Football Governance Bill [HL]

Committee (3rd Day) (Continued)

Amendment 39

39: Schedule 2, page 86, line 13, leave out “may” and insert “must”

My Lords, Amendment 39 is grouped with Amendments 41, 46 and 48. This is a pretty straightforward amendment, simply seeking to change in the Bill the word “may” to “must”.

For context, the Bill as it stands says that a non-executive member of the board “may” be removed from office in certain circumstances. That is clearly appropriate and something that we should expect. Similarly, the Bill says that an executive member “may” be removed in certain circumstances. Again, that is something that we should expect and is totally appropriate.

However, the circumstances in which such a removal can take place are actually rather serious. They are laid out quite clearly as being when the person is

“guilty of serious misconduct … has a conflict of interest … has failed to comply with paragraph 6(4)”,

which is about information on conflicts of interest, and

“is unable, unfit or unwilling to carry out their functions”.

I think we would all agree that, whether we are talking about a non-executive or executive member of the board, we need to take such issues seriously.

That is why I ask the Minister why it is only “may” be removed and not “must” be removed, because these circumstances would seem to justify removal. If anybody falls foul of the items identified here, there really has to be a presumption that they will be removed, and so the word “must” might be more appropriate.

My Lords, the difference between “may” and “must”—or may and shall—is a pretty old parliamentary debate, but the noble Baroness has something here. I read through the amendments and thought, “It’s pretty clear. How could they stay if they’d done these things?” It will be interesting to hear the Minister’s response. I know that “may” probably means “must” in certain circumstances, but if we could just have it clarified, we might get through this very quickly. It is very worth while having it clarified in this case.

My Lords, I understand the point that both the noble Lord, Lord Addington, and the noble Baroness, Lady Taylor, are making, but I am always hesitant to say that something “must” happen. I speak here as someone who spent many years as a personnel/human resources director, acting as the final stage of appeal in disciplinary matters. As the noble Lord implied, I know that there is a debate in legal fields, because nowadays lawyers generally do not like being bound by something that tells them that they “must” act in a certain way.

It does not seem to be appropriate to insert “must”. The noble Baroness said that there would be a presumption—and I think so too. As the noble Lord said, these are very serious offences, but until one is confronted by a set of circumstances, I hesitate to bind anybody to a certain decision. There may be special circumstances where one is found guilty of only one of the categories and circumstances, so I am not convinced that “must” should be inserted in place of “may”.

My Lords, I want partly to echo what my noble friend Lord Hayward said. Given that the individuals concerned will be non-executive directors of a de facto non-departmental public body, they would be covered by the existing code of conduct for non-departmental public bodies, which I think dates from June 2019. It may have been updated by the previous Government; I do not think that the current Government have looked at it. Equally, they are governed by the Nolan principles, with which we are all very familiar—I am as familiar as anyone else, having been a special adviser and currently being a non-executive director of two non-departmental public bodies.

My point is about the restrictive nature of this wording. This is quite an unusual situation, where the individuals responsible for bringing disciplinary issues to the attention of the appropriate authorities in the independent football regulator will have no leeway whatever under this legislation. If it passes the threshold of criminal activity in civil law, legal representatives—the judiciary, magistrates and others—would have no leeway on this. Therefore, you would circumscribe the existing internal procedures.

Those of us who have a role in non-departmental public bodies know that there is a proper process. You would have a verbal warning. I also have a master’s degree in human resource management and have been an HR manager in my time—there are almost as many of us in this place as there are lawyers.

No.

Okay, maybe not. My point is that employment lawyers are very wary about something as definitive as this, which involves disciplinary procedures. The noble Lord, Lord Addington, made a very valid and fair point that, at the very least, we need to know the potential scenarios and circumstances that may arise. That would allow us, without any concern, to accept this in the Bill. At the moment, it is overly restrictive, and it could give rise to unfairness and onerous intervention directly by Ministers. On that basis, at the very least, we need to have more information about this before Report. Like my noble friend Lord Hayward, I feel deeply uncomfortable about having such prescriptive wording in primary legislation.

My Lords, I am grateful for the thought that noble Lords have given to the amendments in this group and to the noble Baroness, Lady Taylor of Bolton, and the noble Lord, Lord Bassam of Brighton, for tabling them so that we can consider them. As the noble Lord, Lord Addington, rightly said, one of the first things that people do when they receive a new government Bill is to go through it and look for the “mays” and the “musts” and consider why they have been put there and what the counterargument would be if the other word were used.

I am grateful to my noble friends Lord Hayward and Lord Jackson of Peterborough, who have brought their professional and personal backgrounds and their qualifications to the scrutiny of this. Like them, I think that we must be careful of being too prescriptive here and of limiting the role of the professionals we are appointing, particularly as this is an independent regulator. We want it to act independently and have a bit of professional discretion. However, the noble Baroness and the noble Lord, Lord Bassam, have an important point that motivated them to bring the amendments, which would limit the discretionary ability of both the independent football regulator and its chief executive officer in cases of misconduct or where an individual is not able to perform his or her duties, whether they are a non-executive director, an executive director or a member of the expert panel.

Clearly, if this new regulator is to enjoy the support of fans and the businesses and clubs that it regulates, it must uphold and be seen to be upholding the very highest standards. It is good to pose the question of whether this discretionary power should be written in the Bill as it is. The discretionary power as written would allow the independent regulator the ability to keep an individual in place, even in cases where he or she is guilty of misconduct, has a conflict of interest, has failed to provide appropriate information to the chief executive or is unfit, unwilling or unable to carry out his or her functions. That is quite a serious list of reasons, so I can see why the noble Baroness, Lady Taylor, and the noble Lord, Lord Bassam, have posed this question to the Committee. While I share some of the scepticism that my noble friends have set out, I am more sympathetic than might be expected.

I would be grateful if the noble Baroness could, if she is able to engage with the hypothetical in those scenarios, give some examples of where she thinks it would be appropriate for somebody guilty of misconduct or a conflict of interest to carry on. It is hard to envisage scenarios which would fit those circumstances. I am not sure that it would serve the best interests of the regulator or football if they did. In many other sectors, regulators have similar discretionary powers to come to a judgment on matters such as this. We have talked in previous debates about the Financial Conduct Authority, which has similar discretionary powers. There may be a case for the regulator to have higher standards than we have imposed on previous regulators. Given the power of football to set an example and capture the imaginations of so many people, I wonder whether it ought to be held to a higher standard in the public eye than perhaps we have set out in previous legislation.

Similarly, if a member of the expert panel is demonstrably not able to carry out his or her duties effectively, why should the chief executive have the option to retain him or her? It might be more appropriate to require his or her removal, ensuring that the panel remains fully capable of discharging the duties that it is given under this Bill.

The essence of the argument boils down to ensuring that the interests of football come first and are best served by the Bill. Clearly, fans of football will not be able to scrutinise the intricate details of the new operational framework of this regulatory regime as we can in this Committee. However, they will notice the effect of it, the outcomes and whether the independent football regulator is acting decisively, impartially and transparently when faced with the inevitable challenges when discharging its duties.

If the Government adopted some of these amendments or changed the Bill to meet in the middle, it would send a clear message that the regulator needs to be bound by law to hold itself to the same high standards that it is expecting of others. An alternative would be for the regulator to follow a lower path, which we would not want to see. We spoke previously about the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services, which looked at how the Financial Conduct Authority has been discharging its duties as a regulator. That cross-party report highlighted a “defective culture” within the Financial Conduct Authority, with staff alleging a toxic environment which discourages challenges to management. One former member of the FCA described the culture as