Football Governance Bill [HL]

Lord Mann Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Markham (Con)]

Again, I hope the Minister will answer this point. This is what the shadow regulator was explaining to us last week. What is the one thing you can do short of that? You can look to de-risk the situation, particularly if your only criterion is sustainability at that club; in other words, it survives by you saying, “You have to put money on deposit”. That is exactly the model they were taking from the financial regulator and the banks; that is what I see as the whole problem.

It is fundamental. As my noble friend Lord Jackson’s amendment suggests, we could make sure that it is aware of the burdens of regulation, or, as some of the earlier amendments proposed, it could be about broadening the definition and objectives of the regulator so that it has other criteria at stake. I truly believe that, unless we widen it out—it is only one-dimensional—we really are going to harm the great game.

[Lord Mann (Lab)]

My Lords, I appreciate that it is a little unconventional to speak to the amendment, but I would like to make a few comments to the mover of the amendment and the Minister. The case was made that this is all about small clubs. I have met very many clubs outside of the Premier League and discussed this issue with them. They have raised many issues and changes that they would like to see, some of which might be controversial in the football world or in government but not in relation to this regulation Bill. I have not yet come across any club outside of the Premier League that has said that it is worried or opposes this Bill—not one. Perhaps the Minister might like to reflect on that.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to my noble friend Lord Jackson of Peterborough for moving his Amendment 16. It has been well worth having a debate on this on its own because his short and simple amendment, if inserted into the Bill, would represent a vital step towards ensuring that the regulation of English football was both fair and economically responsible. It would require the independent football regulator to consider the potential economic harms of overregulation.

As my noble friend so eloquently established, overregulation is an issue that can choke off investment and disrupt growth in many industries. It can also, as my noble friend Lord Maude of Horsham powerfully reminded us by invoking the example of Brighton and Hove Albion, prohibit the visionaries and the innovators who help to drive industries and sectors forward. None of us wants to see that harmful effect happening in the case of this new regulator and the example of football.

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If the Minister has not had a chance to look at that report yet, I hope she will and that she will bear in mind some of the points that my noble friend highlighted to us as we look at the bringing about of a new regulator. It is important that the Committee looks again at the real-life examples of regulators that Parliament has established over the years, to see how their scope increases. Their costs go up and they are tempted, both by contributions made in Parliament and by pressures put on them by vocal people who may not always represent the mean opinion of a sector, to take their work in further and new directions.

[Lord Mann (Lab)]

I was a member of that group and heavily involved in that work. Will the noble Lord reflect on the fact that all of its recommendations request that the regulator, the FCA, regulate more toughly and more appropriately, not less and more weakly, including the cases involving football that I am personally very involved in? That was a case for more and stronger regulation, not less.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to the noble Lord for his intervention and for mentioning that. The point remains that it would be beneficial for us to look at that report on the way in which the FCA is doing its work to see whether it is doing what Parliament asked it to do when it was set up and to see whether we agree with the points that the all-party group, of which he is a member, made in its recent report.

As a number of noble Lords from across the House have said in our debate on this group, the amendment simply requires the regulator to have regard to the risks inherent when regulating a large industry such as football. I am grateful to my noble friends Lord Moynihan and Lord Maude of Horsham for the benefit of their considerable expertise and to my noble friend Lord Hayward for going so forensically through the impact assessment published by the Minister’s department.

My noble friend Lord Jackson’s Amendment 16 represents another guardrail for the regulator to use to focus its attention when exercising its functions. It would complement some of the other amendments that I have tabled and which we have been looking at. Such simple insertions of text into the Bill may be criticised as unnecessary, but they are important. The language that we use when establishing in law new public bodies and new regulators is of supreme importance. It creates a starting point from which that body will grow or change and be investigated by all-party groups and Select Committees. What that starting point looks like and how it is clearly defined has the potential to shape its future trajectory. We are looking at a regulator we hope will do its work very successfully for generations to come. Surely, we want that trajectory to enable future growth and innovation—future visionaries—and to remain free from mission creep and expansion into areas which we do not want to see it moving in.

The proposed model of regulation in the Bill will require the frequent submission of reports and financial plans. These will, as per the licensing conditions and as per our debate on this group, all have to be approved before a regulated club is granted a licence and are a condition for it maintaining that licence. The monitoring and collection of that information will naturally require a large number of staff to help comply with the new regulation. Added to the costs of the levy, this could have damaging effects on regulated clubs—damaging effects, as my noble friend Lord Maude of Horsham and others powerfully set out, that would be felt most keenly by those at the lower end of the pyramid.

That is also particularly evident in the provisions in the Bill that require clubs which are no longer regulated, by virtue of their relegation, to continue to comply with the duties set out. Part 5, for instance, states that some of these duties will be applicable for up to 10 years after the club has been regulated. This ratchet effect means that clubs could still be required to submit a whole host of information to the regulator, even when they have diminished resources because they have dropped below the lower limit of the regulatory ambit envisaged by the Bill. I hope that we can all see the potential for harms here and the risks of those harms growing.

I am grateful to the noble Baroness, Lady Taylor of Bolton, for drawing the Committee’s attention to her Amendment 72. We should all take a careful look at it in light of the debate that we have had. We will touch on it when we come to that group later on, but I appreciate that it is an attempt to make that sort of regulatory burden easier on clubs. When we come to it, I will ask her more on how her amendment envisages the regulator potentially paying some money to clubs. I will be interested to hear her set that out, but that is for another group.

Football is not only an extremely popular pastime but a vital part of our economy, and the financial health of clubs has to be protected, as my noble friend Lord Jackson’s Amendment 16 seeks to do. By mandating a thorough assessment of the financial implications of the new regulator’s regulatory actions, his amendment would guarantee that clubs’ sustainability would never be overlooked in the pursuit of regulation or reform.

The requirement for regular reports to be submitted to the Secretary of State and laid before Parliament would add to the Bill’s parliamentary oversight, which it currently lacks. It would enhance the transparency of the new regime that we will be bringing in through this law and allow for prompt corrective action, if needed. That is an approach which aligns perfectly with Conservative values, but one which I hope would garner support from every corner of your Lordships’ House. As my noble friend Lady Brady has reminded us, the Prime Minister has recently spoken, to my mind encouragingly, about the risks of overregulation and the need for growth. I hope that these points will resonate with the Benches opposite and with the Minister too.

My noble friend’s amendment seeks to safeguard the future of football while maintaining accountability to Parliament. I know that he would have tabled an amendment such as this if we were still in the last Parliament. If I had found myself at the Dispatch Box opposite, I would have been responding to it. I must say that I would have looked very favourably on it. I think it seeks to strike the right balance between regulation and the economic vitality and viability of football clubs. I hope the Minister will look favourably on it as well.