Football Governance Bill [HL]

Committee (4th Day)

My Lords, as we begin day 4 of Committee on the Football Governance Bill, we have an ambitious target today and I urge all noble Lords to work together to achieve it. I particularly draw the Committee’s attention to the front page of today’s lists from the Government Whips’ Office and all the reminders about speaking times, which were agreed by the House last year. I remind the Committee of that and we expect noble Lords to work together to make progress to that ambitious target; we need to get to it today.

My Lords, before my noble friend sits down, the rubric states quite clearly the expectations that there are on Members of the House. Those are of course maximum time limits, not targets to be aimed for, but the document also says that Members

“should not summarise or repeat at length points made by others, and if speaking more than once a Member should not repeat points they have already made”.

I have already sat through a couple of hours of this Committee and heard that done repeatedly. Will the usual channels intervene if people deviate from the subject or are repetitious, and therefore ask them to sit down?

I thank my noble friend for that. I hope that we will not need to intervene, but the Whips on the government Bench will certainly intervene if necessary. I ask all noble Lords to read the points on Committee stage, which were agreed by the House. We do not want repetition; we want proper scrutiny, with progress made today on the Bill. We have a number of groups to get through, but it is perfectly achievable in the time.

My Lords, I suggest that we now begin.

Clause 6: The IFR’s objectives

Amendment 51

51: Clause 6, page 5, line 9, leave out “protect and promote” and insert “monitor and where necessary intervene to safeguard”

My Lords, Amendment 51 stands in the name of my noble friend Lord Maude of Horsham. He has asked me to move it because he is, unfortunately, unavailable on this occasion. Perhaps I might observe that, out of the 300-plus amendments, some 120-plus of them come from the Government’s own Back Benches.

This amendment deals with an area which I have touched on on a number of occasions during debate on the Bill’s clauses and subsections: the financial impact that it will have on the different leagues. They are not named in the Bill, but we all know which ones we are talking about.

I am particularly interested to be talking to Amendment 51 on the basis of the Prime Minister’s own Damascene conversion—if I can refer to Syria as being the place in the public eye at the moment—to avoiding, where possible, impositions on the private sector by regulation. He commented on that in his speech last Thursday. It would appear that he is now of the view that regulation should be kept to a minimum, or that the Civil Service—I specifically exclude the civil servants advising the Minister, who have been very helpful throughout—is providing a “tepid bath” of steady decline. I think those were the Prime Minister’s words. Other Ministers have then been sent out to clarify on the matter, one of whom today described it as an attempt to take the approach of a start-up. Well, my noble friend Lord Markham has identified how to aim to start up and the funding needed when one actually takes that approach, which may not be conducive to the overall approach outlined in the Bill for football regulation.

The other matter on which I have touched at different points is the importance of ensuring that the Premier League in particular and English football overall should be able to adjust in what is a highly competitive world. Last week we saw something of which, I will be honest, I was unaware—that football’s Club World Cup is to take place next year. It involves 32 clubs from right around the world, only two of which are English: Chelsea and Manchester City. It will take place in June and July next year and will inevitably impinge on the football structure in England. Therefore, we have to ensure that any football regulator acts in a manner that takes cognisance of developments that I have identified, not only in sport in general but in football, because in those six weeks, in the period when the football season is not normally taking place in this country, it will be taking place throughout the United States. It is relevant that players who are participating on behalf of English clubs will naturally want some form of respite in one form or another when they come back from the tournament, at whatever point their participation ends.

My noble friend has proposed the changes to Clause 6, on line 9 of page 5, which would follow the elements of scrutiny that I have raised on a number of occasions—to

“leave out ‘protect and promote’ and insert ‘monitor and where necessary intervene to safeguard’”.

He then has Amendment 52 as well. Under those circumstances, it is relevant, as I have said persistently, to ensure that there is clear identification of the impact on the clubs, more specifically than saying that this will be proportionate. We need to adopt a frame of mind that ensures that the regulator is acting beneficially to football in general and not imposing undue burdens on our clubs that are not faced by other clubs around the world, with whom we will have to compete not only in tournaments, to which I have just referred, but for television rights and international funds. Without that frame of mind, we will not have a Premier League of which we can be rightly proud. With those opening comments, I beg to move my noble friend Lord Maude’s amendment.

My Lords, I will speak to my Amendment 57 in this first group. I am delighted to see the noble Lord, Lord Harris of Haringey, in his place and I appreciate his cameo role in this Committee. I had not noticed him here for most of the deliberations of the Committee, but we welcome him anyway.

This is a probing amendment to press the Government on how much intervention they envisage the regulator pursuing in the internal financial affairs of clubs. It is a probing amendment because we on this side seek to solicit from the Minister more precise details, which are not in the Bill, about how much she and the Government envisage the independent football regulator having a part to play in the technical minutiae of the finances of each club.

Because of the nature of the Bill and the wide-ranging powers under its Henry VIII clauses, we simply do not know the degree of interference in those 116 clubs. For instance, will a club be required periodically to enunciate its liquidity requirements on a quarterly, half-yearly or annual basis? What debt cap rules will they have? What player acquisition and sales issues will the regulator become involved in?

Importantly, there are also the decisions taken by the boards of the 116 football clubs around land and property, which are covered elsewhere in the Bill but relate to this amendment—where they play and what contractual arrangements they may have with landowners on a rental, leasehold or freehold basis. Will the regulator be prescriptive about which banking arrangements, and with which organisations, each club is free to enter into?

These are important issues. This Committee’s effective scrutiny requires more insight from the Government into the regulator’s intentions regarding financial regulation, not least because other non-departmental public bodies already have significant powers and the capacity to intervene directly in what are, in effect, small and medium-sized enterprises and significant, big businesses turning over large amounts of money. There are the Financial Conduct Authority, the Competition and Markets Authority and His Majesty’s Revenue & Customs, and local authorities have widespread powers to intervene in the everyday activities of the clubs contained within their local government areas. There are also various companies Acts, such as the Companies Act 2006 and that of 2016, that are within the bailiwick of the interface between government and football clubs.

My Lords, I refer the Committee to my interests declared in the register. I support Amendment 71 tabled by my noble friend Lord Markham, which raises a crucial point regarding the backstop mechanism. We must be clear at the outset about what this mechanism governs and, critically, what it does not.

First, it is vital to understand that the backstop is categorically not about the fair apportionment of collective football revenues. Each party—the Premier League and the EFL—has its own central broadcast revenues. Indeed, the EFL has just secured a landmark five-year domestic broadcasting deal worth nearly £1 billion, increasing its central revenues by 50% from next season. This is testament to the Championship’s growing competitiveness and appeal.

I will not dwell on the fact that many of its recipients are incredibly wealthy—I believe there are nine billionaire owners in the Championship, along with many other extremely well-funded ownership groups—but I will dwell on the fact that, despite its very healthy income, the EFL does not give any money to the National League. It gives no funding to the leagues directly below it. It is the Premier League that supports the National League. Far from some sort of neutral arbitration to allow all parties to share with each other, the backstop is in fact a mechanism for the forcible redirection of billions of pounds of Premier League revenue only. In other words, this is one set of private businesses handing over money to another competing set, even if they do not want to give more than the £1.6 billion they already do and it damages their ability to compete.

The critical point, therefore, is that this backstop mechanism represents a completely unprecedented and untested intervention in what are the private commercial rights of Premier League clubs only. It impacts uniquely on Premier League clubs. The gravity and novelty of such an intervention demands the most careful consideration. Crucially, the backstop introduces a major and radical change in the Bill: the inclusion of parachute payments. This decision was taken without adequate consultation with Premier League clubs.

I rise to speak to my amendment to Clause 71 on financial redistribution, and to add to the very valuable points made by my noble friend Lady Brady.

What the Bill seeks to do—which I have not seen in relation to any other regulator in the UK—is to give the regulator unprecedented powers to take money from one part of the sector or certain companies and give it to another. In any other field, this would be unheard of. Can you imagine the FCA saying, “I think HSBC should give some money to Barclays”? Can you imagine Ofwat saying to Severn Trent, “Thames Water is having a bit of a hard time, can you help it out”? Can you imagine Ofcom saying that Sky should help ITV out where advertising revenues are going down? That is unheard of among regulators.

I value the days in Committee as there is such knowledge around the House, so I would love it if any noble Lord could come up with an example of where a regulator has got the power to take away money from a part of the sector or company and give it to another. I would love to hear it.