Football Governance Bill [HL]

Lord Bassam of Brighton Excerpts

Committee stage
Wednesday 27th November 2024 Lords Chamber

The point I am making to the Minister is that the wording of this clause is so loose and, dare I say, not well drafted that it will give rise to misunderstandings and potential litigation. On that basis, the Minister should take the opportunity, perhaps on Report, to come back with a much tighter wording in order for us to understand the Government’s aims and make sure that it is litigation-proof as we go forward, because we are creating an unprecedented regime.

[Lord Bassam of Brighton (Lab)]

My Lords, I am intrigued by the amendments from the Benches opposite because there is a degree of amnesia in some of this debate. The noble Lord, Lord Parkinson, moves to strike out “sustainability” from Clause 1. I have a copy of the Bill that was introduced in another place at the beginning of the year. In Clause 1, “Purpose and overview”, it says:

“The purpose of this Act is to protect and promote the sustainability of English football”.


That is the same wording as is in the Bill before us. I say to noble Lords on the Benches opposite that this Clause 1 is exactly the same as the Clause 1 that the noble Lord, Lord Parkinson, would have brought to this House, had he still been the Minister and had the Conservative Party not lost the general election. So I am extremely puzzled by the approach of noble Lords opposite.

[Lord Maude of Horsham (Con)]

Picking up that point, I think the noble Lord is trying to make it appear as if this is a partisan thing, but it is not. I would have tabled exactly the same amendments if this had been the previous Government’s Bill that he refers to. This is not a party-political matter at all; it is about a game that we are passionate about and that is a spectacular success. We do not want to see something done that damages it.

[Lord Bassam of Brighton (Lab)]

The noble Lord has the benefit of supporting Horsham FC. I have the benefit of supporting Brighton and Hove Albion, and I am absolutely passionate about my football club, which is one of the best clubs in the Premier League. I would not be party to wishing to do anything that damages the Premier League, and neither would my colleagues on these Benches. We recognise, understand and appreciate that the Premier League is an institution that is more than worth supporting. It is the best in the world and we know that.

The other thing that noble Lords need to focus on in this debate is that when the noble Lords opposite were in government, they were very keen to have this legislation. A DCMS report published in September 2023 quoted the findings of a research paper that showed that there continues to be

“a widespread issue of clubs being run in unsustainable ways from a traditional financial analysis viewpoint”.

That was then the position of the party now in opposition, and I am hoping that it has the same range of concerns about our football finances now as it did back then, because it was quite clear that that was the primary motive for the legislation, and it is the primary motive for the legislation today. It is about its financial sustainability.

If a product or a good cannot be produced in a way that is sustainable, it will not be, as the noble Lord, Lord Hayward, made a great song and dance about, successful. That is why my noble friend Lady Taylor and I have tabled our amendments in the first group—to focus on making sure that the Bill and the regulator that the Government are seeking to create promote the sustainability and success of our beautiful game. That is why we are here today; that is what we are arguing about and what we are so passionate about. It is for that very reason that we tabled our Amendment 10 to Clause 1.

I hope that the party opposite is not going to suffer from this collective amnesia for too long, but that it will get behind the Bill, get behind the purpose and objectives set out very clearly in that first clause—a clause that, in government, it amply supported and gave voice to. We need to get behind the Bill and make sure that it is sustainable for the future.

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The problem with the idea of sustainability, which is undefined in this Bill, being the purpose of the regulator is that it can get in the way of ambition and aspiration, of calculated risk taking, and all the things that make the Premier League such an exciting and competitive league. Those are the reasons it is the best league in the world, and it is that competitiveness which drives the commercial broadcast values which are the revenues that underpin the entire football pyramid.

[Lord Bassam of Brighton (Lab)]

I am told that EFL clubs are likely to lose around £450 million in this current football season, and I think the noble Baroness said something similar. The regulator in this Bill, which is focused primarily on financial sustainability, is surely a good thing for football regulation because it is trying to make sure that those clubs—yes, involved in the business of risk and jeopardy—are financially sustainable and have a duty to their communities, and that their activities do not risk the future of those clubs. The point of the legislation, from the previous Government and our Government, is to make sure those clubs can be sustained and not have undue financial risk.

[Baroness Brady (Con)]

I thank the noble Lord; he made his point very well. The Bill does not say “financial sustainability”. Sustainability is not defined. If you put sustainability above overall success, growth and the competitive nature of the game, you might have a safer league, but you will have one that no one wants to watch. You might, notionally, have a more sustainable ecosystem, but it will also be smaller, more boring and poorer. If sustainability is the number one aim of the regulator, can the Minister explain to us what she and the Government consider to be the definition of the “sustainability” of English football? Can she also explain why sustainability does not include supporting the sustainability of the success and growth of the Premier League?

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[Lord Markham (Con)]

The point that I was trying to make is that I absolutely agree that the noble Baroness’s amendment is well intended in terms of sustainability. I am worried that, as we all get back to the mission creep point and try to resolve all these things, we get into the law of unintended consequences. I know from speaking to a club chairman that if you put that money aside in that way, all you will do is deter their ability to invest in players. As the noble Lord, Lord Watson, said, if we want to make ourselves unpopular in all this, it is by starting to do things that stop clubs buying players and investing. We think that VAR is unpopular today. Suddenly, you make all the clubs put £30 million to £40 million in escrow and they cannot buy those players. That would be a very brave decision for a Minister.

[Lord Bassam of Brighton (Lab)]

Following up on my noble friend’s point, looking at the finances of some clubs, you do wonder. Would the noble Lord, who has been in business himself, tolerate a situation where he only had five hours’ worth of reserves? Nottingham Forest last year spent something like £58 million on wages but had just £25,000 in cash reserves. I know that this is not uncommon across the world of football, but is that a highly desirable state of affairs? Is that not something that we should focus on? Is it not why we want good financial sustainable regulation? That is why we have got to this point where both sides of the Chamber have accepted the need to have a football regulator.

[Lord Markham (Con)]

The noble Lord may be looking down the wrong end of the telescope. It is not that they have got only £25,000 in cash. You have to look at the whole balance sheet. The fact that they have a load of players who are worth a lot of money, who they could sell, means that they are fine financially. There are loads of companies out there today in positions of net debt. Most FTSE 100 companies have debt as a vital part of their balance sheet. You would be saying to them, “Oh, you haven’t got much money in your account, you’re in a net debt position”, when the value, when you look at all the assets too, means that it is in the FTSE 100 and is a very successful company. That is an example of why the whole area of us as politicians trying to get involved in setting criteria worries me. We will put things forward that are well intended but have unintended consequences. We will come on to this in later debates on the Bill.

I will finish. I hope that noble Lords understand that the reason why we have gone over time is that we have had a good discussion. It has been helpful in terms of the questions that have been asked. I would be pleased if the Minister could say why we would not want those measures of success as part of the criteria.

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[Lord Maude of Horsham (Con)]

My Lords, I am grateful to my noble friend Lord Moynihan for the way in which he has introduced and moved his Amendment 5. My Amendment 6, which also carries the name of my noble friend Lady Evans of Bowes Park, has a similar effect. It would deal with the consequences if the Bill is not amended in a way that protects against those consequences. It is another way of getting at the same point—the same danger, risk and jeopardy that English football is potentially in if this is not dealt with at a very early stage.

On this business of English football having its own autonomy and not being subject to influence or control by government, we know that there are countries where football is an important activity and where national teams take part in international competitions. But in some of those countries, the boundary between where the state ends and the Government begins is sometimes unclear. It may be contended that in these circumstances, given the undoubted influence and control over English football that will come if the Bill is enacted in its current form, there will be state intervention, for sure. Is that the Government? It will be contended that this is an independent regulator.

None the less, it is a regulator appointed by Ministers in the Government. Its powers will be defined in secondary legislation drafted by the Government and if there is mission creep and scope creep, which some of us fear is almost inevitable, that will come about because of government decisions. This is a real issue; it is not scare- mongering. UEFA has written on these concerns, so when it is argued that this cannot really matter because Germany has regulated football, the fact is that that has been done in a way that prevents those concerns.

UEFA, which matters for these purposes, is not content at this stage that this jeopardy does not exist, so it has to be dealt with. The sooner that the Minister can give us some comfort that she understands how serious this is and the political danger the Government would be in if they—by lack of proper care and attention to these risks—allowed this malign effect to come about. It is very important to indicate at the earliest possible stage, which is really tonight, in this debate, that a provision which deals with this risk will be incorporated into the Bill by way of government amendment. I think that would be a great comfort to all of us.

[Lord Bassam of Brighton (Lab)]

My understanding of the exchange of correspondence was that UEFA’s primary concern was that the scope of the legislation in the Bill may go beyond financial concerns. It was entirely happy with the regulator being concerned about the finances of football, and rightly so. I do not quite see the fear that lies behind this set of amendments. Although the noble Lord is right that we need early clarification, the regulator’s purposes are clear: they are about ensuring sustainability and success, and all the rest of it, of our brilliant game. I think UEFA was just seeking clarification that it was tightly constrained around the notion of football finances.

[Lord Maude of Horsham (Con)]

I am grateful to the noble Lord. I am a bit of a Brighton supporter myself. Tottenham is my first love; Horsham is my second; Brighton comes a very close third. I hope the letter from UEFA will be published so that we can see in exact detail what is said and therefore satisfy ourselves that the concerns will be dealt with comprehensively and finally so that there is no lingering anxiety.

I totally understand the point raised by the noble Lord, Lord Bassam. I wish I could be as happy as he is that there is no risk of subsequent mission creep, which is exactly the concern that UEFA raised. Some of us have raised that, in the Bill as currently drafted, there is scope for precisely the kind of mission and scope creep that UEFA seems to have identified. That is why it is so important at this stage that it should be dealt with and for it to be finally laid to rest that this concern need not be a concern.

My noble friend Lord Goodman spoke about the political risk for the Government if they come to be the people who have enacted a Bill which inflicts savage damage on English people’s expectations that their clubs will be able to participate in the Champions League, the Europa League and even the Europa Conference League, which West Ham so spectacularly won. It has to be dealt with quickly, cleanly and effectively, so that we no longer need to have sleepless nights over this.

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[Lord Bassam of Brighton (Lab)]

The noble Lord, Lord Jackson, made a point about Clause 11. I have read it and I have also read the previous Clause 11. As far as I can see, they are absolutely identical. Perhaps the noble Lord, Lord Parkinson, can help us, because he would have been in the DCMS at the time. Was it the case then that Ministers sought assurances from UEFA and FIFA that there was nothing in the Bill’s powers that would have offended them? If that is the case, and if Clause 11 is so important in the argument of the noble Lord, Lord Jackson, this argument is probably a bit of a non-argument in the end, because we have had that clarification and assurance through the exchange of letters that took place in September this year.

[Baroness Fox of Buckley (Non-Afl)]

I think this is important. The last two contributions have just reminded me. I do not care what was in the previous Government’s Bill, which, to be honest, I would have stood up and argued against at that time as well.

[Lord Bassam of Brighton (Lab)]

I entirely accept that the noble Baroness would have done that, but I was more concerned about the argument coming from the Official Opposition.

[Baroness Fox of Buckley (Non-Afl)]

I agree, but I was going to appeal to us myself to try to tackle the Bill—which is so important in many ways—with at least a little of the spirit of what is in the best interests of football, rather than what is in the best interests of the political footballs of political parties. That is just an appeal—it might not work—because Henry VIII powers, for example, are anti-democratic and illiberal whoever uses them. I do not therefore want not to be able to criticise them in case somebody thinks that I am on the side of the Tories or that I am anti-Labour. That is not the point, surely.