Football Governance Bill [HL]

Lord Addington Excerpts

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Pannick (CB)]

My Lords, I too hope very much that the Minister and the department will look favourably on these amendments, for the reasons given by the noble Baronesses, Lady Brady and Lady Evans. They seem to be absolutely essential for reasons of efficacy and to give confidence to those who will be regulated that they and others will be properly consulted. I would be very surprised to be told that the regulator would not intend to do so. If that is right, it is surely essential, as in other legislation, that this is put in the Bill so that there is no doubt about it and so that the confidence that is absolutely essential is promoted.

[Lord Addington (LD)]

My Lords, this amendment about the bodies that will be regulated has a fair bit of common sense behind it. I am sure the Government will have done great work on consultation and making sure there is communication between the bodies that will be being regulated and the new regulator. If the Minister can tell us how this is being done, some of my worries will be removed. Also, stating where that information will be provided would very much help. If not, it has to be in the Bill somewhere.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I will speak to my amendments in this group and say a little about the amendments tabled by my noble friends Lady Brady and Lord Moynihan.

The amendments relate to the guidance the new independent regulator will be required to publish. My noble friend Lady Brady and I agree that the Bill, as drafted, should be strengthened to ensure that the regulated clubs have the information they need to meet the requirements of the new regulator.

My Amendment 116 would require the independent football regulator to issue a code of practice for competition organisers and licensed clubs. The regulator would be required to consult the FA, each competition organiser and each club in preparing this code. The overriding point of all the amendments in this group, I think, is to support clubs and competition organisers in complying with the requirements of the new regulator. We cannot expect the regulator to be effective unless it is doing its work in a clear way. These amendments would help to deliver that clarity.

I will not speak at length on this point as it is a simple one. We seek clarity from the Government more than anything else. Will the Minister give the Committee an assurance today that the regulator will produce a code of practice for regulated clubs and competitions? Might there be a way of publishing a draft code of practice while the Bill is being considered? That was certainly very helpful when we looked at the new regulatory regime brought in through the Online Safety Act, although I appreciate that, in that case, Ofcom had more of a head start than the shadow regulator does here—but it would be helpful if that were feasible.

My Amendment 117 delivers much the same result as the sensible amendment in the name of my noble friend Lady Brady. Again, we want to give clubs and competition organisers a fuller picture of the independent football regulator’s plans for the future, so they can prepare for the impact it will have on the game. Again, I hope the Government will look favourably on this amendment and the point that lies behind it.

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[Baroness Twycross (Lab)]

I thank the noble Baroness, Lady Brady, and the noble Lords, Lord Moynihan and Lord Parkinson of Whitley Bay, for putting forward these amendments.

On Amendments 112, 113, 114, 115 and 117, in the name of the noble Baroness, Lady Brady, we clearly agree that producing guidance will be a really important part of the regulator’s work. It will help to clarify the practicalities of the legislation and ensure that clubs’ owners and competition organisers know what is expected of them and what to expect from the regulator. However, while I recognise the intent of the approach proposed, I disagree to some extent with the approach to guidance that the noble Baroness, Lady Brady, has suggested we take. Amendments 112, 113, 115 and 117 would require the regulator to produce guidance on all aspects of its functions. This is likely to be a disproportionate and needlessly burdensome requirement that would likely end up being more unhelpful than helpful.

There is little benefit in issuing guidance on issues that are self-explanatory or that do not have a direct impact on the industry. I will endeavour to find some examples of that type of guidance to meet some of the queries from noble Lords—for example, on every one of the regulator’s operational or administrative functions, excessive guidance would make it harder and more burdensome for clubs to understand and comply with the system, not easier, and National League clubs would potentially struggle to sift through reams of guidance to get to what was relevant to them. We expect that the regulator will publish guidance on all relevant parts of its regime, as appropriate. It is in everyone’s interests to maximise the industry’s understanding and compliance.

On Amendment 114, in the name of the noble Baroness, Lady Brady, the regulator is already required to publish guidance on how it will use discretionary licence conditions, including the outcomes it seeks to achieve. We believe that this requirement is sufficient, and it will be for the regulator to determine what that guidance should look like and how best to aid the industry without unduly burdening it.

I turn to Amendments 116 and 118, in the name of the noble Lord, Lord Parkinson. Amendment 116 would require the regulator to prepare and issue a code of practice for all competition organisers and licensed clubs. We do not believe that a code of practice for all clubs would allow for a proportionate, tailored approach to regulation, where what is required of a club should vary depending on the club’s specific circumstances. The regulator’s current approach of bespoke regulation will address the unique challenges and risks faced by clubs better than a list of one-size-fits-all recommended measures, and its guidance, as per Clause 12, should already help clubs to understand what is required of them and to comply.

On the points raised by the noble Baronesses, Lady Brady and Lady Evans of Bowes Park, on Amendment 118, the regulator is already required to consult such persons it considers appropriate when publishing guidance. We strongly expect that this will include the FA, competition organisers and regulated clubs, since those persons will all be directly relevant to and affected by that guidance. However, we have not taken the approach in this Bill of listing every person the regulator should consult for every piece of guidance issued. To do so would, in our view, be counter to the operationally independent and agile regulator that we are trying to establish.

There may be times when different levels of consultation are necessary, or with different stakeholders. The regulator is best placed to draw the line between comprehensive consultation and needless bureaucracy, and to ensure that the correct groups are consulted on a case-by-case basis. On the specific consultation requirements in the Bill, including on guidance, the regulator has a regulatory principle that it should co-operate and proactively and constructively engage with clubs, owners, officers and competition organisers. I hope that that gives the noble Baroness, Lady Brady, some confidence around the collaborative points she raised. This amendment would require the regulator to consult on minor revisions to guidance, needlessly creating an administrative burden for the regulator and those consulted.

Finally, Amendment 119, in the name of the noble Lord, Lord Parkinson, and Amendment 119A, in the name of the noble Lord, Lord Moynihan, relate to the Secretary of State guidance in Clause 13. Amendment 119 seeks to extend the period that the Secretary of State cannot amend guidance on the regulator’s functions from three to five years. While the regulator must have regard to the Secretary of State’s guidance, as an operationally independent body it will not be obliged to follow it. The industry and fans alike have been clear that they do not want to see excessive ongoing government involvement in football. That is why the Secretary of State may not revise this guidance any more frequently than every three years. The Secretary of State must consult both the regulator and anyone else they consider appropriate before publishing or revising any guidance, and must lay the guidance before Parliament. While I appreciate the concerns of undue influence, extending this to five years, when there may be an issue that needs clarificatory guidance before then, would be sub-optimal.

On Amendment 119A, I agree that the regulator should be independent and free from government influence. I do not have the level of detail that the noble Lord, Lord Moynihan, requested. However, I am confident that appointments will be made on merit. I will write to him with additional detail following the debate. Secretary of State guidance on this point would be unnecessary. The employees of the regulator will already be independent from the Government, like other regulators in the country. Independence has been at the heart of the regulator’s design, with it having sole discretion over its operational decisions. The aims of this amendment are therefore already achieved by the Bill’s current drafting.

I have noted the points from across the Committee on the amendments in this group and I am happy to discuss these further ahead of Report. However, for the reasons I have set out, I hope the noble Lords will not press their amendments.

[Lord Addington (LD)]

I take it that we have a consensus that there should be some way to find out what the regulation is and the reactions to it. Will the Minister give us an assurance that it will be published somewhere we can find it? That is the real point.

[Baroness Twycross (Lab)]

Perhaps the noble Lord could clarify whether he means once the regulator is up and running. I assume so. It would be very unusual for that to not be the case, but I will confirm that and get back to him, I hope, in the course of the evening.

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[Lord Maude of Horsham (Con)]

My Lords, I have a concern with the whole of this part of the Bill and the way in which operating licences will be required and the adjudication made upon them. This part of the Bill is nine very dense pages of text, backed by three or four schedules. At various stages, it includes such dark phrases as:

“An application must be accompanied by … such other information and documents as may be specified by the IFR in rules”.


I used to be a lawyer, a long time ago, and I am reasonably accustomed to reading Bills and Acts, but when I start to read through this part of the Bill I can feel my lifeblood draining away. What of the owner or board of a small club looking at what will be required of them?

I noted that in the Minister’s winding up of the last debate she said that well-run clubs have nothing to worry about, which was meant to be reassuring. It does not matter how well-run a club is; it will have to comply with all this, and it will have to set itself up with lawyers, consultants and accountants to draw up a strategic business plan. A lot of clubs will not have a strategic business plan. That does not mean that they are badly run, but they will have to prepare such a plan. A strategic business plan is a document containing the proposed operation of a club: its estimated costs, how those costs are to be funded, the source of such funding and other information as may be specified by the IFR. That does not get done spontaneously or arise automatically.

The reality is that this is a very demanding regime intended to be put into law and enforced by the new regulator. I wonder whether there has been sufficient consideration given to putting in place a halfway-house system of regulation. Think about how companies are regulated: it is a requirement that, if you set up a limited company, designed to limit the personal liability of owners of the company, it is registered with Companies House. By law, certain listings are required and a certain amount of information has to be made public, including the filing of accounts. However, you do not have to get consent from a regulator to set up a company; you just have to register that it is in existence and subject to the laws that apply to it.

As we know, the state of football is pretty strong, stable, vigorous and successful compared with football in other, similar jurisdictions to ours. Have we given sufficient consideration to whether it might be good to take time, before we require small clubs up and down the country—which are not necessarily finding it easy to get through from week to week, month to month and year to year—to submit to this horrendous set of requirements just to get a licence to get on to the field of play in the first place, before they even set about winning a match, to go back to the drawing board and construct a regime that would require clubs to register in the same way that a company is registered, subject to rules and requirements for disclosure and transparency, and to changes being registered. That would reduce hugely the burden on clubs and would start to introduce the kind of consistency which, for reasons that I totally understand, is being sought.

I oppose the whole of Part 3 and its accompanying schedules—I am not even going to think about the plethora of regulations, guidance and further verbiage that will come out of it—standing part of the Bill.

[Lord Addington (LD)]

My Lords, it might be convenient for me to say a few words on this. Primarily, I am drawn to the amendment from the noble Lord, Lord Bassam, for the reasons he gave. We have heard that this is a wonderful, successful league. Bits of it are but, unfortunately, those are the bits at the top. Most of the cultural capital, I am afraid, is in the less glamorous clubs with less successful balance sheets.

We have a situation where we want to maintain the whole of the football structure: five leagues. This has proven to have—let us say—attracted financial irregularity; I think it was described as “chancers and fantasists”. We have to do something to stop this or we will start to have more disasters that mean something to the fan base.

The amendment from the noble Lord, Lord Bassam, starts to address this. I hope that the Government are far more in tune with that amendment than with some of the others in this group.

[Baroness Grey-Thompson (CB)]

My Lords, I rise briefly to speak to Amendment 128. We are getting to the crux of what this regulator should be about: making sure that there are sensible financial decisions, and that risks are mitigated so that they do not jeopardise clubs’ futures.

Clubs in the EFL are expected to lose around £450 million this season and are reliant on owners to fund the shortfall. If this funding is not forthcoming, it can lead to financial trauma. Only 66 of the 92 clubs that filed accounts for the 2021-22 season included data on wages and cash reserves. Nottingham Forest spent £58,606,000 on wages but had just £25,000 in cash reserves—five hours’ worth of reserves. Surely that cannot be acceptable.

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[Lord Pannick (CB)]

My Lords, I am very sympathetic to the purpose of the noble Lord, Lord Markham, in relation to his Amendments 125 and 135. Perhaps I may respectfully suggest to him and to the Minister what may be more palatable than what his amendments suggest. Amendment 125 is rightly concerned that the rules for a provisional operating licence should be made speedily. Everybody must know what the rules are. The amendment would require that these rules be made no later than the period of one month beginning with the day that this Act is passed. If the noble Lord is going to bring the amendment back on Report, I respectfully suggest that it would be more acceptable to say within one month from the date when the Act is brought into effect. The noble Lord will know that under Clause 99(1) and (2), Part 3—with which we are concerned—comes into effect not when the Act is passed but at a later date when regulations are made.

In relation to Amendment 135, the noble Lord is rightly concerned that the IFR should make the decision whether to grant a regulated club a provisional operating licence speedily. He lays down a period of one month from when the application is made. The amendment would allow for an extension of only two weeks. It is an absolute rule, subject to a two-week extension period. I respectfully suggest that that is far too confined. It is normal in a provision of this sort to allow for the period to be extended if there are exceptional circumstances. It is not difficult to envisage cases where, rightly, the IFR cannot take the decision within a period of one month plus two weeks.

For example, the IFR might reasonably take the view that it needs answers from the club to questions of detail, which it puts to the club, and the club may not provide those answers, or be able to provide them, within the period of six weeks for which the noble Lord’s amendment allows. I understand and I share the concerns at the root of Amendment 135, but it really needs to have an exceptional circumstances provision.

[Lord Addington (LD)]

My Lords, looking at these amendments, I think that a little bit of agreement is breaking out that certainty and getting things done quickly are required in the Bill. The noble Lord, Lord Pannick, may have made drafting suggestions on the hoof, and we are lucky to have him to fulfil that function for us, but something that clarifies and addresses the issues raised here would probably be helpful. If there is something that we have all missed and it is hiding somewhere, that is great, but we need those answers.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I have added my name to the amendments in this group, and I certainly agree with what the noble Lord, Lord Pannick, has suggested in relation to Amendment 125. We are grateful to him. The noble Lord, Lord Addington, is right that we are seeking to make sure that we get the right balance with this group of amendments. We are keen to close the unfortunate gap that the Bill currently poses, which is that, if it passes without amendment, nobody will know what rules the regulator might yet specify or the period in which it might specify them. We need a bit more clarity for those preparing to be regulated and wanting to do so in this way would be useful. With gratitude to the noble Lords who have done the work of the Committee and suggested ways in which to improve on this ahead of Report, I look forward to hearing what the Minister thinks.

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[Baroness Grey-Thompson (CB)]

My Lords, regarding Amendments 150, 152 and 164, I will not repeat what has already been said about community assets. I will speak just to my Amendment 248A, which probably counts as a miscellaneous amendment. It is a probing amendment, strong concerns having been raised by the Supporters Trust at Reading. It seeks to insert a new clause, after Clause 51, on ticket pricing, meaning that regulated clubs would have to adhere to the following rules: dynamic pricing strategies being prohibited, concessionary tickets being mandatory and ticket prices for away fans being kept at the level set out in regulations by the Secretary of State. It is a simple amendment, but I suspect that it will not be universally supported.

I understand why clubs want to use dynamic pricing and how it can be used very successfully, but this amendment seeks a more fan-inclusive approach. The Supporters Trust at Reading quoted the Early Day Motion tabled in September 2024, when 19 of the 20 2024-25 Premier League clubs increased their ticket pricing. Abolishing or reducing concessionary tickets would be very bad news for older or younger fans who felt the effects of the cost of living crisis harder than most. Also, Fair Game has said that the constant rise in ticket prices has priced long-standing fans out of the game and that there should be proper consultation with supporters to address their concerns.

I do not seek to open the debate on what a fan is, but this amendment is about giving consideration to how fans can be engaged in discussions about ticket pricing. I am expecting many noble Lords to tell me that this is too interventionist and that it will limit clubs too much, but I am interested to hear the Minister’s response.

[Lord Addington (LD)]

My Lords, going through this long list of amendments, I think that we can all agree that “miscellaneous” is a good description of this group. On what is a competition, I added my name to one of the amendments, but probably should have added my name to the one about heritage. Is it a ground part of the heritage, is it part of the structure, is it what is going on? I should have put my name to this and look forward to the Minister’s reply. If we do not include this, we are missing an important part of why this Bill is justifiable.

[Lord Moynihan (Con)]

My Lords, I support the probing amendment tabled by the noble Baroness, Lady Grey-Thompson, although not necessarily the wording of it or the outcome. It is related to something that the noble Baroness and I have worked on for a long time and which is covered in my miscellaneous Amendment 258A. It binds the noble Lord, Lord Bassam, and me to the same cause. There is still a major problem of abuse in the ticket market for football, not least for membership cards. Last season alone, in February one club had to cancel more than 30,000 membership cards. They were all in the hands of the touts. This is a massive problem now.

When we started to campaign to sort out the secondary ticket market, it was much smaller. Fifteen years ago there were some 120 professional touts. Now there are subscription groups which get together using bots to get hold of tickets, place those tickets on the secondary market and sell them illegally. Viagogo is, regrettably, used as a speculator—a ticketing lobby. From that, those tickets are sold abroad illegally with, quite often, information hidden behind the icons. This goes against the terms and conditions set by the clubs, which do a huge amount of work across football to make sure, especially at sold-out matches, that tickets do not get into the wrong hands.

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[Lord Kennedy of Southwark (Lab Co-op)]

Addington.

[Lord Addington (LD)]

It is nice to have a little fan club.

My amendment may be making the ultimate pedant’s point, but the Bill says that a relevant thing that cannot be interfered with is the name of a team operated by a club. My amendment refers to the name of the club itself. Is my point covered by this? I do not know. If it is, tell me where and I will be terribly happy.

The main point is that we will be still talking about who a fan is this time next year unless the Government make a decision and come up with something solid. It affects how the regulator operates and who they exclude. The Government may well have to decide who they are going to offend, but please let us do it, because otherwise fan involvement will mean nothing.

[Lord Maude of Horsham (Con)]

I would like to make a short point, but it is an important one that has barely got a mention. Football clubs have a very strong interest in consulting their fans. The fans are their customers. The truth is that, if you look across the gamut of clubs all the way down the pyramid, the composition of those fan bases will be very different. Broadly speaking, the higher up the pyramid you go, the more dispersed the fan base will be. Famously, almost none of Manchester United’s fans actually live in Manchester.