Football Governance Bill [HL]

Lord Jackson of Peterborough Excerpts

Committee stage
Wednesday 27th November 2024 Lords Chamber

[Lord Moynihan (Con)]

My Lords, I speak to my Amendment 3, and in so doing will cover a number of other amendments in the group. I say to the noble Baroness, Lady Taylor, that I see this as a Bill that is almost uniquely all-party. Both Front Benches are in favour of it. One introduced it in another place, albeit for another purpose; the Prime Minister at that time talked about dropping a legislative bomb in the path of a possible breakaway super league. It has morphed quite considerably since that time to take into account many other issues.

In a sense, it is a Bill of two parts, and they have not always completely aligned. On the one hand, there is the role of the regulator with regard to the financial success or otherwise of English football. We will come to what that means in a moment, because it is fairly important. On the other hand, there are the many recommendations that came out of the fan-led review. The noble Baroness and I have both been around a long time; it is about 40 years since I started in the other place, and I have rarely seen a Bill with 340 amendments tabled from all sides of the House before we got to Committee. That is because many Members of your Lordships’ House are interested in the fan-led review; equally there are those—I echo the words that she has just said—who are concerned indeed that a regulator should not diminish or damage the success of the football league on which the waterfall payments depend. The more successful that Premier League is, the better for football and the better for everything that we are looking at.

My noble friend in sport—dare I say that?—the noble Lord, Lord Mann, looked just a moment or two ago as if he felt that spending too much time on the Bill was nearly as depressing as three minutes before the end of the Swansea-Leeds game at the weekend, and some noble Lords opposite look as though that is how they feel. However, at the weekend he was awakened by a wonderful goal that led to a 4-3 victory by Leeds, which we both celebrated.

I want to focus first on the important issue of the Delegated Powers and Regulatory Reform Committee, because it is important that we recognise and understand clearly what it stated. It said:

“The fundamental purpose of the Bill is to ‘protect and promote the sustainability of English football.’ … One must go through a series of definitions only to find that the Bill does not, after all, provide the definition of English football. Ultimately, the meaning of ‘English football’ depends on regulations to be made in due course by the Secretary of State—albeit by the affirmative procedure”.


The report stated:

“‘English football’ means ‘all regulated clubs and specified competitions, taken together’. A regulated club means a club that operates a relevant team. A relevant team means a team that is entered into, is a member of, or participates in a specified competition. A specified competition means a competition specified in regulations made by the Secretary of State”.


That means that the meaning of English football is deliberately left unclear on the face of the Bill that we are debating in this critical Committee. The answer will emerge only after the Bill is enacted, when the Secretary of State makes regulations to fill in the definitional gap left in the meaning of “specified competition”. As a result, the remit of the new regulator is presently unclear. The report goes on to conclude with a recommendation that

“the power of the Secretary of State in clause 2 to define ‘specified competitions’ should be removed from the Bill. Government policy is clear—that the top five leagues of the men’s professional game should be regulated. This policy should appear in primary legislation, not be relegated to secondary legislation”.

My noble friend who has just spoken from the Back Benches is also aware that, as we have discussed, there is a question of hybridity about the Bill. When the Minister comes to respond to this set of amendments, I would be grateful if she could say, first, what she intends to do to give clarity to the issue of English football and what it means in the context of this legislation and, secondly, answer the question on hybridity. Until we have answers to those two questions, we have a number of challenges. I think there is widespread agreement across both sides of this House that there should not be a whole series of major decisions left to secondary legislation. They should be in the Bill and we should be considering them in detail as we progress.

On the question of sustainability, which is key to this series of amendments and the first part of this legislation on the role of the regulator, I hope that Amendment 12 in the name of my noble friend Lord Maude commands widespread agreement across the House. It provides that football needs to continue

“to be globally competitive in relation to audience and quality … to attract significant domestic and foreign investment …. to grow economically in terms of commercial revenues, domestic and international broadcasting agreements, and asset and enterprise values”

and continue

“to produce industry-led agreements on the distribution of revenues”.

Capital will travel overseas if that is not the case. Fans will benefit from ensuring that they and their clubs see success in English football, and that success is driven by a successful Premier League.

We can debate at length how much money flows through to the rest of English football but, unquestionably, the more successful the Premier League is, the better for the fans and better for the clubs that should benefit from that. The regulator is appointed in part to opine on that relationship, so it is critically important that the regulator takes into account the success of the Premier League and of English football. Indeed, the Prime Minister is very much on that page as well. He has recently pledged to get rid of regulation: his view is that he would

“do everything in my power to galvanise growth including getting rid of regulation that needlessly holds back investment”.

So we need to explore in detail the powers of the regulator and what it is going to do—and immediately, that is a highly complex area of regulation.

The regulator that we are appointing here also has to work alongside the regulations put in place by the Premier League, the EFL, UEFA and FIFA. We have already seen what happened when UEFA came forward and said, “We don’t like one of the powers that you’re giving to the regulator”. The Government immediately said, “You’ve told us to jump—how high? We’ll remove that from the Bill”. We therefore have a highly complex tapestry of regulation and are adding significant further regulation to that. I am going to look, in further deliberations of this Committee, at how we align the work of the regulator to the UEFA financial fair play regulations.

The point that the Minister made in Committee was really about the number of Premier League clubs that have been in trouble over the years. She kindly referenced and name-checked my comment in her letter, which we have very much appreciated today. She said:

“The Noble Lord, Lord Moynihan, referenced there having been ‘only seven liquidations since 1945’. For the fans and communities who bore the brunt of those failures, that is seven too many. There have also been over 60 instances of professional clubs entering administration since 1992”.


Yes, I agree that there have been seven liquidations since 1945 and seven too many, but that is nothing like the number of liquidations and insolvencies we see in society at any given time. The numbers for the country at large are substantially greater and football has been highly successful. Only last year, something like 25,158 companies went into liquidation in the country at large, with 2,827 of those being compulsory liquidations.

So I think that the success of English football has been underestimated by the Minister and by those have been compiling the arguments that, in some sense, we should not on the face of the Bill recognise the importance of growth, financial success and financial sustainability, which are at the core of the amendment that I have tabled.

With those initial comments, I will just add one other very important point for the consideration of the Committee. All the indications are that in France, which has far greater regulation, and in Germany, which has much greater regulation as well, there is no evidence that that regulation has forestalled the insolvency of some of the clubs made insolvent under those two regulatory bodies. On the contrary, it is not the regulation that stops insolvency after all. I am very happy to give way to the Minister on this. If there is a club that seems to be in financial trouble, what will the regulator do about it? At what stage will he or she intervene? At what stage will they therefore state whatever steps they feel should be taken at that point?

That is not on the face of the Bill because, no doubt, it is the Minister’s view that that should be left to regulation and it is up to the regulator. But the reality is that you appoint a regulator only if you really believe there is a serious problem and you know exactly what that regulator would do in any given circumstance. That has not been the case in either France or Germany, which are the two major case studies relevant to us at this stage. So I would echo the points that have been made. We need to make sure on face of the Bill that the regulator recognises that football should be as successful financially as possible, and that nothing the regulator does should inhibit the success and growth of the financial success of football. With those comments, I am supportive of both my noble friend Lord Maude’s amendment and, clearly, my own.

[Lord Jackson of Peterborough (Con)]

My Lords, it is a pleasure to speak in Committee on the Bill, and obviously at Second Reading as well. I put on record my thanks to the Minister for her helpful and comprehensive letter today, which also referenced my reference to Woolworths. I think she might have misunderstood what I was saying, but we will let that pass.

I will focus specifically on Clause 1, which is the centre of this Bill: it is the cause, the purpose and the raison d’être of this Bill. As I mentioned at Second Reading, if you cannot adequately identify what the problem is that you are seeking to solve, you are very unlikely to reach an efficacious solution. This Bill—this Act, assuming it gets Royal Assent at some point—will be a living document. It will be the Government, the state, via a large regulator with unique powers, intervening in what hitherto has been a very successful commercial activity—perhaps one of the most successful commercial and business activities in the whole of our country, and certainly one that is globally very well regarded.

Therefore, it is incumbent on the Government to look seriously at the excellent amendments put down by my noble friend Lord Parkinson and to take on board some of the points raised by my noble friends Lord Maude, Lord Moynihan and Lord Hayward. The odd thing is that the Bill is drafted in such a way that it ignores some of the key points made in the impact assessment. The first page of the impact assessment contains a commitment to “improve financial sustainability”, which is in my noble friend Lord Moynihan’s amendment. However, in the Bill the wording is quite opaque and that wording does not appear.

Equally, focusing narrowly on Clause 1—which is the reason the Bill is coming to this House—I note that it seems odd that the local community is not defined in primary legislation. Ministers will say, “That’s because we need the leeway to bring forward subsequent secondary legislation and statutory instruments for unusual circumstances”. That is not an ignoble or unfair interpretation, but it is a difficult proposition to put to this Committee when we have to judge what is in front of us and not what might happen in the future in a very complex market model. So that omission is still problematic, which is why I repeat it from Second Reading. The other issue is that clubs’ fans are not defined definitively in the Bill, probably for the same reason.

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[Lord Watson of Invergowrie (Lab)]

Yes, I can accept those figures. I accept the noble Lord’s general premise, although I am not sure about Spain. I do not think that more than two clubs have won La Liga; actually, the two Madrid clubs and Barcelona have won it.

The noble Lord, Lord Moynihan, talked about comparing England with France and Germany. I am not sure that is a fair comparison because in Germany the clubs are fan- owned. No club can have more than 49% ownership—51% is owned by the members of those clubs. There is not a direct comparison there. Yet Germany has been disproportionately successful in European competitions over that same period.

I want to move on to something else that my noble friend Lord Mann talked about— the opposition of many on the Opposition Benches. Unless I misinterpreted my namesake, my noble friend Lord Watson seemed to say that he was not in favour of the regulator having the powers that the Bill suggests. On the question of the role of the state, I thought that my noble friend Lord Mann was going to say that the Taylor report, which followed the terrible events of Hillsborough, was driven by the then Prime Minister, Margaret Thatcher. Quite right—I do not think anybody would object to that. There are cases where state intervention is appropriate and the only answer. If it had just been decided that we would hope all clubs produced all-seater stadiums for safety reasons, we would still be waiting for some of them.

That is one of the issues that we will probably come to later. The other one is the question of who is a fan. It is not for today, but it is very important to define what a fan is. The noble Lord, Lord Jackson, talked about Peterborough and how Posh fans are spread right across the fen-lands and beyond. If you are defining a fan, it really has to be a season ticket holder, because otherwise you cannot pin them down. Manchester United and all the big clubs have fans across the world. You could not possibly consult them. I am sensitive that noble Lords will not necessarily agree with that. What about somebody who cannot afford a season ticket or who is not physically able to go to a match? I accept that, so we have to try to pin that down, and it will be one of the most difficult aspects of the Bill, because if we are going to take the views of fans into account, we have to have a means of corralling them and then taking those opinions. At this stage, I do not see how we can do that beyond season tickets.

My noble friend Lady Taylor talked about the sustainability and the success of English football, not just the Premier League but right down the system. The noble Lord, Lord Goddard, talked of Stockport County. They sunk right down to level 6 in the National League North after going through some very traumatic periods, but have been able to come back up to level 3. My noble friend Lord Mann talked about AFC Wimbledon; in nine years they came from, basically, parks football to being back in in the Football League. It is natural that we tend to concentrate on the Premier League, but there has to be some understanding that the clubs below them are important. I am being opportunistic, but the Labour Government have talked about fixing the foundations. In any sense, when you look to go forward, you must have strong foundations. The foundations of English football are right down at the grass roots. I am not talking about the amateur level.

[Lord Jackson of Peterborough (Con)]

The noble Lord references Amendment 10 tabled by the noble Baroness, Lady Taylor of Bolton. Will that amendment not potentially embed in primary legislation an economic concept of moral hazard? It is an economic term: a situation where a party has an incentive to take risks because it does not have to bear the full costs of those risks. That is going to be on the face of the Bill for the new regime, and will be directed by the new regulator. Is that not the case?

[Lord Watson of Invergowrie (Lab)]

We will have to see how that comes out in debate. I am not quite sure what the import of that amendment is. That is one of the issues about the role of the regulator. Noble Lords, particularly on the other side of the Chamber, are seeking to give him or her greater powers or influence than intended in the Bill. The noble Lord, Lord Moynihan, said at one point that we do not need a regulator because nothing is wrong. There is something wrong, because the Premier League and the English Football League have been unable to reach agreement on the disbursement of the funds from the top level to levels below. That is one of the problems in the system at the moment.

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[Baroness Evans of Bowes Park (Con)]

My Lords, I want to ask the Minister to follow up on something she said in her wind-up speech at Second Reading. She said that, that week,

“the Minister for Sport had a productive discussion with UEFA and they committed to continuing to work together”.—[Official Report, 13/11/24; col. 1908.]

Obviously, it was just a reference, but I wonder whether she might be in a position to give more detail about that conversation, whether some issues raised in the letter have now been dealt with, and what continuing conversations might entail. As she mentioned it quite briefly at Second Reading, it would be great to get a bit more information if she can provide it to us. If she cannot do it now, could she perhaps write to all noble Lords to give us the latest on the discussions that have been ongoing?

[Lord Jackson of Peterborough (Con)]

My Lords, I support the amendments from my noble friends Lord Moynihan, Lord Maude and Lady Evans of Bowes Park. The important thing we are missing is the sweeping enabling powers in the Bill; I think there are 42 powers and a number of Henry VIII powers.

The Prime Minister said on 17 September in response to UEFA:

“I don’t think there’s any problem with the rules, because this is a truly independent regulator. But as you’d expect, we’re talking to UEFA, and I’m sure we’ll find a way through this”.


I reiterate the view of my noble friend Lady Evans and ask for an update from the Minister.

I am not sure if the Prime Minister has actually read the Bill. If he did, he would surely concede that particularly in Clause 11, “Football governance statement”, there are very wide-ranging powers. For instance, Clause 11(3) states:

“The Secretary of State may revise any football governance statement”,


while Clause 11(1) states:

“The Secretary of State may prepare a statement”.


In paragraph 28 of the Explanatory Notes, there are significant powers that are open to future interpretation in a court of law. This is an unprecedented situation, but the notes state that

“guidance is intended to aid the IFR in interpreting the intention of legislation and to inform the detailed development and implementation of its regime. IFR guidance to the industry should give clubs greater information about the specific requirements of the regime, including how the IFR will operate and what is expected of clubs”.

With the best will in the world, that is a very pervasive, far-reaching, enabling power for the Secretary of State and Ministers in the department to exercise. If I can beg the forgiveness of noble Lords, I am slightly sceptical. I am not quite taking the side of FIFA and UEFA, but I have some empathy with the concerns they have about mission creep and a movement from financial issues into the minutiae and technical, granular operation of different football clubs. That is why my noble friends and I are raising this issue. I hope and expect the Minister to address those concerns.

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[Baroness Fox of Buckley (Non-Afl)]

I agree, but I was going to appeal to us myself to try to tackle the Bill—which is so important in many ways—with at least a little of the spirit of what is in the best interests of football, rather than what is in the best interests of the political footballs of political parties. That is just an appeal—it might not work—because Henry VIII powers, for example, are anti-democratic and illiberal whoever uses them. I do not therefore want not to be able to criticise them in case somebody thinks that I am on the side of the Tories or that I am anti-Labour. That is not the point, surely.

[Lord Jackson of Peterborough (Con)]

I will briefly respond to the noble Lord, Lord Bassam. I take on board the Maude doctrine, which is that, had we had the opportunity to have scrutiny and oversight of the Bill at the appropriate moment, I would have made exactly the same points to my own Government when they were in power. So, with all due respect to the noble Lord, he is flogging a dead horse by keeping on saying that this was a Tory Bill. We are today considering a Labour government Bill on its merits and its efficacy, which is why we are debating it.

[Baroness Brady (Con)]

My Lords, I support Amendment 6. I clarify for the noble Lord, Lord Bassam, and the noble Baroness, Lady Taylor, that there is no state regulator in France or Germany—all the regulation there is football-led—so this is something completely different.

I will raise with the Minister the alarming letter that UEFA sent the Secretary of State. In it, the warnings are spelled out very clearly, as are the concerns about “governance interference” in football. It points out that it has very “specific rules” that guard against state interference in order to

“guarantee the autonomy of sport and fairness of sporting competition”.

It states:

“If every country established its own regulator with similarly broad powers, this could lead to a fragmented, inefficient and inconsistent approach to football governance across the continent and in essence hinder the ability of UEFA and other bodies to maintain cohesive and effective governance standards across Europe”.


It goes on to say that

“it is imperative to protect and preserve the independence of the FA in accordance with UEFA and FIFA statutes”.

It warns against anything that could compromise

“the FA’s autonomy as the primary regulator of football in England”

or the ability of domestic leagues to set

“their own season-to-season financial sustainability rules”.

As the noble Lord, Lord Moynihan, said, it gives stark warnings about the backstop power and licensing. UEFA expresses significant concerns about the backstop and stresses the importance of preserving collaboration and voluntary agreements in football governance, while cautioning against overreliance on regulatory backstop powers that could disrupt the sport’s balance and stability.

It says that the backstop threatens

“the balance of power within football governance”

and that

“mandating redistribution which affects the competitive balance in the game and wider European competition would be of concern to us”

and would

“prevent amicable solutions being found”.

UEFA says that the backstop in the current Bill should be “carefully reconsidered”.

However, despite those warnings from UEFA, the Government have made the backstop even wider and broader in scope, to now include parachute payments, which are fundamental to competitive balance. They have removed the incentives for a football-led deal, which goes specifically against the advice of UEFA. So it appears that the Government have ignored that letter and its warnings. UEFA spells out that

“the ultimate sanction would be excluding the federation from UEFA and teams from competition”.

No matter how small the Minister may say the risk is, the inclusion of this amendment will help to ensure that the IFR does not act in a way that enables such unintended consequences for football fans. That would be a huge relief.

We should be careful not to empower this regulator without fully addressing the concerns of the international governing bodies in advance. If we create even a small but ever-present risk of intervention in the future, that could put the Government, the regulator and our competitions in an invidious position down the track, especially in circumstances where the interests of English football may not align with UEFA or FIFA—for example, in the event of future disagreements on the football calendar. I therefore urge the Minister to give assurances that every single issue raised in the letter has now been dealt with to UEFA’s satisfaction, including its concerns on financial distributions and independence from government. This leverage, once granted, cannot be taken back.

It is imperative that nothing in the Bill gives the regulator powers to interfere with the rules that already govern football—which, by the way, is one of the most governed and regulated industries around. We have to comply with FIFA rules, UEFA rules, Football Association rules, Premier League rules and EFL rules—and now we have the IFR rules. We will be tied up in more red tape than a company applying for a post-Brexit import licence.

So will the Minister ask the Secretary of State to allow a full copy of the letter she received from UEFA to be put in the House of Lords Library and the Commons Library for every single Peer and MP to be able to see it, read it and be aware of its nature and tone and of the consequences it spells out, so that every Peer in this House can take that into account when they consider why this amendment is so important and so necessary?