Football Governance Bill [HL]

Lord Markham Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

I would welcome a definition of what sustainability is and where that is to be found, but please remember that we are not doing this because football is in a great place at the moment. The people at the top may have plenty of air and light, but the people below them are struggling, and we have decided that we want to keep these structures, including of promotion and relegation. If we keep that in mind, the progress of the Bill will be quicker and saner.

[Lord Markham (Con)]

My Lords, I will speak to my Amendment 13. I echo the points made by my noble friends Lord Maude and Lord Jackson: if the Chief Whip had stayed and heard the debates last week and this week, he would have found real experts and real, passionate supporters—dare I say fans—scrutinising the Bill and making sure there is real health and success there. I believe we would all be doing this whatever colour of Government had introduced it.

Last week, if noble Lords recall, we were left scratching our heads somewhat about how there was some sort of aversion to the use of the words “growth” and “success” in all this. That is what we are trying to address in Amendments 12 and 13, both with a similar purpose. To answer the noble Lord, Lord Addington, this is vital because the pyramid structure and the health of all clubs depend on the health at the top of the Premier League, because the redistribution of that money funds so many of the other clubs and is allowing the Championship to be the sixth-richest league in the world as a result.

I really do not understand the Government’s reluctance to engage in these types of measures. There are precedents in other regulators. Everyone knows about the Bank of England’s inflation target, but also within its targets is a target to facilitate the international competitiveness of the UK economy and its growth in the medium to long term. Other regulators such as Ofcom, Ofgem and Ofwat have a growth duty to look at innovation, infrastructure and investment, competition, skills, efficiency and productivity, trade and environmental sustainability. It is very clear that other regulators are being asked to consider these other measures of overall success in their objectives.

Why does it matter? Like other noble Lords, I think the meeting we had with the shadow regulator last week was very helpful. It is undoubtedly true that the intentions of all the people there are very good. Like all of us, they are trying to make sure that the game we love is protected, but the shadow regulator’s thinking on sustainability is very much in the mould of a bank regulator’s. The main method it sees achieving sustainability is to insist—as the FCA does with banks—that a certain amount of money is put on deposit to give a buffer, a certain comfort, to clubs. Numbers have been bandied around—it may be £20 million or so per club in the Premier League. Those are large numbers; £400 million will go out of the game because it will be held in aspect. That amount of money has a real impact. If the regulator has only a one-dimensional objective on sustainability, it will always be weighted towards putting more and more money aside as a buffer. However, if it has other objectives in its definition of sustainability, it will take other factors into account.

I think noble Lords know that all the successful companies we see today, such as the magnificent seven that people talk about—the Googles, Microsofts, Facebooks and Teslas of the world—had an early start-up stage when there was heavy investment and their costs far exceeded their income. We absolutely see that in football clubs. The story of Brighton was mentioned earlier, and I happen to know a thing or two about it. I think we would all agree that it is a fantastic success story. For years and years, that success was reliant on Tony Bloom, the owner of Brighton, putting his hand in his pocket to invest more in players than the club’s income. He believed that, just like in any start-up company, you have to make that investment. That will build success, and from that you will manage to get promoted and get to a more and more sustainable position. He was able to achieve that.

Not every club can achieve that because, as we all know, not every club can get promoted. But the danger is that if the regulator’s only dimension is sustainability, it would look at business plans such as Brighton’s and say, “Hang on, they’re going to run a deficit if they stay in that league. That doesn’t sound very secure. How are we going to guard against that? We’ll make them put a certain amount of money into escrow as a buffer”. That will undoubtably dampen innovation, which is exactly the opposite of what we want. We all know that the beauty and the strength of English football are in the fact that clubs can get promoted and go on to do wonderful things, and we all know of plenty of examples.

Unless a regulator has more than one dimension—more than one club in its locker—it will only ever look at the sustainability angle and put more and more money aside. That is where I am coming from with Amendment 13, which is similar in intent to Amendment 12. It is from my knowledge of selling TV rights and of what people are really looking for. It is all about TV viewership, sporting competitiveness, the income that is generated and match attendance. To the point from the noble Lord, Lord Watson, those things are all clear and measurable; they are all things that a regulator should want for the health of the game.

I hope that when the Minister answers, she will let us know why we would not want to follow the lead of the regulators of the Bank of England, Ofwat, Ofgem or all the others, and give this regulator more than one dimension. I know the Minister really wants to see the health of the game and that everyone has good intentions. That is why this debate is so good—we all want what is best for the game. Widening the basket of measures that the regulator seeks to achieve can be only good for the health of the game.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to my noble friends Lord Markham and Lord Maude of Horsham for speaking to their amendments and for setting out the case for them. Before the Minister responds to them and to my Amendment 7, which I moved at the outset, I should say that I am not precious about my amendment vis-à-vis those of my noble friends in this group, Amendments 12 and 13.

The noble Lord, Lord Watson of Invergowrie, said that he did not like my wording and found it rambling and insubstantial. I take no offence; I simply took the wording that the Government used in the Explanatory Notes and sought to put that in the Bill. If he finds that rambling, it may be that the Explanatory Notes are as well.

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[Lord Goodman of Wycombe (Con)]

My Lords, I declare an interest of a kind as a season ticket holder at Wycombe Wanderers, who are still top of League One, as they were when I spoke at Second Reading. Therefore, I would count as a fan under the definition in Amendment 17A, spoken to by the noble Lord, Lord Watson of Invergowrie. However, I want to describe a group of people who would not count, as I think it casts some light on our proceedings as to what the regulator might say and the Government’s view.

Last year, a Spanish-language YouTube channel, La Media Inglesa—I hope I am pronouncing it correctly; it is apparently the largest football YouTube channel—wrote to every single EFL club asking why Spaniards should support their club. Wycombe Wanderers were the only club to reply in Spanish. As a consequence, 100 Spanish supporters turned up to see Wycombe play Derby County at Adams Park, then again for a game against Sheffield Wednesday, and then again to Fratton Park for a game against Portsmouth—and so on, and so forth. They greatly enlivened the proceedings by waving their scarves, chanting loudly and showing commitment—to pick up the word just used by the noble Lord, Lord Addington—to their team.

The point we are trying to get to the heart of is not exactly who we think is a fan, but what the regulator’s view will be and what the Government believe the regulator’s view might be, given that “fan” is not defined in the Bill. There is obviously common sense in the approach just taken by the noble Lord, Lord Mann, among others. He suggested that, logically and intuitively, there must be some sort of difference, in respect of interest in the ownership of the ground and the prices of tickets, between fans who live in the broad locality and fans—however committed—who travel to the ground from a great distance away.

That is precisely what we need to hear a view about from the Government Front Bench. What I suspect the Minister will say—knocking the issue back across the Benches—is that these are matters for clubs to decide for themselves. If that is the Government’s view, then the Minister in due course should tell us.

[Lord Markham (Con)]

My Lords, I rise to speak to my Amendment 17. What we have seen today, and I am glad that the Chief Whip has been here to witness it, is a passionate and informed debate. Perhaps it will give him an understanding of why the debate may be lengthier than one might have hoped. Not surprisingly, 15 or 20 noble Lords have spoken and we have probably had 21 or 22 different definitions of what a fan is—so none of us underestimates what a complicated area this is, but what we are all united in is that it is vitally important and, as such, it should be in the Bill. That is what we are asking the Minister to reply on.

I am probably biased, but I happen to think my Amendment 17 tries to take those different aspects into account, saying that fans are

“individuals who … identify with the club, engage with the service the club provides, and have an interest in seeing the club succeed”.

Bringing in the service that the club provides is trying to take into account that wider commitment and interest in it. I completely agree with the noble Lord, Lord Mann, that the most dedicated version of that is the season ticket, but we also know that there are massively long waiting lists for season tickets. Does that mean that people who are on a waiting list or people who cannot afford a season ticket somehow count less? That is why my wider definition talks about people who engage with the services of that club to try to take that into account.

I think we all agree with the noble Lord, Lord Watson, in his amendment that giving the independent regulator a definition to work to is vital, because this is at the core of what a club is. In any consultation that a club has to undertake, it needs to be clear who it is consulting with.

[Lord Moynihan of Chelsea (Con)]

My Lords, I rise to speak against Amendment 17A, tabled by the noble Lord, Lord Watson, and in favour of Amendment 17, tabled by the noble Lord, Lord Markham. The noble Lord, Lord Watson, has clearly thought very carefully about this and I agree with a great many of his nuances and analyses of what a fan is. I also agree with much of what the noble Lord, Lord Mann, said, although not about the localism.

Why are we talking about San Francisco or South Korea fans? It is because, surely, the purpose of this Bill is to sustain and continually improve the commercial and financial success of football, not to introduce some more nebulous—indeed, I would say suspicious—metric that we could conjure up on social grounds or whatever. If we are here explicitly to damage the commercial and financial success of football, let us admit it—but, if we are not, let us then look at the consequences and implications of that.

What is a fan? Can it only be a season ticket holder? The noble Lord, Lord Goddard, said about fans, “These are working-class people”. As an unregenerate member of the middle classes since childhood, I sort of resented that, but let us go with it. I am sure that the noble Lord, Lord Watson, is a champion of the working classes, but how many of the working classes can afford a season ticket? When I was 10 years old, I would jump on a number 11 bus and go down the King’s Road to Stamford Bridge. I only got there once a month maybe, by not having a gobstopper or a Barratt sherbet every day and saving up the five bob it cost me to get into the ground. I could not afford a season ticket. Fine, you could say that I should not be consulted, either, any more than children of 10 should be allowed to go on social media.

When I was an undergraduate of 21, I could not afford a season ticket but I was a fervent Chelsea fan. Later, I became a season ticket holder. Did I suddenly become worthy of consultation because I had managed to get a job that helped me afford a season ticket? Then when I moved abroad for a couple of decades, to study and work, did that disqualify me from being a fan? Then when I came back and got a season ticket, was I suddenly qualified to be a fan again? It is nonsense. If we are thinking about the commercial and financial success of this industry, we should follow the commercial and financial logic: my noble friend Lord Finkelstein was quite eloquent about that just now.

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[Lord Goodman of Wycombe (Con)]

My Lords this series of amendments raises an issue that will come back again and again during Committee, which is a clash of priorities. I will introduce it by again reading out a section from Tracey Crouch’s original report, in which she refers to

“the fragility of the wider foundations of the game. It is both true that our game is genuinely world leading and that there is a real risk of widespread failures and a potential collapse of the pyramid as we know it”.

In other words, we are being told, on the one hand, that football is so financially troubled that we need a state regulator to guide it and, on the other hand—in this series of amendments and others to come—that we must load the regulator with additional responsibilities.

As my noble friend Lady Brady said, these amendments relate to climate change, but we will have more on fan safety, the regulation of women’s football, the expansion of the regulator to other leagues and others on environmental sustainability. On and on they will come. There is a fundamental tension between loading the regulator with these responsibilities and the state of football as the Crouch report described it and as the Bill attempts to address.

There may be other ways of meeting these environmental objectives. I will avoid being drawn into the adverse exchanges between my noble friends Lord Deben and Lord Moynihan of Chelsea. There may be other ways in which clubs that lead on environmental action can help clubs that do not. As matters stand, the regulator, were these amendments to come into force, would be imposing on clubs that have, for better or worse, not thought about these matters at all, requirements that would affect how fans come to the games, how they treat their pitches and how they deal with litter—all matters for which they are completely unprepared.

If the Government are correct in stressing—as they have done throughout in talking to Peers; the Minister has been generous in doing this before and during the Bill—that they do not want the regulator to have a heavy touch, I look forward to the Minister explaining the other ways there might be to encourage clubs to take responsible environmental action besides accepting these amendments to the Bill, which might have effects we do not expect or want on clubs that are in financial difficulties—the very basis, after all, on which the Bill has been brought forward.

[Lord Markham (Con)]

I join in with the sentiments expressed by many other noble Lords. I made the point at Second Reading that, however well intentioned, noble Lords came up with seven new commitments they wanted the regulator to be involved in. This all starts from the premise that we believe it should be a light-touch regulator and the unintended consequence is that each one, however well intentioned, can add another burden, as so ably explained by my noble friend Lady Brady. I, like others, am fearful of adding something new to the Bill.

I would like to explain a slight difference. In her response to the first group, the Minister talked about mission creep regarding how we were trying to expand the sustainability argument to other objectives of the regulator; for example, to some of the income-generating TV advertising. The key difference here is that we were trying to talk about the action the regulator takes—the measures the regulator might take to force clubs to put down a deposit to cover their sustainability requirements, and whether the regulator should have wider criteria beyond financial sustainability regarding the wider benefits of the game. Those sorts of things are appropriate because they look at what the regulator is responsible for and its objectives. Thing that put new burdens on the clubs come into a different category. They come into the mission-creep category, so to speak, which I, like other noble Lords, are reluctant to add in.

So, although I support the points made by other noble Lords, I would make that distinction. When talking about things the regulator might do that might impact clubs we should make sure that the regulator looks at the wider benefits of the game but we should not look to add extra burdens on clubs, however well intentioned.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to the noble Lords, Lord Bassam of Brighton and Lord Addington, to the noble Baroness, Lady Jones of Moulsecoomb, to all noble Lords who have contributed to the useful discussion on this group of amendments, and to the noble Baroness, Lady Taylor of Bolton, for her Amendment 15, which the noble Lord, Lord Bassam, and the noble Baroness, Lady Jones, spoke to on her behalf.

We recognise the importance of environmental sustainability and the target to reach net zero greenhouse gas emissions by 2050. It was, in fact, as noble Lords know, the previous Government who introduced and passed the law to ensure that the United Kingdom reduces its greenhouse gas emissions by 100% from 1990 levels by 2050. In recent scrutiny of and debate on other legislation before your Lordships’ House, we on these Benches have discharged the duty not just of the Official Opposition but, importantly, of sparking several debates on environmental sustainability and protection.

My noble friends Lord Gascoigne and Lord Roborough tabled an amendment to the Water (Special Measures) Bill to make provisions for nature recovery and nature-based solutions. We also supported and helped to pass an amendment to the Crown Estate Bill to require the Crown Estate commissioners to assess the environmental and animal welfare impacts of salmon farms on the Crown Estate.

I am very proud of those demonstrations of our commitment on these Benches to the protection of the environment and I am sorry that the Government did not support the sensible provisions brought by my noble friends Lord Gascoigne and Lord Roborough on the water Bill. But I am not persuaded by the amendments in this group because I am not convinced that they are the proper responsibility of the new independent football regulator. I worry that additional requirements—in this case on environmental sustainability—will place a further burden on football clubs.

Amendment 15 in the name of the noble Baroness, Lady Taylor of Bolton, supported by the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Jones of Moulsecoomb, requires clubs to operate

“in a way that will achieve net zero … by 2050 … materially reducing negative impact on the natural world”.

Amendment 55, tabled by the noble Baroness, Lady Jones, adds an environmental sustainability objective to the list of objectives for the independent football regulator under the Bill.

These are important and noble causes, but they will be, as this debate has highlighted, very costly duties that some of the clubs, particularly in the lower leagues of the football pyramid, might not be able to discharge. This speaks to the tension that the noble Lord, Lord Goddard of Stockport, mentioned in our debate on the previous group about making sure that we are thinking about clubs of all sizes and at both ends of the leagues with which the Bill is interested. There is a great difference between their financial and administrative ability to discharge some of the duties the Bill will place upon them. The clubs in the lower leagues of the pyramid are significantly smaller than those at the top and have far fewer available resources.

Even with the Bill’s efforts to help with the financial flows throughout the football pyramid, we should be mindful of the concern about whether these clubs will be able to cope with these further regulations, particularly, as my noble friend Lady Brady pointed out, in light of the additional burden placed on them by the Government’s new taxes on employment through expanding the scope and rate of national insurance contributions. Given the additional costs to football clubs from measures such as that and the other measures we will look at in the Bill, such as the industry levy, the costs of compliance with the financial regulations and so on, I fear that these amendments mean further regulatory burden on clubs at both ends of the spectrum.

It is important to note, as noble Lords have reminded us, that clubs and leagues have already voluntarily adopted and embraced elements of environmental and sustainability governance rules. In February this year the Premier League clubs met and agreed a Premier League environmental sustainability commitment. That means that each club in that league has agreed to:

“Develop a robust environmental sustainability policy”


by the end of the current season,

“designate a senior employee to lead the club’s environmental sustainability activities”,

and

“develop a greenhouse gas … emissions dataset … by the end of the 2025/26 season”.

My noble friend Lady Brady set out some of the other excellent work that has been done on a voluntary basis, but with enthusiasm, by clubs in the Premier League.

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[Lord Goddard of Stockport (LD)]

I support the noble Baroness, Lady Brady, in what she and the previous speaker have said and in all the work that she does. It is all there in the Deloitte report on the Premier League. The Premier League has missed a trick; the pages of the report show where the money goes and how it is spent, and it is all very laudable. Premier League football clubs, independent of the Premier League, do great schemes as well. Manchester City’s City in the Community started in 2003 with no funding from the football club, apart from one officer and that was Alex Williams, an England goalkeeper, who has just retired after doing 20 years at City in the Community. That is an example of the social responsibility of football clubs.

The reasoning behind these amendments, even though they may be just probing amendments, is that those things that can be given can be taken away. If football clubs in the Premier League fall on hard times and things have to stop being done, they may stop doing the things they do not have to do, and that effect will invariably come down to the poorest parts of the pyramid.

All we are trying to say with these amendments is: let us acknowledge the social responsibility that the Premier League has and the Premier League football clubs deliver but let us give the regulator the ability to ensure that that carries on. My noble friend is not being prescriptive and saying, “You should all pay that much”, but he wants to ensure that, to avoid unintended consequences, football clubs do not suffer in the event that some Premier League clubs or the Premier League itself cannot deliver those benefits in future years. I have no reason to think that will happen, because the Premier League is getting bigger and going global and more money is coming in, but that is the point of the fan-led review. How many football clubs did the review show were one match away from disaster? That why we are looking for a regulator. Sometimes the unintended consequences are too dire, especially for smaller clubs.

[Lord Markham (Con)]

Like others, I have a dilemma, in that I am mindful that the noble Lords, Lord Addington and Lord Bassam, and the noble Baroness, Lady Taylor, are well intentioned and, on the whole, I agree with what they are trying to do. However, like others, I feel that there is the danger of mission creep. This is another area—we will be speaking about others later tonight, and over the next few days there are other areas that we will be adding—where each one on its own might not feel like a lot, but if we add layer upon layer, we move far away from the original intention of being a light-touch regulator and towards one that becomes overbearing.

It has been an education, probably for all of us, to hear, as my noble friend Lady Brady was saying, about the good acts that the Premier League is doing with local communities through local football clubs. There is probably more that can be done to make sure that the awareness of those, as the noble Lord, Lord Goddard, was saying, is enhanced and greatened.

Generally, the idea, as my noble friend Lady Brady was saying, of having a meeting with the noble Lord, Lord Addington, and the Premier League to see how that can be more fostered, encouraged, known about and channelled is probably the right way. Where things are working, I much prefer the use of the carrot than the stick.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, this has indeed been a good and very valuable debate. The issues which amendments in this group address are in a slightly different category to some of the additional duties and areas into which amendments in other groups have sought to take the work of the regulator and the scope of the Bill because, as the noble Lord, Lord Addington, said in opening, nothing has the reach of football.

These amendments speak to sustaining the future of the game and making sure that clubs can continue to do the work in their communities which noble Lords have spoken about passionately from Second Reading onwards. Particularly, the noble Lord’s Amendment 247 is about making sure that they are facilitating

“training for young women and girls”

and that the valuable work done in recent years is extended there. Like others, I was struck by the powerful contribution from my noble friend Lady Brady, who said that these are responsibilities which are authentic and deeply felt by clubs. She gave examples, drawing particularly on her experience in the Premier League. I agree with the points that my noble friend Lord Hayward and others have made: perhaps that work ought to be better known and the clubs should blow their trumpets more loudly, not just those in the Premier League but clubs at every level that are doing important work.

It might be helpful to flag to the Committee that the Premier League and the EFL already have rules in place regarding corporate responsibility. Section K of the Premier League’s handbook has a whole host of rules including, to name a few, a safety certificate and medical facilities, ground rules and regulations. Those are but some of the requirements already placed upon clubs. The noble Lord, Lord Addington, rightly highlighted the work done by the EFL through the awards that it presents to clubs that are doing valuable work in this area.

Amendment 151 from the noble Baroness, Lady Taylor of Bolton, the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Grey-Thompson, seeks to impose additional reporting obligations on the executives of football clubs. While transparency in this important area is an admirable goal, it is important to bear in mind proportionality and, again, to echo the concerns that have been raised about adding to the duties of clubs and their executives in other areas, clubs, especially those lower in the league structures, already face significant financial and administrative pressures. Requiring more and more reports on a growing list of matters could strain their limited resources and have an opposite effect to that by which noble Lords are motivated when they bring their amendments. We have to bear in mind that a one-size-fits-all approach to corporate governance would fail to recognise the diversity which we should be mindful of in the financial ecosystem of football.

Amendment 165 from the noble Baroness, Lady Taylor, aims to compel clubs to adhere to certain corporate codes beyond those which the Bill would currently mandate. As we keep reminding ourselves, football clubs are not merely businesses; they are community institutions with unique identities and relationships with their supporters. While it is a useful idea, we also have to be careful of imposing rigid corporate structures designed for companies in other sectors, which could risk alienating clubs from their communities. We have to find ways to ensure the sort of good governance that the noble Baroness seeks without overburdening clubs with corporate obligations that could conflict with the broader role that they play—and always have played, as the noble Lord, Lord Addington, my noble friend Lady Brady and others have reminded us this evening. Like others, I favour encouraging that work to continue voluntarily, but it would be valuable for a spotlight to be shone more brightly on the work being done, not just at the top end of football but all the way through.

The noble Baroness, Lady Grey-Thompson, thanked the Minister for answering the very good question that she raised at Second Reading about what would happen in the event of conflicts between the Privy Council and Senedd Cymru. I had a quick look again at the Minister’s helpful letter of 27 November and I do not think it was covered in that. My apologies if I have missed the answer that the Minister gave the noble Baroness but, if it was not in that letter, could it be shared with other noble Lords? It was a very technical question but an interesting one, at least to me, so it would be useful if the Minister is able to share that with the rest of us. But with that, I look forward to her response.