Football Governance Bill [HL]

Debate between Lord Pannick and Lord Moynihan

Committee stage
Wednesday 15th January 2025 Lords Chamber

[Lord Moynihan (Con)]

I am equally keen to sit down so that we can hear the Minister respond. I was party to the letter from the EFL and to the reply from the noble Baroness, who set out clearly the steps taken during these negotiations, and it is simply not true to say that over the past 12 months no progress has been made. I hope that the noble Lord will agree that the proposal made by the noble Lord, Lord Birt, is a far more efficient, professional and collaborative way in which to make progress, and I very much hope that the Minister will echo that in her response.

[Lord Pannick (CB)]

My Lords, my response to the noble Baroness, Lady Taylor, is that the experience in litigation over recent years is that a requirement on parties to acrimonious disputes to mediate does often ensure a consensual settlement of disputes that seemed unable to be resolved—the formal process of mitigation. I declare, as I always do, my interests as counsel to Manchester City in disciplinary proceedings. I am a season ticket holder at Arsenal. I am interested to hear that the noble Lord, Lord Parkinson, is in the Caribbean; I had intended to go to the Emirates Stadium tonight to see Arsenal play Tottenham Hotspur, but I decided, on the basis of their recent form, that it would be far more entertaining to listen to the noble Lord, Lord Birt, and other noble Lords.

I just make two points about the amendments from the noble Lord, Lord Birt. I agree that they deserve close attention and I look forward to hearing from the Minister. The first is on Amendment 297A, on the appointment of a mediator. The noble Lord proposes that the person to be appointed must have held high judicial office. I say to him that, based on my experience, the best mediators are not necessarily those who have been judges. A mediator is not deciding anything; a mediator needs empathy and the ability to build a relationship of trust with the warring parties. I therefore respectfully suggest to the noble Lord that he may want to think about that point.

The second point that I raise with the noble Lord and the Committee is on his Amendment 297F. If I have understood his scheme correctly, there is a mediation stage, then there is an arbitration stage and then the ability for either party who is dissatisfied with the arbitration to take the matter to the Competition Appeal Tribunal. I point out to noble Lords that it is customary, where there is arbitration, that the power to take a matter that has been consensually arbitrated to a court or tribunal is very limited. That is the whole point of arbitration; it is to reduce the possibilities of further lengthy and expensive proceedings. The Arbitration Act, in most circumstances, limits the ability to go to court or to another tribunal thereafter to very specific and limited grounds. Again, the noble Lord may want to give thought to that.

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[Lord Moynihan (Con)]

I am very grateful to noble Lords who have participated in this debate. I think it has been one of the best debates we have had in Committee. I particularly highlight the contribution made by the noble Lord, Lord Birt, which is very relevant to the amendment. There is a huge difference in costs between light-touch regulation that is effective and appropriate and what he has identified in the 125 pages of this overcomplex and bureaucratic legislation —let alone the secondary legislation that will flow from it. If it becomes overcomplex and bureaucratic, it becomes expensive.

To get that balance right, which was an important point made by the noble Baroness, Lady Taylor, we need regulation. But football is regulated. The FA is the core regulator of both professional and amateur football in England. It has been absolutely absent from this debate. It has said nothing, to the detriment of its reputation as the national governing body of football in England. It is very sad that it has had nothing to say and no opinion. It is there to protect the autonomy of football and really should have come to the table and provided us with its thoughts. Indeed, I know that some noble Lords have written to the FA to ask it for a briefing on the Bill, and the FA’s response has been that it does not have a view on the Bill. We have no briefing. That is exceptionally sad.

[Lord Pannick (CB)]

Does that not tell the Committee something about the lamentable quality of regulation that the FA currently provides?

[Lord Moynihan (Con)]

Without a shadow of a doubt. My criticism is of the FA and its inability to be the core regulator for a professional sport. Indeed, in an earlier intervention this evening, the noble Lord, Lord Pannick, alluded to the fact that we need this Bill because we need a regulator to oversee solutions that would occur. I would have intervened on him, if I had not been eagerly awaiting the ministerial response, to point out that the FA should have been first and foremost in that role. It is sad and regrettable that it has not been.

I will briefly touch on other points that have been made. Of course, for the senior clubs in the Premier League this will be a burden, but less of a burden proportionate to the clubs that the noble Lord, Lord Bassam, and I are worried about in terms of cost. UEFA compliance is onerous, for example, and much of the compliance that UEFA imposes on clubs will need to be replicated. Clubs will need to look at it carefully to see whether there is overlap. My principal concern has been one shared with the noble Lord, Lord Bassam, at an earlier stage in this Committee: how much is this going to cost?

The amendment purely looks to try to resolve that question. There is an argument that it would not need to come before Parliament but can simply be published by the regulator, drawing on information from clubs. Indeed, the regulator will have to do that, but given the huge scope in potential cost that ranges from light-touch regulation to invasive regulation, along with the length of the Bill and the associated costs, it is appropriate that Parliament reviews that. Whether that is after six months or longer—as the noble Baroness, Lady Taylor, said—either way it is important. It is a one-off opportunity. After that, we will have the regulator reporting and the relevant reports coming towards Parliament.

The Minister, who has worked exceptionally hard and could not have been more helpful to Members of the Committee at all stages, said, having been handed a note from her Box—that has not been too frequent, which is to her credit as throughout this Committee she has relied very little on the Box for additional information—that the impact assessment has been based on similar regulators. There is no similar regulator in the world of sport, let alone the world of football. It is simply not possible to do that. The impact assessment is the reason I am so worried about the costs. It says:

“The proposed intervention is a bespoke, sophisticated and evidenced-based regulatory framework”.


The noble Lord, Lord Pannick, will recognise that phrase. That is exactly the quality of advocacy I would expect from him on any occasion—bespoke, sophisticated and evidence-based—but I might suggest that it does not come particularly lightly on the purse.

As a result, the costs associated with having that regulatory regime might be very considerable, especially when the very same paragraph states that the regulator, in the view of the Government,

“will be legally prohibited from intervening in football … or commercial … activities, thus limiting the potential risk of deterring investment”.

That is exactly the opposite of what the Bill sets out to achieve. Therefore, if these figures are based on that statement, they are erroneous and illusionary. They are fanciful pipe dreams. We really need an opportunity, therefore, to review the costs of regulation for all clubs six months after the Bill has been enacted. It would be very helpful to Parliament to see what those costs are at that stage and to reflect on them. For the time being, at least, I beg leave to withdraw.

Football Governance Bill [HL]

Debate between Lord Pannick and Lord Moynihan

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Lord Pannick (CB)]

I entirely accept that there are detailed regulations, in particular in relation to money laundering, but that is a far more specific area, where there is a government system and a whole army of people with expertise to assess those matters. The question is whether we wish to make it a function of the independent football regulator to have a whole department that is concerned with this. I see the force of the principle, but I remain sceptical about it in practice.

[Lord Moynihan (Con)]

My Lords, this is one of the best debates we have had in Committee to date. I am equally sympathetic to the points made by the noble and learned Baroness, Lady Butler-Sloss, and the interventions of the noble Lord, Lord Scriven, and the concern about the practicality of this, but none of that is covered in Amendment 200, which is in this group.

Let us just assume, hypothetically, that a state-owned entity acquiring a football club in England has an excellent human rights record and no problems with modern slavery. Under Amendment 200, it would be banned from owning a club in England because it is state-controlled. All the points that have been made are relevant and important, but Amendment 200, in the name of the noble Lord, Lord Bassam, is very specific and states that:

“No state-controlled club may be granted an operating licence”.


There is no reference to human rights abuses or to any of the important issues regarding the supply chain, which have been mentioned. It simply states that a foreign-owned, state-controlled company cannot own an English football club. If we pass this amendment, immediately we would then have to divest the Abu Dhabi United Group of its majority ownership of Manchester City and Saudi Arabia’s Public Investment Fund of its ownership of Newcastle United, to mention but two cases.

How have the Premier League and UEFA addressed this to date? They have focused on the word “control”. When the Premier League addressed the Newcastle ownership test, it received “legally binding guarantees” that the state of Saudi Arabia would not have control over Newcastle United in the event of any deal. However, the Bill goes much further. It grants powers to the regulator that are not just about control. An individual has to be considered who has

“a higher degree of influence”

over the ownership of a club. The control test that UEFA and the Premier League currently use, which is a tough test that takes up a lot of time and energy, is overridden by a requirement in this legislation—for the first time in sport—to test whether an individual has a higher degree of influence. There can be no doubt that the Crown Prince of Saudi Arabia, as chair of the PIF, has a very high degree of influence over that board —he appoints it. Indeed, a Minister from that board has been appointed to be chairman of Newcastle.

If we go forward and accept Amendment 200 as it stands, what would we be saying to football, to Newcastle, to the Qataris—who might want to acquire a company, which there has been much speculation about, not least in this Committee—and to Abu Dhabi in relation to Man City? It would drive a coach and horses through the current ownership of the Premier League. It would be a very serious decision by the Government to take state control over who owns the football clubs in this country.

I say that because it comes down to the degree of state influence that is behind the regulator. The Government have said:

“Regarding the scope of the tests, we recognise the trade-offs involved, and are aware of the range of corporate structures behind clubs”,


and they specifically mention here sovereign wealth funds. They go on to say:

“We are designing the legal scope of the tests with these challenges in mind”.


They call them challenges, to be faced down at the request of government. We would have an open back door in the Bill if we accepted the amendment in the name of the noble Lord, Lord Bassam, straying into foreign policy in a way that we do not currently do. We have plenty of legislation elsewhere on the statute book allowing the Government to intervene if they felt they needed to in a certain circumstance.

The Government have therefore further confirmed the scope of the regulator. To me, it is incredibly important that the regulator is not given so many powers as to require it to have direct influence. I lost an amendment on Monday night, when I asked for that at least to be defined and for consultation to go out to find out what “significant influence” means in this context. I think that is extremely important.

I have a question for the Minister. I cannot find an answer as a result of the debates we have had so far, but football needs an answer and probably needs it now. Is it the Government’s position that the Crown Prince, Mohammed bin Salman, should be able to own Newcastle United under the definition of ownership in the Bill? It is a very simple question, with a yes or no answer. If yes, why have Ministers deliberately constructed a Bill that will quickly put him through the ownership test of significant influence, and why did the Minister confirm on Monday that she wanted incumbent Heads of State to be tested? If no then surely the Government should say so, and we should have that as part of an open debate.

I hope that, if that question is answered this evening, there will be no doubt in future about what the Government intend, not least following the Prime Minister’s visit to Saudi Arabia last week and his offer to go to a football match with the Crown Prince. It is only reasonable for Saudi Arabia and the Crown Prince to know whether he is expected to divest himself of the interest in Newcastle United or not.

Football Governance Bill [HL]

Debate between Lord Pannick and Lord Moynihan

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Moynihan (Con)]

The noble Lord, Lord Bassam, has made some important points and, of course, everything I have said is based on the fact that those clubs will be following that. They are basic conditions that any organisation, not least a football club, should follow. All my amendments—I have studied them carefully—seek to make it easier to ensure that the clubs follow those procedures and that the uncertainties and vagaries in the current drafting of the Bill are clarified, making it easier and more efficient for clubs to meet their obligations as companies and football clubs in the professional leagues.

[Lord Pannick (CB)]

The noble Lord, Lord Parkinson, posed a number of questions about the operation of Part 3 in relation to licensing functions. I will add one further question, to which I do not necessarily expect an answer today. Pursuant to UEFA regulations and delegation from the FA, the Premier League currently licenses clubs for the purposes of their participation in UEFA club competitions. I declare an interest as a season ticket holder at Arsenal Football Club—I realise that some of the other clubs supported by noble Lords would not have an interest in this matter for various reasons. My question is: will this function of the Premier League be affected by Clause 15 or any of the other clauses in Part 3?

Football Governance Bill [HL]

Debate between Lord Pannick and Lord Moynihan

Committee stage
Monday 9th December 2024 Lords Chamber

[Lord Pannick (CB)]

I point out to the noble Lord that the whole point is that this regulator is independent. Obviously, it is influenced strongly by government decisions, but it is independent. Surely, many of the concerns that the noble Lord is expressing—as, indeed, is the noble Baroness, Lady Fox—are answered by the appointment of a sensible regulator who will act in a proportionate manner.

[Lord Moynihan (Con)]

I only wish I could say to the noble Lord that that is what we have in front of us. Had we had the opportunity to sit with him and explore each and every clause as we have gone through this, we might have been able to say so, but that is not the case. This is not light-touch regulation. This is not even regulation that you find in the Companies Act.

Let me give the noble Lord a quick example; I risk admonition for repeating a point that I made earlier, but I will make it very quickly indeed. When you give powers to the regulator to explore not just the controlling influence of a football club but those who “significantly” influence a football club, those are very different roles. You have “controlling” in the Premier League; you have “significant influence” in the Bill. Significant influence can reach back as far as the Crown Prince, who has significant influence over the PIF, which owns Newcastle, whereas, by definition in this Bill, he does not control that club, nor would the Premier League investigate him on that basis.

So it is reasonable to accept the noble Lord’s premise—I wish it were true that this is light-touch regulation—but, in reality, this is incredibly intrusive, highly detailed regulation. It goes further than the regulation I put in place in 1990 when I was the Minister responsible for water privatisation and we were setting up Ofwat. That was light-touch regulation in comparison with this extraordinarily detailed Bill. That is the most important point driving my concern about unintended consequences—what some people call the “mission creep” of regulation.

I turn to the amendments. Given that we are going to have a Bill for the reason that the noble Lord, Lord Blunkett, said—there is all-party support for having legislation of this kind—we may as well get it right. There is real merit in looking at the amendment from the noble Lord, Lord Blunkett—backed so eloquently, as ever, by the noble Baroness, Lady Grey-Thompson—which would

“ensure regulated clubs have a clear, appropriate governance structure with a board consisting of executive and non-executive directors enabling decisions to be taken collectively”.

I hope that it would not be just regulated clubs. I hope that all clubs in all sports would do that, because the benefits of having both executive and non-executive directors is well known to those of us in sport—not least in the British Olympic Association, which I had the privilege of chairing.

The noble Lord, Lord Mann, has widespread support in this House for the work he has done on anti-Semitism and anti-Semitism training. I am glad that he tabled his amendment, because it gives us an opportunity to thank him on behalf of sport and on behalf of football. That work has been absolutely critical; I say this not just as a fellow Leeds fan but because, across sport as a whole, it is vital that we put equality, inclusion and diversity right at the top of what we do.

We are expected to do that outside football. I have an interest to declare as the chair of Amey, which has some 13,000 people. Almost the first thing that I did as chairman was set up an ESG committee immediately beneath the board and chair it so that I could ensure inclusion and diversity were right at the heart of our policy and were in the DNA of everybody who worked in that organisation. I do not believe that that is different from sport and I do not believe that that is different from football.

So, if we are to have legislation—which, as noble Lords know, I regret—let us get this right and listen carefully to what the noble Lord, Lord Blunkett, said in the first 50% of his speech, and to the noble Lords, Lord Knight and Lord Mann. There is real merit in the Minister taking this away and thinking about what we would expect to see from the regulator in this context.