Football Governance Bill [HL]

Baroness Taylor of Bolton Excerpts

Report stage
Monday 17th March 2025 Lords Chamber

[Baroness Brady (Con)]

My Lords, I refer the House to my interests, as declared in the register. I support my noble friend’s amendments, which would remove parachute payments from the backstop.

I hope it will assist the House if I explain why I am so concerned about the inclusion of parachute payments within the definition of relevant revenue. It is not because I believe that the parachute system is perfect—I really do not. It is not because I believe that the precise level or design of parachutes should be fixed forever or protected from scrutiny—I do not. Nor is it because Premier League clubs are insensitive to the aspirations of clubs throughout the pyramid—we are not. We all share the same common goal: a thriving, dynamic, sustainable football ecosystem from top to bottom. It is because the backstop mechanism as it has been designed is so fundamentally unsuited to addressing the issues of parachutes.

The previous Government’s backstop was badly flawed, enabling a binary choice between two proposals, one of which must be selected in its entirety. That was highly unusual and posed significant risks. However, that mechanism could have just about been tolerable because, by isolating solidarity or voluntary payments as the sole issue for resolution, the backstop at least delivered a binary choice between two numbers. That is a judgment the regulator could reasonably make. I remind noble Lords that the levels of solidarity are explicitly linked to parachute payments in the existing distribution agreement between the Premier League and the EFL. One can be used to smooth the potential rough edges of the other, which is what the previous Bill correctly recognised.

However, the expansion of the Bill’s scope to include parachute payments transforms the backstop entirely. It is no longer about determining quantum, but now forces a judgment on the wholesale redesign of football’s financial architecture. It has become a choice, not between two numbers but two fundamentally different systems and it is substantially more legally and financially risky as a result.

The crucial thing to appreciate is the connection between the now systemic nature of the backstop and the position of the EFL. The EFL’s chair has called parachute payments

“an evil that needs to be eradicated”

—not reformed or adjusted, but eradicated. When we combine that system, a binary process, with the open agenda of one of the two parties, we create an absolutely intolerable risk. The backstop offers no capacity for careful calibration or fine tuning, which I would be wholly supportive of.

There is no part of this Bill that allows the regulator to make a reasoned, balanced judgment. It creates a binary, “winner takes all” approach, with no room for nuance but plenty of room for poison pills and final damage. It enables a proposal from the EFL that would level down the bottom half of the Premier League, rather than genuinely elevate the entire football pyramid. Surely, we want a mechanism that delivers both a strong Premier League and a strong EFL, rather than a zero-sum game.

The Government have made their political choice on the backstop, but I believe that they did so without the full understanding of its implications for the delicate ecosystem that sustains football at all levels. If we are to avoid serious, legal and economic consequences for football over the next few years, the Government would be well advised to now address the serious problem they have created. If they are not prepared to revisit the decision on parachutes, my amendments on how the IFR should make its final decision offer a constructive path forward that would benefit the entire pyramid. The proposal from the noble Lord, Lord Birt, offers an alternative. There can be no doubt that change is needed.

We all want the same thing—financial sustainability throughout English football—but the starting point must surely be a shared recognition that we cannot achieve this by dismantling the very mechanisms that have made English football, from the Premier League to the National League and beyond, the world’s most successful ecosystem.

[Baroness Taylor of Bolton (Lab)]

My Lords, I start by reminding the House that the Bill will not abolish parachute payments or change the architecture in the way that has just been suggested. When the noble Lord, Lord Markham, talked about the need to have confidence, so that clubs can invest in new players and have confidence in the strong club structure and financial position, he mentioned only the Premier League. He did not refer at all to the rest of the football pyramid. The Bill needs to make sure that we have sustainability, not just of those clubs in the Premier League, but of the whole English football pyramid. It is important to bear that in mind because, while parachute payments may have a place—as most people have acknowledged, certainly at the moment—there is no doubt that the level of parachute payments is such that it distorts competition in the Championship. I asked the noble Baroness, Lady Brady, when we were in Committee, whether she would acknowledge that, and she declined to comment.

If we look at the actual figures involved, there is no doubt that the current arrangements distort competition. At the moment, clubs that are relegated receive, in year one, £48.9 million. Other clubs receive £5.3 million. The redistribution that is often talked about from the Premier League to the EFL does not help all the clubs in the EFL equally. It distorts competition, which is something we should bear in mind when we are talking about parachute payments. Although they may help a few, they do not help the sustainability of the whole pyramid, as they could—and should—if we had a fairer system of distribution.

[Lord Goddard of Stockport (LD)]

I support the noble Baroness, Lady Taylor of Bolton, especially after Saturday’s result between Bolton and Stockport County—thereby hangs a tale.

I was following the thread from the noble Lord, Lord Markham, really well until he mentioned that every game is competitive. Ipswich Town supporters would not agree with that this season. The evidence suggests that is not the case. If we look at leagues across Europe, they have jeopardy. There are last games of the season where relegation and promotion come to the edge. It is not the be-all and end-all.

It is right that you need a fairer distribution than this endless three up, two down, three down, and that money needs to go further down the pyramid to encourage further clubs to be able to compete. It looks as if the three that came up this season are going to go down. If that continues to happen, it will have a detrimental effect on the Premier League—it must have. It gets more and more difficult every year to sustain. The Brightons and the Bournemouths have burst through, as have other teams, and they are managed really well. But there are unintended consequences if we do not look at these things in totality and just isolate them. If we say, “Leave the parachute payments alone—everything is all right with it”, that is not making progress, and we need to make progress. That is why we need to look at this within the bigger picture. It is not in the Bill but it needs looking at.

--- Later in debate ---

[Lord Hayward (Con)]

My Lords, I begin by asking the Minister, when she responds to this debate, to identify specifically whether she intends to accept the amendments in the names of the noble Lord, Lord Birt, and others now or to change anything for Third Reading. I believe that we need absolute clarity of the position both for this and future debates.

I suggest that the Minister should look at the people proposing this amendment. This is not some party operation: we have a former head of broadcasting organisations who, as he identified, spent his time negotiating the original football broadcasting rights; a former Lord Chief Justice; a former senior civil servant; and a current senior lawyer. It is important that the Minister asks herself why it is impossible for her and her team to accept the carefully considered and detailed amendments that we are debating.

When I spoke at Second Reading, I identified a willingness to consider the proposal as it is in the Bill because, unlike the noble and learned Lord, Lord Thomas, I have faith in people, other than just lawyers, able to take an impartial decision. I speak, as I have identified previously, as somebody who has spent many years negotiating with trade unions—and I use the word “with” deliberately, as I was across the table from them. I always regarded it as a failure if we did not get to an agreement between management and the trade unions.

I have considered what we are talking about carefully. I have not discussed it with my colleagues, but have looked at my industrial experience and asked myself whether the proposal put forward by the Government or that put forward by the noble Lord, Lord Birt, is better. There is an inherent misunderstanding of what we are talking about here. As the noble and learned Lord, Lord Thomas, identified, we are not talking about two sides. Earlier today, the noble Baroness, Lady Taylor, referred to the different levels of the competition—the Premier League, the Championship and the lower leagues—so it is not a question of one versus the other because, as sure as eggs are eggs, once you get into the discussion about allocation of resources, you discover that there are not two sides and a pendulum that swings from one direction to the other. There is a series of different interests all the way up the league table to the absolute top. Therefore, you cannot ask us to accept a process that awards to one side or the other, when there are not in fact two sides but several sides, which will respond very differently depending on where they are in the league structure in any season.

I started by asking the Minister a very serious question, which I will repeat: can she please give a very clear indication to the Chamber of what the Government’s view is of the very serious, excellently drafted and well-debated proposal from the noble Lord, Lord Birt, and others?

[Baroness Taylor of Bolton (Lab)]

My Lords, I want to say a few words, because the whole House acknowledges that the noble Lord, Lord Birt, is trying to be constructive here. He, with his colleagues, has produced some incredibly detailed amendments, and that is partly what concerns me. I am not saying that there is no merit in his approach, but I think that some of the conditions are potentially overburdensome.

Will the Minister remind the House of the purpose behind the backstop? As I understand it, the backstop was there to encourage parties to come together, discuss the situation and try to reach agreement. That is so important, because we have had the absence of agreement in recent years because, I think, of the stubbornness of one party.

I therefore worry that the amendments from the noble Lord, Lord Birt, and his colleagues are overprescriptive. He mentioned several of the problems that exist in football today, such as the level and unsustainability of players’ wages and the need for stadium improvements. All are relevant and important to those of us who are concerned about the future of football but, if we are going to be prescriptive about what comes in at that last stage, we may get into difficulties. I hope that the “state of the game” report, which he mentioned and which is extremely important going forward, will deal with some of these issues.

I would like to agree with the noble Lord that all of football is two sides of the same family, but I am not sure that that has been the experience of the last few years in the negotiations between the Premier League and the EFL. It certainly is not a balanced debate or discussion in terms of their powers. I understand the noble Lord’s wish to have levels of arbitration, but we must be careful not to cause delays or take the pressure off parties to come to an agreement between themselves.

[Lord Pannick (CB)]

My Lords, I added my name to my noble friend Lord Birt’s series of amendments and thank him for the time and effort that he has devoted to producing them. I also thank the Minister, the Bill team and the Secretary of State herself for the amount of time that they have devoted to discussions with me and many other noble Lords on this complex topic of the distribution of revenue and the resolution process.

I entirely support what has been said today by my noble friends Lord Birt and Lord Burns and by my noble and learned friend Lord Thomas: a formidable forward line—the Pelé, Messi and Bobby Charlton of this debate. I will add a response to the concerns that some noble Lords and perhaps the Minister have about these amendments, which have been expressed by the noble Baroness, Lady Taylor, and are in the briefing to noble Lords from the EFL. There are two main concerns that need to be addressed.

First, there is a concern that we have agreed that the Bill is to be light-touch regulation when we have a complex series of amendments here—and they are complex. My response is that the distribution of revenue and the resolution process are complex matters. We are addressing the distribution of millions of pounds, which is vital to the financial stability of clubs outside the Premier League, and this money is to be extracted from Premier League clubs. The mechanisms for that process have to be effective and fair. They need to set out how this is to occur in detail and by reference to what substantive principles. As has been said, with all due respect to those who drafted this Bill, the current provisions lack proper detail on evidential basis and procedures that are adequate to ensure a fair result, and they do not contain the substantive criteria that are required. Yes, we could regulate this important matter in a much simpler manner, but the detail is absolutely vital in this context to ensure efficacy and fairness.

The second criticism that has been made is that expressed by the EFL in its briefing document. The EFL is worried that the Birt amendments will result in an invasion of lawyers—as they put it, “in particular, expensive lawyers”, God forbid—who will be briefed by the Premier League. The EFL says that it will not be able to compete. As the EFL has expressed this concern, it needs to be addressed in this debate.

--- Later in debate ---

[Lord Norton of Louth (Con)]

My Lords, I will stick to what I know about, and for that reason I will make no comment on football. I too commend the Minister for bringing forward Amendment 90 in response to the debate in Committee. This is a wholly positive development.

As I said then, the House of Lords Constitution Committee in its 2004 report Parliament and the Legislative Process recommended that Bills, once enacted, should be subject to post-legislative scrutiny—a recommendation endorsed by the Law Commission. In 2008, the Government accepted that Acts should normally be reviewed three to five years after enactment, with reviews sent to the relevant departmental Select Committees in the House of Commons.

Since then, not all Acts have been reviewed. Practice in recent years has been somewhat patchy. Some departments have been good at reviewing Acts, others not so. I commend those departments that have undertaken thorough post-legislative reviews and have made Written Ministerial Statements when they have done so.

The Minister said in a recent Answer that some Acts were not reviewed following correspondence with the chairs of the relevant Select Committees. I am not sure how the chairs will know whether or not a review is necessary if they have not carried out a review. This is something I may pursue. However, I am keen to commend those departments that do undertake post-legislative reviews, and I especially welcome this amendment that puts the review on a statutory basis. There are precedents, but not many—as my noble friend Lord Goodman indicated—so I am delighted that we have another.

In essence, the amendment reproduces the normal practice for a review, although it goes a little further in prescribing a draft report and stipulating bodies to be consulted, which constitutes a significant concession. Given that, the amendment is to be welcomed, and I hope it will be emulated by other departments.

I have sympathy with the amendments tabled by my noble friend Lord Goodman; I can see why he wishes to commission a report by an independent body. I suspect the Minister will point out that bodies can carry out reviews if they wish to anyway and doubtless will.

As far as the amendment goes, I think it is to be wholly welcomed. It is a very good development, and it is very positive in showing how the Government have responded to the debate in Committee, which shows the value of this place. I hope the message will go out to other departments to follow suit.

[Baroness Taylor of Bolton (Lab)]

My Lords, I have tabled amendments asking that Parliament should fulfil its role of scrutinising regulators across the board. I am glad that, in this one respect, my noble friend the Minister has taken that on board with this particular regulator in terms of the review that the noble Lord, Lord Norton, has just referred to. Very often, the problem has been that Parliament itself has not been proactive enough. This amendment ensures that Parliament will have to take some notice.

[Lord Hayward (Con)]

My Lords, I will briefly touch on a subject I raised at length in Committee and which we have not touched on at Report: costs and compliance. The Minister, very helpfully—I say “very helpfully”, but I am going to add a “but”—wrote to all relevant noble Lords on 6 March. I have a feeling that this is just the sort of thing that will come up for review once the IFR is in operation.