Football Governance Bill [HL]

Lord Hayward Excerpts

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Pannick (CB)]

My Lords, I repeat my declaration of interest, having spent much of the past three months representing Manchester City Football Club against disciplinary charges brought by the Premier League.

I pay tribute to the noble Baroness, Lady Brady, who has long been a friend of mine. She has unrivalled experience of being employed by Birmingham City Football Club and, for many years, West Ham United Football Club, and has achieved great success at both those clubs. I respectfully suggest, though, that here she protests too much. Clause 11(2) contains a very important restriction on what a football governance statement may do. It

“may not contain any policies that are inconsistent with the purpose of this Act or with the IFR’s objectives”.

The second protection is in subsection (6):

“The Secretary of State must lay any football governance statement, or any revised statement, published under this section before Parliament”.


Those are very considerable protections.

We listen to concerns that companies that own football clubs need long-term planning, but surely any company is subject to changes of government policy over the years. There is no protection whatever against those and the consequences thereof. I see absolutely no reason why football clubs should be protected by more than the three-year period stated here.

[Lord Hayward (Con)]

My Lords, before I start my comments on this clause, I thank the Minister for meeting me last week to discuss a number of issues—they did not include this clause, but I appreciate the opportunity to discuss other issues with her. My concern about this clause comes from the very first words of the Bill, which say that it is to:

“Establish the Independent Football Regulator”—


an independent regulator, not one circumscribed by a government Statement as laid out in Clause 11.

I disagree with the noble Lord, Lord Maude, who said, if I heard him correctly, that this was unique. It is not. Sadly, my mind goes back to a previous occasion when the Government wanted to circumscribe an independent regulator. I remember the debate clearly, because the late and great Lord Judge made a massive contribution to it, scything through the then Government’s arguments about why they should have a Statement in relation to an independent regulator. The independent regulator to which I refer is encompassed in the Elections Act. The previous Government said, “Ah, we’ve got an Elections Act. We don’t really like what the Electoral Commission is doing, so we’ll put in a nice little clause which requires the Government to make a Statement”, which, in effect, circumscribed the Electoral Commission. What is fascinating about that set of circumstances, which Lord Judge and I—and the Liberal Democrats and the Labour Party—criticised comprehensively, is that the wording in Clause 11 is remarkably similar to that in Section 16 of the Elections Act. In fact, Clause 11(5) of the Bill is almost identical, word for word, to new Section 4A(7) of PPERA inserted by that section.

I said just now that people on other Benches spoke against the Government imposing some form of Statement on the Electoral Commission as

“‘not fit for purpose and inconsistent with the … role as an independent regulator’”.—[Official Report, 6/2/24; col. 1604.]

We are talking here about the same wording. Those were words from the Liberal Front Bench—the noble Lord, Lord Rennard. The Labour Front Bench, in the form of the noble Lord, Lord Khan, said that

“this statement is unnecessary and the Government have provided no evidence for why it is needed … There was cross-party agreement that the commission’s independence is vital”.—[Official Report, 6/2/24; col. 1602.]

I could go on quoting the noble Lords, Lord Khan and Lord Rennard, making the point that a regulator is independent if it is independent, not because it is circumscribed by a set of conditions as set out in Clause 11. I recommend anybody to look at the relevant amendments to the Elections Act 2022, where the wording is virtually identical. The Government then wanted to circumscribe the Electoral Commission. I would not be surprised if the officials discussing this Bill when it was in draft under the previous Government said, “Oh, we’ve got a good basic tenet; we’ve even got a set of words which we can lift, virtually verbatim, and it’ll circumscribe the independent regulator”.

I opposed the Government’s imposition of that statement in the Elections Act, because I believed it circumscribed what should have been an independent regulator. When the then Opposition forced a vote on it, I sat where the noble Lord, Lord Bassam, is now and abstained, because I refused to support the Government imposing on an independent regulator a provision which is virtually word for word that set out in Clause 11. I therefore strongly support the amendments and oppose this clause standing part of the Bill.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I will speak to my Amendment 111, which is part of this group, and pick up some of the points that my noble friends have raised in the debate.

My Amendment 111 states that the Secretary of State should not be permitted to revise a football governance statement simply because there has been a “significant change” in government policy on football. The reasoning for this comes from much the same place as my noble friend Lady Brady’s Amendment 110: both try to prevent the possibility of frequent changes in the Government’s policies for the regulator. If the Secretary of State took up every opportunity that the Bill allows to alter the governance statement—it could be every three years, after every general election and after every change in government policy—we could see this governance statement being altered rather frequently, every few years, with effects on the stability of football.

How would clubs have the certainty they need to plan their investment? As my noble friend Lady Brady said, football clubs plan their infrastructure and stadium developments over periods of 10 to 15 years or more. The talent pipeline, which is needed to develop the players of the future, requires much more than five years of careful thought and investment. To do all this and deliver the sustainability of English football, clubs need to know what the policies of the regulator will be over the long term. They need to know what the regulator will require of them.

My noble friend Lord Hayward reflected on a broader point in his remarks. The Government have been at pains to stress the importance of the independence of this regulator. I do not doubt their intention, but how will that independence be maintained when there could be regular and changing political statements setting out the policies to which the regulator will have to adhere? We need some assurances that these governance statements will not interfere with the operational independence of the regulator. To do that, it seems much more sensible that the Secretary of State should not be able to revise these statements on a whim or because the department’s Secretaries of State are changing with the regularity that we have seen in recent years.

I hope the Minister will address the points that have been raised and look favourably on these amendments. I look forward to her reassurances.

--- Later in debate ---

[Lord Hayward (Con)]

My Lords, in relation to consultation, on which several comments have been made during the discussions on this and previous groups, it is worth bearing in mind, when the Minister tells us that there will be wide consultation in whatever circumstances, what my noble friend Lady Brady said on day one of Committee. She said that the Government had consulted seven Premier League clubs, which did not include Manchester City. They consulted those seven clubs for about as long as it took Spurs to score four goals against Southampton yesterday. It was hardly serious communication and consideration. That is what worries so many of us: we are listening to a series of comments that sound reasonable in themselves—and I have sympathy with what the noble Lord, Lord Goddard, said—but I would believe it if there had been a very clear indication at previous stages of the Bill that there had been consultation with the interested parties.

[Baroness Brady (Con)]

My Lords, I support Amendment 124. I think it introduces a sensible and proportionate idea: that the independent football regulator should have the power to delegate certain functions to competition organisers, such as the Premier League, the EFL and the National League, where it is appropriate. First, I want to consider the position of the leagues themselves, especially the Premier League and the EFL, both of which already play central roles in the regulation and operation of English football. These organisations are not merely administrative bodies; they are sophisticated, well-sourced entities with established systems for financial monitoring, licensing and governance.

For example, the Premier League currently performs all the UEFA licensing for clubs on behalf of the FA, demonstrating its capability to operate efficiently and effectively under stringent regulatory frameworks. It also has robust financial monitoring mechanisms in place, which ensure that clubs comply with obligations relating to profitability, sustainability and long-term planning. As I mentioned earlier in Committee, the Premier League also invests significant resources and time in performing its owners’ and directors’ tests to a very high standard, and intends to continue to do so.

Simply duplicating all these existing structures within the IFR would be inefficient and burdensome, as the White Paper that led to the Bill rightly acknowledged:

“The Regulator may wish to allow concurrent systems, or delegate responsibilities to industry bodies, in certain circumstances. It would manage this in a way that is coherent and simple for all involved, especially clubs”.


Unfortunately, however, no sensible delegation power currently exists in the Bill, so I commend my noble friends Lord Markham and Lord Parkinson for addressing this issue and allowing for this conversation. This amendment would align perfectly with that principle expressed in the White Paper. It would be a smart, almost unarguable step to take: delegation would allow the regulator to focus its resources, especially in the early years of its life, on areas where independent oversight is essential, such as addressing market failures and managing systemic risks. At the same time, it would give the regulator the option of leaning on existing processes or information systems where they are already successfully implemented.

Delegation would also address an important practical reality. The workload facing the IFR will be immense. I am not surprised that the EFL wishes to offload some of its costs to the regulator, and that is its right. In its early years, this regulator will have to establish itself, build capacity and gain the trust of stakeholders across the ecosystem. That is a big burden. Allowing it to delegate certain functions, with appropriate safeguards, ensures that it can deliver its objectives without being overwhelmed by administrative tasks that others are well placed to manage.

However, this clearly cannot be done on blind trust. The amendment includes what seem to be important safeguards: the IFR must ensure that any competition organiser meets the same degree of stringency, aligns with its objectives, and adheres to its regulatory principles. This would seem to protect the integrity of the regulatory framework, while avoiding unnecessary duplication and, therefore, unnecessary cost.

More broadly still, this amendment raises an important question that we must address about the future role of the Football Association. While the fan-led review’s position was that the FA’s current governance arrangements make it unsuitable to house the IFR at present, it also envisaged a scenario where one day this might change. As the review noted,

“the FA might at some point be a suitable location for IREF … However, the Review has concluded that this is not appropriate at this time”.

This amendment raises the possibility of the delegation of certain functions to the FA, as part of its reform journey. If the FA continues to modernise its governance structures and demonstrate the capability to take on certain functions, it could play a much larger role in football’s regulatory framework.

Indeed, I encourage the Government to consider including the FA in the scope of this clause as such, because it should meet the same rigorous criteria that the leagues have to. Delegation to football bodies could be tied to a broad review of football governance a few years into this regime. This review could assess not only the progress of the IFR but the readiness of the FA and other football bodies to take on greater responsibilities. This will ensure that the IFR can be a dynamic institution, evolving in response to the needs of the game and empowering existing bodies to step up, where it makes sense. I believe that all stakeholders, including the most ardent supporters of the fan-led review, as well as those worried about the unintended consequences of this delegation, could support this kind of sensible amendment.

Finally, but most importantly, in a letter sent to me by the general-secretary of UEFA only last week, he said:

“UEFA appreciate the background of the Football Governance Bill discussions and proposals, and we were encouraged by the intent of the original Fan Led Review which stated that this regulatory area should be returned to The FA in time. UEFA supports The FA and UK policymakers in ensuring that this is still the case”.


The FA told me, also last week, that it has recently told DCMS that

“the FA is willing to take on delegated powers from the IFR, if there are services that the regulator believes we can operate and deliver effectively”.

I ask the Minister: is it still the case, as UEFA and the FA seem to believe, that the Government intend the future delegation of powers to be handed back to the FA at some point? If it is, surely this is an amendment that the Government could and should support.

--- Later in debate ---

[Baroness Twycross (Lab)]

My Lords, before I respond to the points that have been raised, I want to respond to the point raised by the noble Lord, Lord Addington, in the previous group, in relation to the regulator’s guidance. I can confirm that the regulator’s guidance will be published. Clause 12(5) of the Bill states:

“The IFR must publish any guidance”.


I also want to clarify a point raised by the noble Lord, Lord Hayward, because I am concerned that if I let it lie then, at a later date, somebody may suggest that it was accepted. It was that only seven clubs had been met with. I stress to your Lordships’ House that this Bill is the culmination of almost five years’ work which started in 2019. Officials have had extensive regular engagement with key stakeholders, including with the clubs which will be subject to the regulation. All clubs have had a number of formal opportunities to share their views, particularly as part of the fan-led review and the football governance White Paper. Over this five-year period, DCMS has had hundreds of meetings with clubs, leagues, fan groups and other stakeholders. No club that has requested a meeting has not had one. I hope that clarifies that point.

[Lord Hayward (Con)]

While I understand the Minister citing a series of meetings that have taken place over a number of years, we are now talking about a Bill which has been introduced by this Government with changes from the previous Bill. Some of those changes have already been debated, and some have not. Surely, it behoves the Secretary of State and any Minister within a Government to have slightly more than a half-hour conversation with seven members of the Premier League when we know that they are going to be the most affected clubs in terms of cost burdens.

[Baroness Twycross (Lab)]

The noble Lord and I may need to agree to disagree on the level and extent of the consultation. The culmination of consultations between officials and the various meetings that have taken place constitute very sound consultation. I was concerned that it might appear to your Lordships and to people externally that only seven clubs had been met during the whole course of the design of a new regulator, which I think all noble Lords would agree would be highly unusual and undesirable. I may return to that point; noble Lords may raise it again in Committee. I look forward to further discussion of what constitutes consultation.

I thank the noble Lord, Lord Markham, for his Amendment 124, which creates a mechanism for the regulator to delegate its function to the competition organisers. I understand that some noble Lords believe that the regulator should act as an overseeing body, only acting through the leagues and only stepping in once the leagues have failed to address a problem or, in some instances, not wishing the regulator to exist at all. Without wanting to disappoint noble Lords, including the noble Lords, Lord Maude of Horsham and Lord Hayward, the noble Baroness, Lady Brady, and others who support this amendment, I am afraid that the model of regulation is not one that we are proposing and nor is it the model that the previous Government proposed. Notwithstanding the points that have been raised repeatedly, this is now this Government’s Bill and we are very proud to bring it before your Lordships.

The fan-led review laid bare the issues with industry self-regulation, and this is an amendment where it is important for your Lordships’ Committee to reflect on the fact that football has had ample opportunity to get this right. We are legislating only because the leagues do not have the incentives and governance structures to address these problems adequately.

I agree with the point made by the noble Lord, Lord Goddard of Stockport, that this amendment could be argued to represent a bear trap. I also agree with a number of points raised by the noble Lord, Lord Pannick, and the noble and right reverend Lord, Lord Sentamu. As has been demonstrated, compliance with current competition organiser rules has not proved an effective way of ensuring sustainability of the game. That is precisely why a new bespoke regulator is required, with the powers, incentives and agility to act where competition organisers are unable to.

However, I want to reassure the noble Lord that the regulatory system is already designed in such a way that the regulator should not need to intervene if the required standards are already being met. If clubs are meeting their threshold requirements naturally—for example, through their compliance with the industry’s existing rules—then the regulator will not need to apply discretionary licence conditions. There is also the more formal

“Commitments in lieu of … discretionary licence conditions”


mechanism, where leagues will be given an opportunity to address specific identified financial problems so that the regulator does not need to attach a licence condition.

Beyond this, however, we do not believe that the regulator should delegate functions to the leagues—there would be a significant issue of accountability. In a case where a function was delegated and serious failings happened, accountability would then be hard to ascertain. We also do not think that a power for the Secretary of State to direct the regulator would be appropriate. Not only could that constitute undue political influence on the regulator but it would also open the door to continuous lobbying by competition organisers for regulation to be delegated to them. What is more, the amendment would allow the Secretary of State to give this direction and for regulation to be delegated back to the industry without any prior parliamentary scrutiny.

On the points raised by the noble Baroness, Lady Brady, about the FA’s willingness to take on delegated functions, my department continues to have discussions with all stakeholders, including the FA, on a range of issues. It is encouraging that there is willingness in the industry to tackle the problems of financial sustainability. However, as the fan-led review clearly showed, the industry has not proved able to take forward the reforms needed at this time due to the governance and constitutional arrangements in place, as well as lacking the expertise required to deliver the regime we have been discussing. An independent body free of industry influence is needed; now is not the time to delegate functions. However, as with all aspects of the Bill, the Government will keep under review the effectiveness of the regime to deliver regulation. For these reasons, I am unable to accept the amendment, and I hope the noble Lord will withdraw it.