Football Governance Bill [Lords] (Fourth sitting)

Debate between Louie French and Melanie Onn

Committee stage
Thursday 5th June 2025 Public Bill Committees

[Mr French]

I thank my hon. Friend for sharing his experience of regulation more generally. He highlights an important point about growth, which we were trying to get at with our earlier amendment and which we have discussed again this afternoon. Unless the regulator has a clear growth mandate—as I said in the previous debate, I understand that the Chancellor is consulting regulators for growth ideas—it may not seek to stick to it, and it could therefore become obsessed with other issues and regulations. This amendment is not trying to alter what the regulator does; it is just trying to ensure that we have information on costs so that Members of this House can understand the impact. Again, I believe that is a valuable tool for us to have.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

The shadow Minister is talking about growth. Does he accept that growth has been included as a secondary duty in clause 7?

[Mr French]

I do accept that, but as we made clear in the earlier debate, we want growth to be included in the Bill as a primary objective. The hon. Lady has just said that it is a secondary objective, but why is it not a primary objective of the regulator to try to grow the economy of football? We have previously argued that it should be, and I do not want to rehash that whole debate, but that is the distinction that we are making. The hon. Lady quoted the secondary objective, but we have said that it should be primary.

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[Melanie Onn]

On that point, the fact that growth is in the Bill means that it is a clear obligation on the regulator. The expectation is that the regulator would then be obliged to consider the desirability of avoiding

“adverse effects on the financial growth of…English football.”

That seems perfectly plain in the Bill.

[Mr French]

I respectfully disagree with the hon. Lady. That is obviously her opinion, and we have made a counter-argument and point of debate, which is what this House is for. We believe that growth should be a primary objective. Before the break, we also outlined at length one of the risks of adverse impacts on growth, which was her second point. We have substantially highlighted the impact that English clubs being excluded from European competitions, or the national team being excluded from international competitions, would have on the growth of the game. We have made that argument quite clear. Government Members may not agree with those risks or the points that I have made, but we have been quite clear on why we believe that growth should have been included in the primary objectives.

I will return to the amendment, because I am at risk of getting a yellow card this afternoon. We believe that this Government’s regulator will blur the lines on who has caused financial instability, as the actions of the regulator are being kept behind closed doors unless this amendment is agreed to. Not only have the Government appointed one of their Labour donors as the regulator’s chair, as we have already heard, but they are now trying to deny English football fans the information to which they are entitled to judge for themselves the success of the Government’s regulator in delivering financial stability, or instability. For supporters, increased costs mean higher ticket prices, fewer community programmes and cutbacks to the very things that make their clubs more than just businesses. They are at the heart of the community, which I believe most people will agree with.

We have already seen the regulator begin to grow in size. While the Minister refused to confirm the number of staff that she expected her regulator to end up employing, she answered my written question after our deliberations in this Committee concluded, which I appreciate. The Minister confirmed that, as of 1 June, the shadow football regulator had 42 employees, 11 of which had previously been employed by the Department for Culture, Media and Sport, and 2 had formerly advised the Department. I make that point because the shadow regulator has already seen a 10% increase in headcount since the Minister in the other place answered a similar question back in January. We know that the Government are hiring more people, and we are still not clear on how big it will become or what the subsequent costs will be.

If that is the direction of travel, transparency on the cost burdens to clubs is not a nice-to-have but absolutely essential to understand how successful an impact the regulator is having. My amendment would introduce a simple but essential safeguard so that Parliament, clubs and, most importantly, fans could see in plain terms what this Government’s regulator was really costing. That scrutiny and transparency will encourage restraint, discipline and proportionality in the way in which the Government’s regulator operates. That, in turn, will help reduce its burden on clubs and thus make football more sustainable—I believe that was the point made by my hon. Friend the Member for Spelthorne in his earlier intervention.

We do not want to replace one form of financial instability with another, where well-meaning but poorly monitored regulation drives costs even higher, disproportionately affecting those least able to bear them. This is not about opposition for opposition’s sake; it is about delivering sustainable regulation that supports, not stifles, the game that we all cherish. For that, we need proper accountability of the regulator.

As I said on Tuesday, I do not believe that many people think that regulation has been done well in this country over the past 20 years. We can talk about whom we want to blame, but I argue strongly—this is not a party political point—that regulation has not been done well and that Parliament has devolved too much power to unelected people who are not held accountable for their decisions. I want to avoid that at this point in the Bill. We are setting up a new regulator—I am sure that will happen—so let us ensure that it is accountable to this House, that we do not make the same mistakes as in the past, and that we have accountability and transparency on cost and direction of travel.

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[Mr French]

The Minister has outlined clauses 17 and 18 at some length. We had a lengthy debate on clause 17 in relation to our amendment 101. We are naturally disappointed that the amendment, and the time limit that we seek for the provisional licensing, was not agreed to. However, in the interests of time, I will move on to clause 18.

Clause 18 sets out the process by which the Government’s regulator may grant the full operating licence to a club, which is a crucial stage in the proposed licensing regime, with significant long-term implications for the structure, stability and future of the English game. This clause is where the Government’s regulator transitions from assessing provisional eligibility to giving a formal stamp of approval for a club’s longer-term competition and compliance. However, the clause raises several questions that the Committee must interrogate, and that I hope the Minister will be able to answer—not least whether it achieves the right balance between regulatory assurance and operational flexibility.

Under the clause, the regulator may grant a full operating licence only if satisfied that a club meets the relevant conditions of eligibility. That is right and proper, and clubs should be expected to operate on a stable financial footing, meet appropriate governance standards and protect the game’s integrity. But I am concerned about the breadth and, in some respects, the open-ended nature of what those conditions of eligibility might come to mean in practice.

We must be alive to the risk of regulatory overreach, as the Opposition have highlighted, and we should all recognise that bad regulation is worse than no regulation at all. If clubs are to be subject to vague or ever-changing thresholds, with little recourse or clarity on what is required, we risk imposing a level of uncertainty that could deter vital investment, discourage long-term planning and undermine the very sustainability that the regulator seeks to ensure. That is why the Opposition will—as we already have done in Committee—continue to press for greater transparency around the costs and cumulative burdens that flow from the action of the regulator; and it is why we believe that the regulator should not have unfettered discretion to shift the goalposts without clear parliamentary scrutiny and approval. As I have said, we should not write blank cheques to a politically led regulator.

Another issue with the clause is timeliness. As we have explained, clubs will need to plan ahead, financially, structurally and operationally. If the licensing process drags on, it risks becoming a bottleneck and not a safeguard for clubs around participation. We tabled amendments that would ensure timely decision making on provisional licences, and the same principle must surely also apply to full licences. However, we appreciate the different context within which a full operating licence will exist. That is why we have not tabled an amendment to this clause with a specific deadline. We understand that full licences will take slightly longer.

Moreover, there is a danger that the full licence becomes a tool for undue influence. We have spoken about our concerns about the impact that that may have on the statutes of UEFA and FIFA—in the interests of time, I will not go into that again. If clubs feel under pressure to comply with this new licensing regime to be able to play in English football, there may be a concern about them breaching other regimes, such as UEFA and FIFA, and, again, they may fear expulsion from those competitions.

One club asked me this question, although it was a tongue-in-cheek comment, so I will not name them. If a Premier League club decided not to apply for a licence, would the Government look to exclude it? There is the risk that, if a club feels that it will not be able to compete in Europe, for whatever reason, it may choose what this Bill was originally intended to stop: the European breakaway league.

I am not sure that the club would do that, as it was a tongue-in-cheek comment, but what would happen if a club says, “We are not going to meet these conditions, and therefore we will not apply for a licence”? Would the Government or regulator be willing to kick that club out of the Premier League? Even though that question is hypothetical, we need to know where this might lead, because we are talking about a regulation that will have an impact. If the Minister can answer where she thinks that club might go, I would be particularly interested in that.

We are also concerned about the future interpretation of eligibility and how that may veer into what we believe to be subjective decisions, or where the Government’s regulator will take on new powers as it enters mission creep. As such, I would appreciate it if the Minister will confirm that there will be no demands, for example, on clubs to provide diversity quotas, net zero targets or enforced political campaigns, all of which stray beyond the regulator’s core remit of financial sustainability and good governance. Let us not forget that football clubs are not franchises, as they are in the American sport system. Our clubs are community institutions with long histories and unique identities. They are not all cut from the same cloth.

[Melanie Onn]

Would the shadow Minister consider the kick racism out of football campaign to be political activity that clubs and the regulator should not be involved in?

[Mr French]

I thank the hon. Lady for her intervention, but that is not the point I was making. I am talking about quotas, which is a slightly different thing. We do not think that the regulator should be insisting on quotas, and that is very different from Kick It Out, which has made incredible progress for football over the years. The hon. Lady has raised a very different point, so I will not go down that rabbit hole.

I am sure that the Minister would agree that what is best for Barnsley FC is not necessarily best for Bromley FC or Bristol Rovers. Each club has unique characteristics and should be treated as such. However, we feel that the Bill, as drafted, could lead to clubs being lumped in the same direction. We believe in the equalisation of treatment, but each club should not be treated exactly the same when there are clear differences, whether that be in league structures or financial positions.

We are concerned about parts of clause 18, but we believe that it is an important part of the licensing structure that must be implemented with care, proportionality and consistency. It is essential that the Government’s regulator operates with discipline, sticking to those statutory objectives, resisting the temptation to micro-manage and always keeping front of mind the importance of stability, continuity and respect of football’s unique heritage. We support the principles of the clause, but I would appreciate it if the Minister answered some of my questions about what may come in the future and what the Government would do if a club decided not to apply for a licence.

Football Governance Bill [ Lords ] (First sitting)

Debate between Louie French and Melanie Onn

Committee stage
Tuesday 3rd June 2025 Public Bill Committees

[Mr French]

The hon. Gentleman was chuntering, but I did not hear what he said so I cannot comment on it. The amendments tabled in my name are important to ensure that there is transparency, and to ensure not only that the regulator has independence in everything that it does but that the perception of its independence is not brought into question, because that is important.

I will talk through the grouped amendments. Amendment 117, to schedule 2, would insert that :

“Any political interests of, and political donations made by, the prospective chair of the Board, must all be declared as part of the appointments process, and published before the chair’s pre-appointment hearing with the Culture, Media and Sport Select Committee.”

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

Will the shadow Minister propose changes to the Cabinet Office’s governance code on public appointments, which is where this decision sits?

[Mr French]

I am not clear why the hon. Member disagrees with the point that I am making about transparency of political donations.

[Melanie Onn]

I was not disagreeing or agreeing. I was simply asking a question.

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[Mr French]

As I said, I am not sure what the argument is against the point that I am making, which is that donations should be made very clear.

[Melanie Onn]

I think it is important to understand whether this is a general point of principle, as the hon. Member acknowledged in his comments about the previous Government’s decisions on the BBC, or something specific and unique to the Bill. He cannot have it both ways.

[Mr French]

I am not trying to have it both ways. I am talking about football and the Bill in front of this Committee. I have answered questions openly and willingly, where others might have ducked them.

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[Mr French]

I recognise what the Minister is saying, and I understand the comparison she is making, but my understanding is that, if a Minister refers to a letter between the Government of the day and an international body that has important structures, there are rules within “Erskine May” that would allow—and sometimes force—the Minister to table that letter in the House of Commons Library for all Members to see, so I would urge the Government to do that.

Sir Jeremy, because this is very important, I seek your advice on whether, now that the Minister has referred to that letter, it should now be published under the rules of “Erskine May”. Can the Clerks clarify that, because the Minister has referred to it in her comments? It is in “Erskine May”—I checked on Second Reading—but I just want the guidance of the Clerks on whether that letter should now be published so that Members of this House can have an informed discussion about the risks to English football linked with the independence of the football regulator, because that is critical to all the work that we are going to do today.

[Melanie Onn]

I wonder whether the shadow Minister could indicate in which section of “Erskine May” that information can be found. If that applies to this letter, it will apply to all letters to previous Governments as well.

Football Governance Bill [ Lords ] (Second sitting)

Debate between Louie French and Melanie Onn

Committee stage
Tuesday 3rd June 2025 Public Bill Committees

[Max Wilkinson]

The shadow Minister makes a persuasive point, but I still do not understand why it is right for politicians to say, before a regulator has even been set up, “You may have no more than x employees.” I shall end there.

[Melanie Onn]

It is a pleasure to serve under your chairmanship, Sir Jeremy. I want to address some of the points about the costs. I fear that as we discuss each amendment we run the risk of disappearing down quite a few rabbit holes and losing sight of the Bill’s principle and purpose.

Everyone will have received the submission from Fair Game, a collaboration among the smaller clubs that are concerned about the football pyramid as a whole. Fair Game’s biggest concern is not the potential for runaway regulator costs, although it is important that the costs are proportionate. Nobody is saying, “Let’s have a cast of thousands,” but the shadow Minister has failed to provide any workings-out for his number in respect of the scope and size of the organisation.

The fundamental issue for clubs is not the costs of the regulator and the economics of the bureaucracy. The issue for them is how little the smaller clubs get from broadcasting and attendance, and the fact that the football pyramid is entirely broken. If we fail to remember that in each debate, we will fail to assess and address the points that are being made up and down the country. The shadow Minister keeps referring to the costs of premiership clubs, but the majority of areas around the country do not have premiership clubs; they have clubs in the Championship and below. Those clubs are struggling to make ends meet and to keep going year by year, and they are seeing extraordinary disparities in the entirety of the financial system.

It is worth referring to the disproportionate spread of the costs. The broadcasting deal controlled by the Premier League is worth £3.2 billion, of which 88% goes to Premier League clubs and 70% goes to clubs in receipt of parachute payments. The remaining 5% is then split between the next 138 clubs. I would say that clubs’ futures and costings rest on issues that relate to that, not on the costs of setting up a regulator. If we continue with the argument of not wanting the associated costs, we will not have a regulator. We cannot have one free. It comes down to the fundamental question of whether we do or do not want one. The Opposition currently seem to be going down the route of saying, “We don’t want one.”

[Mr French]

The hon. Lady is missing the point of what I said. By adding tens of millions of pounds, which I suspect will end up being the cost of the regulator—the Minister will be able to explain the figure—we are not reducing the cost for clubs but adding further costs. We will get on to distribution—

[Melanie Onn]

I thank the shadow Minister for that intervention.

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[Mr French]

We will come to the distribution of media rights and so on, to which the hon. Lady referred, but that is separate from the problem that we are talking about, which is that if the regulator is too big, it will add to the costs and there will not be as much money to go down the pyramid.

[Melanie Onn]

The shadow Minister might be surprised to hear that I understand perfectly well what he said, as I have understood on all the previous occasions on which I have intervened. I am sorry that he does not seem to recognise that I do.

If the clubs had more money in the first place, because the structure of the pyramid and the flow of the finances were right, some additional cost proportionate to the size of a club would not be prohibitive to that club. Therein lies the problem: we fix the issue with the pyramid and then everything else will flow from that, and we can do that only with the existence of a regulator. The regulator cannot exist in isolation. It must have some supportive executive functions to be able to fulfil its roles and responsibilities in this weighty Bill.