Football Governance Bill [ Lords ] (Fifth sitting)

Stephanie Peacock Excerpts

Committee stage
Tuesday 10th June 2025 Public Bill Committees

[Jon Pearce]

Absolutely. As a Derby fan, for once I can probably agree with a Notts Forest fan. It is vital that fans have a say. Fans will always want their clubs to do better and to drive forward, and there will be cases where it is right for a club to move; but where there is malign interest, the fans need to have the ability to keep their stadia and clubs together.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)]

It is a pleasure to once again serve under your chairship, Sir Jeremy. I look forward to day three of Committee. I thank my hon. Friend the Member for Sheffield South East for the amendments; I am never fed up of hearing from him and I know he is very passionate about this issue.

The Government recognise the intent behind the amendments to ensure that football continues to be played at a club’s home ground. The Bill already has a number of strong protections to safeguard home grounds against reckless sales or ill-thought-out relocations. I will respond to a couple of points made in the debate and will then outline why we will not be accepting the amendments.

Fan consultation was mentioned. Clubs must consult their fans on any plans to change or move their home ground as per the fan engagement threshold condition. The shadow Minister, the hon. Member for Old Bexley and Sidcup, made an important point about how it will sometimes be necessary for clubs to relocate their home ground, for a number of reasons, such as the ground being too small, facilities no longer working or the ground being sold. We recognise that we need flexibility in that approach, but fans will have a say.

For clubs that do not own their stadium or have already sold the stadium, due to the scope of the Bill and existing property law, it is not always possible for home grounds that are not owned by the club to have the same protections as home grounds that are. This point was recognised in the fan-led review. However, alongside the fan engagement requirements, there are also protections under the national planning policy framework for sports grounds and existing assets of community value, and there is work under this Government, as well as an ongoing Law Commission review of security of tenure that has the scope to address sports grounds. Those powers will all work alongside the soft powers and levers of the regulator to look to protect home grounds, as far as possible.

My hon. Friend the Member for Sheffield South East also referred to the fact that leagues have requirements for tenure, and clubs are prevented from entering the league if they do not meet them. Leagues also have enforceable standards regarding the quality of the grounds. These vary from league to league and can get into the specifics of grass length on matchdays, for example. Given those requirements, we do not feel it is necessary for the regulator to duplicate rules. Instead, it will work alongside the leagues.

It should be noted that clubs may not own their home grounds—I have responded on that point—and therefore they would require the agreement of their landlord to meet the additional licensing requirement we believe that the amendments would lead to. These amendments would place a requirement on clubs to guarantee something that may not be within their control, as well as duplicating pre-existing league requirements for home grounds.

We recognise that the fan-led review recommended that the Government explore the viability of introducing security of tenure property rights for football clubs. I hope I have explained why we do not feel we can do that.

The Law Commission is now in the process of reviewing the Landlord and Tenant Act 1954, including an assessment of security of tenure for all commercial properties, including football clubs. Following the review, the Ministry of Housing, Communities and Local Government will consider the recommendations and publish a full response.

For those reasons, I am not able to accept my hon. Friend’s amendments and would ask that he withdraws them.

[Mr Betts]

I am still not quite sure why my amendments would cause so many problems. I understand the difficulty where a club does not actually own the ground but leases it, but the amendment is about security of tenure. There does not have to be ownership; it could be a secure lease, as the English Football League requires, for a 20-year period. That is implied by the amendment.

I was not quite sure what the Minister was saying about how the review by the Law Commission and implementation by MHCLG Ministers would secure the position for football clubs, and what else is being looked at in terms of the planning framework. Is she able to say any more on those points to get on the record what further safeguards might be in place?

[Stephanie Peacock]

On the point in the amendments about 20 years, we appreciate that not all the leagues go that far, but we think that the point is addressed by the league rules. On the consultation by MHCLG, it might be helpful if I ask my counterpart there to write to my hon. Friend and to share that letter with the Committee, because that ongoing work falls in that Department.

[Mr Betts]

The Minister often completely convinces me—on this occasion, she goes a little way towards being convincing. I want to read what MHCLG is going to say. In the end, it is not how we do it, but what we achieve in terms of the safety and security of grounds for the fans. That is what this is about. If what MHCLG is going to do moves us in that direction, as the Minister indicates it will, I am happy to await that correspondence from it before pushing this further. I hope that we can get a response from MHCLG Ministers before Report—if the Minister could encourage them to write in that time period, it would be helpful.

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[Stephanie Peacock]

It is a disappointment that I am not able to convince my hon. Friend fully. Not all of what he asks is in my gift, but I commit to the Committee that I will do my very best to get a response from the Department before Report, and if possible earlier.

[Mr Betts]

On that basis, with the Minister going as far as she can this morning, I am happy not to press the amendment. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Stephanie Peacock]

I will begin with a couple of brief points in response to the shadow Minister. However, as Sir Jeremy has just outlined, some of the shadow Minister’s points relate to schedule 4 more broadly, which falls under group 38, and the points on fan engagement fall under group 48. I will make some quick comments, but I am happy to take some points away and elaborate further when we come to those groups.

The shadow Minister asked a specific question about what constitutes “adequate” and “effective”. The Bill is intentionally designed to allow for each club to have its own approach to fan engagement. That is why a specific form of fan engagement is not mandated in order to meet the benchmark of adequate and effective. Instead, we expect that the regulator will look at a number of factors to assess fan engagement at clubs, and publish guidance for clubs on what will be expected. Across all of that, the regulator will look to uphold proportionality, taking into account the size and make-up of each club and what is appropriate. We will revisit those issues when we move on to groups 38 and 48. Of course, the debate on ticket pricing has been well rehearsed. This Government added an obligation to consult fans on ticket prices, which will strengthen the fan voice on that issue.

Amendment 104 seeks to add a requirement for a club to consult fans on any political statements or positions that it makes or takes, and new clause 16 seeks to mandate fan approval prior to any political statement or political activity being made by the club, its players or staff. It is not the place of a statutory regulator tasked with financial sustainability to limit or add additional approval processes for political speech or action. Clubs and leagues here and abroad take positions on a variety of issues that could be deemed political, and that is their right.

However, it is not appropriate for an independent statutory regulator to take subjective positions, or opine on the positions of others, in the same way—especially not a regulator tasked only with a tight mission of financial sustainability, to which political statements bear no relevance. It may be that clubs wish to consult their fans in this regard as part of their regular fan engagement. We would not expect the regulator to have any issue with that, but it is not something that it will require of clubs.

The Bill is intended to ensure that fans have a voice in key decisions regarding their club, but we must ensure that this is proportionate. That is why we have not listed every possible issue on which clubs should engage their fans in minute detail. We also do not want to inhibit the free speech of players or any representatives of the club. It is also notable that many sporting personalities have used the attention that the sport gets to protest relevant issues that concern them. We do not want to inhibit the free speech of any of those individuals.

[Max Wilkinson]

Is the Minister concerned about inhibiting the free speech of Members of the House of Lords, for example Baroness Brady, who made significant and very valuable comments in the debate on the Bill in the other place, and then repeatedly made similar statements in the press and other media? She is, of course, a representative of West Ham and the Conservative party, as was noted by the hon. Member for Portsmouth North. Would we seek to retain her freedom of speech and freedom of expression by voting down new clause 16?

[Stephanie Peacock]

The hon. Gentleman puts his point on the record. We had a full debate in the other place, in which many Members took part.

Ultimately, the amendments have no relevance to the regulator’s purpose and will not help it to deliver its objectives. Rather, they would serve only to stifle freedom of speech. For those reasons, I ask the hon. Member to withdraw them.

Question put, That the amendment be made.

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[Mr French]

I thank my hon. Friend for making that point. I must admit, as a long-term football fan, that I have never heard a player say that he kissed the crest of his club when celebrating a goal. The footballing term is as accurate as the legal one, as he highlights.

This may seem a modest amendment, but it speaks to something bigger: the importance of precision, respect for history and an understanding of football not just as a product but as a tradition. If we are going to regulate the game, let us do it properly with the right words and the right respect.

[Stephanie Peacock]

The hon. Member’s amendment follows the extensive debate regarding heraldic terminology in the other place. I can reassure him that the Government have worked closely with the College of Arms to ensure that the term “crest” is used consistently with heraldic law, and with the FA to ensure accuracy and cohesion with industry norms, as the term “crest” is the key term within its existing heritage rules. The Government amendments made in the other place make sure the legislation remains in step with both the FA and heraldic law, and that is in addition to changes to the explanatory notes, to further clarify the point.

Although the word “crest” is used colloquially in the industry, “crests” have a very specific meaning in heraldic law. Crests can only be granted by the College of Arms and only a select few clubs have been granted one. For that reason, the legislation refers to crests, but also needs to capture other clubs and circumstances. That is why the Bill uses “emblem”.

When making these changes, the Government explored the use of “badge” instead of “emblem”. However, it was felt that “badge” would risk unintentionally only capturing the image on shirts. In examples such as Arsenal or Liverpool, the shirt features only one element of the club’s emblem, such as the cannon or the liver bird. In those instances, “badge” might capture only those elements and thereby not deliver on the policy intent of protecting the heritage associated with the entire emblem. Given those comments, I ask that the hon. Member for Old Bexley and Sidcup withdraw the amendment.

Question put, That the amendment be made.

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[Stephanie Peacock]

Schedule 4 sets out the three threshold requirements—financial resources, non-financial resources and fan engagement—that clubs will have to meet in order to be granted a full operating licence. As I set out last week, to apply for a licence, a club must submit a business plan and a personnel statement. These are basic requirements that any club should be able to complete. As I have made clear, the regulator will support them with their applications wherever needed.

Before discussing the requirements for a full operating licence, I would like to correct a point I made last week regarding the hypothetical scenario where a club is not granted a provisional licence. I want to clarify that once a provisional licence is in force, a club must have a licence to be able to play in a specified competition.

As I have set out, to receive a provisional licence, a club must submit a business plan and a personnel statement. We think these are basic requirements that any club should be able to complete, and the regulator will support them with their applications where needed.

[Lincoln Jopp (Spelthorne) (Con)]

The Minister mentioned the two criteria of the business plan and the personnel statement. I thought from our discussions last week that giving the regulator any form of information that the regulator so requested was an additional condition.

[Stephanie Peacock]

The two I mentioned are the basic points. The regulator has the ability to ask for further information should they want it. I think I gave the example that if the regulator is unsure about the source of funds, or whether there is enough, it could ask for more information. That will be at the discretion of the regulator—we had a well-rehearsed debate on that point last week.

We think that the requirements for a provisional licence are basic requirements that any club should be able to complete. As I was really keen to stress in the debate last week, the regulator will be keen to work with clubs to do everything it can to help them to meet those requirements.

The regulator needs to be satisfied that a club will be able to meet the mandatory licence conditions and duties on clubs once it has been granted a licence. This is a forward-looking “would comply” test. The expectation is that the provision of information and documentation, as well as the engagement with clubs as part of the application process, will be sufficient to satisfy the regulator. It should be straightforward for all clubs to obtain a provisional licence. Once they are in the regulatory system, a club will have time to improve standards up to the necessary requirements for a full licence, with the support of the regulator as needed.

[Mr French]

One of the points we were slightly unclear about when we had the discussion of provisional licences before was what would happen if a club decided it did not want to apply for a provisional licence. There are several clubs that are very publicly concerned about the regulator. What would happen if they were to form, say, a union and go against the regulator and refuse to apply for a provisional licence? How would that work in practice? Would they be kicked out of the league?

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[Stephanie Peacock]

The Government envisage that licence refusal or the revocation of a licence would be in extreme circumstances, but there will come a point when the regulatory system switches on and a licence will be needed in order to play. That is the point that I am keen to clarify. Yes, ultimately a club can be stopped from playing if it does not apply for a licence, but I stress that, with the provisional licence, it does not have to be meeting it; it has to be willing to meet it.

The regulator will do everything it can to work with clubs, because it is in no one’s interests for a club to be unable to play—that would be completely contrary to the purpose of the Bill. The purpose of the Bill is to improve club sustainability once the regime is in force. There must be a consequence for extreme cases, which is the point that the shadow Minister is making, but the club must be given every opportunity to meet the standards if it has failed to do so. Once a club is licensed, the regulator will have a range of other escalating enforcement tools. We will come on to enforcement, so I will not elaborate on that now—I do not want to test your patience, Sir Jeremy.

I turn now to the threshold requirements in schedule 4. There are three main areas of the regulator’s licensing regime that build on the freestanding duties in the mandatory conditions. Meeting the threshold requirements will mean that the regulator is satisfied that the club can currently operate sustainably in its financial, non-financial and fan-engagement areas and will continue to do so.

Although the threshold requirements are principles set in legislation, what each club must do to meet the threshold will not be the same. For example, what constitutes appropriate financial resources for a Premier League club will be very different to a League One club. A club may already meet the threshold requirements, for example, through naturally good operations or by complying with competition laws. In such cases, the regulator will not need to directly intervene. But if not, the regulator can apply discretionary licence conditions to bring the club up to the required threshold, which was the point that the hon. Member for Spelthorne referred to.

The structure will allow for a proportionate, light-touch system, with requirements tailored to clubs. The threshold requirement for financial resources means that clubs need an appropriate level of financial resources to support their long-term financial sustainability. The regulator will be able to consider any relevant factors to determine whether the club’s financial resources are appropriate relative to its circumstances and the risks it faces. For example, that might include which competition the club competes in, its financial relationship with its owners, and the wider economic context that it operates in. In particular, the regulator should take into account the club’s financial plan, and its contingency plan for dealing with financial shocks.

In essence, a club must have the financial resources to match the business it is operating—and plans to operate. If a club does not have the finances to back up its plans, or does not have plans in place for how it would manage foreseeable risk, it would need to do one of two things: either demonstrate that it has access to the necessary funding, or reconsider its plans and risk appetite. If it does not, then the regulator can impose discretionary licence conditions to bring the club’s finances back in line with its operations and risk level.

For non-financial resources, a similar threshold requirement and process applies. Non-financial resources could include things such as internal control systems and policies, as well as the information and people that a club has available to it. Although not financial in nature, these are important resources for any well-run club and need to be adequate. When assessing whether these resources are appropriate, the regulator might consider the skills and experience of senior managers, its plans, and its corporate governance arrangements.

The financial and non-financial resources of a club both need to be appropriate. For example, a club needs to have the financial means to back up its plans, and on the non-financial side it needs to have a contingency plan and risk-management processes to mitigate potential financial shocks.

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

Is it the Government’s expectation that financial and non-financial resources will be proportionate to the size of the club?

[Stephanie Peacock]

My hon. Friend makes an important point; it will be proportionate. I have met with all the leagues a number of times, and this was of particular concern to the National League. It will be proportionate, and the regulator will take that approach when dealing with the different clubs and leagues.

[Mr French]

I appreciate the Minister’s comments about proportionality; we will look to review that as the Bill goes forward. One question I have is about how the regulator will interact with the existing rules. The most obvious ones that come to mind are the financial fair play rules that are already in existence in the Premier League. What analysis of, and crossover with, the existing league investigations and restrictions to clubs will there be?

[Stephanie Peacock]

Those will be an issue for the leagues; where the leagues have rules, clubs will continue to comply with them. That is not something that the regulator will be involved with. Where there are league rules, that is for the leagues to enforce. I am happy to write to the hon. Gentleman to outline that further.

[Mr French]

If the Minister could outline that further, it would be really helpful. At the end of the day, we are keen to ensure that there is no confusion in the regulations for clubs, nor any duplication of purpose for the regulator. We would like to understand how that will work in practice, and I would appreciate that in writing.

[Stephanie Peacock]

I will give way to the hon. Member for Spelthorne.

[Lincoln Jopp]

I am sure that the Minister realises that one of the variants in a club’s business plan is whether its matches are selected for being televised. It is an incredibly haphazard process and difficult to predict, because they are decided within season. What guidance will the Minister give, as the appointer of the regulator, as to reasonable assumptions in the business plan regarding expected television revenue in season?

[Stephanie Peacock]

I think that it is an issue for the leagues, but I will happily write to the hon. Gentleman. I will check that point, but I am pretty confident that it would be left to the leagues. It is similar to what they deal with now. I will write to the hon. Members for Spelthorne and for Old Bexley and Sidcup further to their points, because it is helpful to get clarity in writing. Where there are league rules, they are for the leagues to enforce, but I will add further detail in writing, if that is helpful.

I would like to move on to the final point, about the requirement for clubs to adequately and effectively consult and consider the views of fans when making decisions relating to certain specified matters. Those relevant matters are listed in the Bill and cover key “off pitch” decisions, which the fan-led review highlighted as important to fans across specified leagues. The Government have made it explicit that that will include ticket pricing, as mentioned already, which is an issue of importance for many fans.

The threshold requirement is designed to work in tandem with the fan consultation mandatory licence condition. Through that condition, all clubs must regularly consult with a representative group of supporters to discuss the relevant matters listed in the Bill. That must be in place by the time a club is granted a provisional licence. Appropriate fan engagement will look different at every club and will partly be based on the size and complexity of the club’s fanbase, as I touched on in my earlier contribution.

[James Naish]

This point is slightly tangential, but it is related to fan engagement. England are playing Senegal in Nottingham later today. With the support of the FA, we have run a competition for primary and secondary school children to design a new England shirt. Would the Minister be happy to congratulate Albie, Dylan, Joshua and Mikey on their contributions?

[The Chair]

Order. That is not slightly tangential; it is very tangential. Just a brief answer, Minister, and then we must return to the schedule.

[Stephanie Peacock]

With the indulgence of the Chair, I will speak to the hon. Gentleman after today’s sitting. I would like to write to those who took part in such a wonderful competition.

I would like to complete my remarks by talking briefly about the threshold requirement, which has been designed to allow the regulator to recognise the inherent variation between clubs, while ensuring that standards are raised where necessary. It also allows the regulator to impose discretionary licence conditions on clubs relating to fan consultation.

Fans are the foundation of any club, and putting in place a supporter engagement threshold requirement recognises that they must be consulted on key decisions that affect their club. The Government have also looked to protect fan views, even in the worst-case scenario of a club entering administration. That includes the addition of a requirement to continue taking the views of fans into account when making decisions in insolvency proceedings, as long as the club retains the power to make decisions about the relevant matters.

[Mr Betts]

On a general point, when we talk about fans and fan groups, who defines who they are and the relevant ones? That is a really important point. Coming back to our club, Sheffield Wednesday, we have more than 20 different fan groups. That is also true of other clubs. Talk to the EFL, because it often struggles to engage or know who actually represents fans, as opposed to two or three people who have got together to name themselves as a group. How are we going to deal with that? As fans become an integral part of the process, who decides who the relevant groups are?

[Stephanie Peacock]

I appreciate that point. We will come on to discuss that in relation to schedule 5, and I will give a fuller response then.

Question put and agreed to.

Schedule 4 accordingly agreed to.

Clause 19

revocation and cessation of operating licence

[Mr French]

I beg to move amendment 106, in clause 19, page 13, line 19, at end insert—

“(c) inviting the club to make representations about the proposed revocation, and

(d) specifying the means by which, and the period within which, such representations must be made, which must be a period of not less than one month beginning with the day on which the notice under subsection (3) is given.”

This amendment allows clubs to make representations about the proposed revocation of their operating licence.

Clause 19 concerns the revocation and cessation of an operating licence granted to football clubs. That is understandably a crucial provision that goes to the heart of how the Government’s new regulator will exercise its most serious power, the ability effectively to remove a club from the regulated football pyramid by taking away its licence to operate. Let me clear from the outset that we support an independent regulator that can intervene when standards are seriously breached but, as with all powers of this kind, the devil is in the detail. Our task in this Committee must be to ensure that the regulator’s powers are proportionate, transparent and accountable.

Clause 19 provides that the regulator may revoke a licence if the club in in breach of licence conditions or if there are grounds to believe that the licence should never have been granted. In principle, that is entirely reasonable, but the consequences of revocation, for clubs, fans and communities, are potentially devastating. This is not the revocation of a licence to sell alcohol or to host events late into the night; it is the revocation of a licence to participate in the life of a community—in many cases, the cultural soul of a town or city. That power should not be exercised lightly, so I must raise several matters with the Minister.

First, what thresholds and safeguards are in place to ensure that revocation is used only as a last resort? Will the Government’s regulator be required to consider less draconian alternatives—such as conditional compliance periods, fines or a change in ownership—before resorting to the total revocation of a licence? Secondly, what procedural protections exist for clubs facing this threat? As it stands, there is no right of appeal, which is why I tabled amendment 106, which would allow clubs to make representations about the proposed revocation of their operating licence.

These are serious matters. The Government’s regulator is empowered to act in the interests of the game and to uphold high standards of governance, transparency and financial responsibility. But with such powers must come robust safeguards, and that is where the clause as drafted falls short. As it stands, there is no explicit requirement for the regulator to notify a club of its intention to revoke the licence, or to invite the club to make representations, before such action is taken. In effect, the regulator could move straight to revocation, without a formal process that allows the club to defend itself, explain its actions or offer remedial steps. That is not due process, it is not natural justice, and in any other regulated sector such an approach would be wholly unacceptable.

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[The Chair]

The hon. Gentleman was sneaking slightly into clause stand part territory.

[Stephanie Peacock]

As you say, Sir Jeremy, we will speak in detail about the revocation or suspension of an operating licence when we debate clause 19 stand part, so I will save my detailed remarks for then.

To respond directly to the shadow Minister’s questions, there is an appeals process, and clubs can make representations; I will outline how. I thank him for his amendment, but the Bill already provides sufficient opportunity for a club to make representations ahead of its provisional licence being revoked. If a club persistently fails to meet the test for a full licence, clause 18(4) requires the regulator to give it notice inviting it to make representations.

There is a high bar for the revocation of a provisional licence under clause 19. The regulator must be satisfied of three things: first, that the test for a full operating licence is not met; secondly, that the club in question has persistently and without reasonable excuse failed to take reasonable steps to meet the test; and, finally, that there is no reasonable prospect of the club meeting the test within a reasonable period, even if it is given more time. In the unlikely circumstance that that high threshold is met, clause 18 sets out requirements to notify the club and allow it to make its case one last time. Specifically, if the regulator is minded to revoke a club’s provisional licence, it must give the club notice explaining why and invite it to make representations.

Only after that, if the regulator is still convinced that there is no reasonable prospect that the club will obtain its full licence, even given an extension, it can revoke the club’s provisional licence. In every case, the club will have been given adequate opportunity to make formal representations on the issue, in addition to the informal constructive engagement that we expect the regulator to have with the club regularly throughout this period. It is not necessary or proportionate for the club to be given another opportunity to make further representations as the amendment proposes.

If, after all that, the club believes that the regulator has taken the wrong course of action, there is further recourse through the appeals process. The club will be able to request that fresh decision makers at the regulator reevaluate the decision through an internal review. Alternatively, the club may appeal directly to the Competition Appeal Tribunal. If the tribunal decides to hear the appeal, it will do so on the merits of the case, so it will reconsider the evidence and may substitute its own decision for that of the regulator; it may, therefore, reverse the decision to revoke the club’s licence. That is another way that the regulator can be held to account and its decisions can be scrutinised. For those reasons, I ask the hon. Gentleman to withdraw his amendment.

[Mr French]

The Minister has outlined the initial process before revocation is determined by the regulator. As I explained in my lengthy speech, which I will not seek to repeat, the amendment would give clubs a say if they believed a decision reached by the regulator was wrong. The Minister was clear about the tribunal approach if a club is not happy with a decision, but as I have outlined previously, my fear is that clubs will end up spending more time in court than they will focusing on the pitch and on the game. The official Opposition believe that an appeal process at that point would be more beneficial than a legal route.

[Stephanie Peacock]

As I said, clubs can make representations to the regulator and ask the regulator to look again, and beyond that there is the appeals process. As with all aspects of appeals process, the key considerations are the expertise of the judiciary, the tribunal’s experience and familiarity with the policy, speed and cost. We think the Competition Appeal Tribunal is the best option for balance. It is an internationally well-respected tribunal which offers time and cost-efficient options, with flexible case management to expedite urgent cases and bring in appropriate expertise. We believe that that avenue and the internal review process make adequate provision in the Bill and that the hon. Gentleman’s amendment simply is not needed.

[Mr French]

I thank the Minister for that lengthy response. To be blunt, I disagree, and rather than delay the Committee any longer, I will press the amendment to a Division.

Question put, That the amendment be made.

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Question proposed, That the clause stand part of the Bill.

[Stephanie Peacock]

Clause 19 details revocation of a club’s provisional operating licence for failing to progress to a full licence, and a licence ceasing to have effect. For the revocation to occur, the regulator must satisfy itself of three things: first, that the test for a full operating licence is not met; secondly, that the club in question has persistently and without reasonable excuse failed to take reasonable steps to meet the test; and finally, that there is no reasonable prospect of the club meeting the test within a reasonable period, even if given more time. The regulator should engage with the club throughout this period. We expect that, through constructive dialogue, a solution can be found that avoids this drastic step in all but the most serious of cases.

The regulator must notify the club of its decision and provide its reasoning. Revocation must not take place before the end of the current season, to reduce as much as possible the impact on ongoing sporting competitions. A licence automatically ceases to have effect only when a club stops operating a team in specified competitions, the most likely cause being that the club is relegated from the specified competition and is therefore no longer in scope of the regulator.

[Mr French]

I am trying to get clarity. Again, I will happily accept it in writing if the Minister does not have the answer today. Waiting until the end of the season before revoking a licence is entirely sensible, but what would that mean for relegation and promotion? For example, if a club is mid-table and the regulator decides its licence should be revoked, that will have a direct impact on the competitive nature of the league. Has any thought been put into whether, for example, that may mean only two teams are relegated that season, because one has lost its licence? How might it work in practice?

[Stephanie Peacock]

Where possible, we want to reduce any impact on ongoing sporting competitions. The hon. Gentleman presents me with a hypothetical scenario. I think it would be best if I respond in writing to him.

Regarding the circumstances when a licence automatically ceases to have effect, it will only happen when the club stops operating a team in specified competition. The most likely cause of that is a club having been relegated and therefore no longer being in scope. I commend the clause to the Committee.

[Mr French]

I will not rehash the debate we have already had on the amendment. We were seeking greater transparency and a greater say for clubs at risk of losing their licence, which, as I have explained, is the ultimate sanction and would cause enormous damage to clubs and the communities in which they operate through job losses, and impact on the game and on fans. I would appreciate the Minister giving more clarity on how this will work in practice. These situations are hypothetical, but realistic, and would have serious consequences for not just the individual clubs, but the leagues and how they operate.

We believe strongly that promotion and relegation should be based on competition on the pitch. However, in the extreme example of a club breaching the licence so significantly that it is revoked, which might more realistically happen at the lower end of the pyramid, we need to have a greater understanding of what that means for relegation. All clubs deserve transparency in that regard. We have seen much speculation in recent years around change of ownership—I will not mention the clubs involved as some of the legal cases are ongoing—what that might mean for relegation and the significant financial consequences it may have for other clubs. It would be greatly appreciated if the Minister provided guidance on that in writing so that all Members can have a greater understanding of how it will work in practice.

[Baggy Shanker (Derby South) (Lab/Co-op)]

Will the Minister say whether a good licensing regime and, if necessary, revocation of licences would prevent clubs from going into full administration—as in the example of Derby County that my hon. Friend the Member for High Peak described—and the knock-on effect of that on supporters, suppliers and the local community? A licensing regime should prevent full administration and be able to deal with problem clubs at a much earlier stage.

[Stephanie Peacock]

My hon. Friend raises an important constituency point. I do not want to comment on particular clubs and predict the action the regulator may or may not take. We hope that the Bill will raise the bar across the board and prevent clubs from getting into difficulty, but I do not want to be drawn on the specifics.

We have been clear that this is not a zero-fail regime. I will endeavour to write to the shadow Minister regarding the complex, but important, hypothetical situation he has proposed.

[Mr French]

I appreciate the Minister committing to that. The example just mentioned by the hon. Member for Derby South needs fleshing out as well, because clubs get into financial difficulty as a matter of course; points are therefore deducted mid-season, as we have seen, or, in the worst cases, the club goes into administration. The tests for the licence are about financial prudence and sustainability, so the hon. Gentleman makes a fair challenge.

What would happen if a club went into administration? Would the regulator seek to change the owner to allow the operating licence to continue, for example, or would the club, having lost the licence, then reapply via a new owner? The consequences would be dramatic. One would automatically assume that a club that no longer had a licence would have to start at the bottom of the football pyramid and come back up again, as we have seen in the past. Can the Minister add clarification of that important example to her letter?

[Stephanie Peacock]

Absolutely. We will come on to the owners and directors test later in the Bill Committee; perhaps we can explore this further at that point. The one point I would make to the shadow Minister and to my hon. Friend the Member for Derby South is that the aim of the regulator is always to minimise disruption to ongoing sporting competitions. I will add clarification on that when I write to the shadow Minister about the complex scenario he proposed.

Question put and agreed to.

Clause 19 accordingly ordered to stand part of the Bill.

Clause 20

Mandatory licence conditions

Question proposed, That the clause stand part of the Bill.

[Stephanie Peacock]

The clause requires the regulator to attach full mandatory licence conditions to the provisional and full operating licences for all licensed clubs. These are basic and fundamental requirements of the whole regime and so apply to all licensed clubs, regardless of their individual circumstances.

The mandatory conditions vary in their aims. They are set out in schedule 5, so we will cover them in more detail, but to summarise briefly, the conditions on financial plans and annual declarations are about ensuring that the regulator has the relevant and timely information it needs to regulate effectively. That includes financial risk assessments, plans for managing financial risks, details on income and expenditure, and contingency plans in the event of a shock such as relegation.

The corporate governance condition introduces basic requirements to report against the club corporate governance code of practice published by the regulator. This reporting mechanism will mean that clubs are transparent about board structures, decision making processes and equality, diversity and inclusion.

The fan consultation condition establishes a baseline level of fan engagement that requires clubs to consult fans on specified matters. This will ensure that clubs have a framework in place to regularly meet and consult a representative group of fans on key strategic matters at the club, and on other issues of interest to supporters. This will work in tandem with the freestanding duties, such as those protecting club heritage and other key areas.

The annual declaration condition requires the club to submit a declaration on any matters that should have previously been notified, or to confirm that there are no such matters. I commend clause 20 to the Committee.

[Mr French]

As outlined by the Minister, clause 20 requires the IFR to attach four mandatory licence conditions to the each club’s operating licence, whether provisional or full. This includes a requirement for the club to submit a financial plan, either annually or at more frequent intervals. I would be interested to hear the Minister’s views on how frequent she believes is reasonable; is that semi-annually, for example?

The club must also submit and publish a corporate governance statement explaining how it is applying the IFR’s corporate governance code, and regularly consult its fans. I think we need some clarity about how that will work in practice. The hon. Member for Sheffield South East raised the example of Sheffield Wednesday and multiple fans’ groups claiming to represent the club. I think that that needs some fleshing out so that the regulator is clear about what that consultation looks like. Obviously, that will be different for each individual club, which should, hopefully, know its fans better than anyone else.

Last, there is a requirement to submit an annual declaration of any material changes in circumstances affecting the club. Again, we would argue that that needs to be very clear to clubs, particularly if there is any—

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[Stephanie Peacock]

I appreciate the shadow Minister’s comments. I will address them in detail when we come to the relevant debate.

Question put and agreed to.

Clause 20 accordingly ordered to stand part of the Bill.

Schedule 5

Mandatory Licence Conditions

[Mr Betts]

I beg to move amendment 7, in schedule 5, page 100, line 19, at end insert “(e) an enforcement condition.”

See explanatory statement for Amendment 8.

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[Mr Betts]

They would, and therefore the club disappears. No one wants to see that. The whole purpose of the Bill is to stop clubs disappearing, to stop what happened to Bury, and so there is a gap in the legislation, because what happens in that situation? It nearly happened at Reading—the club nearly disappeared, but in the end it was a last-minute sale. If the owner had not sold it at the last minute, however, the EFL has no powers to deal with it, and the regulator will not either. The regulator has the power to say: “You shouldn’t be owning the club. You shouldn’t have a licence to operate the club, because of what you have done, you haven’t got the funds, your source of funds is inappropriate”—all those things—but then what happens?

I am saying to the Minister that the whole intention of the Bill is to ensure that the clubs that fans have supported for years, for generations—for communities, it is their club—do not disappear, go out of business or lose their place in the competition they are playing in. Clubs might get relegated, that is fine, but they should not lose their place because they have an owner who is not fit and proper, and does not meet the test. We have to find way of dealing with this, which the Bill does not do as drafted.

[Stephanie Peacock]

I thank my hon. Friend for moving the amendment and tabling amendment 8. To be the owner of a football club is to be the custodian of a treasured and historic community asset. That should be an honour, but it also comes with great responsibility. We recognise that in the past, however, it has typically been the actions of unsuitable custodians that have put our historic clubs at risk of collapse. It is vital that the regulator has the necessary powers to protect clubs and their fans from such owners. We therefore completely recognise the intent behind the amendments—to ensure that the regulator has the necessary enforcement mechanisms to back up its regime and guarantee protection from unsuitable owners.

I reassure my hon. Friend that the Bill already suitably achieves that. The regulator already has the power to require a club to make constitutional changes if the regulator considers that that is an appropriate way to secure an unsuitable owner’s removal. It has a range of strong powers to enforce against any non-compliance. The powers include the imposition of sanctions, such as financial penalties, all the way up to forcing divestment, which would force an owner to divest their stake in the club at no minimum price, directing them to take no part in the running of the club in the meantime. If necessary, the regulator can appoint an interim officer to assist the club operating effectively in the owner’s absence.

To respond to the point made by the hon. Member for Spelthorne in an intervention—a point made by my hon. Friend the Member for Sheffield South East a number of times—that ability to isolate and remove unsuitable owners and officers should mean that a club never has to have its licence suspended or revoked. A clubs’ fans should therefore not have to suffer the consequences of bad leadership. To be clear, because the licence is separate from the owner, the removal of an owner will not impact the club’s licensed status. We will come on shortly to discuss owners and directors, so I shall reflect on my hon. Friend’s comments ahead of that debate. I hope to provide him with reassurance, but we will not support his amendment.

[Mr Betts]

Is the Minister saying that the regulator has the power to direct that someone else should be in charge of running a club and having operation of the licence that the club needs to compete in the competition, even if the owner is not a fit and proper person?

[Stephanie Peacock]

I am saying that the regulator may—I am not saying definitely will, because I do not want to get into hypotheticals of what it will do or not—appoint an interim officer to assist a club to operate effectively in the owner’s absence. To be clear, the club’s licence is separate from its owner, so the removal of the owner does not impact the club’s licensed status.

[Mr Betts]

In further debate, we will come back to the issues of owners and directors, to which the Minister referred. As I said at the beginning, this was an exploratory amendment for discussion of the whole issue, which is important, but with her reassurance. at this point I will not press the amendments to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Mr Betts]

Assets of community value have been looked at in a number of different ways over time. Some clubs are already in this situation because their fans have moved to do this. That is true at Sheffield Wednesday, where fans moved some time ago to have the ground designated as an asset of community value. It does not provide a complete safeguard against an owner, who wants to cause mischief and upset for fans and the club, transferring the ground for another purpose, but it provides more of a safeguard than simply having it as a ground without any particular protection, as is currently the case.

The Minister referred to what the MHCLG might be doing in this area on the rules around planning. Is she prepared to look at using assets of community value to give further protection and to comfort fans that football grounds hold a different status to other assets that owners, from time to time, might want to change for another purpose?

[Stephanie Peacock]

I thank my hon. Friend for tabling the amendments. I know we have discussed this issue a number of times; it has always been a pleasure to do so, and I recognise its importance. Home grounds are often the most important asset that a club owns, so that is why I want to thank my hon. Friend for placing a real focus on them.

The significant financial and heritage value that grounds hold is why the Bill has strong protections to prevent home grounds being sold, used as collateral or relocated without the necessary considerations. Asset of community value status is another mechanism that a number of clubs and supporter groups have obtained for their home grounds. We would expect the regulator to welcome any club that wishes to gain community value status for an asset as another way to protect their home ground.

However, we are confident that the legislation will provide the necessary protections to address fan concerns and keep these important assets protected without mandating this status. Additionally, while assets of community value have proven beneficial for many clubs where no other protections have been in place, these amendments may place an unnecessary burden on clubs. As currently drafted, they would require clubs to either go through what can be a lengthy process with the relevant authority or make structural changes to the constitutional document of a club. Given that significant protections are already in place in the Bill that deliver the necessary safeguards, it is difficult to justify any additional measures for all regulated clubs, especially as a mandatory licence condition.

I really want to reassure my hon. Friend, as I know that home ground protections are of particular importance to him, that the Government have already committed to asset of community value reform in our manifesto, and this is something that the recent English devolution White Paper from the Ministry of Housing, Communities and Local Government commits to.

[Mr French]

I have a lot of sympathy for the amendment tabled by the hon. Member for Sheffield South East. The Minister argues that this does not need to be addressed through the regulator, but will guidance be published for those fan groups who are keen to ensure the long-term future of their grounds? What guidance will be published to ensure that any fans in this situation have clear advice from the Government on the best routes to protect their ground?

[Stephanie Peacock]

I am saying that I am confident the legislation will provide the necessary protections to address fan concerns, but I also draw the Committee’s attention to the work of the Ministry of Housing, Communities and Local Government on the specific issue of assets of community value. Of course, that does not fall into my portfolio, but I am very happy to commit to speaking to my relevant counterpart and adding to the letter that I have earlier committed to writing. This is something that I am sympathetic to, but I do not have the ability to make that commitment today. I believe that the work the Ministry is doing is very interesting and relevant to what we are discussing. For that reason, I am unable to accept my hon. Friend’s amendment, and I ask that he withdraws it.

[Mr Betts]

I thank the Minister for that reply; it is helpful in moving the discussion in the right direction. I appreciate that she cannot commit on behalf of another Department and other Ministers, but she has indicated that work is going on in this area. Again, it would be helpful if she could encourage her colleagues in the MHCLG to come forward with that further information before we get to Report. If they are going to write to us about the other issue, they could write to us about this as well. It would be extremely helpful if that could be done, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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[Mr French]

As I have made clear, we believe that some of these issues are important, but we believe that they should be addressed on a voluntary basis, which is what has driven progress in the game. We do not believe that it should be mandated in statute at arm’s length by the Government. I have been clear in making that distinction in my comments.

Requiring clubs to report annually on their EDI action is not a proportionate or effective way to achieve those broader aims. It amounts to moral licensing, encouraging clubs to go through the motions rather than to take meaningful steps to foster a welcoming culture in ways that make sense for them.

My amendments would restore clarity to the regulator’s remit. They would ensure that schedule 5 is focused on what really matters: clear lines of accountability, proper oversight of directors and owners, and a robust governance structure that protects clubs from the kind of catastrophic mismanagement that we have seen in the past. Football has always been about community; it is in the dressing rooms, on the terraces and in the shared heritage of our towns and cities that the game’s values are lived. Let us not fall into the trap of thinking that they can be legislated for by line item in a regulator’s reporting requirements. It is for that reason that I tabled these amendments. I urge the Minister to reflect seriously on whether this part of schedule 5 is truly consistent with the aims of the Bill and the traditions of our national game, which is inclusive by default.

[Stephanie Peacock]

I thank the hon. Gentleman for the amendments, but I disagree with the attempts to remove the references to EDI from the Bill. I will outline why and then, towards the end of my contribution, I will respond to his specific questions.

The Government believe that equality, diversity and inclusion is a key part of good corporate governance. As my hon. Friend the Member for Great Grimsby and Cleethorpes outlined, it is common practice. Research shows that diversity on boards and in organisations promotes better governance, decision making and transparency, all of which, in turn, contribute to improved financial sustainability. The relationship between diversity and better corporate performance is recognised by the Financial Reporting Council and the Association of Chartered Certified Accountants.

The industry is already taking action in this space, and the shadow Minister shared some examples, which I will not repeat. In November 2024, the FA published its four-year equality, diversity and inclusion strategy, titled “A Game Free from Discrimination”. It set out a long-term commitment to celebrate and promote diversity in English football, as well as an ambition to tackle all forms of discrimination in the game.

At a club level, in May this year, Chelsea’s incredible work in that area was recognised, with the Premier League awarding them the advanced level of its equality, diversity and inclusion standard—the highest level that can be awarded. All clubs in the Premier League, and some that have since been relegated from it, engage with the Premier League equality, diversity and inclusion standard initiative.

The Bill does not put EDI in football—it is already there and it is being celebrated by the industry. It is therefore right that, as a regulator that will be introducing a corporate governance code and requiring clubs to report against that, it covers EDI. The regulator will look to work co-operatively with stakeholders, draw on the expertise of the sector and add industry initiatives.

As with fan engagement, this will be a statutory baseline. Clubs that already champion equality, diversity and inclusion will not have an additional burden placed on them, other than having to periodically report on those things. Under the corporate governance code, clubs will simply be required to explain how they are applying the code and what actions they are taking to improve equality, diversity and inclusion—and nothing more. That is not onerous; it is a very helpful transparency measure, and it speaks to the question that the shadow Minister posed. I want to be very clear: the regulator is not going to prescriptively micromanage each club’s board or set targets and quotas on EDI. That is simply not the role of the regulator and would cause a significant burden to both the regulator and clubs. Ultimately, this is only a reporting requirement that all clubs should be able to meet.

[Mr French]

I appreciate the clarity provided by the Minister in outlining what she believes the regulator should or should not do. On quotas, can we be absolutely clear that the Government’s intention is not for there to be a mandated quota for clubs to have certain elements and different parts of the community on the board? Is that the clear intention in what the Minister is saying?

[Stephanie Peacock]

Absolutely. I will repeat the wording I just used in the Committee: to be very clear, the regulator is not going to prescriptively micromanage each club’s board or set targets or quotas on EDI. We will have that in Hansard twice now, so the intention should be very clear. Therefore, I hope that the hon. Member will seek to withdraw his amendment.

[Mr French]

I appreciate the clarity that the Minister provided on quotas, because that particularly concerns Opposition Members. As I have mentioned—I will not seek to repeat my comments—we are concerned about mission creep and scope creep of the regulator and what the Bill is designed to do. I made it clear earlier that I believe that football is inclusive and that it has done amazing work, when we compare the state of football 20 or 30 years ago with where we are today. We see that on the terraces at most clubs every single week, and we certainly see that with the national team, which most of the country comes together to support, particularly in big tournaments.

Mandating EDI reporting and turning it into a bit of a tick-box exercise—that was highlighted in some of the Minister’s comments—moves away from what we believe to be the valuable part of this work, which is to drive forward inclusivity in clubs and increase the fan base, which is good for clubs, by expanding beyond some of the traditional support of the game. We fear that having this provision in the corporate governance code, in the way it is written, will lead to unintended consequences. It will drive certain agendas, and we fear that clubs will walk into a number of traps accidentally.

We have tabled these amendments because we believe that EDI reporting, especially in certain areas where it is contested, should not be put on clubs in this way. The voluntary scheme in football has worked much more powerfully over the years, and that is proven in the experiences at football grounds around the country.