Football Governance Bill [HL]

Lord Addington Excerpts

Committee stage
Wednesday 15th January 2025 Lords Chamber

[Lord Addington (LD)]

My Lords, the amendments in front of us seem very appealing on the face of it, but I wonder why we have not got there already. If the Minister has some idea about the process that led to the position that we have, which does not seem to have been universally popular, I would be grateful to hear it—and I think the Committee would benefit from that.

[Lord Markham (Con)]

I wish all noble Lords a happy new year, because this is the first time I have been here. I wish that my noble friend Lord Parkinson was joining us here instead of being in the Caribbean, from where he sends his best wishes. I really appreciate the time, effort and work that the noble Lord, Lord Birt, has put into this, although I am not sure about his statistic that 40% of the best players worldwide play in the Premier League. I would be interested in understanding where that statistic comes from, particularly as there seemed to be a Liverpool bias in that statistic.

The point behind all this, as the noble Lord said, is that a redistribution power gives unprecedented power to a regulator—unlike any other regulator in the country. As noble Lords have heard me say before, you do not see the FCA giving money from one bank to another or Ofwat giving from one water company to another. This has to be at odds with what the Sports Minister said just today—that they were looking to put in place a light-touch regulator. Instead, they are giving the regulator more powers than any other regulator in the country, which feels as if it is going in the opposite direction. The amendments in the second group seek to address that by suggesting that maybe we should not have those redistribution powers. But given a scenario in which we have those powers, the noble Lord has tried to set out a thorough and well thought-out process that is designed to foster compromise and avoid gaming. That is my concern about this.

I particularly appreciate the amendment on the criteria for settlement, which would make sure that there is a wider set of criteria in all this—looking to the competitive nature, audience appeal and continued investment. Without that, you are really just asking the expert panel to go back to the original objectives of the Bill, which are very simple and talk only about the financial resilience of the league, safeguarding heritage and financial soundness. There is a very easy way in which to achieve all those things, pointing the expert panel to saying that whichever suggestion gives the most money is going to achieve that, without having any other objectives. We could say, “Hang on a moment; going with the one that gives the most money does not at all take into account the appeal of the Premier League or the competitive nature of it all—it just makes sure that it is financially sound by giving it as much money as possible”. That cannot be right, but that is what we are setting up the regulator to do, if those are the only criteria and measures that it has to guide by. That is why I appreciate the wider set of measures set out in the amendment, which is very much a guide to how to do that, similar to the amendments tabled by my noble friend Lord Parkinson, which are in my name as well, on having a financial investment duty on the regulator in deciding any final proposal.

I also support Amendment 297F, which is about putting in place a proper appeals process. It is about getting as sensible, thorough and transparent a process as possible, and I look forward to hearing from the Minister how the Government would look to take on board these sensible provisions.

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A three-year transition period for any changes to parachute payments is not just reasonable but essential. I urge the Government to consider their approach and support these amendments. Football’s future really does depend on the Government listening, engaging and getting this right.

[Lord Addington (LD)]

My Lords, when it comes to parachute payments and what they imply—that is, the survival of a fall—I cannot help but feel that if we made what clubs were falling on a little softer, it would improve their chances. We have a situation here of deciding whether to cushion the fall or let clubs float down. Some combination of the two might be appropriate. Let us remember that no situation will remain as it is now; we cannot guarantee that consumption patterns and the way football is viewed will not change over time, because they already have.

So, what I would say about the noble Baroness’s amendment is that maybe the timescale would be easier if it was longer. What is the Government’s thinking about stability to allow this survival to come out? We do not want people being destroyed by it—the noble Baroness is quite right. Equally, having the “cosy club” of those who have tried and failed and come back up again is not that desirable. How you have a civilised or better way of getting out of that situation is something that we want to look at here. I do not know whether there is a right answer here, but we need to look at the way this happens and how those clubs are going to survive and continue as clubs. When I looked at this Bill, I thought that was the most important bit. You have the Premiership which makes lots of money and the rest of it which apparently we want to keep. How you square that circle is what we are talking about here. The Government’s thinking on this is what I would like to extract from this discussion.

[Lord Markham (Con)]

I will be brief because my noble friend Lady Brady made the points extremely well and we have debated parachute payments quite a bit already this evening. The only thing I would say is that they give clubs in the Premiership the incentive or the confidence to invest and in my understanding every European league now has some variation on that, because it is seen as a system that works. It is fundamental to the competitiveness of the Premier League. It underlies its whole audience appeal and broadcasters all round the world will make media sports rights payments to see such an exciting and competitive game.

It is known that we would prefer that parachute payments were not included but, if they are going to be included, the proposal to make a three-year safety net as opposed to a one-year safety net is very sensible. In the conversations that the Minister helpfully set up with her officials, I could tell that it was something they understood and were quite well disposed towards. The fact, as my noble friend Lady Brady, said, that contracts for players are for three years shows the importance of having that. So I hope that this is a sensible amendment that the Minister can speak to.

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[Lord Addington (LD)]

My Lords, to follow up on the point from the noble Baroness, Lady Taylor, will the Minister tell us how the Government seek to enable Parliament, and indeed the Government, to look at how this is working when it comes in? There are provisions and, as the noble Baroness, Lady Taylor, sensibly put it, we are looking more at regulators, basically because of a failure of regulation—it has occurred in many fields. When you have a new regulator, you should review it. What is the process of review that the Government have in mind or going on? I hope that it is not a matter of waiting for failure.

[Lord Hayward (Con)]

My Lords, before I come on to the question of compliance costs specifically, I return to an answer the Minister gave me in response to a question I asked at the start of the debate this evening. It was on whether the shadow regulator would be present at the meeting with the Chancellor tomorrow. The response that the Minister gave—I hope I have it correct—was that the shadow regulator would not be present because the invitation was to existing regulators. I note that the Minister is nodding to that, so I presume that I have the phraseology broadly correct, and certainly the message correct. To be honest, I find that staggering. We have been told that the shadow regulator body— I was present at the meeting recently with the shadow regulator and his staff—should be up and running so that the regulator can take over a body that is already in full operation. We were told how many staff had already been recruited. We have been told persistently that this is light regulation.

I refer here to the fan-led review by Tracey Crouch. On page 15, paragraph 15 states that there are five important factors that should be pursued, including, in sub-paragraph (d),

“minimising burdens on clubs or an expensive system”.

Surely a shadow regulator that is going to hand over an up-and-running system and is going to operate a light-touch process of regulation should be invited to a meeting with the Chancellor to discuss precisely that issue. I am at a loss, as I think a number of people in this Chamber are, to understand why the shadow regulator has not been invited to that meeting. I am afraid that it indicates to me the attitude of the Government towards the role of the regulator in this process.

I now turn to the question of compliance costs. I do not intend to cover the issues that the noble Lord, Lord Moynihan, has covered so effectively, but I would like to cover a number of other issues. The noble Lord, Lord Moynihan, made reference to the fact that we were talking about all football clubs. The concentration throughout all our days in Committee has been overwhelmingly to do with the Premier League and the Championship. But when one is talking about the sorts of figures that the noble Lord, Lord Moynihan, was referring to—I have pursued persistently the honest assessment of what the actual cost is for a club, whatever it may be—the Minister has said persistently to me and others that the costs would be proportionate.

It is therefore relevant to remind this Committee what the turnovers of the small clubs are. I am quoting from Deloitte’s figures for the season 2022-23, which I understand are the last figures currently available. The average revenue for a club in League One is £9.8 million. The average figure for clubs in League Two is £5.5 million. Therefore, the categories of hoped-for costs identified in the analysis that the noble Lord, Lord Moynihan, gave earlier fall very heavily on a club.

I will cite a few examples. AFC Wimbledon’s revenue is £7.4 million, Crewe Alexandra’s £4.1 million and Northampton Town’s £5.1 million. I have looked for the figures for Stockport County, but I am sorry: I do not have them. I would give them if I could. If there are to be a series of compliance costs on top of all the other costs faced at the moment—not least national insurance contribution charges and the like—that will make a pretty big hole in the revenue of a club with a turnover of £5 million to £7 million.

The Minister has said that the burden would fall proportionately on the biggest clubs. In an earlier contribution, I said that when I was head of the British Beer & Pub Association I had the responsibility of steering the introduction of substantial changes in licensing legislation, which we did with the full agreement of government. The burdens do not fall proportionately on the biggest companies. They can employ a compliance officer or two but, in a small company or a small football club, you do not have a compliance officer so you have to turn to other people for advice. It therefore takes longer and costs more.

It is like anything in life. If you own a large number of flats as opposed to one home, and you take out insurance and are filling out a form, you know only too well that if you have done it once for one flat, it is just the same the next time. If you are dealing with one property, you do not know because you have never been confronted with the issues before and so you have to turn to other people for advice. The burden is not proportionate. There is a massive imbalance between big clubs with huge turnovers and the smaller clubs living completely hand to mouth.

I have quoted once already from the review. The point I want to raise was triggered by the presentation from the shadow regulator. When he was talking about staff, I believe he said that it had just recruited five people for IT systems. We are told, indicatively, that the regulator is likely to employ some 250 people—that is more than 10% of the total of DCMS’s staff, covering all the range of its departmental remit. Are five people needed for an IT system?

Then I actually looked at the review. There was reference earlier this evening to the question of clubs in terms of a few clubs. In fact, the review says:

“Many clubs are poorly run”.


It goes on to say of the regulator:

“The Review has … concluded that the new financial system should involve real time financial monitoring”.


That is what those IT employees are there to do. They are not there to operate the regulator, because you do not need that many for the day-to-day operations of a business of that size. It is about investigating the processes. When they go to a club and ask it to produce the information, it will say no, because it operates on a completely different system.

When I was first involved with boundary changes, we tried to get figures out of local authorities about the number of voters on an electoral roll. Noble Lords might imagine that the returning officers from different authorities would operate on identical systems. No: they were on four different computer systems. It took several years to get the accurate figures. This is precisely what will happen with the small clubs. They will be operating their own systems, when suddenly along will come the regulator to say that it wants the information, but that it wants it in its own computer system, not the clubs’. Sadly, the likes of Stockport County, Rochdale, or wherever it may happen to be, will be told that they must revise their IT system because they have to give the regulator the answers and the computer says no.

The compliance costs fall very heavily on the smaller organisations. They are not proportionate, and we should be honest about that.

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[Lord Watson of Invergowrie (Lab)]

My Lords, with all due respect to the noble Lords, Lord Pannick and Lord Markham, is it not rather disingenuous to suggest that UEFA might have some concerns with this legislation but is not willing to make them public? UEFA is not known for being shy and slow in coming forward when it is concerned about any aspect of football in any of its member countries, so I think we can be fairly certain that, if it had serious concerns—or indeed, any concerns—it would have made them public and we would know about them.

[Lord Addington (LD)]

My Lords, I find myself agreeing with both the noble Lords, Lord Watson and Lord Pannick. It would be good if we could know what has been said and, if there is no big objection, we could move on. It was suggested that we had to comply with UEFA’s rulings in our own law. That is patently absurd. But, if there is no problem, let us know about it. We have not been told that English clubs will be banned if this goes ahead, so presumably it is not that big a deal. Surely, finding out about it now would be sensible.

[Lord Jackson of Peterborough (Con)]

My Lords, I support the noble Lord, Lord Markham, and express my concern about the non-appearance of this letter. We have been debating whether there is a letter or what the letter says. We have been speculating on what it might or might not say for several weeks and several sessions of this Committee.

I have carefully read the Written Answer that the noble Baroness gave my noble friend Lord Moynihan on 8 January. She does not, interestingly, pray in aid any Cabinet Office guidance or recommendations on the release of so-called private correspondence that forms a part of government policy formation. She just says that

“it would not be appropriate to publish private correspondence with any stakeholders in the Library of the House”.

If it were an individual divulging personal information in the course of their letter to a Minister or a government department, that would be a separate issue. Noble Lords will be aware that, for instance, freedom of information is quite circumscribed as to what can be released in terms of impinging on someone’s privacy, or if it would interfere with an ongoing judicial case. This is not the case. This is not a private letter; this is a letter from a corporate representative body. It may not be a government body or a non-departmental agency in the UK, but it is a representative body of some standing with a rulebook which governs the practice of football in our country.

On that basis, at the very least it is incumbent on the Government to produce that letter. If we have overegged the pudding and, in respect of the backstop, UEFA has no qualms or serious misgivings about this legislation as a whole, and particularly the backstop, I for one am happy to be disabused of my cynicism. In the meantime, we, the media, noble Lords and others in the other place when this goes there will be suspicious unless that letter is produced.

So I respectfully implore the Minister to think again and place that letter in the Library of both Houses so that we can inform a proper debate on specific issues that are germane to this Bill: in other words, the attitude of an important and prestigious organisation such as UEFA.

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[Lord Watson of Invergowrie (Lab)]

The noble Lord may be surprised and not too pleased to hear that I support this amendment. It makes sense not to have in-season changes. This message needs to be got through to some Premier League clubs, including West Ham—I invite the noble Baroness, Lady Brady, to reply. Some clubs change their ticketing arrangements in the middle of a season, shutting out some fans—particularly children and seniors—from getting cut-priced tickets. This is apparently in pursuit of greater income. Manchester United are the main culprits. I understand that a group of fans from various clubs has come together to protest at these changes. It is wrong for this to happen in season, which is why it would be sensible for the Bill to incorporate an amendment similar to the one that the noble Lord, Lord Markham, has just moved.

[Lord Addington (LD)]

My Lords, I basically agree. There is a break at the end of the season. Most organised team sports change their rules and regulations in that break if they are going to do so. It might not need to be in the Bill, but it might be a Pepper v Hart type case; I say that timorously in view of the company I am keeping. If the Government can give us some indication that they will make major changes in the off-season, when players are exhausted and structural changes can be made—that is basically what it is for—then I would be happy because it is quite a sensible principle.

[Baroness Blake of Leeds (Lab)]

My Lords, I thank the noble Lord, Lord Markham, for tabling the amendment and other noble Lords for their comments. I will go through the reasons why we will not support the amendment. We understand that its intention is to avoid any burdens or disruptions for clubs that might be associated with mid-season licensing. This includes the risk, albeit remote, that licenses are refused mid-season.

However, the amendment would mean that the entirety of Part 3 could not be commenced until the off-season. For example, it could affect the ability of clubs to prepare and submit their applications early. If the regulator became operational mid-season, it could mean waiting for as long as eight or nine months before it could even begin to license clubs. We do not think this is right. Clubs should be able to prepare and, if they so wish, submit their applications early to avoid the regulator having to deal with a rush of 116 applications in the relatively short window between seasons.

Ultimately, if the Secretary of State does not have the flexibility required to determine when the regulator’s powers commence, it could lead to delays, confusion and inefficiency throughout the set-up process. We are, of course, prepared to continue the fruitful conversations we have already have and I look forward to more of them. Although I recognise the amendment’s helpful intent, I am unable to accept it. I hope that the noble Lord will withdraw it.

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[Lord Hannett of Everton (Lab)]

My Lords, I will refer to the comment by the noble Lord, Lord Norton, about not everybody being interested in football. As a long-suffering Evertonian, sometimes that is not a bad place to be, especially having seen Everton’s results tonight —but there you go; there is another day. I say to the noble Baroness, Lady Brady, regarding David Moyes, who has now returned to his spiritual home, that I hope some of his success at West Ham will rub off on Everton.

I have listened on a number of occasions to this debate and to some of the contributions and the experience that has been expressed. However, I am with my noble friend Lady Taylor—this is a time to move on and to enact the Bill, because this is what football fans want. As a football fan—a season ticket holder at Everton—I was delighted that support for the Bill was in the manifestos of all the main parties. From some of the contributions, you could sometimes be confused that that was the case. As football fans say, this is an important Bill. Noble Lords have on occasions appeared to forget how we arrived at this position. The fan-led review was based not on hot air but on the genuine concerns of football fans. The fans and the future sustainability of our beloved national game must always be at the heart of the House of Lords.

Noble Lords’ amendments—there have been too many to comment on individually, so this is a general observation—would in effect ensure, even before the independent football regulator gets off the ground, that those who oppose it would be seen to be working to ensure its demise. We know there are people who hold strong views about regulation, but there are occasions for regulation and this is one of them.

It could be said that this is another way, on top of the attempts through other means, to kill the Bill—to kill the regulator by the back door. That is not what fans want. I speak to fans from many different clubs who have been waiting for the Bill to pass.

In conclusion, I thank the Ministers for the way they have had handled this debate over many weeks, not only with stamina but with attention to detail. That is extremely uplifting.

[Lord Addington (LD)]

My Lords, I too do not think that these amendments are necessary. I agree with the principles the noble Lord, Lord Norton, laid out—I think the whole Committee agrees with them—but we do not need the amendments. The Minister can correct me if I am wrong but we have the “state of the game” reports, which are built in to look at the structure and success of this. We have a better vehicle for looking at what goes on than we have ever had before. If we decide to get rid of it, do we go back to what we had? Do we go back to having all those small clubs saying, “Nobody’s checking that we’re selling our ground for a nice development of flats”—the first thing raised with me 30 years ago about what is wrong with certain types of people who buy football clubs. That sort of decision is not new.

We have a successful Premier League—all power to it—but we have to look at the other divisions and the rest of football. We have the opportunity to do that and I hope we carry on. When the Minister replies, we should hear what the Government would do if the “state of the game” report suddenly said that we have got it wrong somewhere. I hope we will hear that and that we will carry on, because the underlying problem that brought this Bill forward was one event that actually, oddly, preserved the Premier League. If we go forward with this, we need a series of reviews—I have already raised this. Who Watches the Watchdogs? and all the reports concern themes in Parliament, as does post-legislative review. If we can bring this in and we have a vehicle for delivering it, this Act might actually something of a beacon for how we can achieve it.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I challenge the approach of the noble Lord, Lord Hannett, to this by saying that I support the amendment. I object to the way this is posed as a fans’ piece of legislation, that the fans want it, and that anyone who does not support or has any reservations about the Bill is not thinking about the fans.

The Bill is based on Tracey Crouch’s original fan-led review but there is a danger of a sleight of hand. I know it sounds populist—and I am keen on populism—to say that this is all about the fans. Actually, it was based on 20,000 online responses, so it is not necessarily all fans. There are fans across the leagues at all different levels who are finding out the detail of the legislation and some of them are quite shocked. The fact that the media are beginning to pick up on it is quite important.

I would like fans to have a proper opportunity to have a debate as the law is understood and rolled out, so that they can take things into consideration. I am not trying to insult fans. I am not trying to say they do not know what they are voting for. That kind of paternalism annoys me. But I sat through about half of this Committee, maybe less, for hours and hours, as others have and, despite some snipes about filibustering, I have found the contributions to be brilliantly well informed. There have been lots of layers of debate and lots of nuance from all the contributors. I say that because I thought I knew what was coming up in the Bill but I have had some genuine shocks about its political consequences.