Football Governance Bill [HL]

Baroness Brady Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

[Baroness Brady (Con)]

My Lords, I rise to speak in support of Amendment 16, tabled by my noble friend Lord Jackson. The amendment would require the regulator to take into account the economic risks of overregulation and report against this risk. I am sure this is an approach that will interest all parts of the Committee, especially, as my noble friend Lord Jackson reminded us, as the Prime Minister himself recently made such a high priority of reducing the impact of regulatory burden on British investment and growth.

We should consider the Prime Minister’s words carefully. He spoke of breaking free from the trap of excessive regulation, of removing needless barriers to investment, and of ensuring that regulators take growth far more seriously. Yet, here we are again, at risk of creating a new regulator without proper safeguards against exactly these risks. Indeed, the Department for Business and Trade this year published a report on smarter regulation, which described the problem in stark terms:

“Good regulation allows our markets and societies to function. However, there is strong evidence that points to our regulatory culture acting as a drag on our ability to generate economic activity, innovation and to attract investment. The regulatory environment is often confusing and sometimes features of it appear to exist for the benefit of the regulators, rather than the industries who they regulate, consumers or Britain as a whole”.


We must take care to guard against our regulatory culture having a similarly damaging impact on British football.

As other noble Lords have pointed out, the Premier League represents one of Britain’s most successful exports, contributing £8.2 billion annually to our economy and more than £4 billion to the Exchequer, while supporting more than 90,000 jobs. Already, we are seeing concerning signs in the Bill: undefined ownership tests: parallel regulatory requirements; unproven intervention powers; and sweeping powers to redistribute Premier League revenue. Each adds complexity and risks that could deter the very investment that we need.

The Premier League competes globally for capital, for talent and for attention. Excessive regulation could quickly diminish its appeal to serious investors, with knock-on impacts for the pyramid which relies on the Premier League. As the chief executive of the Premier League has said in relation to this Bill, we must not wound the goose that lays English football’s golden egg. It is that egg that supports so much of the good work that we discussed earlier and the football pyramid as a whole.

The Prime Minister pledged to “march through the institutions”, ensuring regulators take growth seriously. Yet this Bill creates a regulator with no equal duty to consider success, economic impact or growth alongside the very vague notions of soundness and resilience, which, as I said earlier in this Committee, have no clear end state. We can have both effective regulation and economic dynamism, but only if we build in appropriate safeguards from the start. Without them, we risk creating exactly the kind of bureaucratic barriers to investment that the Prime Minister has correctly identified as holding Britain back.

[Lord Hayward (Con)]

My Lords, I rise to support the amendment in the name of my noble friend Lord Jackson. I will concentrate particularly on both the impact assessment and what my noble friend Lord Maude was referring to: the impact on small businesses. Following on from the comments of the noble Lord, Lord Birt, when I made my comments at Second Reading, I emphasised that my concerns are not that there are no problems; the question is how we actually tackle the problems that exist in the industry while not damaging the success.

I have made a number of references to the impact assessment, and I quoted from it earlier today. On page 8, paragraph 17, it states:

“This Impact Assessment (IA) provides evidence and analysis to support the government’s case for intervention”.

I am concerned after reading the impact assessment that, as my noble friends Lord Jackson and Lord Maude identified, the impact is not on the big companies. Anybody who has sat on the side of an industry, as I did when changes were made to licensing law, for example, knows that it is not the big companies that are affected by such changes. They have the resources. It is the small companies that are confused, concerned and lost. They do not have a specialist to deal with the minutiae of a clause. I was the chief executive of the British Beer and Pub Association at the time, and it was an enormous task to guide smaller companies through the issues they faced. For me, the impact assessment dramatically underestimates the impact that small companies face in these circumstances.

I will come back to other elements later, but I am particularly concerned—and am referring to page 53 onwards—about the identified benefits that are supposed to accrue to the industry. The costs are dealt with, but I must admit that I am not convinced. On the indirect benefits, paragraph 225 comes up with a wonderful sentence:

“These indirect benefits are extremely difficult to quantify, given the range of variables that will affect the profitability of individual football clubs. Therefore, these are not quantified in the appraisal”.


Paragraph 227 says:

“These benefits are extremely difficult and speculative to quantify and therefore are not quantified in the appraisal”.


The noble Baroness, Lady Taylor, will no doubt be relieved that I have not entered into any word counts on this occasion.

On accruing benefits for the community, paragraph 233, on page 54, states:

“The model states that the results of this contingent valuation survey of football users and non-users shows that people positively value the club they support/their local club and would be willing to pay an annual subscription to support it”.


I find myself at a loss to believe that my noble friend went round the streets of Wycombe or any other community and asked, “Would you be willing to pay X sum to support the club?” The suggestion that large parts of any population are

“willing to pay … to support”

their local club is really stretching credibility far.

This comment was made as a result of some work undertaken by Ipsos, an organisation for which I have high regard and with which I deal on polling. But the next paragraph, 235, refers to the following:

“DCMS guidance states that a lower bound”—


I am not sure whether the authors intend “bound” or “band”—

“95% confidence interval of willingness to pay (WTP)”.

That is rather like talking about turnout at a general election by asking people whether they are going to vote. I checked with a pollster this morning, and the mean answer given is 80%. The turnout at the last election was 60%, so there was an error of a quarter or a third, depending on whether you go upwards or downwards. To suggest that you can quantify the willingness of a community and people in the street to pay to support their local club stretches the bounds of credibility.

But on page 56 we have a breakdown, in detail, of the willingness of each region of the country to pay a sum to support its local club. There has been infinite reference to the fact that the support for clubs crosses from one place to another. Therefore, if you are contributing in the north-east or in London you may not be willing to pay to support a specific club. It is not surprising that London is identified as the place where people are most willing to supply most money, but it does not say whether the sums involved include a season ticket. Many of the people who answered the question will have thought, “Well, I actually pay in the form of a season ticket already and therefore I am contributing”.

What is depressing about the impact assessment is that it goes into such detail in relation to the benefits that will be gained from this legislation, but there is no attempt to identify what the clubs will have to pay. I am not talking here about the Premier League clubs; I am talking about the small clubs. In her response to the points that I and others raised at Second Reading, the Minister said that the costs would be proportionate. But no figures are given. I find it barely credible that such detail can be provided to identify how much people from each different area of the country are willing to pay, but there is no calculation of the cost for a small club.

That is where the important issue—the questions raised by my noble friend Lord Jackson—arises. People can concentrate on Premier League clubs, but we are talking here about regulating over 100 clubs. People do not realise that the impact will be on the small clubs. The Government need to be honest before this legislation passes, and to identify the probable burden for each of the small clubs, because without that information it is not appropriate to pass into law a football regulation Bill.

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[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—

[Baroness Brady (Con)]

I thank my noble friend for allowing me to intervene. My understanding of the Bill is that the ultimate sanction the regulator can have is to withdraw the licence from the football club. If a football club loses its licence, it ceases to be able to play. It is put in a very difficult situation whatever the remedy: it either complies wholeheartedly with whatever remedy it is told by the regulator to put in place, or it loses its licence and cannot play in the league. Surely that cannot be right.

[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.

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[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

I thank the noble Lord, Lord Jackson of Peterborough, for tabling this amendment. I also particularly welcomed the personal account of the noble Lord, Lord Moynihan. I thank all those who contributed, including the noble Lord, Lord Maude of Horsham, who has considerable expertise in regulation. The description from the noble Lord, Lord Birt, of the benefits of regulation, including a strong board and what advantage that might bring, was particularly helpful.

In response to the noble Lord, Lord Goodman, we will cover the scope of specified competition in the next group, so your Lordships’ Committee will come to that shortly.

The amendment seeks to add an explicit requirement for the regulator to have “due regard” to the potential economic harms of overregulation and to report on this. It is an important point to be aired, and I welcome the opportunity to respond to the concerns the noble Lord has. I absolutely agree that overregulation is something to be avoided. It is why the regulator’s general duties and regulatory principles provide sufficient safeguards to prevent this.

The regulation ensures that the regime is proportionate. In particular, Clauses 7 and 8 emphasise the need for the regulator to act in a way that avoids, as far as reasonably possible, adverse effects on investment and competitiveness, and that it should act proportionately.

The noble Lord, Lord Jackson, asked about overregulation and was echoed by the noble Baroness, Lady Brady. The regulator’s general duties require it to have regard to how regulation might affect, among other things, financial investment in English football. Its regulatory principles clearly state the importance of advocacy and the need for the regulator to engage with stakeholders. It must act, as I said, in a proportionate manner. All these measures provide a safeguard against overregulation.

The noble Lords, Lord Hayward and Lord Maude, asked about burdens or potential costs on small clubs and the risk of disproportionate burdens. In addition to the explicit regulatory principle guiding the regulator to be proportionate, the entire system has been designed with this proportionality in mind. For example, the licence conditions placed on clubs will vary depending on their unique circumstances. Where clubs are smaller or lower-risk, the regulator’s requirements will reflect this. This means that the regulator will not impose unnecessary burdens on smaller or already well-run clubs.

[Baroness Brady (Con)]

A comment was made about there being no concern for costs outside the Premier League. However, Mark Ives, the general manager of National League, said:

“We are concerned about the costs … The expectation of how much it is going to cost clubs at a National League level is a huge concern—it may be a small amount of money, but it is a lot to the clubs. We are worried about mission creep within the Bill and the additional bureaucracy. There is a lot of duplication of work, such as the licensing system—there’s an expectation for clubs to do two lots of licensing”.


Dagenham & Redbridge chief executive officer, Steve Thompson, said:

“We are worried that the Bill will be so onerous. Some National League clubs work on two or three people and some volunteers … It does really worry me that some of our small clubs will not survive with the regulation and the reporting that is required”.


There may be a proportionate cost, with clubs in the Premier League from the top down paying proportionately but, whatever the cost, there is concern throughout the leagues.

[Baroness Twycross (Lab)]

The noble Baroness raises a particular concern. I am not suggesting by any means that people will not need time to get used to and understand the burdens or costs on smaller clubs but, as I felt I had outlined, I hope that, with enough clarity, the licence conditions—that includes the costs placed on clubs— will vary depending on their unique circumstances. I am sure we will have further opportunities to discuss that as we go forward. Hopefully we can give your Lordships’ Committee and the clubs some reassurance on that point.

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[Baroness Taylor of Bolton (Lab)]

I am very grateful to my noble friend for giving way. Was it not said at some stage during the consideration of the predecessor Bill before the election that it would be a good idea if the regulator was up and running and got some experience of the regime being introduced before considering extending it?

A few minutes ago, we heard that Members opposite thought that this would be too great a burden on smaller clubs. So perhaps it is a good idea to consider when the time is right and what experience the new regulator will have.

[Baroness Brady (Con)]

It was the smaller clubs, as well as us, that said it would be a burden to them. I read out what the National League’s general manager said about his clubs and their concerns.

[Baroness Twycross (Lab)]

I will address the issue of why the regulatory regime is currently intended to be limited to the top five tiers of football and not to include the National League North and the National League South. The issues we are concerned with arise most typically and markedly in the professional game where the financialisation of clubs is greatest. We recognise that the top five tiers is not necessarily a perfect proxy for the professional game, since some semi-professional and professional clubs can move between these leagues. However, we consider it the most appropriate and proportionate place to draw the line and the place where it would not result in some clubs in the league being subject to regulation and others not. We do not currently believe that extending the scope beyond the top five tiers would be proportionate to the burden on smaller clubs below the National League.

On Amendment 19—and apologies if I am repeating parts of my speech, because it is some time ago that I was actually on my script—in the name of the noble Lord, Lord Parkinson, I understand his desire to have upfront clarity on the face of the Bill.

Turning to Amendment 21, I thank my noble friend Lady Taylor for putting forward this amendment. As I am sure my noble friend is aware, the Secretary of State would have the ability to specify competitions that are in scope of the regulator and we believe that the top five tiers is a sensible and proportionate place to draw the line.

In relation to the points on hybridity, questions of hybridity are for the examiners, not for the Government. If the amendment is made, there will be a process to be followed that will decide whether the Bill is hybrid and needs to go through the hybrid procedures. Initial advice is that the Bill would be thought to be hybrid and I understand that, following the tabling of Amendment 19 in the name of the noble Lord, Lord Parkinson, and Amendment 21 in the name of my noble friend Lady Taylor, issues have been raised about their hybridity.

The noble Lord, Lord Goodman, asked whether we had discussed with the Delegated Powers and Regulatory Reform Committee ahead of the process. We would not discuss committee reports with clerks before they draw them up.

I know that noble Lords want to continue to work constructively on the Bill—