Football Governance Bill [HL]

Lord Hayward Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Maude of Horsham (Con)]

My Lords, I am happy to support the amendment moved by my noble friend Lord Jackson and the eloquent case that he made for it. I wholeheartedly endorse the remarks of my noble friend Lord Moynihan.

As we go further into this Bill and debate it further, it becomes clearer that this was a Bill conceived in a fit of absence of mind; it has come about almost by accident. There were some concerns about Bury Football Club going into administration. There were concerns about the European Super League being proposed—an idea that was almost literally dead on arrival not because of a regulator or primarily because of political intervention but because of a fan revolt. The system as it was worked. It was the deep commitment of fans to the current arrangement, the current competitive leagues and all of that. Their anger and dismay at this were reflected in the British clubs which had committed to it, including my own. They abandoned it as if it was suddenly realised that this thing that they were holding was red hot and that the sooner they got rid of it the better. This was working. Yet there was a casual threat made by the then Prime Minister, reacting—as a populist will often do—to popular anger with a threat to introduce legislation. It is more and more evident as we go further that the Bill we are now considering at length, with its deficiencies and its threats, is the result of that.

I want to consider, for a moment, the case that my noble friend Lord Jackson made about overregulation. I have been involved, at various stages of my long and chequered career, in trying to counter overregulation. The first time was nearly 40 years ago when I was Margaret Thatcher’s Minister for Deregulation. Later, I chaired a deregulation task force at the request of my noble friend Lord Heseltine, the then Deputy Prime Minister. I then chaired periodically the coalition Government’s better regulation Cabinet Committee, or whatever we called it. I have been involved in this a lot and spent a lot of time looking at the effects of overregulation, who the beneficiaries are and which organisations suffer because of it.

One of the conclusions that I reached very early on was that it is not the big businesses that suffer most but the smaller ones. A bit of a theme in how we have been debating this Bill is the sense that “All of the resentment and all of the difficulty with this is coming from the Premier League”, and that somehow we are trying to defend it. I have to tell your Lordships that the clubs that will feel the least of the burden of overregulation, the compliance costs, are the big clubs, because they are big machines. They are serious businesses. They have the personnel and infrastructure and can draw on resources to deal with the unexpected effects of regulation. They will have a machine that will accommodate it. It will be uncomfortable and unnecessary and it will have costs, but they will not be threatened by it. The clubs that will really feel the burden are the small clubs. They do not have these big machines and are not equipped with armies of lawyers and accountants and the rest of the panoply of resource that is required to deal with this totally new form of regulation that is suddenly being thrust upon them.

This is something we need to think about very carefully indeed. One might not want there to be bad effects, but so many of the debates we have had on this Bill have been about the threat of unintended consequences.

[Lord Hayward (Con)]

I thank my noble friend for giving way. He has made an important point in relation to small companies, and is it not confirmed by an article in this morning’s Times, which says that the Financial Conduct Authority’s “over-regulation … harms small companies”? That is exactly the point he is making: it is small companies that are affected, rather than large ones.

[Lord Maude of Horsham (Con)]

I am grateful to my noble friend for drawing your Lordships’ attention to that. It is absolutely the case. When Governments consult with a sector, the people they consult with tend to be the big ones. I spent a lot of time thinking about this and trying to work out how to deal with it in previous contexts. If you run a small company, business or operation—a small football club—you are far more concerned with getting on with whatever the next thing is on your agenda. You have got relatively few people around to do the work. Big companies have a machine that is set up to deal with all this, so the point that my noble friend makes is entirely right.

The point behind this amendment is incredibly important, and my noble friend has done a great service in raising it in the vivid way that he has. We have to consider this, because once you create an independent regulator, you have created something that is supposedly independent, and it is much harder to come back. Later in these debates, we will come to my noble friend Lord Goodman’s proposed sunset clause. That would be some kind of constraint because the threat or certainty of there being a proper, serious review after a given length of time will focus the minds of the regulator. But without that, without the kind of amendment that my noble friend has tabled, I think we stand in great danger.

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[Baroness Brady (Con)]

My Lords, I rise to speak in support of Amendment 16, tabled by my noble friend Lord Jackson. The amendment would require the regulator to take into account the economic risks of overregulation and report against this risk. I am sure this is an approach that will interest all parts of the Committee, especially, as my noble friend Lord Jackson reminded us, as the Prime Minister himself recently made such a high priority of reducing the impact of regulatory burden on British investment and growth.

We should consider the Prime Minister’s words carefully. He spoke of breaking free from the trap of excessive regulation, of removing needless barriers to investment, and of ensuring that regulators take growth far more seriously. Yet, here we are again, at risk of creating a new regulator without proper safeguards against exactly these risks. Indeed, the Department for Business and Trade this year published a report on smarter regulation, which described the problem in stark terms:

“Good regulation allows our markets and societies to function. However, there is strong evidence that points to our regulatory culture acting as a drag on our ability to generate economic activity, innovation and to attract investment. The regulatory environment is often confusing and sometimes features of it appear to exist for the benefit of the regulators, rather than the industries who they regulate, consumers or Britain as a whole”.


We must take care to guard against our regulatory culture having a similarly damaging impact on British football.

As other noble Lords have pointed out, the Premier League represents one of Britain’s most successful exports, contributing £8.2 billion annually to our economy and more than £4 billion to the Exchequer, while supporting more than 90,000 jobs. Already, we are seeing concerning signs in the Bill: undefined ownership tests: parallel regulatory requirements; unproven intervention powers; and sweeping powers to redistribute Premier League revenue. Each adds complexity and risks that could deter the very investment that we need.

The Premier League competes globally for capital, for talent and for attention. Excessive regulation could quickly diminish its appeal to serious investors, with knock-on impacts for the pyramid which relies on the Premier League. As the chief executive of the Premier League has said in relation to this Bill, we must not wound the goose that lays English football’s golden egg. It is that egg that supports so much of the good work that we discussed earlier and the football pyramid as a whole.

The Prime Minister pledged to “march through the institutions”, ensuring regulators take growth seriously. Yet this Bill creates a regulator with no equal duty to consider success, economic impact or growth alongside the very vague notions of soundness and resilience, which, as I said earlier in this Committee, have no clear end state. We can have both effective regulation and economic dynamism, but only if we build in appropriate safeguards from the start. Without them, we risk creating exactly the kind of bureaucratic barriers to investment that the Prime Minister has correctly identified as holding Britain back.

[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.

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[Baroness Twycross (Lab)]

The noble Baroness raises a particular concern. I am not suggesting by any means that people will not need time to get used to and understand the burdens or costs on smaller clubs but, as I felt I had outlined, I hope that, with enough clarity, the licence conditions—that includes the costs placed on clubs— will vary depending on their unique circumstances. I am sure we will have further opportunities to discuss that as we go forward. Hopefully we can give your Lordships’ Committee and the clubs some reassurance on that point.

[Lord Hayward (Con)]

To follow up on the Minister’s comments and the observations made by the noble Baroness, Lady Brady, given the detail that is included in the impact assessment on every other category of cost and benefit, and even though I find some of the calculations dubious, to say the least, at the next sitting of this Committee can we have a clearer indication of the likely proportionate costs which will fall on clubs at different levels in the pyramid, rather than some broad, general observation that it will be proportionate?