Football Governance Bill [HL]

Committee (2nd Day) (Continued)

Amendment 16

16: Clause 1, page 2, line 4, at end insert— “(3A) Notwithstanding the purpose of this Act, the IFR must have due regard to the potential economic harms of overregulating English football.(3B) As part of fulfilling its duty under subsection (3A) the IFR must assess the effects of its activities on the financial position of regulated clubs and submit a report to the Secretary of State within six months in the first instance and annually thereafter which must be laid before Parliament within 28 days of their receipt of the report.”

My Lords, this amendment, on the potential harms of overregulation, goes to the heart of this whole Bill. What we are discussing in this Committee is not just the role of a new regulatory body but the future of English football in its totality. The Bill introduces a complete overhaul of the entire system of English football. It creates an entirely new organ of state apparatus, which will no doubt introduce copious amounts of onerous rules and regulations that clubs and leagues will be forced to comply with—in addition to the already stringent rules that the leagues impose on clubs themselves.

The Premier League has a handbook on its rules and governance procedures that is 768 pages long. Contained within this vast document are reams of rules, regulations and duties relating to matters such as club finances, tests for the prospective owners and directors of clubs, the disclosure of relevant interests by club officers, requirements for directors’ reports, and so on. Under rule E.22, the league has the power to impose financial penalties, and under E.37 it can deduct points from clubs which violate those rules. All the things that the Bill seeks to address are already covered by the Premier League.

It is not just the Premier League that does this. The EFL already has an established financial regulation department, aptly called the club financial reporting unit, which monitors and ensures financial regulations that EFL clubs must abide by. The EFL can and does hand out penalties to clubs that fail to meet its standards. For example, in May 2023 Wigan Athletic FC was deducted four points, beginning the 2023-24 season on minus eight. That was because the club failed to comply with the EFL’s requirements that the club deposit 125% of its forecast monthly wage bill into a designated club account. In fact, in that season there were 15 disciplinary and enforcement proceedings against clubs by the EFL for breaching its rules. That existing self-regulation has clearly been effective. Despite some high-profile cases of failure, the vast majority of the time the current regulations do serve their purpose.

My Lords, I will speak for the first time today to support my noble friend’s amendment, because it is important to set this Bill in context.

I, for one, am not in favour of the financial regulation in the Bill. I have a degree of support for many of the amendments that came out of the Tracey Crouch review, and the propositions on fan-led change are reasonable for the Premier League to consider. What worries me is that we are introducing—the only country in the western world to do so—the imposition of regulatory control over one of our major sports. Even countries such as Russia and China, which have sports laws, recognise the overall authority of the International Olympic Committee, FIFA and UEFA. They do so in recognition that they would not be able to host or to participate in their sporting events if they did not accept that overall authority.

On the first day in Committee, it was clear that the Government were not prepared to countenance putting the important rider in the legislation that we would do nothing that would threaten the role and playing of our clubs in European competitions and the World Cup—and, if we include women’s football, in the Olympic Games too, but that is a matter for a latter amendment. I am concerned about the imposition of regulatory control, being the only country that does this, because, as was rightly pointed out by my noble friend, this does not in any way generate growth. On the contrary, it proposes a whole series of measures that will restrict the competitiveness of the clubs in the Premier League, which, in turn, will mean that the waterfall of financial support that comes through to all professional football in this country is lessened, not increased.

I speak from the position of somebody who has had the privilege of being involved in sport for 30 or 40 years. When I was interested in becoming a Member of Parliament, I wanted to go to Moscow as an athlete for the Olympic Games. Had we legislated that the athletes could not go, I would not have been permitted to go. As it was, I led a campaign for the athletes to go against the boycott that my then Prime Minister, Margaret Thatcher, strongly supported. I felt that, under the autonomy and independence of sport and the vital principle that sportsmen and sportswomen should not be political pawns, it was right for the competitors, who wanted to go, to compete in Moscow, however much they may have opposed the Soviet invasion of Afghanistan, as indeed I did. I recognised that to use sportsmen and sportswomen as the only way to demonstrate opposition to the invasion of Afghanistan by the Soviet Union was wrong, when people could buy tickets for Aeroflot in Piccadilly and go to watch the Bolshoi in Leningrad, and while trade and diplomatic relations continued.

The moment you impose government control of sport in any way, you are in great jeopardy of losing the opportunity to continue to compete in international events. That is at the heart of the existence of the bodies that represent international sport. The most important issue for FIFA, UEFA and the International Olympic Committee is to oppose political interference and political control on the regulation of any sport—and, in the case of football, to oppose rigorously the unacceptable intrusion into the independent governance of sport, which is at the heart of those international competitions. So, it was with no surprise—I say this to my noble friend Lord Jackson—that UEFA threatened to expel us from Euro 2028 before we even started considering the Bill in this House. On what basis did it do that? Because of

“government interference in the running of football”.

That speaks volumes to the sensitivity that we should express on financial regulation in relation to all the detail that we are discussing today and the excellent points that my noble friend made.

Indeed, it was so important to keep the two apart —and the autonomy of sport whole—that, during the 2012 Olympic Games in London, we introduced legislation in this House at the request of the International Olympic Committee as a precondition of us hosting the Games. We had to recognise the autonomy of the International Olympic Committee, and we had to do things that I do not think politicians wanted to do—for example, closing the fast lanes on many of our roads to allow members of the IOC and some of the sportsmen and sportswomen to travel down them. There was not too much support in this House at the time for that—nor indeed among politicians on either side of the House of Commons—but we did it because we recognised that, if we were to host the Games, the autonomy of sport was vested in the International Olympic Committee. That was a condition precedent not only of hosting the Games but of our athletes supporting and playing in the Games.

My worry is that, if we do not resist politicisation and we do not protect autonomy, then we will very quickly find that decisions taken by the regulator about an individual club will immediately be the subject of questions to the footballers in that club about whether they believe that the regulator was right to intervene because there was concern about the behaviour of any of the owners or directors of the club. This is such a critically important issue. Unless we get this right, unless we pause to reflect seriously on ensuring that we respect the autonomy of those organisations that run sport—the Premier League and the EFL nationally and FIFA and UEFA internationally—we risk in the future jeopardising the ability of our sports men and women, in this case our footballers, to play in those international games.

I say to the Minister that, in looking at each and every clause of this Bill—and we are only on Clause 1—it is not as if one side is talking this out. Far from it; the majority of amendments tabled to the Bill come from the Government Back Benches. The reality is that there is a lot of concern. There would not be hundreds of amendments down on the Bill unless there was real concern about how it is drafted. This Bill is an enabling measure. It is no more than that. We are coming to that in Clause 2. It is an enabling measure, yet it is longer than the Great British Energy Bill. We must pause at some stage in these proceedings to reflect that, unless we get this light-touch regulation right, and unless we recognise the authority of UEFA and FIFA, we will jeopardise the financial success of football in this country and the right and opportunity of our footballers, both now and in the future, to play. That is not to say that it will not go through. This will go through, so, if it is going to go through, let us at least get it right.

My Lords, I am happy to support the amendment moved by my noble friend Lord Jackson and the eloquent case that he made for it. I wholeheartedly endorse the remarks of my noble friend Lord Moynihan.

As we go further into this Bill and debate it further, it becomes clearer that this was a Bill conceived in a fit of absence of mind; it has come about almost by accident. There were some concerns about Bury Football Club going into administration. There were concerns about the European Super League being proposed—an idea that was almost literally dead on arrival not because of a regulator or primarily because of political intervention but because of a fan revolt. The system as it was worked. It was the deep commitment of fans to the current arrangement, the current competitive leagues and all of that. Their anger and dismay at this were reflected in the British clubs which had committed to it, including my own. They abandoned it as if it was suddenly realised that this thing that they were holding was red hot and that the sooner they got rid of it the better. This was working. Yet there was a casual threat made by the then Prime Minister, reacting—as a populist will often do—to popular anger with a threat to introduce legislation. It is more and more evident as we go further that the Bill we are now considering at length, with its deficiencies and its threats, is the result of that.

I want to consider, for a moment, the case that my noble friend Lord Jackson made about overregulation. I have been involved, at various stages of my long and chequered career, in trying to counter overregulation. The first time was nearly 40 years ago when I was Margaret Thatcher’s Minister for Deregulation. Later, I chaired a deregulation task force at the request of my noble friend Lord Heseltine, the then Deputy Prime Minister. I then chaired periodically the coalition Government’s better regulation Cabinet Committee, or whatever we called it. I have been involved in this a lot and spent a lot of time looking at the effects of overregulation, who the beneficiaries are and which organisations suffer because of it.

I thank my noble friend for giving way. He has made an important point in relation to small companies, and is it not confirmed by an article in this morning’s Times, which says that the Financial Conduct Authority’s “over-regulation … harms small companies”? That is exactly the point he is making: it is small companies that are affected, rather than large ones.

I am grateful to my noble friend for drawing your Lordships’ attention to that. It is absolutely the case. When Governments consult with a sector, the people they consult with tend to be the big ones. I spent a lot of time thinking about this and trying to work out how to deal with it in previous contexts. If you run a small company, business or operation—a small football club—you are far more concerned with getting on with whatever the next thing is on your agenda. You have got relatively few people around to do the work. Big companies have a machine that is set up to deal with all this, so the point that my noble friend makes is entirely right.

The point behind this amendment is incredibly important, and my noble friend has done a great service in raising it in the vivid way that he has. We have to consider this, because once you create an independent regulator, you have created something that is supposedly independent, and it is much harder to come back. Later in these debates, we will come to my noble friend Lord Goodman’s proposed sunset clause. That would be some kind of constraint because the threat or certainty of there being a proper, serious review after a given length of time will focus the minds of the regulator. But without that, without the kind of amendment that my noble friend has tabled, I think we stand in great danger.

My Lords, absolutely nobody is going to support the idea of overregulation. I spent my whole career, however, in a highly regulated industry: broadcasting. The BBC was the result of a regulatory regime imposed over 100 years ago, and ITV was heavily regulated, with enormous benefits as a result. We have the best broadcasting system in the whole world, so good regulation makes things better. I agree that we do not want to see overregulation.

The strongest part of this Bill is that it tries to ensure that every club is well managed, and that is to be welcomed. Let us recognise that that has not been the general picture, and there is no club that I know of that has not been badly managed, including my own, at some point in its history. Somebody else gave the example that, for a few hours this weekend, Brighton were number two in the Premier League. That is absolutely 100% down to the fact that they have been exceptionally well-managed in recent years.

In my career, I encountered many boards of clubs at every level and, frankly, it was an extremely mixed picture. We name no names. Some of them I encountered were very well-managed, some were managed by rogues and many by people who had a bit of money—not enough money—and were attracted to football for the wrong reasons but completely and utterly lacked any ability to manage a club properly. The great strength of this Bill, in demanding proper boards and financial probity, will bring, I hope, a great improvement to the generality of English football down the leagues and have strong, competent boards wherever you look.

I cannot resist one short story. I know of a Prime Minister—I will not name who the Prime Minister was, but it is not the person you think that I am thinking of; it is somebody else—who was invited to a match and to have lunch beforehand. The Special Branch at Number 10 looked at all the other guests, and every single one of them had a criminal record. That is a true story. That is what we want to put an end to. We want good, strong boards and prudent financial management.