Football Governance Bill [HL]

Lord Goodman of Wycombe Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Hayward (Con)]

My Lords, I rise to support the amendment in the name of my noble friend Lord Jackson. I will concentrate particularly on both the impact assessment and what my noble friend Lord Maude was referring to: the impact on small businesses. Following on from the comments of the noble Lord, Lord Birt, when I made my comments at Second Reading, I emphasised that my concerns are not that there are no problems; the question is how we actually tackle the problems that exist in the industry while not damaging the success.

I have made a number of references to the impact assessment, and I quoted from it earlier today. On page 8, paragraph 17, it states:

“This Impact Assessment (IA) provides evidence and analysis to support the government’s case for intervention”.

I am concerned after reading the impact assessment that, as my noble friends Lord Jackson and Lord Maude identified, the impact is not on the big companies. Anybody who has sat on the side of an industry, as I did when changes were made to licensing law, for example, knows that it is not the big companies that are affected by such changes. They have the resources. It is the small companies that are confused, concerned and lost. They do not have a specialist to deal with the minutiae of a clause. I was the chief executive of the British Beer and Pub Association at the time, and it was an enormous task to guide smaller companies through the issues they faced. For me, the impact assessment dramatically underestimates the impact that small companies face in these circumstances.

I will come back to other elements later, but I am particularly concerned—and am referring to page 53 onwards—about the identified benefits that are supposed to accrue to the industry. The costs are dealt with, but I must admit that I am not convinced. On the indirect benefits, paragraph 225 comes up with a wonderful sentence:

“These indirect benefits are extremely difficult to quantify, given the range of variables that will affect the profitability of individual football clubs. Therefore, these are not quantified in the appraisal”.


Paragraph 227 says:

“These benefits are extremely difficult and speculative to quantify and therefore are not quantified in the appraisal”.


The noble Baroness, Lady Taylor, will no doubt be relieved that I have not entered into any word counts on this occasion.

On accruing benefits for the community, paragraph 233, on page 54, states:

“The model states that the results of this contingent valuation survey of football users and non-users shows that people positively value the club they support/their local club and would be willing to pay an annual subscription to support it”.


I find myself at a loss to believe that my noble friend went round the streets of Wycombe or any other community and asked, “Would you be willing to pay X sum to support the club?” The suggestion that large parts of any population are

“willing to pay … to support”

their local club is really stretching credibility far.

This comment was made as a result of some work undertaken by Ipsos, an organisation for which I have high regard and with which I deal on polling. But the next paragraph, 235, refers to the following:

“DCMS guidance states that a lower bound”—


I am not sure whether the authors intend “bound” or “band”—

“95% confidence interval of willingness to pay (WTP)”.

That is rather like talking about turnout at a general election by asking people whether they are going to vote. I checked with a pollster this morning, and the mean answer given is 80%. The turnout at the last election was 60%, so there was an error of a quarter or a third, depending on whether you go upwards or downwards. To suggest that you can quantify the willingness of a community and people in the street to pay to support their local club stretches the bounds of credibility.

But on page 56 we have a breakdown, in detail, of the willingness of each region of the country to pay a sum to support its local club. There has been infinite reference to the fact that the support for clubs crosses from one place to another. Therefore, if you are contributing in the north-east or in London you may not be willing to pay to support a specific club. It is not surprising that London is identified as the place where people are most willing to supply most money, but it does not say whether the sums involved include a season ticket. Many of the people who answered the question will have thought, “Well, I actually pay in the form of a season ticket already and therefore I am contributing”.

What is depressing about the impact assessment is that it goes into such detail in relation to the benefits that will be gained from this legislation, but there is no attempt to identify what the clubs will have to pay. I am not talking here about the Premier League clubs; I am talking about the small clubs. In her response to the points that I and others raised at Second Reading, the Minister said that the costs would be proportionate. But no figures are given. I find it barely credible that such detail can be provided to identify how much people from each different area of the country are willing to pay, but there is no calculation of the cost for a small club.

That is where the important issue—the questions raised by my noble friend Lord Jackson—arises. People can concentrate on Premier League clubs, but we are talking here about regulating over 100 clubs. People do not realise that the impact will be on the small clubs. The Government need to be honest before this legislation passes, and to identify the probable burden for each of the small clubs, because without that information it is not appropriate to pass into law a football regulation Bill.

[Lord Goodman of Wycombe (Con)]

I rise to support the amendment of my noble friend Lord Jackson and to speak further to the points raised by my noble friends Lord Maude and Lord Hayward about large clubs, small clubs and financial burdens.

We are presumably all agreed that large clubs are better able to bear the cost of regulation than smaller ones. My noble friend Lord Hayward referred a moment ago to 100 clubs, but if some noble Lords have their way, it will be more than 100 clubs. We have already heard today, as we will hear as the Bill develops, proposals to tack on to the Bill corporate social responsibility, net-zero obligations and so on. There are amendments tabled to tack on to the Bill specifically the National League North and National League South. I am sure that the Minister would resist any such amendments, in the same way that the Government will resist most of the amendments that come forward. But as my noble friend Lord Moynihan pointed out at Second Reading—if he did not, I am sure other noble Lords did—the Bill is shy about saying which leagues will be covered by the regulator.

The Government have made it very clear that it will be the pyramid—the top five leagues—but the point is that at any future date the Government might change or, heaven help us, the Minister might move on and be replaced by someone else. At that point, the Government could bring forward by regulation changes to the scope covered by the regulator in order to bring in the National Leagues North and South, or other leagues. Even more small clubs would then be covered by the regulator and have to bear the costs. My noble friend’s amendment is a wise, precautionary one, not only in dealing with the measures the Government are proposing to bring within the scope of the Bill, but as a hedge against other leagues being brought within the scope of the regulator in the future.

--- Later in debate ---

[Lord Bassam of Brighton (Lab)]

My Lords, I rise to speak to my amendment about the inclusion of the National Leagues North and South. I accept that my amendment is defective; I think the Committee on Statutory Instruments has declared it as such. However, I will use this opportunity to raise the question of where down the pyramid the regulatory process should stop.

Some of the teams in the National League North and National League South are quite substantial. Scunthorpe United is quite a big club and has a turnover somewhere in the region of £5 million to £6 million a year. Torquay United has a turnover of probably £2 million or £3 million a year. Even Maidstone, another former league club, has a turnover of between £2 million and £3 million a year. These are small but substantial businesses. They probably employ no more than 10 or a dozen staff—Scunthorpe probably employs more than that, looking at its accounts—but we expect other parts of the business world to be regulated by health and safety or environmental legislation, by financial conduct rules and regulations, and so on.

It is not smart to leave those two leagues out of consideration, because one of the things we should worry about is predatory ownership. We have seen some of that in the past, to the detriment of clubs in the lower leagues. The Bill is about making sure that the clubs in the lower leagues are properly protected. We have heard a lot from noble Lords on the Opposition Benches about the Premier League and how they believe that the regulatory regime may be damaging to the Premier League, but it is the plight of clubs lower down the pyramid that has sparked the most concern over the years and has been the motor for both major political parties to seek a football regulator.

I make that point because at some stage, we will need to have the National League North and National League South clubs in the regulatory framework. It seems odd to regulate one of the National League’s divisions, but not the other two. I wonder about the cliff-edge effect of having clubs coming up from both those leagues into a system of regulation. That does not necessarily seem to be the right way to do things; it would be better if they were all captured by the same framework.

The Minister made the point at Second Reading that regulation would be appropriate at each level of the pyramid—that has to be right—and that teams in the National League do not require the same degree of regulation as teams in the upper leagues. That is a sensible and proportionate way of looking at things. These clubs are already used to regulation; they are regulated by other regulators.

There is a case that we need at an early stage in the life of the regulator—I accept it may not be now—to have a report, or perhaps a section in the “state of the game” report, that looks at this issue. There may well be some unintended consequences and some cliff-edge issues, and if we do not get regulation right for these clubs, which could be vulnerable to predatory takeovers, some of them may well suffer as a consequence. None of us in the Committee wants to see that happen—I certainly do not, based on my experience as a Brighton & Hove Albion Football Club fan in the 1990s, when we were nearly destroyed by a predatory takeover. We very nearly went out of the league and out of business, and it took us a decade to recover our position.

[Lord Goodman of Wycombe (Con)]

My Lords, I will follow my noble friends Lord Moynihan and Lord Markham in their references to the Delegated Legislation Committee.

I hesitate to disagree with anything my noble friend Lord Moynihan says in any way, but he described me as a senior member of the committee, and I am afraid that this is not accurate. I am, in fact, the most junior member of the committee, having arrived only very recently, but certainly in time to consider this Bill. When I joined the committee, I found that it was very worked up about the rise in secondary legislation, as it set out in its key document, Democracy Denied?, published in 2021—I will come to the significance of that date in a moment. It criticised the use of Henry VIII powers, disguised legislation and skeleton legislation, saying:

“The abuse of delegated powers is in effect an abuse of Parliament and an abuse of democracy, and this report will, we hope, be a prompt to strengthen Parliament in the coming years”.


I find myself in an awkward position here with my own Front Bench, because in 2021 a Conservative Government were in office. The committee clearly feels that this tendency for skeleton legislation, Henry VIII powers and so on has carried on from 2021 to the present.

My noble friend Lord Moynihan will remember that at Second Reading, he drew attention, as I did, to Clause 92(3), which states:

“The Secretary of State may by regulations amend …the definition of ‘football season’”


and

“the definition of ‘serious criminal conduct’”.

Such is the exquisite moderation of the committee that we did not follow that matter up in the report, but we did concentrate on the issue, raised by my noble friend Lord Moynihan, of the leagues not named in the Bill. He has read out the relevant sections of the report, and I have no intention of reading them out again.

However, I reinforce the closing point made by my noble friend Lord Markham and put it to the Minister in the form of a question. Can she confirm or deny that if the leagues in the pyramid were to be named in the Bill, the Bill would therefore become hybrid? She is nodding, and she will doubtless amplify on that nod when she responds to the debate, but that is a very important point. If that is the case, did the Government refer to that in their discussions with the committee clerks when they were drawing up the report?

[Lord Goddard of Stockport (LD)]

My Lords, nobody faint, but on this issue I fully support the noble Lord, Lord Parkinson. I bear the scars of Democracy Denied? It was an excellent report that it took us quite a long time to bring through. The Government cannot have it both ways. We say that the purpose of the Bill

“is to protect and promote the sustainability of English football”,

yet it does not explain what English football is.

That is the nub of this. We spent hours on the first part of that, but the second part we seem to want to leave to the Government, because it is seemingly easier to amend delegated powers than primary legislation powers. That is not the point. What is in the tin should be on the front of the tin. It should name what it is doing, which is the Premier League and the Championship. It could go down the tiers and include leagues north and south. You would then have a full list of what this legislation is covering. It is probably just bad drafting, and no more than that. This could be done very simply. Everybody would then understand what the Bill is about.

--- Later in debate ---

[Baroness Twycross (Lab)]

I will address the issue of why the regulatory regime is currently intended to be limited to the top five tiers of football and not to include the National League North and the National League South. The issues we are concerned with arise most typically and markedly in the professional game where the financialisation of clubs is greatest. We recognise that the top five tiers is not necessarily a perfect proxy for the professional game, since some semi-professional and professional clubs can move between these leagues. However, we consider it the most appropriate and proportionate place to draw the line and the place where it would not result in some clubs in the league being subject to regulation and others not. We do not currently believe that extending the scope beyond the top five tiers would be proportionate to the burden on smaller clubs below the National League.

On Amendment 19—and apologies if I am repeating parts of my speech, because it is some time ago that I was actually on my script—in the name of the noble Lord, Lord Parkinson, I understand his desire to have upfront clarity on the face of the Bill.

Turning to Amendment 21, I thank my noble friend Lady Taylor for putting forward this amendment. As I am sure my noble friend is aware, the Secretary of State would have the ability to specify competitions that are in scope of the regulator and we believe that the top five tiers is a sensible and proportionate place to draw the line.

In relation to the points on hybridity, questions of hybridity are for the examiners, not for the Government. If the amendment is made, there will be a process to be followed that will decide whether the Bill is hybrid and needs to go through the hybrid procedures. Initial advice is that the Bill would be thought to be hybrid and I understand that, following the tabling of Amendment 19 in the name of the noble Lord, Lord Parkinson, and Amendment 21 in the name of my noble friend Lady Taylor, issues have been raised about their hybridity.

The noble Lord, Lord Goodman, asked whether we had discussed with the Delegated Powers and Regulatory Reform Committee ahead of the process. We would not discuss committee reports with clerks before they draw them up.

I know that noble Lords want to continue to work constructively on the Bill—

[Lord Goodman of Wycombe (Con)]

I think my question was, in advance of the committee considering the Bill and the Government giving their reasons to the clerks for objecting to the Bill, why did they not then raise the matter of hybridity? Is it the Government’s position that raising the matter of hybridity just is not their business? If it is their business, why did they not raise it?

[Baroness Twycross (Lab)]

It is for the examiners, not the Government, to decide whether or not there is hybridity.