Lord Pannick
Main Page: Lord Pannick (Crossbench - Life peer)(2 days, 12 hours ago)
Lords ChamberMy Lords, I repeat my declaration of interest, having spent much of the past three months representing Manchester City Football Club against disciplinary charges brought by the Premier League.
I pay tribute to the noble Baroness, Lady Brady, who has long been a friend of mine. She has unrivalled experience of being employed by Birmingham City Football Club and, for many years, West Ham United Football Club, and has achieved great success at both those clubs. I respectfully suggest, though, that here she protests too much. Clause 11(2) contains a very important restriction on what a football governance statement may do. It
“may not contain any policies that are inconsistent with the purpose of this Act or with the IFR’s objectives”.
The second protection is in subsection (6):
“The Secretary of State must lay any football governance statement, or any revised statement, published under this section before Parliament”.
Those are very considerable protections.
We listen to concerns that companies that own football clubs need long-term planning, but surely any company is subject to changes of government policy over the years. There is no protection whatever against those and the consequences thereof. I see absolutely no reason why football clubs should be protected by more than the three-year period stated here.
My Lords, before I start my comments on this clause, I thank the Minister for meeting me last week to discuss a number of issues—they did not include this clause, but I appreciate the opportunity to discuss other issues with her. My concern about this clause comes from the very first words of the Bill, which say that it is to:
“Establish the Independent Football Regulator”—
an independent regulator, not one circumscribed by a government Statement as laid out in Clause 11.
I disagree with the noble Lord, Lord Maude, who said, if I heard him correctly, that this was unique. It is not. Sadly, my mind goes back to a previous occasion when the Government wanted to circumscribe an independent regulator. I remember the debate clearly, because the late and great Lord Judge made a massive contribution to it, scything through the then Government’s arguments about why they should have a Statement in relation to an independent regulator. The independent regulator to which I refer is encompassed in the Elections Act. The previous Government said, “Ah, we’ve got an Elections Act. We don’t really like what the Electoral Commission is doing, so we’ll put in a nice little clause which requires the Government to make a Statement”, which, in effect, circumscribed the Electoral Commission. What is fascinating about that set of circumstances, which Lord Judge and I—and the Liberal Democrats and the Labour Party—criticised comprehensively, is that the wording in Clause 11 is remarkably similar to that in Section 16 of the Elections Act. In fact, Clause 11(5) of the Bill is almost identical, word for word, to new Section 4A(7) of PPERA inserted by that section.
I said just now that people on other Benches spoke against the Government imposing some form of Statement on the Electoral Commission as
“‘not fit for purpose and inconsistent with the … role as an independent regulator’”.—[Official Report, 6/2/24; col. 1604.]
We are talking here about the same wording. Those were words from the Liberal Front Bench—the noble Lord, Lord Rennard. The Labour Front Bench, in the form of the noble Lord, Lord Khan, said that
“this statement is unnecessary and the Government have provided no evidence for why it is needed … There was cross-party agreement that the commission’s independence is vital”.—[Official Report, 6/2/24; col. 1602.]
I could go on quoting the noble Lords, Lord Khan and Lord Rennard, making the point that a regulator is independent if it is independent, not because it is circumscribed by a set of conditions as set out in Clause 11. I recommend anybody to look at the relevant amendments to the Elections Act 2022, where the wording is virtually identical. The Government then wanted to circumscribe the Electoral Commission. I would not be surprised if the officials discussing this Bill when it was in draft under the previous Government said, “Oh, we’ve got a good basic tenet; we’ve even got a set of words which we can lift, virtually verbatim, and it’ll circumscribe the independent regulator”.
I opposed the Government’s imposition of that statement in the Elections Act, because I believed it circumscribed what should have been an independent regulator. When the then Opposition forced a vote on it, I sat where the noble Lord, Lord Bassam, is now and abstained, because I refused to support the Government imposing on an independent regulator a provision which is virtually word for word that set out in Clause 11. I therefore strongly support the amendments and oppose this clause standing part of the Bill.
My Lords, I will speak briefly in favour of this group of amendments. I particularly support those that would introduce a requirement for the IFR to consult those affected as it produces guidance. Consultation with key interested and impacted parties, particularly the leagues, is critical.
The IFR is an entirely new regulator operating in an entirely new regulated space with no real international experience to draw on. As I highlighted at Second Reading:
“The Explanatory Notes themselves acknowledge that football ‘was previously not regulated by statutory provisions’, and explicitly state that ‘the new regime and the distributions provisions in particular are unique and unprecedented’”.—[Official Report, 13/11/24; col. 1850.]
A duty to consult on key areas, such as those set out by my noble friend Lady Brady, to ensure that unintended and potentially damaging consequences are avoided as the regulator begins its work and develops its guidance, is surely a no-brainer.
At our recent meeting with the shadow regulator, and in various responses from the Minister during Committee, the desire and expectation of the regulator to work in a collaborative and proportionate way have been repeatedly reiterated. Several amendments in this group simply put that consultative approach firmly and squarely on the face of the Bill. I hope the Minister can look favourably on them.
My Lords, I too hope very much that the Minister and the department will look favourably on these amendments, for the reasons given by the noble Baronesses, Lady Brady and Lady Evans. They seem to be absolutely essential for reasons of efficacy and to give confidence to those who will be regulated that they and others will be properly consulted. I would be very surprised to be told that the regulator would not intend to do so. If that is right, it is surely essential, as in other legislation, that this is put in the Bill so that there is no doubt about it and so that the confidence that is absolutely essential is promoted.
My Lords, this amendment about the bodies that will be regulated has a fair bit of common sense behind it. I am sure the Government will have done great work on consultation and making sure there is communication between the bodies that will be being regulated and the new regulator. If the Minister can tell us how this is being done, some of my worries will be removed. Also, stating where that information will be provided would very much help. If not, it has to be in the Bill somewhere.
I hope noble Lords will see this as another constructive measure that is in keeping with many of the issues on which there has been broad consensus in the Committee. The principle behind the amendment is delegating regulatory functions to the competition organisers where they are considered best placed to discharge them.
Many noble Lords have said that the competition organisers already regulate their own competitions to a large degree. We are all aware of the fit and proper owner test and of financial fair play, to mention just a couple of areas. We would all agree that competition organisers have extensive experience in this space, having been doing it for a number of years. If they were discharging a lot of the functions and the regulator was also discharging them, there would be the danger of duplication. Again, I think most noble Lords want the regulator to be light touch and low cost, particularly as all the costs are coming out of the pockets of the clubs.
I hope that this will be seen as a sensible move. The regulator would be asked to look at each area of responsibility and to decide which of the competition organisers might be best placed to carry it out. If the regulator thinks that, in delegating some of those powers, the current Premier League or EFL owner tests are insufficient, there would be nothing to stop the regulator saying that, on top of competition organisers’ existing processes, it would like them to add X, Y and Z. That would be entirely appropriate and would give the competition organisers the opportunity to prove themselves.
Given that the regulator would have overall responsibility, it would always have the opportunity to take the powers back if it thought the competition organisers were not up to the job. Amending the Bill in this way would be seen as a sensible move. It would send a good signal to football that we want to work with it in setting up the new regulator. We have all heard the Minister say that she does not want to increase the burdens on the independent regulator—in fact, she made that point in responding to the last group—so here is a way to reduce the burden we put on the regulator and to delegate it to a local level, where others are felt best placed to carry out the functions in a collaborative way. I beg to move.
The noble Lord, Lord Markham, puts his case very powerfully but I for one am not persuaded, because the delegation of functions to competition organisers would frustrate the very purpose of independent regulation. The whole purpose is that regulation is done by the independent regulator. As I said in considering the previous group of amendments, it is of course vital that the regulator consults those affected and takes into account their concerns and expertise. But to delegate the responsibility to those who are being regulated, or to the competition organisers, would be an abdication of regulatory responsibility.
My Lords, I support the amendment of my noble friend Lord Markham and strongly disagree with the noble Lord, Lord Pannick. We constantly hear that the purpose of the Bill is for the regulator to be agile, to be as light touch as possible and not to impose unnecessary additional burdens on football. Every million pounds spent on the cost of running the regulator, as well as the additional compliance costs for football clubs themselves, means there is less of the pie to be distributed under the redistribution parts of the Bill.
Surely one of the key ways in which we can do our best to avoid that cost burden being excessive is to avoid duplication. The reality is that the competitions, the leagues, already exercise a self-regulatory function—not regulating themselves but regulating the clubs that are members of the leagues. That is in their nature: there are conditions of belonging to those leagues that they rightly enforce, and they are going to be obliged to carry on doing that anyway. It is possible that not all of them have done that perfectly, and that not all of them will continue to do it perfectly in the future, but it is also possible that the independent regulator will not do its job perfectly. We should consider that possibility at this stage of consideration of this really important Bill, given that many clubs—not just the Premier League clubs but right down through the pyramid—have concerns about the costs, imposition and impact that creating the regulator will involve. When we move on to the next group, we will be looking at the really big, crunchy part of the Bill that covers the regulator’s operating licensing powers.
If we are to be sensitive to these genuine concerns of football clubs—which, by and large, have been pretty successful over the decades—this is a good way of showing it. If this amendment is passed and accepted by the Government and goes into the Bill, none of it says that the powers have to be delegated to any particular competition organiser; but at least giving the possibility of avoiding this overburden of new regulation, cost and impositions on something which is already very successful would be a very good signal for the Government to send.
I hope the Minister when she responds to this amendment will not rule it out out of hand but will take it away and say that we should now be looking for ways to address some of these genuine concerns. This would be a very good way of doing it.
My Lords, I want to say a little about Amendment 124, which my noble friend Lord Markham has outlined and to which I have added my name. I am sorry that we have not yet fully convinced noble Lords across the Committee in favour of it, but it might be helpful to clear up some of the confusions which have arisen.
We are proposing delegating these duties not to clubs but to competition organisers. In doing so, we seek to avoid the sort of confusion that the noble and right reverend Lord, Lord Sentamu, has just highlighted about duplication in the regime. As noble Lords have pointed out, there are already football bodies which have a regulatory role—the Football Association, the Premier League, the English Football League and, indeed UEFA. They will retain many of those functions. As the noble Lord, Lord Pannick, knows well, Manchester City’s dispute with the Premier League is because of its powers to make some of the rules for the competition to which it relates. We are trying to avoid the duplication of regulatory functions. If an existing competition organiser has processes in place to carry out these functions effectively, why could the Secretary of State not direct the regulator to delegate them to these competition organisers and bring them closer to the clubs that are playing in that competition of their own free choice?
The noble Lord emphasises that the purpose of the amendment is to allow for delegation of powers to competition organisers, not to clubs. But the noble Lord will know that the Premier League, which is a competition organiser, simply consists of the will of the 20 clubs.
The 20 clubs have competed to get into it. It is a changing 20, based on the ability of clubs to take part in that competition.
Similarly, it might be more appropriate for functions to be carried out by other competition organisers at other levels of football, if there are sufficient safeguards for them to do so in a way in which the Secretary of State feels is appropriate.
In our amendment, we have tried to reflect these safeguards to make sure that the same regulatory standards apply to the bodies to which functions are delegated. Subsection (2) of the new clause proposed in Amendment 124 says that a function can be delegated only if the regulator is satisfied that the competition organiser would discharge the function with the same degree of stringency as the regulator itself and that it would meet the objectives established by Clause 6 and discharge the function with regard to the negative outcomes as outlined in Clause 7(2).
We are where are because there are elements of football which have not been good at self-regulating in a way that has pleased fans. More than one political party has been concerned enough to bring this Bill before your Lordships’ House. Are we saying that we have reached a point of no return? If the competition organisers and other football organisations get their house in order and meet the standards set out in this Bill which the regulator is trying to do, will there never be a situation in which we will be able to delegate some of these functions back down to the level of competition organisers? This would mean a much more light-touch, organic form of regulation, which I think is what a lot of noble Lords in the Committee would like to see. That is the thinking behind the amendment and on which I would be interested in hearing an answer from the Minister.
The noble Lord, Lord Bassam, has made some important points and, of course, everything I have said is based on the fact that those clubs will be following that. They are basic conditions that any organisation, not least a football club, should follow. All my amendments—I have studied them carefully—seek to make it easier to ensure that the clubs follow those procedures and that the uncertainties and vagaries in the current drafting of the Bill are clarified, making it easier and more efficient for clubs to meet their obligations as companies and football clubs in the professional leagues.
The noble Lord, Lord Parkinson, posed a number of questions about the operation of Part 3 in relation to licensing functions. I will add one further question, to which I do not necessarily expect an answer today. Pursuant to UEFA regulations and delegation from the FA, the Premier League currently licenses clubs for the purposes of their participation in UEFA club competitions. I declare an interest as a season ticket holder at Arsenal Football Club—I realise that some of the other clubs supported by noble Lords would not have an interest in this matter for various reasons. My question is: will this function of the Premier League be affected by Clause 15 or any of the other clauses in Part 3?
My Lords, I will speak to my Amendments 168 and 169, which connect with some of the themes raised by the noble Lords, Lord Pannick and Lord Moynihan. One of the most sensitive areas of this regime is the imposition of discretionary licence conditions on clubs. The purpose of my Amendment 169 is to say that the regulator can introduce such conditions only after being satisfied that the conditions would
“not be met by the club complying with all rules, requirements and restrictions which … will be imposed by a competition organiser”.
Essentially, this does not go as far as full delegation to leagues such as the Premier League—I agree with the noble Lord, Lord Pannick, on the broad criticism of that—but would introduce in one specific area what might be thought of as a limited principle of subsidiarity for the imposition of discretionary licence conditions.
The main purpose is to ensure that the regulator observes the norm of good regulatory co-operation—with not just the Premier League but all the leagues—by looking first to the adequacy of league arrangements in response to specific problems that will be the most politically and competitively sensitive, before stepping in and intervening with club-specific conditions attached. Why? It is because subsidiarity is a good principle of regulation where it is not inconsistent with the application of the intent of the law; also, I believe that it will foster the habit of regulatory co-operation more generally—not just on discretionary licence conditions. It will avoid duplication and confusion in regimes, and it will equip the regulator with a bit more political protection when it comes to the charge of political interference, because it can say, “We’ve looked to the leagues to step in first before stepping in”.
In the case of the Premier League specifically—let us face it, that is where the rubber hits the road on this issue most of all—it gives it, first, a chance to maintain system-wide and league-wide governance integrity before club-specific rules arrive, rather than risking the intervention of the regulator, leading to fragmentation between clubs. Secondly, it allows differences in application, inside the Premier League, of the general IFR rules in ways that account for differences in risk, finance and strategy, which we have heard discussed many times in Committee.
An example is capital buffers. The regulator will want to require cash reserves, and in the case of the Premier League, you want to take account of those areas where there are genuine differences from lower league clubs—differences in player registration rights, meaning players are more liquid assets, for example. The Premier League could design league-wide rules that are sensitive to these different conditions. The amendment does not say that Premier League rules would trump regulator rules, but where there are concerns, the regulator would look first to the Premier League to modify league-wide rules that respond to the concerns before the regulator directly intervenes.
Another scenario might be an issue of liquidity management inside a Premier League club. This amendment would point to the regulator first looking to the Premier League to take steps such as enhancing its monitoring systems, developing new metrics, et cetera, before it goes to individual licence conditions. This, again, would ensure that the league could retain the integrity of league-wide rules, rather than Premier League clubs having individual regimes as and when they trip up over certain rules.
What if the regulator wanted to intervene with a specific club as a matter of urgency? It could still do this. What if the regulator thought Premier League rules were inadequate to the task and insisted on imposing a licence condition that cut across and undermined league rules? Ultimately, it could still do that too; in fact, it may think that was the right thing to do. But what the amendment would do is introduce a prior stage that looks to the leagues to make league-wide governance adjustment first. In the name of good regulation, that seems to me a sensible, limited amendment.
Under Clause 22(6), the Secretary of State may make the regulations the noble Lord is concerned about only if requested in writing to do so by the IFR, so the Secretary of State does not have complete discretion. We would be creating a new system which may reveal defects and omissions in its operation, so surely it is sensible to have a power to amend it if defects become manifest.
I thank the noble Lord. Of course, we want to have the flexibility to react to such situations. This issue comes up in various other contexts, such as government statements. There are lots of points where the Secretary of State can vary the approach. The question is: how do we get the checks and balances right? However, I think there is basic agreement on this issue, and I would like to hear the Minister’s views.
I shall speak to Amendments 125, 133 and 135. Hopefully, this will be a fairly uncontroversial, simple set of amendments, which try and set out clear expectations on timing.
I am very aware that, while there is uncertainty as to what the discretionary licensing regime may be, that has an unsettling effect on both clubs and potential investors into the sector. We would all agree that this is not something that we want. We want everyone to know what the rules of the game are, so they can either get on with doing whatever they need to do to apply to those licensing conditions and/or, if they are looking to invest in the game, so they can have that degree of certainty as to what the rules of the game are going to be, so as not to have that potential chilling effect on any new investment.
Amendment 125 tries to give the regulator a time limit of one month from the passage of the Act. I am very aware that there is a shadow regulator in place at the moment, so I hope that this is something that the shadow regulator is working on in the meantime. That is why I think that a one-month deadline is quite doable in that sense.
Related to that is Amendment 135, which says that once a club has put a discretionary licence application in, it will receive a reply from the regulator within one month. Again, I am very much assuming that these things are not a binary process. I would expect the club to be in liaison with the regulator as it put this application in and be receiving advice as it did so—so a one-month timeline at the end of that is quite relevant.
It is for us to set some expectations on the regulator in the Bill. In Clause 17(9), the regulator gets to set its own timing for it all, so it is quite appropriate that we are saying that, given the uncertainties placed on clubs, we expect these sorts of reasonable timeframes. Again, I am quite happy that we decide what those appropriate timeframes might be through our discussions on this, and there may be arguments to vary that slightly—but one way or the other, it is quite important that we set out what those timings and expectations should be.
Finally, Amendment 133 tries to give more time for how long provisional licences last. We want to try and avoid a cliff-edge situation whereby clubs are suddenly in the provisional licensing regime and then do not get beyond that. We would all then have a set of circumstances which I do not think any of us have really planned for, in terms of what would happen and whether the club would have to stop taking part in the competition at that point. Amendment 133 tries to give a bit more time around the provisional licence, increasing it from three years to four.
The main reason for these amendments is to make sure that these things are considered and that there is a good debate on what the appropriate timeframes are. It is reasonable that we put down what those timeframes should be, so clubs get as much certainty as possible in this. I beg to move.
My Lords, I am very sympathetic to the purpose of the noble Lord, Lord Markham, in relation to his Amendments 125 and 135. Perhaps I may respectfully suggest to him and to the Minister what may be more palatable than what his amendments suggest. Amendment 125 is rightly concerned that the rules for a provisional operating licence should be made speedily. Everybody must know what the rules are. The amendment would require that these rules be made no later than the period of one month beginning with the day that this Act is passed. If the noble Lord is going to bring the amendment back on Report, I respectfully suggest that it would be more acceptable to say within one month from the date when the Act is brought into effect. The noble Lord will know that under Clause 99(1) and (2), Part 3—with which we are concerned—comes into effect not when the Act is passed but at a later date when regulations are made.
In relation to Amendment 135, the noble Lord is rightly concerned that the IFR should make the decision whether to grant a regulated club a provisional operating licence speedily. He lays down a period of one month from when the application is made. The amendment would allow for an extension of only two weeks. It is an absolute rule, subject to a two-week extension period. I respectfully suggest that that is far too confined. It is normal in a provision of this sort to allow for the period to be extended if there are exceptional circumstances. It is not difficult to envisage cases where, rightly, the IFR cannot take the decision within a period of one month plus two weeks.
For example, the IFR might reasonably take the view that it needs answers from the club to questions of detail, which it puts to the club, and the club may not provide those answers, or be able to provide them, within the period of six weeks for which the noble Lord’s amendment allows. I understand and I share the concerns at the root of Amendment 135, but it really needs to have an exceptional circumstances provision.
My Lords, looking at these amendments, I think that a little bit of agreement is breaking out that certainty and getting things done quickly are required in the Bill. The noble Lord, Lord Pannick, may have made drafting suggestions on the hoof, and we are lucky to have him to fulfil that function for us, but something that clarifies and addresses the issues raised here would probably be helpful. If there is something that we have all missed and it is hiding somewhere, that is great, but we need those answers.
In speaking to my Amendment 332, I will follow the words of some other noble Lords and say that I find it quite confusing that we have so many disparate amendments grouped together.
My Amendment 332 would stop the Secretary of State being able to define a season. I hope that someone—maybe the Minister or the noble Lord, Lord Pannick—will tell me that I have read this wrong somehow, or that it is not the intention at all, but I think we would all agree that, when it comes to regulatory or government overreach, trying to define a season and when it should start and end is not the role of government or a regulator. I hope that this is quite an easy one to clear up, because I would be very surprised if that is the intention behind it. The relevant Clause 92(3)(a) says that:
“The Secretary of State may by regulations amend this section so as to change … the definition of ‘football season’”.
It would be very welcome if that could be clarified; otherwise, I suggest that we might want to delete it.
My Lords, I will comment very briefly on the subject of football agents, which was raised by the noble Lord, Lord Mann, and supported by the noble Lord, Lord Goddard. I declare an interest: my son Joel Pannick is a football agent—I am very proud of my son—who works at Base. My perspective of football agents is that there are still abuses; they need to be regulated and they are regulated. The era of unregulated bungs no longer exists to the extent so vividly described by the noble Lord, Lord Mann.
Let me say why I want, in the interests of balance, to inform this Committee of what the position is. Football agents are now licensed and they have to pass a demanding examination. They are regulated by FIFA and the FA. I should mention that the scope of the regulations was the subject of legal challenges in the last year, and those legal challenges partially were successful. It is the case that HMRC adopts a far more vigorous approach to this topic than it used to, and rightly so; it keeps a close eye on payments and receipts. The noble Lord, Lord Mann, is absolutely right that there are many agents who are not subject to HMRC because they are based abroad, but those based in this country certainly pay tax, and in many cases a great deal of tax. I thought I would just mention those factors in the interests of balance.
My Lords, like the noble Baroness, Lady Taylor of Bolton, I always balk when I see a group described as miscellaneous, or even worse in this case, “misc”. On the failure to give new names to the groups that have been degrouped, it is always helpful to have a go at giving us a theme. But I am grateful to the noble Lords who have covered a wide range of very important issues in this group.
I wanted to say a few words about my noble friend Lord Markham’s Amendment 332, to which I have added my name. A number of noble Lords raised in previous debates the concerning example of the delegated power for the Secretary of State to decide what and when a season is. I am glad we have had opportunity to discuss that on its own. This delegated power seems to be egregious. I am not quite clear why the Secretary of State should have a say on what constitutes a football season. I am not even sure why this delegated power is necessary—apart from granting the Secretary of State more powers over the game, there does not seem to be any particular advantage to her in granting herself this rather curious power. I would be interested to hear the Minister’s response. I wonder whether UEFA has a view on this measure. Would it not regard the Secretary of State being able to intervene in the definition of a season as political interference? If the Government have had discussions with UEFA on this point, I would be grateful to know.
I do not think the noble Lord, Lord Mann, actually got round to speaking to his Amendment 153 in this group, which relates to modern slavery—such are the pitfalls of a miscellany—but I wanted to highlight that one and congratulate him on bringing it forward. I am sure all noble Lords would agree that everyone has a duty to prevent this abhorrent crime. I was very proud to work at the Home Office when my noble friend Lady May of Maidenhead brought through the Modern Slavery Act 2015, which has made large headway into cracking down on this abhorrent behaviour. Since then, both the Premier League and the English Football League have released an annual anti-slavery and human trafficking statement, as have all the participating clubs. As the Minister knows, I am wary of increasing the scope of the regulator, but I would be interested in hearing how she thinks this new regulatory regime will operate within the law that we already have to tackle modern slavery and what she thinks of the amendment from the noble Lord, Lord Mann.
I am grateful to the noble Lord, Lord Pannick, for his comments on football agents. Whether they are more or less popular than lawyers, I will leave to others to decide—and indeed whether the existing regulation that is brought about by UEFA and others he mentions is, in this case, sufficient and not a requirement for further regulation, as we see in some of the other behaviours in football. I leave all these, and the miscellaneous other issues that noble Lords have raised, to the Minister to respond to.