Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

2nd reading
Wednesday 13th November 2024 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

My Lords, I refer to my interests and to 65 years of attendance at Stamford Bridge. Your Lordships should oppose this Bill, root and branch. It is badly written, of course—it is a Christmas tree.

However, beyond this one very bad Bill, there is a major problem facing us: far too much regulation, with both major parties over the past two decades having succumbed to the impulse to interfere, to busybody, to regulate. Excess regulation kills economic growth, reduces wealth and suppresses human happiness. Fact-based academic studies from around the world confirm this, but, in the UK, regulation has mushroomed.

We cannot roll out a decent nuclear programme. We have demolished the London Stock Exchange, with so few companies now opting to list there. Policy Exchange cites 25 destructive Human Rights Act impositions, one for each year since its adoption. Then there is the £100 million bat tunnel: noble Lords, over the last few days, have expressed bemusement as to how it came about. People ask why these things happen. It is regulation and regulators—that is what goes wrong. My own recent book on economic growth estimates that reversing all of this would increase GDP per capita by some 13% in a decade.

If most of us agree that there is too much regulation, how come regulation has proliferated so much? It is because those few who love regulation have become adept at pushing it through. First, find yourself a problem—in this case, parachute payments and alleged financial incompetence, although it is odd to assert that about one of the world’s most financially successful industries. In phase one, cry that something must be done, and then create a further panic about diversity or equal pay and get to phase two, “The Government must step in”. Talk something about, “Football, blah, grass roots, blah, women’s football, blah”, and stir up a general feeling that a regulator would be a damn fine thing. Phase three is, “There ought to be a regulator”. So, a football regulator—what could possibly go wrong?

The Bill is actually an attack on the Premier League. It is driven by Willie Sutton’s philosophy, “That’s where the money is”. Are we so sure the Premier League will be unscathed? It pays £4 billion a year in tax and £1.6 billion to lower leagues and grass roots. With overseas TV deals, it is a great export success, and there are 90,000 Premier League jobs. It drives Britain’s soft power around the world: you can have a vivid chat about Arsenal or Liverpool in a taxi from Jakarta to Lagos. All of that raises people’s estimation of this country around the world. There are 3 billion viewers, in 900 million homes, in 189 countries.

Did this happen by accidental circumstance? No, it was private enterprise that created this. Would it have happened had a regulator had been suppressing experimentation and initiative over the past 20 years? You know that it would not. Free markets need competition, fair exchange, no rent seeking, no crony capitalism and private property rights. They wither when subjected to heavy-handed regulators. Do we really want to be known in future times as the Parliament that destroyed the global success of the Premier League?

Establish a compulsory governance code—because, after all, we know best—licences, the imposition of removal orders and disqualifications for life on not-proper owners. Look, I am as anti-oligarch as anyone, but why dissuade a billionaire from dropping a substantial proportion of their wealth into the UK to invest in a football club? Which bureaucratic regulator would be able to distinguish between a good owner and a bad one? Would Sheikh Mansour have been permitted to purchase Manchester City and turn it into one of the greatest teams of the modern era? Would Sir Alex Ferguson’s famous hairdryer have been allowed by an equality, diversity, inclusion-loving regulator? What possibly can the “E” in EDI—equality of outcome—mean in football? Football is a competition. Winning and losing is the whole point. You cannot have equality of outcome—or will the regulator require that all games end in a draw? Or perhaps, if we are to diversity, they will require that 50% of teams be women. That would be difficult when there are 11 in the team, but I am sure they can solve that, too.

Seriously, we know there will be regulatory creep. We have already heard this afternoon from a number of hungry, prowling Peers eager to add their own obsession to the regulatory Christmas tree. We are told that this is a fan-led initiative, but do these busybodies, incidentally demanding that they be put on the board of this regulator, truly represent fans? Public First’s poll asked which kind of regulators were needed. Least wanted of all was a cricket regulator, and second-least wanted was a football regulator.

Of course, with the artfulness of polling, when you offer a list of possible regulations, people say they are in favour of the most absurd things, which could eventually be added by the regulator. Force the whole club to go on mandatory EDI courses, cap footballers’ wages, give equal pay to women footballers, create quotas for English players in Premiership teams—all in favour. Just a few of those would destroy the Premier League’s success. There would be no more global supremacy, no more soft power and far less tax revenue—a depressing future to contemplate.

We must pull back from this overweening belief that we know best. We do not. Hayek’s book, The Fatal Conceit, nailed that error. I recommend it; Lady Thatcher loved it and I am sure noble Lords will, too. It is the free market that knows best. We should back off from so much regulation, and in particular from this attempt to plunder and distort that precious jewel in the economy’s crown, the Premier League.

I end by asking the Minister: has there been a request for a formal evaluation of this proposed regulator’s possible damage, both to football and to the economy? If not, will she conduct one?

Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

Committee stage
Monday 2nd December 2024 Lords Chamber

[Lord Parkinson of Whitley Bay (Con)]

That is the question I am trying to probe with this amendment. Are the interests of fans of, say, Manchester United or Manchester City really served only if, as the Bill currently defines it, English football is contributing to the economic or social well-being of the “local communities” with which regulated clubs are associated? Surely Manchester United is associated also with Weymouth, for instance, or other parts of the country where people might choose to be a fan of that club, even if they have never lived in Manchester.

As I set out at Second Reading, I am not the world’s biggest football afficionado, but I know that people do not have to be born in a specific town or city to feel an affinity to, pride in or excitement from certain regulated clubs. I am interested in whether the sustainability of those clubs should also serve people in Weymouth and people across the country. The noble Lord makes an important point about the growing tension with growing the international following of football, but, as we have heard in previous debates, that, too, is a good thing. It is an important part of the soft power of the United Kingdom. It brings inward investment and greater glory to the UK. That is a separate point from the amendments, which look at the work of the sustainability—

[Lord Moynihan of Chelsea (Con)]

I interrupt to comment on the proposal from the noble Lord, Lord Knight. It is quite extraordinary. Are we little Englanders who think that our only role is in this country? There is a vast amount of soft power created by what is probably the UK’s most successful industry, so it is really odd that the noble Lord claimed that there are major problems with it. If there are major problems with our most successful industry, we are in trouble.

--- Later in debate ---

[Lord Markham (Con)]

My Lords, I rise to speak to my Amendment 17. What we have seen today, and I am glad that the Chief Whip has been here to witness it, is a passionate and informed debate. Perhaps it will give him an understanding of why the debate may be lengthier than one might have hoped. Not surprisingly, 15 or 20 noble Lords have spoken and we have probably had 21 or 22 different definitions of what a fan is—so none of us underestimates what a complicated area this is, but what we are all united in is that it is vitally important and, as such, it should be in the Bill. That is what we are asking the Minister to reply on.

I am probably biased, but I happen to think my Amendment 17 tries to take those different aspects into account, saying that fans are

“individuals who … identify with the club, engage with the service the club provides, and have an interest in seeing the club succeed”.

Bringing in the service that the club provides is trying to take into account that wider commitment and interest in it. I completely agree with the noble Lord, Lord Mann, that the most dedicated version of that is the season ticket, but we also know that there are massively long waiting lists for season tickets. Does that mean that people who are on a waiting list or people who cannot afford a season ticket somehow count less? That is why my wider definition talks about people who engage with the services of that club to try to take that into account.

I think we all agree with the noble Lord, Lord Watson, in his amendment that giving the independent regulator a definition to work to is vital, because this is at the core of what a club is. In any consultation that a club has to undertake, it needs to be clear who it is consulting with.

[Lord Moynihan of Chelsea (Con)]

My Lords, I rise to speak against Amendment 17A, tabled by the noble Lord, Lord Watson, and in favour of Amendment 17, tabled by the noble Lord, Lord Markham. The noble Lord, Lord Watson, has clearly thought very carefully about this and I agree with a great many of his nuances and analyses of what a fan is. I also agree with much of what the noble Lord, Lord Mann, said, although not about the localism.

Why are we talking about San Francisco or South Korea fans? It is because, surely, the purpose of this Bill is to sustain and continually improve the commercial and financial success of football, not to introduce some more nebulous—indeed, I would say suspicious—metric that we could conjure up on social grounds or whatever. If we are here explicitly to damage the commercial and financial success of football, let us admit it—but, if we are not, let us then look at the consequences and implications of that.

What is a fan? Can it only be a season ticket holder? The noble Lord, Lord Goddard, said about fans, “These are working-class people”. As an unregenerate member of the middle classes since childhood, I sort of resented that, but let us go with it. I am sure that the noble Lord, Lord Watson, is a champion of the working classes, but how many of the working classes can afford a season ticket? When I was 10 years old, I would jump on a number 11 bus and go down the King’s Road to Stamford Bridge. I only got there once a month maybe, by not having a gobstopper or a Barratt sherbet every day and saving up the five bob it cost me to get into the ground. I could not afford a season ticket. Fine, you could say that I should not be consulted, either, any more than children of 10 should be allowed to go on social media.

When I was an undergraduate of 21, I could not afford a season ticket but I was a fervent Chelsea fan. Later, I became a season ticket holder. Did I suddenly become worthy of consultation because I had managed to get a job that helped me afford a season ticket? Then when I moved abroad for a couple of decades, to study and work, did that disqualify me from being a fan? Then when I came back and got a season ticket, was I suddenly qualified to be a fan again? It is nonsense. If we are thinking about the commercial and financial success of this industry, we should follow the commercial and financial logic: my noble friend Lord Finkelstein was quite eloquent about that just now.

--- Later in debate ---

All we are suggesting in this Bill is that it is a good idea to ask the regulator to remind people of the standards which are now accepted and insisted upon by all decent businesses. These are not exceptional; they are not political; they are merely what we, today, expect. That small number of people who do not understand that are betraying not just the present generation but their children and grandchildren. I hope that this House will feel that it is our duty to make sure that we can look our grandchildren in the eye and say, “We did our best to make sure that your world is a world in which it is a pleasure to live.”

[Lord Moynihan of Chelsea (Con)]

I am not aware of any reputable scientific body that makes the claims the noble Lord has just made.

[A noble Lord]

What are you talking about?

[Lord Moynihan of Chelsea (Con)]

I absolutely say that the central prediction of all the major bodies is that there will be no major problem faced from climate change by 2050. If, indeed, the noble Lord or any other Peer wishes to controvert me, could they please quote such scientific evidence? By the way, they should also take into account, for example, the recent statement from the winner of the 2022 Nobel Prize for Physics, that climate change theories are a scam. I am not saying that, and I would not go so far as to say that, but could they address that? If they could please point to a central prediction that contains the sort of apocalyptic predictions just made by the noble Lord, Lord Deben, I would be very interested. I will say no more at this point.

[Lord Deben (Con)]

There is no scientific society of any major country that does not say that climate change is the biggest material threat to mankind. All of them say and support the view that by 2050, we need to get to net zero if we are to have any possibility of keeping within a 1.5 degree increase in temperature compared with pre-industrial periods. All of them say that, if we do not do that, the effects upon people will be enormously damaging. You only have to look at what has happened with just a 1 degree increase: the recent floods in Spain, for example, the wildfires and the rest. What my noble friend says is not true and it is very dangerous, because that kind of attitude is what allows people to get off the hook.

Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

Committee stage
Wednesday 4th December 2024 Lords Chamber

[Lord Jackson of Peterborough (Con)]

Your Lordships and I can rely on my noble friend’s forensic interrogation of the letter and the Bill generally. I know that we will come back to this issue.

I mentioned proportionality and a final example is the framework document, which has a strange description on page 2 of the letter. It says:

“DCMS as the sponsor department will agree a ‘framework document’ with the Regulator”.


It will be up to a parliamentary committee to look at what the point of that framework document is and whether its delivery by the regulator is efficacious. We need to know about the accounting officer. We need to know about the role of the National Audit Office and how it will intervene and work with the department, the regulator itself and any parliamentary committee. The levy, the proportionality and the cost are all areas where Parliament has a very important role to play.

I think we have reached the turning point in trusting regulators to discharge their duties without appropriate and close examination by legislators. That is our job and the job of those elected in the other place. Because the weather has changed for regulators, we no longer implicitly trust them to be full of experts and to do their job effectively. As my right honourable friend the former Prime Minister Rishi Sunak said, “In God we trust, everyone else bring data”. I am not just looking at the right reverend Prelate when I say that. The serious point is that we need to see that the regulator is doing its job. We cannot rely on just undertakings and assurances. We need the proper statutory function of a committee to oversee the work of the regulator. On that basis, I warmly support my noble friend’s excellent amendment.

[Lord Moynihan of Chelsea (Con)]

My Lords, it is a pleasure to follow my noble friend Lord Jackson and to support the three amendments tabled by my noble friend Lord Parkinson. I spoke a few days ago about how the Premier League became so successful, so popular and such an enormous contributor to the soft power of this country around the world, as well as to our finances in the many billions of pounds of taxes it pays. I spoke about the very delicate nature of entrepreneurial activity and the danger that comes from overregulation.

As noble Lords will know, I am not keen on the whole idea of this regulator—particularly one that is given so many powers in such an enormous Bill. But there is only one thing worse than a regulator given many powers and that is one given untrammelled and unscrutinised powers. Therefore, if we are to have this regulator, it is absolutely crucial that there is sufficient scrutiny of what it does.

We know that regulators like to regulate. People who are attracted to the idea of supervising other people like to get really involved and talk about what they would like to happen and how they can make that happen. They want to have the powers to make it happen—and preferably without scrutiny. I do not know how many Members of this Committee have had the experience of many years of scrutiny by regulators who decide, “You’re a wrong ’un and we’re going to go after you”. The process becomes the punishment.

And as many noble Lords have asked already this evening and earlier, who is going to come into this game? Who is going to apply their entrepreneurial flair if they believe that an untrammelled and unsupervised regulator is going to be able to second-guess everything they do, consider their fitness and will be able—from what we were told earlier—to reach into their funds and, through the backstop, extract them for whatever purpose, unchallenged, unsupervised and without any scrutiny. I submit to noble Lords that these amendments, if we are to have a regulator, are absolutely crucial for the regulator’s good functioning and for the future success of this wonderful part of our economy.

[Lord Goddard of Stockport (LD)]

On these Benches, we broadly support these measures. It is a pleasure to follow the noble Lord, Lord Moynihan of Chelsea, because he speaks his mind and I like that. There is no ambiguity in what he is trying to say; he just says it. That, to me, is refreshing.

In supporting the amendments from the noble Lords, Lord Parkinson and Lord Markham, with respect, we do not need Erskine May or Burke. It should be common sense to us that the regulator must be accountable to Parliament. We are the heart of democracy and the social fabric of the country, and we are funding it. So, if there were an overwhelming reason why the Government did not want this, I would find it unfathomable; the regulator should be accountable.

The noble Baroness, Lady Brady, was passionate in what she said, and I understand the pitfalls she can see coming, but this is really about regulation and accountability. That is the fine line that we draw. We are not overregulating but we need that accountability. I suppose it is about scope and the number of times we may be calling people, and which Select Committees can call them. I would suggest it should not be just any Select Committee; it should be pertinent to the business.

The Government will ask that the amendments be withdrawn today, but could they commit that this will be somewhere in the Bill? Without an agreement that the regulator will be held to account by Parliament and will report to Parliament, this group of Peers—the small and happy band that we are—will be less than supportive of not supporting this, if that makes sense.

Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

Committee stage
Wednesday 4th December 2024 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

My Lords, I support all three amendments in this group, particularly Amendment 253. I am delighted to follow the noble Lords, Lord Jackson, Lord Markham and Lord Parkinson, in their advocation of these amendments. I declared my interests on Monday, but this evening I have a fairly massive conflict of interest. I do not believe that I am alone in the Chamber in having been forced not to watch Chelsea breach all the principles of equity by beating Southampton 5-1 as we sat here. The poignant thrust of this conflict would be if my football friends started telling me that my staying away from Chelsea matches is good luck for the team. Therefore, it is not without anguish that I stand before your Lordships.

I go back to my earlier warnings about the dangers of regulators. Such dangers are stark in the clauses that we seek to amend and in the amendments themselves. The questions that your Lordships have raised in the debate boil down to what it will cost overall. That is what clubs will be asking, and then they will be asking what it will cost them. The third question that will come to the mind of the clubs—except those luckless ones in the Premier League—is around what they are going to get. We will talk about that in a minute but, to go back to what it will cost overall, we have heard over and again that we have no idea. There are estimates, which are clearly—

[Lord Mann (Lab)]

I have met plenty of clubs that have given an estimate of the likely cost, including across the Premier League. There is no ambiguity around the kind of sum that many Premier League clubs are citing as to what they expect the cost to be.

[Lord Moynihan of Chelsea (Con)]

I thank the noble Lord for that intervention but the fact remains that they cannot know what it will cost because, for a start, we do not have any certainty about what clubs will be in the scheme. We have been told what it might start at, but the Minister has said that she will not—

[Lord Mann (Lab)]

There have been extraordinarily levels of dialogue between the Premier League and the Government over a long period on this. The suggestion that the Premier League does not have some idea of the likely potential cost and has not spoken to clubs in relation to that is simply nonsense. I have spoken to clubs which have given specific estimates of what they anticipate it will be. Whether that is accurate or not, the idea that those figures have not been discussed at length is something of a fantasy.

[Baroness Brady (Con)]

I am sorry to intervene on the intervention, but I have not seen the noble Lord at any Premier League meetings; I have been to them all. I can assure him that we have never had a discussion about the potential costs, because we have never known what the potential costs are; no one has told them to us. We have looked at the impact assessment and that has given us a vague estimation, but to suggest that we have had a long, detailed discussion and debate, and that we understand and know what the costs are, is not correct.

[Lord Moynihan of Chelsea (Con)]

I thank the noble Baroness, Lady Brady, and the noble Lord, Lord Mann, for his intervention. He seemed to think I was talking about Premier League clubs. I was not. I was saying that the Minister had said that she did not want to specify in the Bill which clubs were going to be regulated, so the club does not know whether it will be regulated, and it certainly does not know how much it will cost it. The noble Lord might shake his head, but that is a fairly obvious point. We do not know who will pay. We also do not know what it will cost. I believe the noble Lord, Lord Hayward, talked about an estimate of £10 million—I beg your pardon; it was the noble Lord, Lord Markham.

[Lord Hayward (Con)]

If I might clarify for my noble friend: the noble Baroness, Lady Brady, referred to £10 million; I was quoting from the impact assessment, which says that £140 million over 10 years is the mid-point the Government are operating to.

[Lord Moynihan of Chelsea (Con)]

I beg the noble Baroness’s pardon for not attributing the £10 million figure to her. The fact is that we know that is ludicrous, because the cost of other regulators is way more than that.

I will make some headway. What will it cost overall? We do not know what the overall cost will be or what it will cost individual clubs. To talk a little bit more about that, imagine you are a local entrepreneur. There is a club in a little bit of trouble. They come to you and say, “You always wanted to own a football club. Why don’t you take over our club and then you can have one of those back-to-back league promotion successes that you’ve dreamed about and you’ll be famous in your community?”. You say, “Well, I’ve got a few bob. I don’t know how much, but yeah, okay, I’ll consider it”. It is one of those clubs that a noble Lord opposite talked about on Monday. I think the numbers cited were a turnover of £2 million and seven employees. You are invited to take over this club and bung in some of your money. You may not have a lot, but you may think you have enough. Then you say, “What’s going to happen?” My concern is that when you are told there is going to be a regulator that will tell you who to have on your board and all that, you will say, “Forget about that; as an entrepreneur, I don’t play that particular game”. But let us say you swallow that. Then you say, “How much is this regulator going to cost me?” The answer: “Dunno mate”. You ask, “Well, what could it be?” The answer: “Dunno”. So you turn your back and go off to sponsor the local cricket club or something like that. It does not work if you are not absolutely clear about what the cost will be.

[Lord Markham (Con)]

I ask the noble Lord this given his experience of consulting in a lot of entrepreneurial and start-up situations. I know that he has done lots of these types of moves. Clearly, when you invest in a start-up business or a club you will have business plans. They might be good or bad business plans, but they are normally based on an investment and an expansion. In this case, given that the regulator can say no to those business plans and that investment once it gets into it, I assume your investment proposition would suddenly be up a creek. I would like to hear the noble Lord’s opinion on what that will do to the investment proposition.

[Lord Moynihan of Chelsea (Con)]

The noble Lord, Lord Markham, makes a very good point. If some local worthies approach you and ask, “Will you invest in this club?” and you say, “Well, I’ve got to figure out what it’s going to cost me”, and they then say, “You’ve also got to figure out whether your plans are going to be acceptable to the regulator”, again, you would turn your back. Entrepreneurialism is the heartbeat of the economy, as several noble Lords have said in this debate over the past few days. This regulator proposal just turns entrepreneurs away from wanting to invest.

[Lord Mann (Lab)]

It would be helpful if the noble Lord could give examples of entrepreneurs wishing to invest in football who he has spoken to. I have spoken to a lot of entrepreneurs, including people who have invested smaller amounts in smaller clubs and larger amounts in Premier League clubs. They know exactly what they are anticipating and what they are going into. Of course, as part of their business plan, they are factoring that in. There is a figure, there is a concept, and investment has not gone down in the past 18 months. Indeed, further major investment in major clubs in English leagues is likely to happen soon. What is going wrong if they are all running away? Can he give a single example?

[Lord Markham (Con)]

I posed the question, and I can give an example of that. I have mentioned to noble Lords before that I have experience of the Brighton situation and know the board and the set-up there quite well. Brighton is a perfect example, and it is a shame that the noble Lord, Lord Bassam, is not in his place, because he is very familiar with it. It was a club without a stadium or good training facilities. An owner, Tony Bloom, came in and invested a lot of money in it, with a plan predicated on investing in players and doing a lot of analysis to get the best ones from around the world. It was absolutely a start-up scenario where he was heavily investing, and part of that was the concept of being able to yo-yo in terms of having parachute payments. He cited to me the example of West Bromwich Albion, which at that time had been promoted and relegated and promoted and relegated, but each time, because they had the parachute payment, they were able to become more sustainable.

Suddenly you get a situation whereby someone is thinking, “I want to do another Brighton like Tony Bloom, but I do not know what my cost base will be. I do not know whether the regulator is going to stop me going on with my plans because it thinks I am unsustainable or make me deposit a large sum of money as a financial buffer. I do not know whether my parachute payments, which are part of my plan, are then going to be taken away. Suddenly I’ve got a hell of a lot more risk involved”. I can only believe that that is going to dampen enthusiasm to invest in the first place. That is a very real example.

[Lord Moynihan of Chelsea (Con)]

I thank my noble friend. I apologise to the Committee for going over my allotted time, but I hope that it will appreciate that a great deal of that time was taken up not by me but by entirely welcome interruptions by other speakers.

In the interests of trying to move this on fast, I will stop talking about this issue of “What is it going to cost me?”, important though it is to have far more understanding of and far more limitations on the regulator’s ability to charge, and will move on to that of “What I will get?”. As soon as it becomes possible for a club to get money out of this arrangement, suddenly you have discussions about parachute payments and backstops; you have supplicants; you have lobby, lobby, lobby. It is called crony capitalism, state capture, rent-seeking. These are the dangers that you get when you involve the Government, and although we are calling it a regulator, this is a governmental action. It is essential that we limit the amount of money that that regulator has to play God with football in this country.

With those problems, it goes beyond just stopping the regulator spending beyond the levy amounts, as I understand Amendment 253 to say. We need to ensure that the levy amounts in the first place are suitably parsimonious and as little burdensome as possible to the clubs. I appreciate what the noble Lord, Lord Addington, had to say, but let us not be too free with other people’s money. I am sure it is not popular in all parts of this House to quote the great Baroness Thatcher, but she had the great remark, “You can spend other people’s money until pretty soon there isn’t any more”. Let us think about the impact.

[Baroness Blake of Leeds (Lab)]

I understand that the noble Lord received a number of interventions, but I think he is reaching the limit of his time. I would be grateful if he drew his comments to a close.

[Lord Moynihan of Chelsea (Con)]

I would almost have concluded in that space of time.

Once the method for determining the levy is agreed and the amounts are fixed, most surely the regulator should be prevented from spending any more than that. I thank noble Lords for their attention.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the noble Lord, Lord Mann, is right that we have had extensive discussion on the issue of cost, but if there has been lengthy dialogue on this point then it is because the answers have not been forthcoming in the way that the Committee has wanted.

I am particularly grateful to my noble friend Lord Hayward, who is doing an invaluable service not just for this Committee but for the smaller clubs on whose behalf he has spoken this evening, and in the way that he has gone through the impact assessment to try to get to the bottom of the cost implications for them in particular. I am glad that he will continue to keep at this important point, and I hope he gets some better and more detailed answers from the Minister as he does so.

My noble friend mentioned a letter that the Minister had sent him. Again, she has been kind in responding in writing to individual points that noble Lords have raised, but I ask her to share those letters with the whole Committee when the team sends them through. I think they are coming through to the individual noble Lords who have raised those points but they are not always being shared, and it would be a benefit to the whole Committee if we could all see those letters when they come. However, I am grateful to her, as I know those noble Lords are, for the speed with which she is responding in writing to the points that they have raised.

I am grateful to my noble friends Lord Jackson of Peterborough and Lord Markham for tabling their amendments in this very important group, which concerns the state funding of the regulator. That is a big issue that is worthy of debate, and I support the way that they have drafted them. I put my name to my noble friend Lord Markham’s Amendments 171 and 253, but I am happy to associate myself with my noble friend Lord Jackson of Peterborough’s Amendment 50 as well, which was the one that began this group.

My noble friend’s amendment seeks to strip away the broad powers that could be granted to the Secretary of State to provide financial assistance to the independent football regulator as she sees fit, subject to conditions deemed appropriate by her. Amendment 50 from my noble friend is an important amendment in seeking to safeguard the integrity and independence of the independent football regulator. We would like to think that one of the core purposes of the new regulator is to serve as a neutral body overseeing the governance and financial management of football clubs in this country. By granting the Secretary of State the power to provide it with financial assistance, there is a real and present risk that the independent football regulator’s independence could be compromised.

As with any independent regulator, it is crucial that the independent football regulator operates free from any external pressures, particularly from the Government. The role of the regulator should be to assess the game on its own merits without any concern about political influence or the priorities of the Government of the day. If we were to allow the Government to fund the regulator, we would be introducing the potential for at least the appearance of government influence over the regulator’s work and its activities.

Even if that influence were not overt or immediate, the mere existence of government funding could lead to the perception, and possibly the reality, that the regulator would become beholden to future Governments. That is a danger we must seek to avoid, as it would erode the public’s trust in the new regulator, undermine its effectiveness and hamper its impartiality. The Government have rightly made much of the changes they have made to the Bill in order to guarantee the independence of the regulator in the eyes of international bodies that have paid attention to the Bill, so I am sure that is something they want to avoid in this instance as well.

I hope the Minister will agree that the provision as it stands is concerning in the way that it gives the Government the power to impose conditions on how the regulator uses its funds. The consequences of that are worth considering. The Government could impose restrictions or directives on the work of the regulator, such as mandating certain areas of focus or influencing the scope of its investigations. It could lead to the independent football regulator neglecting crucial issues or, even worse, aligning its work with the agenda of the Government of the day. That sort of shift would diminish the regulator’s ability to act in the best interests of football clubs, players, fans and the broader football ecosystem which the Government and all of us are mindful of protecting.

The existence of that sort of conditional funding could set a dangerous precedent for other regulatory bodies. If government assistance became contingent on adhering to political agendas or priorities, then the independence of other regulatory bodies could be called into question, further eroding public trust in oversight.

I would like also to support my noble friend Lord Markham’s amendments in this group, Amendments 171 and 253. Amendment 171 restricts discretionary licence conditions to include only “internal financial controls”. In Clause 22, the Government allow discretionary licence conditions to relate to “internal controls”. It is important that, in a Bill such as this, the Government recognise the details of the Bill and make clear that the provision refers to financial controls as opposed to solely internal ones.

As my noble friend set out, “internal controls” is broad and open to wide interpretation. Without his amendment, the regulator could potentially impose conditions that extend beyond the presumably intended focus on financial oversight. That surely creates a risk of the sort of regulatory overreach that the Committee has been very concerned about, whereby the regulator might intervene or interfere in areas unrelated to the core objectives of this Bill, such as operational decisions or non-financial activities within football clubs.

If we were to insert “financial” as my noble friend suggests, we would ensure that the discretionary licence conditions relating to internal controls are focused exclusively on financial governance. This refinement would make the regulator’s powers more precise, ensuring that its interventions are effective, proportionate and fully aligned with its mandate to oversee the financial health of football clubs. We have heard, repeatedly and rightly, that the financial sustainability of English football is what the Government are most concerned about and what has led to the Bill that is before the Committee.

The non-financial resources threshold requirement as outlined in the Bill is designed to ensure that clubs have adequate resources, financial and otherwise, to operate sustainably, but the specific mention of internal controls as part of this framework needs to be carefully defined to prevent unintended consequences. Without this amendment, the regulator could use its powers to impose conditions on internal controls that have little or no connection to financial matters. That could include operational areas such as staff management, logistical decisions or club culture, none of which falls under the regulator’s core responsibility to ensure financial sustainability.

By explicitly tying internal controls to financial matters, my noble friend’s amendment reinforces the Bill’s focus on financial governance, while respecting the operational independence of football clubs. They are of course complex organisations operating in—

Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

Committee stage
Monday 9th December 2024 Lords Chamber

[Lord Markham (Con)]

I rise to speak to my Amendment 104, but I start by saying that I agree with the thrust set out by the noble Baroness, Lady Taylor, that we want this to be a comprehensive report. We all agree that we need a common factual basis on which to try to agree onward action. As such, I agree that this needs to be the first thing that the regulator does. With that, I am sympathetic towards the quicker timeframe. Obviously, I am mindful that we need to give it a certain amount of time so that it can do the report properly; six months is probably unrealistic as a quick proposal but 12 months should be enough time. Beyond that, given how quickly things move, every three years is a reasonable frequency.

Before I come on to Amendment 104, I admit that I am a bit concerned by Amendment 95, which asks the regulator to report with its assessment of how well each club is managed. It is one thing working with each club and looking at its plans; having to report on that is almost like a different level of burden of proof when it comes to the evidence needed. I am sure the regulator will be nervous about putting this down in black and white without having a strong evidential base. When you are trying to do that across 116 clubs, it creates a duty that is probably burdensome on the whole industry. It would result in a whole host of Deloittes, KPMGs and PwCs of the world going into every club, all 116 of them, to try and find assess how well they are run.

I turn to my Amendment 104. Key to this is football financial health. We all agree that it is critical to everything that we have been talking about—to sustainability and to the whole pyramid payment system and how much money is going at the top end. Every time I have proposed something, I have thought it was not controversial, and have said so many times over the last few days. I have then been—“upset” is too strong a word—mildly disappointed that it was not taken up by the Minister. I hope that asking the regulator to write in the “state of the game” report a section on football financial health is a no-brainer. Even though we are getting towards extra time, and into stoppage time, I hope we can have one thing chalked up that the Minister is happy to take away and agree to tonight.

Similarly, on the state of fan engagement, one thing that united the whole Chamber earlier was when we were talking about how fans should be consulted in all this. I hope that including a section on fan engagement in the “state of the game” report would be considered as close to a no-brainer as you would hope to get.

Lastly, proposed new paragraph (f) looks at the operation of the current regulators and an assessment of how well the independent regulator performs. That comes on to a clause later with the subsidiarity principle, and we are asking the independent regulator to, for want of a better term, contract out different functions where a current regulator—the FA, the Premier League or whatever—is better placed to do that. That is the general principle that we hope to get established. However, for it to be able to do that, the football regulator in the “state of the game” report first needs to report on the functions of the current regulators and how well they fulfil them.

Again, late into stoppage time, I hope these will be seen as quite sensible and uncontroversial measures. I look forward to hearing the Minister’s views on them later.

[Lord Moynihan of Chelsea (Con)]

My Lords, we are, I hope, on the home straight, to take a metaphor from another sport. I rise to support an amendment in this group, to say nothing about some others, and to oppose some others.

I take my thoughts from a reflection on Hong Kong and its enormous success as an economic entity for many decades before, lamentably, we had to lose it to the Chinese—with the current appalling situation that we now see in Hong Kong. Why was Hong Kong so successful? It is generally acknowledged that Sir John Cowperthwaite took an attitude of benign neglect to its success. He arrived in Hong Kong, he was urged to govern, and he said, “No, I’m going to step back because it’s doing very well without my interference”. He assiduously prevented reports being written about Hong Kong.

I am very much in support of the amendment tabled by my noble friend Lady Brady because it seeks to limit the report, and I say nothing about the various timing amendments, which I do not feel qualified to discuss, but I did say at Second Reading that this Bill was a Christmas tree and, unfortunately, people like to hang baubles on Christmas trees: “Let’s look at women’s football”; “Let’s look at the environment”; “Let’s look at so many things”—it is irresistible when you have a Christmas tree. What is wrong with having a report on these interesting, important things? We go back to Cowperthwaite: if you have a report, people feel urged to do something about it. If you say, “My report says that there’s something wrong here, or that more could be done there”, then that moves on to the impetus to interfere more and more.

There are two attitudes in this House to what is going on in football in this country. There is the attitude that we know best and that we say what is fair—fairness seems to be the prime objective among many speakers. There are others who are saying, “Why are you wanting to interfere with what is working so well?” I applaud the noble Lord, Lord Addington, for defying the injunction not to repeat ourselves, since he repeated himself earlier this evening in claiming that there was this catastrophic situation in the lower orders of football. I do not see it. Football is thriving. Others said the same when the point was made before—but good on him for defying this attempt to suppress deeply held thoughts, even if spoke twice.

No actions have no consequences. Attempts in these amendments to put more and more into this Bill will be detrimental to the great sport of soccer in this country.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, I will briefly say a few words about my Amendments 106, 108 and 109. Given the hour, I will not speak at length. As with the other amendments in this group, these concern the “state of the game” report. I am grateful to all those who brought amendments in this group and who have contributed to it.

My Amendment 106 is attempting to address a very similar point as does Amendment 105, tabled by the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Bassam of Brighton. Both amendments are attempting to reduce the period in which the regulator will have to publish the first “state of the game” report. As the noble Baroness noted, my amendment changes this from 18 months to six months, whereas theirs looks to change it to 12 months, but the reasoning behind both is the same. The sooner we understand the state of the game under this new framework, the better we can refine and improve the regulator’s role. I think that the sooner that happens the better, but I am not precious about the precise time.

Amendment 108 in my name requires the “state of the game” report to be published every four years to allow for a full and proper reappraisal of the issues facing football. The original draft of the Bill, when it was introduced by the previous Conversative Government, set the period for republishing the report at three years, and the current version sets it at five. With this amendment, I am trying to probe the Government as to why they have made the change that they have in this instance, and I would be grateful if the Minister could say.

With Amendment 109, again, I am trying to probe the Government’s intent. The Bill includes numerous references to consultations with fans, but it does not include any reference to engagement with fans on the draft “state of the game” report. I am curious as to the reasoning behind the drafting. If the Government believe that fans should be consulted elsewhere in the Bill, why not in this instance and with this provision?

I will not speak at length to the other amendments in this group that the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Taylor, have tabled, but I am grateful to them for their thoughts in doing so.

I will touch on Amendment 103, because I am conscious that the noble Baroness, Lady Jones of Moulsecoomb, is not here to mention it. Her amendment deals with the question of environmental sustainability. That falls very much into the category of the baubles on the Christmas tree that my noble friend Lord Moynihan of Chelsea would be very sceptical of. While football has a role to play in tackling climate change, the regulator must ensure that its focus remains on football governance. In the noble Baroness’s absence, I wanted to make sure that her amendment was noted, and if the Minister has anything to say on it, I am sure that she will be grateful to read it back.

Amendment 104, in the name of my noble friend Lord Markham, and to which I have added my name, attempts to expand the scope of the “state of the game” report. This requires the regulator to include an assessment of the overall financial health of football, an assessment of the current state of fan engagement and an overview of the current regulatory functions that are carried out by existing football bodies. We think that these additions are crucial. Financial health is the bedrock of football’s future, and fan engagement is its very soul. We must also respect and leverage the expertise of existing bodies, such as the FA, in ensuring that the regulator complements, rather than duplicates, their efforts.

The amendments tabled in this group reflect the wide-ranging interests and challenges facing English football. On these Benches, our priority is to ensure that the Bill creates a framework for governance that is robust, focused and effective. We must protect the integrity of the game, empower clubs to succeed and respect the fans who are its beating heart. I hope the Minister will seek to do that too in her response.

Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

Committee stage
Monday 16th December 2024 Lords Chamber

[Lord Jackson of Peterborough (Con)]

I rise to support my noble friend Lady Fox of Buckley, and I was pleased to sign the amendment. Noble Lords should remember that the corporate governance statement is not a voluntary part of Schedule 5; it is a mandatory licence condition and a threshold requirement. A club simply cannot progress in the licensing process unless it abides by this rather pernicious sub-paragraph of Schedule 5.

My noble friend Lady Fox made an excellent case in saying that this should be removed from the Bill; it is disappointing. We have heard many times from the Government Benches—including the Minister and the Chief Whip, who is no longer in his place—that it is hypocritical for us on these Benches to criticise the provisions of the Bill, given that the previous Conservative Government introduced the original Bill. But noble Lords will now know that I refute this suggestion because I personally would have opposed many aspects of the Bill. I think it is a terrible Bill, frankly, and would have opposed it under the previous Administration.

The Benches opposite cannot make that charge on this particular aspect of the Bill, because this is a brand new inclusion by the current Administration. I am not sure why the new Government thought this was an important measure. It is disappointing that there are no Labour Back-Benchers supporting their own Government on one of the most contentious aspects of the Bill, although I concede that the hour is late.

There are already a whole host of measures that clubs and leagues take to progress inclusion and diversity. We had debates previously, a week or so ago, which made the point that this is covered, comprehensively, by the Equality Act 2010. It is also covered by a number of employment Acts, such as the Trade Union and Labour Relations (Consolidation) Act 1992, which would prevent direct and indirect discrimination without the heavy-handed nature of this provision. Because it is going to be set down in primary legislation as part of a corporate governance statement, it will very quickly become not just statute law but case law, so it will be a de facto tablet of stone—irrevocable, a settled document.

That worries me, because we know there is a huge amount of bureaucracy—and I can say this as a former human resources specialist. There are, per capita, more HR specialists in the UK than practically anywhere in the European Union and the developed world. That means there will not just be this corporate statement; there will be the bureaucracy of impact equality assessments, people specs, job specs, race action plans, EDI plans, LGBT plans, et cetera. This is what it will become. It will be about a divisive attempt to segment and disaggregate different fan groups. I think that will be deeply regrettable. Therefore, I think it will give rise to anger and resentment—the very opposite of the sense of cohesion, belonging, unity of purpose and community pride, which surely are the raison d’être of football.

As an example, Peterborough United—Posh—posted a single photo on its Facebook page of a Pride flag. I do not have a problem with a Pride flag. I treat gay and lesbian people with respect. They are football fans; they can come and go as they wish. I make no value judgment on that. But it gave rise to an absolute deluge of negative comments on the Facebook page, and it set fans against each other. It was seen, cynically maybe, as virtue signalling by Posh. It was a kind gesture, but it backfired, I am afraid.

The Bill claims to have the interests of the fans at its heart, and the Government claim the same. It strikes me as incredibly bizarre that they have no clue what the fans actually want. Is there any quantitative or qualitative data to back up whether this provision is needed in the Bill? Football fans are not interested in EDI. They want their clubs to be run properly; they want the teams to deliver high-quality football. They actually believe in fairness and decency, not tick-box virtue signalling.

Finally, there is the issue of cost to the clubs. Policy Exchange, the think tank, has highlighted its recent annual report, Politicising Business, the enormous cost that EDI can place on clubs. It has analysed the cost of the new EDI rules that the FCA brought in for firms that it regulates in December 2023. It estimated that the new rules will incur a one-off cost of £561 million, and ongoing costs of up to £317 million a year to businesses—that is over £500 million for firms simply to improve their diversity and equality policies, which are already embedded in existing legislation. Surely this cost will be prohibitive.

Finally, I ask: what are the objectives? What are the key performance indicators? What does success look like? What does a cost-benefit analysis look like? This is about appearing virtuous and will result in conflict and discord. I do not believe that it should be in the Bill. We should trust clubs to do the right thing and to treat people both properly and fairly.

[Lord Moynihan of Chelsea (Con)]

My Lords, the hour is late and I found my brain somewhat pounded into stupefaction by the thoughts of the noble Lord, Lord Parkinson of Whitley Bay. I found myself, perhaps disloyally and strangely, in agreement with the thoughts of the noble Lord, Lord Addington, on that matter. In this state of stupefaction, I am concerned about the serried ranks on the Government Benches waiting to jump on any mistake that I might make, so I hope that they, or perhaps their ghosts, will forgive me for any. I shall make just three quick points because the noble Baroness, Lady Fox, and the noble Lord, Lord Jackson, have said it all. I could perhaps just say what they said, but I shall try to make three very quick points, in view of the lateness of the hour and the evident but brave tiredness of the ranks in front of me.

My first point is that EDI is, believe it or not, for those who desperately believe in it and think it is tremendously important and essential to have in the Bill, a passing fad. It is a fashion. It is not even a fashion that we came up with: it is a fashion that we imported from America. My wife was, for many decades, a fashion designer in New York and she would point out to me how the colour would be decided in New York and the next year it would be copied in London. The line, the cut, the theme of fashion would be decided in New York and a year later would arrive in London. So it is with all these moral panics that, for the last decade we have seen arise, one by one, be taken very seriously and gradually fade away.

The noble Baroness, Lady Fox, talked about how, even now, American academia having become obsessed with it for many years, everybody is getting bored with it because it actually turns out to be a bit of a disaster. One by one, all these moral panics will disappear and, in coming decades, people will ask, “Why on earth did they think that way? What on earth told them to do that?” There is, as the noble Lord, Lord Jackson, said, no academic evidence. The academic evidence that companies such as McKinsey used to make hundreds of millions or more out of companies for selling these lines has been shown to be disreputable by careful academic analysis. I know; I used to work for McKinsey. There were 800 people around the world when I worked there; there are now 46,000 and the numbers grew on stuff like this, without any really valid academic basis. It is a passing fad and I hope we will not allow it to become implanted into football just at the time that it is beginning to fade.

My second point is that it crowds out useful activity. I spent decades advising chief executives of the largest companies in the world as to what they should do, and the one thing that I and so many others like me advised them on was focus: do not allow yourself to get distracted. But noble Lords who have been here during this Committee will remember that I have frequently described the Bill as a Christmas tree. What we have heard is everybody trying to hang baubles on the Christ1mas tree.

--- Later in debate ---

[Baroness Twycross (Lab)]

My Lords, it is getting late and I have just dropped all my notes. This is not actually about football per se; it is about good governance. The regulator will be concerned with sustainability. As a sustainability regulator, its interest in equality, diversity and inclusion is that it contributes to good corporate decision-making, which, in turn, makes clubs more sustainable. This is why the regulator will encourage good EDI in clubs by requiring them to report on what action they are taking to improve EDI. That transparency will only be a good thing. I therefore hope that the noble Baroness will withdraw her amendment for the reasons I have given.

[Lord Moynihan of Chelsea (Con)]

Before the Minister sits down, may I offer to send her the academic study headed, “Study linking ethnic diversity with performance by McKinsey questioned by academics”? I am very happy to send her this. It completely rebutted the McKinsey finding that she quoted. It would be very useful were she to understand that that has been rebutted, so that she might not be quite so keen on the ideas she wishes to espouse, and we could come together on that point.

[Baroness Twycross (Lab)]

The noble Lord is very welcome to send this to me, but I am afraid that, as somebody who used to work in governance myself, I am quite committed to the concept that good governance should also include good EDI.

[Lord Moynihan of Chelsea (Con)]

Why?

[Baroness Twycross (Lab)]

For the reasons that I have outlined in my speech.

Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

Committee stage
Wednesday 18th December 2024 Lords Chamber

[Lord Addington (LD)]

My Lords, I am beginning to wish I had jumped up before the noble Lord, Lord Pannick, because I have come to a similar conclusion.

For every success story in football, if you look you will find a failure. It is often the case when people come forward and buy themselves the dream team, then something goes wrong. You will find that especially in the lower levels. There are stories of those clubs, with Bury et cetera copping out, that have more expenditure going out on wages than they have coming in from revenue. If the regulator does not have the power to stop that speculative spending in certain circumstances, it is being denied a basic power over one of the biggest problems that has led to instability, particularly in the lower parts of the game. After some of the discussions we had on this, I really cannot see how we can support the lead amendment here and still have the central thrust of the Bill.

How will the regulator assess the slightly strange finances of investing in people who are always one trip away from being worth nothing? One accident on a training field and your principal asset is worth nothing. How is that taken into account and balanced, which would require a level of expertise? Does the Minister have examples of where information will be gathered to make a sensible assessment on this?

On speculative purchases, we have heard about deals with agents, et cetera, on other parts of this Bill; it is important to bear in mind how these are done. If the Minister has information on how that information will be gathered and those assessments made, I would be very interested to hear it.

[Lord Moynihan of Chelsea (Con)]

My Lords, I hope the Minister will bear in mind that the repeated statements “For every winner there is a loser”, “The Premier League is in terrible danger” or “Football is in terrible danger” just ignore the fact that football is tremendously successful in this country. If for every winner there is a loser, there would have been no progress in the last 20 years. There has been progress and enormous success. We now have the greatest football league in the world. The statement that “Your biggest asset is only one accident on a training ground away from being worth nothing” completely ignores the fact that all football assets—all players—are insured. If, God forbid, your best player was injured irrevocably on the training ground, you would receive an enormous insurance payment, so it is just not true. The actual commercial realities of what is going on in football in this country seem to be completely mis-stated so often in this Chamber. I hope that the Minister will take heed of the tremendous success that private enterprise, unfettered by an onerous regulator, has created in the world of football in our country.

[Lord Markham (Con)]

I will sum up on a couple of new points. I always welcome comments from the noble Lord, Lord Pannick, because his forensic brain is really helpful in making sure we get to the bottom of what we are talking about. I have only just had a chance to look up Clause 22(4); this is about the regulator’s ability to restrict expenditure. It says that the regulator

“may not impose restrictions on expenditure of a particular kind or a particular transaction”.

That can be open-ended, unless the particular kind or particular transactions are defined somewhere; they could refer to anything. I do not know if the Lord, Lord Pannick, is aware of what they refer to, but perhaps the Minister could follow up on that, either now or in writing.

--- Later in debate ---

[Lord Markham (Con)]

My Lords, just to be clear for the record, no law was passed in this instance. In a matter of days the clubs quickly withdrew from the competition because, as my noble friend mentioned, it went down like a lead balloon and fans were up in arms. The Government were nowhere near it. That was a perfect example of where the clubs and the fans regulated themselves.

[Lord Moynihan of Chelsea (Con)]

My Lords, I have a very strong recollection of this because I wrote an article the day after the proposal came, which was published, like many articles at the time, and I remember that the very next day the proposal was withdrawn. It had nothing to do with the Government. By the way, I was not a politician at the time; some would say I am not one now, but it had nothing to do with Governments or Parliaments.

Football Governance Bill [HL]

Lord Moynihan of Chelsea Excerpts

Committee stage
Wednesday 15th January 2025 Lords Chamber

[Lord Jackson of Peterborough (Con)]

I fear the noble Lord, Lord Pannick, has misconstrued my comments. Perhaps it would be apposite to clarify that I was merely pressing him on the intellectual rationale for the assertions he made. That is a completely different issue from whether I agree that, being community minded, the Premier League should indeed disburse its funds generously to lower leagues.

[Lord Moynihan of Chelsea (Con)]

The noble Lord, Lord Watson, reminded us of solidarity. Does my noble friend agree that there is a great difference between legislative—which is to say coerced—solidarity, which some would call theft under the law, versus the voluntary and friendly solidarity that is already being shown by the Premier League? Does he agree that there is a fundamental difference between the two and that it is a subversion of the word to call it solidarity?

[Lord Watson of Invergowrie (Lab)]

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