Football Governance Bill (Fifth sitting)

Debate between Ian Byrne and Stuart Andrew

Committee stage
Tuesday 21st May 2024 Public Bill Committees

[Stuart Andrew]

At the end of the day, we want to ensure a standard approach to regulation to ensure that we secure clubs in the future. As I say, I hope that as the regulator starts getting up and running, the leagues will see that there is no need for duplication and will make decisions accordingly. Ultimately, however, it is up to them to make that decision.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Clause 16 to 18 ordered to stand part of the Bill.

Schedule 4

Threshold requirements

[Ian Byrne (Liverpool, West Derby) (Lab)]

I beg to move amendment 4, in schedule 4, page 93, line 3, leave out from “has” to end of line 6 and insert—

“(a) adequate means by which to consult its fans about relevant matters, and

(b) structures and processes for effective engagement with its fans and takes the views of its fans into account in making decisions about the relevant matters.”

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[Stuart Andrew]

Schedule 4 introduces the threshold requirements that clubs will have to meet to be granted a full operating licence. These are the three main areas of the regulator’s club licensing regime, which build on the freestanding duties and the mandatory conditions. Meeting the threshold requirements will mean that the regulator is satisfied that the club can currently and will be able to continue to operate sustainably in its financial, non-financial and fan engagement areas.

Although the threshold requirements are principles set in legislation, what each club must do to meet those requirements will not be the same. For example, what constitutes appropriate financial resources for a Premier League club will be very different from a League One club. A club might already meet the threshold requirements—for example, through naturally good operations or by complying with competition rules—in which case, the regulator will not need to intervene directly. If a club does not, the regulator can apply discretionary licence conditions to bring it up to the required threshold. That structure will allow for a proportionate system with requirements tailored to individual clubs, rather than the approach taken by the industry to date of blanket rules catering to the lowest denominator but applying to all.

The threshold requirement for financial resources means that clubs need an appropriate level of financial resources to support their long-term financial sustainability, accounting for their circumstances and risks. For example, that might include which competition the club competes in, its financial relationship with its owners, and the wider economic context in which it operates.

In particular, the regulator should take into account the club’s financial plan and its contingency plans for dealing with financial shocks. For non-financial resources, a similar requirement and process applies. “Non-financial resources” refers to things such as internal controls, systems and policies, as well as the information and people that the club has at its disposal. Although not financial in nature, those are important resources for any well-run club, so they need to be adequate. When assessing whether the resources are appropriate, the regulator might consider the skills and experience of the senior management and its corporate governance arrangements.

The threshold requirement for fan engagement requires that clubs adequately consult and consider the views of fans when making decisions relating to certain specified matters. As we heard from the FSA on Tuesday, this is the first time that there has ever been a requirement for fan engagement to this extent. The relevant matters are listed in the Bill and cover key off-pitch decisions, which the fan-led review highlighted as important to fans across the specified leagues. The threshold requirement is designed to work in tandem with the fan consultation mandatory licence condition. Through that condition, all clubs must regularly consult a representative group of supporters to discuss the relevant matters listed in the Bill, and that must be in place by the time a club receives a provisional licence.

Appropriate fan engagement will look different at every club and will partly be based on the size and complexity of the club’s fanbase. The threshold requirement has been designed to allow the regulator to recognise the inherent variation between clubs while ensuring that standards are raised where necessary.

[Ian Byrne]

Is the Minister confident that independence will be hardwired into engagement? Regarding the fan advisory boards, there are several examples of Premier League clubs flooding them with club employees. For engagement to work, it has to be completely independent so that we can hold the powers that be to account.

[Stuart Andrew]

The hon. Gentleman is absolutely right and I give that reassurance. If fans feel that the body that is currently being consulted is not truly representative, the independent regulator can have a look and, if necessary, apply discretionary licence conditions.

Fans, as everybody has said, are the foundation of any club. Putting in place a supporter engagement threshold requirement recognises that they must be consulted on key issues that affect their club. The requirement for clubs to have adequate means to consult their fans and to take fans’ views into account allows the regulator to consider the outcomes of fan engagement and whether the appropriate processes are in place at clubs and are being utilised.

Importantly, the regulator will be able to take enforcement action, such as censure statements, where it deems it appropriate following non-compliance with the licence conditions relating to the fan engagement threshold requirement. That is just one of the factors that results in a robust fan engagement requirement on clubs.

Amendments 4 and 16, however, seek to add something that is already captured in the legislation, with the difference in legal effect of “adequate” and “effective” being negligible. There does not seem to be a way in which a club’s fan consultation could be determined to be adequate without the structures and processes for effective engagement in place. Although the Government understand the intent to make sure that the fan engagement provisions in the Bill are strong, I can provide reassurance that that is the case already and I therefore hope that the hon. Member for Liverpool, West Derby will be able to withdraw his amendment.

Turning to amendment 8, I have been clear that the Government agree with the need for many clubs to engage with their fans on more issues. We expect that the issues of joining a new competition or not playing matches at their home ground would already be captured by the “relevant matters” of

“(a) the club’s strategic direction and objectives;

(b) the club’s business priorities;

(c) operational and match-day issues;”

and matters relating to “the club’s home ground”. It is therefore already implicit in the “relevant matters”, so to add this amendment would be duplicative.

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[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.]

[Ian Byrne]

We are not withdrawing the Bill! I thank the Minister for giving me the answers and really good explanations of why I should withdraw my amendment, so I am happy to do so. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Stuart Andrew]

I will begin with clause 21. Where needed, discretionary licence conditions will be used by the regulator to bring a club up to the required level of compliance with the threshold requirements. That means that the regulator is satisfied that the club can currently, and will continue to be able to, operate sustainably in financial, non-financial and fan engagement areas, as per the regulator’s objectives. Those conditions will be in addition to the standardised mandatory licence conditions and, when applied, will be tailored to the club’s specific circumstances and identified financial risks. If a club already meets the threshold requirements set by the regulator, the regulator will not need to attach any discretionary licence conditions. That means that it can be light touch where appropriate, and need not directly intervene if the desired outcomes are already being met. Discretionary licence conditions could also be used to protect and promote the financial resilience of the football system. The conditions would be used to resolve risks that might not threaten any one club significantly, but their potential aggregated, correlated or multiplied effects may pose a significant risk to large parts of the football system, or the pyramid as a whole.

Clause 22 sets out the scope of the regulator’s powers to attach or vary a discretionary licence condition. Under the financial resources threshold requirement, discretionary conditions may only relate to one of four areas including debt management, liquidity requirements, and overall cost reduction, or they might restrict a club’s ability to receive illicit finance. The fourth area is integral and enables the regulator to restrict the club’s ability to access funding that it has reasonable grounds to suspect is connected to serious criminal conduct. It will empower the regulator to limit illicit finance, which is inherently unsustainable for a club.

Under the non-financial resources threshold requirement, conditions may only relate to one of three areas: internal financial controls, risk management, and financial reporting. As outlined in the previous clause, the regulator can also attach discretionary licence conditions to advance its systemic financial resilience objective. That objective is specifically to address systemic risks, or structural issues, by applying conditions to multiple clubs or even to all licensed clubs. Clause 22 limits the scope of discretionary licence conditions to only conditions that relate to debt management, liquidity requirements, and overall cost reduction.

To future-proof the regulated regime, the Secretary of State will have the power to amend the areas to which discretionary licence conditions may relate. However, that can be done only if the regulator makes a request in writing to the Secretary of State, having first held a consultation, explaining why an amendment is needed by reference to the purpose of the Act. That will limit the risk of unwanted, politically motivated scope-creep in the future.

Clause 23 sets out the procedure for attaching or varying financial discretionary licence conditions on clubs. The procedure outlined in the clause ensures that clubs and competition organisers are notified and given the appropriate opportunity to engage in advance when the regulator considers a discretionary licence condition is needed. Where appropriate, the regulator will seek to allow the relevant club and league to address identified issues and risks so that it does not have to intervene formally. That may produce a better regulatory response and outcome. The football industry may be best placed to address specific issues within the overall context of a league’s regulatory framework.

[Ian Byrne]

I thank the Minister for what he has said so far. I want to touch on a point for the clubs and, certainly, for supporters, having spoken to those of both Everton and Nottingham Forest, regarding profit and sustainability rules and the tariff that was served on them. At the moment, there seems to be zero confidence in the Premier League’s ability to govern that system and there are many calls—in fact, I got about 14 last night—from supporters right across the board who are asking why the independent financial regulator is not taking control of the whole profit and sustainability issue, any breaches and then levying the punishment to clubs in a manner that people think would be fair and transparent and, as I say, a process that they have a belief in. At the moment, they undoubtedly do not have that and that is a real worry.

It would be remiss of me not to touch on Manchester City winning the league yesterday and congratulate the club on that. However, there are 115 charges hanging over the club’s head and there is lots of disquiet around the whole process. It would have been welcome if the Minister had considered whether that should sit with the independent financial regulator to restore faith in the whole process, which, unfortunately, is not there.

[Stuart Andrew]

I understand what the hon. Gentleman says, but there is a balance about football having its rules and independence. We have to honour that in terms of relationships with UEFA and FIFA. However, we are ensuring that there is a regulatory regime that I hope will start to improve confidence among fans, as the hon. Gentleman describes. When it comes to the specific area under focus, if the regulator feels that the league’s proposition does not meet the objectives it needs to fulfil its duties, it can decide that it will still impose its own. The regulator will have to be satisfied that what the league is proposing will meet its required objectives.

Before any action is taken by the regulator, there will be a period where both the relevant leagues and clubs can make any representations and in which the relevant league, as a competition organiser, can also give a commitment to take action in lieu of the condition being attached or varied, as proposed by the regulator. Where the regulator is looking to attach financial discretionary licence conditions to a club, it must go through the relevant procedure to do so, as outlined in clause 23.

Clause 24 sets out further details on one key aspect of the procedure: a final, formal opportunity for competition organisers to offer a self-regulatory solution to a problem identified by the regulator so that the regulator does not have to step in. That is known as the competition organiser making a commitment in lieu of a financial discretionary licence condition. The clause is another important aspect of the regulator’s approach, which emphasises engagement and working with the industry to minimise formal intervention where possible. The regulator will still have powers to step in if the issue is not resolved, but it provides the chance for a competition organiser to present a football industry-led solution to an identified risk.

The regulator can accept a commitment if it concludes that that commitment should achieve the same results as the proposed discretionary licence condition and it does not conflict with the regulator’s objectives. If the commitment proposed by the league will not achieve the regulator’s desired outcome, the regulator can reject it—to repeat the point to the hon. Member for Liverpool, West Derby—and retains the power to intervene directly by imposing the discretionary licence condition.

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[Stuart Andrew]

My understanding is that if the 2007 Act is updated with a new crime, it will still be relevant to the Bill. However, I want to be absolutely sure, so I will write to my hon. Friend, and if I am wrong I will correct my homework.

By requiring new owners to undergo the regulator’s test, clause 28 will better mitigate harm to clubs by stopping unsuitable custodians.

[Ian Byrne]

Further to the point made by the hon. Member for Chatham and Aylesford, what happens if the ownership is a nation state that does something falling within the remit of potential international criminality?

Football Governance Bill (Sixth sitting)

Debate between Ian Byrne and Stuart Andrew

Committee stage
Tuesday 21st May 2024 Public Bill Committees

[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.

[Ian Byrne (Liverpool, West Derby) (Lab)]

It is always a very crowded field in the FA cup replays. I am sure that the Minister has seen the news, today I think, about Tottenham players getting on the plane to go to Australia for their end-of-season friendly. Is that not a smack right in the face of player welfare and ensuring that players are okay? That is why the FA cup replays were allegedly taken off the table.

[Stuart Andrew]

As the hon. Gentleman knows, the purpose of the Bill has been tightly focused to feature those particular issues. We have a fine balance to ensure that we do not upset or get into challenges with UEFA and FIFA, and it is for football to make some of the decisions that it has made, but I would expect that, as the provisions in the mandatory conditions say, clubs will consult their fans on decisions on match days.

The extension to clubs regulated in the past 10 years will stop them circumventing the rules by withdrawing from existing competitions in order to join a new breakaway competition. The regulator is expected to prohibit competitions on the basis of the predetermined, proportionate and transparent framework based on the prescribed factors set out in legislation. That will provide up-front clarity to the industry and means that new competitions will not just be prohibited outright. That is important to ensure that the regulator does not unduly stand in the way of innovation in the market—for example, like when the old First Division became the Premier League in 1992.

The clause requires the regulator, when deciding whether to prohibit a competition, to consider several factors, including whether the competition is merit based, operates on the basis of fair and open competition, jeopardises the sustainability of English football’s existing competitions or the clubs in those competitions or harms the heritage of English football. Of course, football belongs to its fans, so the regulator will also determine and consider the views of fans in England and Wales before prohibiting a competition. As the national governing body for football, the FA will be consulted before the regulator prohibits any competition, and the regulator will also consult anyone else it considers appropriate. I commend the clause to the Committee.

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[Stuart Andrew]

I thank the hon. Lady for her contribution. On the ruling that she mentioned, my understanding is that it will be considered, but I want to make sure I have that right, so if she does not mind I will write to her.

The regulator will not be able to take action until it is fully operational. It would be inappropriate to give it backdated powers in relation to competitions, as clubs cannot comply with preapproval requirements after an action has been taken, so I hope the hon. Lady understands the position we are in.

Question put and agreed to.

Clause 45 accordingly ordered to stand part of the Bill.

Clause 46

Duty not to dispose etc of home ground without approval

[Ian Byrne]

I beg to move amendment 3, in clause 46, page 38, line 15, at end insert—

“(6A) Before the IFR grants an approval under subsection 6 it must—

(a) consult the supporters of the body in question, the relevant competition organisers and persons representing the local community with which the body is associated; and

(b) have regard to the views expressed by those consulted.”

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[Stuart Andrew]

In schedule 4, paragraph 4(3)(a) on page 93, it says “the club’s home ground”. It is there.

The regulator will examine each transaction in the context of the regulated club’s individual financial circumstances. That should provide sufficient comfort for fans or other proposed stakeholders that the proposal does not adversely affect the financial sustainability of the club. The additional stakeholders to be consulted will not have a financial interest in the transaction. Amendment 3 would impose an additional level of bureaucracy and complexity to the process. It would also introduce a potential delay in completing a transaction, which is often time-sensitive, and it may have adverse implications, such as the buyer pulling out or renegotiating terms. That could undermine the sustainability of clubs. For the reasons I have set out, I am unable to accept the amendment.

Turning to clause 46, a home ground is often one of the most vital and valuable assets that a club can own. However, home grounds are sometimes used as collateral for debt or even sold off entirely to raise money. Although there can be sensible financial reasons for clubs to do that, both courses of action may result in a club’s financial position seriously deteriorating, or it having no ground to play at. Selling the home ground also potentially seriously weakens the club’s balance sheet. Likewise, using the home ground as collateral for a loan might make financial sense depending on the use of the cash raised, but it may also saddle the club with too much debt or high interest costs.

The clause therefore places a duty on clubs that own their home ground to obtain the approval of the regulator prior to any sale or use as security in a loan or liability. The regulator will consider the risk of the proposed transaction to the club’s financial sustainability and block any potentially financially damaging sale of a club’s home ground. The provision applies not only to regulated clubs, but we are also extending it further to capture clubs that are not currently regulated but have been within the last five years. The regulator must be satisfied that the club has taken reasonable steps to ensure that a team play their home matches at the ground prior to its sale or use in a loan—that is, that football club continues to be playing at the ground. That protects against potential bad actors who might otherwise choose to pull their team from the league and no longer be a regulated club so that they can asset-strip and sell off the ground to make money.

Turning to amendment 29, the Government believe that the safeguarding of club heritage and the voices of fans is vital. We expect the regulator to consider whether a club has adequately engaged with its fans in reaching its decision on whether to approve a relocation. However, there will be a number of additional factors for the regulator to consider when assessing whether a proposed home ground relocation will significantly harm club heritage. Those may include the history of the club, distance from the original home ground or the views of others in the local community. Although fan views will be an important consideration, the Government believe that the regulator should be able to take an holistic view of any proposal. I therefore hope that the hon. Member for Liverpool, West Derby withdraws his amendment.

Turning to clause 48, home grounds play an important role in the history of a club, and are often the club’s most valuable asset. Relocating home grounds permanently to areas that have no connection to the heritage and history of a club can have a significant impact on those supporters and the local area, as we saw when Wimbledon moved to Milton Keynes. This clause is aimed at stopping that from happening again.

However, the Government do not want to stifle development that brings value and aligns with the heritage of a club. The impact of a home ground relocation on both fans and the club is why we are legislating for the regulator to preapprove any proposal in this regard. As set out in subsection (4), the regulator must be satisfied that the proposed relocation would not undermine the financial sustainability of the club, or significantly harm its heritage. Clause 48 makes the important and necessary recognition of the vital role that home grounds can play in communities, and adds an extra layer of protection to them.

I commend the clause to the Committee.

[Ian Byrne]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 46 ordered to stand part of the Bill.  

Clause 47

Duty not to appoint administrator without approval

Question proposed, That the clause stand part of the Bill.

[Stuart Andrew]

The regulatory framework is not a zero-failure regime. Therefore, it is possible that football clubs may enter administration despite the best efforts of the regulator. We would of course, hope that this is rare. There already exists a legal framework for companies—and that includes football clubs—to enter into administration, which is detailed in the Insolvency Act 1986, and in many cases this existing framework has enabled clubs to go into administration and re-emerge as solvent clubs. It should be noted that those clubs often re-emerge in a lower league as a result of the sporting sanctions placed on them by the competition organisers.

Given that the existing administration regime seems to work well in relation to appointments initiated by creditors, it is not necessary for the regulator to cut across that process. However, there are occasions where the administration of a club is not initiated by creditors but by the club itself. A club can appoint administrators directly, and so does not require a court to sanction the appointment in advance. In those circumstances, there have been occasions in which some stakeholders have had cause to question the relationship between the insolvency practitioner appointed as administrator and the football club.

That is why, in those specific circumstances, the appointment of an administrator requires the regulator’s approval to ensure that the process is transparent and to avoid conflicts of interest. Such approval should give all stakeholders, particularly fans, more confidence in the system and more confidence that the outcome is the best available, in the circumstances, for the individual club.

The requirement to seek approval from the regulator for the appointment of an administrator applies to clubs that have a licence, and those that should have a licence but for whatever reason do not, as well as clubs that were formerly regulated within the previous five years. That is included to ensure that clubs are not deliberately run so that they are no longer in the leagues that the regulator has oversight of, to then take advantage of being an unregulated entity to appoint an administrator without approval of the regulator.

I commend the clause to the Committee.

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[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.

[Ian Byrne]

On the scope of the independent regulator, Liverpool football club tried to trademark the name “Liverpool”, which caused absolute outrage among Liverpool and Everton supporters and market traders. The local community fought back, and the supporters of both football clubs came together. Is something like that within the scope of the regulator’s ability to influence?

[Stuart Andrew]

That is a very good question, and I feel my officials thinking, “Not another letter!” If the hon. Gentleman does not mind, we will write to him. I apologise to my officials, who have enough on their plate, but I want to make sure I am not saying something that is not correct.

The existing FA rule has been used to prevent name changes that have been proposed in the past against the wishes of fans, as happened at Hull City, for example. Codifying that as a legal duty will mean that there are additional powers to ensure that clubs do not make changes without proper approvals and to respond to instances of non-compliance. I commend the clause to the Committee.

Football Governance Bill (Fourth sitting)

Debate between Ian Byrne and Stuart Andrew

Committee stage
Thursday 16th May 2024 Public Bill Committees

[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.

[Ian Byrne]

That is a really good outline of why heritage is important. The Minister has talked about communities and football clubs. Maybe two words were missed out: “working class”. We have to ensure that working-class representation in the game stays within the game, as part of the heritage. I ask the Minister to include ticket pricing in that, because if we price working-class fans out of the game, we lose the lifeblood of the game.

[Stuart Andrew]

I never thought I would get into a discussion about class when talking about this Bill. My view is that football is there for everybody, and I absolutely recognise the roots of it in various parts of the country. Of course, particularly in the hon. Gentleman’s part of the world, there is a close association. I know we will come on to ticket prices later, but I hope the clause provides reassurance that the things that are important to fans—the identity of their club with their community, the colours, the names and so on—are an integral part of the work that the regulator will do to protect them.

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[Stuart Andrew]

I absolutely recognise that issues such as ticket pricing are really important to fans. Indeed, match days, as others have said, would not be what they are without the fans. The Government believe it is important that clubs consult fans on key off-pitch issues that impact supporters, including operational and match-day issues. These provisions, and the wider provisions for fan engagement, will ensure that fans have a voice on the issues that are most important to them, but it would not be appropriate—the hon. Member for Barnsley East was alluding to this—for the regulator to be a fix for all of football’s woes. Rather, it will be set up with a tightly focused and defined scope and purpose, to tackle the specific market failures that carry a risk of significant harm to fans and communities.

[Ian Byrne]

I do not think the supporters expect the regulator to fix ticket prices. What they are expecting the regulator to do is to ensure that the clubs go into dialogue with the supporters, so that they can understand the difficulties that supporters may have in relation to affordability. Also, as we heard during the evidence sessions today, many decisions are being made by clubs instantaneously, or within hours, and with zero consultation, which is a cause of massive discomfort. We heard about Arsenal and Tottenham football clubs getting rid of concessions. My own football club, Liverpool, made a decision to increase ticket prices with zero consultation. That is what needs to stop. These are important things. I link this to the heritage element: if we price football supporters out of the game, we lose the heritage of football.

[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.

Football Governance Bill (First sitting)

Debate between Ian Byrne and Stuart Andrew

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Stuart Andrew]

Q You gave us quite a lot of information about the financial situation in both the Premier League and the EFL, but what about the National League?

Kieran Maguire: As far as the National League is concerned, I think the average losses were £970,000 a year. There are no cost-control measures as far as the national league is concerned, so that is why we have seen the recent arrival of owners who have transformed individual clubs, because they have been allowed to achieve effectively unlimited levels of loss. That potentially has implications when those clubs are promoted to League Two, although again they have tended to do very well.

The National League has been intriguing, and certainly issues arose with governance during covid, such as the grants that were given to support those clubs, which proved to be quite contentious. Like both the Premier League and the EFL, there appears to be some form of civil war taking place within—or between—clubs. We talk about the Premier League, the National League and the EFL, but I do not think there is a collective viewpoint within those institutions themselves from an individual club basis.

Dr Philippou: From a financial profile point of view, the National League shows very similar financial issues to League One and League Two. It is not as if National League clubs are free from problems, and the reason why they are in here is because they are pro clubs—it is professional football.

[Ian Byrne]

Q Is there anything in the Bill that imperils the financial sustainability and global success of the Premier League?

Kieran Maguire: The Premier League has been successful because it has gone out to an audience and it has sold its services. There is no reason why the Premier League will not be competitive on a European basis in recruiting players, in respect of these rules. On attracting investment into the Premier League, part of the reason for its success is that we have moved effectively from a duopoly, which is where we were in 2005, to a more competitive product. In my view, if I was an investor, I would like to be able to invest in an industry where the opportunity to break even becomes greater, and I think that is more likely with the regulator than not.

Dr Philippou: We are not seeing much investment from certain areas that you would expect in most businesses. Part of that is the loss-making and the difficulty in conducting due diligence around football clubs. What we see in the Bill should fix that, and therefore we would expect to see more of a certain type of investment. Yes, perhaps there will be less investment from those who would rather not be in a more regulated environment, but that is not the overall picture.

--- Later in debate ---

[Stuart Andrew]

Q First of all, thank you, Kevin, for what you said about the officials. You are absolutely right; they have been superb throughout this whole process. Thank you, too, for your engagement.

I remember when I was first appointed, the first meeting I had was with you and with other fans. It was clear from that meeting that some clubs do engagement extremely well and, as you have just alluded to, there are others that do it differently. Given that fan engagement is part of the licensing regime, do you think that that is going to be sufficient to bring about a significant impact on the quality of fan engagement that we are currently seeing across the board? That is, are we levelling up, to coin a phrase?

Kevin Miles: I very much hope so, and I am optimistic in that regard. It is the first time that we will have had a requirement from clubs to engage with the fans and, to use the Prime Minister’s words, to put the fans’ voice “front and centre” of all those discussions. I do think, though, that there are a lot of details still to be worked out about how that actually looks.

There are some clubs, as you say, that are very good, but one of the illustrations of the limitations of self-regulation has been that when the leagues have been trying to put together their own requirements on fan engagement, because it has to be voted on by their members and agreed by their rulebook, the lowest common denominator tends to be put into the rulebook. We know that there are clubs that will resist the idea. There are owners who think they have nothing to benefit from in listening to the fanbase—their customer base, if you like. We know from experience that there are some who will do everything that they can to get around this. We will need to have an underpinning of that in the regulatory system, and some monitoring of it through the club licensing system. We recognise that this is challenging, because it cannot simply be a look at what structures are put in place. The regulator will have to do more than just monitor that there is a fan advisory board notionally in place. There will have to be some evaluation and examination of the content and spirit of the fan engagement. We are not expecting a fan veto on club decisions, but we are expecting that the fan voice is not just heard but listened to and given due consideration.

Evaluating that is a more complex process. Somebody referred earlier—I think in the first witness panel—to the possibility of Ofsted-type investigations. Maybe in some cases it will require the regulator to be able to consult the fan groups to see how they think it has been done, and to make its own evaluation about whether the spirit of what is intended here is actually being carried forward. That will need to be underpinned by requirements in the licensing condition.

[Ian Byrne]

Q Kevin, on the regulatory principles, I have tabled an amendment saying that supporters and supporter organisations should be added to clause 8(b). Does the organisation you represent agree with that?

Kevin Miles: Absolutely. If you look at that clause, you see that it is about the principles of the regulator. It currently reads that the regulator should,

“so far as reasonably practicable, co-operate, and proactively and constructively engage, with

(i) clubs,

(ii) owners, senior managers and other officers of clubs, and

(iii) competition organisers”.

We think that it is in the spirit of the rest of the Bill if a further provision is included that says “supporters and supporter organisations”. If the Bill really is about giving fans a voice at the heart of the game, the regulator should have that as part of those regulatory principles.

I cannot help thinking that this is an oversight rather than a conspiracy. Actually, the spirit of all the engagement we have had with the Department and with Ministers has been precisely that the supporters’ input into the regulation of the game would be an important component. But I think there’s a requirement for it to go on the face of the Bill in that clause.

Football Governance Bill (Second sitting)

Debate between Ian Byrne and Stuart Andrew

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Ian Byrne]

Q Moving on from that, how does fan engagement look in your club, and does the Bill add to or enhance it? What is your opinion? We sort of have fan engagement from the Premier League perspective, but what it is like at your level?

Steve Thompson: We work with supporters and have different supporters’ groups. We also work in our community; all our clubs have a community trust, and all the Football League and Premier League clubs will have a community trust. Everybody does lots of work in the community. As parliamentarians, many of you will know that at the 2010 election there was a big British National party problem in Barking and Dagenham, and as a football club Dagenham & Redbridge stood up and made a big thing about that. A couple of months before the election, there was a big game, and McDonald’s was selling burgers for 99p, so I said, “We’ll let everybody in for 99p, with kids in for 25p.” We had the managers of small local football teams buying all the players a ticket and it costing less than a fiver.

That put out a message, and it was an important message. At the time, I was reported as saying that we are in a white working class area, as it was in 2010, that the majority of our supporters are white males, and that if there are 10 BNP councillors out of 50 in Barking and Dagenham, some of the supporters must have voted for them. We had a really multiracial team at the time: we had a Barbadian international, a South African player and a Muslim player. We had several. I turned around and said, “You’ve got to show them that you can’t be cheering on a multicultural team on a Saturday and then expect them to all go home on a Monday.” That took traction. We stood up. Darren Rodwell, who might be part of this establishment within the year, will turn around and say that “he”—unless I am in the room, in which case he will say “we”—kicked the BNP out of Barking and Dagenham. That is the power of your local football club. We can stand up and do things like that, and it is important that we can. The supporters will go with you.

[Stuart Andrew (Pudsey) (Con)]

Q First, thank you for all your engagements so far as we have been preparing the Bill. On the point about proportionality, you made good representations as we were preparing the Bill. I hope the Bill reflects that the amount of work you will have to do will be dependent on where you are in the pyramid.

If the Bill goes through, there will be a statutory regulator. What discussions have clubs had with the National League about whether it will row back and allow the statutory regulator to do the work so that there is no duplication?

Secondly, the independent experts we had in this morning said that clubs are looking in the rear-view mirror at the moment and that the advocacy-first approach means that there will be a real-time approach to analysis of clubs, which would be helpful for clubs. Do you agree?

Steve Thompson: I was quite hoping that the regulator would work with the National League, the EFL and the Premier League, allow them to continue with their reporting, and step in only if there was a problem with particular clubs. It would be a much more light touch. We have discussed that before. I understand that that will be down to the regulator, but I was hoping it would be more like that.

Darryl Eales: I think the forward-looking approach is to be welcomed. I am an accountant by background, and I am very happy to share my ideas on how that approach can put more pressure on owners to be financially responsible. The only reason football clubs get into trouble is their playing budget, so there needs to be some linkage between your playing budget and the financial resources of the owner.

--- Later in debate ---

[Stuart Andrew]

Q The first question was, why has football not sorted this out?

Tony Bloom: When I was in the Championship about 10 years ago, there were big discussions, big debates and big negotiations with the Premier League. For sure, as you can imagine, the English Football League wants to have more revenues and a bigger percentage of the Premier League revenues. A deal was done—it was not easy, but it got done.

Of course the lower league clubs always want more money. As Sharon was saying, if she gets promoted, she is going to have a much bigger bill. If there was more money going into Bolton, no doubt for that season and the season after, things would be a bit easier, but have no doubt that when more money goes into the English Football League—the vast majority of it will go to the Championship—it will go on player salaries. That is what happens, so there will still be issues. Unless you have sustainability levels where there are caps on spending, and clubs have their money there, there will always be such issues.

On your first question, regardless of the Bill, the English Football League and the Premier League are becoming much more forward thinking in the way they have the football regulations for finance. Regardless of what is happening with the Bill, that is what the Premier League and the English Football League are looking to do, which I think is a positive thing.

Steve Parish: The implication is that nothing is being done. Profit and sustainability rules were the first step in trying to control spending. People have to realise that we are subject to competition law as well, and we are being challenged on some of these things within the league. Some of the things that the majority of clubs would like to do—salary caps in some instances, which some people would like to do, or the cost caps that we are working on at the moment, which are broadly salary caps—are challengeable under competition law, so we have to get advice and be very careful that we are proportionate in the things that we undertake.

In terms of why a deal has not been done, I think it is quite simple: it is the backstop. It was made quite clear in the last panel that view of people at the EFL is that whatever deal is given to them now, they will pocket it and then go and see the regulator to get a much better one, because they do not think it will be good enough. I genuinely think that is the reason that a deal has not been done so far.

[Ian Byrne]

Q You are both custodians of the clubs that you own, and bloody good ones, to be fair—you are two of the better ones. Would you not agree that if something happened to you and you had to walk away from them, having the regulator would mean that there was a better chance of getting two custodians like yourselves, and not like some we have seen previously? I am speaking about the experience of Liverpool, with Hicks and Gillett, and what is happening at Everton now. The status quo cannot prevail. For the benefit of your clubs, when you move on, do you not think that the regulator gives you a better chance of getting better owners?

UEFA Champions League Final 2022: Independent Review Findings

Debate between Ian Byrne and Stuart Andrew

Tuesday 28th February 2023 Westminster Hall

[Stuart Andrew]

I assure the hon. Lady that colleagues in the Department regularly engage with colleagues in the Foreign Office. In fact, in the run-up to the World cup, I met with Foreign Office Ministers and the Qatari ambassador, because we were seeking reassurances that fans would be safe when they travelled to Qatar. We have regular engagement, and I can assure the hon. Lady that we will continue to do so.

Government Ministers met their French counterparts at the time of the final, as the hon. Lady just mentioned. The meeting was to understand how the French Government intended to respond to their part in the mishandling of the event and to refute their assertions that Liverpool fans were at fault. Ministers made it clear then that an independent review was needed to establish the facts of what happened. The Secretary of State will further press French Ministers on the action that her Government will be taking in response to that review.

The Government will also reflect on the lessons that can be learnt from the horrific events witnessed in Paris last year. That will inform planning for the UEFA champions league final in 2024 at Wembley, as well as our UK and Ireland bid to host Euro 2028. The UK has a strong record of hosting safe and successful major international sporting events, and we will continue to ensure that the measures we already have in place to support safe spectator experiences continue to be aligned with the highest international standards.

In September 2019, London successfully secured the rights to host the UEFA champions league final in 2023. That was postponed to 2024 because of covid. Around the world, it will be the biggest club football match of 2024 and one of the most-watched sporting events.

[Ian Byrne]

I thank the Minister for his response to far. I impress on him the importance, whoever ends up in that final—I hope it is Liverpool—of fans having a voice in the shape of that final and proper engagement. They are the ones who go to matches and have the experience, and they do not get listened to enough. We did not get listened to in Paris, and our voices are often not heard, as my hon. Friend the Member for Wirral South (Alison McGovern) mentioned. It is important that the Government commit to ensuring that, whoever is in that final, the supporters will be sat down at the organisational table and listened to.

[Stuart Andrew]

I am not aware of whether that happens, but I will absolutely make a personal commitment to ensure that we look into it. The hon. Gentleman is absolutely right to say that we should ensure that the voices of fans are listened to, so I will take that forward.

As we saw when delivering the event in both 2011 and 2013, the 2023 champions league final will generate employment and volunteering opportunities in the events and hospitality sector. It will also enable a significant source of income for many businesses, but fan safety will be the priority for the Government, and we will continue to work with the police, the FA and all other relevant stakeholders to review any further action that is necessary to maintain the welfare of supporters. I can give hon. Members my personal commitment that I will look into this issue very carefully.

I thank hon. Members for their contributions to the debate. I thank the hon. Member for Liverpool, West Derby for his work in highlighting the experience of Liverpool fans at the champions league final last year, and for pushing for more action to improve the management of major sporting events. No supporter should ever have to go through what fans were subjected to on the night of last year’s champions league final. The Government will work with all relevant stakeholders to ensure that the recommendations of this important report are implemented, and I will be happy to continue engagement with hon. Members to make sure that that is delivered.

Question put and agreed to.

Fan-led Review and Football White Paper

Debate between Ian Byrne and Stuart Andrew

Monday 20th February 2023 Commons Chamber

[Stuart Andrew]

I know that my hon. Friend and my hon. Friend the Member for Southend West (Anna Firth) have worked incredibly closely together in support of the local football club. He is right to highlight the significant role that all football clubs play in our communities. Addressing many of those issues is precisely what we sought to do in developing the White Paper, and I hope that he will be satisfied when he sees it published this week.

[Ian Byrne (Liverpool, West Derby) (Lab)]

Football without fans is nothing. The delay in the publication of the White Paper should worry every supporter. What we need now is protection for the future of the game: we need a regulator with teeth and a fit and proper owners test that is fit for purpose. As a Liverpool fan, I am worried about what we might face in future—I am sure that every other supporter of a club is the same. The delay in legislation harms the future of the game.

Events this week, with the publication of the independent review of the events in Paris, which exonerated Liverpool supporters, show that governing bodies such as UEFA and Governments have a long way to go with regard to the treatment of supporters. We must never forget that they are the lifeblood of the game, which is why this is important—this is a crucial point in football history. Will the Minister assure me that the White Paper places supporters at the heart of decision making to ensure that their voices are heard and that they can play a major role in shaping the future of football in this country?

[Stuart Andrew]

I thank the hon. Gentleman for his question. We were all glad to see that the Liverpool fans were exonerated. The fact that they faced such disgraceful action was appalling. My right hon. Friend the Secretary of State will shortly meet her French counterpart to understand what lessons are being learned from that awful incident. The hon. Gentleman is absolutely right that the fans need to be at the heart of this, which is why they were the first group that I met when I was appointed, as I said at the beginning. They have been foremost in my thoughts when I have been working on the White Paper.