My Lords, with the leave of the House, in moving this Motion I will also speak to Amendments 2 to 62.
I tried very hard to avoid the overuse of football metaphors or puns at the earlier stages of the Bill but, despite the Bill having left your Lordships’ House previously, I think we can say that we did think it was all over, and I sincerely hope, with your Lordships’ agreement, it almost is now.
Over the course of the passage of the Bill, we have heard concerns about the risk posed by the distributions mechanism outlined in the Bill. I thought that the original model had its merits. However, as I committed to do on Report and at Third Reading in your Lordships’ House, the Government have taken another look at the mechanism and in response have made a series of important amendments in the other place.
The Government are grateful for the careful and considered scrutiny from noble Lords across this House, which was invaluable in the development of this new model. I take this opportunity to again put on record my particular thanks to the noble Lord, Lord Birt, for his extensive and thoughtful work in providing such scrutiny. I know that he was sorry not to be able to be here in person today, but I also know that he will be well represented by his Cross-Bench colleagues. I thank the noble Lords, Lord Burns and Lord Pannick, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for the expertise they have provided over the last few weeks.
The amendments we have made alter the distributions model through changes to Part 6, alongside supporting amendments to other clauses. These are primarily designed to change the mechanism from the previous binary choice mechanism to a new “staged regulator determination” model. This new model is designed to give more certainty to parties while ensuring that the backstop is designed to reach the best solution possible for all of football.
I will briefly explain how the amendments achieve this goal. First, the amendments introduce two new clauses. Clause 61 has been replaced with a completely redesigned proposal process. We have been clear that our strong preference is for the leagues to reach an independent distributions solution without the need for the backstop to be triggered.
Since the Bill was last before this House, the Government have announced David Kogan as our preferred candidate to chair the regulator. I know that David Kogan shares this view that the backstop should be triggered only as an absolute last resort, and our new proposal stage has been designed to incentivise that. If the backstop process is ever triggered, the regulator would invite the leagues to submit proposals detailing their solutions to the questions for resolution. The leagues would then submit their proposals to both the regulator and to each other. This will allow for more constructive negotiations, as the leagues will be more informed regarding each other’s position on core issues.
My Lords, I am very grateful to the Minister for introducing these amendments and for setting out the reasons behind them. On Report in March, the noble Lord, Lord Birt, introduced a series of amendments. These were aimed at addressing what he regarded as some weaknesses in the role of the independent football regulator in the distribution of funds between the various football bodies. I supported the amendments, along with the noble and learned Lord, Lord Thomas, and the noble Lord, Lord Pannick.
Unfortunately, neither the noble Lord, Lord Birt, nor the noble and learned Lord, Lord Thomas, can be here this evening, and I have been asked to respond jointly for our little group, in place of the noble Lord, Lord Birt. The noble Lord, Lord Pannick, is in his place, I am pleased to say, and I hope that we will hear from him in due course.
Throughout debate on this Bill, we have emphasised the uniqueness of this situation. Under the proposed legislation, a regulator could potentially make decisions to transfer income from one regulated body to another. Moreover, both bodies are part of the same football family and they must coexist. Many clubs could find themselves moving between the Premier League and the English Football League. We argued that the arrangements should take these factors into account, including the objective of the overall success of the football pyramid.
We are very grateful to the Minister for the time that she has spent on this since then. Subsequently, the Government have brought forward their own amendments, which were agreed by the Commons and now come to this House today. I think I can say that as a group we support these amendments. While they are not entirely as we hoped, they address many of the concerns we had with the original Bill and go some way towards meeting the tests that are involved.
The most significant change is the fundamental re-engineering of the backstop process. This removes the Russian roulette binary mechanism, where an expert panel would have chosen between the final offers of the two parties, without the option of finding middle ground. Instead, the regulator now has the driving seat in both the negotiation and the determination process. The amendments strengthen the role of the “state of the game” report and modify the principles and criteria to explicitly refer to the regulator’s duties as well as its objectives. While it does not go as far as we hoped, it is an improvement and it means that, if the regulator is called on to decide, it will consider domestic and international competitiveness, growth and investment in the industry. I think that is a significant step forward.
My Lords, I declare my football interests: I remain a season ticket holder at Arsenal Football Club and counsel to Manchester City Football Club in the continuing disciplinary and regulatory proceedings involving the Premier League. In respect of both those interests, I very much look forward to next season.
I am grateful to the noble Lord, Lord Burns, for setting out with such clarity why the team captained by the noble Lord, Lord Birt, of which I am proud to be a member, welcomes the Commons amendments, in particular to remove the binary mechanism which would have fettered the power of the regulator. I welcome these government amendments because they seem to further what I hope that the Minister will confirm are the three key goals of this Bill.
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First, the amended Bill recognises implicitly the extraordinary success of the Premier League. David Kogan, the new regulator, is a man of great experience and good judgment. I am confident that he will have well in mind the vital need to ensure that nothing done under this legislation injures the golden goose.
Secondly, the amended Bill recognises, rightly, that there are contexts in which football will benefit from regulation. That is because football is such an important part of the lives of so many people and so many local communities, and the grass roots of the Premier League reach down into the lower leagues. It is very important not to forget that point.
Thirdly, seeking to balance these two objectives, the amended Bill recognises that this should be light-touch regulation, with the regulator intervening only where it is necessary. I thank the Secretary of State, the Minister and the Bill team for their efforts to engage with me and with other noble Lords to improve the Bill. I congratulate the Secretary of State, the Minister and the Bill team on their significant achievement in managing this Bill and, mixing the sporting metaphors, getting it over the line.
My Lords, I will say a few words in support of what the Minister said this evening. It is right that we talk a little about the new arrangements for mediation and the backstop. The original amendment was overcomplex, but many of us were concerned about the binary nature of the choice that was to be made. For many of us, the important factor in finding a way forward was that we maintained a backstop, because we are not talking about negotiations between equal partners. That is why we needed the retention there; that is very important. I congratulate Ministers on finding a way through this which is satisfactory to everybody who expressed concerns and wanted to move forward.
I welcome what the two previous speakers said about the new independent regulator. He is intent on making this job work and moving things forward very quickly, which is exactly what football needs.
On behalf of my noble friend Lord Bassam, who cannot be here this evening, we are very impressed by and very much welcomed the engagement of the Minister in this House, my noble friend Lady Twycross. It is a model of how Ministers, Back-Benchers, civil servants and external parties can react. I am very glad to see the noble Lord, Lord Parkinson, nodding, because we have not agreed on every aspect of this Bill. That has been important.
I should declare my interest: I am looking forward to the new season, with Bolton Wanderers playing Stockport on that first Saturday—I think I am looking forward to it anyway. Bolton Wanderers went through all the problems that are very well known. I was struck, in the final stages of the debate in the other place, by how many individual MPs had to get up to say that their individual clubs had just gone through difficulties or were facing similar difficulties in the very near future; Sheffield Wednesday is the most obvious example.
My Lords, I will be reasonably brief. The noble Lord, Lord Burns, covered most of what I was going to say on the technical stuff. We sent the Bill back, and I think everybody agreed it was not perfect. Then we got this list of amendments back, and my heart sank at the thought of another 12 hours’ debate on each and every one of them. The only person whose eyes lit up was the noble Lord, Lord Pannick, who obviously gets paid by the hour by Manchester City. We are nine months into waiting for the 115 charges result; we are still playing a lot of extra time on that one, but let us park it. I am not sure who is the underdog in the game between Bolton Wanderers and Stockport County, but it will be an interesting encounter.
We went over these amendments to try to find fault with them, to pick something out, and to see whether the Government were trying to slide something through. Honestly, they have improved the Bill tremendously, and that is partly because of the slight input from the regulator designate, who has clarified the situation. We were a little bit in the dark before about what we thought the role should be and what it was morphing from and to, but just talking to David and understanding his love of what he is going to do, and hearing the passion with which he speaks about being the regulator, tells me it is in safe hands.
I had a number of chairmen, not so much from Championship but from League One and League Two clubs, emailing me, and I said that it is going to be good for the game. That is really where I have always been: at the bottom of the pyramid. The Premier League is fantastic—it will flourish and it will carry on delivering—but League One and League Two clubs, and some of those in non-league clubs, will take a deep breath now and say, “Let’s see this happen”. It will give them that certainty and hope that there will always be something there for them when times are difficult. I have known football clubs that have had to come to local authorities and beg and borrow for assistance. That is a difficult thing to do with public funds, but we did it, and the benefits for the economy, for local councils and for shopkeepers are there now for all to see. The community is all football, and if you had any doubt about that, you would look at this.
My Lords, I refer the House to my register of interests, in particular my position as vice-chair of West Ham United, who play in the Premier League.
One of the privileges of speaking in this House is that we can talk not only to the present moment but for the historical record. When the story of the Football Governance Bill is told, I hope it will reflect that this House asked the right questions, foresaw and understood the risks, and ultimately helped improve the legislation. I acknowledge that the Bill we return to today is better than the one we began with. That has not always been an easy journey, but Ministers have listened, for which I am very grateful, and some important safeguards have been added. For that, they really do deserve genuine credit.
We are now entering a new phase, moving from the politics of the Bill to the reality of the regulator. In doing so, I suggest that the new regulator will be judged against three simple but vital tests. First, will it protect growth? The Premier League is not just a domestic competition; it is one of the UK’s most globally admired exports, an economic powerhouse, a cultural asset, a voluntary supporter of the entire football pyramid and a £4.2 billion annual contributor to the public finances.
Future success is not inevitable. It is under pressure from a range of sources. FIFA and UEFA are expanding club competitions and business models that compete directly with the Premier League and put huge pressure on the domestic football calendar. Broadcast markets are changing very fast and in a number of competitive European leagues domestic revenues from broadcasting are falling, as we have seen in the example of Ligue 1 in France. Agent fees are rising, taking money out of the game. State-backed competitors, such as the Saudi Pro League, are changing the football economy. The EFL’s leadership appears to have chosen stasis over innovation.
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We now move from process to purpose. The regulator will be tested quickly. The Premier League and its clubs will engage positively and constructively, but it will also defend what makes our competition great. As we enter this critical new phase in the context of all the challenges I have set out, the Government should also consider their approach to our national game. We must move away from layering on new risks, more friction and additional costs. We can no longer treat the Premier League as a bottomless well of money or a political target, because the Premier League is not just a domestic institution; it is a special national asset that belongs to its millions of passionate fans, and its success powers the whole pyramid, the deepest and best funded in the world. Let us regulate it with care, not complacency. Let us preserve its global leadership position. Let us ensure that, in doing so, this new regime does not weaken English football but strengthens it for generations to come.
My Lords, I simply want to thank the Minister for her perseverance, for staying with the task until it is done, for her humour and for appearing truly human. She had quite a lot of stuff coming in her direction but she did not get distracted. For that, I thank her very much.
I am going to limit my comments to the amendments. The Minister moved the Motion on Commons Amendment 1, but I want to go up to Amendment 9 and tell the House why I think these amendments are wonderful. We all learn Americanisms, where nouns and pronouns of all kinds become verbs—which we should not really want. The word “levy” we know, but in our draft we used the word “leviable”—however you might pronounce it. We all know that you can levy but I do not know whether people in the football team will know what we called the leviable function. It is not a perfect English word, but I prefer what the Commons have done. They want us to insert “functions under this Act”. This goes through Clauses 53 and 54 and I think it is more readily understood than the word “leviable”. Sometimes it is better to use quite simple English, so that everybody can understand it. I hope that, when it comes to those nine amendments, we will not quibble but will say that they have put the English in a way that the man and woman on the Clapham omnibus can understand.
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The leagues would also be able to submit revised proposals, ensuring both sides have the best chance possible to outline their position to the regulator, and, in turn, allowing the regulator the opportunity to request additional relevant information. This structure will ensure that the regulator is in the position to make the best possible evidence-based decision, while incentivising the leagues to make their own agreement.
We have replaced Clause 62 to introduce more flexibility for the regulator. Our new clause removes the binary choice for the regulator. Instead, it sets out how the regulator can create its own distribution order if, after all previous stages have concluded, the leagues still cannot strike a deal.
In the creation of this order, it can choose all of a league’s proposal or part of either or both proposals, or can propose unique solutions based on the evidence. The regulator would first have 60 days to create a provisional order. The regulator would share this provisional order with the leagues and invite representations, which it must consider before finalising the order. Any finalised order that it produces would have to take into account any relevant issues raised by the “state of the game” report, the evidence the regulator has gathered throughout the process, its engagement with the leagues and any proposals that they have submitted. Finally, under the new model, the regulator would be required to consult the FA before setting the questions for resolution, ensuring that the national governing body can now raise any views about the scope of the backstop process.
We are confident that the regulator, with its clear objective to promote sustainability and its duties to avoid adverse effects on growth and sporting competitiveness, would come to a balanced solution. I know that there is probably a slight variance with models that noble Lords view as ideal. However, I am confident that this new model is the right one, and I hope that noble Lords will support it as being substantially better than the original model that we debated earlier in the Bill’s passage through your Lordships’ House.
In addition to the changes to the backstop, we have also made some minor and technical changes to other parts of the Bill to aid the implementation and effectiveness of the regulatory regime and reduce the burden on the industry. I am happy to answer any questions noble Lords have on these changes. I hope that noble Lords understand and can support the changes that we have made in the other place. They have been arrived at after much careful consideration and conversation with noble Lords and the industry, and will ensure that the regulator can best deliver for fans. We believe the changes strengthen the Bill and will strengthen the regulatory model.
This Government promised in our manifesto to safeguard the future of our national game. In fact, as all noble Lords will be aware, the commitment to establish an independent football regulator was in the manifestos of all three main parties at the election a year ago. I hope that noble Lords will support this much- needed piece of legislation, which delivers on that commitment by protecting and promoting the sustainability of English football in the interests of fans and the local communities that football clubs serve. I beg to move.
We are confident that David Kogan, the preferred candidate to be chair of the IFR, will be able to make these arrangements work. He has exceptional football knowledge and expertise. Following the publication of the “state of the game” report, we hope that the regulator will set out its views about the most significant challenges that are faced by the leagues covered by this process. At the same time, we hope that the regulator will set out the criteria that it will apply in determining the appropriate funds flow down the pyramid. Overall, I am satisfied that this leaves us in a much better position than when we last discussed the Bill, and we support the amendments.
The need for this Bill is well and truly proven. It is now in extremely good shape, and I congratulate those who have been involved. We should mention Tracey Crouch, who started this process with her review. I will also say that I am very pleased that three talented women Ministers have been the ones to see this through.
I have no complaints about Chelsea becoming the world champions, but that was the most ridiculous competition in the most ridiculous place. Any regular football fan seeing two o’clock in the morning kick-offs was the Armageddon that was said would happen to us. It has not happened because we have got our Bill through; we have got our ducks in a line, and we will be able to protect the league that we love and cherish. I wish the Bill well on its way now. We can move forward. If the noble Baroness has nothing to do, she might want to help me out with the employment Bill tomorrow if she is free, because that is another challenging Bill.
In that challenging context, protecting growth must be front and centre for the regulator, not just because it is good for the Premier League but because that growth underwrites the very system that the regulator is charged with supporting. That system today includes record redistribution, rising solidarity payments, and the ongoing voluntary support for clubs up and down the pyramid. If we do not protect growth, we risk weakening the whole system. It must therefore be uppermost in everything the regulator does.
The second test is whether the regulator will truly be light-touch. This is a commitment that Ministers have repeatedly made. The proof will be in the pudding. The new independent regulator will have extraordinary powers that are unprecedented in global sport. That requires not just legal and policy constraint but cultural restraint. It must show grit, independence and judgment. It must be evidence-led and not driven by others’ grievances or agendas. Above all, it must demonstrate a proper understanding of football’s competitive dynamics, with a regulatory approach that offers clarity and certainty for clubs. Critically, that means protecting the competitive balance that is so central to the magic, appeal and value of the Premier League.
In other words, clubs in the same division must know how to comply with the financial regime and trust that they will not face opaque financial constraints that place them at an unfair disadvantage on and off the pitch. In football, a fair and level playing field is not a “nice to have”; it is a precondition for compliance. A disproportionate approach, where clubs do not know if they fall the right side of the line, or even which line rival clubs are aiming for, simply cannot work in football. It will be the fastest route to regulatory failure.
Whatever one’s views of party politics, the appointment of David Kogan as the inaugural chair is encouraging. He brings serious knowledge of the game and credibility across football. The regulator will have an early opportunity to set the tone through the approach taken in the “state of the game” review, the appointment of the board and the CEO, and the proportionality and clarity of the regulatory approach it instils in the first place.
The third test whether the backstop will truly be a backstop. This House has done important work to constrain and de-risk this power. I thank noble Lords including the noble Lords, Lord Birt, Lord Pannick and Lord Burns, and the noble and learned Lord, Lord Thomas, for their diligence, thoughtfulness and pragmatism. The legal, evidential and procedural safeguards now in place are appropriately strong. Under this model, the IFR board will need to consider incredibly carefully whether it could ever be in the best interests of English football to use this mechanism, which Dame Tracey Crouch described as “nuclear coding”. Thanks to an important government amendment, the IFR board must now exhaust all other regulatory tools before ever using the backstop. As the Sport Minister confirmed in the other place, that means using those tools and failing, not just imagining that they may not work.
However, the EFL’s current situation appears to rest solely on the promise of this lever, betting its future not on innovation but on a perceived regulatory shortcut. There is no doubt that the backstop has made the conventional, consensual approach to agreeing the distribution of Premier League revenue far harder. I can report to the House that the Premier League has very recently made a credible and generous proposal to the EFL, but this has been rejected by the EFL board. We must hope that common sense will soon return and that a new approach can develop in the best interests of the whole game.