions must be taken forward and resolved through the backstop process. Therefore, the questions for resolution are set out at the very beginning and carry through, determining the scope of the whole process. They are the questions that the leagues discuss in mediation, as we will see when we debate clause 60, and they limit the scope of any regulator distribution order—something that we will discuss further when we come on to debate Government new clauses 3 and 4—to issues of financial sustainability.
Setting the questions for resolution is therefore a very important step that demands a clear statutory process and a rigorous approach by the regulator. That is even more important in the light of the proposed changes that Government new clauses 3 and 4 will make. Those new clauses propose a new model for the backstop—a staged regulator determination. They move away from the binary, winner-takes-all, final-offer model and increase the regulator’s discretion to devise its own solution for distributions. Because of that increase in discretion for the regulator, it is important that the scope of the distributions process is well defined from the outset, so that all parties are clear about what the regulator will and will not rule on if the leagues ultimately cannot agree to an industry solution themselves.
These amendments therefore strengthen and clarify the process for—[Interruption.]
Stephanie Peacock
I have indeed—clearly.
These amendments therefore strengthen and clarify the process for setting the questions for resolution. They highlight the importance of a league proposing specific questions for resolution when it applies to the regulator. They emphasise that if the regulator agrees to trigger the backstop, it will not take a sweeping approach and try to rule on every possible aspect of distributions. It must set out specific questions that it will resolve, and its powers are then restricted to resolving those questions.
These amendments make it clear that questions must meet certain tests in order to be resolved through the backstop. Those tests are twofold. First, the regulator must consider that leaving the questions unresolved presents an apparent threat to the regulator’s objectives. Then they must consider that the questions could not be resolved within a reasonable time by the regulator exercising any of its other functions.
The amendments clarify that the regulator need not take forward all the questions proposed and that the regulator can modify the proposed questions. They will also require the regulator to take into account representations from the other league that accompany the application. That will give the regulator the flexibility to pick out which questions it is appropriate and within its remit to address, without forcing it to either accept every element of an application or reject the whole application outright.
The amendments also set out procedural requirements. They require the regulator to consult the FA before setting the questions for resolution, ensuring that the national governing body has a chance to raise any views about the scope of the backstop process. They will also ensure that the regulator transparently sets out what questions it has chosen and how it made that decision. The questions for resolution will then be taken forward into the mediation phase. That will ensure that all parties understand the specific aims of the mediation stage.
Jim Dickson (Dartford) (Lab)
The Minister is setting out how important it is to get the distribution arrangements right. This is the part of the Bill that may be the most critical in ensuring that the pyramid is sustainable, which is the objective. It is great that the Government are working hard to get the backstop arrangements right, as she said. Does she agree that, once the regulator is in place, it will be important to have the state of the game report already in place—with an analysis of what is going wrong in the financial distribution and how it could be put right—before a distribution agreement is made and the backstop powers are used to bring that about?
Stephanie Peacock
My hon. Friend is absolutely right, and he touches on something we will discuss later. It is important that the state of the game report takes place swiftly. That is an important part of the Bill. Of course, it is a backstop, and we are keen that a football-led solution is the priority and that people get round the table. I often quote Dame Tracey Crouch, who was one of my predecessors as sport Minister, and obviously we know how involved she was in the Bill. In the previous Bill Committee, she made a short but very focused speech, which I encourage hon. Members to read, on how the backstop should be a backstop. I often quote that speech.
For the reasons I have set out, the amendments are vital for supporting our new backstop model, and I hope that they will be accepted. I commend them to the Committee.
Amendment 28 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Stephanie Peacock
Clause 56 is the first clause of part 6, which relates to financial distributions and the backstop mechanism in its totality. I understand the desire on both sides to apply appropriate scrutiny to a part of the Bill that could significantly impact the future financial landscape of football, and I hope through this debate to demonstrate that the approach taken in part 6 is the most proportionate and effective one.
These backstop powers have been introduced to help ensure that an agreement can be reached between the leagues on the distribution of revenue from the selling of TV broadcast rights. If the leagues cannot agree a deal, it will allow the regulator to step in as a last resort and impose one. A solution to this issue is vital to ensure the future financial sustainability of the football pyramid. The process has been designed to encourage an industry solution while providing the assurance that, should one not be reached, the regulator can ensure that one is put in place.
The Government have listened to industry, to members of both this Committee and its equivalent in the last Parliament, and to concerns raised in the other place. We have taken on board the points raised regarding the original distribution model in the Bill, and we have therefore tabled targeted amendments to improve the mechanism. As I have said more than once, I will set out the detail in a later group. We are confident that the regulator will have the powers necessary to ensure a timely, satisfactory distribution order, while not unduly inhibiting the ability of industry to resolve the issue itself.
Clause 56 sets out an overview of the backstop powers and outlines some key definitions that are important for clearly setting out the scope of these powers, including “relevant revenue”, which I will come on to in just a moment. Importantly, this clause also makes clear right at the outset in subsection (1) that the regulator can impose a distribution order only if the leagues are unable to reach an agreement during the backstop process. In other words, even after the process has been triggered, a regulator-imposed solution remains a last resort, only to be used if industry fails to strike a deal.
One of the key terms defined in this clause is “relevant revenue”. It expressly includes broadcast revenue because this is the predominant source of revenue for the relevant leagues, and this is the revenue that underpins the financial flows between the leagues. This clause also allows the Secretary of State to specify other kinds of revenue to be included as “relevant revenue”. This is simply to future-proof the policy; for instance, if broadcast revenue is no longer the main source of income for the leagues. However, there are safeguards on the use of this power. The Secretary of State must consult the regulator, the FA and the relevant leagues, and can use this power only when there has been a material change of circumstances. Any use of the power will be subject to the affirmative procedure in Parliament.
The previous Government’s version of the Bill explicitly excluded parachute payments from the definition of “relevant revenue”. Our version of the Bill no longer makes this distinction, allowing the inclusion of parachute payments where appropriate. This change was made to ensure that the regulator can consider all relevant aspects of revenue distribution as it makes a financial assessment of the game. Parachute payments can be included in the backstop only if the regulator considers that issues relating to parachute payments present an apparent threat to its objectives, such as the sustainability of the pyramid.
Another important definition in this clause is the “qualifying football season”. This determines which seasons can be in scope of the backstop. In effect, it limits the regulator’s power to only the next six football seasons, which prevents excessively long regulator orders or premature applications for seasons far in the future.
Question put and agreed to.
Clause 56, as amended, accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)