Football Governance Bill [HL]

Debate between Lord Addington and Lord Pannick

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Lord Pannick (CB)]

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

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

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

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

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

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

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

[Lord Addington (LD)]

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

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

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

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

Football Governance Bill [HL]

Debate between Lord Addington and Lord Pannick

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Pannick (CB)]

My Lords, I too hope very much that the Minister and the department will look favourably on these amendments, for the reasons given by the noble Baronesses, Lady Brady and Lady Evans. They seem to be absolutely essential for reasons of efficacy and to give confidence to those who will be regulated that they and others will be properly consulted. I would be very surprised to be told that the regulator would not intend to do so. If that is right, it is surely essential, as in other legislation, that this is put in the Bill so that there is no doubt about it and so that the confidence that is absolutely essential is promoted.

[Lord Addington (LD)]

My Lords, this amendment about the bodies that will be regulated has a fair bit of common sense behind it. I am sure the Government will have done great work on consultation and making sure there is communication between the bodies that will be being regulated and the new regulator. If the Minister can tell us how this is being done, some of my worries will be removed. Also, stating where that information will be provided would very much help. If not, it has to be in the Bill somewhere.

--- Later in debate ---

[Lord Pannick (CB)]

My Lords, I am very sympathetic to the purpose of the noble Lord, Lord Markham, in relation to his Amendments 125 and 135. Perhaps I may respectfully suggest to him and to the Minister what may be more palatable than what his amendments suggest. Amendment 125 is rightly concerned that the rules for a provisional operating licence should be made speedily. Everybody must know what the rules are. The amendment would require that these rules be made no later than the period of one month beginning with the day that this Act is passed. If the noble Lord is going to bring the amendment back on Report, I respectfully suggest that it would be more acceptable to say within one month from the date when the Act is brought into effect. The noble Lord will know that under Clause 99(1) and (2), Part 3—with which we are concerned—comes into effect not when the Act is passed but at a later date when regulations are made.

In relation to Amendment 135, the noble Lord is rightly concerned that the IFR should make the decision whether to grant a regulated club a provisional operating licence speedily. He lays down a period of one month from when the application is made. The amendment would allow for an extension of only two weeks. It is an absolute rule, subject to a two-week extension period. I respectfully suggest that that is far too confined. It is normal in a provision of this sort to allow for the period to be extended if there are exceptional circumstances. It is not difficult to envisage cases where, rightly, the IFR cannot take the decision within a period of one month plus two weeks.

For example, the IFR might reasonably take the view that it needs answers from the club to questions of detail, which it puts to the club, and the club may not provide those answers, or be able to provide them, within the period of six weeks for which the noble Lord’s amendment allows. I understand and I share the concerns at the root of Amendment 135, but it really needs to have an exceptional circumstances provision.

[Lord Addington (LD)]

My Lords, looking at these amendments, I think that a little bit of agreement is breaking out that certainty and getting things done quickly are required in the Bill. The noble Lord, Lord Pannick, may have made drafting suggestions on the hoof, and we are lucky to have him to fulfil that function for us, but something that clarifies and addresses the issues raised here would probably be helpful. If there is something that we have all missed and it is hiding somewhere, that is great, but we need those answers.