Football Governance Bill (Sixth sitting)
Debate between Clive Betts and Stuart AndrewTuesday 21st May 2024
(6 months, 1 week ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 May 2024 - (21 May 2024)
Mr Clive Betts (Sheffield South East) (Lab)
I am speaking in the right place this time. I was pre-emptive in my comments before the break, but that has given the Minister an opportunity to go away and look at the wording that he will come forward with to improve new clause 3.
I take the Minister’s point about the complicated circumstances for many clubs with respect to who owns the ground and what form they own it in, and that is understood. I hope that we can find a way of ensuring that, whatever the complications, the owner cannot simply put the club and the ground into different organisations—different legal constructs—but that in all cases there can be an assurance that the club will have use of the ground going forward, because otherwise the club cannot be sustainable by anyone’s definition.
I thank the Minister for agreeing to go away to look at the issue. I accept that new clause 3 is probably imperfect, and I very much look forward to a perfect clause coming back from him in due course.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
It is a pleasure to serve under your chairmanship this afternoon, Ms Nokes.
I thank hon. Members for their contributions. The hon. Member for Sheffield South East thinks I can work that quickly, just in the time we had during the break, but I have committed to write to him. Work is going on among colleagues in the Department for Levelling Up, Housing and Communities, for example, but I will write to him with further details.
On the specific question of the hon. Member for Barnsley East about local information, she made an important point. Fans and other sources are able to provide information to the regulator about the suitability of their owners or officers should they wish to do so. It will of course be up to the regulator to determine the relevance and significance of any information provided to it, but the mechanism exists.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Clause 28 to 31 ordered to stand part of the Bill.
Clause 32
Determinations under sections 28 and 29: time limits
Stuart Andrew
I thank the hon. Lady for her comments.
As I said, if the regulator deems that a current owner is unsuitable, it would first direct them to leave the club in the specified timeframe. During that period, the regulator will have available several powers to safeguard the club from further harm. However, as the hon. Lady rightly said, there is a risk that an unsuitable owner does not comply with the directions. For instance, they may refuse to leave the club or may continue to use their position as owner to damage the club. In those situations, the regulator will have the powers to directly remove the unsuitable owner from the club.
The hon. Lady makes a point about cases in which there is a failed incumbent owner but no new prospective buyer for the club. By conducting strong statutory tests on prospective owners, the regulator will ensure that clubs are run by suitable custodians and that unsuitable owners can be stopped at the point of entry. That will help to reduce the risk of unsuitable owners entering the industry.
The wider regulatory system of financial regulation and improved governance will further put clubs on a more sustainable footing, which should ensure that clubs are attractive as investments for prospective buyers. If an owner wishes to sell, or is required to sell by the regulator, the club should therefore be a much more attractive asset.
Mr Betts
The Minister is almost assuming that the regulatory regime is going to make a perfect world, and that there are not going to be failures. The question being asked is: what happens when there are? When there is an owner who is required to sell, what happens to the club in those circumstances?
Stuart Andrew
The hon. Gentleman is right. I am not saying that this is going to be the panacea for all football clubs; they are businesses, and businesses go under at times. When the regulator is ensuring that the club has to be sold, its powers will minimise the risk of a bad owner further damaging the club, which adds to the pressure of finding a good new owner to take over. By having those powers, we are not drumming that club into the ground, as we have seen in other instances; it remains a positive and attractive prospect for investment. I hope that answers the hon. Gentleman’s question.
Question put and agreed to.
Clause 38 accordingly ordered to stand part of the Bill.
Clauses 39 to 44 ordered to stand part of the Bill.
Clause 45
Duty not to operate a team in relation to a prohibited competition
Stuart Andrew
Amendments 21 and 13 would require the regulator to determine and have regard to the views of club staff and players, placing them on equal footing with the club’s fans for the purposes of clause 45. I do not believe that the inclusion of players and club staff is necessary here. The Bill is designed to protect and promote the sustainability of clubs so that they continue to serve the interests of their fans in local communities, who have been around far longer than any owners and will be around long after those owners have moved on. That is why clause 45 requires the regulator to determine and consider the views of fans.
A decision to prohibit a competition may also impact a wide range of other stakeholders, which is why the clause already requires the regulator to
“consult such other persons as”
it
“considers appropriate.”
That allows for consultation with a broad range of potential stakeholders. If the regulator considers players and staff of regulated clubs to be an appropriate group, it must consult them. It is right that the regulator has the discretion to make the judgment.
Amendment 22 seeks to draw out that when the regulator is determining the views of fans about a competition being prohibited, it must include their views on the full impact of the competition being prohibited. Specifying that in the Bill is unnecessary as it is already implicit that fans would consider the potential impacts as part of reaching a view on a competition’s prohibition. For the reasons I have set out, I hope the amendment will be withdrawn.
Mr Betts
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 13, in clause 45, page 37, line 15, at end insert—
“(aa) professional football players,”.—(Stephanie Peacock.)
This amendment expands the list of those whom the IFR must consult.
Question put, That the amendment be made.
Stuart Andrew
I understand the point that the hon. Gentleman makes. We have had this conversation several times on the replays, and I understand that point. As I have said before, not drawing on the merits of the decisions that have been made, I understand some of the challenges that those organisations have in terms of a very crowded field and in terms of competitions.
Stuart Andrew
The Bill requires regulated clubs and clubs that have been regulated in the past five years, which I shall simply refer to as clubs, to notify the regulator where there is a reasonable prospect of either the club selling or otherwise disposing of its home ground or using it as security for a loan or other liability. The proposed transaction can proceed only if the regulator grants approval. Clause 46, which the amendment seeks to change, deals with only the narrow issue of a home ground disposal or the use of the home ground as security. Those matters do not necessarily threaten the heritage of the club in the same way as forcing a relocation. Where currently regulated clubs propose to relocate in parallel, which may impact on the clubs’ heritage, that is subject to a separate approval from the regulator under clause 48.
Clause 48 sets out that the regulator can grant approval to a relocation only if it does not undermine the financial sustainability of the club and does not cause significant harm to its heritage. Given that clubs will be required to consult with fans on matters relating to home ground, we expect that the regulator would consider that in reaching its decision on whether to approve a relocation.
Mr Betts
The Minister is therefore saying that a club makes a proposal, consults with the fans and comes to a view, then the regulator must accept the view that the club has come to. Why does the regulator not have a responsibility to ensure that the fans are comfortable with any proposal in the way that amendment 29 suggests? Why is it simply left to a club, which may have a vested interest, to consult with fans and report at second hand to the regulator?
Stuart Andrew
The regulator will be able to see whether that consultation was done properly, and the mechanisms that we are setting up for fan engagement are much strengthened from what they may be at the moment. That gives confidence that what the clubs consult on will be done through a mechanism that is much stronger than some of the examples mentioned earlier by the hon. Member for Barnsley East. By doing that, because it is about the club’s heritage—it is its home ground, and the club is going to move—the club must demonstrate that it has properly consulted with the fans in the way described by the Bill.
Stuart Andrew
The heritage of the club will include its home ground. Of course that is part of the description of heritage, so it will come under that aspect. Just selling the club to get a loan, for example, will not move the stadium, but if it is going to relocate, that is a change to the club’s heritage, so that will come under the heritage aspect of the Bill.
Stuart Andrew
As I said a moment ago, clause 48 sets out that a relocation can be granted approval only if it does not undermine the financial stability of the club or cause significant harm to its heritage. It will come under that.
Mr Betts
I will reflect on what the Minister said. I will perhaps do so at a future date, but I will not move it at this stage.
Clause 48 ordered to stand part of the Bill.
Clause 49
Duty not to change crest, home shirt colours or name without approval
Question proposed, That the clause stand part of the Bill.
Stuart Andrew
A club’s name, home shirt colours and crest are intrinsic parts of its heritage, and therefore the decision to materially change any of them requires considered thought and consultation. The clause requires a club to establish that a majority of domestic supporters approve any material changes to its badge or predominant home shirt colours. In practice, we expect that to take place through a formal survey of fan opinion, as happened last season when Bristol Rovers supporters opposed the final proposal put to them, resulting in the club halting the redesign of its crest.
The clause also requires clubs to get Football Association approval prior to changing the name their team plays under. The view of supporters is a significant factor in the FA’s final decision, but it may also need to balance wider considerations, such as the effects on other clubs in the pyramid, and the relationship between the club’s current name, the proposed name and the locality with which it is traditionally associated.
Stuart Andrew
The reality is that, to help it understand the specifics of club finances, the regulator will have at its disposal information that we do not have at the moment. If we set the levy by percentage, we may unintentionally cause a problem for some clubs and cause an unintended consequence. The regulator will be best placed to make sure that the levy is proportionate, which is why we want the regulator to determine it. My hon. Friend is right, in the sense that some clubs will pay more for a player than most clubs earn in a year, but we will make sure that the levy is proportionate. I understand the points the hon. Member for Sheffield South East made, and I have heard what some of the smaller clubs have been saying, but I am confident we will be able to achieve that aim.
Clause 52 will allow the regulator to charge a levy to licensed clubs that covers the regulator’s running costs, following the precedent of other regulators, such as the FCA and Ofcom. The cost of the regime will be paid for by licensed football clubs. By making football clubs more sustainable in the long term, the regulator will be providing a service to the industry. As the industry would benefit from regulation, it is logical that it, rather than taxpayers, should cover the cost.
The legislation puts robust checks and balances on the regulator, which will be limited to raising funds to meet its annual regulatory running costs. That includes the costs of ongoing regulatory activity, additional money for new activities, and costs associated with recouping set-up costs. In line with the principles of transparency and accountability, the regulator will be subject to “Managing Public Money” guidance, and its forecast running costs will be subject to review by the Department for Culture, Media and Sport and the Treasury.
The clause also gives the regulator discretion regarding the method for calculating the levy and in setting the levy payment level for individual clubs. To ensure that the regulator takes into account clubs’ differing financial circumstances, and to prevent charges from being unaffordable for clubs, clause 52 requires the regulator to take into account a club’s financial resources and the league it plays in. Clause 53 imposes a statutory duty on the regulator to consult regulated clubs and the Government on its levy rules.
The levy is an operational matter that should be determined independently by the regulator, and it would not be appropriate for the Government to make the assessment. As I say, running costs will be checked by both the DCMS and the Treasury.
Stuart Andrew
I can confirm that I am confident.
Question put and agreed to.
Amendment 23 accordingly agreed to.
Clause 54, as amended, ordered to stand part of the Bill.
Clause 55
PART 6: OVERVIEW AND INTERPRETATION
Stuart Andrew
I must say that I almost want to stand up, say what other Members have said and sit down again. I agree with everybody else: I wish we were not at this stage and that there had been a deal between the parties concerned, because it is in the interests of football for them to come up with a deal. I hope that the mechanisms we are talking about will enable us to encourage that deal to happen sooner rather than later.
On amendments 27 and 31, although the parachute payments can have the distorting effects outlined, they play a pivotal role in protecting clubs at risk of relegation from going bankrupt, as others have said, and certainly give certainty to clubs competing for promotion. As I mentioned on Second Reading, in the past, relegation from the Premier League often meant financial ruin, as teams such as Bradford City failed to adjust to the huge drops in revenue. Given the important role that parachute payments play in helping to ensure the financial sustainability of relegated clubs, removing them entirely could have significant adverse effects on the game, and we do not want to create an opportunity through the Bill’s distribution mechanisms to get rid of parachute payments by the back door. Including parachute payments in the Bill’s scope, as amendment 27 proposes, could do just that. It could mean the regulator accepting a final proposal from one of the leagues that removes those payments, and if the mechanism allowed for that, it could create significant financial uncertainty for clubs that could not confidently invest in promotion. My hon. Friend the Member for Chatham and Aylesford also mentioned the commercial agreements that are in place.
An exciting, competitive and sustainable pyramid is at the heart of what makes English football the asset that it is, and we should not put that at risk. We have excluded parachute payments from the backstop, because it needs to be targeted and simple to work effectively. Including parachute payments in the backstop means that the regulator could be presented with two entirely incomparable final proposals, which could render decision making almost impossible, but it is important to remember that the backstop may never be triggered, and is only ever intended as a last resort. We expect the leagues to reach a football-led solution themselves and will continue to press them to do so.
I recognise there are also concerns about the potentially distortive effects of parachute payments, and that is why the broader regulatory framework is designed to address it. If the regulator finds that parachute payments are causing a structural or systemic issue, it could attach discretionary licence conditions to parachute payment clubs to address that. We are creating a financial regulator, and it is entirely right that we solve issues like this through financial regulation wherever possible.
Mr Betts
It would help if the Minister was clear on what he was suggesting the regulator should do to deal with the massive gap between the clubs with parachute payments and those in the Championship without. Is he suggesting that the regulator should come in and tell clubs with parachute payments, “You have got them, but you cannot actually spend them, or not all of them, because that is distorting competition”? It seems a very odd way to try to deal with the problem.
Stuart Andrew
The whole point is that the regulator can look at financial controls and make discretionary licence conditions if it wants to try to minimise that impact. However, if the backstop ever gets triggered, if two very different bids are put in, the regulator is put in an incredibly difficult position; in contrast, if those backstop payments are there, the two sides will be able to adjust their bid to address it in another way, such as by improving the solidarity payments to other clubs as a proposal to reduce that cliff edge. That is the point we are trying to make. As I say, I cannot accept the amendment that the hon. Member tabled and I hope he will withdraw it.
Mr Betts
Could the Minister explain what he has just said? I still do not understand how it is going to work. On the regulator’s powers to deal with the problem created by parachute payments, which he accepts could be created, what exactly are those powers? How does he expect the regulator to use them?
Stuart Andrew
As I mentioned, it can introduce a discretionary licence condition. There will be a range of options that the regulator may consider, but it will have discretionary licence conditions that it could put on clubs in receipt of those payments that will manage the amount of money they are spending while helping to keep clubs financially solvent and sustainable. That is the point I am trying to make.
By way of background to clause 55, the Premier League earns significant revenues from selling its TV rights. It then determines how much of its broadcast revenue is distributed within its own league, and how much is distributed to the rest of the game, including the EFL and the National League. These backstop powers have been designed to incentivise reasonableness, encourage industry solutions and tackle any bargaining imbalance between the leagues. The clause sets out an overview of those backstop powers and defines some terms that are important for setting their scope.
One key term defined in the clause is relevant revenue. It expressly includes broadcast revenue, which is the predominant source of revenue for the relevant leagues and of any redistribution. The clause allows the Secretary of State to specify other kinds of revenue to be included as relevant, which will future-proof the policy—for instance, if broadcast revenue is no longer the main source of income for the leagues. There are safeguards on the use of this power, as the Secretary of State must consult the regulator, the FA and the relevant leagues, and can use the power only when there has been a material change in circumstances.
The exclusion of parachute payments in the clause is to ensure that the two final proposals can be easily compared. That is based on detailed analysis and advice on similar mechanisms. However, as mentioned, the regulator will still be able to consider parachute payments through the licensing regime.
The clause also sets out several other definitions, including the idea of a “qualifying football season”. The effect of this definition, together with the operative clauses in this part, is that the backstop can be triggered only in relation to the current season and the five subsequent seasons. That ensures that the backstop powers are used only in a reasonable timeframe and not for the remote future. I commend the clause to the Committee.
Mr Betts
I am not convinced by the Minister’s arguments, I must say. I think that we will be giving further consideration to this, as I hope the Minister will, and that we will come back to this issue on another occasion. I just hope that, by the time we come back, the Minister might be able to better explain the powers of the regulator to smooth out the issues where there are problems for Championship clubs trying to compete with those clubs with parachute payments. I was not convinced about that point from his arguments, but we will consider that further at another stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 31, in clause 55, page 45, line 3, at end insert—
“unless the IFR specifies otherwise in rules.
(2A) The IFR can only make such rules if it can be satisfied that their inclusion furthers its objectives under section 6 by protecting and promoting—
(a) the financial soundness of regulated clubs, and
(b) the financial resilience of English football.
(2B) The IFR should also have regard when making any rules under section 7 to act in such a way that avoids any—
(a) effects on sporting competitiveness of any regulated club against another regulated club,
(b) adverse effects on the competitiveness of regulated clubs against other clubs, and
(c) adverse effects on financial investment in English football.”—(Stephanie Peacock.)
Question put, That the amendment be made.
Football Governance Bill (Fifth sitting)
Debate between Clive Betts and Stuart AndrewTuesday 21st May 2024
(6 months, 1 week ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 May 2024 - (21 May 2024)
Mr Clive Betts (Sheffield South East) (Lab)
It is a pleasure to serve under your chairmanship this morning, Mr Sharma. I thank the Minister for his positive comments on new clause 8, which are very much in line with what it is trying to achieve. I think the Minister said that the new clause is unnecessary because the essence and intention of it is already contained in other clauses, and the regulator would be expected to operate in providing assistance to clubs in line with the way described in new clause 8. I think I have got that right.
Mr Betts
The Minister is nodding on that point. On that basis, I will not push the new clause, because the Minister’s explanation, and the evidence we have heard, reassures me that clubs that are coming up from the National League and want that assistance will be helped in precisely the way the new clause would require of the regulator.
Stuart Andrew
I welcome the positive comments from the hon. Member for Barnsley East. She is right that we are trying to have a fair and supportive approach here and that clubs should be supported.
I want to reassure the hon. Member for Sheffield South East that we have tried to design the Bill so that it recognises that the level of activity at the top of the Premiership, for example, will be vastly different, and that, as we heard in the evidence sessions, many of the club officers in the National League will be volunteers and we would not want to overburden them.
Stuart Andrew
The leagues will have to report to the regulator if they are making changes to any of the competition rules—that is a requirement within the legislation. If changes to competition rules were to impact any of the “relevant matters” in the Bill regarding fan consultation, the club will be required to consult the fans on the related club decisions. However, where changes to competition rules do not have such an impact, it does not seem appropriate to mandate that consultation. Therefore, I hope that the amendment will not be moved.
Mr Betts
Is the Minister saying that if there is a requirement by FIFA, UEFA, the Premier League or any other league for clubs to play their home matches away in another country, the clubs would have to consult the fans about that issue and the regulator would take account of that consultation, even if it was a requirement on the club by the competition organiser? Could the regulator overrule the requirement of the competition organiser in line with the fan consultation that a club would have to engage in?
Stuart Andrew
I think I understand the hon. Gentleman’s question, but my understanding is that that will be looked at on case-by-case basis. I want to ensure that I have exactly the right line for him and I would not want to give any misinformation, so I will write to him, if he will allow it.
On amendment 5, the hon. Member for Liverpool, West Derby is correct that fan engagement in football clubs is an integral part of football and capturing that in the Bill is essential. Regarding the specific amendment, I assure him that the fan engagement threshold requirement and the wider licensing regime already captures what the amendment is describing. As the Bill is drafted, before a club receives a full operating licence, the regulator—which is independent—will assess if the club has adequate means to consult fans and to take their views into account on a range of issues in the Bill. The test for a full licence, which is set out in clause 18, is such that a full licence cannot be granted unless the club meets the threshold requirements, including those on fan engagement.
Once a licence is granted, the regulator will continue to monitor the club’s adherence to all the threshold requirements, including on fan engagement. For the avoidance of any doubt, the regulator’s general duties in clause 7(4) explicitly require that. If the regulator identifies that a club is no longer meeting the fan engagement threshold requirement, the regulator can take relevant action to bring the club back to meeting that threshold requirement. Given that those elements are already a feature of the licensing regime, I hope the hon. Member will not move his amendment.
On amendment 17, the FSA has been extensively consulted from the fan-led review until now. I am incredibly grateful to Kevin Miles and all those at the FSA for their support—the amount of help and support that they have given to this process has been extraordinary. The Government expect that the regulator will continue that engagement with the FSA, and it is often likely to be a relevant stakeholder on fan engagement. It is therefore not appropriate for the legislation to bind the regulator unnecessarily, but I hope that that makes it clear that we expect the FSA to be consulted where relevant.
As currently drafted, the Bill is future-proofed so that the regulator may always consult the most appropriate stakeholders in relation to and at the time of a particular decision. The regulator will be best placed to establish what adequate fan consultation looks like in practical detail, given its position of oversight and understanding of each club’s fan base. Adequate fan engagement is not a one-size-fits-all, as the hon. Member for Barnsley East mentioned, and limiting it to a strict definition would water down the intention for clubs to be able to take a bespoke approach. The legislation has deliberate, in-built flexibility so that fan engagement expectations can be tailored to a club’s size, fan base and individual circumstances.
On the topic of guidance on fan consultation, it will be for the regulator to determine the most effective course of action in relation to producing and publishing any formal guidance, the contents of guidance and the timing of publication. As we heard on Tuesday, this is a key area for the FSA, and the Government expect that the regulator will work at pace on any required formal guidance, working throughout with appropriate stakeholders, including the FSA. Setting a legislative requirement for that may risk rushing the regulator’s work in the space without sufficient time for necessary consultation with those stakeholders, or force the premature publication of guidance to the detriment of its quality. I therefore hope that the hon. Member for Barnsley East will withdraw her Bill—sorry, her amendment. [Laughter.]
Mr Betts
On corporate governance, I do not want to name names, but this relates to a club not too far from me. Is the Minister saying that in the future it will not be appropriate to regulate the corporate governance of a club if it merely has an owner who is the chairman, and no board of directors to run the club?
Stuart Andrew
The hon. Gentleman makes a really important point, which is why one of the mandatory conditions is good corporate governance. Some clubs do that extremely well, and he gives an example of one that may not be doing so well. For it to get a licence, the regulator would expect a minimum level of corporate governance.
Stuart Andrew
Well, the Bill identifies an individual as the owner, not a state, but we will come on to some of those points. I have heard some of these representations as we have been preparing the Bill. It would not be right for the regulator to be getting into foreign policy—I do not think any party would want a regulator of any sort to be setting the nation’s foreign policy—but I get that it is an area of interest, and we will come on to it later in our proceedings.
Football clubs hold unique importance to their fans and local communities, who are the ones who lose out when clubs are exploited or mismanaged by unsuitable officers. Clause 29 will prohibit individuals from becoming a new officer of a regulated club unless the regulator has determined beforehand that they are suitable to be an officer.
Once the prospective officer has provided a complete application to the regulator, it will assess them to ensure that they meet the individual officer fitness criteria, as defined in clause 26. They must possess the requisite honesty and integrity and the requisite competence and must be financially sound. If the regulator is satisfied that the individual meets these requirements, it must find them suitable to be an officer of the club; otherwise, it must find them unsuitable. When the regulator is making this determination, it will take into account the matters listed in clause 37. By requiring new officers to undergo the regulator’s tests, the clause will better mitigate harm to clubs by stopping unsuitable individuals from becoming officers.
The Bill requires prospective new owners and officers to pass the regulator’s owners and directors test before they join or buy a club. However, it is possible that someone might take up a position at a club without first having undergone those tests. This may be a blatant and deliberate breach of the requirement to undergo tests before joining the club. A prospective owner may act in bad faith, hoping that once they are in, the regulator will be more hesitant to fail them, but in some circumstances a person may fall into the definition inadvertently or have some other relatively innocent reason for the breach. This may occur, for example, if a person inherits significant equity in a football club or if a person disputes in good faith whether or not their actions bring them within the Bill’s definition of an owner.
Clause 30 will therefore provide the regulator with the powers that it needs to respond decisively but flexibly when a person has become a new owner or officer of a club without the regulator having first determined whether that person is suitable. When the regulator becomes aware that this has happened, it must either notify the new owner or officer that they are being treated as unsuitable automatically or require them to provide an application, treating them as though they were a prospective applicant. When deciding which option to take, we expect the regulator to assess the circumstances of each case carefully and consider whether the new owner or officer has an innocent explanation or whether they have deliberately breached the regime.
The regime cannot be allowed to be abused. The regulator must have the discretion and the teeth that it needs to address harm to the sector. Clause 30 is an important step towards achieving that aim.
When the regulator is minded to fail a new or prospective owner or officer, clause 31 will require the regulator to give that person and the relevant club an opportunity to make representations before the regulator makes its final decision. Affected persons can also require an internal review of the regulator’s decision and then can appeal the outcome of that review to the Competition Appeal Tribunal. The purpose of clause 31 is to allow a new owner or officer, or the relevant club, an opportunity to argue their case before the regulator finds them unsuitable, which will ensure that the regulator has all relevant information available to it, allowing it to make better decisions and ensuring the regime is more effective.
The Government recognise the intent behind new clause 3, which is to ensure that football continues to be played in a club’s home ground. The Bill takes account of a variety of ownership structures relating to home grounds that exist across the football pyramid. The new clause would capture only one type of ownership structure. Owners may not necessarily directly own the rights to the club’s ground; in fact, only about 40% of clubs own their stadium outright. The new clause would require owners to make a commitment about something over which they do not necessarily have complete control or influence.
Let me be clear: the intent of the new clause will already largely be achieved by the Bill as drafted. The Bill places duties on the club itself regarding selling the club’s home ground or relocating from it; clauses 46 and 48 will require clubs to obtain approval from the regulator before a home ground is sold or relocated. If that requirement is breached, the regulator can exercise its enforcement powers.
Mr Betts
The Minister refers to what the Bill will do in regard to future sale, but the new clause does not deal with future sale; it deals with something that has already happened. The Minister says that it does not cover all eventualities, which may be true, but surely there are eventualities that need to be covered. If the Minister does not think that the new clause goes far enough, is he prepared to table another new clause that goes further to ensure a sustainable future for a club with a ground to play on?
Stuart Andrew
The hon. Gentleman makes an interesting point. I will not commit to introducing a new clause, but I will commit to going away and having another look at the points that he has raised, if that will satisfy him.
The Bill also allows for senior managers to be held accountable if they are responsible for the club breaching the requirements. That means that enforcement action could be taken against an owner of a club who was also a senior manager of the club and responsible for the club failing to comply with clauses 46 and 48.
Football Governance Bill (Fourth sitting)
Debate between Clive Betts and Stuart AndrewThursday 16th May 2024
(6 months, 1 week ago)
Public Bill CommitteesRead Full debate Football Governance Bill 2023-24 View all Football Governance Bill 2023-24 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 16 May 2024 - (16 May 2024)
Stuart Andrew
Clause 2 sets out the key definitions used in the Bill. It also gives the Secretary of State the power through a statutory instrument to specify competitions. Those specified competitions then define the regulated population—the clubs and competition organisers in scope of regulation. Defining the scope in that way is important in future-proofing the Bill. In particular, it will allow the regulator’s regime to adapt to future innovations in the market like those that we saw when the old First Division became the Premier League in 1992, or when the Football League was expanded and rebranded in the years that followed.
I turn to clause 3. Owners of football clubs play a pivotal role in the sport; without their efforts and investment, English football would not be the success that it is today. Owners have an immense responsibility not just to their club, but to fans, local communities and businesses in the surrounding area. While current league rules outline a requirement to declare who controls a club, the fan-led review identified concerns with the application of the role, in particular where clubs are owned or controlled by offshore entities or complex company structures. Fans have also expressed concerns about the opaque nature of who owns their club. Fans deserve to know who has ultimate responsibility for the club they support, and the clause will ensure just that.
Clause 3 signposts to schedule 1, which defines when a person is an owner of a club. The clause also defines a club’s ultimate owner or owners as those who have the highest degree of influence or control over the activities of a club. When a club applies for a provisional operating licence, it has to identify its owners and ultimate owners to the regulator in a personal statement. Clause 51 requires licensed clubs to publish their personal statements.
Defining the ultimate owner of a club and requiring clubs to declare who they are will be a crucial step in improving transparency and accountability in the game, and in ensuring that fans know who owns their club. Schedule 1 defines owners for the purposes of the Bill and equips the regulator to apply this definition in different real-life circumstances.
It is crucial that owners are suitable in order that the sport can be placed on a more sustainable footing. An ownership chain may be long and complex with many links. To ensure that clubs have suitable custodians, the regulator needs to identify the person with actual control at the very end of that chain, rather than the holding companies or the legal structures that are just links along the way. That is why, under the Bill, only individuals or registered societies are defined as club owners.
Registered societies are specific legal structures defined in clause 91. They must be run as co-operatives or for the benefit of the community. When used by fans for collective ownership of professional football clubs, they are typically “one fan, one vote” organisations in which control is split equally between hundreds or thousands of members. As such, they do not concentrate influence or control with just a few individuals.
Mr Clive Betts (Sheffield South East) (Lab)
This is a really important clause. There have been so many problems in so many clubs where actions have happened but there is some mystique about who is responsible. The mystique is often deliberate, to hide the real owners and what they are doing.
Although this will be the rule from now on, one issue that I can see arising is about what happens when a league wants to look at who was responsible for the actions of a club in past months and years. Will there be a trail to discover who the owner was in past months and years, so that that sort of action can be taken by the leagues?
Stuart Andrew
That would probably be an issue for the leagues. This is about setting up the statutory obligations and the powers that the regulator will need, and will have, to be able to identify the specific owner. The hon. Gentleman is absolutely right: I have heard time and again from fans that trying to identify who the specific person is has been almost impossible. As we are now putting this measure on a statutory footing, the clubs themselves will be obliged to identify who that person is, but I think retrospective work would be something for the leagues to deal with. If the hon. Gentleman will permit me, I will have a further think about the point and come back to him in writing.
I was explaining why ownership chains can end with registered societies without those societies needing to identify the named individuals behind them. The Bill’s definition of an owner is designed to apply to those at the end of ownership chains, no matter how complex the chains are. It draws heavily on precedent from other legal regimes where ownership can be complicated or opaque, including the “persons with significant control” regime in the Companies Act 2006. It is designed to capture those who have significant shares or rights in or other forms of significant influence or control over clubs. The definition also includes owners who meet one of those conditions at arm’s length, such as via a trust or similar body. This robust and comprehensive definition of owners recognises that clubs have different ownership structures. Part 3 of schedule 1 allows the definition to be amended to ensure that it is future-proofed.
Ultimately, the definition enables the regulator to look behind ownership structures to find the person who is actually responsible. That means that owners cannot simply evade regulation by creating ever more complicated ownership structures. Having a clear definition of an owner that reflects those who have influence or control over a club means owners can be identified, tested and held to account as custodians of the club.
I turn to clause 4. The Bill will introduce two key things that are missing in the industry at present: transparency for fans and accountability for decision makers at clubs. Central to both those points is clarity about who the decision makers are. Officers and senior managers must be clearly defined within the new regime so that regulatory requirements and enforcement can bite on the right people and fans know who is running their club. The clause defines an officer and a senior manager of the club for the purposes of the Bill. The definitions have been drafted in recognition of existing legislative precedent, including the Companies Act 2006 and the Financial Services and Markets Act 2023. It also uses the definitions currently used in the football industry.
The purpose of the clause is therefore to appropriately define the people who run or have a significant level of direct influence over the day-to-day running of the club. Other provisions in the Bill will require regulated clubs to publicly set out who their officers are and which persons carry out specified senior management functions. Officers of the club are subject to legislative requirements, including owners and directors tests. Senior managers will be accountable for the aspects of the club’s affairs that they are responsible for. The regulator may take enforcement action against a senior manager if the club commits a relevant infringement that is connected to a senior management function carried out by that individual or individuals.
Mr Betts
Can I just raise two issues? The first is about appointments to the board. Does the Minister feel that the issue of conflict of interest is important? Does he feel that he ought to be setting down somewhere what conflicts of interest may amount to, and what may disqualify someone from being a member of the regulator’s board? Secondly—this issue arises in Select Committees from time to time—will the regulator’s chair be subject to a pre-confirmation hearing by the Select Committee?
Stuart Andrew
I agree with the hon. Member for Luton South about the independence of the football regulator; we were really careful to ensure that as we drafted the Bill. She is right that we have to take into account the UEFA and FIFA rules. That is why we have made sure throughout that the regulator will be independent, including from political interference. We would not in any way want to see any sanctions on English football because of any pressure that might be given. As with others, we have engaged with both of those bodies. So far, we feel that they recognise that we have gone to great lengths to ensure that that independence is recognised.
On the board being reflective of society, I am a big advocate of making sure that that happens. There are the usual processes of Government appointments; as hon. Members will know, that issue is very much a consideration. Work is constantly being done to encourage a wide range of candidates to apply. I suppose this gives me an opportunity to shout out to the wider society: get involved! We need a very diverse range of candidates to apply for these positions.
We absolutely need to ensure that the measures on conflicts of interest are in there, just as we would with any other public body, and, yes, there will be a requirement for pre-confirmation of the chair through the Select Committee.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Schedule 2
The Independent Football Regulator
Stuart Andrew
The clause sets out the regulator’s objectives, which are its primary aims and also the limits of its statutory remit. As clause 7 sets out, the regulator may only act if the action taken advances
“so far as reasonably practical…one or more of the IFR’s objectives”.
The fan-led review highlighted a myriad problems facing football in this country, and they are all important issues on which action is need. However, in our response to the independent review, and the White Paper that followed, we were clear that not all those problems are for a regulator to fix. The Government have been clear about the areas on which a potential football regulator would need to act. They are areas related only to sustainability, as it is on the issue of sustainability that we believe the market has failed and remains ill-equipped to act. The three objectives in clause 6 codify that intention into legislation, while limiting the opportunity for scope creep to the various broader issues in football.
The first objective on financial soundness looks to deal with the ability of individual clubs to continue to meet their debts and liabilities, even in the face of changing circumstances, new risks and financial shocks. The lower the risk that a club will be unable to meet its debts and liabilities in the future, the more financially sound it is. More financially sound clubs should help to reduce the risk of clubs being run into the ground and lost to their communities.
The second objective is on the wider financial resilience of the English football system. It involves the regulator taking a more macro view of the market to address structural issues and systemic financial risks. There are issues that individually are a small problem, but when aggregated or multiplied pose a significant threat to groups of clubs or the pyramid as a whole. Examples include the distribution of broadcast revenue throughout the football pyramid, or where several clubs are highly dependent on similar sources of income or similar credit markets.
Mr Betts
I am interested in what the Minister says about the sustainability of the football pyramid. If a particular measure on the distribution of funding affects other clubs and those in the pyramid that receive that money, that could be construed as posing a risk to the pyramid and might fall within the remit of clause 6(b).
Stuart Andrew
We have had this discussion many times, and I look forward to further debate on this as we go through the Bill. The hon. Gentleman will know that we also have provisions in the Bill for the regulator to look at those sorts of issues through the licensing conditions. I look forward to going into that in a bit more detail with him when we get to that part of the Bill, but I am acutely aware of his interest in that specific issue.
The third objective is on safeguarding the heritage of English football. Since the game was first played more than 160 years ago, football clubs have been an integral part of local communities and the lives of their supporters. The identity of each club is unique and often entwined with the identity of its fans and the history of the local community. Clearly, financial collapse is a risk, but so is the potential for clubs to become unrecognisable to their fans and communities.
Mr Betts
I am interested in the Minister’s definition of heritage. So far he has talked about the heritage of English football clubs, not the wider game, and that is quite interesting. Does he accept, for example, that the FA cup is very much part of the heritage of football in this country, and therefore the regulator ought to be able to give some thought to that competition and its future?
Stuart Andrew
The hon. Gentleman tempts me to get drawn into an area of further expansion. I understand his point. I have never in my entire life been stopped by so many people to talk to me about football as on the weekend that announcement was made. I of course recognise the importance of the FA cup, but for the regulator to get into areas of match timings, replays and so on may be a bit too far. We will probably look more into that later.
The third objective looks to safeguard the elements I mentioned in the interests of the community and future fans, but not to stand in the way of the natural growth and renewal of a club. I commend the clause to the Committee.
Stephanie Peacock
Given the purpose of the Bill, as set out in clause 1, it is important that the regulator’s objectives are shaped carefully and clearly, as they will underpin many of the other measures. Although the fan-led review initially recommended a dual focus on sustainability and competitiveness, when it came to the regulator’s objectives the White Paper streamlined things so that the primary duties were regarding sustainability, with competitiveness becoming a secondary focus. I understand the Government’s reasons for that and have welcomed the subsequent primary duties being in three areas: the financial sustainability of individual clubs, the systematic stability of the football pyramid, and protecting cultural heritage.
I am pleased that the proposal from the White Paper is largely reflected in the Bill. However, I am curious about a few small changes, to which my hon. Friend the Member for Sheffield South East alluded in his intervention. For example, the exact wording in the Bill has “financial soundness” rather than “sustainability”, as was in the White Paper. Will the Minister explain why? It seems strange that the word “sustainability” is not included at all in the objectives. Further to that, the White Paper framed the systemic financial resilience objective in terms of the football pyramid, but the Bill goes only so far as to say “English football”. Will the Minister tell us whether the word “pyramid” has been purposedly omitted? Or does he believe that the definition of “English football” adequately covers things? I have no further issues with the intent of the objectives, but the wording is important if the Bill is to achieve its stated aims.
Mr Betts
We should always be cautious when we look at regulation. Without drawing you into the debate, Sir Christopher, I am sure that you would echo that point. Nevertheless, the fact is that there is a bit of conflict in the Government’s argument. Why are we here today with the Bill in terms of regulation? One of the reasons why is that a handful of clubs decided that they wanted to break away into a European super league, so the Bill specifically mentions clubs not being able to simply up roots and go into a different league without permission. The Bill legislates for and gives the regulator powers over new competitions and which clubs may enter into them, but no powers over existing competitions and how they may be changed.
Let me put a scenario to the Minister that involves not just FA cup replays, because I suppose that decision could be reversed; it would not be too difficult to manage if we got to the point where we wanted that to happen. Let us say there is a scenario—it nearly happened a few years ago—in which the Premier League decides to create a Premier League Two, then pulls the drawbridge up and stops relegation from that league. What would happen then? Would the Minister say, “That is terrible. I am getting a lot of letters and emails and people stopping me in the street; I cannot do anything about it and the regulator has no power”? Indeed, would the regulator have a power to intervene at that point, because that would be a major disruption to the whole structure and pyramid of English football? If the regulator will not be there to protect the pyramid, what will it be there for?
Stuart Andrew
On the hon. Lady’s points, the term “sustainability” is used in the purposes and not again in its objectives. Our advice from the Office of the Parliamentary Counsel said that “soundness” achieves the same thing, but we are talking about the remit over the entire pyramid. We feel that would overstretch the regulator, which is why we are focusing on the top five leagues.
I understand the points made by the hon. Member for Sheffield South East. On a recent podcast, I repeated the phrase, used by many, that replays are often the David and Goliath of English football. However, in terms of financial sustainability, I cannot imagine a single club relying on the off-chance that it may have a replay at some point as a sustainable business model for its individual club. As I say, that is why the regulator will focus tightly on what the business plans would be.
Mr Betts
I was thinking of moving my amendment from the Chair and then I could have directed the Minister to agree with it. [Laughter.] This proposal would feel very strange, as Ben Wright from the PFA said this morning, without the two groups of people who are absolutely key to football. We can manage without owners and directors, but we cannot manage without fans and players, and they are not mentioned in this part of the Bill. Will the Minister give us some comfort at least about how that particular point will be addressed?
Stuart Andrew
I recognise the intent behind the amendments, which is to add further groups to the list of persons the regulator should co-operate and proactively and constructively engage with. However, we do not think that is necessary, and we believe it would alter the intention and effect of the regulatory principle in question. We have always said that the regulator should take a participative approach to regulation, which means to co-operate constructively with the regulated industry where possible.
The principle’s original intention was to guide the regulator to take that approach, which might not otherwise have been implicit, since the natural instinct for regulators may be not to co-operate with the persons they are regulating. By contrast, for other groups such as fans and members of local communities, it is implicit that the regulator should engage with them where appropriate, not least because the sustainability objective of the regulator is in the very interests of fans. Indeed, fans and local communities are the key consumer group that the regulator is established to protect. They feature in the very purpose of the Bill in clause 1.
My concern is that to list every possible stakeholder that the regulator should engage with during the course of regulation would be a slippery slope that could impact on the effectiveness and, crucially, the speed of the regime. That is not the intention of this principle, nor is it necessary detail for the face of the Bill.
I absolutely recognise that players and fans have a huge role to play in football. It will be for the regulator to engage with those stakeholders during the appropriate process. That is why, absolutely, where collaboration is working well, we would expect the regulator to continue that. Having a comprehensive list might mean that we miss out a group that we would like the regulator to consult. It might also mean that the regulator then feels obliged to consult that entire list on everything, whether appropriate or not, clogging the regulator up, if we are not careful.
Stuart Andrew
I absolutely understand the hon. Gentleman’s point. It is why, on page 93, the Bill specifically says that the “relevant matters” include
“matters relating to…operational and match-day issues”.
I encourage the clubs to speak to the fans about these very issues.
The Bill is very focused on sustainability in order to protect the long-term future of clubs, in the interests of the fans and the local communities. That means that the regulator will not intervene directly on issues outside this scope—including match scheduling and ticket prices. Issues of that kind are for football to address. It is well within the gift of the leagues and the authorities to intervene if clubs are not getting it right.
The purpose of the state of the game report is to allow the regulator to better understand the finances and economics of the industry and its individual clubs. As industry experts said on Tuesday, the state of the game report will allow the regulator to look forward as well as in the rear-view mirror. In turn, that allows it to deliver on ensuring the sustainability of clubs. To specifically require the regulator to consider ticket pricing and match scheduling as part of the report would detract from that purpose.
Mr Betts
The Minister is saying that this is a job for the leagues and the clubs. One problem with the legislation—it relates to the point made a few minutes ago by my hon. Friend the Member for Liverpool, West Derby—is that clubs consult their own supporters. The real argument in the Premier League a few years ago was about the price of tickets for away supporters. How do clubs consult on that? Why should not the regulator, in looking at the sustainability of the game, consider the impact on the future of the game of pricing out away supporters?
Stuart Andrew
Again, the clubs will have that engagement and raise those points with their own individual club—the away clubs can raise the issues within their club. This is actually putting it into legislation. It gives them that opportunity, which does not currently exist.
The Government do not believe that amendments 6 and 18 are necessary, as we expect that
“operational and match-day issues”
will already capture ticket pricing, and kick-off times are ultimately a sporting decision. It is not for the regulator to intervene on the sporting calendar, but I do recognise the issues that it causes for fans. It has been raised in Culture, Media and Sport questions with me on a number of occasions, and I have raised it with the authorities. They have promised to come back to me although, in fairness to them, these decisions are sometimes out of their control too. It is quite a challenging area.
The Government would welcome any club that chose to go beyond the relevant matters and consulted fans on kick-off times and everything else. However, as I have just mentioned, it is not always an issue that clubs have enough control over to adequately consult fans and respond to opinions. Therefore, to mandate them to do so could be problematic.
For those reasons, I am not able to accept the amendments and I hope the hon. Member for Barnsley East’s will therefore withdraw them.
Football Governance Bill (Second sitting)
Debate between Clive Betts and Stuart AndrewTuesday 14th May 2024
(6 months, 2 weeks ago)
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Mr Betts
Q
Steve Parish: As I said, if you had a regulator that we all believed would uniquely make all the right decisions for football, of course we would be in favour of it. What you asked me is what my concerns about the Bill are; my concern with the Bill as a starting point is that relevant revenue is only broadcast income, which would be 75% of Bolton’s revenue should they get into the Premier League, and it is about 20% of the top six’s revenue. That straight away is an example of an area of concern.
I just want to come back on parachute payments, because I need to give you some numbers. In the Premier League, if you finish around midtable, you will turn over about £180 million—it is not an unreasonable thing to budget for. The first year in the Championship, with parachute payments, is about £70 million—so you have about an £110 million drop in revenue, which is pretty catastrophic for any business to try and contend with if they get relegated. Many clubs manage to get back in the first year—on average, it is about one a season for the last 10 years—but the average finishing position of a parachute club is eighth. Many clubs, like Stoke or Sunderland, disappear from the Premier League, and that big gap and big drop gets them in a lot of financial difficulties. This is why parachute payments are so important for the sustainability of football.
Tony Bloom: You talk about self-interest: that is not the case at all. I care about every football club in this country. I am not worried about the top six—I have not said anything about the top six. We have regulations in the Premier League, and if something is going to be changed, you need a two thirds majority; if they get two thirds majority, and the top six vote, and get a few more people, that is the way it is. I am not complaining. Football needs to vote, and the Premier League has its constitution; I have no issues with that.
I used to be in the Championship, and we had parachute payments. I was not complaining—we just worked away to try and be the best we could for our football club. I was never in favour of parachute payments when we went and won the Championship; I never voted for that or discussed that. All I was asking when I was in the Championship was for there to be a bit of sustainability so clubs did not lose an average of £10 million a year, which was voted against because clubs wanted to give themselves a chance to get promoted to the Premier League. I am saying exactly the same in both divisions.
Stuart Andrew
Q
Tony Bloom: Because of the talk of a regulator, as I said—
Mr Betts
Q
David Newton: I do not think that is necessarily a fair characterisation. The fixture calendar is extremely complex. We sit down two years prior to the season with our colleagues at the Football League and the Premier League and discuss how we are going to best fit in the games we have. We are the only major European footballing nation with three domestic cup competitions: the EFL trophy, the Carabao cup and the FA cup. We have 20 teams in the top league and 24 in each of the other three leagues, and the calendar is extremely congested. It is not just as a result of European ties. Each of those is a fantastically vibrant competition in its own right. Each of those competitions has a heritage and importance, and it is about a balance between all those competitions, as well as the European ones, that allows them to be fitted in.
Stuart Andrew
Q
David Newton: It is common knowledge around the room that UEFA and FIFA have statutes of their own, which basically prevent state interference in the running of football and football competitions. We have worked closely with UEFA and FIFA, and with the DCMS staff who have worked so hard on this Bill. They have been taken through where we have got to. Although we have not had a definitive view as such, it is reasonably clear that a tightness of the Bill relating to football governance is not likely to present huge or significant problems, subject to any changes that may occur. However, anything wider would increase the risk of FIFA or UEFA intervention. That is obviously a place we do not want to be, because of the sanctions that may flow, in theory, from that. We continue to work closely with both those bodies and keep them abreast, along with DCMS, of where the Bill has got to, but I think the narrowness of scope is very important.
Football Governance Bill (First sitting)
Debate between Clive Betts and Stuart AndrewTuesday 14th May 2024
(6 months, 2 weeks ago)
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The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)
Q
Dr Philippou: It is fairly light touch from a compliance background, if you look at the financial implications and what is being asked for. In summary, you are effectively asking for some budgeting, some basic risk assessment, and knowing the roles of your senior management. It is fairly light touch, if you are running the club properly. From my perspective, it does not look particularly over-regulated. Certainly, from a compliance perspective, I would expect that if you are running the club properly, a lot of that information should be there anyway, and should be easily reportable without adding much burden to clubs.
Stuart Andrew
Q
Kieran Maguire: In terms of the issues at the bottom of the Premier League, three clubs have just been promoted and have almost been relegated. The three clubs above them—excluding Everton, because if it had not had a points deduction, it would have been on 48 points—have been in the Premier League for two or three seasons, so there is an acclimatisation issue. There is also an issue at the top of the Championship. The clubs that have just been relegated have greater resources than their peer group, and that is going to have a yo-yo effect, which we appear to be locking in on a greater basis. That tends to be more of the case in the Championship and League One, where some clubs are moving. That is driven by the culture of the owners. The system at present encourages overspending. We have not seen that in respect of the three clubs that are being relegated, but we did see it to a greater degree with the clubs that were promoted in 2022.
Dr Philippou: Absolutely, there is that competitiveness issue, which we have seen diminish over time. That has a long-term impact on the commercial side and on broadcasting rights, because the less competitive a league becomes, the less likely people are to watch it and the less likely broadcasters are to put money in, so that can also have an impact.
Mr Betts
Q
Kieran Maguire: You would hope that the parties would be able to sort something out between themselves. If we did not have a regulator, we would be in a very similar position to the one we have at present. The Premier League has no incentive to be more beneficial, in terms of the distribution of money. It would have to be dragged to the table by the regulator, so that is why the backstop powers are important. The EFL is a fantastic league in its own right. The chances are that anybody who has supported a club in the Premier League have also supported it in the EFL.
When it comes to the regulator using last resort powers, it is effectively the same as the Bank of England. The Bank of England is the lender of last resort, but there are alternatives. Surely the same should be true in football. It is testament to the intransigence of the Premier League, in particular, which is unwilling to look at the broader football issues in the country.
Football Governance Bill
Debate between Clive Betts and Stuart AndrewTuesday 23rd April 2024
(7 months ago)
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Stuart Andrew
My hon. Friend raises an interesting point. I have had dozens of meetings with the Premier League, but as far as I can recall, I do not think that it has raised carving out international broadcast revenue in those discussions, which have always revolved around the net media revenues and the aggregate revenue received by both the Premier League and the EFL; she raises a very interesting point.
Some say that the regulator should be able to trigger the backstop right at the outset. Frankly, that would just be a frontstop, and it may hinder a deal being struck by football itself, but the Bill provides that if there is no deal because one has not been offered or one side cannot sign it because it is not a good deal, that side can ask the regulator to trigger the backstop.
Members have mentioned parachute payments, and I am always happy to meet colleagues to discuss and look at that matter further, particularly in Committee. I am also happy to organise a briefing, if that would be helpful, because it is quite a complex issue. Parachute payments play an important role in the sustainability of the system by softening the financial blow of relegation, and removing them could have adverse effects. Look at Bradford City: when they were relegated from the premier league in 2001, there were no parachute payments, and the following season they went into administration.
Stuart Andrew
I literally have two minutes. I have offered a briefing, and we can have this debate afterwards.
We realise that parachute payments can have a distortive impact, particularly in the championship, which is why the regulator has the power to address any structural or systemic issues through its licensing regime. Any distortion created by parachute payments also has the potential to be addressed through distribution to non-parachute payment clubs; that is exactly what the regulator will be able to look at as part of the backstop. Leading experts have advised us to keep the backstop targeted and simple, which we have done, and to design it so that it may never need to be triggered, which we have also done. As such, we do not think it is appropriate to include parachute payments in the backstop, nor we do think it is necessary to do so, as we have ensured that the regulator will be able to address any distortive effects that they cause via the licensing regime.
I am running out of time to answer more questions. This is a landmark Bill for football. It has been carefully designed to celebrate the sport’s success and encourage investment, but it is about providing stability for clubs, sustaining the pyramid and putting fans at the heart. We recognise that there are many successes, but it is important that we tackle the issues. The IFR will be focused on football, focused on financial stability and focused on fans.
I close by playing on the iconic words of 1966. Too many fans have seen their club on the brink, and they think it’s all over. Well, it’s not now.
Question put and agreed to.
Bill accordingly read a Second time.
Football Governance Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)), That the following provisions shall apply to the Football Governance Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 6 June 2024.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.—(Joy Morrissey.)
Question agreed to.
Football Governance Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Football Governance Bill, it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by the Secretary of State.—(Stuart Andrew.)
Question agreed to.
Football Governance Bill (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Football Governance Bill, it is expedient to authorise:
(1) the charging of a levy by the Independent Football Regulator in connection with the exercise of its functions under the Act; and
(2) the payment of sums into the Consolidated Fund.—(Stuart Andrew.)
Question agreed to.
Oral Answers to Questions
Debate between Clive Betts and Stuart Andrew(1 year ago)
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Stuart Andrew
The hon. Lady raises an important point. Legacy is incredibly important to me. That is why we have been giving hundreds of millions of pounds to improve on and build new grassroots sports facilities, so that there are plenty of opportunities for people to enjoy the things they want to do that are inspired by tournaments just like Euro 2028.
Mr Clive Betts (Sheffield South East) (Lab)
This should be an opportunity for fans to celebrate and enjoy. I remember the 1996 Euros, when the Danish fans came to Sheffield and drank the city dry, without any problems or disorder whatsoever. Will the Minister give two commitments? First, will he engage with the Football Supporters’ Association in full planning for this? It needs to be involved because it has really good ideas and experience. Secondly, will he talk to the authorities about ticket pricing, so that those on low incomes, and particularly children, can get to the games and enjoy the events?
Stuart Andrew
I absolutely commit to engage with the Football Supporters’ Association. I also met fans ahead of the European championship finals in Istanbul this year. The hon. Gentleman is right, and there are lots of issues for us to discuss. We are in constant discussions with the likes of UEFA, for example, to which I will happily make those representations.
Football Governance White Paper
Debate between Clive Betts and Stuart Andrew(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Stuart Andrew
May I again put on record my thanks for all the considerable work done by my hon. Friend in this area? She is right to highlight the fans, and they have been at the forefront of my mind in all the meetings I have held to discuss the White Paper. I agree that there is no threat to competition within the White Paper. If anything, it will bring about a great deal of confidence, and I hope we will see even more investment—dare I say from the right people? On the time frame, we will be doing a short, targeted consultation following the publication of the White Paper. My vision is to get on with this as quickly as possible, and I know that the Secretary of State shares that as far as—Members will expect me to say this—parliamentary time allows. In the meantime we are also considering the establishment of a shadow regulator to do much of the preparatory work, so that once it is enacted, the regulator can get on with the work straightaway.
Mr Clive Betts (Sheffield South East) (Lab)
I welcome the White Paper, which contains most of the important recommendations of the fan-led review. Most football fans in this country will not read the White Paper, and probably do not have an understanding of our deliberations here, but if we do not implement this and get it right, the same devastating consequences will befall some clubs over the next few years as have already befallen clubs such as Bury.
One of the most important things is that the enormous wealth of football is distributed more fairly through the whole pyramid. The Minister says the regulator’s powers will be a fallback, but I think they will be necessary. Paragraph 9.12 of the White Paper talks about the regulator deciding on the
“issues that any financing would need to address.”
Is it not more than that? The regulator needs a steer from the Government and from this House on what those issues should be. Does the Minister accept that the issues are twofold? We should have a fair distribution that, first, ensures the sustainability of all clubs throughout the pyramid and, secondly, prevents the cliff edge of parachute payments, which create unfair competition at various points in the pyramid.
Fan-led Review and Football White Paper
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Stuart Andrew
My right hon. Friend is right to highlight the importance of the issue. We will set out our plans for reform of the game in the forthcoming White Paper. As with all Government policy, when the Government commit to reform, legislation only follows when parliamentary time allows, and we will be working on that at pace.
Mr Clive Betts (Sheffield South East) (Lab)
Will the Minister just stop trying to deflect attention by saying that football will sort itself out? The mess that the game is in is because football has not sorted itself out. That is why we need the Government to come in with a clear statement, a White Paper and a commitment to legislate speedily. The message is simple—he must have talked to the English Football League, which says there is no chance of an agreement on funding with the Premier League, because the Premier League holds all the money and all the cards and it will never give to the rest of football that which is enough to make the rest of the game sustainable.
Stuart Andrew
The hon. Gentleman likes to tease me regularly on this issue. I agree with him; that is precisely why we will publish the White Paper on Thursday, and I am sure he will be pleased with its contents.
Oral Answers to Questions
Debate between Clive Betts and Stuart Andrew(1 year, 11 months ago)
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Mr Clive Betts (Sheffield South East) (Lab)
The Minister quite rightly wore the armband in Qatar. Does he agree that it is completely disgraceful that FIFA stopped Harry Kane and other captains from wearing the armband as a demonstration of solidarity? Will he encourage our Football Association to work with other, like-minded FAs to ensure that FIFA changes its approach to the awarding and running of World cups?
Stuart Andrew
That was one of the reasons why I wore the armband. It was totally unacceptable that both the Welsh and English teams, at the 11th hour, were faced with an impossible decision. I thank those teams for wanting to wear the armband; it means a lot to all of us. I have already spoken to the FA about where we go from here. We cannot, at the end of this tournament, just let the matter come to an end. We need to talk about the future.
Oral Answers to Questions
Debate between Clive Betts and Stuart Andrew(2 years, 1 month ago)
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Mr Clive Betts (Sheffield South East) (Lab)
I want to push the Minister a little bit further, as he might appreciate. There is widespread support for the fan-led review. Okay, have the discussions about how it is going to be done, but can we have a commitment from the Front-Bench team that they are going to implement the principles of the review—an independent regulator, fairer distribution of funding, and an end to parachute payments?
Stuart Andrew
The hon. Gentleman is very good at pushing me on points, but I am sure he would accept that it is only right that I check all the details before making commitments. I assure him, though, that we will be publishing the White Paper very soon.
Oral Answers to Questions
Debate between Clive Betts and Stuart Andrew(2 years, 5 months ago)
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Mr Clive Betts (Sheffield South East) (Lab)
I welcome the initial support—it is initial I am sure—that the Government are giving towards regeneration in my constituency. However, there is a problem. Initially, Sheffield Council was planning under the local plan to build around 40,000 homes in the next 15 years. With the metropolitan uplift, that has increased the number to more than 50,000. That will mean unnecessary building on greenfield sites, which otherwise could have been saved, and it will take the impetus away from building on regeneration brownfield sites. Will the Minister agree to meet me and representatives of the council to discuss how we can avoid this double disaster from happening?
Stuart Andrew
How could I possibly turn down an invitation to meet the Chair of the Select Committee? On the uplift, we are clear that this should be about the identification of existing sites and the regeneration of brownfield sites to meet that uplift. I will of course meet him to ensure that that happens. Regeneration is what we want, and I am glad that we are helping out in Sheffield.
Oral Answers to Questions
Debate between Clive Betts and Stuart Andrew(2 years, 6 months ago)
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Mr Clive Betts (Sheffield South East) (Lab)
We look forward to seeing the Minister and the Secretary of State at the Select Committee to discuss these matters early after the recess. It seems there are some genuine improvements in the proposals, particularly, as described in paragraphs 50 and 60 of the explanatory notes, the clauses that give greater strength to local plans in looking at individual planning applications.
There are two areas where the Bill might be strengthened. The first refers back to what the hon. Member for Bexhill and Battle (Huw Merriman) said. Yes, developers will have to set out what they intend to build, but what sanctions will the local authority have if developers do not follow those promises? The second is about what happens if a developer does not observe conditions attached to a planning permission. That has happened with Avant Homes at Owlthorpe in my constituency—I have talked to the Minister about this—where the developer is refusing to comply with a whole range of conditions, including on wheel washers, compounds for workers and engaging with the local tenants’ association. I notice that the other day, the Daily Mail drew attention to the fact that the same developer has not met conditions in Nottinghamshire. What sanctions will the local authority have to deal with a developer in such a situation and to take into account those failures when a future planning permission is put in for?
Stuart Andrew
I am grateful to the Chair of the Select Committee and for the reports that fed into many of the changes we have made. He is right to raise those issues. One issue communities see far too often, and the reason why they are sometimes opposed to development, is that they do not actually get what was promised at the beginning. I am really keen that, through the Bill, we give that power back to local communities and ensure neighbourhood plans are strengthened.
Building Safety Bill
Debate between Clive Betts and Stuart AndrewWednesday 20th April 2022
(2 years, 7 months ago)
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Stuart Andrew
I must start with a reminder of where this journey started: 72 people lost their lives in the Grenfell Tower tragedy, which was the largest loss of life in a residential fire since the second world war. All our thoughts are with those families who have lost loved ones. The Government are determined to ensure that such a tragedy never happens again.
I thank the Members of this House, noble Lords, cladding groups and industry stakeholders who have worked tirelessly on this landmark legislation. I remind Members that the Bill not only creates an improved building safety regulatory system but protects leaseholders, who have become victims in the building safety crisis. We have stuck to my right hon. Friend the Secretary of State’s principles on building safety, which are that we must make industry pay to fix the problems for which it is responsible; protect leaseholders; and restore common sense to the assessment of building safety risks, thereby speeding up the fixing of the highest-risk buildings and stopping buildings being declared unsafe unnecessarily .
Mr Clive Betts (Sheffield South East) (Lab)
I accept that a lot of what the Minister is saying is correct—that those who are responsible should pay and leaseholders should not—but he missed out one group that has been particularly affected by Grenfell: social housing tenants. Why is the Minister not prepared to offer them the same financial support as he is giving to leaseholders?
Stuart Andrew
We continue to review all these matters. We are looking at and consulting on the whole of the affordable housing and social housing policy area, and we will come back to ensure that we get it right.
Stuart Andrew
I am grateful to the hon. Lady for her engagement, too. She raised this important point with me yesterday. Yes, absolutely, we have officials looking at that, but also, as I have said, the Building Safety Regulator will be assessing buildings such as those. If this becomes an area that needs further consideration, we will look at what measures need to be introduced.
Mr Betts
I thank the Minister for giving way. He is being very generous, but these are important and quite complicated issues. There is a general welcome for the Government’s attempts to take a more proportionate approach and for moving away, albeit over a period of time, from EWS1 forms to PAS 9980, which can cover whole blocks rather than individual properties. The two questions that the Select Committee has not had answers to are, first, whether the Government will look at making the building regulator responsible for deciding which blocks need this new assessment rather than the building owners, who might have a particular interest in saying no; and, secondly, whether he will ensure that the professional indemnity insurance scheme also applies to assessors on the PAS 9980 assessments as well as to those on the EWS1 forms?
Stuart Andrew
Once again, I thank all hon. Members for their contributions. They have raised lots of very serious points and questions and have clearly demonstrated a long-standing commitment not only to their constituents, but to this wider issue. I am grateful to right hon. and hon. Members for acknowledging that this piece of legislation is vastly different from what it was, and I apologise to the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), for the necessity, I suppose, of the late amendments that we tabled. I hope that he agrees, however, that it is important for us to get the Bill on the statute book, and to start the process of making sure that people feel safe in their home. I was particularly struck by some of the contributions from my hon. Friends who mentioned that. I also thank all those who have been involved in campaigns; they have shown how hard-working campaigners can make a considerable contribution on a very serious issue such as this.
I will start by responding to some of the amendments that the hon. Member for Sheffield South East (Mr Betts) tabled. I thank him and the Levelling Up, Housing and Communities Committee for their prelegislative scrutiny of the Bill and their tireless scrutiny of the Government’s response since the fire at Grenfell Tower.
Amendment (e) to Lords amendment 184 states that no
“service charge is payable under a qualifying lease”
where the landlord is either a private registered provider of social housing or a local authority. It provides that funding to meet the costs concerned would come from the levy set out in clause 57. I reiterate the Government’s commitment to protecting leaseholders, but we will not be able to support the amendment. We are clear that those responsible for creating historical building safety defects need to pay to put them right. That principle should apply equally where the party responsible is a social housing provider or local authority. Social housing providers will not be subject to provisions that stipulate that building owners and landlords with a net worth of more than £2 million per in-scope building must pay all in-scope remediation costs. They will be required to pay in full only where they were involved in developing the building.
We are also introducing an ambitious toolkit of measures to allow those directly responsible for defective work to be pursued. Those measures include an extension to the limitation period under the Defective Premises Act 1972 to 30 years; a new course of action relating to product manufacturers; and provisions removing the protections afforded by special purpose vehicles and shell companies. We have been working closely with social housing providers to help them to understand the impact of these changes.
Amendment (f) to Lords amendment 184 provides that where
“the freeholder of a building is a local authority”,
remediation costs will be paid “in the first instance” by the developer of the building and otherwise through the levy set out in clause 57. Again, the Government will not be able to accept the amendment because developers are already expected to remediate their buildings, and as we have announced, developers have signed our pledge to commit to do that. We are also introducing the ambitious toolkit that I mentioned.
Stuart Andrew
I committed earlier to continuing to work on the whole area of social housing, and I assure the hon. Gentleman that I am keen to deliver the ambitious affordable housing programme that we have announced. I do not want to see that affected in any way, so it is in my interest to ensure that we do everything we can in this area. I commit to our doing that.
Non-commissioned Exempt Accommodation
Debate between Clive Betts and Stuart Andrew(2 years, 9 months ago)
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The Minister for Housing (Stuart Andrew)
It is a pleasure to take part in this important debate in my new role. I sincerely and genuinely thank all hon. Members on both sides of the House for their frankly powerful contributions.
I know the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Walsall North (Eddie Hughes), takes this issue very seriously, as hon. Members on both sides of the House have fairly commented. I have seen how passionate he is about this in just the few days that I have been in the Department, and I will do everything I can to support him in his work to tackle this issue.
It is abundantly clear that the problems affecting the supported accommodation sector are having a very real and serious impact on hundreds, if not thousands, of vulnerable individuals in many parts of the country. That, in turn, has knock-on implications for the housing benefit bill, but there is a human cost, too.
Several hon. Members rightly raised the criminality and antisocial behaviour in their constituencies that stems from people not receiving adequate support and the accommodation that they not only need but deserve. The Government and I are unequivocal in stating that everyone in our society deserves to live somewhere decent, safe and secure, which is why my hon. Friend said in his opening remarks that we have been working relentlessly to crack down on rogue accommodation providers who are exploiting exemptions that were designed to benefit the most vulnerable. Importantly, we have also been working hard to support the high-quality supported housing providers who deliver life-changing services to those who need them most.
Many of this afternoon’s contributions struck a chord with me, and it was particularly important to hear from my hon. Friend the Member for Hertford and Stortford (Julie Marson), who rightly said that this is not just an issue for cities because, as other hon. Members said, it will start spreading out to the rest of the country. She was also right to praise the good providers, as it is important that we recognise there are excellent providers out there and that we give them that support.
My hon. Friend the Member for Bury North (James Daly) talked about the Government’s £12 billion affordable homes programme, and it is right that we build beautiful homes for people, including council homes. The hon. Member for Birmingham, Ladywood (Shabana Mahmood) has been passionate about this subject, and we could just feel from her speech that she has done a tremendous amount of work on it. I know that she will be rightly keeping us at pace on the issues. The hon. Member for Birmingham, Yardley (Jess Phillips) spoke movingly, from a very personal perspective, about the experiences of her own family; those contributions are incredibly valuable for us to hear, as we realise that this is about real people.
First, I would like to take the opportunity to clarify some of the issues raised about the exempt accommodation sector as a whole, because there is a problem with some but by no means all exempt accommodation. The term “supported exempt” is used to define accommodation for housing benefit purposes and covers a wide range of accommodation provided by different providers. So although the term “exempt accommodation” is increasingly synonymous with housing that is of poor quality and poor value for money, we need to be clear that this issue does not apply to all supported exempt providers. More specifically, they should not be tarred with the same brush as the rogue landlords that I, along with many other hon. Members, want out of this system.
Several hon. Members have highlighted examples from their constituencies of accommodation providers gaming the system, claiming for services that they never provide and then walking away with exorbitant amounts of money. Although we know that only a minority of supported housing landlords are behaving in that way, there is clearly evidence that some accommodation providers are exploiting housing benefit rules for their own financial gain. Obviously, that amounts to an egregious abuse of the supported exempt accommodation system, and we have been taking concerted action to stop it. As we heard, the Government have invested more than £5 million in support, which has gone to places such as Birmingham, Blackburn with Darwen, Blackpool, Bristol and Hull, areas that we know have experienced acute difficulties with the local exempt accommodation sector. This funding has been used to crack down on rogue providers, while trialling new and innovative approaches to improve quality and value for money across the board.
Mr Clive Betts (Sheffield South East) (Lab)
I apologise for not having been here for the whole debate, as I have been speaking at a conference on private renting this afternoon. The Minister has just said that we know that only a minority of providers are operating in this unacceptable way. Given that the system is unregulated and the Government do not collect the information, how does he know that it is only a small minority doing this?
Stuart Andrew
I suppose the point I am trying to make is that an awful lot of people out there are doing an enormous amount of work, and although it is important that we highlight where the rogue landlords are, we must not tar everybody with the same brush. There is a danger that schemes could be tarred with being known as inappropriate when we know that some of them, as the hon. Member for Birmingham, Yardley said, have turned people’s lives around. I want to see more of that, I really do. I want to see people who are coming out of prison being able to get back into the workplace. I want to see people who have been victims of domestic abuse living in safe accommodation and feeling confident in their lives again. So it is important that we tackle the issue but we do not tar everybody with the same brush.
The other thing I wanted to say was that we are awaiting the final report from the independent evaluators, who are working very hard. I say to the hon. Member for Greenwich and Woolwich (Matthew Pennycook) that they are working with urgency and at pace so that we can get that fully reviewed as quickly as possible.
Housing and Planning Bill
Debate between Clive Betts and Stuart Andrew
Mr Betts
I want to say a little about the “alternative provider” clauses and the relevant Lords amendment, which I understand that the Government will be accepting.
I continue to be concerned about what I consider to be a most peculiar form of privatisation. Normally, in cases of privatisation, the council is able to choose the companies or organisations that will provide the service and put that service out to tender. In this case—very peculiarly—the applicant will decide who will conduct the process on behalf of the council and eventually, presumably, supply information and advice to the planning committee. In other words, the council which is ultimately responsible for making the decision—and that, I think, is what the Lords amendments further clarify—will have no role in deciding which organisation will be involved in the process of working with the applicant to decide, eventually, what the recommendation on the application is to be.
There seems to be an idea that suddenly, at the end of the day, a recommendation comes out of thin air. It does not; it results from a very detailed process involving a major application, in which a planning officer and an applicant work through all the details of the scheme. The Bill, however, proposes that that should be done by an alternative provider appointed by the applicant. I think that that is a very strange process, and one that is difficult to justify.
There is also a potential conflict of interests. The alternative provider in one council who advises the planning authority about a scheme could also be a consultant operating directly on behalf of someone in another authority making a very similar application in relation to a very similar scheme, and being paid for doing so. We should be very aware of that possible conflict of interests.
The Lords amendments clearly state that the council—the planning authority—is ultimately responsible for making the decision, and nothing that the alternative provider does should bind the council. I want to know whether, in the context of the pilots, the Minister intends the alternative provider to do all the work and make the recommendation to the planning committee, or whether the alternative provider will make information available to council officers who will independently make a recommendation to the planning committee. I think that that is incredibly important. Will a councillor who receives an application and a recommendation receive the recommendation from a council officer who is independent, on the basis of advice from the alternative provider, or receive it directly from the alternative provider who is appointed by the applicant? That is a fundamental point, which has not been clarified even by the Lords amendments.
Stuart Andrew (Pudsey) (Con)
I want to speak briefly about Lords amendment 97. The issue of planning has been at the forefront of the minds of people in my constituency. I have often said in the past that my constituents felt that planning was something that happened to them rather than something in which they could become involved. I therefore welcome the move towards neighbourhood plans.
Much of this has come about because we have had masses of development on old brownfield sites. That is, of course, a good use of such sites, but we now face the prospect of having to build 70,000 homes over the next 14 years, as that is the target that the city council has set itself. There is a great deal of concern in the constituency that we are going to have to release green-belt land to match that demand.
This has galvanised a lot of local action, and I pay tribute to those involved in the Aireborough neighbourhood development forum and in the Rawdon and Horsforth parish councils who are now working hard to develop local neighbourhood plans. However, their experience in the past has been that the city council can turn down an application on very good grounds, only for it to go to an inspector who will turn it around. Those people want to feel that they have all the necessary support and tools at their disposal to defend their neighbourhood plans. They feel that this is far too often a one-way process.