Football Governance Bill [HL]

Baroness Brady Excerpts

Committee stage
Wednesday 4th December 2024 Lords Chamber

[Baroness Brady (Con)]

My Lords, I refer the Committee to my interests, which are declared in the register. I defer to other noble Lords who have experience of the technicalities of hybridity and parliamentary procedure, but I hope it is helpful and illuminating in this context to raise the issue of consultation with clubs. We are creating legislation that will profoundly affect 116 unique institutions, from Premier League clubs through to the National League community clubs. But it is important for everyone to understand that the consultation with these affected businesses by the current Government has been remarkably limited—almost unbelievably so.

Just seven Premier League clubs—mine was one of them—were granted a brief half-hour meeting with the Secretary of State over the summer. Following this cursory engagement, significant decisions were made that could fundamentally affect the future of English football, most notably with the inclusion of parachute payments within the backstop mechanism. I say again: seven clubs out of 20 have been seen for just half an hour since the Government took office and before they made that seismic decision.

This is particularly concerning given that fundamental issues still remained unresolved. We still lack any clarity on UEFA’s position regarding state interference, for example. This clearly creates profound uncertainty for clubs competing in, or aspiring to, European competition, as well as our national teams. We do not know what the ownership test will look like. This causes significant uncertainty for potential investors as to whether they are able to own a club.

I have listened with real interest to this debate on hybridity. Can the Minister help my understanding here? Can she confirm that, if my noble friends are correct and hybridity is a live question for the Bill, this would give clubs at all levels a real opportunity to present their specific circumstances to Parliament? For example, would it mean that National League clubs could explain their concerns about the regulatory burden and the concerns of the many that they say “would not survive” this regulation? Would it mean that Premier League clubs could have more than half an hour to detail the very serious implications for them, and the risk that we may harm the competitive balance of the Premier League, which we have all agreed that none of us wants to do?

That would be especially important, given that the impact on Premier League clubs is very different from that on other stakeholders in the Bill, as the Premier League is the only party that provides funding to any other part of the football pyramid. The backstop is clearly designed as a mechanism to gain direct access to, and apportion, Premier League revenue and no one else’s. It would allow the IFR to do this even if it was against the Premier League clubs’ will, or even without the clubs’ agreement, even if it was to have a detrimental effect on the clubs and the overall competition that it removes revenue from.

I have spoken to many of my colleagues across the whole football pyramid. We are all alarmed about, and puzzled by, the lack of discussion on the Bill with Ministers. Does the Minister agree that we all want to get the detail of the Bill right, and can she see any downsides to providing meaningful opportunities to hear from all clubs across the football pyramid affected by the legislation?

[Lord Markham (Con)]

I must admit that, probably like other noble Lords, I am scratching my head over this. As the Minister said earlier, it is very clear that the leagues know who we are talking about here and that a large section of the Bill is talking about the whole arrangement, and in Clause 6 about the distribution agreement, the pyramid, the parachute payments and all that. There are only two instances where that counts, in the payments from the Premier League to the other leagues, so it is very clear that we are referring to Premier League and English Football League clubs. I do not think there is any doubt about that at all. As I was taught as a kid, if it walks like a duck, looks like a duck and quacks like a duck, it is probably a duck.

I am pretty sure that this is a hybrid Bill already. I am not an expert, but I cannot see why it is not a hybrid Bill because, as the Minister just said, it is very clear to everyone which leagues we are referring to. The argument that somehow we could not change things if things changed, or if league structures changed, just does not stand up. Just as we are going to nominate which competitions we are talking about under secondary legislation, we could do exactly the same if there was any change in the format of the leagues. The Minister wrote in her letter about trying to stop people gaming the system, but we have a very easy way to stop them gaming the system. It is set up there already—you can change it in secondary legislation, just as the Government intend to do in defining the competitions involved in the first place.

I cannot see any reason why we would not call it as it is. It is as if we were somehow trying to stop the clubs having the proper amount of consultation. As my noble friend Lady Brady just said, it is clear that there has been very little consultation to date. The clubs themselves have said that there was very little consultation. The people here who are members of those clubs probably know more than anyone else about this.

I believe that we are all united in this Committee in wanting the best for football. That comes through very clearly in every conversation we have had. I know that colleagues from right across the spectrum want what is right for football, and I know that the Minister wants what is right for football—so why not give clubs the opportunity to be properly consulted and have proper input on something that is going to profoundly affect the whole game?

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[Baroness Brady (Con)]

I can confirm to the noble Lord that only seven were invited. They were selected.

[Lord Goddard of Stockport (LD)]

To be helpful to the Committee, could the noble Baroness, Lady Brady, give us the names of the seven clubs? That might shed some light on what is going on here. There seems to be an illusion that the Premier League was suddenly born out of the ether, and then provides for all. Players such as Ryan Giggs, Phil Foden and Alan Shearer do not just suddenly materialise; they come up from the other divisions. I get what the noble Baroness is trying to do, and I respect her position, but you have to look at this in a holistic way. This is about a regulator regulating for the five divisions, and if it is not blindingly obvious to anybody what those five divisions are, they may be sat in the wrong place.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to the noble Lords who have taken part in this debate. It has been worth while having it again, painful and irritating though it may be. I am sorry if that upset the Minister—it certainly was not my intention to do so. I did it because this issue matters.

By the Minister’s own admission on Monday, she did not know about the issue of hybridity until it was raised with her on Monday. Does she think that a few hours’ consideration, along with all the other matters we gave attention to in Committee on Monday, and a few minutes’ debate in Committee late on Monday evening, is sufficient to dispose of an issue as fundamental as this?

As I said in my opening remarks, the Government Chief Whip knew about this issue at the same time I was alerted by the clerks, on 26 November, almost a week earlier. I am grateful that he stayed to listen to our debate on this group. Maybe he, if not the noble Baroness, can tell us what discussions he had in light of that issue being raised with the usual channels on 26 November. This is about engagement with the people, organisations and businesses that this new law will profoundly affect. I was shocked to hear what my noble friend Lady Brady said about only seven hand-picked clubs being given just half an hour of—

[Baroness Brady (Con)]

As requested, I will clarify who the seven invited clubs were: West Ham, Crystal Palace, Brighton, Liverpool, Spurs, Everton and Brentford.

[Lord Parkinson of Whitley Bay (Con)]

I am grateful to my noble friend for providing that information to the Committee. As I am not the world’s greatest aficionado of football, I will leave it to others judge whether that is a representative spread of the beautiful game, but I am interested to hear from the Minister the rationale by which those clubs were selected. I would like to know whether she was present at the half-hour meeting with those clubs and, if she was not, how much time she has given to engaging with clubs before bringing this legislation before your Lordships’ House and asking us to pass it.

As my noble friend Lord Markham set out, the changes the Government have made to the Bill since the last Parliament—on backstops and parachute payments—make this a substantively different Bill. I disagree with the noble Baroness, Lady Taylor of Bolton: this is not a virtually identical Bill; there are some substantial differences in policy terms, to do with parachute payments and so on. I think she would agree that those affect certain leagues and clubs more than others, and engage the question of hybridity and to what extent this Bill is targeting certain groups differently from others.

As with the amendments of the noble Lord, Lord Bassam, and the noble Baroness, my Amendment 19 was a probing one to see whether we could provide clarity in the Bill for those whom it will regulate, so they know from the outset what they must do and that they must comply with it. Like the noble Baroness, the first I knew was when we received the advice from the Clerk of Legislation explaining that this would make the Bill a hybrid one.

It is worth saying that I agree with the noble Lord, Lord Goddard of Stockport, that the previous Bill, when it was in Committee in another place, was not a hybrid Bill and it was right to conclude that. The question is, if we give that explicit information to the English Football League, the Premier League and the National League, so they know that they are going to be covered by this law—which the Government, in their Explanatory Notes, say they will: something they are happy to say outside the House but are not happy to say in the Bill, because that would afford them the right to come and speak directly to Parliament—then it is a question well worth pausing on, and I make no apology for returning to it today.

I am proud of the way your Lordships’ House scrutinises legislation; we go through things sometimes slowly, more slowly than Governments would wish— I have stood on the other side of these Dispatch Boxes and share the pain the Government Chief Whip and the noble Baroness are feeling today. This is a shining example of the importance of your Lordships’ House and the excellent advice we receive from its clerks. Thanks to that advice, two successive Lords’ Ministers for this Bill have been alerted to the fact that it could become a hybrid Bill if it is said in it what it is trying to do. That is an important point to have returned to in Committee, and I would like to understand from the Minister why, when we pass this law, we should not tell the people it is going to affect that it is going to affect them.

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[Baroness Fox of Buckley (Non-Afl)]

My Lords, in the debate on an earlier group we heard some dilemmas around the fact that, for example, Welsh teams such as Wrexham might not be in scope of the Bill. It is possible that Rob McElhenney and Ryan Reynolds will be relieved to discover that they might not be. Those following Wrexham’s progress will know that they spend a great deal of time complaining about the ridiculous regulatory framework that the football club has to negotiate. It is not football regulation but every other—as they say—bonkers regulation that means they cannot build. There are many hoops that they have to jump through.

This is slightly important because, when we have this discussion about suitability and fitness, we constantly see it as scrutiny because we are wary of charlatans. Everybody that has ever been involved in football is anxious about types of owner who might not have football at their heart, but the reality is that many owners of football clubs and many people with influence over them love the game and are nothing but great influences on the clubs. That is obviously why Rob McElhenney and Ryan are well-known heroes worldwide now. But there are also corporate interests that can be just as beneficial and important.

One reason why this is so tricky, why it needs to be clarified and why I am glad to see these amendments in this group is that any discussion about suitability and fitness that gives so much intrusive and overbearing power to a regulator has to be queried to understand exactly what it will mean. The last question from the noble Baroness, Lady Evans, was important: what happens if there is a clash?

Outside of football, the debates on who is suitable to run what are subject to all sorts of subjective and sometimes malicious trouble, caused by people who do not have the best interests of the clubs at heart. If noble Lords have ever spent any time with football fans, they will know that many do not think that their club’s owners are suitable or would pass any suitability test—as I will tell you over a pint. It might well be the gripe of the day.

My point is that the Bill has to be reined in, in terms of how much power has been given to make decisions that are not straightforward or scientific. Until we recognise that there is a danger of unintended consequences, the Minister might—not through any desire to—open a can of worms that will be damaging to many football teams.

[Baroness Brady (Con)]

My Lords, I rise to speak about ownership definitions and tests proposed in the Bill, and particularly to support Amendments 27 to 29 tabled by my noble friend Lord Moynihan.

Although everyone can support proper scrutiny of football club ownership, I have concerns that the current provisions create unnecessary complexity and uncertainty. It is important that we are clear about the purpose of the Bill in this respect. As my noble friend’s amendments demonstrate, the Bill proposes a new definition of ownership that goes beyond current football tests, introducing the concept of influence. This goes beyond the football authority definitions, which focus only on control. Yet the Bill provides little detail about how this extended scope will work in practice or what problems it aims to solve. It will apparently be for the Secretary of State to decide what is meant by “influence”.

Equally concerning is the lack of clarity regarding existing owners. As has already been asked, do the Government envisage using these new powers to retrospectively challenge current ownership arrangements? If not, why create a broader definition than the existing tests? If they do, this represents an extraordinary intervention into private property rights that demands much greater scrutiny.

The Premier League has significantly strengthened its owners tests, including in relation to the Abramovich case, and sanctioned individuals. What evidence suggests that parallel tests, with differing criteria, would improve outcomes, rather than creating uncertainty and potential legal conflict? Without such clarity, we risk creating a framework that deters responsible investment, while failing to address any real problems in football governance.

Let me be clear about another point. As my noble friend Lady Evans pointed out, the EFL is, I believe, very happy to give up its own ownership test to the regulator because it views the exercise as costly and time consuming—that is its right. But the Premier League fully intends to maintain its own ownership tests—why should it not? It is a fundamental right of a members’ organisation to determine its own composition, and the Premier League really is a membership body. We have only 20 clubs, not 72, and it is a fundamental part of how we drive forward the Premier League, grow in international markets and make collective decisions about the future of the game, together with the FA.

Determining who can come into the group is therefore a key part of how we collectively run the Premier League as equal shareholders. I would argue that we have one of the most sophisticated ownership tests in world sport. Yet the Bill would introduce a parallel test, and it would do so without defining its contents. Naturally, this creates immediate uncertainty.

The Bill is troubling, too, on detail. The planned test, which will be for the regulator to create and define at some stage in future, would appear to include more subjective elements than the Premier League’s existing criteria. That would be very strange. Surely it would be quite a good idea if prospective investors and owners could know with confidence, from the outside, whether they qualified to buy a football club. I would be grateful if the Minister could answer a simple question: is the test provided for in the Bill going to be a subjective or an objective test? It obviously cannot be both. As my noble friend Lady Evans said, the practical implications run deeper. What happens when the regulator approves an owner, but the Premier League does not, or vice versa? Can the IFR force the Premier League to take in an owner that it does not want? The Bill makes no provision for resolving such conflicts. Instead, I worry that it creates the perfect conditions for prolonged litigation—exactly what proper regulation should avoid.

Of course, all this uncertainty is likely to be very damaging to investment. Put yourself in the shoes of an investor examining Premier League football as a potential opportunity. They now face not one ownership test but two, both with different criteria. One test is not even defined in legislation. Either could result in rejection. Both could trigger lengthy legal challenges. What serious investor would begin spending the millions of pounds required to explore a transaction in football —on the investment bankers, the lawyers, the due diligence, the regulatory compliance, the tax advisers and the rest of it? Why would we want to introduce such fundamental uncertainty?

I worry that, without far more clarity in the Bill, we risk deterring the very kind of responsible, long-term investors that football needs and wants. I urge the Minister to carefully consider these points. At a minimum, we need clarity on: how conflicts between tests will be resolved; exactly how and why the IFR’s test is intended to be materially different from the existing tests; what provisions exist for managing litigation; why the definition of ownership is wider than that used by the football authorities today, and what the implications are; and, above all, how investment confidence will be maintained.

The goal of proper ownership scrutiny is, of course, completely correct, but we must achieve it through clear, workable mechanisms and not parallel systems that create uncertainty and confusion.

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[Lord Parkinson of Whitley Bay (Con)]

My Lords, as well as moving my Amendment 37, I will speak to my further amendments in this group, Amendments 38 and 123. In the letter which she kindly sent to the Committee earlier today, the Minister displayed her familiarity with and affinity for Erskine May and, even if I did not have unbridled delight as to the contents of the letter, I was pleased to see this reference to one of our great constitutional experts and authorities on legislative procedure.

In that spirit, I would like to quote another revered expert on constitution matters, the great AV Dicey, who expounded that:

“The principle of Parliamentary Sovereignty means neither more nor less than this, namely, that Parliament … has, under the English constitution, the right to make or unmake any law whatever; and further, that no person or body is recognised by the law of England as having a right to override or set aside the legislation of Parliament”.


In more recent times, the Constitution Unit at University College London has set out particularly relevant arguments for the importance of parliamentary accountability. In its 2023 briefing Parliamentary Scrutiny: What is it and why does it matter? the unit rightly said that:

“Government accountability to parliament is central to our democratic system”.


I think this all demonstrates that the right of Parliament to oversee and hold public bodies to account must be upheld dearly as well.

This new regulator, which we are bringing about through this Bill, will at the start of its existence have recourse to public funds. It is crucial that any body which has funding streams derived from the taxpayer at any point should be accountable to and scrutinised by Parliament. That is what Amendment 123 requires.

Amendment 37 seeks to ensure that any person who is appointed to the board of the regulator must be approved by a parliamentary committee, and Amendment 38 requires the chief executive to appear before a parliamentary committee at least once a year if they have been so invited. This ensures that anyone who is going to be holding any formal position in this new regulator can be scrutinised by parliamentarians before they can be appointed.

Following on from the debates in the two groups that we have just had about conflicts of interest, it may be that rather than setting it out in the Bill, as the probing amendments sought to do, the parliamentary oversight that we could bring about this way might be able to give us the reassurances we seek that the people who are given these awesome new responsibilities are doing so without conflicts of interest or the pressures on them that we wish to resist. I beg to move.

[Baroness Brady (Con)]

My Lords, I support this group of amendments, which I think are very helpful because they will help to tease out one of the real challenges at the heart of this Bill—how to achieve the right balance of proper oversight with the absolute necessity of delivering regulatory independence. We should, of course, acknowledge the natural instinct to ensure democratic accountability of any new regulator. Given the cultural and economic importance of football to our nation, Parliament should rightly maintain some oversight of how this new body exercises its considerable powers.

The question “Who regulates the regulator?” is beginning to be asked more and more often, not least in relation to the many clear failings of UK regulators, and rightly so. However, I believe we must also tread with real care here. Football’s international governing bodies, UEFA and FIFA, have clear provisions against state interference in the game. While their primary concern has historically been direct government control of national associations, they could well choose to interpret these provisions more broadly. We have already seen their willingness to act even in response to the mere creation of this regulator, and we have seen the Government’s instant removal of a clause in this Bill relating to foreign and trade policy. This tension means we must achieve a delicate balancing act: too little accountability and we clearly risk regulatory overreach; too much involvement of the state and our democratic institutions and we risk creating leverage that could be used against English football’s interest.

I have already spoken about some of the risks here. If Select Committee oversight and IFR responsibility to both bodies was seen as political interference, it could feasibly create that leverage we have warned about whereby clubs participating in European competition, or even England’s tournament participation, is put in jeopardy. We have already seen concerning signs of how these tensions might play out. In just a short time since this Bill’s introduction, we have witnessed numerous attempts to expand the regulator’s scope from environmental sustainability to ticketing prices and kick-off times to corporate responsibility requirements. I am concerned about how this pressure might intensify with direct parliamentary oversight.

Members of the other place, responding quite correctly to constituents’ concerns, might press the regulator to intervene in broadcast arrangements or ticket allocations, or elements that go to the heart of competition tools that should be reserved for the leagues. Select Committees could demand action on issues far beyond the regulator’s core financial sustainability purpose. Each intervention, however well intentioned, risks creating exactly the kind of state interference that could threaten English football’s international position.

We have seen this pattern in other sectors: regulatory mission creep that is driven by political pressure and external events. Football’s unique international framework makes this dynamic particularly dangerous. Every expansion of scope and political intervention creates new vulnerability to UEFA and FIFA leverage. I would be grateful if the Minister, when she responds, could explain how the Government intend to manage these competing demands. How will they maintain appropriate accountability while preventing political pressure from expanding the regulator’s remit? How will they ensure that parliamentary oversight does not become a backdoor for state intervention in football’s affairs? What safeguards will protect against the regulator being drawn into issues that should remain matters for the football authorities only?

Finally, I would be grateful if the Minister could confirm whether this issue has been directly discussed with UEFA and, if so, what its view is on how the IFR’s independence should be preserved in this respect. It seems clear that without comprehensive assurances on every single aspect of the IFR and how it will operate, we risk inadvertently subjecting English football to permanent external control. The irony of creating this leverage will be quite incredible. In seeking to protect our game through regulation, we must not end up permanently compromising its independence and losing control of English football for ever.

[Baroness Taylor of Bolton (Lab)]

My Lords, when the noble Baroness, Lady Brady, started speaking, I thought that we were going to have a first. She started off by agreeing with the noble Lord, Lord Parkinson, on some points that I would agree with him on. Then she went totally against that and said that a Select Committee might be too interfering. I point out to her that the Select Committee that covers DCMS has, for many years, talked about the problems in football such as ticket pricing and the timing of matches. That has not impinged in any way on any international arrangements.

We have to make a clear distinction between Parliament and the Executive, because we are not talking about state control or government control. What we are talking about in this amendment is a proper accountability for any regulator. As I mentioned at Second Reading, I have the privilege of chairing the Industry and Regulators Committee of this House. We had a report about who regulates the regulator, so it is strange that the noble Baroness should use those words. This is not about regulating the regulator; it is actually about holding regulators to account. Both Houses have a very important role to play in making sure that regulators are held to account by Parliament.

I go further: if some of the regulators had been held to account more closely by Parliament in recent years, we would not, for example, have the crisis that we have today in the water industry. There has been a failure of Parliament to hold regulators to account.

My Amendment 89 is not grouped with these amendments but covers very similar points and the same principle. I hope that the Minister will give us an assurance that Parliament will have a role to play in holding all regulators to account, including the independent football regulator.