Football Governance Bill [HL]

Debate between Lord Bassam of Brighton and Baroness Twycross

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Baroness Twycross (Lab)]

I was going to come on to that. I anticipated that if the noble Lord, Lord Hayward, was here, he would ask me that question. If I can carry on through my speech, with the noble Baroness’s permission, I will address that later in my remarks.

We think it only fair that industry should cover the cost, as opposed to taxpayers. Football is a wealthy industry, and the cost of regulation would represent just a tiny fraction of its annual revenue of over £6 billion. However, this legislation puts robust checks and balances on the regulator. It will be limited to raising funds to meet a set of tightly defined costs that are necessary for regulatory activity only. The regulator will not have a blank cheque; it will be subject to numerous safeguards, including annual auditing by the National Audit Office, and its annual accounts will be laid before Parliament. This will provide the necessary transparency and scrutiny to deliver value for money.

Clause 53 also requires the regulator to have regard to a club’s individual financial position and the league it plays in when setting the levy charges that a club must pay. This should ensure a proportionate approach where no club, big or small, is asked to pay more than what is fair and affordable. As noble Lords are aware, the regulator will be the one that decides on the methodology and, ultimately, the cost of the levy.

I understand, however, that there is a clear desire, as expressed by the noble Baroness, Lady Brady, the noble Lord, Lord Hayward, and other Members of your Lordships’ Committee, to have a much better understanding of how the costs may be borne at different levels of the game. I will endeavour to provide more clarity on this issue. Therefore, after further discussions with the shadow regulator, I will write to noble Lords to provide further clarity on costs ahead of Report. I will also place a copy of this letter in the Libraries of both Houses and would be happy to meet noble Lords or take any questions.

This is a complex issue and we cannot fetter the discretion of the regulator. The letter, when it comes, cannot therefore be considered a definite estimation of costs. It will merely be illustrative, in an attempt to be helpful to this Committee and provide your Lordships’ House—and the clubs that will be regulated—with some clarity and reassurance before we get to Report.

For the reasons I have set out, I am unable to accept the amendments in this group. I therefore hope that noble Lords will not press them.

[Lord Bassam of Brighton (Lab)]

My Lords, I am more than happy to withdraw my amendment and grateful to the Minister for the assurances that she has given about the levy. I just say to colleagues on the Opposition Benches: it is worth reminding ourselves that we are talking about the regulation of only 116 different football entities. This is a small regulator, at the end of the day, so we should not be overly worried about its eventual costs. I think the costs will be, in relative terms, small—nothing at all by comparison with the FCA. Some of the clubs regulated, such as Gateshead, employ only three staff. If you are an Ebbsfleet staffer, you are one of just six, whereas Arsenal employs more than 500 full-time backroom staff. That is why we need to be certain that the levy raised is proportionate to the size of the club. Proportionality should be at the core of the regulator’s consideration when setting its levy. Having said that, I beg leave to withdraw the amendment.

Football Governance Bill [HL]

Debate between Lord Bassam of Brighton and Baroness Twycross

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Baroness Twycross (Lab)]

The Competition and Markets Authority has used it.

The process proposed by this group of amendments, excluding Amendment 260, would allow the regulator to intervene at its discretion and would require it to take into account the potential use of any revenue distributed. It is the Government’s view that this is regulatory overreach and a fundamental change to the intent of the process as drafted.

The other amendments from my noble friends Lord Bassam and Lady Taylor seek to change the structure of the backstop process from a two-party mediation and final proposal/order process to one that could apply to any number of relevant parties. I understand the overall intent of these amendments and have chosen to address them as a group to ensure that that intent is understood comprehensively, and that the Government’s position is in turn communicated coherently.

To clarify, the Premier League, the English Football League and the National League can all apply to trigger the backstop process. Any of the specified competition organisers can submit an application to trigger the process, and simultaneous instances of the backstop process could be triggered to cover the relationships between each of the leagues. The process is inherently designed as a two-party process. Fundamentally, distribution agreements are agreed between two individual leagues and the process is designed to facilitate these agreements. As the final offer process is set up and designed between two parties to facilitate a decision between two proposals on the basis of relevant principles, it would not be effective for the regulator to engage in this process with more than two parties. This is also, in part, why it would not be appropriate for the regulator to make a third offer. Without the incentive of the two-proposal process, parties are likely to stay at polarised positions, rather than find areas for compromise. However, when the two proposals submitted are the only choices, the pragmatic decision is to submit the most reasonable proposal possible. This is the incentive we wish to create.

I now turn to Amendments 292, 296 and 314, tabled by my noble friends Lord Bassam and Lady Taylor of Bolton. While there is a slight difference between “special” and “compelling”, we are satisfied that the bar is set sufficiently high with the use of “special”, which is the more usual terminology in these sorts of provisions. There is likely to be no tangible difference in outcomes, and therefore these amendments would be minor, insignificant changes to the wording of the Bill. As such, the Government believe the current drafting is sufficient. This is also the case for Amendment 264. While we understand the intent behind this amendment, we are content that the current drafting in the Bill sufficiently captures all revenue relevant for consideration during the backstop process. The proposed drafting change would not capture any revenue sources not already captured by the existing wording.

I turn now to Amendments 261, 262, 276 and 315. Amendment 276 seeks to significantly broaden one of the conditions by which the backstop process could be triggered. Condition 2 is specifically designed to be triggered by a material reduction in relevant revenue, as this poses a significant threat to the financial sustainability of the pyramid. Amendment 315 would, if the distribution process was ended due to incomplete or inconsistent proposals, require the regulator to issue a distribution order based on its expert panel’s own proposal, rather than ending the process. This would prevent the regulator ending the final proposal stage without an order, even if both leagues have chosen not to submit proposals.

These amendments, and the others referenced, would increase the likelihood of an enforced rather than an agreed solution. The Government’s preference is for an industry-led solution. It is our view that the regulator should have a role in facilitating the final proposal process only where no agreement can be reached on distribution, and that the process should be the least interventionist it can be while remaining effective. This approach encourages future collaboration and prevents the leagues relying too heavily on the regulator in the future.

I turn now to Amendments 284 and 286. While I agree that the state of the game report is a usual source of information to be considered as part of the distribution agreement process, it is our position that these amendments are unnecessarily prescriptive. As it stands, the Bill does not make specific reference to the report being included as a potential question for consideration. However, the existing drafting does not in any way exclude consideration of the state of the game report, and the regulator must have regard to it as part of its general duties. I would expect the state of the game report to be considered by both the leagues applying to trigger the backstop process, and the regulator, given its relevance. However, to include this expectation beyond what is already set out in primary legislation would be inflexible.

Turning to Amendment 267, while the Government understand the broader intention to involve fans in as many areas of the Bill as possible, it would not be appropriate for the regulator to be mandated to consult a group which is neither directly financially involved nor a governing body. This is not to say that fans should not make their views known to the regulator, and there will be many instances, such as in the state of the game consultation, where we expect the regulator to be able to consider a number of perspectives. This includes the views of fans on the financial situation in English football. Furthermore, the proposed drafting requiring consultation with representatives of regulated clubs is duplicative, given that the Bill as drafted already requires the consultation of the leagues.

Finally, Amendment 319 seeks to remove the provision that explicitly outlines that leagues can come to an alternative agreement at any time in the backstop process. The ability of leagues to come to an agreement independently has been protected in the legislation itself intentionally, to highlight that an industry-led solution is both preferred and encouraged. We believe this explicit protection will encourage the leagues to reconsider at every step of the process whether regulatory intervention is necessary, ideally bringing them closer to an independent agreement that works for all of football.

I hope that my responses have reassured my noble friends and other noble Lords that the Government’s approach is appropriate and provides the necessary protections, and that my noble friends will not press their amendments.

[Lord Bassam of Brighton (Lab)]

My Lords, the noble Lord, Lord Markham, rumbled me early on in his comments when he worked out that these were probing amendments; that is what they were intended to be. The group is disparate—I did not author it; it was what we were handed. It has been useful because it has enabled me to hear from the Minister how she sees the regulatory arrangements working as far as distribution is concerned, and the extent of the regulator’s flexibility.

I did not make this observation in my opening remarks but I think—the Minister covered this point—that the “state of the game” report will be critical when the regulator gets to grips with the distribution. The distribution of the revenues will be most important, because that is designed to make the game sustainable, to make sure that clubs do not go into administration, that we do not have clubs paying more than they actually earn in revenues, and so that clubs do not get to the point where they cannot properly trade. That is the most important thing for me.

Although I appreciate that my amendments would appear to some to be a bit of regulatory overkill, I think the point was made that we need to make sure that the regulator can do its job properly. The Premier League should not be at all threatened by the powers that the regulator has. Given the amount of money there is in the game and the continuing success of the Premier League—and, for that matter, the Championship —the regulator should be able to get our national game to the point where it is much more financially in balance and there are not the big gaps and distortions in revenue distribution throughout the pyramid.

I thank the Minister for what she said. Obviously, I shall study it very carefully. I think it unlikely that I shall return to these issues on Report, but obviously I will look at it very carefully before we come to that point. I beg leave to withdraw the amendment.

Football Governance Bill [HL]

Debate between Lord Bassam of Brighton and Baroness Twycross

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Bassam of Brighton (Lab)]

My Lords, if I may ask the Minister to give way very briefly, I raised the issue of the abolition of FA Cup replays in the context of consultation. Had that been in the future, would there have been an obligation on the FA to consult which the regulator could have enforced? The shape of that competition is very germane and important to football fans across England and Wales, and it seems to me that it is a significant issue that ought at least to be part of the regulator’s consideration.

[Baroness Twycross (Lab)]

My noble friend raises an interesting point. The issue of the FA Cup replays would rightly be outside the scope of this regulator. The sporting calendar and the rules of specific competitions are matters for the football authorities to manage in consultation with the appropriate stakeholders. I am not sure whether that reassures my noble friend, but we can maybe have a longer discussion about it at another point.

On Amendment 242A from the noble Lord, Lord Moynihan—apologies if I am going over paragraphs that I have already covered—the intention behind this amendment is to make sure that clubs are not overburdened with requirements to notify the regulator of every event that ever happens. We do not want this either, nor is it in the regulator’s interest to receive a flood of unnecessary information. As the clause sets out, the notification requirement relates to material changes in circumstances. It will be up to the regulator to set out what it considers to be material in guidance, which we expect it will produce on this. The regulator will already have burdens in mind when setting its guidance and enforcing this duty on clubs, given public law principles and its regulatory principles. We want the regulator to receive the information and updates it needs to regulate effectively. By raising the bar for when clubs are required to notify the regulator of changes, the proposed amendment risks doing just that.

Amendment 248, from my noble friend Lord Mann, would introduce a new requirement for regulated clubs to register with the regulator all player contracts, transfer fees and other fees annually for the previous 12 months. I reassure my noble friend that, where this information is relevant for the regulator to understand a club’s finances, it can already obtain it. All clubs will be required to submit financial plans which detail, among other things, their revenues and expenses. These plans should capture details about player contracts and transactions where this information is relevant to the regulator understanding a club’s finances. Furthermore, the regulator has extensive information-gathering powers. Should it need greater oversight of the detail set out in this amendment, the regulator can already request this information, and it would not have to wait 12 months to get it. Therefore, I am confident that the Bill already delivers the intent of the amendment.

I am also grateful to the noble Baroness, Lady Grey-Thompson, and the noble Lord, Lord Moynihan, for Amendments 248A and 258A respectively, which focus on ticket prices. I understand that the noble Baroness intends to address the recent rise in clubs removing concession pricing on tickets and other such changes that have left some fans priced out of match attendance, and she highlighted concerns raised by fans from Reading. Fans are justifiably concerned, and I am exceptionally sympathetic to that. I am equally grateful for the attention by the noble Lord, Lord Moynihan, to ticketing and the issue of resale. These are huge issues that matter to fans, which is exactly why the Government have made it explicit that clubs must consult their fans on ticket pricing as part of their fan engagement. This also includes engagement on other operational issues, which is intended to capture many of the issues the noble Lord has made in his amendment. It is also important to note that any unauthorised resale of tickets for designated football matches is already addressed in the Criminal Justice and Public Order Act 1994. Many clubs take this exceptionally seriously and work with police and relevant authorities on it. However, the regulator should not be seen as a vehicle to fix all of football’s woes, especially those that are well within the gifts of clubs, leagues and the FA to address. On the noble Baroness’s amendment in particular, it would also not be appropriate for the Government to dictate prices or concession categories, and there is limited precedent for such an interventionist approach on commercial decisions.

Football Governance Bill [HL]

Debate between Lord Bassam of Brighton and Baroness Twycross

Committee stage
Monday 2nd December 2024 Lords Chamber

[Baroness Twycross (Lab)]

I thank my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, the noble Lord, Lord Addington, and the noble Baroness, Lady Jones of Moulsecoomb, for raising the very serious issue of environmental sustainability and how it relates to the regulator. These are issues of considerable concern, not least with the shocking storms we have seen recently and the change to weather patterns over the past few years. The impact of the climate emergency on all aspects of our lives is very real.

In response to these amendments, I would like to make clear that the Government are absolutely committed to environmental sustainability. One of the Prime Minister’s five national missions is to accelerate the transition towards clean energy and ensure the UK fulfils its legal obligation to reach net-zero emissions by 2050. As a huge part of our national life, all sports, including football, have an important role to play in this transition. The Government expect authorities across this sport and across all sports to be working together to advance environmental sustainability.

A point made eloquently by the noble Lord, Lord Deben, is that we have to be able to justify the view we take now to future generations. This is true. The noble Baroness, Lady Jones of Moulsecoomb, made an interesting point on placing this requirement within the Bill. However, while I entirely support her views, we do not feel it is right to add environmental sustainability to the purpose of the Bill. As the noble Lord, Lord Goodman of Wycombe, highlighted, this Bill is acting only where industry has shown it is not capable of resolving matters itself and statutory regulation is the most effective way of tackling any market failures.

I would, however, be happy to discuss further with the noble Baroness how we can use good examples of football clubs already acting on the climate change emergency and spread best practice. What I would stress, when noble Lords are discussing something so important both nationally and internationally, is that noble Lords are still debating the very purpose of the Bill. The areas specified in the purpose of the Bill are based only on issues that English football has clearly shown itself to be unable to self-regulate and to risk clubs being lost to their fans and local communities.

By contrast, football has already demonstrated the ability to take action on the environment: for example, the Premier League’s new minimum standard of action on environmental issues across both the clubs and the league. I welcomed the examples given by the noble Baroness, Lady Brady. The noble Baroness, Lady Jones, and my noble friend Lord Bassam described some interesting measures when describing the work of Forest Green Rovers, but this is clearly only a starting point on which future initiatives must build. Football authorities must take more proactive steps to accelerate their own environmental initiatives. However, it is within the gift of leagues, clubs and other authorities across the game to do so without government intervention.

We must also be wary of scope creep and unintended consequences. The addition proposed in Amendments 11 and 15, in the names of my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, would potentially add burden and cost to the regulator, as well as potentially limiting its ability to carry out its main objectives. Therefore, while I acknowledge the importance of this issue, as I have set out, we do not feel it is right to add environmental sustainability to the purpose of this Bill.

I look forward to further discussions on how we can best promote environmental sustainability within the game. However, for the reasons I have set out, I hope the noble Lord will withdraw his amendment.

[Lord Bassam of Brighton (Lab)]

My Lords, I think it has been of great value to have this discussion and debate on the notion of environmental sustainability in the football industry, which is a very responsible industry actually. I take heart from the examples that the noble Baroness, Lady Brady, gave of the Premier League’s initiatives and those from the noble Lord Parkinson.

It seems to me that this is an important issue for football. All the other regulators seem to have an environmental purpose as well. I have looked at the Financial Conduct Authority, Ofcom and even the Pensions Regulator, which you might think is a million miles away from being a regulator interested in sustainability. They all have environmental statements and purposes as part of their work.

I think the football business is making progress in this space. I want to see it making more progress, perhaps with a more level playing field. It seems unfair that some clubs leap ahead and leave others behind. Forest Green Rovers, although a small club and in the fifth tier of football, has led the way for some years and I think it only right that we encourage other clubs to do the same, whether that is through the regulator or by applying environmental legislation more generally.

I look forward to the invitation to have some more discussion on this point but, for now, I beg leave to withdraw the amendment.

Olympic and Paralympic Games: Team GB

Debate between Lord Bassam of Brighton and Baroness Twycross

Monday 4th November 2024 Lords Chamber

[Lord Bassam of Brighton]

To ask His Majesty’s Government what steps they are taking to support the continued success of Team GB at the Olympic and Paralympic Games, and to ensure that there is community benefit from such participation.

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

My Lords, I am delighted that this Government will continue to support the successes of Team GB and Paralympics GB. The Chancellor has confirmed that a multiyear investment will mean that a total of £344 million will be invested in Olympic and Paralympic success over the next cycle. This will support the teams through to the 2028 Olympic Games and provide excellent foundations for the 2032 Games and beyond.

[Lord Bassam of Brighton (Lab)]

My Lords, that is more excellent Budget news; it keeps coming. However, how people watch and are inspired by our sporting heroes is changing. During the Paris 2024 Olympics and Paralympics, the BBC had over 67 million online catch-up requests. The next two Olympics and Paralympics will be in totally different time zones. The listed events regime protects live TV viewing but does not prevent digital or on-demand clip rights being hidden behind a paywall. Can the Minister confirm the completion of the 2022 review covering this and help find a way to protect digital and on-demand clips so that everybody can enjoy LA 2028 and Brisbane 2032 despite being in a different time zone, and also be inspired?

[Baroness Twycross (Lab)]

My noble friend makes a good point about changing viewer habits. It is important that sporting events of national importance remain available for people to view for free in years to come. Both the Olympic and Paralympic Games are rightly group A-listed events, which means that live coverage must be offered to at least one free-to-air broadcaster. I can reassure my noble friend that we will continue to consider the issue that he raises on digital rights; we will look to set out our position on that in due course.