Football Governance Bill (Sixth sitting)

Debate between Tracey Crouch and Stephanie Peacock

Committee stage
Tuesday 21st May 2024 Public Bill Committees

[Stephanie Peacock]

I have no major issues with the clauses, so in the interests of not repeating what the Minister outlined, I will simply welcome them.

Question put and agreed to.

Clause 34 accordingly ordered to stand part of the Bill.

Clauses 35 and 36 ordered to stand part of the Bill.

Clause 37

Matters relevant to determinations

[Dame Tracey Crouch (Chatham and Aylesford) (Con)]

I beg to move amendment 1, in clause 37, page 27, line 30, leave out “must” and insert “may”.

[Dame Tracey Crouch]

This important clause will give comfort to many fans about the agility of the regulator. Of particular note overall is the reference to bankruptcy, which I know many fans will take a great deal of comfort from. My hon. Friend the Member for Southend West will speak on that part of the clause if she catches your eye, Ms Nokes.

I advised in my speech on Second Reading that I would table this amendment, if only to impress the importance of independence within the regulator. There has been much commentary on the independence of the independent regulator, and much of it has focused on the fact that it is a political appointment. To allay some of those concerns, I should say that there are more than 600 agencies in Government, of which the largest number sit within the responsibility of the Department for Culture, Media and Sport. That is why the Minister always looks so exhausted: because of the number of stakeholders he must deal with. I have been there.

Some of the concern and criticism has focused on clause 37(2), which states that the regulator must

“have regard to the foreign and trade policy objectives”

of the Government. Throughout the passage of the Bill, there has often been confusion about what certain things within it mean, and the wording of clause 37 has set hares running. The Sunday Times this weekend had an interview with the Premier League’s Richard Masters, in which the journalist—not Richard—made reference to the clause, saying that it

“raised questions as to whether it could be forced to give state-backed clubs such as Manchester City and Newcastle United soft treatment”.

The piece refers to whether the regulator would have any say on the outstanding charges and, if it were to have a say, whether, due to foreign policy, there would be a softer stance on that.

Although we on the Committee understand that the clause relates to ownership, the wider world has somehow got it into its head that it also relates to the administration of the league rules, which is beyond the remit of the regulator. However, the clause would relate to the purchase of the club and, as the Minister will know from his own never-ending media round, also often relates to the public investment fund takeover of Newcastle. As the Minister has outlined, the ownership tests are set out in the legislation and apply to all potential owners and directors, regardless of where they are from, as long as they are not from a country where sanctions are in place.

However, my concern about clause 37(2) is that it adds an element of uncertainty into the test because of the fluidity of our foreign trade policy. For example—I use this with complete poetic licence—Donald Trump decides to add to his golf course portfolio and wishes to buy Arsenal. Concerns about his integrity are well documented, and yet our foreign and trade policy determines that we consider the USA to be one of our key allies and an absolute must for investment and trade in the future. Therefore, do we automatically give the keys to the Emirates to the former, and possibly next, President? Can the Minister confirm that the foreign policy test is just one part of the test, and would not overrule others where there is evidence that other matters might disqualify a prospective owner?

I am also concerned that the clause is not applied fairly across industries. Ofcom does not need to take into account foreign or trade policy when adjudicating on a takeover of a newspaper, but the football regulator does for the takeover of a club. I am not saying that subsection (2) should be removed altogether, although I am not sure I understand the value it brings. Many will be acutely aware that most of our Premier League clubs, and an increasing number of clubs elsewhere in the pyramid, are foreign-owned or owned by British people living in other countries, so it is essential that we have complete transparency in the process, including on at what point subsection (2) is relevant.

However, I fundamentally believe that if we are to truly value the independence of the regulator’s day-to-day decisions from the Government, the subsection ought to be reworded from “must…have regard” to “may…have regard”. In this morning’s sitting, in response to a question from the hon. Member for Liverpool, West Derby, the Minister said that we do not want the regulator to be involved in foreign policy. But putting subsection (2) into clause 37 does exactly that. A minor tweak to the wording satisfies everyone, but most of all retains the spirit of independence and removes some of the confusion about who is deciding who owns our football clubs. I am very interested in what the Minister has to say in reply.

[Stephanie Peacock]

Clause 37 has three main parts. It requires the regulator to have regard to determinations from competition organisers, requires the regulator to have regard to foreign policy and trade objectives, and provides the criteria for judging honesty, integrity and financial soundness. I will speak to each of those parts in turn and address amendment 1 with the second part.

On the regulator having regard to determinations from competition organisers, I have already raised the issue of conflicting outcomes and was reassured by the Minister’s explanation, so I will move on to the issue of the influence of Government policy objectives on the regulator.

The clause states that the regulator must have regard to the Government’s “foreign and trade policy objectives” when making determinations on ownership. That has caused concern across the board, including across football governance structures, which usually have a harder time finding consensus, and with fans. That almost unanimous voice tells us something important: everyone wants to see a regulator that is free from undue political interference. I agree. The Government should not be in a position where they can apply pressure to the regulator to make decisions on ownership just because they might be politically favourable. Club ownership must not be a tool used to reward those with which the Government have a positive relationship or penalise those with which they have a negative relationship. That is particularly so given that the Bill empowers the regulator to make decisions on incumbent owners and officers.

However, I understand that there may be circumstances in which national security and foreign policy objectives may be pertinent to the regulator’s decision making. The regulator should, and will want to, have an understanding of all relevant information when making a determination. That is part of the reason why the regulator was chosen as the location of the tests, due to its ability to access relevant information that would not otherwise be available. I therefore do not believe that the intention of the clause was to compromise the independence of the regulator, but to empower it where security or foreign policy objectives are concerned.

Whatever the intention may be, we must ensure that the clause is not open to abuse. I am therefore pleased to offer my support to amendment 1, tabled by the hon. Member for Chatham and Aylesford, which suggests that we change “must regard” to “may regard”. That amendment might help to provide some reassurance on the purpose of the clause and the independence of the regulator.

Some further clarification on how the measure will work in practice would also be helpful. In particular, there must be more guidance on how the regulator will be made aware of “foreign and trade policy objectives”. That is particularly important because transparency is a crucial tool for providing accountability, but may be difficult given that some information will naturally be confidential in line with national security considerations. Can the Minister provide any information on what good practice will look like in terms of striking the balance between accountability and security?

--- Later in debate ---

[Stephanie Peacock]

I appreciate your comments, Ms Nokes. I can skip forward to the amendments. I have some separate thoughts on clause 45. I do think that the background is quite important to the amendments, but am happy to move on directly to address them.

Amendments 13 and 21 are on player consultation. It seems like a missed opportunity that the views of players are not to be taken into account by the regulator. That is why I tabled amendment 13, which would expand consultation requirements to include them. Similarly, amendment 21, tabled by my hon. Friend the Member for Sheffield South East, would require the regulator to seek the views of players and staff, so I will address both amendments together.

Players in both the clubs that tried to break away and the clubs that were left behind had an instrumental role in demonstrating against the ESL. For example, just 48 hours after the announcement, a group of high-profile Liverpool players issued a collective statement against the Super League. That clearly stated:

“We don’t like it and we don’t want it to happen.”

Meanwhile, Leeds players, while warming up for a game, wore shirts featuring slogans such as “Football is for the fans” and “Earn it.” Players in other clubs followed suit. It is clear from that that players feel passionately about the competitiveness and fairness of the competitions that they operate in, and have a view to share on these issues.

[Dame Tracey Crouch]

The shadow Minister is making a really interesting speech, but is she not actually making a speech against the amendment, because the players did that without there being a statutory requirement for them to do it?

[Stephanie Peacock]

That is a fair point, but I do not think we should have to rely on players having the bravery to make public statements. We are saying—this is a debate that we rehearsed earlier in Committee—that there should be an obligation on the regulator to consult them, and I will come on to make that argument.

Many players care about the fans and communities that they play for, and it is players who are likely to come under fire if they take part in competitions that fans oppose. At best, they will act as a vehicle for fans hoping to hold their clubs to account. At worst, when competing in closed competitions, players may become the face of the demise of the long tradition of the English football pyramid, without having had any say in the matter. At a time when there has been a particularly concerning rise in abuse of football players—albeit from a shameful minority of fans—that becomes even more concerning.

Football Governance Bill (Fourth sitting)

Debate between Tracey Crouch and Stephanie Peacock

Committee stage
Thursday 16th May 2024 Public Bill Committees

[Stephanie Peacock]

I welcome my hon. Friend’s comments. He is absolutely right, and he sums up why the process for appointments must be robust and underpinned by transparency and accountability on all sides.

[Dame Tracey Crouch (Chatham and Aylesford) (Con)]

The shadow Minister is making a very important point, but has she looked at the public appointments process on the Government website? The appointment to the independent regulator will be subject to the processes from the Office of the Commissioner for Public Appointments, which has stringent rules around appointments, particularly regarding transparency and conflicts.

[Stephanie Peacock]

I welcome that input, and that is absolutely right. I am trying with these probing amendments to seek some clarity from the Government, so that all hon. Members and everyone who has an interest in the Bill are satisfied. I tabled them to make important clarifications and to ensure that appointments to the regulator are free from vested interests. I believe that that is the intention behind the Bill.

It is peculiar that the process of declaring a conflict of interest does not involve potential appointees making any declarations themselves. Given that potential appointees are the experts on their own history, they must take a level of responsibility for ensuring that time is not wasted as part of their appointment. Amendment 15 would ensure that candidates are obliged to make a declaration if they hold any relevant interests that might give rise to a conflict. That would create a pathway for unsuitable candidates to be easily and quickly dismissed, and ensure that the appointer is not the only person responsible for identifying conflicts. That shared accountability would strengthen the process.

The involvement of the appointer in any investigation of any potential conflicts will also be crucial. I tabled amendment 14 to require appointers to categorically and objectively ensure that the candidate is free from vested interests. It is not enough for an appointer to simply say they are satisfied that there is no conflict; the Bill must require a level of intentional due diligence on behalf of the appointer, so that if any conflicts are identified later down the line, there is a level of objective accountability. Replacing “is satisfied” with “has ensured” will strengthen not only the wording but the entire system of appointments.

I hope that the Minister can accept the changes as a necessary part of achieving the Bill’s aims, or at the very least can provide clarification on why the Bill as drafted allows for subjectivity in decision making when it comes to conflicts. It is only by getting the appointment system right that we will get the regulatory system right. We hope that the process will be watertight.

--- Later in debate ---

[Stephanie Peacock]

My hon. Friend makes an important point. Again, we are attempting to be as helpful as we can. We are not giving a veto; we are simply saying that the regulator should have a good, constructive working relationship with these groups.

I will make a little progress. My final point, as I said, is that the Bill does not currently recognise that there are cross-governance structures that work well within the game and with which it could be beneficial for the regulator to work constructively. The PFA provides an example of that in the Professional Football Negotiating and Consultative Committee. This mechanism is used by the league’s union and governing body of football to provide a backstop on players’ rights, ensuring that substantive changes to player contracts and conditions cannot be made unilaterally. Where collaboration works well in the football ecosystem, it is important that the regulator can work constructively with the bodies as well as clubs, governance structures and competition organisers. Has the Minister considered that? I would welcome his thoughts on that today.

It is great that the independent regulator will be tasked with working constructively, but we must make sure that there is a comprehensive list of those that should apply to so that co-operation exists in the new landscape wherever possible. I tabled amendment 9 to broaden the scope of constructive working. I hope Members across the Committee will lend their support.

Amendments 20 and 2, tabled by my hon. Friends the Members for Liverpool, West Derby and for Sheffield South East, mirror my amendment, demonstrating that there is a wider recognition of the need to expand the list. I hope that the Minister will take that into account.

[Dame Tracey Crouch]

I am not unsympathetic to the hon. Lady’s point about supporters and the fan community, but given that the Bill establishes an independent regulator to look at the long-term financial sustainability of the game, what does she think the other people listed in her amendment would practically contribute to, for example, the owners and directors tests or some of the licence conditions?

[Stephanie Peacock]

We are not suggesting that they will all be able to contribute to every element. I gave an example where, for example, football clubs are in the early stages of suffering financial problems and issues. Often, the groups that I refer to are the first to recognise and realise that. We are simply attempting to make sure that the legislation is as strong as it can be and that the regulator has the most thorough and useful list of people to work with constructively.

[Sir Christopher Chope in the Chair]

Football Governance Bill (Second sitting)

Debate between Tracey Crouch and Stephanie Peacock

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Stephanie Peacock]

Q Do you think there is a risk that clubs make asset transfers from the women’s game to the men’s game in order to become financially sustainable?

Jane Purdon: One of the classic models at the moment, as you have heard, is that the women’s team sits within the same legal entity as the men’s team, and there are pros and cons to that. The pros are obviously that the club has the brand, the IP and the infrastructure. The cons are that it can make the women’s team very vulnerable to what happens in the men’s team. I saw that with my own club, Sunderland, which 20 years ago was so ahead of the game, but the men’s team fell down two divisions. I understand that it is a cost centre and tough decisions must be made, even if they are not the decisions that I would make.

I have actually posited the question before of what happens when women’s football begins to make money and becomes profitable. What are we going to do with that profit, and how much will go back into the men’s game and how much stays in the women’s game? I think that would be a great question for football to debate.

[Dame Tracey Crouch]

Q Good to see you, Jane. You are obviously involved in Women in Football, which is not always about women’s football. Do you think clubs are making enough progress in ensuring that there are more women on their boards and that there is greater diversity in the boardroom? What do you think the regulator should or could be involved in in the future?

Jane Purdon: There are some statistics and research showing that, I think, 10% of current Premier League directors are women. That research was done earlier this season, but the key thing is that it has not shifted since somebody last looked at it in 2019. The answer, with a very broad brush, is that it would appear not. I have to say that there are some clubs doing fantastic work, some of whom have given evidence today. If you want a great exemplar, take a look at Brentford football club, but as a whole, I do not think the industry is moving fast enough. We need to look at not just boards but executive committees—the lead executive decision-making body within the club.

We speak to our members a lot about this. We have 9,500 members, 80% of whom are women—we do welcome men into our membership—and we talk to them regularly about how they are feeling. We are getting a very mixed picture. We are told that 89% of them feel optimistic about the future of football, but at the same time, again, getting into 80% say that they have experienced sexism in their football careers. A minority of them feel that they are supported to get to the highest path. I would say that things are changing but not quickly enough.

To the second part of your question about what the regulator could do, we have a proposal for a code of governance practice. What concerns us at Women in Football is that both on the face of the legislation and through discussions we have had with the Government in our lobbying activity leading up to this point, there is an indication that it will not include any provisions about diversity. Having co-written the code for sports governance in 2016—under your maestro-ship, Tracey, if I may say so—and having seen how that really shifted the dial, I am really concerned about this. I think it is a poor vision of corporate governance if you do not address equality and diversity. You are not actually writing something about governance. You are writing something else.

To really shift the dial on this, you need three things. You need to make the business case and win hearts and minds. People need to understand and not be frightened, and realise that there are really sound business reasons for doing this. You need to give them support, but you do need to have a bit of a lever—whether that is a funding consequence or a “comply or explain” consequence and the transparency that comes from that in the case of the UK corporate governance code. That is one thing we would like more assurance on and express reference to in the legislation.