Football Governance Bill [HL]

Lord Markham Excerpts

Committee stage
Monday 9th December 2024 Lords Chamber

[Baroness Brady (Con)]

My Lords, I refer the Committee to my interests declared in the register. I support Amendment 71 tabled by my noble friend Lord Markham, which raises a crucial point regarding the backstop mechanism. We must be clear at the outset about what this mechanism governs and, critically, what it does not.

First, it is vital to understand that the backstop is categorically not about the fair apportionment of collective football revenues. Each party—the Premier League and the EFL—has its own central broadcast revenues. Indeed, the EFL has just secured a landmark five-year domestic broadcasting deal worth nearly £1 billion, increasing its central revenues by 50% from next season. This is testament to the Championship’s growing competitiveness and appeal.

I will not dwell on the fact that many of its recipients are incredibly wealthy—I believe there are nine billionaire owners in the Championship, along with many other extremely well-funded ownership groups—but I will dwell on the fact that, despite its very healthy income, the EFL does not give any money to the National League. It gives no funding to the leagues directly below it. It is the Premier League that supports the National League. Far from some sort of neutral arbitration to allow all parties to share with each other, the backstop is in fact a mechanism for the forcible redirection of billions of pounds of Premier League revenue only. In other words, this is one set of private businesses handing over money to another competing set, even if they do not want to give more than the £1.6 billion they already do and it damages their ability to compete.

The critical point, therefore, is that this backstop mechanism represents a completely unprecedented and untested intervention in what are the private commercial rights of Premier League clubs only. It impacts uniquely on Premier League clubs. The gravity and novelty of such an intervention demands the most careful consideration. Crucially, the backstop introduces a major and radical change in the Bill: the inclusion of parachute payments. This decision was taken without adequate consultation with Premier League clubs.

I mentioned earlier in Committee that just seven out of 20 clubs were invited to a 30-minute meeting on the Bill with the Secretary of State between the Government taking office in July and the decision, which was taken in October. It is no surprise that this lack of consultation has produced such a reckless decision. There simply cannot have been an appropriate understanding by the Government of its potential consequences.

Parachute payments are not a financial convenience; they are a cornerstone of the Premier League’s competitive balance. Without them, clubs cannot plan for long-term investment, or the stability required to maintain the intense competitiveness that is the hallmark of the Premier League and a significant driver of its global appeal. Parachutes are also—this is an often-overlooked point—a key part of the financial incentives for Championship clubs to invest in that league, knowing that if they reach the promised land, it will not all be undone with one bad year.

To fundamentally alter this system risks undermining the very factors that have made the Premier League such a global success and one of the UK’s greatest soft power assets. Potentially harming the magic ingredient of the Premier League’s competitive balance threatens to destabilise long-term commitments, jeopardising investment in lower-league stadiums, academies and community programmes. I believe it would fundamentally undermine the Championship, too.

We should also consider the concerns raised by UEFA. It has warned that the backstop mechanism could disrupt the balance of power in football governance and negatively affect the competitive equilibrium in both domestic and European competitions. UEFA has urged the Government to carefully reconsider their approach, emphasising that mandating redistribution in this way risks deterring amicable solutions and the very investments that underpin the success of English football.

This unprecedented intervention into private commercial rights must be carefully scrutinised. It very obviously has a differential and disproportionate impact on the clubs within the Premier League. It is also clear that the consequences of this seismic and deeply flawed intervention have not been fully understood. We do, as UEFA has said, need to reconsider this critical issue.

[Lord Markham (Con)]

I rise to speak to my amendment to Clause 71 on financial redistribution, and to add to the very valuable points made by my noble friend Lady Brady.

What the Bill seeks to do—which I have not seen in relation to any other regulator in the UK—is to give the regulator unprecedented powers to take money from one part of the sector or certain companies and give it to another. In any other field, this would be unheard of. Can you imagine the FCA saying, “I think HSBC should give some money to Barclays”? Can you imagine Ofwat saying to Severn Trent, “Thames Water is having a bit of a hard time, can you help it out”? Can you imagine Ofcom saying that Sky should help ITV out where advertising revenues are going down? That is unheard of among regulators.

I value the days in Committee as there is such knowledge around the House, so I would love it if any noble Lord could come up with an example of where a regulator has got the power to take away money from a part of the sector or company and give it to another. I would love to hear it.

[Lord Goddard of Stockport (LD)]

On the noble Lord’s point, can he explain to me what happened to the banks when the financial crash came and they ran out of money, or the money was disappearing? Who stepped up then and financed all the banks? The Government did. That was an example of rebalancing and ensuring that the money supply could keep going throughout—that is why they did it.

This Bill will ensure that the rest of the pyramid can survive and carry on. One document I read today says that in 2022-23,

“20 members of the Premier League and five … in the EFL … received 92% of the distributable”

wealth—£3 billion—while

“the other 67 professional clubs”

got £245 million. Is that fair?

[Lord Markham (Con)]

That goes right to the heart of this conversation. I can point out loads of industries where there are only one or two top companies. Think of the share of the search revenue that Google has. Is that fair? Is it the role of a regulator to get involved and say, “Oh, Google, you should give some money to Bing, because it’s not doing that well”? That is exactly my point.

The noble Lord made a point about the banking sector. The Government stepped in there because they felt that there were wider consequences for the whole economy. They stepped in; they did not say, “Barclays, you should give some money to HSBC”. What we are talking about here is fundamentally different. It is a different set of regulatory powers that I do not think anyone has seen—

[Lord Bassam of Brighton (Lab)]

We are talking here about a fundamentally different thing: the football pyramid and its sustainability. That is what this Bill is about. The question from the noble Lord, Lord Goddard, was entirely fair. Is it fair that the top 20 Premier League members and the top five clubs in the Championship get 92% of the television revenues generated, when it is the whole of the football world, in a sense, that helps generate those revenues? I do not think it is fair, and I want to hear the noble Lord, Lord Markham, comment on its fairness or otherwise.

[Lord Markham (Con)]

Is it fair that Federer, Djokovic and Murray earned so much in their time? Did Wimbledon not need all the players to take part for it to be so valuable? Is it fair that Verstappen has won the championship four or five times in a row and is earning far more than everyone else? That is about sporting competitiveness—or competitiveness in anything. It is not the role of a regulator to start to redistribute income; I believe fervently that we will then get the law of unintended consequences.

My noble friend Lady Brady talked about parachute payments. This weekend was a perfect example of why the Premier League is the most popular league in the world. Crystal Palace held Man City to a draw. Can you believe that Crystal Palace—fourth from the bottom, right on the edge of being relegated—would have invested that much in players if they knew that, if they got relegated, they would lose all that money and face almost financial ruin in the Championship without it? I do not think so. I think a regulator would have said, “Oh, Palace, it’s not very sustainable having all that money when you could go down”. That would fundamentally alter the competitiveness of those games. That is the value of the Premier League. People will tune in, because they know that it will not be a walkover between Palace and City in this example; they know that it will be a competitive game.

Countries all over the world are prepared to pay more money than anyone else to see these games because they are competitive. Take the Bundesliga or the Italian or Spanish leagues: there are two or three top clubs and then a lot of also-rans, so it is not competitive in the same way. That is the danger we face here. By allowing regulators to redistribute income, on the basis that it is not fair that the top clubs are getting more, you will alter the whole competitiveness of the structure. Again, we say that it is not fair, but is it fair that the Championship is the sixth wealthiest in the world, while the Premier League is the wealthiest? Why is that? First, it gets a lot of payments down from the Premier League as part of voluntary arrangements. Secondly, it is because of how the whole of football has been set up for clubs to be promoted: money is being invested to give them a chance.

We have all said many times that this is our number one industry worldwide—there is no doubt whatever about that. We then have the second tier, which is number six worldwide. There is nothing else like that, and I believe we are at risk of putting that whole system under threat if we meddle in these ways.

[Lord Pannick (CB)]

I declare an interest, having acted recently for Manchester City in relation to the charges by the Premier League. I put it to the noble Lord that the system he and the noble Baroness, Lady Brady, portray of Premier League clubs having the normal activity of a commercial company that can to do what it likes is simply incorrect. The Premier League itself imposes considerable restraints via financial fair play on what companies can spend and how they use their money. It does that because this is a sport, and the effectiveness of the sport depends on competitive constraints. What the regulator may or may not do is simply an aspect of that. The world that the noble Lord portrays simply does not exist.

[Lord Markham (Con)]

I thank the noble Lord. He makes a very strong point, which is that the current system of regulation for Premier League clubs, and the EFL doing it for its clubs, seeks absolutely to set up that competitive environment and those financial fair play rules. My point supports what the noble Lord said: there already is a system of checks and balances, which is working well and making sure that our English Premier League is the first in the world and the Championship is the sixth. Why do we need a regulator coming in between that?

I perfectly accept that there are certain things that the regulator is important for, such as the breakaway league, but is it really the best place to start to have financial distribution from one club to another? That is why I brought this amendment forward. We are fundamentally asking a regulator to do something that we have not asked any other regulator to do in the whole of the economic environment. I thank noble Lords for their interventions; they have added to the debate. I look forward to discussing this further.

Briefly, my other amendments, Amendments 126 and 130, again try to ensure that we do not get mission creep, that we are quite clear about the information the regulator should be asking for from the clubs, and that we cannot set up a regulator that is allowed to go on a complete fishing trip in a lot of these areas. The amendments would set out what information the regulator can ask for from clubs and what they should provide in their strategic business plans, so that we are all clear about that without an endless list that goes on and on. Again, I speak in the context not just of the large clubs; a lot of these are very small clubs, without a large amount of resource to reply to lots of information requests. We need to be quite clear about what we are asking the regulator to do.

I hope this has contributed to the debate. I hope noble Lords will reflect on the fact that we are asking the regulator to do more than we do in any other sector—in our most successful sector too—and whether that is wise.

[Baroness Evans of Bowes Park (Con)]

My Lords, I speak in favour of these amendments, which would enhance the regulator’s approach. I particularly support Amendments 51 and 52, in the name of my noble friend Lord Maude. The language change may appear subtle—to replace “protect and promote” with

“monitor and where necessary intervene to safeguard”—

in the IFR’s objectives, but the implications for the regulator’s behaviour would be important.

The Minister has said several times in our previous debates that she believes the regulator’s approach should be proportionate. That is welcome, but I am concerned that the current wording of the objectives does not fully support that intention. We have discussed overregulation at length, and the potential for it is clear, particularly as we do not have a counterbalancing growth or success duty to guard against such an approach.

It is important to remember that most clubs, at all levels of the game, are well run. There is no justification for an overly risk-averse set of financial rules that can dampen investment and threaten our hard-won global leadership position, or for infrastructure investments that drive long-term value to be second-guessed. We can guard against such unnecessary interference and regulatory creep. My noble friend Lord Maude’s suggested wording could provide an underpinning for a more proportionate approach. It would recognise that most clubs manage their affairs responsibly and that football’s existing structures in the main work effectively, but would allow for targeted regulatory intervention for genuine issues that have been identified and where it becomes very clear that IFR action is necessary.

The systemic resilience objective requires particularly careful consideration, as we must set an appropriately high bar for macro-level interventions that may fundamentally change how football works. Changing this objective to one to intervene where resilience is “substantially threatened” would properly frame the backstop power as a true emergency brake. As the Minister herself said, it should not be a routine tool.

This matters hugely. As we have heard already in discussions in Committee, the football pyramid depends hugely on the Premier League’s commercial success. Constant intervention risk in a readily available backstop would create exactly the kind of uncertainty we do not want to see that could damage long-term investment. We must make sure that the backstop power genuinely is an “in case of emergency only” tool.

The commercial confidentiality provisions tabled by my noble friend on the Front Bench are equally important. As we know, football clubs compete internationally for players, commercial partnerships and broadcast value. Forcing the detailed disclosure of business strategies or commercially sensitive information could damage clubs’ ability to operate effectively in these markets.

This group of amendments is about ensuring that the regulator enhances rather than inhibits what makes English football successful: genuine competition, where well-run clubs can thrive through strong management, innovation and calculated ambition. Once again, we are talking about a set of changes that could provide the regulator with a lighter-touch, proportionate model of regulation. I hope the Minister will give them some serious consideration.

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The noble Lord, Lord Hannan of Kingsclere, asked about fairness; and there was also a discussion from the noble Lord, Lord Markham, about businesses being required to give away their cash. The Premier League itself recognises that financial redistribution is needed to ensure the solidarity of the football pyramid, which is why it already voluntarily distributes its revenue to lower leagues. The Government’s strong preference is for an industry-led solution that works for all of football. However, given the importance of financial distributions to financial sustainability and that ensuring a timely satisfactory agreement is in the public interest, the regulator will need to have a targeted backstop power to intervene if necessary. The regulator will have targeted powers to intervene as a last resort. This means that, if football cannot deliver a solution, the regulator will. These backstop powers have been carefully designed to incentivise an industry-led solution that delivers the right outcomes with minimum regulatory involvement. As such, the regulator will only ever intervene as a last resort.

[Lord Markham (Con)]

I want to make sure I properly understood the answer to the question on the circumstances in which the Minister would say it was appropriate to take money from one club and give it to another. The Minister answered that the Bill was not seeking to do that because it was looking at the movement of money between competitions. But if you take more money from the Premier League to give to the Championship and other clubs, by definition the clubs receive less money, so that is what happens there. I am not sure that saying money is coming from the competition, not the clubs, is an answer; the money is coming from the clubs. I was not sure about the Minister’s answer. When you change the payments between the Premier League, that directly impacts the clubs and the money they receive.

[Baroness Twycross (Lab)]

My understanding is that the amendment would prevent money going from club to club. The model is around distribution between leagues or competitions, as the noble Lord suggests. There is already a situation in which the Premier League recognises that some financial redistribution is needed. I refer the noble Lord to previous discussions about why the regulator and financial redistribution of some type are required within the football pyramid.

Amendments 126 and 130 relate to the regulator being able to state in its rules any further information that is required to accompany the application for a provisional licence or the strategic business plan. The regulator will be independent, and it will be the expert. We need to give it the flexibility to implement its regime as it considers appropriate. This includes being able to request additional information in a club’s application if necessary to satisfy itself that the club will meet the test for a provisional operating licence. This will be set out up front in the rules, so clubs will always know in advance what is required of them when submitting an application or a strategic business plan. For the reasons I have set out, I am unable to accept the noble Lords’ amendments, and I hope they will not press them.

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[Lord Knight of Weymouth (Lab)]

My Lords, I shall speak to Amendment 157 in my name; I am grateful to those who have added their names. It seeks to add to the governance requirements for licensed football clubs that there should be at least two independent non-executive directors appointed to their main board. The remit for these directors should follow the definition set out in the UK Corporate Governance Code developed by the Financial Reporting Council. I thank the Arsenal Supporters’ Trust for its support for me in putting this amendment together.

As your Lordships know, independent non-executive directors bring independent expertise, scrutiny and accountability to a board, and would have a key role to play in upholding the principles of the Bill around financial sustainability and supporter engagement. I had a quick look and noted that Brighton & Hove Albion Football Club have several independent non-executives; West Ham are reported to have a couple; Liverpool have solely Kenny Dalglish; and Arsenal have simply the noble Lord, Lord Harris of Peckham.

I think we should have more than just the one. The appointment of independent non-executive directors, and their role in advising and scrutinising a club’s financial position, can be an effective check and balance. It is likely to mitigate the need for an independent regulator to intervene regularly, as more issues will be successfully addressed through the accountability that independent non-execs provide.

They can also safeguard the interests of the association’s stakeholders and membership, as the code sets out. In this case, that means supporters. The UK Corporate Code sets out how independent non-execs have a role in overseeing effective engagement with stakeholders. In the case of football, this would of course be adopted to cover supporters and would really help to develop progress on the requirement for effective fan engagement by providing independent senior voices who would play a key part in ensuring effective dialogue with fans.

In that vein, the DCMS requires all national governing bodies for sport to appoint independent non-executive directors to their boards, as set out in the sports governance code. So I ask the Minister to set out provision for independent non-execs on the face of the Bill, or give us reassurance that the regulator itself will bring forward requirements around this issue in the governance code that it will produce.

[Lord Markham (Con)]

I would like to support absolutely these amendments. I say for the record—and I am sure that I speak for all contributors to these debates—that I am making these points because I care deeply about football and about what is best for football. I think these amendments absolutely do that.

I have many examples of sitting on boards as an independent non-exec director; they are absolutely the sort of people we want, making sure that a club is putting forward appropriate business plans that are sensible, and sometimes taking a risk—risk appetite is in these amendments—but with the right approach to doing so. Having that balance on the board, of owners, supporters and independent, wise heads, has got to be a sensible thing. With that in mind, I offer my support for the amendments.

[Baroness Grey-Thompson (CB)]

My Lords, I rise very briefly to speak to Amendments 54, 156 and 157. I apologise to your Lordships for not being here on the previous day of Committee but, as chair of Sport Wales—I declare my interest—I was chairing a meeting of Welsh governing bodies of sport.

In my time involved in sport, I have sat on a number of different sports bodies, including British Athletics, where intimate knowledge of the sport is really helpful, and the Olympic Park London Legacy Development Corporation, where wider knowledge of a range of sports makes a difference. I put my name on these amendments because I sat for two years on the board of Yorkshire County Cricket Club and was interim chair for nine months. As part of that, I was challenged occasionally on whether I knew the laws of cricket and how dare I put my name forward for this. But I was not there as an independent non-executive to umpire a game; I was there to bring good governance to the county.

Bringing that jigsaw of skills is really important. As the noble Lord, Lord Knight, mentioned, there is a sports governance code. Olympic and Paralympic sport have benefited greatly from having this. It is about bringing that expertise, accountability and scrutiny. For me, it is about setting the tone for the whole pyramid of the game, and how that feeds up to the Premier League. If we do not get this right for the pyramid, we do not get it right for the sport. I look forward to hearing the Minister’s response to these amendments.

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Moved by

[Lord Markham]

56: Clause 6, page 5, line 14, at end insert—
(d) to promote the growth of English football (referred to in this Act as “the growth objective”);(e) to promote and protect financial investment in English football (referred to in this Act as “the financial investment objective”).”Member's explanatory statement
This amendment creates two new objectives the IFR must promote.

[Lord Markham (Con)]

I hope that this proves to be a quicker debate, because I would hope that what we are talking about here are not controversial measures but measures that go to the heart of the regulatory framework we are trying to establish. It is a shame that the noble Lord, Lord Addington, is not in his place. Although we are supportive of the principles of regulation, as my noble friend Lord Hayward said, we are trying to make sure that that regulation is set up in the right way.

Our debates in Committee stage so far have all been about the first few pages of the Bill, which are about the regulatory framework and objectives; the point of my Amendment 56 is that if you only have an objective of sustainability, it is one-dimensional and that is not good for the game. I will freely admit that I have spoken to a Premier League club which wrote to me about that—Brentford—and I hope that noble Lords would agree that Brentford is exactly the sort of club we should listen to in this sort of debate, because it is a club that has come through the divisions and is seen as a well-run model club—and one definitely not guaranteed its place in the Premier League. So it has an important contribution to make to this debate.

The letter that Brentford wrote to me and to local MPs says: “a regulatory framework that prioritises stability above all else would be disproportionate. It could mean the regulator financially constraining some Premier League clubs more than others. For Brentford, a club that has risen against the odds to the Premier League, such restrictions risk stifling our ability to grow and compete with larger, established clubs”. That is why I tabled this amendment, to expand the regulator objectives. Otherwise, there is the danger exactly as written in the letter, which I am happy to share with all Members here and which has also been sent to local MPs.

The exact concern of Brentford’s chairman is that, if the regulatory framework is just based on financial sustainability, it risks entrenching the closed-shop nature of the top clubs and will restrict the ability of the Brentfords of the world to compete. From its point of view, having an objective that promotes the growth of all English football, protects financial investment in the game and means that you know you can reap the rewards from investing in a club is very important. Amendment 56 seeks to add this, and is, I hope, uncontroversial, because who would not want to promote growth? We know that that is the Government’s number one objective, and it is fundamental to the Bank of England’s remit and a lot of other regulators also have growth objectives.

In the new clause proposed in my Amendment 58, subsections (1)(a) and (1)(b) refer to the “financial soundness” and “resilience” of clubs and aim to ensure that the regulator takes into account the whole financial picture of clubs, looking at their assets and liabilities—their whole balance sheet—and their ability to meet any future liabilities. In other words, we want a holistic picture of their sustainability. Funnily enough, that is akin to what the Chancellor announced in the Budget about government spending and so-called “persnuffle”—or PSNFL—which looks at assets and liabilities to make sure you have a rounded picture of the health of the Government’s, or the country’s, finances. Amendment 58 tries to encourage a similar approach to looking at the overall wealth of a club and its overall balance sheet strengths.

Proposed new subsection (1)(c) looks to make sure that the heritage of English football, which we all agree is vital to all this, is rounded out in its definition, while proposed new subsection (1)(d) looks at all the things that are key to the health of the overall game. It would make sure that the regulator, when it looks at how it acts in this space, looks at the overall health of the game—the growth of football in terms of TV viewership, matchday audience, fan engagement, number of clubs and number of fans. I shall not repeat the arguments that we made earlier, but noble Lords will be aware that these are the key things—that media rights go to the heart of the value and TV stations around the world pay to back those media rights, for the health of those sorts of objectives that we would like to see it have.

That is why, in introducing this amendment, I am trying to make sure that we have a much more rounded definition, going to the heart of the framework of what we hope the regulator would look to do and have in place. I hope that noble Lords will be able to support what I hope is a very sensible objective and will take on board the concerns of the Brentford chair—if it was only one-dimensional and looking at financial sustainability alone. I hope that the Minister will be able to take those points away for further consideration. I beg to move.

[Baroness Brady (Con)]

I support Amendments 56 and 58, tabled by my noble friend Lord Markham, which together propose critical enhancements to the objectives of the regulator. These amendments seek to establish clear and ambitious goals for the regulator, while ensuring that its powers remain proportionate and carefully defined.

Amendment 56 introduces two new objectives for the regulator: to promote the growth of English football and to promote and protect financial investment in the game. These objectives are not just desirable; they seem to me to be essential, if we are to preserve the vibrancy, competitiveness and international appeal of English football.

The Premier League is the crown jewel of global football. Its growth and success have been driven by significant financial investments, made in good faith and with the legitimate expectation of stable and predictable regulatory conditions. Without that certainty, clubs would not have been able to commit to the infrastructure, youth development or community programmes that are now the pillars of our game. Yet, as currently framed, the regulator’s remit is heavily focused on constraints, restrictions and redistribution. While these may be important, without taking growth into account, they risk creating a chilling effect on the investment that has driven English football to its current heights. To constrain without also providing balance is to risk stagnation or, worse, managed decline.

Amendment 58 complements this by providing detailed definitions of these new objectives. It outlines what growth means in practical terms: increasing TV viewership, matchday attendance, fan engagement, the number of clubs and the number of fans. These are good proxies, in my view, for the growth of football and ensuring that the regulator’s actions are aligned with the long-term health of the game. Although promoting growth and protecting investment are vital, I listened carefully to the Minister’s argument that a growth duty or purpose could in fact be scope-widening. I believe that she indicated that it could place the regulator in conflict with the broader European framework of football governance. This would risk significant repercussions—but only, of course, for those clubs competing in European competitions.

This is one of the tensions at the heart of the Bill. You could have proper balance in the regulatory regime’s design, so that it is de-risked, light-touch, pro-growth and business-friendly and protects this highly successful industry—but, in doing so, you potentially risk the future of a smaller number of clubs which may, one day, be barred from European competition. Alternatively, you could do what the Government have done, and you therefore risk setting up the regulator to be harmful to growth, overly intrusive, risk-averse and dampening to investment—but, in doing so, you are more likely to be compliant with UEFA, although no one has been able to provide a cast-iron guarantee on that.

In supporting these amendments, I urge Ministers to take this opportunity to refine the objectives of the IFR to set it firmly on the path to success. We need to create objectives that support football’s future without overextending the regulator’s reach or compromising the autonomy of competition tools, which must rightly remain the domain of the competitions themselves. I hope that, as we deepen our scrutiny of the Bill, we can find a better balance.

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[Baroness Twycross (Lab)]

I thank the noble Lord, Lord Markham, for Amendments 56 and 58. I look forward to reading the letter to which he referred when it is forwarded to the Committee.

On Amendment 56, while we appreciate the intent of the amendment and agree that English football should continue to be as successful as it has been, we do not believe the amendment is necessary to safeguard this. The growth of English football over the past 30 years and the financial investment in it have been widely regarded as a huge success and have turned it—as has been noted by a number of noble Lords across the Committee—into a global export. However, in pursuing such growth and investment, systemic issues have grown throughout English football which justify regulation. Some noble Lords have suggested that football’s growth is evidence that regulation is not needed, but these two things are not mutually exclusive. English football is both successful and fragile, with issues of sustainability throughout the pyramid.

We have discussed the reasons why the game needs regulating at some length, so I am not going to go through them again, but the main aim of the Bill is to address these issues to ensure financial soundness and resilience of clubs and to safeguard the heritage of English football—all things that football has shown itself unable to do. On growth and attracting investment, on the other hand, football has already shown itself to be incredibly good at both those things and does not need, in our view, a statutory regulator to promote them. Indeed, as is clear from its articles of association, “promoting” the game is one of the objectives for which the FA is established.

Noble Lords have raised concerns about breaching UEFA and FIFA’s statutes. In my view, stepping on the FA’s toes here is exactly the sort of thing that might risk that. That is why we do not believe that the regulator needs primary objectives to actively pursue growth and financial investment. However, the Bill already makes provision to safeguard these features. As part of its general duties, the regulator must have regard to the desirability of avoiding impacts on important outcomes in football—domestic sporting competition, the competitiveness of our clubs against international clubs, and investment into football—rather than a general growth objective.

The bespoke and novel duties in Clause 7 acknowledge the specific market features that have contributed to English football’s growth and will be key to its continued success. Much of the success of English football has come from investment and exciting competition, and we do not believe the Bill will in any way deter this. Indeed, a stable and more certain regulatory environment will be more likely to attract investors. These amendments would require the regulator to bring into scope anything that relates to the growth of English football. This would include things like broadcasting revenues, transfer fees, sponsorship deals and many other areas. Not only would this dramatically widen the scope but the regulator would also be required to become actively involved in these areas.

My noble friend Lord Watson of Invergowrie highlighted that these amendments would broaden the scope of the regulator. We cannot on the one hand warn against scope creep and over-intervention in a successful free market and on the other hand call for a statutory regulator to be tasked with growing the market. Regulators exist to address specific problems that the market cannot address itself. Football has a sustainability problem and not a growth one.

On Amendment 58 specifically, the additional detail in subsection (1)(a) to (c) in the noble Lord’s proposed new clause is already included in the Explanatory Notes which cover heritage. Explanatory Notes provide illustrative detail about the intention behind legislation and not drafting intended for the Bill. As the noble Lord will appreciate, the purpose of Explanatory Notes is to provide additional illustrative detail. However, this kind of detail is not appropriate for the face of the legislation, because good legislation should be clear and concise, and the current drafting is in line with that ambition.

I want also to draw noble Lords’ attention to the letter I sent to the noble Baroness, Lady Evans of Bowes Park, on this same topic of a growth duty. A copy of that letter was also placed in the House Libraries. For the reasons I have set out, I hope that the noble Lord will not press his amendments.

[Lord Markham (Con)]

I thank noble Lords for their contributions, and the Minister for replying. Before I come to address what has been said, I thank my noble friends for their contributions and especially my noble friend Lady Brady for her point that there are concerns about UEFA competitions as well that we are seeking to address in this.

Although I did not hear anyone say that these were not desirable objectives, I heard two reasons not to introduce them. First, the Minister said that we are already successful on investment and the Bill will not deter it. I am afraid that is where there is a fundamental disagreement, because the Bill introduces new aspects to this. It gives the regulator responsibility to make sure clubs are sustainable and says that the regulator can look at this through things such as the parachute payments and the solidarity payments. That fundamentally changes the investment proposition in clubs. The letter from the Brentford chair makes the point, as have others, that clubs would be much less likely to invest in new players and in resources if they did not have the safety net of parachute payments if they were to go down. That will directly affect investment in clubs via the change in the laws that we are talking about and the responsibilities of the regulator to look only at sustainability. It is the same for solidarity payments. We are changing the playing field and moving the goalposts, so we cannot expect everything to go on as normal. That will inevitably affect the investment proposition, so it will impact the amount of money we see going into the game.

That comes on to the second point that was raised about why we should not introduce these amendments: that we are somehow trying to expand the regulator’s duties, which goes counter to everything we have said so far about it being light touch. That is not what we are trying to do. We are trying to make sure that the regulator will have more than one objective when it looks at the measures it can take. If it has only one objective, about sustainability, we hope it will interpret it broadly, but I could make all clubs sustainable tomorrow by saying that all the Premier League money should be distributed. That would do it. It would give everyone loads of money, it is completely sustainable and the regulator could say, “That’s fantastic, job done”. But we know it would fundamentally harm the whole structure and the whole environment.

I do not think for one moment that a regulator would be as unwise as that, but the main point of what we are trying to do is to set out what we believe are the right objectives. As I mentioned, the Government have done that with the Bank of England and given it growth objectives alongside inflation objectives. They have done it with Ofwat and with Ofgem. They have given all of them their regulatory requirements and a growth objective. We are trying to make sure that the regulator is wise in any measures it puts in place by always having other objectives that are for the good of the game. That is not increasing its reach; it is just making sure that it has more than one objective. I hope this is something we will be able to talk about further.

[Lord Hayward (Con)]

Was my noble friend as surprised as I was by the Minister’s use of the phrase that the Bill should be clear and concise? Is not the problem we have been trying to tackle precisely that there is a complete lack of clarity in a Bill that is anything but concise?

[Lord Markham (Con)]

Yes, and I thank my noble friend for exactly that point. It is about the clarity of the objective. The most important thing we can all do as legislators is set down what we think the regulator should do. That is why we spent three days trying to work out exactly what we want. It is fundamental to everything we are trying to do. That is why it is taking time. I hear reasons such as, “It’s not necessary”, but why not make it an objective? If the regulator is going to do it anyway then fair enough, but why not be sure that it will take growth and success as its key North Star in all this? With that, I beg leave to withdraw the amendment.

Amendment 56 withdrawn.

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Moved by

[Lord Markham]

59: Clause 7, page 5, line 16, leave out “, so far as reasonably practicable,”

[Lord Markham (Con)]

My Lords, I hope that this one will be simpler. A lot of the amendments in this group are just trying to make sure that there is more specificity; I go back to my noble friend Lord Hayward’s previous point about making sure there is absolute clarity on what we want the regulator to do. Amendment 59 would take out

“so far as reasonably practicable”

because we want to make sure that there are no areas of greyness. We think that these are things the regulator must do.

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[Lord Markham (Con)]

I thank the Minister. I will not go around the same loop again. A lot of this is again around the growth and success objectives . We rehearsed those arguments quite well in the previous groups. However, I would question a new point that the Minister made: that, somehow, they would open up the regulator to legal challenge. I am not sure that I agree with that. I do not believe that the growth objectives that Ofwat, Ofgem, other regulators and the Bank of England have open them up to any more legal challenge. It is just saying that it is a criterion and trying to make sure that in any decisions they make, they have more than one objective that they are seeking to fulfil. I will not go beyond that and rehearse the arguments, but I thank the Minister and beg leave to withdraw my amendment.

Amendment 59 withdrawn.

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[Lord Mann (Lab)]

My Lords, Amendment 65 is not about whether women’s football should be covered by the Bill; it is about something quite different. I will very briefly illustrate it with an issue that would arise at a regulated club, the National League Solihull Moors Football Club, should this Bill go through. I do not know whether the issue has been resolved and, in a sense, that is rather incidental to my point.

The issue, from what I have ascertained, is that Solihull Moors has a women’s football team as well as a men’s football team and, because of that, with a licence, it would be regulated under the men’s football team. The women’s football team would be quite separate, but the women’s football team plays in the same complex as the men’s team. Also, the business had been structured with a set of community interest companies that were required to break even. The one that the women’s football team played on did not break even, which led to them being thrown off their pitch. However, the facility had been part-funded by the Football Foundation.

That is a particular comment on Solihull Moors, but also a real example from this year. Using it as an illustration, in that situation, where funding has been received and a women’s club has been, as some claim, thrown off so they are not able to play on a facility, is this an issue for the regulator? It should be. The regulator could, for example, look at whether the moneys that were given by the Football Foundation should be repaid. While it is a small issue in monetary terms, if you are a women’s football club and you are thrown off the pitch, it is a big issue. So the reason for tabling this amendment is to see whether this kind of situation is covered. If it is not, I suggest it requires an amendment similar to or the same as the one I have tabled. I beg to move.

[Lord Markham (Con)]

My Lords, I rise in support and to give an example of a similar unintended consequence. This is around the 3 pm kick-off on Saturday games and not allowing those to be televised. Again, that was set up exactly because Premier League games, if they were televised, would impact the attendance of the Championship League and other EFL games, because they knew that people would be watching those games instead. Within that regulatory framework, they had a view on the impact of how that one competition could impact the other competitions.

In a similar way, what the noble Lord, Lord Mann, is trying to do is to add, in proposed new paragraph (d), the impact on the women’s game and make sure that it is one of the considerations taken into account. Without it, you could be taking action around the men’s games in the competition that has those unintended consequences—so I support it.

[Lord Addington (LD)]

My Lords, the amendment from the noble Lord, Lord Mann, is one of those that reflects real life. Anybody who has set up any club of any structure at any point knows that, if you are working between two bodies—I have seen it very much at junior level between rugby and cricket clubs—their interests seem suddenly to contradict each other under a new set of circumstances. I hope that the Minister will have a reassuring answer about the flexibility and ability of the regulator to intervene and try to find a way forward, because this is a real problem that will occur every now and again. It is probably not a structural thing, but “Is the flexibility there?” is a genuine question. I do not think any of us wants one of our regulators to suddenly start having a negative effect.

My Amendment 70 in this group basically says that support should be available for the women’s game. We have already covered this issue at some length, so I will not go much further than to say that we should not exclude giving the women’s game some help, because it is developing and going forward, and it is very important to the foreseeable future of developing elite-level sport in this country. We should address that by having another look and asking what the capacity is.

I see that the noble Baroness, Lady Taylor, is ready to speak to her amendment. Can we find out what flexibility there is and what the regulator is seen to be doing to handle these not quite down-the-line situations, where there are positive outcomes that we hope would be facilitated by it?