Football Governance Bill [Lords] (Fourth sitting)

Debate between Louie French and James Naish

Committee stage
Thursday 5th June 2025 Public Bill Committees

[Mr French]

The hon. Gentleman liked that.

At the heart of the Bill is the ambition to secure the long-term sustainability of English football clubs across the pyramid. That is a commendable—perhaps even noble—objective. However, plain as day, as we have discussed, it will increase costs for every single fan across the country. We need to know how much that cost will be. As the Government attempt to deliver that goal, we must not lose sight of a fundamental truth: regulation is not free. Every new obligation, every form to be filled and every audit to be passed has a cost, financial and operational, that ultimately lands at the door of our football clubs and is then passed on, I am afraid, to fans.

As I have said in previous clauses, many clubs, in particular those in the lower leagues, already operate on a knife edge and in certain circumstances on a shoestring budget. For them, even modest extra compliance burdens can pose fundamental, existential challenges. Those in the lowest leagues—the National League and below—would welcome the improved odds of, for example, perhaps being able to compete in the EFL. As things stand, however, the National League 3UP campaign has been ignored.

The National League clubs that I have spoken to are keen for the 3UP campaign to be included, because they believe that closing the gap on competition should be a conversation not just between the regulator and this Committee about closing the gap between the EFL and the Premier League—a constant theme of our discussion—but about closing the gap at the bottom of the pyramid. Clubs in the National League would have an increased chance of getting into the English Football League. Given the number of clubs in the National League that were previously in the English Football League, we can all understand why the campaign has grown in momentum among the National League clubs. For any Members who were not aware of it, that is the 3UP campaign.

That is not helping the financial sustainability of the clubs that are fighting hard to return via promotion to the Football League or to be promoted for the first time—those that have lofty ambitions to go further up the pyramid. Those in the National League that are, as a direct result of their situation, most impacted by some of the new bills that have been imposed by various actions of the Government, deserve to be able to see why they have those costs and who is causing them. The amendment gets to the heart of that.

At the moment, most fans have an owner they can point to—and blame, if they wish, for their financial failures, as well as their successes on the field. They can campaign to get them out, as Manchester United fans continue to do regarding the Glazer family, for example, or they can sing their praises from the rooftops, as Newcastle fans have done in recent months after their historic success on the pitch. However, this Government’s regulator will blur the lines about who has caused financial instability, because the actions of the regulator will not be as transparent as we believe they could be.

[James Naish]

I am conscious that we will have several more days of discussion, so I would be grateful if the hon. Gentleman could clarify exactly how this body would have been funded under the legislation of the previous Government. He keeps talking about the costs of the regulator under this Government, but how did he think it would have been funded under the previous Government?

[Mr French]

That is obviously not what this amendment is about. It is about transparency. It is not about the overall cost, but about the transparency of the cost. The hon. Gentleman asks about how things would have been funded before, but we have to accept that we are in different economic circumstances. A number of costs have impacted clubs already. I am talking about the cumulative impact of Government policy—the Minister has heard me say this in a number of debates, including in the debate on swimming yesterday—on clubs from the elite level all the way down to the grassroots level. The point is that there are now extra costs from the regulator, on top of the national insurance increase, which we think has probably been the biggest change, the changes to business rates calculations, which have negatively impacted a number of businesses, and wage increases. Hon. Members may or may not agree with those costs, but we are talking about their cumulative impact.

Because it is ultimately funded by the clubs, the regulator will increase those costs. The hon. Gentleman talks about how we perceived it would be paid for. The clubs will pay the costs of the regulator—that has not changed—but we are trying to get at the cumulative impact. We want transparency about that impact on clubs, including for Parliament, so that we, as hon. Members who represent constituencies around the country, can have informed debates about the impact on English football of the decisions that we make in this House. As Members of this House, it is not unreasonable to want to understand the impact of our and the regulator’s decisions. Whether or not hon. Members agree with the amendments, they make it quite clear that we are calling for transparency on the costs of the regulator.

Football Governance Bill [ Lords ] (Second sitting)

Debate between Louie French and James Naish

Committee stage
Tuesday 3rd June 2025 Public Bill Committees

[Mr French]

I must admit that I am surprised to get a concise answer from a Minister; I thank the hon. Lady very much. There are 42 employees and a number of those were already in roles in the Department. That is very important because it highlights the size of this regulator already.

[James Naish (Rushcliffe) (Lab)]

I used to advise businesses on their target operating models, so I understand how to build teams and structures. On what basis does the hon. Member think that the figure of 50 is correct? What work has he done to understand the different structures that will be required? How does he think the aims of the Bill can be achieved with a staff of 50?

[Mr French]

If the hon. Gentleman bears with me, I am about to answer that. The figure is based on conversations with the leagues and other regulators already in play. I will respond to the hon. Gentleman’s questions in the points I am coming to.

We have heard that the number of people employed is 42. Unofficially, before today, I was told that it would be 80. That is the rumour going around the football world, but we have clarity from the Minister that it will be 42. [Interruption.] That is based on conversations with clubs. That is what engagement is about. That is why we asked the question. We are not basing the figure on rumour; I have just asked the question. That number will include civil servants, of course, and, as we have heard, regulatory specialists, policy advisors, analysts, stakeholder engagement leads, public affairs professionals and legal advisors, all of them at considerable expense to the taxpayer in the short term, and at significant cost to football fans in the longer term, as costs are passed on. In our conversations, the industry shared concerns about the scale and cost, especially compared with how football currently operates.

The hon. Member for Rushcliffe just made a point about the size of the regulator. I do not think it is fair to quote someone directly when they are not here, or to quote an informal conversation, but I understand from a briefing that was given to the Lords, and a similar conversation that took place with me directly, that a gentleman very well-respected in football—who was key to this Bill—suggested that the work of the regulator could be done with several people. That was his expert opinion. When I suggest 50 people in this amendment, I am being very generous, given what the football industry believes the number should be, the costs and the fact that other regulatory bodies will still be involved in football.

[Mr French]

I respect the hon. Member’s comments, but I think that this issue is fundamental to the discussion. The Opposition are seriously concerned about the cost and scope of this regulator, and how that will impact both clubs and fans in football’s delicate international ecosystem, so this issue is pertinent to the point that we are trying to make. The number that we have reached was not plucked out of the air. We had discussions with people directly involved in running football to try to ascertain an appropriate number of employees for the regulator. People in football are concerned about how big this regulator has become, and how quickly, even before the chairman has his feet under the table.

[James Naish]

The shadow Minister says that one individual suggested that several people would be sufficient, yet he claims that the figure of 50 is not plucked out of thin air. I ask him again: what modelling has been done, how many departments would be involved, and how many people would be in each of those departments, so that he can credibly stand there and say that 50 is an adequate number?

[Mr French]

I am slightly confused. The hon. Member for Dartford is telling me that we should not dictate how the regulator works and how it manages staff, and the hon. Member for Rushcliffe is saying the opposite. We have suggested a cap, and I will be interested in the Minister’s comments on what that cap should be and how many employees she believes the regulator will need. That is important because we are passing a piece of legislation that is the first of its kind, and it will create extra costs for clubs that, as I am arguing, clearly will be passed on to fans. If the essence of the Bill is to protect clubs and fans, we need an honest, open conversation about how big the regulator should be. The Conservatives have tabled a sensible amendment that seeks to cap the regulator’s size in line with how other regulatory bodies in the sporting world work. That is the premise of our amendment. I would like to move on, because I am testing your patience, Sir Jeremy.

We are told that, once operational, the Government’s regulator will be funded through yet another statutory levy. That may sound benign but, in practice, it will be yet another financial obligation imposed on clubs, many of which, particularly in the National League and the EFL, are already stretched due to increases in other bills that we have already seen this year. Higher energy bills, national insurance, and employment costs around wages are real costs with which clubs are already struggling.

--- Later in debate ---

[Mr French]

I am getting used to being interrupted, Sir Jeremy. This is so thrilling that people want to escape as quickly as possible. Before the Division, we were highlighting that clubs will have no choice but to pass these additional costs from the regulator on to fans. As we have explained, we believe that a number of clubs are financially stretched, particularly as we go lower down the pyramid, although that is not always the case, as clubs’ finances differ.

We believe that this cost will go on to fans, by which we mean higher ticket prices and higher merchandise costs. Matchday programmes, concessions, streaming fees and even transport subsidies and loyalty schemes could be scaled back as clubs tighten their belt, and they will be required to tighten that belt even further. This is not just speculation; it is the economic reality that clubs are experiencing, according to their feedback, although I appreciate that economic reality is not always the Government’s strong suit.

This matters because, as those of us who still manage to watch our local clubs know, the cost of attending football matches has already become prohibitive to many families. The idea that we are creating a regulatory regime in the name of protecting fans while simultaneously driving up the cost of a matchday experience is not only a contradiction; it is laughable.

[James Naish]

What figure is the shadow Minister using for how much a single full-time employee would cost that leads to the total of 50 in this proposal? What figure is he using to say that this will be economically prohibitive for clubs?

[Mr French]

The structure of the regulator is addressed elsewhere in the Bill, so I will not drift too much because I have already been yellow carded by the Chair, to use a football term. However, we have made it quite clear that we are trying to limit the size of the regulator because we are already concerned, and that question about costs is one that I want to ask the Minister. I assure the hon. Gentleman that we will come on to this shortly.

The Opposition have been clear that we will not oppose the Bill for the sake of opposition, but like many fans and clubs up and down the pyramid, we are worried about how these bills will be paid. A regulator of this scale, with powers of licensing, enforcement, business model oversight, owner scrutiny, fan engagement mandates and financial analysis, does not come cheap, yet nowhere in the Bill do we see sufficient transparency or constraint on how big this body might grow to be, including how many people it may hire or how heavy-handed it may become. That is our concern regarding scope creep.

Let us not forget that the Football Association already exists, the EFL has its own monitoring tools and the Premier League already has fit and proper tests and financial regulation. This new regulator risks not only duplicating existing efforts but adding an entirely new layer of complexity, cost and compliance for clubs, particularly those already operating on a knife edge. The smaller clubs that are already struggling will, in a cruel twist of fate, be the clubs that suffer the most. When they are forced to divert resources away from their academies, community foundations or stadium improvements to pay for the regulator’s levy, it will be fans who feel it first and the Government who will deserve the blame.

Looking forward, what is the projected headcount of the football regulator over the next three years? What is its estimated operational cost in its first full year? How much of that cost is expected to be recovered from clubs? Will the Minister provide exemptions for smaller clubs or those in financial distress, or will this be another flat levy that hits the lower leagues the hardest?

Good governance in football is vital, but so is affordability, restraint and remembering that every pound extracted from the system is ultimately paid by someone—the fan in the stand, the father and daughter already paying £90 to sit in the upper tier of some Premier League clubs, the lifelong fan who travels to away games week in, week out, and the dedicated fans who create their own podcast to discuss their club’s trials and tribulations. There are lots of podcasts out there, and I could recommend a few. On a more serious note, they are the ones who will suffer, and they are the lifelines that clubs will lose. We are already seeing fans protesting ticket prices in the streets and the stands. We are concerned that the burdens from extra reporting will increase the cost for those fans.

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[Mr French]

Well, we will see. All jokes aside, I agree with my hon. Friend’s point. It would be highly unlikely and deeply unpopular if any member—or especially all of them—of that regulator was paid more than the chief executive, and it would add more to our cost argument.

[James Naish]

When looking at the operating model and how pay should be done, one would benchmark against equivalent organisations. What benchmarking has the hon. Gentleman done against the pay of other chief executives? The Prime Minister’s pay is not a good example for that particular type of role.

[Mr French]

There is no equivalent to the football regulator. It is the first of its kind. We cannot argue to fans that it is unique and everything else, but then say that it is the same as something else. If it is the same as something else, why are we doing it?

We have benchmarked the figure quite clearly—the hon. Gentleman may disagree; that is what voting is about in Committee—to the Prime Minister’s salary, which we believe is fair. It is fair to the taxpayers, who understand that someone appointed by the Government or by the board to run the independent football regulator established by the Government should not be paid more than the Prime Minister. That is fair and moral.

[James Naish]

This amendment is yet another example of plucking a random figure—although it is an actual figure, as has been referenced—and putting it in legislation, which is not best practice. That is why it should not be supported.

[Mr French]

I understand the point that the hon. Member is trying to make. We have had lots of attempts at muddying the waters today, but it is Government Members who will have to explain to their constituents and fans around the country why they believe that a regulator should be appointed that earns more money than the Prime Minister. We on this side of the Committee are happy to stand up and say very clearly that we do not agree that that should be the case.

We do not agree that those costs—which we have concerns about, as I have said in debates on previous amendments—should be passed on to fans, as the cost of the regulator ultimately will. That may not be the case for the clubs that have large billionaire owners, but we are talking about the whole pyramid all the way down to the National League. I fundamentally believe that it is our duty in this place to seek to limit the cost of the regulator to those fans.

--- Later in debate ---

[Mr French]

I appreciate the Minister’s comments, although I think they were more confusing than they were an answer to the questions. We have tried to be clear, and I do not mean this disrespectfully. I am not wilfully misunderstanding; I am asking a really clear question about the comparison the Government are making. What does the benchmark look like? That is not a theoretical question; we already know that someone has been appointed, and they used a benchmarking exercise to make that appointment. That is the point I am trying to make: a benchmarking exercise must have already been carried out, if the Government have done their due diligence in making that appointment.

[James Naish]

I make the point again: it is the hon. Member’s amendment that would insert a figure. He is lecturing the Government and saying that benchmarking should have been done, but his amendment includes a figure, yet he is saying that he has not done the benchmarking and that it is just a random figure.

[Mr French]

To use the Minister’s comment, I think that the hon. Member is wilfully misunderstanding. I have made it absolutely crystal clear that the political argument—what we believe and what the taxpayers and fans will believe—is that it is not appropriate for a regulator to be paid more than the Prime Minister, the No. 1 so-called public servant in the country. That is the benchmark in the amendment.

What I am asking the Government—the hon. Member is conflating this, I think deliberately—is this. What is the benchmark that they have already used to appoint somebody? That appointment—not of the chief executive, but of the chairman—has already happened. That is the point we are asking about: whether the Government have done a benchmarking exercise. They must have an idea of what the regulator looks like, yet we have had no answer to that question.

We on this side of the House will be putting fans first. We will be seeking to cap the size of the Government’s regulator, to ensure that it is nimble and light-touch, that it is not overburdensome and that it does not do what we know regulation can do in this country, which is to snowball and to create more jobs and more duties for itself. We will look to cap it, in the interest of fans and taxpayers.

Question put, That the amendment be made.