Lords Chamber

Monday 17th March 2025

(began 10 hours, 38 minutes ago)

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14:38
None Portrait Oral questions: Support or advice to companies domiciled overseas who have set up a UK registered subsidiary in order to bid for public sector work
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My My Lords, My Lords, first My Lords, first Oral My Lords, first Oral Question.
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None Portrait Legislation: Mortgage Prisoners Inquiry Bill - committee stage
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mortgage prisoners enquiry bill. I understand that moments have
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Lord Jackson of Peterborough Portrait Lord Jackson of Peterborough (Conservative)
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I rise to move amendment 31 and support amendment 33 in the name of support amendment 33 in the name of myself and noble Lady Fox of Berkeley. The amendment seeks to Berkeley. The amendment seeks to remove the explicit reference to EDI, equality diversity and EDI, equality diversity and inclusion on the face of this bill. inclusion on the face of this bill. By way of a compulsory obligation in the independent football regulators corporate governance statement. I corporate governance statement.

I don't wish to rehearse the arguments in the Committee stage where the Minister would suggest did not fully engage on this issue, but I am grateful that her letter to Lord Moynihan of Chelsea, who is in excellent work on this issue, but I look forward a partial rationale for this part of the bill. There is a encumbrance that the bill put forward in the last Parliament and that extent, it does not have the support of his loyal opposition.

I want to say at the outset that it is important to treat everyone in football with fairness and equity, and I believe it is good business as well as morally the correct thing to do. That is why we have a strong existing regulatory regime in this country to ensure compliance to the basic tenets of decency, fairness and equality. But I oppose the compulsory and Draconian imposition of an EDI opposition on football clubs for a number of reasons. It is heavy-handed and diverts resources from an excellent committee engagement initiatives which have developed organically over the last few years in grassroots football.

It is costly and bureaucratic and divisive and I believe undermines cohesion and will impose unnecessary costs on a majority of smaller clubs whose financial health is precarious. And on which the owner's provisions will weigh heavily. It will encourage diverse litigation and the intervention of third-party groups such as Stonewall and result in cases such as that of the football club banished for expressing how unlawful gender critical views online, and questioned my opinion in the disgraceful Orwellian fashion by Northumbria police which the latter were forced to issue a belated and grudging apology.

These proposals will chill free speech, because the proliferation of ideological training schemes and undermine training schemes and undermine winners sex rights in the workspace. The noble Lady the Minister praise in a study by McKinsey into EDI and improved corporate decision-making, but as she knows, McKinsey's 2018 study delivering delivery through diversity has been comprehensively critiqued and discredited published on Econ Journal watch which demolish the empirical evidence-based and metallurgical assumptions, specifically on reverse causality of paid data, quartile balance and global versus US scope of the research.

Other academics of the London business School have similarly echoed robust and rigorous reputation of the studies. It is noteworthy that the Minister in this house which reference any other generic EDI research in respect of its efficacy, nor any on football or wider support. Perhaps you will address this issue in her later remark. There is a reason why it was an EDM policy which didn't harm profitability but there was no evidence that it helps it either.

A rather important issue that the Wall Street Journal estimates that globally, businesses will be spending $15.4 billion on EDI next year. Where is the evidence that an EDI duty will make clubs more sustainable and ensure good corporate decision-making? Really? The penny is finally dropping. The financial conflict ditched their lands to ditch costly diversity and inclusion regulations on the Financial Services Act sector. The only impact assessment estimated that it will cost £561 million to setup and £317 million in recurring annual expenditure.

The fans and wider public agree. In May last year, policy exchange found that 50% to 14%, people agree that businesses have become too concerned with taking political decisions on contested issues, and 75% of people believe that companies should prioritise hiring on merit regardless of race or gender, rather than hiring to create a diverse team, and of course, they are right. And 40% of Premier League footballers are nonwhite on merit. I assume both the prime minister and his adviser Morgan McSweeney read these polls and media coverage as well, and I am heartened by reports that the most senior leaders in government are considering prioritising growth and economic prosperity rather than overregulation and virtue signalling.

And they are giving serious thought to ditching the IFR. Perhaps the Minister will offer her views on this issue. Finally, does anyone really believe that fans clamoured for mandatory reporting of data on race, gender and sexuality when Perry AFC went bust in 2019? The opposition is ridiculous. We need to trust our football clubs to do the right thing with the current laws, and regulation for regulation sake will only hasten the demise of our football success story. For those reasons, I move this amendment.
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Baroness Fox of Buckley Portrait Baroness Fox of Buckley (Non-affiliated)
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My Lord, I support the noble Lord Jackson in his amendment and I am leading my own in this sphere. These amendments do aim to move requirements to submit statements to the independent regulator. Detailing plans to improve, as we have heard, equality, diversity and inclusion policies. This requirement was added to the original bill by the government and in my view it is unnecessary and burdensome. It could act as a Trojan horse for politicising clubs in ways which would be divisive.

First, as the noble Lord Pannick has explained, this is a duplication of work which has already been done by many club. The Premier league and English Football League already require clubs to do work in this space to comply with standards. Can the Minister explain that if the expectation is they need to do more or do EDI differently, what does improve comprise of? Can the Minister elaborate what she envisages will trigger sanctions for non-compliance and what does non- compliance look like? This matters for all those clubs beyond the Premier league and English Football League.

National League clubs which operate on tight margins with small staff and volunteer teams. Thinks of the sanctions clubs could face and requirements of external EDI professionals and they do not come cheap or face financial penalties will ultimately face the revocation of their operating licence. There is a price to pay and a lot of pressure to comply which could generate substantial burdens on clubs. All the evidence shows across a multitude of institutions that EDI regulatory regimes often divert scarce time and attention on resources away from the core mission and priorities of organisations.

It also tends to expand its remit. One of the most obvious ways in which regulator organisations prove their Elaborate flashy guidance documents, training programs, unconscious bias workshops and so on. It is a perfect example of a well-meaning policy that grows and proliferates and has a self-fulfilling mission. Oxford University now employs 59 staff in EDI roles. A 20% increase since 2022. At the cost of 2.5 million per year before pensions and benefits. This seems baffling given the dire state of university finance.

Such concern of these bureaucratic and financial burdens are not confined to a few of us here. As we have heard last week two regulators also made similar points. The Financial Conduct Authority and the regulation authority did announce their decision to abandon plans to impose a diversity and inclusion rules on financial firms will stop this must give the Minister pause for thought, surely. Surely it is not too late to consider the section of the bill to consider such adverse outcomes and to consult on this issue from stakeholders and fans et cetera.

If you listen to the debate in the financial services sector, it is instructive. A partner in the head of financial services said it was a relief the FCA was no longer proceeding with this proposal, which she said would have imposed unwarranted costs on firms without delivering clear benefits. Instead the regulators in financial services will limit their role to voluntary industry initiatives. I am not opposed to that. Surely a voluntary approach is appropriate for football as well. Requiring that you regulator to impose whatever regulators admit are too burdensome is not proportionate.

My key question still is what problem is this a solution to? We heard in committee and have heard since there is a concern about the lack of diversity in senior management level of clubs but there is little evidence EDI in practice, whatever the intentions are in theory will resolve this problem stop I would be reassured if the government could elaborate on how it envisages EDI policies will operate in regard to employment in individual clubs. EDI has a poor track record in improving workplace culture.

The opposite is often true. Last week Trevor Phillips wrote a comment piece in the Times entitled "there is a better way than DEI to fix prejudice". He warned of the way in which these policies could stir up resentment and competitive victimhood which will do little or cause conflict in workplaces. He says these programs increasingly appear not to be aimed at making the workplace better and more productive, but on modern day inquisitions dedicated to damaging for their existence. In Kings College staff were told they could not get promoted unless they signed up to the whole of the EDI initiatives and that included taking part in activities run by an organisation now considered so controversial it has been largely injected from activities at Whitehall.

EDI training at Imperial College proves how to be a white ally and being asked to agree that they have white privilege. I want to know if the Minister envisages that is a productive thing if that is what would happen in clubs and is that what she thinks EDI clubs will look like because it looks like that in many organisations. Does the Minister see the danger of introducing a contentious and politicised agenda into club culture? While EDI is often fostering decision-making but in reality it often reinforces groupthink in workplaces.

I'm just worried about this seemingly small part of the bill dragging football clubs into a murky political territory. To note that a judicial minefield is here, for example if clubs chose to set quotas to fulfil EDI requirements based on protected Would that not open up the gates to biological males who identify as women being able to play women's sports? This is such a political and sports? This is such a political and ethical topic, and you can see the controversies the system is involved in here and Lord Triesman spoke about it passionately in committee.

I'm not suggesting noble Lortab to agree with my views on this but can I urge the government to wait at least for the judgement by the Supreme Court in the case with Scottish ministers in a case about how a trans woman fits in under the Equality Act. Is there a danger these provisions could unintentionally "up to being challenged in court and make them subject to spurious litigation in this area? Over the weekend one of the biggest girls football leagues in the country was threatened by the football Association with being shut down for refusing to allow boys to play in their matches.

Last week an emergency meeting was held by organisers of the league which has at least by the way 6,000 under 18 girls playing across more than 300 team. Statistic progress for girls team. Statistic progress for girls in football and at that meeting is -- meeting managers voiced their concern that allowing boys to play would open the floodgates and is a threat to the girls game. Parents are threatening to take daughters out of the league and girls themselves are saying they will give up if boys join.

And the FA response is that it is part of a inclusion is that it is part of a inclusion Might dismiss these concerns as all a bit culture wars and even a bit trump and nothing could be further from the truth. To reassure the Minister, I would like to call on one of her Cabinet as an ally. Wes Streeting told a support event that sometimes there are some really daft things being done in the name of EDI which undermined the case. One member of NHS staff for example said part of her practice was anti- whiteness.

And Wes Streeting said, what does that say to people more likely to die earlier than their affluent white counterpart? He said the real issue of inequality affecting working-class people is not addressed here and called for the ideological hobbyhorse of EDI needing to go. I agree. I think we should drop it from this bill. That does not mean we should not fight tooth and nail for equality and tooth and nail for equality and fairness in all walks of life.
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Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Labour)
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I would like to counter some of the nonsense that has been thrown from Baroness Fox and the noble Lord who moved the amendment against equality, diversity and inclusion earlier. My Lords, the English Football League represents 72 of the clubs affected by the governance bill simply says that our equality Code of Practice is already mandatory for member clubs. This approach is a logical extension of existing arrangements that will make sure high standards are maintained. My Lords, I think that says a lot, actually.

If you go to any football ground most weekends, as I try to do, you will find there are messages of persuasion and inclusion there to ensure that football plays its part in guaranteeing the game becomes more inclusive. An that the workforce is diverse. During the early debates in committee, I did suggest the business of football outside of the players on the pitch could do with looking at this issue more. The workforce more broadly is not as diverse as it should be.

Certainly at senior level, management and director level. I management and director level. I think we do need to encourage to do better and the amendment may play a role in that as well because it does provide some flexibility within the senior echelons of management. It is the case only 4% of managers in the professional game are from non-white backgrounds. When you think that the workforce, the players on the pitch, some 45% of them are from a minority group and something is clearly not working in the way in which the business is developing and I think we should do all we can to encourage that.

I agree with the noble Lord Pannick that this is a nonsensical Pannick that this is a nonsensical
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Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Conservative)
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I am sure noble Lords will understand if I just begin by prefacing my remarks to Newcastle united, congratulating the mono victory in their first domestic trophy in 70 years. That is longer than the living memory of any of my relatives. I think this is an air in which the noble Baroness and I are in agreement. So, I won't go on about it. Other than to say that I hope that anyone who at the pleasure of being on the London Underground yesterday was as delighted as I was to see all the lads and lasses there with smiling faces, and will join me in sending hearty congratulations to the Newcastle fans who have waited so long for this moment.

The government's new corporate governance provisions have received considerable attention during our debates on this bill. We have set out the concerns of many of these benches very powerfully, and we have echoed them and added her own concerns. I have been very clear throughout the passage of the bill that we on the opposition benches are not persuaded by the changes that the government has made to the bill compared to the version we put forward in the last Parliament. As I said in committee, we don't believe that the admissions made in this government, we have strong governance mandating a corporate governance as part of the process, and that is in addition to the rules already enforced by the Football Association and by competition organisers, so regardless of whether one believes that EDI policies would improve clubs and football in this country, and as we can see from the short debate we have had today, that is by no means a settled view, but clubs have to comply with some of the rules and in many cases, voluntarily go forward.

My noble friend Lady Brady mentioned that in more detail during the debate in committee. Mandating further policies and actions for diversity and inclusion is a clear example of an Julie owner's regulation which has little to do with financial stability for noble Baroness has been very clear throughout our scrutiny that this is in a sustainability regulator. We are tasking regulator with concocting rules to that end, which would increase the risk that we have been increase the risk that we have been concerned about.

We would all be clear that this is part of the regulation, and clearing out the regulatory reels of regulators asking them to promote economic growth, we should be looking at fewer regulations not more. Let me say a few amendments that have been outlined which relate to independent non- executive directors, and we had a strong cross-party exchange on this topic in committee when this was tabled by the noble Lords of Weymouth and Lord Blunkett. They were evidently looking, but I am glad that my noble friend Lord Markham, and very grateful to the Lord Baroness for her time, discussing this with both of us which she did with a number of noble Lords who raised it in committee.

She kindly copied us into the letter that she sent Lord Knight of Weymouth about it, but I look

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forward to any clearer reassurances. I would like to join the noble
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Baroness Twycross Portrait Baroness Twycross (Labour)
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I would like to join the noble Lord in his congratulating of Newcastle United. Commiserations to Liverpool and Liverpool supporters. Good football is always a joy to watch, however, clearly in some circumstances only one side can win, so I do feel for those who put all their effort in and didn't go away :-). I want to address one of the points raised by Lord Jackson of Peter in the noble Lord speech in relation to reports in the media this morning.

The noble Lord should not remember everything you read in the newspapers. Your Lordships house has talked about how to many football fans have been left with nowhere to turn then faced with reckless owners and threats to the clubs very existence. That is why the government remains absolutely committed to introducing an independent football regulator to put fans back at the heart of the game. We have had extensive discussion on the topic of equality diversity and inclusion during Committee stage member of noble Lords and their concern of what is a very standard edition to almost all corporate governance codes.

I'm sure the noble Lord will not be surprised to know that I don't agree with them. It is a key part of good corporate governance. We promote transparency, all of which contribute to financial sustainability. We hear about the vital work being undertaken during committee. The regulator will look to work with the sector and add to initiatives through the code, and as with fan engagement, this will be a statutory baseline. The noble Lord Lord Jackson referred to the hand report which was forwarded to me, and I'm very grateful to the noble Lord for forwarding me the report.

I do appreciate the noble Lord noting the findings regarding McKinsey studies about corporate performance. I recognise the assessment refutes the line the link between ethnic diversity and financial performance, diversity and financial performance, however, it remains my view that the relationship between diversity and improve corporate performance is well established and accepted beyond the studies of simply McKinsey. For example, both the reporting Council and associations of chartered certified accountants acknowledge this relationship. So for clubs who already champion diversity and inclusion, they won't have an additional burden placed on them other than to periodical report on these things.

Lord Patten of Brighton outlined a number of issues that remain within the game, and under the corporate governance code, clubs will simply be required to explain how they are applying the code, and what action they are taking on equality, diversity and inclusion. Nothing more. As suggested by the noble Lord, that doesn't feel own arrest but it is a helpful and transparent measure in the government's view, and I refer the noble Lord to the points made by Lord Pannick as well. As I said previously, the regulator is not going to micromanage each clubs board or set targets and focus on EDI.

That is not the role of the regulator and will pull significant burden to the regulator and to clubs. Turning to 34 in the name of the noble Lord Lord Markham, I would like to thank the noble Lord for this engagement and for his engagement on this along with a number of other noble Lords. I would particularly like to thank my noble Lord who has been a strong advocate on this issue and has met with me to discuss this. I did write to him and I would be happy to lay a copy of this letter in the house.

As I outlined, we are in agreement with none except directors. We recognise they can greatly improve decision- making, provide scrutiny and drive up corporate governance standards. This supports ability and decision- making for football clubs, while we agree with its principal, we do not feel it is right to include this detail on the face of the bill. We don't believe that the government should be writing the code or making detailed recommendations on how we should operate. No corporate governance code is written into primary legislation.

This helps ensure flexibility and future proofing. We are setting up regulators which will, once setup, have in-depth knowledge of the unique challenges of football club governance. It will be for them to then consult and publish this code. This approach includes clubs which is essential to ensure that it is appropriate for football industry and best practice. However, I would like to reassure noble Lords that we can expect to include guidance. This is a norm for all corporate governance codes, and we do not expect the regulator code to be any different.

There is agreement here on the importance of independent directors, and I would like to thank the noble Lords across the house for interest shown in this issue. I hope this will satisfy any concern that will not be included in the corporate governance code. I therefore hope that the noble Lords withdraw their amendments for the reasons given.
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Lord Grantchester Portrait Lord Grantchester (Labour)
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I asked to propose an amendment 35 in the name of the noble lady to which I have added my name, I declare my interest as a former director of a football and chair of director of a football and chair of the memorabilia trust and a small The noble Tanni Grey Thompson apologises to the House that she cannot be here to move her amendment as she is chairing a three-day social care conference. The dates and timings of commitments can present difficulties with the scheduling of legislation.

The women's game has come a long way and now has a recognised pathway for women and girls to progress beyond recreational football enjoyment to elite participation. A pathway that now crosses national structures to successful European clubs where there are more opportunities to progress from less footballing friendly nations. The success of the Lionesses has been a great positive beacon in sport, encouraged by the . There has been a 56% increase in women and girls playing football and a 14% increase in schools offering equal access with sport and PE for girls.

There is so much more that is needed in schools looking to improve female health and well-being through sport. This bill has been a long time coming into fruition. I have not spoken much as I am in total agreement that this improved version will tackle from a fan perspective the shortcomings in the top leagues, leaving problems exposed that would have occurred in the previous government's legislation. This amendment is simple. It is correct that there are powers in the bill for the Secretary of State to expand the remit into the women's game.

Right now the focus needs to be embedded into the men's game appropriately. But the women's game remains vulnerable. A report about raising the bar reached an agreement that the women's game would like to develop on its own terms separate from the men's game but that it Audiences differ, being more diverse and family focused and there is a different culture and even refreshments at games are different. But needing protection as women's football need so much investment in standards and facilities.

This season for the first time in the league all of the teams are teems with a men's Premier league club for finding that investment. The report understood that if the top clubs do not believe in women's football, it will not thrive. But dependent on the men's team is fundamentally problematic. When Reading was in trouble it cut out support for the women's team and disbanded it leaving all of the female players without their club. Baroness Thompson provided the example of also disbanding 18 saved after a public outcry with an indignant Lily then aged seven declaring that if girls want to play football, you cannot just not let them.

I applaud the development on the restructuring of the control competition into two top divisions, separate leagues structures. The Premier league has come forward with a £20 million interest-free loan to nurture this development. This simple amendment, 35, women's football development while depending on funding from the men's game will be protected in an independent operation from the vagaries of the men's game. Whether it develops along US lines with independent funding and stand-alone teams is to be seen. But the point is women's football can develop how it would wish to.

Can I ask my noble friend the Minister for assurances that women's football will be protected in this legislation? Could she confirm that the women's football game will be assessed in state of the game report so the secretary of statement be advised whether problems are emerging which could require the scope of the act to be expanded? Could my noble friend the Minister give any indication what conditions or circumstances might give rise to such considerations? How could this come about so that should concerns and problems arise in the development of outcomes in women's football, there would be records to

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move. Page 14, line 6, insert the words
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Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Conservative)
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I agree with the Baroness Hooper spoken out for the woman's game from second reading all the way through the bill. I thank her for moving the amendment over half. We touched on this a little bit when we are looking at the thorny question of putting in the types of competitions and leagues that would be covered where we ran into the problem of not wanting to make a Hybrid bills but we were interested in the consultation that would be needed if the woman's game were to come under the scope of the bill and the regulator, so I am grateful to the noble Lord and the noble Baroness in her absence for returning to this today.

I rise to speak to my amendment 36 and 95 which have been put in this group. My amendment 36 6 to ensure that the regulator has power to restrict funding from sources that it deems harmful to the interests of the UK. This is intended as a softer approach to the duty now removed from the bill to have the bill approved by as much to his government which we discussed on the report, rather than providing for the regulator to provide for the trade policy.

My amendment focuses on conduct allowing it to interpret it as it wishes, and the government of the day, as we know Uefa and others are very anxious that it should. My amendment 95 reflects some discussions that we had 1922 Committee where we had cross-party support which spoke in favour of the suggestion that the Secretary of State may only make regulations for part 3 to come into effect at the end of a relative football season rather than part way through.

There is clearly a burden on clubs that would have to comply. It would be easier and simpler for them if they were able to do those at the start of the season. So, I bought this matter back in the hope that it will receive some cross-party support for a constructive suggestion, I look reply.
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Baroness Twycross Portrait Baroness Twycross (Labour)
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I would like to thank the noble Lords, Lord Parkinson, Lord Goddard of Stockport, Lord Moynihan and the of Stockport, Lord Moynihan and the noble Lady Baroness Grey-Thompson for tabling amendments and Lord Grantchester for moving the Noble Lady Grey-Thompson's amendment in her unavoidable absence. I particularly welcome the ability to discuss the game and set out a decision on it not least in relation to this bill. I know the lady is really keen to have a debate on women's game and is quite frustrated that we haven't had one at earlier stages, so I am particularly sorry she couldn't join us, but I hope we can give all noble Lords's leaking support of the game that the government really does want to see women's football in this country thrive.

We have seen incredible growth in the sport capitalised by the amazing success of our lionesses, and I know all noble Lords are hugely proud of their achievement, so we understand why there is an interest in ensuring that women's football is avoiding some of the same protections that this bill would deliver for the men's game. As someone not allowed to play football at school and is delighted that my niece absolutely for granted that they are, this is an area that I feel like I want to see grow and thrive.

My noble friends spoke passionately in favour of the women's game and we agree with the independent review of women's football. He noted that it was expertly chaired by Karen Carney. As my friend stated, we recommended that the women's game should be given the space to grow and govern itself, so while there are some shared features, the problems facing women's problem and not the same. We are confident that they will be able to implement the structures and regulations to drive the sport forward.

Where appropriate, this can include members for the game and the regulator. I would like to reassure regulator. I would like to reassure my noble friends that as with all regulation, the scope of the regulator will be kept under review. But as it is not intended in the first instance for the regulator to cover the women's game, the state of the game report will only consider matters in scape of the regulator, but following proper consultation, the regulator's remit could be extended to include competitions by a secondary legislation.

To expand slightly on why we are not at this point intending to regulate the woman's game, it is a different stage of the women's game. It is still in a start-up phase where it needs investment of growth to achieve its potential. The men's team has no issue with global investment. It's issue is that it spends unsustainably and can't keep the massive revenues it raises within the game. Therefore, neither the government or the industry believes that statutory regulation is the correct approach to helping women's football at this stage.

Lord Moynihan alluded to issues that might be prevented, and I am going to refer to a specific example of Reading football club which I don't want to assume the noble Lord was referring to as an example of where the regulator may have helped, and clearly, the woman's game is not intended to form within the regulator's initial scope, so the regulator could not have funded Reading football club from being cut, but it would have been able to address financial problems that the men's club which may have a 30 issue, so it is an indirect benefit potentially.

It would have had access to information that they could chair in specific circumstances only with the authorities in the women's game which might have allowed them to identify and react earlier to an issue and hopefully protect the woman's team, so we are confident that the authorities responsible will be able to implement the appropriate protections to protect future similar scenario as that happened in Redding. Turning to amendment 36 which would allow the regulator stopping interest that it suspects to be harmful, protecting football from wider harms is important to the noble Lord of Whitley Bay as it is for all of us.

I agree with the intent and thank him for his engagement, but this is not preferable regulator to judge what is harmful to the interest of this country. This is what the U.K.'s financial sanctions regime is for. If there were to be an oligarch acting against UK interest, then they can be sanctioned. That would automatically stop a club receiving funding from the party in question. Sanctions can be imposed for national security. Beyond this, the bill provides protections against wider harms.

The owners and directors will look at the fitness of the clubs owners and officers including sanctions and whether the individual has been prevented from entering the UK. The 6 to protect English clubs from unsuitable owners or officers. This in conjunction with the power for those suspected to be criminal conduct will help to ensure clubs are protected from harm. Turning now to amendments 39, 40 and 41 in the name of the noble Lord Lord Goddard of Stockport. I would like to thank the noble Lord for his amendments and his continued engagement on this bill.

I have written to the noble Lord and some of the points raised on discretionary commitments, and I would be happy to lay a copy of this in the house library for other members of your Lordships house to access as well. As I outlined, we feel it is appropriate for organisers to have formal opportunity to intervene on an issue if they could achieve the same goal in a less burdensome way. This commitment needs a light touch that we discussed at great length in your Lordships house.

The bill allows ample opportunity to make representations about proposed financial discretionary licence conditions as part of ongoing supervision by the regulator, clubs be made aware of what action the regulator may take to improve the club's standards. If a competition organiser proposes a commitment that the regulator believes would solve the issue in a quick and more effective manner than the regulators propose, the club should not be able to veto this. Turning to amendment 35, we understand the intention of this amendment and we are agreed that the regulator should avoid any burdens or disruptions that may be associated with licensing of clubs, including the risk the licences are refused mid-season.

Once the regulator is setup, we will setup how to submit applications. The entirety of part three being commenced until the period between seasons. The regulator was ready to start preparing clubs and would have to wait before it could do so. We want clubs to prepare application and engaged the licensing process early for the short window. This amendment would prevent that. By contrast, there will be a substantial club in a short space of time.

The noble Lords intention can be achieved through a commencement of part three. We want to look through close 15 one We want to look through close 15 12 have a licensing for all clubs to have the necessary opportunity to claim the licence. On member 96, Lord Moynihan, I understand the Lord's view that the Secretary of State guidance is integral in providing the industry, and it must be produced in a timely manner. That is why I made the following commitment. I committed the secretary of states guidance will be produced before clubs are required to identify owners who meet the definition of having significant influence or control.

I would like to reassure the noble Lord that it would be superfluous in this instance for this amendment. I would like to remind noble Lord that the house made its view very clear when they voted against amendment seven. I hope you will agree that this will be an inefficient use to discuss this issue any further and will take reassurance I have all ready made. Turning finally to men and 37, a number of noble Lords have raised concerns regarding requirements and discretionary licence conditions.

We are making a change to the regulator must satisfy before submitting a request to amend the scope of licence conditions. We were confident the previous drafting would have captured organisers we have listened to concerns across the house about this not being stated explicitly. Therefore, we have brought for this amendment to put this beyond all doubt and address those concerns. As a result, the regulator will now be required in legislation to consult all regulated clubs in each competition organiser in this process for the reasons I have set out, I hope noble Lords withdraw their amendments and I beg withdraw their amendments and I beg
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Lord Markham Portrait Lord Markham (Conservative)
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My Lords, I rise to speak to amendment 52 which seeks to reverse one of the most surprising changes to the bill. The previous Conservative virgin stated the regulator must consult on all changes and this seemed fair and proportionate. If the legislature will charged, or how much it was she to charge, it seems reasonable those who bear the burden of the charge are consulted. The changes introduced by the government provide that the regulator does not have to consult and it considers these changes to be minor.

If the definition of minor is to be determined by the regulator, what would happen if the regulator tries to claim that the change is minor but other interested parties do not agree. As they are not possibility for the regulator to skirt around consultations by claiming be changed are not significant enough to warrant discussion? The problem is this could create endless discussion this could create endless discussion as to what could be determined? Surely it would be simpler to consult on all cases as was the case in the previous bill.

The government has accepted the principle that the interest charged by the regulator should be capped by the legislation and this was an amendment that my honourable friend Lord Parkinson and I tabled the committee. The baroness said that this is an operational decision for the regulator which allows the flexibility to charge interest. We disagreed with this assessment at the time and it is right some flexibility is needed but it is not right the regulator is the one that sees fit to charge whatever is right and I'm pleased that the Minister has changed her mind and brought the government amendment to this effect.
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Lord Goddard of Stockport Portrait Lord Goddard of Stockport (Liberal Democrat)
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I wish to speak to my amendments

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I wish to speak to my amendments 55 and 56. I submitted these previously to the Minister and received a satisfactory reply and I received a satisfactory reply and I also submitted 55 and 56 but did not also submitted 55 and 56 but did not get the support for those amendments and so it is worth explaining what they are. A slight history lesson. The statement made by the Minister The statement made by the Minister on December 16, December 16, 2024, set out clear intent the regulator set out clear intent the regulator should have privacy ahead of competition organisers and that should not stop the leaks imposing their own competition rules as long as they are not contrary to that of the regime.

-- leagues. They will set a baseline and there may be scope for industry bodies and the regulator will coordinate with the bodies to ensure additional rules are supported in terms of regulatory object. This means industry bodies will be receptive to booking the regulator to streamline the existing rules to allow for a coherent strategy regarding the landscape the minimum burden. This is not reflected in clauses 55 and 56 only requires competition organisers to consult with the regulator. We have seen from discussions that the level of cooperation from the organisers has nearly there and it is not satisfactory to rely on goodwill to resolve the conflicts in recent consultations have resulted in a legal spat with the football organisation and the and the executive and this amendment aims to ensure the regulatory system is clear and coherent and avoids confusing and overregulation and the IFR can act as an important safeguard and in a number of recent cases we've seen deep flaws with the approach and the Premier League lost the case to Leicester City and Leicester lost to the Premier League due to the poor drafting of the rules.

That was a report from the High Court and raise concern and the Premier League route is also the transactions were found to be illegal and they have abused a dominant market position as a result and this was three years after the rules were held to be void, as though they never existed. These rules came apart by rushed processes and the panel noted that they have not been subject to proper analysis no examination. There does not appear to have been any discussion or analysis as to how they will affect the effectiveness of the PSR, Principles of Sustainability of Finances competitions.

That was a judgement against Manchester City and additionally there was no clear evidence on the impact of the explosion in different club to seek to justify stewardship. Many of these difficulties, but because of inherent conflicts in the regulatory entitlements of pubs and the ones who set the rules. Clearly the independent regulator will be able to act on that and it will be acting effectively to regulate financial sustainability of English bowl and undermine the entitlement. Through the proposed amendment, this is targeted at financial business and regulations and it leaves 14 regulations and touch.

There is no benefit for anyone in the game for them to be rushed or ill-fight- through. -- Ill-thought-through. There must be quality checks and look at economic market regulation. The Premier League has demonstrated it is not good at economic market regulation and it has cost them tens of millions of pounds in legal fees and activities. I beg to move.

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Can I support Lord Markham in relation to amendment 52 and relation to amendment 52 and And some persons including all regulated clubs to be consulted regulated clubs to be consulted before I think replacing Levy rules and consultation is a vital component of the list. However, component of the list. However, clause 54.2 says the obligation does not apply in relation to amendments or replacements of levy rules that the regulator considers the changes to be minor.

Lord Markham is right. It's not for the regulator to determine whether the changes are minor but those who are potentially adversely affected. Consultation, it matters that the regulator may consider to be minor, is now great impediment because if the changes are in truth minor, as perceived by the regulated clubs, the consultation is not going to take and it is not going to solve any great effort by the regulator. I hope that the Minister will accept Lord Parkinson and Lord Markham's amendment 52.
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Baroness Twycross Portrait Baroness Twycross (Labour)
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I thank the noble Lords, Lord Parkinson and Lord Goddard for their amendments. Amendment 52 from Lord Parkinson would require the regulator consult every regulated club, the Secretary of State and others that the regulator considers appropriate for minor changes to the levy rules and the bill is currently written so that separate consultation is not for minor changes. This is intended to allow the regulator commit material amendments and corrections without excessive bureaucratic burden and in the view of the government this amendment would add a layer of unnecessary process.

There is no need and I imagine no great desire for a club to be made aware of every change the regulator wishes to collect, although I do note the collect, although I do note the points raised by Lord Markham in his support for the amendment and I would like to assure the Bullets clubs will be informed of amendments that affect them. The bill requires the regulator consult every regulated club. The amendment 55 and 56 from Lord Goddard, I understand the intention behind the amendment signed in terms of relevant competition, it would enable the regulator to confirm within the remit and to manage the complex but the government is firmly of the view competition organisers should be free to implement their own rules autonomously and as membership organisations that should be free to set rules for their members which are likely to be brought by the regulators and overreach into the rules of the competition organisers risked the kind of situation Uefa has ruled against.

We are confident the regulator can work with competition organisers to manage interactions between rules and the regulatory system without the need for approval are Vito Burrows. -- veto. In response to the specific points raised by Lord Goddard, they will put this in place for all clubs in school statutory powers to maintain standards and they must meet to operate as football clubs in this country and beyond this competition organisers are free to set membership requirements on member clubs and if they wish to layer additional processes on top of the base, they will be free to do so, providing it is consistent with the law and will be in no one's interest to have unnecessary duplication so we expect competition organisers to focus on other objectives and lead the sustainability to the regulator and in light of these points and the others raised, I hope the noble Lords note is the risk associated with the amendments and withdraw them and support the government amendment.



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Before the noble Lady sits down,
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None Portrait Division
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question will be decided by division, I will advise the House division, I will advise the House when voting is open. Voting is now

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The The question The question is The question is that The question is that amendment The question is that amendment 52

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The question is that amendment 52 be agreed to. As many are of that opinion say, "Content", and of the opinion say, "Content", and of the contrary, "Not content". The content will go to the right by the throne,

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Order.

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Order. The Order. The question Order. The question is Order. The question is that

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My My Lords, My Lords, they My Lords, they have My Lords, they have voted

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My Lords, they have voted contents, 196, not content, 229. So

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I I beg

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I beg leave I beg leave to I beg leave to propose I beg leave to propose that I beg leave to propose that the

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revision. The question is that amendment 53 be agreed to. As many of that be agreed to. As many of that opinion say, "Content," and to the contrary, "Not content." I think the contrary, "Not content." I think the not contents have it. The question will be decided by division and I will be decided by division and I will advise the House when the will advise the House when the The voting is now open. Clear the The The question The question is The question is that The question is that amendment The question is that amendment 53 The question is that amendment 53 be agreed to.

As many as of that opinion say, "Content," The contents will go to the right and the not

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The The question The question is

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The question is that The question is that the

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They They have They have voted

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They have voted contents, They have voted contents, 74. They have voted contents, 74. Not

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They have voted contents, 74. Not content, 330. The not contents have content, 330. The not contents have 54, 54, Lord 54, Lord Addington. 54, Lord Addington. And 54, Lord Addington. And amendment 55, Lord Goddard, not moved. 56, not moved. Clause 56, amendment 57, Lord moved. Clause 56, amendment 57, Lord

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I rise to move amendment 57 in my name and my noble friend, Lord Parkinson, and I speak to amendment Parkinson, and I speak to amendment We talked about parachute payments, and Baroness Brady particularly and Baroness Brady particularly really rotted home how important they are to clubs for promoted clubs they are to clubs for promoted clubs that know that there's a big threat of them being relegated, the next season, and giving them the confidence to invest in new players, and really build the strength of the club and make that financial commitment.

It's only really able to happen because you got the security of the parachute payments behind it. And likewise, I think clubs, any clubs in the bottom half of the table, when you get to this stage of the year, they will be looking over their shoulders and were it not for the parachute payments, not looking to put the investments public in January window, thinking more about selling rather than recruiting players. And as mentioned on previous occasions, the whole fundamental reason that the Premier League is the most popular league in the richest league in the world is because every game is competitive and if you look at other leagues in Italy, Spain France, you will tend to find two or three good teams and a lot of other teams who are, if I'm not too kind, so a lot of games as a result of that are not competitive in the same eye.

In the Premier League everything again is competitive and every single game is capable of a surprise and that is because the bottom clubs invest in their players to make it competitive and know they have got the safety net there. And it's that ultimately that brings in the box in terms of the right bits which fund the whole game, because for broadcasters around the world they want to know that I have got good games, we can, week out, and that's what parachute payments allow to happen.

Properly it was first put by the well- respected Brighton and Hove CEO and Vice Chairman, the relative comfort that parachute payments provide to Premier League clubs, especially those newly promoted, means that owners are mooring to commit funds knowing that if the worst happens, and relegation occurs, clubs have support to adjust to very different reality. My Lords, unaware that the bill does not require the regular editor consider parachute payments. Finally noble Baroness the Minister's made this point before and we understand it but the fact does not negate the risk.

It's not to say also that the current system of parachute payments is not without faults, no one is saying it's perfect. But what is true to say is that every major-league club has a similar parachute type mechanism in some shape or form. And so that's why we feel that removing the ability for the regulator which was of course in the original bill put forward by the Conservative government, to make sure these payments were not part of the regulators remote, was very important but the regulators remote.

On the tenancy would see chance that the noble Baroness the Minister doesn't accept amendment 57, I have tabled amendments 70 as a compromise. What this amendment states that if the regulator does include parachute payments within the scope of revenue distribution, a final proposal cannot wash them entirely. The intent is to give a greater degree of certainty that parachute payments will not be disregarded in the entirety. It acknowledges the regulator writes and considers them if necessary while also ensuring some level of security.

Competition organisers will be able to propose the reduction of payments but could not do away with them altogether. This is fundamentally important to clubs who are often investing with three, four, five year business plans which
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Lord Markham Portrait Lord Markham (Conservative)
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parachute payments to not be considered at all, I'm under no illusions to the parliamentary arithmetic and so in the likely event that they are to be included event that they are to be included in the bill, we put forward amendments 70 as a sensible and measured compromise that does not measured compromise that does not deviate from the government's stated policy. Therefore, if the noble policy. Therefore, if the noble Baroness the Minister doesn't accept my amendment 57 on that small chance, which I hope that she would find herself able to accept compromise, that we put forward in the amendment 70, and so strongly urge has looked favourably on such an amendment in the spirit of consensus that I know noble Lords in this House respect.

If she is able to accept amendment 70 given undertaking for the third reading I will not divide the House on amendment 57. Unfortunately if you does not accept this, what we think is a very sensible compromise, we will have no option but to divide. I beg to move.

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Amendment proposed, both 56, page

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Amendment proposed, both 56, page 45, 932, leave out subsection 2 and insert the words as printed in the

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marshalled list. ... Our opinion on this matter is

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... Our opinion on this matter is very straightforward. She payments are a system that is in place today. are a system that is in place today. This is one thing, something set in stone, and ongoing process. The stone, and ongoing process. The situation will change with this bill. And the parachute payments suggestion, great drop-down, heavy bomb. Hopefully we will raise the ground up a bit, will have some cushioning in place. Having one cushioning in place. Having one system built in forever, I think is against the purpose of the bill.
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Baroness Brady Portrait Baroness Brady (Conservative)
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parachute payments, I hope it will assist the House by explaining why am so concerned about the inclusion am so concerned about the inclusion of parachute payments within the definition of relevant revenue. It is not because I believe the is not because I believe the parachute system is perfect. I don't. It's not because I believe don't. It's not because I believe the precise level or design of parachute should be fixed for a. parachute should be fixed for a. Protected from scrutiny.

And it's not because Premier League clubs are insensitive to the aspirations of clubs throughout the pyramid. We aren't. We all share the same common goal, a thriving, dynamic, sustainable foot ecosystem from top to bottom. It's because the Blackstock mechanism as it has been designed is so fundamentally unsuited to addressing the issues of parachute. The previous governments backstop was badly flawed, enabling a binary choice between two proposals, one of which must be selected in its entirety, was highly unusual and posed significant risks.

But that mechanism could just have about been tolerable, because by isolating solitary or voluntary payments, as the sole issue for resolution, the backstop at least delivered a binary choice between two numbers. That is a judgement, the regulator could reasonably make. I would remind noble Lords that the levels of solid outreach are explicitly linked to parachute payments in the existing distribution agreement between the Premier League and the EFL. One can be used to smooth the potential rough edges of the other and that is what the previous bill correctly recognised.

But the expansion of the built's scope to include parachute payments transforms the backstop entirely because it is no longer about determining quantum, it now forces a judgement on the whole sale redesign of the football financials architecture. It has become a choice not between two numbers but between two fundamentally different systems and it is substantially more illegally and financially risky as a result. The crucial thing to appreciate is the connection between the now since manic nature and the state opposition of the EFL, the EFL has called parachute payments " an evil that needs to be eradicated ".

Not reformed, not adjusted, eradicated. When you combine the system with the binary process with the open agenda of one of the two parties, you create an absolutely intolerable risk. The backstop offers no capacity for careful calibration or fine tuning which of course I would be wholly supportable. But there is no part of this bill that allows the regulator to make a reasoned, balanced judgement. It creates a binary, winner takes all approach with no room for nuance, and plenty of room for poison pills and final damage.

It enables proposal from the EFL that would level down the bottom half of the Premier league rather than genuinely elevating the entire football pyramid. Surely we want mechanism that delivers both a strong Premier League and a strong EFL? Rather than a zero self gain? Government has made its critical choice in the backstop but I believe they did so without the full understanding of its implications for the delicate ecosystem that sustains football at all levels. If we are to avoid serious legal and economic consequences for football over the next few years, the government will be well advised to not address the serious problem in its, it has created.

If had to revisit the decision on parachutes, amendments on how the IFR should make its final decision for a constructive path forward that would benefit the entire period. The noble Lord Lord Birt's proposal offers an alternative postal but there can be no doubt that changes needed. I believe we want the same thing financial sustainability, throughout English football, but the starting point must surely be a shared recognition that we cannot achieve this by dismantling the very mechanisms that have made good football from the Premier League to the National League and beyond the world's most successful ecosystem.



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I think I should start by reminding the House at this bill
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Baroness Taylor of Bolton Portrait Baroness Taylor of Bolton (Labour)
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reminding the House at this bill does not abolish parachute payments, it does not change the architecture in the way that has just been suggested. And when Lord Markham talks about the need to have confidence so that traps could invest in new players, confidence and a strong club structure and financial position, he only mentioned the Premier League. He did not refer at all to the rest of the football amid. And I think one of the things that this bill needs to do is to make sure that we have sustainability, not just of those clubs in the Premier League, but actually of the whole period that is English.

And I think that it is important to bear that in mind because whilst parachute payments may have a place as most people have acknowledged, certainly at the moment, I think there is no doubt about it, that at the moment, the level of parachute payments is such that it distorts competition in the championship. I did ask the noble Lady when we were in committee stage if she would acknowledge that and she declined to comment. But if we look at the actual figures involved, there's no doubt in my mind that the current arrangements do actually distort competition.

At the moment, have that are relegated received in year £114.9 billion. Other clubs received £5.3 million. The actual redistribution that is often talked about from the Premier League to the EFL does not help equally all those clubs in the EFL. It actually distorts competition, and I think that is something we should in mind when we are talking about parachute payments, because yes they may help a few but they do not help the sustainability of the whole pyramid as they could and should it we had a fair system of distribution.



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... Especially after Saturday's result between Bolton and Stockport
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Baroness Twycross Portrait Baroness Twycross (Labour)
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Parkinson of Whitley Bay and Lord Taylor for his amendments and Lord Markham for speaking to them. The government acknowledges that parachute and star an important part -- parachute payments are an important part of the financial landscape and that is part of the current landscape, I thought Adamson current landscape, I thought Adamson made clear. They are important and they must be considered relevant revenue for the backstop in terms of destabilising. How else could the regulator make the decision without the complete picture of finances and amendments all attempt to remove the parachute payments from consideration under the backstop and improve the power for the Secretary of State to amend development revenue and preventing them from ever being included in this definition in the future.

In our view, these amendments are shortsighted. I can hear the concerns from Baroness Brady but we had a different alternative view with Baroness Taylor and Lord Goddard and it clearly is disputed Goddard and it clearly is disputed within the House and if the effect of the payments are risking the sustainability of the wider pyramid, the regulator must have a lever to address the issue and this makes the definition less flexible and less able to address the changing landscape and the current power of the bell allow the Secretary of State to amend the definition and removing this leaves us with a static definition, likely to become outdated over time.

For these reasons, I would ask the noble Lord to withdraw his amendments.
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Lord Markham Portrait Lord Markham (Conservative)
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I thank the Baroness, the minister, for her comments and the comments of all the noble Lord. One thing that has become clear in the truncated debate by taking on the major points from committee stages, we are talking about that all of the noble Lords care passionately about what we're trying to do at the all clear about the best solution for overall. My concern and the concern of my noble friend and many others is that if you damage the competitiveness of a lot of the Premier League games, it will result Premier League games, it will result in less money being paid and media rights and that would mean less money for all clubs in the pyramid and for me that is the most important thing we are talking about.

I address the points made by the noble Lord about the close shop nature, or comment, about the Premier League. Only five clubs had been in the Premier League for the whole time of its existence, only five. That is close shop. The 5% of all the clubs -- 55% of all the clubs I've been in the Premier League at some point during their time. I would say at this point that while it was not unexpected that the comments were made by the noble Baroness, the minister, I believe that the previous version of the that was presented by the then- Conservative government was better than the one before us today and the changes around the parachute payments is one of the major reasons payments is one of the major reasons for that.

And so I am grateful that fast the Minister understand the importance, she must accept amendment 70 as a genuine attempt to reach consensus on this issue and this means the data can still, if considered correct, abolish the -- the regulator can still abolish the parachute payments and that would have a significant impact on the game and damage 92 club. As a result, I am not satisfied by the response and, as indicated earlier,

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I would like to test the opinion of the House. The question is that the

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The question is that the amendment be agreed to. As many of amendment be agreed to. As many of that opinion say, "Content," and to
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Lord Birt Portrait Lord Birt (Crossbench)
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My Lords, in truth, my family, unlike Lord Parkinson's does not have to look back 70 years to find have to look back 70 years to find any trace of silverware. But I do congratulate Lord Parkinson and Newcastle for a thoroughly deserved victory yesterday. If anybody doubts the intensity that fans feel about the clubs, they should have been with me last night a tube train. We were packed like sardines. For some reason all the supporters had gone home and I find myself in a carriage completely composed of Newcastle supporters.

The sheer joy was manifest, as well as the sweetness and kindness of the Geordie nature, including taking pity on a disappointed Scouser. My Lords, I rise to speak to amendments 58, 59, 64, 65, 6, 72, and 77, all in my name, and in names of noble Lords burns and panic and the noble and learned Lord Lord Thomas. These amendments are to be considered in one block because together, they define a holy new process for determining fund flow down from the Premier League to the EFL in the event of the backstop measure is triggered.

Wholly new approach is needed because the current process defined in the bill is in almost every respect and fit for purpose. And I will touch on why SI refer proposal that we place toward today. Step one in the negotiation process that we have designed is the amassing of evidence and state of the game report to inform the negotiation about every material aspect of the English game, including evidence about all the circumstances affecting the health and effectiveness of clubs in the major English leagues, for example a breakdown of the sources of revenue, how they invest and manage their finances, the balance between the equity and their debt.

Evidence of how the English league performs financially and on the pitch, by comparison, with other European leagues. And that is not an exhaustive list. Evidence should be the first building block of a sophisticated fund flow negotiation. Yet the Bill as it stands does not mandate an up-to-date state of the game report. Either to begin, or to form part of the backstop process. Step two in our design is the appointment of a panel of three. Experienced in mediation and arbitration, to manage the negotiation between the Premier League and the EFL.

With all parties in the room, the panel would interrogate proposals and ensure that all relevant issues are surfaced, explored and bottomed out. Step three would establish clear criteria against which the panel can assess the proposals coming from each league. The criteria we layout in our amendments include maintaining the global appeal and competitiveness of English football. Ensuring competitive balance within individual leagues. Enabling well- managed clubs to rise up the football pyramid without risking financial instability. Ensuring long-term investment in stadium and facilities.

Remarkably, the Bill as it stands is all but devoid of criteria to apply to determining the appropriate level of fund flow down the English leagues. Step four is a process of binding arbitration spread over 100 days, with proposals from both leaks presented in defined stages, for example after 75 days, both sides table their final offers. If no agreement is then reached by day 85, the panel itself makes the determination and announces it before day 100.

In the original bill, negotiation was planned to last only 28 days, wholly inadequate timeframe for such a complex and critical negotiation. Also, in the current bill, the two sides, if the two sides failed to agree, a completely different group, so- called expert panel, uninvolved in the process after that point, and with no exposure to that dialogue and debate thus far, has to choose between one of the two deals. The so-called binary mechanism. The expert panel cannot amend, adjust or find middle ground.

In practice, for both leaks, it is a game of Russian roulette. And I absolutely guarantee that the binary mechanism set out in the bill will incentivise gaming, not collaboration, compromise and the building of consensus. Seasoned professionals steeped in mediation and arbitration shake their heads in disbelief when this process is explained to them. Not least, they point out, because this is not a negotiation between two remote lists. But rather between two sides of the same family, where each year, and the top two leagues, six clubs out of 44 moved from one side of the family to the other.

My Lords, to summarise, our proposal for the backstop process, it is based on up-to-date evidence, on the application of clear criteria, and prolonged dialogue and challenge, and on a final determination by wholly engaged mediators if agreement is not reached. None of these factors is present in the current build. We can applaud remarkable success of the Premier League but I'm not mind the fact that there are problems in English Football League and I trust that regulation will address them.

For example, there are strong arguments for parachute payments and we have just heard some of them. But I do think the competition within the championship does need to be assessed. There are good arguments for increasing the quantum of authority payments flowing down from the Premier League to the championship. But how those funds will be invested for instance in stadium, does need to be identified and fund flow also needs to be considered in the context of how the championship itself is managed.

In the last season for which data is available, the top club in the championship had revenues five times greater in the bottom club, not a recipe for fair competition. In 2020, championship clubs spent 125% of their revenues on wages, not a sign of good management. One third of the teams currently in the Premier League were promoted from the championship in the past 10 years. Evidence of the system working. However, Burnley has been both promoted to, and relegated from, Premier League, three times in the same period.

I think the reasons for the recent yo-yoing of clubs up and down between the two leagues do need to be understood. I cite these examples to eliminate the complexity of the issues that the regulator will have to address. And that should be an integral part of that process for determining fund flow down the leagues. And I hope that these examples also illustrate that a far more sophisticated backstop process is needed to address them than is contained in the current.

To conclude, the fingerprints of both main parties are on the design of the backstop process. I hope both will recognise that there is a far better way. I beg to move all the amendments in our names en bloc.

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Amendment proposed, close 57, page 47 line 5, leave out the following conditions and insert following conditions and insert

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conditions in subsections 3 to 6. Can I begin by also congratulating the noble Lord
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Lord Burns Portrait Lord Burns (Crossbench)
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congratulating the noble Lord Parkinson in Newcastle's win yesterday. As a season-ticket holder of Sunderland in the late 1950s, I had to live through the valuation of Newcastle winning 3 cup finals, Newcastle winning 3 cup finals, 1951, 52 and 55. I managed to get to the finals in 73 and 24, 73 Sunderland beat Leeds and in 74 clinical beat Newcastle. Aside my ageing years, advancing years, I have to say yesterday I was supporting Newcastle and I was delighted with them.

I think properly for the first time in my life. The noble Lord Lord Birt has explained some of the prop is choosing the proposed final mechanism in the bill and has presented an authentic proposal. I don't post to go into the details but I do want to make some general points and also to emphasise the extent to which the criteria for any decisions that are taken on this issue of the distribution of revenues has got to be much older than has been indicated so far.

During the debate many noble Lords have reminded us how our integrated football pyramid is a very important part of our foot arrangements, it's essential that leaks were closely together, but it's crucial and winter comes to negotiation, particularly about the distribution of revenue. As Lord said we are dealing with two parts of the same family and overtime many teams will move between the leagues and we therefore do need a constructive mechanism if we are going to resolve differences that are going to work over several periods in the future.

As I mentioned the main point I want to make today is that whatever processes are in place the criteria for making the choice between final offer should be as clear as possible, and it should be relevant to the issues facing the football pyramid. Amendment 72 6 to provide additional clarity on this. And I'm also very grateful to Baroness Twycross for the number of meetings that we had to discuss this, in which she listened very carefully. Given the commercial success of a good football it is inevitable that deciding on the distribution of revenue is going to be difficult and complex.

There are many factors that are relevant to this decision and generally these factors are in interrelated. It is not easy to simply say one or two things upon simply say one or two things upon To protect the overall soundness of clubs, much of the task is down to the appetite of the clubs themselves, in terms of access capital and it is right that they should prosper and I welcome this in the bill and I do not think this can be done by passing money down the pyramid.

It must be more structured and we must see competitive balance in order that fans can watch attractive and competitive for all. We want the Premier League to continue to thrive financially and for clubs to be successful in international competition. A successful pyramid Julie Minns club should be able to move successfully between divisions without creating life-threatening financial crises. We've seen recently an additional source of risk is when there is too great a disparity between financial rewards and one league related to another, then there are strains and stresses that getting the right islands between the leagues is crucial in reducing risk.

These are decisions that will have to be balanced and analytical and well argued by the panel and they will need a good database to work in and they must interrogate this correctly. My own experience as a regulator and being on the receiving end of decisions is that the clarity of the remit is crucial and particularly when it comes to decisions on issues that will be challenged in court. My worry is that the present bill is not sufficient in terms of the criteria and particularly when the panel is forced to decide between two final offers.

We have tried to set up more clearly some of the factors we suggest should be considered and the data that should be monitored over time. For many, it is evident that there are issues to be debated about the present state of government and we've been dragged too far and there are some stresses and strains. On the positive side, several small cups with limited spectator bills are performing well in the Premier League and there are remarkable attendance rates in matches.

The matches are generally finely balanced and despite this it remains difficult for all but a few cops to make an impact on top-6 positions in the league. For the second season in a row, it is likely that promoted teams will be relegated after one season in the Premier League. Last year, the combined points tally for the promoted teams was close to a record low. The competitive balance is moving in the wrong direction. And there are individual leaks and we have to look at the Championship.

Has been mentioned, there are concerns for clubs in receipt of partnership immense and it's clearly designed to protect these clubs and they are also favouring their own members. Then there is the consequence that is harming the competitive balance and it might be more difficult for other championship clubs. In addition, the high wages and the consequence of commercial success is putting additional strain on the finances of championship -- Championship clubs who are finding it difficult to compete in the same labour market.

compete in the same labour market. There are consequences elsewhere in the expert panel or whoever makes the decision will require all of the help that they will master along with clear criteria. It is a complex challenge and they are seeking changes to the mechanism and they wanted to be less adversarial and based on criteria that can be monitored over time.
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Lord Thomas of Cwmgiedd Portrait Lord Thomas of Cwmgiedd (Crossbench)
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It is a privilege to add my name to this amendment. I will not venture into the world of, coming from the nation from which I do. I want to draw on my experience of dispute resolution, where I have spent most of my life. I do not need to add to what has been said as to the essential necessities of dispute resolution criteria and the principles and evidence because that has been done by Lord Burns and Lord Bird.

I want to make five points. Drawn from my experience and that of many others about the dispute resolution process, the first point, and what is the most important, is to examine what is the subject matter of the dispute that will matter of the dispute that will arise if there is no settlement and if you look at what is in the bill and the process that has been selected, I accept it is seen to work in the context in which it is used in terms of settling a tariff rate, salary, or some kind of price RM.

It is not fit this of what this is designed to deal with, which is is designed to deal with, which is very careful, admitted, and fear distribution of some sums of money and everyone has said this must be fair and careful although the final offer system used does not do that. Secondly, the back panel for dispute resolution, experience has shown this is when one party chooses one arbitrator, another chooses the other, and an experienced lawyer is the chair.

There are two reasons for this. First, the ability of a party to appoint gifts that body confidence in the tribunal. It is what... It is constituted by that party but my consent. Secondly, and I fear that there may be misapprehension as to the role of a lawyer and the point of having a lawyer as a chair, they are experienced in guiding dispute resolution process and it is not realistic. Some may think so but it is not and if you have highly contested, is likely to be contested, there could be disaster without experience.

Thirdly, it seems to be important to bear in mind one other point. Even if after expert mediation, you cannot reach a resolution that is acceptable, you must recall that there will be a must recall that there will be a loser and the winner. The loser has to live in this particular context in a good, long-term relationship with the victor. It seems to me that is particularly important when you are disputing the price of something or who is right as a matter of the dispute in terms of evaluating the rights.

What you are looking at is fear distribution. And for a decision to be seen as fair by the loser, and that is particularly important if you are a decision- maker, you want the loser to feel maker, you want the loser to feel bad they have had a fair process, then the panel must be able to reach its own independent judgement and not be bound by one or other of the offers on the table and it will be the author of the winner that is trumped and that will not be seen as fear.

Fourthly, experience of businesses when they are there is outside investment shows how important it is for dispute resolution process to affect the business to be seen in its perception to be based on fair process and independent judgement of the panel that would solve the dispute and not the kind of process which has been described as Russian roulette in the process in the bill. Applying that experience, it seems to be that the procedure for dispute resolution in the context we are talking about will encourage investment.

Finally, the must be a safeguard. The bill has a safeguard in one sense. The Olam is the procedure in section 31 and 82 and section 10 for review but this has a fine tuned procedure which is much more precise and very limited and it seems to me if you look at those five highlighted points, the only conclusion you can come to is the procedure in the bill as a matter of dispute resolution, is not fit for purpose but that in the amendment

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is. I rise to support the amendments and as I have said I believe the arbitration model that has amendments set out it is better than amendments set out it is better than the backstop mechanism currently in the bill and in particular amendment the bill and in particular amendment 72 filled the hall and the current process and that the transparent and clear set of criteria against which clear set of criteria against which the expert panel in his process will
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18:13
Baroness Brady Portrait Baroness Brady (Conservative)
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I raise to offer support for the amendments tabled by Lord Bird. I do not agree with every element of the process but I appreciate that this idea to replace the current mechanism with a structured commercial arbitration process be a substantial improvement to the current flawed and high risk process. This process was likely designed by the previous government and was not a mechanism recommended the few. I believe these amendments will deliver a better process for will deliver a better process for the EFL as well as the Premier League it will be better because it will make the backstop process more transparent, predictable, low-risk.

There is a concise and compelling case for change during committee and it has been done so again today demonstrating the virtue of balance and good sense and these qualities are excluded from the operation of the existing backstop process. The current backstop this is fundamentally flawed. For example, the 20th-day mediation process is little more than mandating a conversation between parties. -- 28-day. Of course, then they have to go back and discuss this with all of their clubs and that takes longer than 28 days and it takes no structure to identify areas of compromise, nor does it incentivise proper negotiation.

It does not require both parties to even make a proposal, so neither party's position is fostered. In practical terms, means we might as well skip directly to the final decision. The current process will leave the expert panel examining two highly divergent proposals which will come out of the loop with no arguments properly aired ahead of the decision and by contrast the amendment before us introduces significant advantages. First, a 3-person panel with two representatives selected by the Premier League EFL, alongside an independent chair, which mirrors successful approaches currently used in football arbitration.

Crucially, the same panel would make the final decision having heard of the arguments throughout. Second, an extended arbitration period of 90 days allows for proper engagement rather than the perfunctory approach currently proposed. Thirdly, crucially, in my view, the requirement for structured offers to be put forward, scrutinise, define, introduces a dynamic but is entirely absent from the current model. By identifying areas of compromise and providing feedback, the panel will progressively narrow the scope of this agreement. By the time you reach the final decision point, many contentious issues have been resolved and taken off the table.

What is particularly attractive about the approaches even if the government retained a binary final- of our process, it would have taken the risk of such a decision by the risk of such a decision by narrowing the points of contention which would address by major concerns that the current backstop enable wholesale changes to financial structures to sustain the entire football pyramid, against the will and interest of one of the parties, to maintain the growth and success of English football we clearly need a system which delivers clearly need a system which delivers The criteria for making the final decision on too prescriptive in my view, simply I do not agree with some of the revisions to the state of the game process and I do not leave it should be up to the regulator to decide how long the party should be able to contract for.

In the end the current process is so flawed that we should not let the perfect be the enemy of the good. The core process is outlined by the noble Lords amendments would represent an overall improvement, it is a proven, knowledgeable process. It is fairer, and it reduces legal and political and economic risk. The health of the entire period matters profoundly to all of us which is why we need a mechanism that respects its complexity. Not one that is reductive, crude and intolerably risky for both sides.

I hope these amendments and the debate they are encouraging can be an important step in creating a process that is fairer for all sides. More balanced and the outcomes it delivers and more respectful of football's enquiry at financial protector, as well as the rights and interests of all parties -- football's intricate financial needs.
18:17
Lord O'Donnell Portrait Lord O'Donnell (Crossbench)
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I should do, interest, I'm passionate about football. And Wembley has been mentioned. I'm in my first trip to Wembley in 1968 to see my team, Manchester United, when the European cup. Alas that may not happen for a while. But like Lord Burns, I was at Wembley in 1973 and 74, unlike him I was playing. Not quite the same crowd, because it was the Oxford versus Cambridge much. But I was there. I won't repeat all the excellent arguments by Lords Bert, and Thomas, I I support them all.

We are now observing the government having issues with regulators. They are saying they are not taking due account of growth. This tells you that in setting up a new regulator, think very carefully about what you want them to consider. These amendments go into detail about that and I think that is absolutely important because otherwise, the current process has this observe system where there are two numbers and you have to choose one. When they are trying to work out where the right balance should be, they need to take account of these facts and the factor should be made clear.

Two aspects to that, one is make them clear, the second is, if you want to let's say fairness and competitiveness to be really, really important, we need a bit of guidance about trade-offs. In my experience, dealing with chelators, those are some of the most difficult issues. Those are some where the politics gets involved and so you need to be clear what you are asking the regulators to do and what they should be doing and referring to others. I would say clarity of the role of the regulator, guidance on trade-offs.

Ultimately I agree with many here, we need fairness and we must keep the Premier League at the pinnacle of the global game. And if we succeed in that, then Premier League clubs will repeat Manchester United's 1968 performance and win the European competitions. Thank

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you. May I open by asking minister
18:20
Lord Hayward Portrait Lord Hayward (Conservative)
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May I open by asking minister quite specifically when she responds to this debate to identify whether to this debate to identify whether she intends to change or accept the amendments in the name of Lord Birt and others, I the Dow, or whether she intends to change anything for third reading because I do believe we need absolute clarity of the position, both for this debate on the future debate. I would say to the Minister, just look at the people who are proposing this amendment.

This is not some party operation. We have a former head of the broadcasting organisations who he has identified, is his time negotiating the original football broadcasting rights, former Lord Chief Justice, the current senior lawyer. It is important that the Minister asks herself why it is impossible for her and her team to accept the carefully considered and carefully detailed amendments that we are debating at this point. When I spoke in second reading, I identified a willingness to consider the proposal as it was on the face of the bill.

Because unlike Lord Thomas, I actually have faith in people able to take an impartial decision of then just lawyers, I speak as somebody who spent as I identified previously, many years negotiating with trade unions, and I do use the word with deliberately, across the table, from trade unions. And I always regarded it as a failure if we didn't get to an agreement between management and the trade unions. What we are talking about here, the reason I have considered it carefully, I have not discussed it with my colleagues, looked at my industrial experience, and asked myself whether this proposal, as put forward by the government, or the proposal put forward by Lord Birt, is better, because there is an inherent misunderstanding of what we're talking about here.

Because as Lord Thomas identified, are not talking about two sides. Baroness Taylor, earlier on today, referred to the different levels of the competition in terms of the premiership, championship, and the lower leagues. So it's not a question of one versus the other. Because as sure as eggs are eggs, once you get into that discussion about allocation of resources, you will discover there's not too sides for which the pendulum can swing in one direction or another.

But there is a series of different interests, all the way up the league table, to the absolute top. And therefore, you cannot ask us to accept a process which awards to one side of the other when they are actually, there actually isn't too sides, there are several sides who will respond very differently depending on where they are in any season in the league structure. I therefore do ask the Minister very seriously, I will repeat the question I put at the start, could you please give a very clear indication to the chamber this afternoon what the government's view is in relation to a very serious excellently drafted and well debated

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proposal from Lord Birt and others? I just want to say a few words because I think the whole House and acknowledge that Lord Birt is trying to be constructive here. And he has,
18:24
Baroness Taylor of Bolton Portrait Baroness Taylor of Bolton (Labour)
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to be constructive here. And he has, with his colleague, produced some incredibly detailed amendments. And I think that that is part of what concerns me. I'm not saying there is no merit in the approach that he is taking but I do think that some of the conditions there are potentially over burdensome. I just want to ask the Minister if she will remind the House of the purpose behind the backstop because as I understand, the backstop was there in order to encourage the parties to actually come together, discuss the situation, and try to reach an agreement.

And that is so important because we have had the absence of agreement in recent years, because, I think, of the stubbornness of one particular party. So I do worry that the amendment from Lord Birt and his colleagues are actually over prescriptive. He has mentioned several of the problems that exist in football today, the level and unsustainability of players wages for example. He mentioned also need to improve stadiums. All of which are very relevant and important to those of us who are concerned about the future of.

But I think if we are going to be prescriptive about what should come in at last stage, we may get into difficulties. And I hope the report that he has mentioned, state of the game, and which is extremely important when forward, I hope that can deal with some of these issues. So I would like to agree with him that all the is two sides of the same family. I'm not sure that has been the experience of the last few years in terms of the gauche Asians between the Premier League and the EFL and it certainly isn't balanced debate or discussion in terms of the powers that are there.

So I do understand his wish to have levels of arbitration but I do think that we have to be careful that we do not cause delays and that we do not take the pressure off the parties to come to an agreement

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between themselves. I want to thank Lord for the time

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I want to thank Lord for the time and effort that he has devoted to and effort that he has devoted to producing this series of amendments Lord Bird. I want to thank the Minister, the build team and the
18:27
Lord Pannick Portrait Lord Pannick (Crossbench)
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Minister, the build team and the Secretary of State for the amount of time they have devoted to discussions with me and many other noble Lords in this complex topic of the distribution of revenue and the resolution process. I entirely support what is being said today by Lord Birt, Lord Burns, and Lord Thomas, a formidable forward line. Thomas, a formidable forward line. The Palais, Lionel Messi and Bobby of this debate. I want to add the response to the concerns, I know some noble Lords and perhaps the Minister have about these amendments and have been expressed by Baroness Taylor and indeed are in the briefing to noble Lords from the EFL.

And I think there are two main concerns about the amendments which need to be addressed. First, there's a concern that we have agreed that this bill is to be like to touch regulation, and here, we have a complex series of amendments. They are. And the response that I would give is that the distribution of revenue and the resolution process are complex matters. We are addressing the distribution of millions of pounds which is vital to the Financial Stability Report clubs outside the Premier League.

And it's money that is to be extracted from Premier League clubs. And the mechanisms of that process have to be effective and they have to be fair. They do need to set out in detail how this is to occur, and by reference to what substantive intervals. And as has been said, with all due respect to those who have drafted this bill, the current provisions lack proper detail as to evidential basis. They lack procedures that are adequate to ensure a result.

And they do not contain the substantive criteria that are required. So I say, yes, we could regulate this important matter in a much more simple manner. But the detail is absolutely vital. In this context, to ensure efficacy and fairness. The second criticism which has been made is that expressed by the EFL in the briefing document. And the EFL is worried that the pert amendments will result in an invasion of lawyers and as they put it, expensive lawyers, who will be briefed by the Premier League, and they say, the EFL, say, they will not be able to compete.

Because that expresses concern, needs to be addressed in this debate. And I declare my interest... Certainly as a lawyer and as an expensive lawyer. I say to the EFL, speaking from 45 years of experience, as a practising barrister, expenses expensive lawyers are not necessarily the most effective lawyers in a particular effective lawyers in a particular It is important to note that the issues in dispute in the present context are not legal issues. We are concerned with an assessment of what is the appropriate sum based on the football factors which are set out by Lord Birt in his amendment 72 if the mediation phase where lawyers are completely useless does not reduce a result.

And that result is going to depend less on legal expertise than on solid football experience, and in particular, the needs of the best Premier League clubs. This is a context where expensive strikers will be less effective on such a mighty pitch than experienced defenders. So, I say that if he is going to press his amendment for a division, he will certainly have my support, but though there was a wise intervention, I hope that we won't get to that stage because I very much hope that the Minister having thought about this matter and having listened to this debate, and I know she always engages with what has been said on this bill during the course of these debates, I hope that she feels able to tell us today that this is a topic on which she and her officials would like to think again
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