Football Governance Bill [HL]

Lord Maude of Horsham Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

I say to the Minister that, in looking at each and every clause of this Bill—and we are only on Clause 1—it is not as if one side is talking this out. Far from it; the majority of amendments tabled to the Bill come from the Government Back Benches. The reality is that there is a lot of concern. There would not be hundreds of amendments down on the Bill unless there was real concern about how it is drafted. This Bill is an enabling measure. It is no more than that. We are coming to that in Clause 2. It is an enabling measure, yet it is longer than the Great British Energy Bill. We must pause at some stage in these proceedings to reflect that, unless we get this light-touch regulation right, and unless we recognise the authority of UEFA and FIFA, we will jeopardise the financial success of football in this country and the right and opportunity of our footballers, both now and in the future, to play. That is not to say that it will not go through. This will go through, so, if it is going to go through, let us at least get it right.

[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.

[Lord Birt (CB)]

My Lords, absolutely nobody is going to support the idea of overregulation. I spent my whole career, however, in a highly regulated industry: broadcasting. The BBC was the result of a regulatory regime imposed over 100 years ago, and ITV was heavily regulated, with enormous benefits as a result. We have the best broadcasting system in the whole world, so good regulation makes things better. I agree that we do not want to see overregulation.

The strongest part of this Bill is that it tries to ensure that every club is well managed, and that is to be welcomed. Let us recognise that that has not been the general picture, and there is no club that I know of that has not been badly managed, including my own, at some point in its history. Somebody else gave the example that, for a few hours this weekend, Brighton were number two in the Premier League. That is absolutely 100% down to the fact that they have been exceptionally well-managed in recent years.

In my career, I encountered many boards of clubs at every level and, frankly, it was an extremely mixed picture. We name no names. Some of them I encountered were very well-managed, some were managed by rogues and many by people who had a bit of money—not enough money—and were attracted to football for the wrong reasons but completely and utterly lacked any ability to manage a club properly. The great strength of this Bill, in demanding proper boards and financial probity, will bring, I hope, a great improvement to the generality of English football down the leagues and have strong, competent boards wherever you look.

I cannot resist one short story. I know of a Prime Minister—I will not name who the Prime Minister was, but it is not the person you think that I am thinking of; it is somebody else—who was invited to a match and to have lunch beforehand. The Special Branch at Number 10 looked at all the other guests, and every single one of them had a criminal record. That is a true story. That is what we want to put an end to. We want good, strong boards and prudent financial management.

What is the justification for that intervention? It is all the things we have already mentioned. These clubs are not just normal commercial assets; they are deeply embedded in their communities; they have their own heritage; they have their own history; they are culturally important. That justifies appropriate and proportionate regulation and intervention.

Having said lots of nice things, I do have profound reservations about the mechanism for establishing fund flow down the pyramid, but that is a matter for later in our deliberations.

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[Lord Birt (CB)]

Is it not far more likely that the regulator will simply insist on having a good-quality, conventional board—I know from the noble Lord’s experience that he will know what that looks like—with a mix of skills, a proper CFO and a real sense of financial accountability and risk management? That is the direction of travel a regulator is likely to take. I am sure the noble Lord would agree from his experience that that tends to lead to strong institutions—and that is not a description of many football clubs at any level.

[Lord Maude of Horsham (Con)]

Before my noble friend responds to that, he is on a very important point here about the remedies that are available to a regulator where they have concerns. The noble Lord suggests that you put in some great and good, experienced, splendid people, and they will make it all better. We have rightly heard a lot from the noble Lord opposite about Brighton & Hove Albion. If a visionary owner had a view of how you could, by investing in the right way, in the right kind of players and the right methodologies, have a different approach to managing and developing a football club, what would a great and good, wise and sage board have said? It would have said “Ooh, very difficult”. Board members would have pursed their lips and sucked their teeth and possibly stopped there being this great success story.

What would a regulator have done? They would have said, “This all looks very risky. How can you justify this great vision you’ve got?” Would they, as my noble friend suggested, say “Well, you’ve got to put more and more money on deposit as a hedge against possible failure”? What are you then going to say to fans when they say, “Well, why aren’t you investing in the players that we need to create the success?” This is why so much of this is of concern. It goes back to the point we made earlier about sustainability. It is all about downward pressure. It is putting a cap on aspiration, vision, excitement, ambition and the possibility of having these great romantic stories of huge success. Is that really what we want the future of English football to be?

[Lord Markham (Con)]

I genuinely thank noble Lords for their interventions. We are trying to unpack and fix a tricky problem. I completely agree with the suggestion from the noble Lord, Lord Birt, about better boards; of course that is a good idea, but how does the regulator make that happen? Will it be given the powers to force people off boards? I have not heard that; I have not seen that anywhere in the Bill. I fully support recommending a stronger board, but how do you make it happen? The only remedy I see for this in the Bill, and which I keep coming back to, is that clubs have to deposit more money as a sort of punishment.

On the visionary business plan at Brighton, which really was visionary, a regulator at the time could have thought, “That looks a bit risky”—and it probably was a bit risky—“so how do I guard against that?” They could have wondered, “How much does this chairman know about football? He is a poker champion; that is brilliant. He believes in the stats. But he is probably not your conventional person, who you would be going to and asking for more money as a deposit”.

This is what we all keep coming back to. If the only remedy is that the clubs put more money aside—

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With those questions to the Minister, I am grateful for the opportunity to speak to the two amendments that stand in my name in this group, but particularly to try to underline the importance—at this regrettably late hour—of hybridity in the Bill.

[Lord Maude of Horsham (Con)]

My Lords, I want to pick up exactly the point that my noble friend on the Front Bench has eloquently started to unpack. It is my fault, but I had not thought about this aspect of hybridity until it was developed this evening. It seems that we have two mischiefs compounding on each other here. The Government are relying on secondary legislation to do something that could just as well be in the Bill, and the committee of which my noble friend is a very distinguished member—although whether junior or senior is not for me to judge—dealt with the Government’s purported reasons for not putting any of these things in the Bill in lapidary and devastating style. They knocked each of them down with casual ease.

The one reason, of course, that the Government did not put forward to the Committee, which the Minister—all praise and honour to her—has accepted as the principal reason, was that to identify the five top tiers in the pyramid in the Bill would have risked making it hybrid. However, the reason why we have a hybrid Bill procedure is quite specific. It is because, if you have a Bill that as well as having general effect has an effect on specific private interests, those private interests are entitled to a way of making their specific concerns directly clear to Parliament.

I remember 40 years ago, as a Whip in the other place, taking through the then Channel Tunnel Bill, which was a hybrid Bill, and a very Herculean effort it was, although it was well worthwhile. It was incredibly important that the private interests—many were affected by it—had the right to make their concerns known. Here we have one technique of putting something into secondary legislation which could easily be put in the Bill, and that is something which generally, in your Lordships’ House and in the other place as well, is generally deprecated.

Even worse is when the reason for putting it in secondary legislation is to suppress the ability of private interests—in this case, really important private interests, right the way down to the National League. There are way more than 100 clubs which, according to the Government, make up English football, which is an incredibly successful and important economic interest. We know, because the Government have said it, that those multiple private interests are the intended target for this legislation. So you have a parliamentary or legislative technique, which is to be deprecated in the first place, being used to frustrate a legitimate right of private interests, which have been identified by the Government as the proposed target for this Bill. Each of those two things on its own should be deprecated, but added together they should give the Government serious pause.

I sympathise with the Minister. She probably did not ask to be put in charge of this Bill and it must have looked like it was going to be quite straightforward, because my party’s Government mistakenly came up with the idea in the first place. It must have seemed like it would be a bit of a doddle to take it through; I am sorry for her that it has not turned out like that but, in every debate we have, something else comes up.

We are not playing games. We are talking about something really serious and important, which affects a lot of people’s lives and economic livelihoods. We are seeing more issues arise; as every layer is peeled away, something else emerges that gives us serious pause. So I urge the Minister to take this back to her department and colleagues and say that it is time to look at it again.

[Baroness Twycross (Lab)]

My Lords, before I respond on this group, I would like to say that I am absolutely delighted to be taking this Bill through Parliament. If somebody had asked me even six months ago if I thought I was going to have an opportunity like this, I would have doubted them, so please do not feel sorry for me in any form. I am delighted to be taking forward this Bill. I thank the noble Lords, Lord Moynihan and Lord Parkinson of Whitley Bay, and my noble friend Lady Taylor of Bolton, for their amendments to Clause 2.

I will start with Amendment 18 in the name of the noble Lord, Lord Moynihan. It is the Government’s view that the current definition of “team” is sufficient and that the definitions in Clause 2 already work as intended. Which clubs are regulated will be determined by which competitions are specified in secondary legislation, as noble Lords have noted. If those are initially men’s competitions only, as the Government currently intend, only clubs that operate men’s teams will be regulated. Restricting the definition of “team” in statute to men’s teams would not only limit the Secretary of State’s ability to bring the women’s game into scope in the future if it were deemed necessary but send the wrong message to all those girls and young women who play football about the value we place on their contribution to the sport.

The noble Lord, Lord Moynihan, asked what would need to happen for us to see women’s football brought into scope in the future. As he referenced, the Government do not believe that the case for statutory intervention has yet been met in women’s football. It should be given the time, space and opportunity to grow and self-regulate. If in the future it becomes clear that women’s football is suffering from a sustainability problem that the industry authorities have been unable to address, the Secretary of State will be able to conduct a formal review. This will of course include consultation with all appropriate parties. Based on that review, women’s football could be brought into scope.

Amendment 19 is in the name of the noble Lord, Lord Parkinson. I understand his desire to have upfront clarity in the Bill about which competitions will initially be in scope of the regulator’s regime. However, the amendment would significantly undermine the regulator’s ability to react to changes in the structure of the football pyramid in a timely manner.

The noble Lord, Lord Markham, questioned why we do not, for example, name the Premier League when it is obvious that it would be included. Names change, and we have seen the restructuring or naming of leagues, such as in 1992, when the First Division became the Premier League, and in 2015, when the Football Conference was renamed the National League. In such a scenario, failing to amend the scope in a timely fashion could result in the legislation becoming ineffectual and the regulator being undermined.

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[Baroness Twycross (Lab)]

I am slightly confused because the noble Lord is going from being proportionate to now appearing to want us to bring in further—

[Lord Maude of Horsham (Con)]

My noble friend just needs to know why. I hope that the Minister will forgive me for saying so, but that is not a satisfactory response. The problem here is that there seems to be no rationale other than saying it is reasonable and proportionate. On what basis? What is the basis for saying that? Why is the line drawn there? It feels completely random; you could just as easily draw it one up or one down. But if there has been a decision, and clubs up and down the country now have to prepare themselves for the likelihood that the Bill will go through and they will become regulated licensed entities, it is important to know why the line has been drawn in this place.

[Baroness Twycross (Lab)]

My Lords—

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[Baroness Twycross (Lab)]

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

[Lord Maude of Horsham (Con)]

But it is for the Government to decide whether to incorporate something in a Bill that might make it hybrid. She has clearly taken advice which concluded that putting the explicit leagues on to the face of the Bill would make it hybrid. So there was clearly a decision based on that advice to exclude the specificity from the Bill and put it into secondary legislation. I repeat my noble friend’s question: why was that reason not given to the committee?

[Baroness Twycross (Lab)]

The primary reason, as I understand it—and it was clearly the previous Government who drafted the iteration of the Bill and the stage of the Bill that we are now at in our discussions is identical to the previous Government’s Bill—was that naming the leagues would mean that, if there was any change in the names of the leagues, there would be an issue in terms of the legislation, as I have outlined previously. I am happy to write to noble Lords on this point.