Football Governance Bill [HL]

Lord Markham 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.

[Lord Moynihan (Con)]

Before the Minister responds, I thank the noble Lord, Lord Birt, who sat through many hours of Committee and held his council until this moment, when he has made some very forceful and powerful points geared specifically towards having a co-operative, thoughtful and collaborative response to mediation. The legislation at present is not like that; it is divisive and nuclear, to use two of the words that the noble Lord used. This is one area where there can be agreement across the Committee, and I hope that there will be agreement from the Minister that we can return on Report to look at this, so that we can be more in line with other regulatory mechanisms for mediation. None is as divisive and polarised as the one in the Bill, and I very much hope that the support will be universal for the noble Lord, Lord Birt. I am grateful to him for the thought that he has given to this.

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[Lord Markham (Con)]

My Lords, I rise to oppose the proposition that Clauses 61 to 64 should stand part of the Bill and I am grateful for the support of the noble Lord, Lord Birt. I will also speak to my Amendment 310, which is also in the name of my noble friend Lord Parkinson, who unfortunately cannot be with us today. I appreciate that there is quite a bit of overlap here with the debate we have just had, so I will try to keep this concise.

For me, the main thing about all of this is, what are we trying to solve here? We all agree that we have a very successful league—the most successful in the world. I love the statistic that 40% of the best players play in it. I would say that even more of the best managers are there when you look at it.

I looked up the solidarity payments and compared the 14% that the Premier League pays with the UEFA figure—in terms of the solidarity payments it pays to clubs not in the European competition but in the leagues —which is 5%. So we have a situation whereby the Premier League is paying almost three times the amount, creating a very successful situation. Of course, a lot of the reason for that is because it realises there is a great degree of fluidity, as per the statistic that the noble Lord, Lord Birt, mentioned earlier and which I have mentioned previously. The fluidity means that over 50% of the 92 clubs at some stage have been in the Premier League, and by definition have fallen out again. So, it is in all of their interests to make sure that the whole structure of football is successful. The fact that the Premier League pays 14% in solidarity payments, far more than UEFA and other leagues, shows all of that.

The statement has been made that we need to step in here as a regulator because there has not been agreement for years. As soon as it was known that a regulator was going to come on to the pitch, so to speak, it is not surprising that you do not get an agreement at that point. If I was the English football league in that, it would be entirely logical to think, “Hang on a moment, if a regulator comes in with powers in this space, that is going to give me more leverage” So, clearly, under that circumstance, it is rational for me to hang on because I am likely to get a better deal under that situation. I cannot get a worse deal than the one the Premier League has already suggested, so why not hang on for the regulator to come into the picture? So, to my mind, it is not surprising that we have not had an agreement as a result. It is actually because of the offer of the regulator that this has not happened.

So my main question about all of this is, what are we trying to solve here? It is not clear to me that there is a problem. In fact, I would suggest the opposite. I do not believe that this is the time to give unprecedented powers to a regulator which no other regulator in the country has, as I mentioned before. The regulator’s only criteria are to promote the financial soundness, financial resilience and heritage of English football. There is nothing else: nothing to do with its success, its audience appeal or the rights money it gets in, just those very narrow objectives. To fulfil those, it is always going to look to the mechanism which redistributes the most amount of money, because those are the narrow criteria it has been given. So I believe that that really gives us a danger of setting in motion a set of unintended consequences.

Given that I accept that there is a small chance those points will not be agreed by the Minister, I will move on to the other amendments we have added. My Amendment 310 states that, when making a determination under Clause 62, to which a final proposal to accept is made, the expert panel must have due regard for Section 7(2), which establishes the negative outcomes that the regulator must take all efforts to avoid. I must say that in all of this I actually prefer the amendments made by the noble Lord, Lord Birt, to any of these following ones that we put down. I am mentioning them in terms of completeness, but my first choice is that the regulator does not have the powers to redistribute at all. If it does, my second choice is that it adopts an approach similar to the one set out by the noble Lord, Lord Birt, which is a very well thought through process. I will speak to all of my amendments with that context in mind.

As I said, Amendment 310 tries to make sure that the expert panel takes into account the unintended consequences set out in Section 7(2), making sure that the expert panel has a duty to consider the impact on the leagues and on the competitiveness of English football, which is what makes it exciting and the best in the world.

I also support Amendment 304 in the name of my noble friend Lady Brady, which deals with precisely the issues that have been identified: the binary nature of the final proposals process. My noble friend’s amendment is simple and very reasonable. It permits the committee of the expert panel to include elements of both final proposals when making a distribution order. This will prevent the regulator simply choosing one proposal and ignoring the other, thereby achieving a real compromise while at the same time ensuring that the regulator is not imposing its will on the competition organisers. Amendment 304 seeks to strike a balance and better meets the aims set out in the Minister’s letter of incentivising compromise. I urge the Government to support these amendments.

[Lord Watson of Invergowrie (Lab)]

My Lords, I had not intended to speak to this group of amendments, but the noble Lord, Lord Markham, has prompted me to do so. He said just now that he does not think the Bill or a regulator are necessary because his aim is— I am quoting him; I hope he thinks I am doing so accurately—“to make sure that the whole structure of football is”, and remains, “successful”.

[Lord Markham (Con)]

Noble Lords will remember that, in earlier debates, I said that there are many good things that the regulator should be set up to do, so I agree with that. The MK Dons is a very good example. The “fit and proper persons” test and the breakaway league are both very positive reasons to have it. An earlier proposal was that every club should have two non-executive independent directors, which, from memory —I cannot quite remember—had widespread support. All those sorts of things are good; it is the financial redistribution of the moneys that I believe is a step too far.

[Lord Watson of Invergowrie (Lab)]

I thank the noble Lord for that, but I do not thank him for mentioning MK Dons, which, as a supporter of AFC Wimbledon, strikes a bit of a raw nerve with me. But I understand the point he was making.

I come back to the noble Lord’s argument about making sure that the whole structure is “successful”—yes, I want that. As a supporter of a club in League Two, I want to make sure that more of the money available in the game filters downwards. I do not even want it to be contained within the Championship; I believe that the Championship has a disproportionate amount of the revenues that come from the Premier League.

I do not believe in parachute payments. All the money, including the parachute payments, should be spread throughout the three divisions below the Premier League—I have argued that before in your Lordships’ Committee in earlier debates. We are told that clubs are disincentivised to get promoted to the Premier League if they cannot have some guarantee. But, from memory, I can think of some clubs who are in the Premier League for the first time and have established themselves after several years—Brentford and Brighton are obvious examples—without having parachute payments to get there. Bournemouth have been in for some time; although they dropped out for a season, they came back again. For this season, somebody mentioned Nottingham Forest, who are second place; they have been in the Premier League for 25 years or so. Ipswich have made it after a similar gap.

I do not think that the parachute payments are anywhere near as essential as has been suggested. However, the money used for parachute payments, if it is spread more equitably, particularly down to League One and League Two to a greater degree, would enable the structure of English football to be successful in the way that the noble Lord, Lord Markham, suggested.

[Lord Markham (Con)]

The noble Lord, Lord Watson, referred to Brighton and Brentford. I have spoken to the chair of Brentford and the CEO of Brighton. Both say that without the parachute payments—that safety net—they would never have invested in the players when they got promoted. If they were relegated without the parachute payments, they would have faced real financial difficulty. So it was the safety net of the parachute payments that gave them the confidence to invest in players, which then allowed them to have a strong enough team to stay up. I think that they would argue—in fact, they have argued this; it was in the letter that I circulated from the Brentford chairman—that the parachute payments were fundamental to their success in the Premier League.

[Lord Pannick (CB)]

My Lords, I cannot support the noble Lord, Lord Markham, on this. We undoubtedly have a very successful Premier League. Two questions arise from that. The first is whether the Premier League clubs have an obligation to provide some of their financial riches to clubs lower down the pyramid. It seems to me that the answer to that is undoubtedly yes. Those clubs, some of which are in a perilous financial state, are vital to their communities, and the pyramid is vital to the success of the Premier League, so they do have an obligation. The noble Lord, Lord Markham, said, very helpfully, that he agrees.

If that is right, the second question is whether the amount of money that the Premier League should provide downwards should be determined exclusively by the 20 clubs of the Premier League. The answer to that, in my view, must be no, of course not. There must be an independent, qualified person who assesses how much is appropriate, in all the circumstances, for the Premier League to provide downwards.

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I hope my responses have been helpful to noble Lords and I thank them again for a healthy discussion on an important part of the Bill. In closing, I hope that noble Lords will not press their amendments, for the reasons I have set out, and I beg to move that these clauses stand part of the Bill.

[Lord Markham (Con)]

I thank all noble Lords, and I agree with the noble Lord, Lord Goddard, and the Minister that it was a good debate conducted in a good tone. I also thank the Minister for her helpful clarifying comments, particularly on Amendment 310 and the expert panel.

On the point raised by the noble Lord, Lord Pannick, I would like to make it clear that I think everyone agrees—I definitely do—that the Premier League should be paying over a share of its—

[Lord Pannick (CB)]

The noble Lord says “everyone”; he might like to have a conversation with the noble Lord, Lord Jackson.

[Lord Markham (Con)]

I will allow my noble friend to speak for himself, but I do not think anyone is saying that the Premier League should not be paying some of its money over, most of all because the Premier League voluntarily believes that it should be paying large sums of its money over because it is critical for the health of the whole game.

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[Lord Watson of Invergowrie (Lab)]

The noble Lord is now making a distinction between solidarity and paternalism.

[Lord Markham (Con)]

That is precisely the point of this debate. I think everyone agrees that the Premier League should be paying money over, no one more than the Premier League itself. The whole question is whether it needs a regulator to enforce a set number. As my noble friend Lady Brady said, the Premier League is more generous than other leagues. As my figures showed, the Premier League pays over 14%, which is almost three times the level that UEFA pays over in its version of solidarity payments. The real point of the debate is whether we really need a regulator to determine it.

We have had a good debate on parachute payments. The noble Lord, Lord Bassam, made a particular point about Brighton and how it did not need them. It is a little known fact that that a job I never got, although I was through to the final round, was being CEO of Brighton many moons ago, when it was a Championship team and was pressing for the Premier League. I recall very well a conversation with Tony Bloom when he was interviewing me for that job. I still think he is a brilliant chair, and I cannot argue against Paul Barber, the CEO; given how good he is, I cannot deny that he chose the right candidate.

[Lord Bassam of Brighton (Lab)]

The noble Lord is obviously used to being a runner-up in these competitions.

[Lord Markham (Con)]

That hurts. Tony Bloom made clear to me that Brighton’s whole business plan depended on what he called “the yo-yo”. West Brom had just done it at the time: you get promoted and make some investment in new players. You then expect to go down and have the benefit of parachute payments to build more players up again, so you slowly get to the level, through the yo-yo, where you can be sustained.

[Baroness Taylor of Bolton (Lab)]

While the noble Lord is talking about parachute payments and the yo-yo, he used the figure of 14%. If you take out parachute payments, is the figure not an awful lot lower and actually near 4%?

[Lord Markham (Con)]

I am sure that we can get the absolute reference from the statto—the noble Lord, Lord Birt, will probably calculate it and tell us by the end of the debate. I think the figure is about 9%, but we can check that.

The point I was trying to make is that Tony Bloom, the chair of Brighton, and Paul Barber, its CEO, whom I have spoken to during this process, would say that parachute payments were a very important part of their business planning in giving them the confidence to invest, which allowed Brighton to stay up and thrive in the Premier League. There is a very good argument for them being there.

As much as I would like the regulator not to get involved in redistribution payments, I accept that it is likely that those powers will be granted. If we really narrow it down, the debate on this group and the previous one is all about the negotiation mechanism. That is where I appreciate so much the work that the noble Lord, Lord Birt, has done on this, because it is not a political point. I do not think anyone in the outside world would get into the intricacies of and care more broadly about the negotiation mechanisms that we are talking about, but what we are talking about is, as the Minister said, a theory behind binary choices and what will happen in terms of gaming. It is an untried theory that has not been done anywhere else, and it has been put forward. I thought the Minister said that it had not been done by the commission.

[Baroness Twycross (Lab)]

It has not been used by the Competition and Markets Authority yet, even though the previous Government gave it the powers to do so. It has been used successfully in other jurisdictions —for example, in Australia and Canada. I have other examples that may be in my speaking notes later in the evening, but I am happy to share them.

[Lord Markham (Con)]

That would be very helpful, because the main point here, and what I hope we can achieve between now and Report, is that we know that there is a small group of economists at the DCMS who have put together this mechanism. There are noble Lords here who have been involved in media sports rights deals and these sorts of negotiations who can add real value to this. There is a real opportunity between now and Report to engage with those officials to really get into those negotiation mechanisms, because this is what we have narrowed it down to and that is what this debate has been useful for. I hope we can use that time productively.

Clause 61 agreed.

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[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.

[Baroness Twycross (Lab)]

I committed earlier this evening to come back to the noble Lord, Lord Hayward, on whether the shadow regulator would join the Chancellor’s meeting with regulators tomorrow. My understanding is that the Chancellor’s invite has gone only to regulators who are currently operational. Therefore, the shadow football regulator has not been invited to the specific meeting to which the noble Lord referred. I would add, however, that I have heard many good points made on growth during the Committee stage of the Bill and look forward to returning to further discussions around that point on Report.

In relation to the group under discussion, I thank the noble Baroness, Lady Brady, for bringing her concerns regarding the future financial sustainability of relegated clubs to my attention with this amendment. I note the clarity from the noble Lord, Lord Markham, in relation to the Opposition opposing parachute payments being included in the Bill. As I made clear in my response to the previous group, the Government agree—and I hope this gives the noble Baroness some reassurance—that parachute payments play an important role in supporting the survival of relegated clubs. This point was also made by my noble friend Lord Bassam of Brighton, even though he had a different perspective from the noble Baroness, Lady Brady.

I highlight first that in the Government’s view it is not inevitable that the backstop would address parachute payments. They will be addressed only if they have been identified as a relevant question for resolution, which will happen only if they are proven to have a substantial impact on the sustainability of the pyramid.

The noble Lord, Lord Addington, asked some pertinent questions, not least relating to the survival of clubs. If parachute payments are deemed relevant for consideration, the Bill currently specifies that they cannot be reduced within a year of the distribution order coming into effect. This point was made by the noble Baroness, Lady Brady. This amendment would extend this period to three years, triggered at the beginning, rather than the end, of a season.

While I genuinely understand the core concern behind this amendment, we must balance the desire to ensure that relegated clubs have as much time to adjust to changes as possible with the need to ensure a new, timely, satisfactory agreement. We would expect the leagues to maintain effective communication with clubs throughout the backstop process which, alongside the existing year-long transitionary period, will mean that clubs have ample time to adjust if parachute payments are deemed in scope. There will be no sudden reduction in payments without warning.

Before I finish, I again urge the leagues to come to an agreement on a new package of financial support under their own steam, which is in the long-term interests of the game. However, for the reasons I have set out, I regret that I cannot accept these amendments and hope the noble Baroness will not press them.

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[Baroness Brady (Con)]

My Lords, Amendment 322 would enable scrutiny of backstop decisions through merits-based review by the Competition Appeal Tribunal. I will also speak to my consequential Amendments 324 to 326 and 333 to 335. Let me seek again to give noble Lords a picture of what I believe is at stake.

The Premier League represents a remarkable British success story, yet the Bill introduces a mechanism that could unravel three decades of innovative ecosystem building in a single regulatory decision. Every few years, a regulator will be forced to make a binary choice between two competing visions for English football. One vision, that of the Premier League, seeks to preserve the delicate balance that has made it the best and most compelling league in the world. The other, explicitly stated by the EFL, aims to fundamentally restructure football’s finances and systems, describing key stability measures as “evil” and seeking their “eradication”.

This is not some narrow funding dispute; what the Government may so far have failed to understand is that this is about the very architecture of English football. It could eliminate the financial scaffolding that enables newly promoted clubs to compete. It could destroy the stability mechanisms that give investors confidence to back ambitious Championship clubs. It could force smaller Premier League clubs to abandon investment and aspiration. This is why merit-based reviews matter profoundly.

Under the Bill, even the most extreme regulatory decision could be challenged only on narrow procedural grounds. Let us think about what this means: a panel could select a proposal that devastated relegated clubs, and those clubs would have no meaningful right of appeal even if that decision threatened their very existence. The Competition Appeal Tribunal would offer a better solution. It brings expertise in complex economic matters and an understanding of how regulatory decisions ripple through competitive markets. Its oversight would drive better decision-making, ensure genuine fairness and protect the investment that makes English football thrive.

This speaks to a broader principle: football is not a utility delivering water through pipes. It is a dynamic ecosystem where success depends on calibration of risk and reward, yet the Bill repeatedly treats football like a water company, relying on judicial review as the primary check on regulatory power—and we all know how well water regulation is going. This creates a fundamental mismatch.

We are asking a regulator to make complex commercial decisions that could reshape our national game, yet we deny affected parties any meaningful right to challenge those decisions on their merits. This occurs throughout the Bill on all sorts of matters relating to ownership, financial regulation, licensing and stadia. Almost nothing, including this multi-billion pound decision about the distribution of the Premier League’s own revenue, is subject to merits-based reviews. Let me say again: I do not oppose regulation. These amendments are a limited attempt to ensure that regulation can operate fairly and sustainably.

As I said earlier this evening, the Premier League has consistently demonstrated its commitment to the wider game through solidarity payments, infrastructure funds and community programmes that reach millions, to the tune of £1.6 billion every three years. During Covid, we ensured that no club went to the wall, but good stewardship is a two-way street, and this statutory regulator requires proper safeguards. Without merits-based review, we risk regulatory decisions that could inflict profound damage on the game we love. The backstop could become a weapon for levelling down, rather than building up, replacing aspiration with survival as the pinnacle of a club’s ambition.

English football is at an important juncture with this Bill. Get it wrong and we risk something precious: not just the Premier League’s global success but the entire pyramid’s vitality. This amendment provides one —and only one—essential protection against regulatory overreach. There are plenty more needed, but I urge the Government and other noble Lords to support it.

[Lord Markham (Con)]

My Lords, Clause 84 details the provisions that may be brought before the Competition Appeal Tribunal. However, as drafted the Bill does not include any decisions made under Clauses 62 or 63 for appeals that may be heard before the tribunal. Given the implications of these two clauses, relating as they do to the distribution of revenue, it is wholly inadequate that the determinations made under them are not subject to an external appeals process. Therefore, my Amendment 323, and the amendments in this group tabled by my noble friend Lady Brady, ensure that any decisions made by the committee of the expert panel relating to distribution orders are reviewable under Clause 84.

I do not dispute that the Bill already provides for distribution orders under Clause 62, and for reviewable decisions under Clause 81. The latter clause states that reviewable decisions are any decisions listed in the table in Schedule 10, and Schedule 10 does include decisions made under Clause 62. However, this relates only to internal reviews. Schedule 10 also states that any internal review of distribution orders is to be carried out by a different committee of the expert panel. Therefore, although the composition of the deciding and reviewing committees must be different, the review will still be carried out by the same body.

Therefore, the Bill currently gives competition organisers the right to appeal only to a component of the regulator. This cannot be right. The imposition of a distribution order under Clause 62 is surely the measure that most affects competition; requiring one league to distribute its money to another league will impact its competition ability. Surely, then, any distribution decision should be reviewable by the Competition Appeal Tribunal.

[Baroness Twycross (Lab)]

I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Markham, for tabling these amendments. I recognise that the intent of the amendments in this group is to ensure that decisions related to the distribution backstop are appealable and subject to a merit standard of appeal, rather than being based on judicial review principles. I understand that this comes from a belief that a merit standard of appeal is necessarily preferable because it would allow the Competition Appeal Tribunal to opine on the merits of the case, rather than just on whether the correct procedure was followed, and thereby arguably offers better protections for affected parties. In this instance, I do not believe that this is the right process.

In truth, it means that a tribunal, which most likely has less technical expertise and background knowledge of the specific issues surrounding financial distribution in football than the regulator, will be able to substitute its own decision for that of the regulator’s. For example, if the regulator were to choose one of the two proposals as part of the backstop process, and make an order imposing that distribution arrangement, the Competition Appeal Tribunal could overrule this and choose the other proposal. Indeed, if we consider how this would most likely play out, the aggrieved competition organiser whose proposal is not selected would be very likely to lodge an appeal regardless.

These amendments would be tantamount to making the Competition Appeal Tribunal the ultimate deciding authority on the financial distribution arrangement in football. This would, in effect, mean cutting out the middleman and having the courts decide how much money should flow down the football pyramid. It is unclear to me why noble Lords, or indeed anyone, would think a court making this decision a better option, rather than the expert panel of the independent football regulator, or why this would necessarily lead to a more robust, more favourable or fairer outcome. It is simply the case that there are certain decisions better suited to certain standards of review.

We have engaged with legal experts and senior members of tribunals while developing the Bill. They agreed that the courts are not necessarily well placed to substitute the decisions of expert regulators on matters of technical regulatory judgment, and that a judicial review standard of appeal would be more appropriate for those types of decisions. This is also a common approach taken across other regulators. For example, the majority of decisions made by Ofcom are subject to appeal on judicial review standards.

By contrast, some of the possible enforcement decisions that the regulator can take under the Bill represent highly punitive actions. For these highly punitive, less technical and less market-specific enforcement decisions, a merits appeal is more appropriate. For example, we are of the view that courts are far better placed to opine on whether the severity of a punishment is appropriate to the infringement than on whether a certain distribution of revenue is better for the financial sustainability of English football. Ultimately, an appeals process should provide the appropriate opportunity to challenge whether a regulator is acting fairly and within its statutory remit. It should also be a focused and efficient process that does not excessively delay the final resolution of decisions or hinder the regulator in achieving its objectives.

While providing effective assurance of the regulator’s decision-making process and judgment, the appeals system should not unduly undermine the expert independent regulator. The Bill effectively balances these different considerations, including through the standard of appeal. The amendments tabled by the noble Baroness, Lady Brady, would also make every decision under Clauses 62 and 63 reviewable, subject to the statutory route of appeal to the Competition Appeal Tribunal. This includes minor and operational decisions such as the giving of notice or extending the period to submit proposals. For the same reasons I have already outlined—balancing fairness, efficiency and appropriate deference to the regulator—we do not believe this is necessary and it is not the approach we have taken in the Bill.

Amendment 326 would be contrary to Amendments 322, 324 and 325. The Competition Appeal Tribunal could not simultaneously review a decision on judicial review principles and on the merits. On Amendments 333, 334 and 335, as I have set out, we disagree with the intention to make every decision under Clauses 62 and 63 a reviewable decision on the merits. However, if that were the intention, additions to the consequential amendments of other Acts, or the Competition Appeal Tribunal rules, certainly would not be the way to do it. For these reasons, I cannot accept the amendments and I hope that noble Lords will not press them.

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[Baroness Taylor of Bolton (Lab)]

My Lords, I just want to pick up on some of the points made. It is right that we need a proportionate system and we have to be careful in what we do. But we cannot afford to be complacent about the state of British football today. Yes, the Premier League is doing very well at the moment, but we have to acknowledge the difficulties of many other clubs and the serious need for some change in the way in which many football clubs are run.

A report published on Monday this week from Professor Nick Lord and lecturer Peter Duncan in the department of criminology at the University of Manchester shows some of the dangers that Premier League clubs could face if we do not get the right financial structure, and how certain clubs could be, because of the complexity of their ownership, vulnerable to their funds being used for illicit purposes. I mention that because we do need regulation and we cannot be complacent and pretend that all is well even in the Premier League.

[Lord Markham (Con)]

I rise to speak to Amendment 329 in my name and that of my noble friend Lord Parkinson. I will speak very briefly, because Amendment 327, on costs, was spoken to extensively.

I think we all accept the need for a regulator. The points about broadcasting made by the noble Lord, Lord Birt, were points I am very familiar with as a former director of ITV and were very well made. On proportionality, we have talked a lot about Premier League clubs, but I would argue that when you have National League clubs who have two, three or four members of staff and an impact assessment that says they will need one member of staff for compliance on this, that tells me that we have the balance wrong. We are saying that a third of their staff need to be in compliance.

I would like to answer the point made by the noble Lord, Lord Bassam, who said that clubs should already have all this information because they are doing an audit. An audit is backward-looking over the year that has happened. What the regulator is asking clubs to do here is to write a three-year business plan, which is forward-looking.

[Lord Bassam of Brighton (Lab)]

The regulator is also encouraging clubs to put things right and offer remedies in their reports that have to be fair and proportionate.

[Lord Markham (Con)]

I can bore on this issue, as a former FTSE chief financial officer. An audit is backward-looking, and you have to have a going concern statement, which is the forward 12 months. It is nothing like the business plan requirements that the regulator is asking clubs to provide for three years going forward. There is no doubt that that will require clubs to employ consultants, accountants—you name it—so it will be a significant burden on them, and this is exactly the point we should be considering. When you think about it, if you are talking about one member of staff per national—

[Baroness Taylor of Bolton (Lab)]

The noble Lord is almost suggesting that clubs of whatever size should not have a business plan. One of the things we want to encourage and develop is sustainability. There has been complacency among many clubs at different levels, such that they have not made proper forward-looking plans. I do not think it is a burden on them to do so at the appropriate level and proportionately, as we were saying earlier, but it would help the sustainability of all football clubs if they were to look forward in that way.

[Lord Markham (Con)]

Speaking as a fully signed-up member of the anorak club, I completely understand the point about business plans, which I have always done in businesses I am involved in. I am talking about the reality of football clubs. There is no way I am going to argue that having a business plan is not sensible, but at the same time, suddenly putting business plan requirements on a club with a turnover of a couple of million and two or three members of staff is an expensive exercise. That is the context in which I am making this point, and it is why I think Amendment 327 is sensible. It would make sure that everything is set out, so that we go into this with our eyes fully open to the burdens and what we are expecting clubs to do.

[Lord Jackson of Peterborough (Con)]

My noble friend is making a powerful case. Will there not be a displacement activity element to this, in that all the money and resources you are deploying on compliance you are not, for instance, concentrating on women’s and girls’ football or new football academies and other outreach programmes? Because you have this heavy-handed encumbrance of compliance, you are not going to be able to deliver the initiatives in grass-roots football that you would otherwise deliver, particularly in the lower leagues.

[Lord Markham (Con)]

Obviously it would be for clubs to decide where they will resource that from, but it will come out of the resources they have. If it is one person for National League clubs—the impact assessment assumes that it will be five people for Premier League clubs—and you put that all together, you are talking about a staff of at least 500 involved in all these compliance activities. It was also said that the regulator will have some 250 members of staff. So, you will have 700 to 800 people working in the compliance domain, and that has to come out of the pot that is football today. That is a very relevant issue. I agree on the needs of the regulator, and I agree that business plans are always a good thing, but there is a certain proportionality here that we need to be mindful of.

I am mindful of the time, so I will move on to Amendment 329, in my name and that of my noble friend Lord Parkinson. It is consequential to an earlier amendment we tabled, Amendment 19, which sought to put the leagues under scope in the Bill. This amendment would simply ensure that the regulations that may be made by the Secretary of State to amend the competitions under scope would be subject to the affirmative procedure.

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Moved by

[Lord Markham]

336: Clause 99, page 77, line 33, after “to” insert “subsections (1A), (1B) and”

[Lord Markham (Con)]

My Lords, I rise to move Amendment 336 and speak to my further amendments in this group. Those amendments are all taken together: indeed, Amendments 336, 338 and 339 are consequential to Amendment 337. Amendment 337 seeks that the Secretary of State must consult UEFA on the provisions and impacts of the Bill and confirm to Parliament that they have done so.

We will all recall that the issue of UEFA’s views on this Bill has cropped up on many occasions throughout Committee. That is not because we are chasing false leads but because there are very serious concerns, raised most notably by my noble friend Lady Brady, about whether UEFA is content with the Bill as it stands. The ramifications of its discontent, notably the disqualification of English teams and clubs from European competitions such as the Euros, are severe. I am sure that the Minister, or indeed the Prime Minister, would not want that on their conscience.

Of course, we do not fully know whether UEFA is discontented or in fact perfectly happy, because the Government still have not published the letter from UEFA to the Secretary of State. Indeed, the Minister has still not responded to the letter sent to her by my noble friend Lady Brady on this issue. While aspects of UEFA’s letter have been seen by news outlets—Sky and the Times have reported on some of its contents—the full views of UEFA have still not been made public. The only sources that noble Lords, and indeed the public, have been able to see to understand UEFA’s opinions are those we have seen in the news stories. This is highly concerning. From those news outlets, we know that the Minister’s comments that UEFA is happy with the Bill do not show the whole picture. Sky news reported in September last year that the letter from UEFA to the Secretary of State said there should be

“no government interference in the running of football”.

As I said earlier, it is disappointing that I am only able to quote that one line, which I found in the Sky news report.

What this demonstrates is that UEFA appears to still have concerns with this version of the Bill. The Government have indicated that their removal of the foreign and trade policy provisions has placated UEFA and that UEFA has no concerns at all about the financial regulations included in the Bill. I would like to be reassured that this is the case, but, alas, I have not heard anything that indicates this. That is why our Amendment 337 is so important. It would explicitly require the Secretary of State to consult UEFA on the provisions of the Bill and confirm that it does not have concerns before the Bill can come into effect. This will have to be confirmed to Parliament so that we are fully satisfied that there is no risk of our clubs being disqualified from the Euros or the Champions League.

[Lord Pannick (CB)]

I support the noble Lord, Lord Markham, on this. I find it quite extraordinary that the governing body of European football has written a letter to the Government relating to this legislation and yet we are not able as a Committee to see it and form a view. It is not my understanding that UEFA has specifically asked that the letter remain confidential. Indeed, it would be a very surprising attitude for the governing body of European football to take. We have discussed this on a previous Committee day, but I did not think we received a very satisfactory response. Could the Minister tell us whether UEFA has asked for its letter to remain confidential and, if not, why we cannot see it?

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[Baroness Blake of Leeds (Lab)]

All I can say, again, is that I shall certainly take that point back. I will not answer that point at the Dispatch Box tonight, but the views have been made very clearly by Members in the Chamber.

I shall move on to the other amendments. If the Secretary of State does not have the flexibility required to determine what the regulator’s powers are when they are commenced, this could lead to delays, confusion and inefficiency through the process of set-up.

The noble Lord, Lord Markham, has referred quite a few times to unintended consequences, which is something the amendments in his name could well lead to. As we all know, the commencement of legislation is a crucial and in many ways delicate process, and it will require careful co-ordination between the department and the regulator to ensure that the provisions are switched on at all times. With those changes, the regulator would likely not be able to make any progress at all with the set-up. Similarly, the delays that this change would cause would be likely to have an impact on areas such as the “state of the game” report, a necessary and vital report that the regulator will need to carry out as soon as possible.

Furthermore, we would have all the regulator’s staff on taxpayers’ money at this point, given that the levy would not yet be up and running, so they would be unable to work. That would mean that a longer period would have to be funded by the taxpayer, until it was recouped. I am sure that the noble Lord agrees that that would not be good use of money. For the reasons I have laid out, I am unable to accept the noble Lord’s amendments, and I hope that he can withdraw his lead amendment.

[Lord Markham (Con)]

I thank noble Lords for their contributions, and I thank the Minister. I think there was a shared view, bar the Minister, that there is an opportunity here to clear this up. It has been going on all the way through, and I must admit that, the more ducking and diving, obfuscation and avoidance there is, the more suspicious I become. We have a new reason today: for the first time, we are told that it is going to hamper the speed of setting up the regulator. The last time I looked, having a meeting with someone takes half a day or a day. It is going to cost a lot more to set it up. I am afraid that that just does not add up. Why do we not ask now? We do not need to wait until Royal Assent—why do we not show them what we are going to go through on Report? The Bill has not even gone through the Commons yet, so we could do this in parallel and it would not need to delay anything. I am sorry, but that does not really wash as a reason. That brings me back to the point that the only reason not to come clean about it all is that there is something they are trying to hide.

The other new reason is that the letter is private. The question rightly asked by the noble Lord, Lord Pannick, is whether we have asked UEFA whether it is private and whether it is willing to provide that letter. I feel sorry for the noble Baroness at this point, because maybe it was felt that this was one of the quieter parts of the Bill to take over from her fellow Minister. That was a bit of a hospital pass. But they do not even want to say whether they are willing to ask UEFA whether the letter is private. It is very clear: we can find out by asking whether UEFA does not want it to be published—that is a very quick question—or are the Government trying to stop it being published?

[Lord Moynihan (Con)]

I just make the point that the only reason we are pushing this so strongly is that if the regulation set by UEFA for European league and other competitions is at odds with what we are considering in this Committee with regard to the regulation that we are looking to put on the statute book, we will have a very real problem. We have the potential for English clubs not being able to participate in European competitions. That is why this is so important.

[Lord Goddard of Stockport (LD)]

Just to reply to that, let us be straight: is the noble Lord seriously alleging that the Government are holding back information that could exclude English football clubs from playing in Europe and the World Cup?

[Lord Markham (Con)]

I just think that this is very easy; it could be cleared up a minute. If there is nothing to hide and no concerns, just release the letter. Then we can say, “That’s fine; there are no concerns. Fantastic”. No one will be happier than all of us. What has been clear through all the Committee days is that we are all here, up to whatever hour at night, because we care about football. We are all football fans here; we have all declared our interests and our various season tickets because we care about football. That is why we are going on about this.

[Lord Pannick (CB)]

I just make it clear that I am not making any conspiracy allegations of any sort; I am simply and purely concerned, as I would be in other contexts, about basic transparency. There is a letter from a very important regulatory body in Europe and we are not allowed to see it. It is obviously relevant to the Bill that we, as the upper House, are discussing. Transparency demands, in my respectful submission, that we be allowed to see it—unless UEFA will not allow that.

[Lord Markham (Con)]

I thank the noble Lord. I think that the points are clear. We are clearly not going to get the resolution now. I think it will carry on as a running sore until the Government, I hope, put all our minds at rest. All the time that they do not, and all the time that they obfuscate, we will continue to be concerned because we know that, if UEFA is not happy, the consequences are, as my noble friend pointed out, pretty dire in terms of our clubs’ involvement in European competitions. I will withdraw my amendment at this stage, but I am sure that this will come back over and again.

Amendment 336 withdrawn.

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Moved by

[Lord Markham]

340: Clause 99, page 78, line 13, at end insert—
“(2A) The Secretary of State may only make regulations for Part 3 to come into effect at the end of a relevant football season.”Member’s explanatory statement
This amendment ensures the operating licensing regime does not come into effect during a football season.

[Lord Markham (Con)]

My Lords, I hope that this will be very simple and quick. All we are trying to do here is prevent the possibility of mid-season disruptions brought about by the implementation of the licensing regime. Clause 99 states that Part 3 will come into force on a day that the Secretary of State may by regulations appoint. The licensing regime therefore could be implemented at any date; there is no specification of when this should come into force. We want to ensure that, when the licensing regime is implemented, there should be as little disruption as possible.

The intention of this amendment, therefore, is to ensure that the Secretary of State cannot apply the licensing regime in the middle of a season. My concern is that the licensing requirements in Part 3 could be quite extensive. The information that clubs will have to provide to the regulator to obtain their licence is not only vast but, at this stage, quite unknown. Of course, the regulator will start to work on publishing its rules and requirements for the licensing regime, although we do not know when because the Bill does not include a timeline for the regulator to do so. However, I would hazard a guess that clubs will have to compile a large volume of information and documentation.

We know the requirements that are in the Bill at this stage. Clubs will have to submit a financial plan, a corporate governance statement, an annual declaration, and a personnel statement. They will have to ensure that they have the appropriate financial and non-financial resources, and meet the fan engagement threshold. If a club cannot comply with these requirements and therefore cannot obtain a licence—I am thinking of the smallest clubs in the National League, with just a few employees—then that club would have to cease operating teams in specific competitions.

If the regulations to implement the licences came in the middle of a season then a club could find itself in the position of having to drop out of the league half way through. The disruption that this could cause would obviously be enormous—not to mention the financial ramifications of such an event. By stating that the Secretary of State may implement operating licences only at the end of a football season, the potential for the disruption I have outlined would be significantly reduced. This safeguard is therefore required to ensure that the licensing regime, when it comes into force, causes less disruption than could otherwise be the case.

[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.

[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.

[Lord Markham (Con)]

I thank the noble Lords, Lord Watson and Lord Addington, for their support. I was hoping that the noble Baroness would say that this is just a very sensible, practical solution. I hope that the Ministers feel able to reflect on it at this stage, because it is a very practical step to make sure we can implement this correctly and not impact clubs mid-season. I am happy to withdraw at this stage.

Amendment 340 withdrawn.

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[Baroness Brady (Con)]

I accept the noble Lord’s apology.

The hour is late, but as we debate this idea of a sunset clause, we should pause and reflect on what is truly at stake. We are all here during extra time because all of us—bar one, I think—love football. It is a cultural touchstone, an economic powerhouse and a source of immense national pride. At its best, football connects communities, inspires individuals and projects the best of Britain to the world.

The Premier League is only one part of English football. I operated in the EFL system for many years and know that it is hugely important to our pyramid, as is the National League. But the Premier League is special for our country: with its global reach, this fizzing, vibrant competition has an extraordinary ability to draw interest, investment and innovation into the game. It not only powers the football pyramid but supports £8 billion in gross value added to the economy, contributes over £4 billion annually to the Exchequer and supports more than 90,000 jobs. The Premier League’s influence extends far beyond the pitch, creating an affinity for the UK and showcasing our ability to create a product that the world wants to watch.

We all know the background and the well-made case for some sort of regulatory intervention, but with this particular Bill we are now at a crossroads. I am passionate about this and live it every day, so I can see the risks very clearly. But I also know that this is a well-intentioned piece of legislation with aims that we can all support. The reason we have been so forensic and questioning during Committee is that it genuinely has the potential to inadvertently damage the structures that have made English football the envy of the world. We are not imagining these deficiencies in the Bill, or the risks that could play out. This is why I am interested in the idea of assessing whether this legislation and the IFR have achieved their goals or inadvertently harmed the game we all love.

The Government have rightly made economic growth their overriding priority. In a time of global economic turbulence and domestic fiscal and productivity challenges, it is vital that we protect and nurture the UK’s most successful industries. Football is clearly one of these: a global export that not only generates revenue but enhances Britain’s soft power and investor appetite for the UK on the world stage. It is against this backdrop that I must express surprise at the puzzling reluctance so far of the Government to listen to the concerns we have been expressing.

At a time when the Prime Minister has asked all regulators to focus on growth—and has also apparently asked Ministers to cancel all anti-growth measures—here we are, about to create a regulator that has no growth duties or objectives. We even read in the newspapers that the Chancellor has told regulators this week that they need to go further and faster in stripping back unnecessary rules and creating an environment where companies can take risks.

But this new regulator will be principally charged with risk reduction and, effectively, a new form of taxation on specifically one part of football, the Premier League. This is a mandate that seems inherently restrictive, redistributive and therefore anti-growth. The signal this will send to global investors could be troubling. If we overreach in regulating one of the UK’s greatest success stories, what might that say about our ability to protect and nurture other industries?

Poorly executed regulation would not just chill investment in football; it would ripple out into broader perceptions of the UK as a place to do business. A sunset clause is an interesting idea. It is clearly important that we do not undermine the regulator from the get-go. We all want this to work. But it is important that an appropriate review and accountability mechanism is found, so that a future Government can assess whether this Bill is delivering the sustainability it promises or whether it is in fact creating regulatory uncertainty and systematic risk, and damaging investment—in which case, we would want to see urgent remedial action.

As I have said this evening, the Premier League and its clubs are not opposed to change. What we do ask, though, is for change to be thoughtful, measured and informed by the realities of what makes football so successful. This Bill has the potential to do some good, but it also carries significant risks that, I say to the Minister, deserve to be engaged with seriously and constructively.

Today, the Premier League is competing not only with domestic leagues but international competitions, other global events and new forms of entertainment in what is a rapidly changing media industry. The UK has created something so special in the Premier League. We should not stifle our ability to adapt in order to deal with these new threats. We should not be complacent when it would be so easy to be knocked off course. We should not gamble that the Premier League is now an unstoppable juggernaut, immune to even the unintended consequences of its own Government’s actions. Empires rise, but they also fall.

It has been said that the Premier League has become the goose that is laying English football’s golden egg. I would encourage all noble Lords to think about it that way, rather than as a cow to be milked or a magic money tree to be shaken. Above all, we should look after it. We should nurture it. Dare I say that perhaps we should even think about how we can help it, not hurt it? We should work together to ensures that it continues to be so successful. To do so, it is obvious that we need some sensible changes to this Bill, and I sincerely hope we can achieve them together as we move towards Report.

[Lord Markham (Con)]

It is late, so I am sure that all noble Lords will be pleased to know that I will keep my comments short.

[Noble Lords]

Hurrah!

[Lord Markham (Con)]

There we go—the biggest cheer of the night.

As this is the last debate of what has been an extensive process, I echo some earlier comments by thanking the Minister for all her time and involvement over all these days in Committee. I thank all noble Lords for what has been an extensive number of days’ debate. I hope that we may have one new convert as a fan, but maybe not. The debate has been so extensive over those days—as mentioned, there have been 380 amendments—and there is such extensive expertise around the Chamber. So many key points have been raised and there is an understanding that the consequences of getting this wrong are pretty extreme.

There seems to be consensus, as mentioned by the noble Lord, Lord Pannick, that there needs to be some sort of review and some mechanism for that. I must admit that I do not think that is the “state of the game” report, because that is written by the regulator. It is extremely unlikely that the regulator would say in that report, “In all of this, the regulator is pretty rubbish and should be reviewed”. That is probably an unlikely outcome from the “state of the game” report. This post-legislative review needs to be conducted by someone who is not at the regulator, because otherwise it would be marking its own homework.

I thank my noble friend Lord Goodman for raising this. A sunset is one very good way of looking at it, but we have had other suggestions as well. I ask the Minister to spend the time between now and Report thinking about how we are to get some sort of post-legislative review, to make sure that we get this all right. Lastly, I also ask the Minister to spend the time that we have to reflect on all the views expressed over the many hours and days of debate on this. I look forward to discussing her thoughts on them when we have the meeting in February.

[Baroness Twycross (Lab)]

I am grateful to all noble Lords for staying the course to debate this group. I am not going to use any footballing metaphors, because I think we have exhausted them during the Committee and clearly this is the final group. I want to stress that I am really happy to continue to meet noble Lords before Report to make sure that we can talk through concerns that they have raised ahead of the next stage in the progress of the legislation through your Lordships’ House.

I thank the noble Lord, Lord Goodman of Wycombe, for tabling these amendments, which have allowed a debate about what kind of scrutiny we might need for a new regulator of this type. I am also grateful to the noble Lord, Lord Norton of Louth, for waiting so late to contribute, particularly given his complete lack of interest in football. There is a real value in hearing from people who are interested in regulation and what makes good legislation when we look at something where there is a risk that noble Lords—or anyone looking at the legislation—might approach it from the perspective of themselves as a fan, rather than what we need to have, which is good legislation, a good regulator and effective regulation.

I am also grateful to my noble friend Lady Taylor of Bolton for her contribution. Her expertise has been recognised by other noble Lords as well. I am keen to reflect on these contributions and the points raised by the noble Lords, Lord Pannick and Lord Addington, ahead of Report. I will take the points about scrutiny and accountability away for further consideration. I will go through a number of points—unfortunately, I am going to keep noble Lords a little longer—but I want to reflect properly on the points that have been raised.

Going back to the amendments tabled by the noble Lord, Lord Goodman, unfortunately, while we completely agree that the efficacy of the regulator should be monitored and evaluated—and I am happy to discuss this point further with the noble Lord—I cannot stress enough how strongly we disagree with the use of a sunset clause in this context. I agree with my noble friend Lady Taylor that these amendments would create a perverse incentive for the regulated industry to deliberately act in bad faith from the outset in the hope that the regulator fails to achieve its objectives and is therefore scrapped. We do not want, through the design of the legislation, to encourage or risk encouraging any non-compliance or vexatious behaviour by clubs and competition organisers who might be setting out with the intention of frustrating the regulator. We want to create the right conditions so that clubs act in a sustainable way, and we feel that the approach adopted is the right one.

On the other points raised by the noble Lord, Lord Goodman, surely, we want a regime that creates incentives for clubs to comply and improve sustainability. Under the amendment, the panel would make the decision, but there would still be an incentive for industry to show that the regime is not working. I also had concerns about the noble Lord saying that this would not be a problem because the Secretary of State would appoint the panel. If the Secretary of State can appoint a panel, knowing that it is not going to act against what the Secretary of State might have already decided, that is not a good panel. Therefore, with respect, I cannot agree with the noble Lord’s comments.

Giving the regulator a deadline of five years would also create the incentive for it to become more interventionist. Knowing it will be judged on whether it was meeting its objectives within a fixed period, the regulator could feel compelled to pursue more severe short-term solutions; this would be an undesirable unintended consequence. In addition to introducing these perverse incentives on both sides, a sunset clause would create inherent uncertainty in the market, as default expiry of the legislation in five years’ time, unless regulations are made to the contrary, would leave the industry and investors unclear on what basis they should plan for the future. We do not want to leave the Government or Parliament open to persistent lobbying to trigger the sunset clause.

The noble Lord, Lord Goodman, raised the important issue of accountability. This is already built in through the “state of the game” report and the annual report. However, I do recognise the point made by the noble Lord, Lord Markham, that these are produced by the regulator, albeit that the “state of the game” report will be based on data from the industry. While I understand the noble Lord’s concerns, the Government believe that the current measures already ensure sufficient scrutiny of the regulator and that it can be held to account if necessary—for example, through the DCMS’s role as sponsor and the requirement for an annual report to be laid before Parliament.

Parliament’s Select Committees can also conduct inquiries into any aspect of the work of the regulator once it is established and take evidence on such matters. The Government believe, given the aforementioned risks associated with the sunset clause, that it would not be an effective way to ensure accountability. For the reasons I have set out, I hope the noble Lord will withdraw his amendment.