Football Governance Bill [HL]

Lord Hayward Excerpts

Report stage
Monday 17th March 2025 Lords Chamber

[Baroness Twycross (Lab)]

I thank the noble Lords, Lord Parkinson of Whitley Bay and Lord Goddard of Stockport, for their amendments.

Amendment 52 from the noble Lord, Lord Parkinson, would require the regulator to consult every regulated club, as well as the Secretary of State, the Treasury and others that the regulator considers appropriate, for minor changes to the levy rules. As noted by the noble Lord, Lord Pannick, the Bill is currently written so that consultation is not needed for minor changes to levy rules. This is intended to allow the regulator to make immaterial amendments or corrections without excessive bureaucratic burden. In the Government’s view, the amendment would add a layer of unnecessary process.

There is no need—and, I imagine, no great desire—for clubs to be made aware of every typographical or grammatical error that the regulator wishes to correct. I note the points raised by the noble Lord, Lord Markham, in his support for the amendment, and I can assure noble Lords that clubs will be properly consulted on matters that affect them. For all changes to the levy rules that constitute material changes, the Bill already requires the regulator to consult, amongst others, every regulated club.

Moving to Amendments 55 and 56 from the noble Lord, Lord Goddard, I completely understand the intention behind these amendments. A right of approval for the regulator over relevant competition organiser rules would enable the regulator to clearly maintain authority on matters within its remit and to manage any potential duplication or conflicts. However, the Government are firmly of the view that competition organisers should be free to implement their own rules autonomously. As membership organisations, they should be free to set rules on their members in pursuit of their own objectives, which are likely to be broader than the regulator’s.

Overreach by the regulator into the rules of competition organisers risks the kind of scope creep that UEFA has warned against. We are confident that the regulator will be able to work with competition organisers to manage any interactions between their rules and its own regulatory system without the need for an approval or veto power. As a result, we do not think the regulator needs the power to require additional information from competition organisers here either.

On the specific points raised by the noble Lord, Lord Goddard, the regulator will put in place the necessary minimum standards for all clubs in scope with statutory powers to enforce and maintain these standards. This would be business regulation of football clubs setting the statutory baseline they must meet to operate as football clubs in this country. Beyond this, competition organisers are free to set membership requirements on their member clubs. If they wish to layer additional requirements or processes on top of the regulated statutory baseline, they will be free to do so, providing that they are consistent with the law. Of course, it would be in no one’s interests to have unnecessary duplication, so we would perhaps expect the competition organisers to focus on other objectives and leave sustainability in this regard to the regulator.

In light of these points, and others, raised, I hope that the noble Lords will recognise the risks associated with their amendments and will be content not to press them as well as to support the government amendments.

[Lord Hayward (Con)]

Before the Minister sits down, I refer her back to the answer that she gave to my noble friend Lord Markham and the noble Lord, Lord Pannick. When I was chief executive of the British Beer and Pub Association, I had notification from the Treasury about a change on tax rules that it considered minor. The Treasury expected it to go through with no contest, but the brewing industry went berserk because the Treasury was unaware of the implications of what it was proposing. That is precisely what appears to be the case regarding the comments from my noble friend and the noble Lord, Lord Pannick: it cannot be for the regulator to judge whether something is minor or major, because it may well be unaware of the implication of what it is doing for one club or another, or for a group of clubs in one form or another. I find the Minister’s answer surprisingly inadequate.

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[Lord O'Donnell (CB)]

My Lords, I support this amendment. I should declare my interest: I am passionate about football. Wembley has been mentioned, and I remember my first trip there was in 1968 to see my team, Manchester United, win the European Cup—alas, that may not happen again for a while. Like the noble Lord, Lord Birt, my former boss, I was at Wembley in 1973 and 1974; unlike him, I was playing, but it was not quite the same crowd, because it was the Oxford v Cambridge match, but I was there.

I will not repeat all the excellent arguments of the noble Lords, Lord Birt and Lord Burns, and the noble and learned Lord, Lord Thomas, but I support them all. We are now observing the Government having issues with regulators, saying they are not taking due account of growth. I think this tells you, when setting up a new regulator, to think very carefully about what you want them to consider. These amendments go into detail about that; that is absolutely important, because the current process has this absurd system where there are two numbers and you have to choose one. When they are trying to work out the right balance, they need to take account of these factors, and these factors should be made clear.

There are two aspects to this. The first is to make things clear. The second is: if you want fairness and competitiveness to be really important, you also need guidance about trade-offs. In my experience dealing with regulators, those are some of the most difficult issues—that is where politics gets involved—so we need to be clear what we are asking the regulators to do, what they should be doing and what they should be referring to others.

We need clarity on the role of the regulator, guidance on inevitable trade-offs and, ultimately—I agree with many here—we need fairness. We must keep the Premier League at the pinnacle of the global game. If we succeed in that, then Premier League clubs will repeat Manchester United’s 1968 performance and win the European competitions.

[Lord Hayward (Con)]

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

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

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

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

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

[Baroness Taylor of Bolton (Lab)]

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

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

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

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

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[Baroness Twycross (Lab)]

My Lords, I thank the noble Lords, Lord Birt, Lord Pannick and Lord Burns, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling the amendments in this group. It is indeed an impressive team, as the noble Lord, Lord Pannick, stated. I particularly thank the noble Lord, Lord Birt, for his considered engagement and persistence, and for the time he spent considering ways in which we could improve the backstop process for the good of football, which is what the Bill is intended to provide.

I am grateful for the contributions from other noble Lords co-sponsoring the amendments and other noble Lords from across your Lordships’ House who have contributed to debates and engaged constructively during discussions and during this debate. We have had a series of productive meetings exploring some of the aspects of the model that were not discussed in detail in Committee.

If I may give a personal view, as someone who has learned a huge amount through the passage of the Bill and been on an incredibly steep learning curve, I think it is unfortunate that the tone and nature of the debate in Committee at times prevented these sensible discussions taking place on the Floor of your Lordships’ House. However, I am grateful to the noble Lord, Lord Birt, and others, as they have raised a series of important questions that have helped to inform our government amendments in this area. I genuinely appreciate his and other noble Lords’ time and expertise. I particularly appreciated how the noble Lords, Lord Birt and Lord Burns, viewed the draft legislation with the regulator and the regulated in mind, using their considerable relevant experience to provide fascinating and useful insights.

We have heard the view of the noble and learned Lord, Lord Thomas, with his experience in dispute resolution. The IFR needs effective tools and, as the noble and learned Lord said, the tools and the approach should be fair and careful. I add to his point that they also need to be seen to be fair.

The noble Lord, Lord Hayward, asked for a specific commitment. While I recognise his concerns, we do not think it would be possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that, while we are sympathetic to the intent of the amendments tabled by the noble Lords and the constructive way in which they have engaged, their approach differs significantly from existing drafting. We therefore do not think there is enough time to conclude discussions on these important differences at this stage or before Third Reading. We kept the model—

[Lord Hayward (Con)]

I thank the Minister for answering as she has, but implicit in what she said is that the Government might find a way to introduce amendments when the Bill goes to the other place. Can I please seek clarification as to whether that is what she intended to say, or whether that was just something that would take it further down the road?

[Baroness Twycross (Lab)]

The only commitment I will give is the one I have in my speech. We do not think it is possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that while we are sympathetic to the intent of the amendments, they differ significantly from the existing drafting.

As I started to say, we kept the model chosen by the previous Government. This model is intended to create the right incentives. A number of noble Lords, including my noble friend Lady Taylor, spoke of the intention behind the current model. The final offer mechanism is designed specifically to address unequal negotiations between parties with power imbalances such as those that naturally arise in the football industry. The noble Lord, Lord Addington, said it was designed for people not to get there. It is actually designed not to be used.

The process as it stands in the existing legislation heavily incentivises reasonable proposals, since an unreasonable proposal has a very high chance of rejection when compared to a more sensible competing offer. We must maintain this incentive—

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[Baroness Taylor of Bolton (Lab)]

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

[Lord Hayward (Con)]

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