Football Governance Bill [Lords] (Fourth sitting)
Thursday 5th June 2025
(2 days, 19 hours ago)
Public Bill CommitteesFootball Governance Bill [HL] 2024-26 View all Football Governance Bill [HL] 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 5 June 2025 - (5 Jun 2025)
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 13 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 11 - Question accordingly negatived.
The Chair
Before we begin, I remind Members, please, to switch all electronic devices to silent. Tea and coffee are not allowed in the Committee room. We will now continue our line-by-line consideration of the Bill.
Clause 10
state of the game report
Mr Clive Betts (Sheffield South East) (Lab)
I beg to move amendment 9, in clause 10, page 7, line 8, leave out “18” and insert “12”.
This amendment would require the first State of the Game Report to be published within 12 months of the Bill passing.
The Chair
With this it will be convenient to discuss amendment 10, in clause 10, page 7, line 12, leave out “five” and insert “three”.
This amendment would require all subsequent State of the Game Report to be published every 3 years.
Mr Betts
It is a pleasure to serve under your chairship, Ms Butler. I do not intend to have a long debate on amendment 9, because I am sure that the Minister will agree readily to my suggestion. At the least, would she agree to reflect on it? The state of the game report is core to what we are trying to do with the football regulator—to look at the state of the game, what the problems are and what needs to be done to change it. Therefore, getting that report in place as soon as possible is the intention of my amendment. Why wait 18 months if it can be done in 12 months? I do not know what the regulator will consider and how long it will have to do so, but its primary job to begin with will be to look at this issue. Twelve months should be completely adequate.
In some ways, my second point is more important. Football does change, like the rest of society, and circumstances in football change, so I do not think it is entirely reasonable to say to the regulator, “Once you’ve done your job, you can sit back and wait another five years before coming to look at the issues again.” Three years seems a much more proportionate time. The Minister will probably tell me that five years is the end time, and the regulator could look at it in the meantime if it so wanted. Perhaps I am anticipating what she is going to say.
Joe Robertson (Isle of Wight East) (Con)
I have some sympathy with what the hon. Member is seeking to do, but I am slightly concerned that perhaps he rolled over before he even rose to his feet, and will not press his amendment to a Division.
Jim Dickson (Dartford) (Lab)
It is a pleasure to serve under your chairship, Ms Butler. My hon. Friend is pushing for 12 months, and I have a lot of sympathy for what he is trying to do because it needs to be quick so that the regulator can start to take the right decisions about the future of game. However, does he agree that what is in the Bill is a significant improvement on what was in the last Bill, which I believe was three years rather than the 18 months that is before us?
Mr Betts
Absolutely. I accept that the Government have been listening to the arguments—not all Governments do, but this one clearly have. That is an important step forward. One of my worries, which we will look at further when we come to later clauses on the distribution of funding, the effect of parachute payments and the role that they may play and for how long, is that unless we give the regulator slightly stricter time periods, we could get to the end of this Parliament and find that nothing has changed.
James Naish (Rushcliffe) (Lab)
My concern when I read the legislation was that five years is one Parliament. One report per Parliament feels like the regulator is being quite lackadaisical when it comes to producing reports. I hope that there can be a more regular publication on the state of the game, given its centrality to life in our country.
Mr Betts
Absolutely. I ask the Minister just to think about it. As my hon. Friend just said, the current provision is one report per Parliament. We can look back over the past five years and see that a lot has changed—there is a lot more money in the game—and if the regulator is going to be there, its main role will be to look at this issue. Allow, encourage and make it do that a bit more quickly. If the Minister cannot accept the amendment today, could she at least indicate that she might give it further thought and have discussions about it before Report stage?
Max Wilkinson (Cheltenham) (LD)
It is a pleasure to serve under your chairship, Ms Butler—it is appropriate that you are chairing given that, as I understand it, the road to Wembley runs right through your constituency. I will say only that we support both amendments. The principles that the hon. Member for Sheffield South East stated apply, and more regular reporting will clearly help the regulator to hold itself and clubs to account. On whether it should be 12 or 18 months, I think the sooner it is done, the better, and then we can get on with sorting out the state of football.
Mr Louie French (Old Bexley and Sidcup) (Con)
It is a privilege to serve under your chairship, Ms Butler—a half-time substitute in today’s proceedings. I will speak briefly to the amendment. I completely understand the objective that he is seeking to nudge the Government towards, which he explained well. The obvious question for the Minister is whether more frequent reporting—three years rather than five years—would mean additional costs. I await the Minister’s response, but I understand that the hon. Member is not seeking to press his amendment to a vote.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)
It is a pleasure to see you in the Chair and to serve under your chairship this afternoon, Ms Butler. I thank my hon. Friend for his amendment.
The state of the game report will be a key study into the structure and dynamics of the industry. It will help to build an evidence base to inform the regulator’s approach and decision making. I therefore recognise the intent behind my hon. Friend’s well-meaning amendments.
The state of the game report needs to be produced promptly, but it also needs to be a robust study. The timeframes set out in the Bill balance the importance of a timely first report with giving the regulator time to undertake the necessary in-depth analysis. The regulator will need to publish its first report as soon as possible or, as my hon. Friend outlined, within 18 months of the competitions in scope of regulation being specified by the Secretary of State, as an absolute maximum. For subsequent reports, a maximum of five years between publications will encourage the regulator to take a more long-term look. That should minimise unnecessary burdens on the industry and better align with the timelines for existing industry processes, such as commercial agreements. The regulator will still have the discretion—as my hon. Friend anticipated—to publish subsequent reports sooner if it considers it appropriate to do so.
I cannot accept my hon. Friend’s amendments to reduce the timings further. He asked me to go away and reflect on them, but I do not want to give him any false hope. We have put careful consideration into the time limits, which were changed from the previous Bill. They are an absolute maximum. We have had a number of conversations with the various leagues and stakeholders, and we are confident that they are the right time limits. We have made it clear that the regulator has the power and discretion to publish sooner, and we would very much hope that that would be the case for the first report in particular. For those reasons, I cannot accept his amendments.
Mr Betts
I will not press the amendments to a vote, but I want to encourage the Minister on this point. As she said, the regulator can come back to the state of the game report before five years. In doing so, would the regulator be encouraged to take account of any views or concerns from the leagues and clubs that are being regulated, and from fans’ groups? If there was a real concern that things were changing fundamentally, would the regulator be encouraged to come back and reflect on whether a state of the game report should be done more quickly?
Stephanie Peacock
Yes, absolutely. We have talked about light-touch regulation throughout the Bill. The regulator has the ability to go sooner, in both its first report and subsequent ones, so we hope that there will be ongoing conversations with all the affected parties. If something happens, the regulator has that power and we would expect it to react. That is why we are not being prescriptive.
Mr Betts
That is a really helpful response. It says to the regulator, “These are your timeframes, but if things change, you should listen to the views and voices of the stakeholders in the game,” and something could be done more quickly. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Lee Dillon (Newbury) (LD)
I beg to move amendment 139, in clause 10, page 7, line 22, at end insert—
“(iia) supporters trusts, fan groups and individual fans;”.
This amendment adds fans and fan organisations to the list of groups that the IFR must consult about a state of the game report.
It is a pleasure to serve under your chairship, Ms Butler.
The amendment seeks to ensure that the heart of football, the fans are remembered and properly considered, and that their voices are heard throughout the Bill. The state of the game report is a key output of the new regulator. It will provide comprehensive assessment of how football is functioning. It will help to set the direction of future policy and regulation, and will be a key measure of accountability for the sport as a whole. Given that, it is essential that fans should have a say.
Week in, week out, fans give their time, money and hearts to the clubs that they love, and yet too often they are the last to be consulted and the first to be overlooked when decisions are made about the future of our national game. The amendment is about changing that. It is about ensuring that the voices of supporters are formally recognised in the process of shaping the game’s future.
Supporters trusts play a key role here. They are often the bridge between clubs and fans, with a working relationship on both sides. They are well placed to represent fans’ views in a constructive and organised way. I recently met STAR, the Supporters Trust at Reading, which represents Reading FC, the closest professional league club to my constituency. Over the years, I have been to many games as a fan, and I have seen at first hand how passionate and committed the supporters are to improve the club and represent their fellow fans. Supporters trusts such as STAR are well placed to act as that bridge between the clubs and their fanbase.
We also recognise that not every fan may agree with their trust. That is why the amendment also allows for individual fans to be heard directly where necessary. It is vital that the Bill is amended to ensure that the independent football regulator listens to supporters when assessing the health and direction of the game through the state of the game report. By formally including fans and their organisations in the consultation process, we ensure that their lived experience, insight and passion are properly reflected in how the game is monitored and improved.
Mr French
The amendment, as explained by the hon. Gentleman, seeks to add supporters trusts, fan groups and individual fans to the list of those whom the independent football regulator must consult about the state of the game report. We have absolutely no problem with the principle of consulting fans in that context, and we would expect the football regulator to wish to do so in the due course of its business, for reasons we explained in other parts of the Bill. I suppose there might be some concern about how long the consultation would take if it had to consult every individual fan, as suggested by the hon. Gentleman, but we will await the Minister’s comments to understand that in the context slightly more.
Mr Betts
Briefly, I think we are going back to a very similar discussion to the one that we have just had, but would the Minister expect—without this going on the face of the Bill—the regulator to consult fans, in particular the Football Supporters’ Association? It has done a brilliant job. It was party to the fan-led Crouch review, and it has provided a great deal of assistance in framing this legislation. I hope that the association would be seen as part of the consultation process when the regulator comes to do that.
Stephanie Peacock
The state of the game report is expected to be a key piece of work that the regulator produces on the basis of extensive research and consultation. The Bill sets out a few parameters. What is included in the state of the game report, and therefore who is relevant to consult, are up to the regulator’s discretion, as the expert, allowing the report to evolve over time. The Bill therefore does not set out an exhaustive list of who to consult, and nor would we want it to.
Throughout the Bill, however, and especially where it states that the regulator should consult other relevant persons, we expect that those affected by the decisions of the regulator, such as fans, players and representative groups, would be included when appropriate. To answer the point made by the hon. Member for Sheffield South East directly, we absolutely would expect those groups to be taken into consideration. That is made clear in the regulatory principle set out in clause 8.
Joe Robertson
I appreciate that we have a situation where one of the Minister’s Back Benchers is seeking assurances in this Committee, but does she accept that is not the equivalent of having something written into the Bill? With the greatest respect, if it is not in the Bill, her assurances here on what she expects from the football regulator is only her expectation—it is nothing more certain.
Stephanie Peacock
I remind the hon. Gentleman that part of the purpose of a Bill Committee is to give our intention as Parliament. Yes, I can give those assurances and I have done so at every step of the way.
Stephanie Peacock
I will take a further intervention, but I have not actually answered the hon. Gentleman’s substantive point. I want to answer it, if he gives me the chance.
Joe Robertson
It is a fundamental principle of lawmaking that, when interpreting the law, judges or anyone else do not go and look at what a Minister might have said in Hansard. I appreciate that she may have a long career, but the Minister will change at some point, and the law has to stand, potentially, for a very long time.
Stephanie Peacock
The hon. Gentleman shouts his CV from a sedentary position.
Kevin Bonavia (Stevenage) (Lab)
Members of the Committee may have heard of the case Pepper v. Hart, which showed that courts do look at what is said in Parliament. What we say here does matter.
Stephanie Peacock
I am grateful to my hon. Friend for that comment. The intention of the regulatory principle is not to list every possible stakeholder that the regulator should ever engage during the course of regulation. That would be a slippery slope to an enormous list that risks missing persons off. Rather, the broader group of those affected by decisions are captured by this provision, even if they are not explicitly mentioned. That is why I am very pleased to give those assurances to my hon. Friend the Member for Sheffield South East.
Mr Dillon
I am grateful to the Minister for her response, and I thank the hon. Member for Sheffield South East for drawing that conclusion from the Minister in his useful remarks. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
The state of the game report will allow the regulator to better understand the finances and economics of the industry and its individual clubs. This, in turn, will inform the regulator’s approach and decision making across the regulatory framework.
Clause 10 requires the regulator to publish the report and sets out the topics that it must cover, including an overview of the main issues affecting English football and whether any features of the industry are jeopardising the regulator’s ability to deliver its objectives. These are deliberately broad and non-specific topics, affording the regulator some discretion as to what to cover. In essence, this means that the regulator can cover any matter that it considers relevant at the time, providing it relates to the functions of the Bill.
I would like to take this opportunity to provide further reassurance to my hon. Friend the Member for Sheffield South East on his earlier amendment. We would expect at this stage for it to include distributions, and powers lie within the Bill for the regulator to do that. I want to put that on record once again, further to our earlier debate. It will depend on which issues and features of the market are relevant to its objectives and the regulatory regime at any given time. However, the report is still constrained by its link to only matters relevant to the regulator’s function, so I reassure the Committee that this cannot be an avenue for scope creep.
The clause also requires the regulator to publish its first report no longer than 18 months after the competitions and scope of the regulation have been specified by the Secretary of State, as we have discussed. Subsequent reports must be published at least every five years after this but, as we have just debated, they could be more frequent if the regulator considers it appropriate. These timeframes balance the importance of a timely first report with giving the regulator time to undertake the necessary in-depth analysis.
Finally, the clause sets out clear consultation requirements, including an open process of inviting suggestions about the issues to be included in the report, as well as targeted consultation on a draft report, which I hope speaks to some of the comments from the hon. Member for Newbury on his previous amendment.
Mr French
I do not want to rehash the debate we had before the lunch break. We will press amendment 122 to a vote under a future clause, but we are disappointed that the Government are not willing to accept amendment 123. As we explained before the break, Conservative Members are very concerned that the regulator may impact ticket prices even further. We were calling for transparency in the state of the game report for fans and for Parliament so that they could understand the impact of the regulator on ticket prices for fans. We are disappointed that that amendment was not accepted. I appreciate the further comments that the Minister made, but I would like her to consider that in the future.
Stephanie Peacock
The hon. Gentleman said that he would not rehash the debate, but somewhat did. I have made my argument clear: ticket pricing is a commercial decision, and the Government have gone further by adding a consultation. We have nothing more to add on that topic; it has been fully debated.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Football governance statement
Mr French
I beg to move amendment 113, in clause 11, page 7, line 41, at end insert—
“(7) No football governance statement may have effect unless approved by resolution of both Houses of Parliament.”.
This amendment would require the football governance statement to be approved by Parliament before it could have effect.
As we know, clause 11 makes provision for the Secretary of State, whoever that may be in the coming months, to issue a statement on issues related to football and, specifically, to the Government’s regulator. While the statement is not a binding one, it walks a very fine line and could be interpreted as political interference in the governance of football. As we have already heard when deliberating on clause 7, that is a very real issue with real-life implications for English football and English clubs.
I do not want to get bogged down in the earlier debate, but I ask the Minister to accept the fact that, aside from the context of the Bill, if UEFA or FIFA deem the Government to be exerting influence on how football is run in a way that compromises the independence of football associations and clubs in line with their statutes, they can, and perhaps will, take action to exclude the nation’s teams and clubs from competition. Irrespective of the Bill, if FIFA or UEFA believe that there is Government interference in football, there is a risk that clubs could be kicked out of European competitions.
Stephanie Peacock
No one is disputing that. We are clear that the Bill does not stray into that. As I said to the hon. Gentleman, in his Government’s iteration of the Bill, the regulator had to have due regard to foreign and trade policy. We took that out, further strengthening the independence of the independent football regulator.
Mr French
I genuinely thank the Minister for clarifying. We have to understand the context in which the Bill is operating. As I said earlier, the Bill is being made not in isolation, but in a complex international football ecosystem. We have to be mindful of that in everything that we do in this Committee and in the legislation that goes forward. Will the Minister therefore accept that, even if she does not believe that it will happen, if her regulator is perceived to be exerting influence and undermining the independence of English football, both international governing bodies will exclude English teams? I want to confirm that the Government understand those risks.
Much like the Secretary of State’s failure to declare her interests in relation to her appointee to the chairmanship of the regulator, who we know donated to her, this is about the perception of undue influence and the impact that will have on how the independence of English football is viewed internationally. If UEFA and FIFA perceive that there is undue influence from whoever the Government of the day may be, they will act, as I explained already with the example of Greek football in 2006. I hope that, as the Secretary of State has now done, the Prime Minister will make sure to declare any relevant interests, as we know that the chairman also donated to his campaign.
I believe that the Minister confirmed that she understands that there is a real risk that we have to be mindful of and that if the regulator breached independence, the entirety of English clubs’ participation in Europe, and the jobs and significant revenues that come alongside that, would be at stake. That is why I have tabled amendment 113, which would require the football governance statement prepared by the Secretary of State to be approved by Parliament before it could have effect. That is a vital safeguard to prevent the perception that any Government of any colour have direct influence over the regulator.
Mr Dillon
The shadow Minister may be coming to this point. His amendment states,
“No football governance statement may have effect unless approved by resolution of both Houses of Parliament”,
but on the other hand he argues for more independence for the regulator. Surely Parliament and, by extension, political parties having to vote for a resolution would introduce more politics into the independent regulator.
Mr French
I thank the hon. Gentleman for the intervention, but I am speaking very clearly about the interference of Government in football. That is very different from how Parliament acts in creating this statute and being able to check that the regulator is not putting clubs at risk, as I have said before. It is about Parliament having its say, rather than just delegating powers to the Secretary of State of the day.
By requiring that Parliament approve the statement, my amendment would ensure two things. First, there will be proper scrutiny of the Government and their policy. Mr Speaker has recently had to remind the Leader of the House, because of the way the Government have continued to ignore it, of paragraph 9.1 of the ministerial code, which states:
“When Parliament is in session, the most important announcements of government policy should be made in the first instance in Parliament.”
The amendment would require the Government to come the House to present and defend their policy, instead of hiding behind media briefings or social media posts.
Secondly, the amendment would help to mitigate UEFA’s and FIFA’s concerns about the direct influence of Government over the independence of English football. Accepting the amendment and inserting Parliament into the equation would make the regulator much more palatable for the international governing bodies.
I hope that members of the Committee will accept the amendment for what it is: an attempt to ensure that no Government of any colour can be the cause of English football’s exclusion from European or international competitions. There will come a day—the sooner the better, in my opinion—that the Labour party is no longer in government. Labour and Liberal Democrat Members must therefore be realistic, practical and honest about the situation. When there is a different Government in place, will they accept the risk of that Government being the reason that the Three Lions cannot play in the World cup, or the reason that English clubs—from Cheltenham to Barnsley or Welling, or perhaps Sheffield Wednesday —cannot compete in European competitions? That might seem a remote prospect at the moment, but it is the ultimate aim of every club to be in such competitions. That is at risk without this amendment.
If hon. Members are being honest with themselves, their constituents and football fans across the country, the answer will be clear, and they should support my amendment to help to protect English football and give Parliament a greater say.
Stephanie Peacock
I thank the hon. Gentleman for his amendment, but I am not sure that his remarks spoke much to the detail of it. I remind him that this part of the Bill has not been changed since its previous iteration under the last Government. He has once again made his well-rehearsed argument about UEFA, but there is no risk in that regard. We have been very clear. UEFA and FIFA are happy with the Bill as drafted, and the FA has made that clear to Members of both Houses.
The purpose of the clause is to allow the Secretary of State the power to prepare a football governance statement that sets out the Government’s policies on issues related to football governance, where these are consistent with the regulator’s statutory remit. We believe that this is an important tool that the Government can use to set out their priorities in football governance, similar to the way that the Government give a strategic steer to the Competition and Markets Authority and other regulators.
We drafted the provision with appropriate deference to Parliament. Any statement must be consistent with the purpose of the Bill and the regulator’s objectives as set out in the Bill. The Committee has already considered that purpose and those objectives and has approved them. Parliament has set out the statutory remit, but it is appropriate that the Government of the day are able to set out their policy priorities within that well-defined remit without requiring parliamentary approval each time. There are also restrictions on when statements can be made, to ensure that they are not overused. Any statement must be published and laid before Parliament, so Parliament can hold the Secretary of State accountable for its content. Requiring the Secretary of State to gain approval for this statement would add an extra burden to Parliament.
Lincoln Jopp (Spelthorne) (Con)
I struggle to understand what might be contained in the Government policy statements. The Minister is steeped in this legislation, so must have discussed this in the past. Can she give the Committee an indication of what sort of thing might be covered?
Stephanie Peacock
I am grateful to the hon. Gentleman. He was new to this place at the election, so he perhaps is not familiar with the previous Bill, but as I have said, this Bill is the same as the Conservative version. On the specifics of the statement, I do not want to pre-empt what may be in there, but it could be, for example, the idea that the Government focus on growth; we have that in the objectives. I do not want to anticipate what could be, but let us be clear: this is about broad objectives, not specifics or operations, and any statement that is not consistent with Parliament’s intention in passing the Bill, as set out in the regulator’s statutory objectives and in the purpose clause of the Bill, could be challenged legally. Similar discussions have taken place in both the House of Lords—the other place—and the House of Commons, and we expect the statement to reflect the Government’s position on the regulator’s use of its powers.
Mr French
I stand to be corrected; we will look at Hansard, but one of the votes that we have had already in Committee was on an Opposition amendment to make sure that growth was clearly defined in that objective in the Bill, and it was rejected by the Government, so I am slightly confused. My hon. Friend the Member for Spelthorne has asked for clarification of what might be in the report, and the Minister seems to be contradicting a vote that has already happened. Could she clarify what she means?
Stephanie Peacock
I can absolutely. I said I did not want to be drawn on the specifics of the statement; I do not want to pre-empt what is in there, but I tried to give an illustration without being drawn into the specifics. If, say, there is a general election and a new Government take power, a new Secretary of State may want to give broad direction. We as this new Labour Government have made it very clear that growth is a focus. We know that is in the Bill, so that is why I thought it was a sensible illustration to give in answer to the question from the hon. Member for Spelthorne, but I want to be very clear that I do not want to be drawn into specifics, because this could cover the approach with regulation in, for example, minimising burdens on clubs, which would tie in with that.
I simply do not think this amendment is necessary. For that reason, I ask the hon. Member for Old Bexley and Sidcup to withdraw it.
Mr French
I must admit I am slightly confused by the answer that was given. I expected the Government to refuse my amendment, but I am genuinely confused about the direction of travel now. I explained the causes of the amendment. The answer that the Minister has just given to my hon. Friend the Member for Spelthorne seems to contradict—other Members are nodding—votes that have already taken place on this Bill. Without rehashing the whole exchange, we wanted to put in as an objective of the regulator economic growth and growing the game of football, for very plausible reasons. The debate was around the word “sustainability”—I appreciate that you were not in the Chair at that point, Ms Butler. To hear the Minister describe the objective that was voted down by the Labour party as a key part of Government policy—that was the argument we made earlier; we could not understand why the amendment was voted against—is confusing. We are genuinely confused, so I will press the amendment to a vote.
Question put, That the amendment be made.
Stephanie Peacock
Clause 11 provides a power for the Secretary of State to issue a statement on the Government’s policies related to football governance. A football governance statement can only include issues within the scope of the regulator’s regulatory regime. It can be revised every five years, or more frequently only if a general election has taken place, as I illustrated just now; if there has been a significant change in Government policy relating to football; or if the Secretary of State considers the statement is inconsistent with the purpose of the Bill or the regulator’s objectives. It cannot be used to direct the regulator’s day-to-day operations, which protects the regulator’s independence.
The general duty set out in clause 7 requires the regulator to have regard to any football governance statement when exercising its functions under the Bill. For the Government to issue such a statement is common practice used with other regulators. In its detail, as discussed, it could cover the approach to regulation—for instance, minimising burdens on clubs—or the Government’s growth agenda.
The clause is an appropriate and proportionate power that will help give assurance to the Government and Parliament that the regulator acts within its regulatory scope and has regard to strategic issues. It does not interfere with any daily operations or affect the independence of the regulator.
Question put and agreed to.
Clause 11 accordingly ordered to stand part of the Bill.
Clause 12
Guidance published by the IFR
Question proposed, That the clause stand part of the Bill.
Stephanie Peacock
To ensure that the regulatory regime is as effective and efficient as possible, the football industry needs to understand what is expected of it. That is why this clause empowers the regulator to prepare and publish guidance on the exercise of its function. The guidance will be crucial to translate the legal framework in the Bill into a detailed and practical explanation of the regulator’s regime. It will ensure that the industry understands the regulatory system, what to expect from the regulator and what is expected of it. Not only will that reduce burdens, but it should improve compliance.
The clause sets out that the regulator must publish guidance about the exercise of its functions under specific sections of the Bill. It also commits the regulator to publish guidance about the exercise of any of its other functions. The regulator must consult any persons that it considers appropriate before publishing guidance for the first time and before revising guidance in the future, unless the revisions are minor. This will ensure the regulator is taking into account the views of all relevant stakeholders and experts when preparing its guidance.
Clause 13 permits the Secretary of State to prepare and publish guidance on the regulator’s functions. If needed, this guidance offers an opportunity to provide some additional detail on the regime that was not included in the Bill.
The industry and fans alike have been clear that they do not want to see ongoing Government involvement in football, as we have debated in this Committee. That is why the regulator must have regard to the Secretary of State’s guidance, but is not obliged to follow it. That is also why the Secretary of State may not revise this guidance any more frequently than every three years. This will deliver an appropriate arm’s length role for the Government, but avoid any risk of the regulator becoming a political football. The Secretary of State must consult both the regulator and anyone else they consider appropriate before publishing or revising any guidance, and must lay the guidance before Parliament. I beg to move that these changes—I mean clauses—stand part of the Bill.
Mr French
The Minister will be pleased to know that I will not pick her up on that slip of the tongue, given I made a few of my own this morning with some of the tongue twisters that my assistant put into my speeches.
As we have just heard, clause 12 requires the Government’s regulator to publish guidance about the exercise of its functions as set out in clauses 21 to 25 and the outcomes it seeks to achieve, and to consult appropriate persons before publishing that guidance.
I have a few questions. Will the Minister clarify when she expects her regulator to have translated its powers and duties into a detailed, cohesive and practical explanation of the IFR regime, and what she believes detailed and practical mean for the clubs, so they can understand that?
Clause 13 permits the Secretary of State to prepare and publish guidance on the Government’s regulator’s exercise of its functions under the regulatory regime. This guidance would aid the Government’s regulator in interpreting the intention of legislation when designing and implementing its regulatory regime. It would be non-binding, but the Government’s regulator must have regard to it when exercising its functions.
There was an interesting debate between two lawyers on this Committee about where those lines are drawn. They have both made their arguments for the record, so I will not go back into that, but the clause does stipulate that revisions to guidance may not be made
“more frequently than every three years”
unless there is a revision to the Bill, or the revision is pre-agreed upon between the Secretary of State and the Government’s regulator. It also requires the Secretary of State to consult both the Independent Football Regulator and any appropriate persons before publishing or revising any guidance and laying it before Parliament, unless the revisions are minor.
The Minister will be aware that in the previous sitting I pressed her about that parliamentary role; I will now do so again. Might we have some insight into where, when the reports come back to Parliament, the Government plan to publish them? On Tuesday I asked the Minister whether that would be the role of the Culture, Media and Sport Committee, or of the Public Accounts Committee, given the financial aspects and the costs, and the role of the Comptroller and Auditor General, or whether that would be on the Floor of the House. We really would appreciate, as the official Opposition, some guidance on where the Government plan to publish those reports, so that everyone in the House may have a clear understanding of the direction of travel and where those reports will be available to be read.
While the guidance may not be binding, the clause highlights the blurred lines between Government and regulator, particularly when the appointee was a political appointee, as we know. How will the Minister ensure that any guidance published by the Government is not interpreted as Government intervention, and that the regulator remains free to act independently while not bringing in those risks that we have discussed today?
Stephanie Peacock
I am grateful for the shadow Minister’s questions. There is no timeline on guidance, but it will be for the regulator to publish. We expect it to be done in a timely fashion, ahead of clubs having to engage with the system.
On the shadow Minister’s question about parliamentary engagement, I wrote back to him this morning; I believe that went out this morning. The obvious Select Committee is the Culture, Media and Sport Committee, but it is not for me as the Minister, but for the individual Select Committees to determine whether it is relevant, and whether they would like to invite the regulator to give evidence or to engage with any of their inquiries.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13 ordered to stand part of the Bill.
Clause 14
Annual Report
Amendment proposed: 122, page 9, line 3, at end insert—
“(aa) the impact that the IFR’s activities have had on the price of match tickets, and”—(Mr French.)
This amendment would require the IFR to include in its annual report the impact that its regulatory activities have had on ticket prices.
Mr French
I beg to move amendment 134, in clause 14, page 9, line 3, at end insert—
“(aa) the cumulative impact of the costs imposed on clubs through compliance with the IFR’s regulatory regime, and”
This amendment would require the IFR to include in the annual report an account of the financial costs imposed on clubs through its regulatory requirements on them.
Let us see whether we get a different outcome on this vote, although I will not hold my breath—I had a wry smile from at least one Member. The amendment seeks to insert reference to the cumulative impact of the costs for clubs from compliance with the IFR’s regulatory regime. The clause makes provision for the Government’s regulator to publish an annual report
“As soon as reasonably practicable after the end of each financial year”.
I will start with a question to the Minister: what does she envision an unreasonable delay to be in the submission of said report? I think we all agree that six months could be unreasonable, for example. I do not ask for a specified time limit of the Minister or in the Bill, although it might be reasonable for the Government to include one; I ask for a rough indication of how long fans will have to wait every season to see what the Government’s regulator is doing. I hope she will give such an indication today in Committee.
Subsection (2), as drafted, lists what the Government’s regulator must include in its annual report. However, we believe that that list is incomplete and requires the amendment tabled in my name. I moved the amendment to require the Government’s regulator to include in its annual report an account of the financial cost imposed on clubs through its regulatory requirements on them.
Increases in regulation have costs for businesses, regardless of the industry or of the intent. The Government and their regulator will ensure that all clubs, as businesses too, will see their costs increase. We have had a lot of debate about where that cost may end up, but I do not think anyone disputes that the costs will rise. First, costs might come from the Chancellor’s tax rises, which we have discussed—whether that is national insurance, wage increases or the energy costs that clubs have to pay. At the elite level, people may be less concerned if they think about the finances of a Premier League club, but such costs have a bigger impact on those lower down the pyramid, all the way to the National League, which will be in scope of the regulator. As we have said consistently, we are very much concerned about the impact on football’s finances and the negative decisions that may result for fans and clubs around the country.
Secondly, but linked to that, there is the ever-increasing cost of red tape, not just that introduced by the Bill, but more broadly. Clubs have to comply with the regulations of the leagues that they play in and of the FA, and now they will have a regulator as well. There are a number of compliance costs, and other legal matters that have been discussed in this House in more recent months will also add cost to clubs up and down the country.
Football might have changed over the years, but I am afraid that the Labour party has not. We believe that the Government have focused too much on their left wing, and left themselves exposed in the midfield and at the back.
Mr French
The hon. Gentleman liked that.
At the heart of the Bill is the ambition to secure the long-term sustainability of English football clubs across the pyramid. That is a commendable—perhaps even noble—objective. However, plain as day, as we have discussed, it will increase costs for every single fan across the country. We need to know how much that cost will be. As the Government attempt to deliver that goal, we must not lose sight of a fundamental truth: regulation is not free. Every new obligation, every form to be filled and every audit to be passed has a cost, financial and operational, that ultimately lands at the door of our football clubs and is then passed on, I am afraid, to fans.
As I have said in previous clauses, many clubs, in particular those in the lower leagues, already operate on a knife edge and in certain circumstances on a shoestring budget. For them, even modest extra compliance burdens can pose fundamental, existential challenges. Those in the lowest leagues—the National League and below—would welcome the improved odds of, for example, perhaps being able to compete in the EFL. As things stand, however, the National League 3UP campaign has been ignored.
The National League clubs that I have spoken to are keen for the 3UP campaign to be included, because they believe that closing the gap on competition should be a conversation not just between the regulator and this Committee about closing the gap between the EFL and the Premier League—a constant theme of our discussion—but about closing the gap at the bottom of the pyramid. Clubs in the National League would have an increased chance of getting into the English Football League. Given the number of clubs in the National League that were previously in the English Football League, we can all understand why the campaign has grown in momentum among the National League clubs. For any Members who were not aware of it, that is the 3UP campaign.
That is not helping the financial sustainability of the clubs that are fighting hard to return via promotion to the Football League or to be promoted for the first time—those that have lofty ambitions to go further up the pyramid. Those in the National League that are, as a direct result of their situation, most impacted by some of the new bills that have been imposed by various actions of the Government, deserve to be able to see why they have those costs and who is causing them. The amendment gets to the heart of that.
At the moment, most fans have an owner they can point to—and blame, if they wish, for their financial failures, as well as their successes on the field. They can campaign to get them out, as Manchester United fans continue to do regarding the Glazer family, for example, or they can sing their praises from the rooftops, as Newcastle fans have done in recent months after their historic success on the pitch. However, this Government’s regulator will blur the lines about who has caused financial instability, because the actions of the regulator will not be as transparent as we believe they could be.
James Naish
I am conscious that we will have several more days of discussion, so I would be grateful if the hon. Gentleman could clarify exactly how this body would have been funded under the legislation of the previous Government. He keeps talking about the costs of the regulator under this Government, but how did he think it would have been funded under the previous Government?
Mr French
That is obviously not what this amendment is about. It is about transparency. It is not about the overall cost, but about the transparency of the cost. The hon. Gentleman asks about how things would have been funded before, but we have to accept that we are in different economic circumstances. A number of costs have impacted clubs already. I am talking about the cumulative impact of Government policy—the Minister has heard me say this in a number of debates, including in the debate on swimming yesterday—on clubs from the elite level all the way down to the grassroots level. The point is that there are now extra costs from the regulator, on top of the national insurance increase, which we think has probably been the biggest change, the changes to business rates calculations, which have negatively impacted a number of businesses, and wage increases. Hon. Members may or may not agree with those costs, but we are talking about their cumulative impact.
Because it is ultimately funded by the clubs, the regulator will increase those costs. The hon. Gentleman talks about how we perceived it would be paid for. The clubs will pay the costs of the regulator—that has not changed—but we are trying to get at the cumulative impact. We want transparency about that impact on clubs, including for Parliament, so that we, as hon. Members who represent constituencies around the country, can have informed debates about the impact on English football of the decisions that we make in this House. As Members of this House, it is not unreasonable to want to understand the impact of our and the regulator’s decisions. Whether or not hon. Members agree with the amendments, they make it quite clear that we are calling for transparency on the costs of the regulator.
Lincoln Jopp
It is important for the House to understand that once an organisation is in the hands of the regulator, it has no choice. I was a director of a company that was applying for an operating licence from a national regulator. It cost millions of pounds, and we never achieved it—we tried three times, and never got there. As long as the regulator is doing its regulatory work, that is okay as far as it is concerned. There can be circumstances in which regulators, as long as things are being done by the rulebook, do not care about the growth of their industry. The amendment is a reasonable counterbalance to that, and would ensure that the regulator understands the financial burden it is putting on teams.
Mr French
I thank my hon. Friend for sharing his experience of regulation more generally. He highlights an important point about growth, which we were trying to get at with our earlier amendment and which we have discussed again this afternoon. Unless the regulator has a clear growth mandate—as I said in the previous debate, I understand that the Chancellor is consulting regulators for growth ideas—it may not seek to stick to it, and it could therefore become obsessed with other issues and regulations. This amendment is not trying to alter what the regulator does; it is just trying to ensure that we have information on costs so that Members of this House can understand the impact. Again, I believe that is a valuable tool for us to have.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
The shadow Minister is talking about growth. Does he accept that growth has been included as a secondary duty in clause 7?
Mr French
I do accept that, but as we made clear in the earlier debate, we want growth to be included in the Bill as a primary objective. The hon. Lady has just said that it is a secondary objective, but why is it not a primary objective of the regulator to try to grow the economy of football? We have previously argued that it should be, and I do not want to rehash that whole debate, but that is the distinction that we are making. The hon. Lady quoted the secondary objective, but we have said that it should be primary.
Melanie Onn
On that point, the fact that growth is in the Bill means that it is a clear obligation on the regulator. The expectation is that the regulator would then be obliged to consider the desirability of avoiding
“adverse effects on the financial growth of…English football.”
That seems perfectly plain in the Bill.
Mr French
I respectfully disagree with the hon. Lady. That is obviously her opinion, and we have made a counter-argument and point of debate, which is what this House is for. We believe that growth should be a primary objective. Before the break, we also outlined at length one of the risks of adverse impacts on growth, which was her second point. We have substantially highlighted the impact that English clubs being excluded from European competitions, or the national team being excluded from international competitions, would have on the growth of the game. We have made that argument quite clear. Government Members may not agree with those risks or the points that I have made, but we have been quite clear on why we believe that growth should have been included in the primary objectives.
I will return to the amendment, because I am at risk of getting a yellow card this afternoon. We believe that this Government’s regulator will blur the lines on who has caused financial instability, as the actions of the regulator are being kept behind closed doors unless this amendment is agreed to. Not only have the Government appointed one of their Labour donors as the regulator’s chair, as we have already heard, but they are now trying to deny English football fans the information to which they are entitled to judge for themselves the success of the Government’s regulator in delivering financial stability, or instability. For supporters, increased costs mean higher ticket prices, fewer community programmes and cutbacks to the very things that make their clubs more than just businesses. They are at the heart of the community, which I believe most people will agree with.
We have already seen the regulator begin to grow in size. While the Minister refused to confirm the number of staff that she expected her regulator to end up employing, she answered my written question after our deliberations in this Committee concluded, which I appreciate. The Minister confirmed that, as of 1 June, the shadow football regulator had 42 employees, 11 of which had previously been employed by the Department for Culture, Media and Sport, and 2 had formerly advised the Department. I make that point because the shadow regulator has already seen a 10% increase in headcount since the Minister in the other place answered a similar question back in January. We know that the Government are hiring more people, and we are still not clear on how big it will become or what the subsequent costs will be.
If that is the direction of travel, transparency on the cost burdens to clubs is not a nice-to-have but absolutely essential to understand how successful an impact the regulator is having. My amendment would introduce a simple but essential safeguard so that Parliament, clubs and, most importantly, fans could see in plain terms what this Government’s regulator was really costing. That scrutiny and transparency will encourage restraint, discipline and proportionality in the way in which the Government’s regulator operates. That, in turn, will help reduce its burden on clubs and thus make football more sustainable—I believe that was the point made by my hon. Friend the Member for Spelthorne in his earlier intervention.
We do not want to replace one form of financial instability with another, where well-meaning but poorly monitored regulation drives costs even higher, disproportionately affecting those least able to bear them. This is not about opposition for opposition’s sake; it is about delivering sustainable regulation that supports, not stifles, the game that we all cherish. For that, we need proper accountability of the regulator.
As I said on Tuesday, I do not believe that many people think that regulation has been done well in this country over the past 20 years. We can talk about whom we want to blame, but I argue strongly—this is not a party political point—that regulation has not been done well and that Parliament has devolved too much power to unelected people who are not held accountable for their decisions. I want to avoid that at this point in the Bill. We are setting up a new regulator—I am sure that will happen—so let us ensure that it is accountable to this House, that we do not make the same mistakes as in the past, and that we have accountability and transparency on cost and direction of travel.
Joe Robertson
It is a pleasure to serve with you in the Chair, Ms Butler.
The shadow Minister, as ever, is a strong advocate for the fans and has set out a compelling case for supporting the amendment. I will not rehash all the arguments, but it is about transparency and reporting—indeed, the clause that the amendment seeks to change is about reporting. Clearly, the Government believe that an annual report should be made or that would not be provided for in the Bill. The report must include a “summary of the activities” undertaken by the regulator, with reference to a financial year, and yet there is nothing about that report’s including the financial impact, which would be fairly usual in a report by any organisation compelled to do one year on year in the interests of transparency.
We debated amendment 122 earlier, and that was more specifically about the impact of the regulator’s activity on match ticket prices. I recall that one of the Liberal Democrat Members did not support that on the basis that the cost of administering the regulator would, if divided up as on his fag packet between match tickets and clubs, add up to a small amount. Amendment 134 is much more compelling because it is about the cumulative impact of the costs of complying with the regulatory regime. It could be the case that the actual budget of the regulator remained reasonably contained, while the regulation that the regulator creates and its obligations on football clubs could balloon.
In my view, that is why the regulator should be compelled each year to include in the report the financial impact of its regulation and the full range of its activities, in so far as they have an implication for football clubs. If it creates a regulatory burden and hence a cost burden on clubs, there will always be the worry that that will be passed on to fans. Whether an individual member of the Committee believes that the regulator is a good thing, or that the cost is bearable, and whatever their view on how much cost is bearable, at the very least the regulator should be reporting this each year, so that the public and Members in this place in the future can form their views. This is a basic argument about transparency, and no one should seek to assist the regulator in not being transparent in financial matters. For that reason, I will back the amendment.
Stephanie Peacock
I thank the shadow Minister for his amendment. He gave a wide-ranging speech, and I will focus my remarks on the amendment itself, but I will first respond to a couple of points that were made. Towards the end of his speech, he commented that regulation has not been done well for the past 20 years—perhaps I should remind him of who was in government for most of that time. [Interruption.] Indeed, the past 20 years. The hon. Member for Isle of Wight East said that some members of the Committee may or may not think that the regulator is a good thing. But of course we all stood on a manifesto that included it, so I hope that most Members here think it a good idea; fans up and down the country certainly agree that it is.
In speaking to the amendment, I again remind the Committee that no changes have been made since the previous Bill. The Government agree that it is vital that the cost of regulation should not place an undue burden on clubs. That is why we have designed an agile and light-touch regulator that takes a collaborative approach with those it regulates. Unfortunately, the amendment could do the exact opposite of what I think it intends. If the regulator were to track and publish compliance costs every year, it would need all clubs to measure and report on that on an ongoing basis.
Lincoln Jopp
What makes the Minister think that clubs themselves would not, as a normal matter of course, be noting their compliance costs?
Stephanie Peacock
Clubs may well do that, absolutely, but the amendment goes further than is needed and I will continue to make the case as to why I simply do not think it is necessary. It could involve the lengthy and onerous process of identifying and separating compliance costs from their overall operational costs. Reporting on compliance costs would drive up those costs unnecessarily. The regulator and Department will already be required to undertake monitoring and evaluation of the impact of regulation; that includes the review of the Act by the Secretary of State as per clause 96. For those reasons, I cannot accept the amendment and I ask the hon. Member for Old Bexley and Sidcup to withdraw it.
Mr French
We tabled the amendment because, as my hon. Friend the Member for Isle of Wight East explained, it is in the interest of driving transparency for fans and clubs, and for Members to see the effectiveness and impact of the regulator. As my hon. Friend the Member for Spelthorne explained, it is highly likely that most clubs captured by the top five leagues of the regulator will have reports in their board rooms that explain the costs of regulation and compliance costs. As I said earlier, they have to report on a variety of functions for their league credibility, so it is not unusual to expect them to be able to account for how much this extra regulation will cost, nor is it unusual to expect us to have transparency on the impact of the Government’s football regulator on the football pyramid from the bottom to the top. We will press the amendment to a Division.
Question put, That the amendment be made.
Stephanie Peacock
Clause 14 requires the regulator to report annually to Parliament on its activity for that year. As with all public bodies, the regulator must arrange for the report to be laid before Parliament by the Secretary of State for purposes of transparency and scrutiny. The Secretary of State will have some flexibility to direct additional material to be included with the annual report. That will help ensure that the regulator captures all relevant information in a year, and allow the Government and Parliament to properly scrutinise its performance.
Stephanie Peacock
I do not believe so. I have written to the shadow Minister and will double-check the correspondence. The report will help to ensure that the regulator captures all relevant information in a year, thereby allowing the Government and Parliament to properly scrutinise its performance. I commend the clause to the Committee.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Clause 15
Operating licences
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 2—Support to clubs—
“(1) The IFR shall provide reasonable and proportionate assistance to—
(a) regulated clubs seeking to obtain a provisional club licence;
(b) clubs with a provisional club licence seeking a full club licence; and
(c) unregulated clubs who are reasonably likely to become regulated clubs in the next football season.
(2) The IFR shall provide reasonable and proportionate assistance to regulated clubs in their efforts to continue to comply with the conditions of their provisional club licence or full club licence.
(3) In fulfilling its duty under subsections (1) and (2), the IFR shall have regard to the factors listed in section 53(9).
(4) This assistance may come in the form of—
(a) financial support;
(b) training; and
(c) support staff.”
This new clause would require the IFR to provide assistance to football clubs transitioning to the new licence regime and to enable clubs continued compliance with its requirements.
New clause 6—Support to clubs—
“(1) The IFR shall provide reasonable and proportionate assistance to—
(a) regulated clubs seeking to obtain a provisional club licence;
(b) clubs with a provisional club licence seeking a full club licence; and
(c) unregulated clubs who are reasonably likely to become regulated clubs in the next football season.
(2) The IFR shall provide reasonable and proportionate assistance to regulated clubs in their efforts to continue to comply with the conditions of their provisional club licence or full club licence.
(3) This assistance may come in the form of—
(a) financial support;
(b) training;
(c) support staff; or
(d) temporary exemption from levy payments.”
This new clause will mandate a duty on the IFR to aid regulated clubs with compliance.
Stephanie Peacock
The clause introduces the licensing system. One of the regulator’s main responsibilities will be to operate a licensing system for football clubs through which the majority of its regulation will be delivered. If clubs do not have an operating licence, they will not be allowed to play. The licensing regime will cover all football clubs that have a team playing in any of the competitions specified by the Secretary of State in regulations—that is intended to be the top five leagues. The clause will require football clubs to have a licence to lawfully operate a team in any of the specified competitions.
The clause sets out the requirement for clubs to have a provisional or full operating licence, along with the regulator’s power to grant licences subject to clubs passing the relevant tests set out in the subsequent clauses. The licence will enable the regulator to regulate clubs through licence conditions set out later in the Bill. That will enable proportionate regulation tailored to clubs, rather than a one-size-fits-all approach. An operating licence will specify which clubs the licence relates to, the team the club is operating and any conditions attached to the licence.
Let me set out how, broadly speaking, the licensing regime will work. The duties in part 5 will apply to regulated and formerly regulated clubs within the licensing regime, and will cover clubs that have been in scope within the previous 10 years, to prevent circumvention. We will debate that later in Committee. For a club to gain a provisional operating licence, the independent football regulator must be satisfied that the club operates a relevant team and will comply with the mandatory conditions and the free-standing duties. The independent football regulator need only be satisfied that the club will comply with the mandatory conditions; it will not need to comply at the time of the provisional licence test. A provisional licence can be issued for a maximum of three years, but the time can be shorter if the regulator determines that. The regulator can use discretionary licence conditions to bring a club’s standard up to the necessary threshold requirement level.
Let me set out the test for a full operating licence. The independent football regulator must be satisfied that a club meets the threshold requirements and will continue to comply with the mandatory conditions and with the free-standing duties, and the regulator must not have determined that a current owner or officer is unsuitable. We will, of course, go into further details on these matters as we move through the licensing regime, so I will not do so now. I commend the clause to the Committee.
Mr Betts
With new clause 2, tabled in my name, we come back to the other key issue in the Bill, aside from distribution: how clubs operate, how owners have in some cases badly operated them in the past, and how we can do more to help to control such situations. The issue of operating licences is, then, absolutely key.
Before anyone gets too worried, I should say that I have not been collaborating with the Lib Dems, although their new clause is very similar. Perhaps we have both been talking to Fair Game, an excellent organisation that has been trying to work with clubs and fans to improve the regulation and operation of football clubs.
The simple aim of new clause 2 is to ensure that the regulator provides help when it is needed. Premier League clubs are not going to need help and Championship clubs should not need help. The EFL says that clubs in Leagues One and Two are already required, under the EFL’s regulations, to provide the vast majority of the information that the regulator will need anyway, so they are doing so as a matter of course. The new clause would probably apply only to some National League clubs. The support may not be financial support; in some ways, for the relevant clubs, training and supporting staff is the key issue. There may not be anyone in the club with a working knowledge of some of the complications and the legalities of the legislation so, to avoid the club getting into difficulties, the new clause would require the regulator, in those circumstances, to help those clubs, in a reasonable and proportionate way, with the requirements of the licence conditions.
Max Wilkinson
It is a pleasure to serve under your chairship, Ms Butler. I reassure the Government Whips that the hon. Member for Sheffield South East and I have not been collaborating, but we have clearly been speaking to the same fans’ groups, who are very supportive of the Bill. There is a very simple principle here: some clubs may struggle with the regulatory burden, as has, I think, been expressed by all Members during the discussion. The way of solving that is not to take the steps that the Conservatives have suggested; it is for the regulator to take a reasonable view on how it might support those clubs.
New clause 6 may well not pass, but I hope that the Minister takes away the message to work with regulators, so that the regulator, when it is set up, is in a position to support the smaller clubs that have maybe only a few full-time members of staff, or even fewer than that. We back the expansion of the regulator to the sixth tier as well; in those circumstances, it would be particularly important that such support was available.
Mr French
That was a strange intervention.
New clause 2 and new clause 6 would require the independent football regulator to provide assistance to regulated clubs seeking to obtain a provisional licence, clubs with a provisional licence seeking a full licence, and unregulated clubs that are reasonably likely to become regulated in the next football season. The new clauses would also require the independent football regulator to provide reasonable and proportionate assistance to regulated clubs in their efforts to continue to comply with their licence conditions.
The sentiments behind both arguments are not bad ones. We have made strong arguments already about our concerns regarding costs for clubs lower down the pyramid. I do, however, question the contradiction of being concerned about clubs in National League South and North, but wanting to get them in the scope of the regulator—we disagree with that. I have a few questions about the new clauses that I hope either the hon. Member for Sheffield South East or the hon. Member for Cheltenham might be happy to answer, just so the Committee can understand.
Given that the new clauses would require the independent football regulator to provide reasonable and proportionate assistance, we would be interested to know what assistance those hon. Members think might be reasonable or proportionate for clubs to require, and whether the independent football regulator is to provide them in the different instances covered by the new clauses. How would the independent football regulator’s liabilities towards clubs under the new clauses be determined and enforced? How would it be funded? That would be a question that all clubs would ask.
In a feedback loop that I am sure the hon. Member for Sheffield South East is aware of through his chairmanship of the football all-party parliamentary group over many years, one of the arguments that a number of clubs make is, “Why should I pay for someone else to come and try to take my place in the league that I am in?” That is part of the competitive nature of football. Although there is cross-club working in a number of areas trying to help clubs, often, the same clubs are competing against each other. We would need a bit of clarity on how the additional provision of help would be paid for. Would the cost be passed on to other clubs? Leaving aside those questions about what that may look like in the future, we understand the sympathies expressed in the new clauses to try to help clubs further down the pyramid, so that they are not excluded based on the fact that they cannot afford to apply for a licence.
Stephanie Peacock
I thank my hon. Friend the Member for Sheffield South East and the hon. Member for Cheltenham for tabling new clauses 2 and 6. The Government recognise the intent behind them, and we agree that the regulator should help clubs to comply with regulation as much as is reasonably possible. It is in everyone’s interests for clubs to become compliant quickly and with as little additional burden as possible. It is vital that the regulator helps clubs get to grips with its regulatory regime, which is why we have been very clear that the regulator will operate an advocacy-first approach, and why provisions for a collaborative approach are already in the Bill.
For example, the regulatory principle of clause 8(b) encourages the regulator to co-operate and constructively engage with clubs. Regulatory principles (c) and (d) encourage the regulator to ensure that any action is proportionate to the benefits expected from it.
In relation to the specifics of the new clauses, we disagree with any provision that would require the regulator to provide financial assistance to clubs to comply with requirements imposed by the regulator. That would amount to redistribution by the back door, given that the Independent Football Regulator would be levying some clubs in order to provide financial assistance to others. That is not the regulator’s role, and we do not believe it should be. On training, the regulator can work with clubs to ensure that they fully understand the regulation and what is expected of them. Of course, in cases where this is necessary, the regulator can appoint a skilled person to assist the club in resolving issues in respect of a relevant infringement. For the reasons that I have outlined, I am unable to accept the new clauses and I hope that they will be—
Mr Dillon
I seek further clarification from the Minister. Subsection (1)(c) of both new clauses refers to
“unregulated clubs who are reasonably likely to become regulated clubs in the next football season.”
They would stand outside the remit of the Bill if unamended, but would the Minister’s view be that the regulator should engage with those clubs that may be just about to come into the regulated area?
Stephanie Peacock
That is a really good question. The regulator can engage with clubs outside of scope, such as those in the National League North and South, to assist with the application process. I hope that answer gives clarity. It is a very good question from the hon. Gentleman. However, for the reasons that I have set out, I am unable to accept the new clauses, and I hope that they will be withdrawn or not pressed.
Max Wilkinson
I echo what was said by the hon. Member for Sheffield South East.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Clause 16
Application for provisional operating licence
Mr French
I beg to move amendment 99, in clause 16, page 10, line 10, leave out subsection (c).
This amendment prevents the IFR from requiring information from clubs in the other than the personnel statement and strategic business plan specified by the Act, when applying for a provisional operating licence.
The Chair
With this it will be convenient to discuss amendment 100, in clause 16, page 10, line 25, leave out subsection (b).
This amendment prevents the IFR from requiring information in the strategic business plan not specified by the Act.
Mr French
Clause 16 is about the application for provisional licences, and this debate builds on the previous debate about costs. The way in which clause 16 is currently drafted is a textbook example of how the Government have left the door open to scope creep from the regulator. This clause gives the Government’s politically led regulator the power to set its own rules on what documents clubs must provide when applying for a provisional operating licence. On the surface, this may sound like a mere procedural point, but it in fact is emblematic of a broader concern: the unchecked expansion of regulatory scope—scope creep—that could come to characterise this regime if we are not careful. In fact, it may no longer be appropriate to define it as “scope creep”, as there is nothing subtle or creeping about it. The Bill actively, in different places, encourages the Government’s new regulator to build its own football governance empire, as other regulators have done. It would be better now to define some of this risk of scope creep and to avoid such scope imperialism in the future.
That is why I tabled these two amendments. Amendment 99 would prevent the Government’s regulator from requiring information from clubs, other than the personnel statement and strategic business plan specified by the Act, when applying for a provisional operating licence. Amendment 100 would prevent the Government’s regulator from requiring information in the strategic business plan that is not specified by the Act.
At this early stage of the Bill Committee, I am already at risk of sounding like a broken record.
Mr French
I am sure the Government Whip appreciates my comments more than that. The Government’s Bill, alongside the unprecedented and seemingly unlimited powers that it grants to their regulator, is, as we have argued already, putting English football at risk. The Government have assured us that their politically led regulator will be proportionate and risk-based, but the Bill as drafted grants it significant scope to expand its own powers, with limited checks on that unaccountable and seemingly unstoppable expansion of power, and the Minister did say in her previous comments that Parliament will not get a vote on this, so Members need to be aware of this as we go forward. The Government’s regulator is in prime position to commit a regulatory land grab that would belong more in a war documentary than in a sport that is supposed to be independent of the state.
We have seen this before. Regulators rarely stick to their lane; just look at Ofcom, who attempted to remove former colleagues from their role as broadcasters. They were found to be in breach of their own rules, so Ofcom changed the rule. What is to stop this regulator doing the same? Over time, objectives change and bureaucracies grow. What begins as a modest remit to protect financial sustainability can turn into a permanent presence in the boardrooms of clubs, pushing even more conditions, even more reporting requirements, even more intervention —all in the name of “compliance”. We believe that that is dangerous for sport, as a general rule. My hon. Friend the Member for Spelthorne also explained how his experience of regulations supports our concern.
Clause 16 allows the regulator to require whatever documents it deems “appropriate” for a provisional licence application. That may include business plans, financial forecasts, ownership structures, or other forms of club data. Crucially, the Bill does not limit what can be asked for. Nor does it require that these requests be proportionate, standardised, or even necessary to the specific risk posed for each club. We believe that this Government have written their regulator a bit of a blank cheque in this area—one that empowers them to define their regulator’s own administrative burden and impose it unilaterally on clubs without giving clubs a say in how that starts to look, going forward, or the issues that it may create in clubs. As I have commented and other Members have commented, that is a particular issue for clubs lower down the leagues, particularly those in League One and League Two, or the National League—clubs that already operate with small margins and stretched resources. We have to remember that while some of this legislation is clearly aimed at the top level—the Premier League level—all clubs will be required to provide documents to the regulator. We must remember that those smaller clubs that may not have big human resources departments will be required to present their homework. Forcing them to comply with excessive or bespoke documentation requirements—there could be uncertainty about what those requirements will look like, going forward—drawn up by a regulator that answers to no shareholders, no supporters and, once set up, only loosely to Parliament—no vote for Parliament—will hit those least able to absorb the resource costs and financial costs the hardest.
More fundamentally, it sets a dangerous precedent. If the regulator is given the power to define its own gatekeeping rules without parliamentary oversight, we create a system where compliance is dictated not by statute but by bureaucracy. Once that door is open, it rarely swings shut, as we have seen with other regulators. We know how these things go. One year it is audited accounts. The next it is fan engagement reports, community impact statements, net zero transition plans perhaps—all well-meaning, but all cumulative, and all irrelevant in practicality to whether a club should be granted a provisional licence to play football.
The way that the Government have drafted and introduced the Bill and conducted themselves during this process shows that they have forgotten the key part of this debate: playing football. They have become more concerned, we believe, with the minutiae of football governance. It is clear that they have put favours over fans in their appointment, cronies over clubs and bureaucracy over the beautiful game as they seek to make it almost impossible for clubs to actually get on with playing football. We must not lose sight of the fact that this is about playing football.
Let me be clear again: we are not opposing things for opposition’s sake, but we will provide a robust and thorough challenge to areas of the Bill that we believe will have unintended consequences. What we must resist is a system where clubs are treated as supplicants—forced to second-guess what information a regulator may require, fearful that an honest administrative error might cost them their licence, or worse, the future of their football club. Currently, clubs are at real risk of being sacrificed on the altar of bureaucracy by this Labour Government.
I urge the Committee to vote in favour of these amendments that would remove the ability of the Government’s politically led regulator to increase its own powers and remit without any oversight. This clause as drafted by the Government includes no provision for Parliament or even for the Secretary of State—whoever that may be in the coming months—to reign in their regulator and reduce their powers, if need be. Once passed, reversing an expansion of power by the regulator will be exceptionally difficult.
This Government promised us and fans a light-touch, risk-based independent regulator. That was before they appointed their own donor to be chair and then returned the favour, we believe, not only by giving him a fairly large part-time salary, but by giving him a fairly blank cheque about how to increase his power over time, as they have voted against amendments requiring more transparency, and we believe the interests of football fans.
It is clear that the Conservatives want to protect fans, and we will press these amendments, which seek to limit the power of the regulator going forward, to a vote.
Lincoln Jopp
It is a pleasure to serve under your chairmanship, Ms Butler. Subsection (3)(c) of clause 16 is an absolute Trojan horse; it gives carte blanche to the regulator to demand whatever it wants, regardless of whether a club produces such documents or information on a routine basis. Anyone who has worked with a regulator will know that means that clubs will have to employ lawyers, because they would never submit anything to their regulator unless it had been through lawyers first.
The shadow Minister used the phrase “blank cheque”, but it is almost a blank invoice to the poor clubs that will simply have to comply. When a regulator says, “Jump”, they do not say, “Why?”; they say, “How high?” However high the bar is set, they have to get over it. It is completely reasonable, at this stage of the regulator’s development, to seek limits so that it can take some very well-defined steps in regulating football, prior to giving it the carte blanche that subsection (3)(c) represents. As the shadow Minister said, I fear that the unintended consequences of subsection (3)(c) will be considerable.
James Naish
Does the hon. Gentleman accept that regulation evolves anyway? My brother runs a property business, and I can tell the hon. Gentleman that what he was first required to deliver to his regulator in 2012, when he set that business up, versus what he is required to deliver today has changed beyond imagination. Things move all the time, so it is appropriate for the regulator to be able to determine what it needs to perform the relevant functions.
Lincoln Jopp
Regulation does indeed evolve, but giving this football regulator carte blanche to evolve it without any recourse to Parliament is a key weakness of the Bill’s current drafting, which is why I support amendment 99.
Joe Robertson
The shadow Minister has already set out in great but necessary detail the reasons why amendments 99 and 100 have been tabled and should be supported. The issue is that subsections (3)(c) and (5)(b) of clause 16 provide a catch-all that allows the regulator to include such other information and documentation as it may specify when a club applies for a provisional operating licence. I support these amendments because I think those two provisions open the floodgates unnecessarily, and clause 16 already sets out the things that the regulator wants to see football clubs submit. To have that completely open floodgate is a problem for the reasons given.
If the Government were keen to have some flexibility here, they could have allowed the Secretary of State to specify any other such information in the future. At least there would then be some accountability via the Secretary of State’s being an elected person and ultimately accountable to Parliament. The particular issue here is that the regulator, once set up, does not have direct accountability, and therefore it would be easy for it to start stipulating all sorts of things. I support the amendments and I think that it should be tight, but the Government could have steered a halfway course here by retaining some powers for the Secretary of State, rather than the unelected regulator.
Stephanie Peacock
I thank the shadow Minister for tabling amendments 99 and 100, which are very similar in effect. The Opposition do seem to be getting carried away this afternoon. I noted down some of the phrases he used: “Politically led”; “unlimited power”; “a regulatory land grab”; and “dangerous for sport”. Then he asked whether the Government had written a blank cheque. Well, I do not think that is the case, but if they did, it was his Government, because there have been no changes to this part of the Bill since its previous iteration.
Mr French
The Minister is trying to suggest that everything is the same, but the Secretary of State has literally nominated a Labour donor who donated to her and the Prime Minister to chair the regulator, so the situation has clearly changed. The appointment is now the subject of independent inquiry; they are under investigation for the appointment. The Minister has been landed the role because the Secretary of State has recused herself, so the situation has clearly changed and it is clearly a political appointment.
Stephanie Peacock
The hon. Gentleman can make that well-rehearsed comment, but I specifically said there are no changes to this part of the Bill. I am focused on what we are talking about, and the parts of the Bill that amendments 99 and 100 relate to have not been changed. He also said that he would not oppose just for the sake of it, but that does seem to be what he is doing.
Lincoln Jopp
My hon. Friend the Member for Isle of Wight East and I were not here in the last Parliament, so what went on and the provenance of the Bill are not really our concern. We are being asked to contribute to the discussion and the debate on the Bill that has been placed before us. Neither of us saw the last one, so these are genuine points.
Stephanie Peacock
I take that point, but both the hon. Gentlemen stood on a manifesto that committed to introducing the Bill.
Amanda Martin (Portsmouth North) (Lab)
I believe that the Conservative Whip, the hon. Member for Kingswinford and South Staffordshire (Mike Wood), who previously represented Dudley South, while highlighting the Bill’s alignment with Conservatives prior to the last election, said he believed that this is a Bill that every single Conservative Member stood on at the last election in their manifesto, which was a ringing endorsement of the Bill.
Stephanie Peacock
Indeed, a number of Conservative Members are on record as supporting this policy; it is just sad that the ones sitting opposite seem to have forgotten the manifesto they stood on.
Mr French
Sorry—Government Benches. Members of this Bill Committee have been appointed to it to scrutinise the Bill based on the situation now. The argument that seems to be coming from the Government Benches is that, under a new Parliament, we are unable to criticise or challenge the Bill because of what a previous Government proposed. We have already explained why we believe that the situation has changed, and why we have concerns, so we are well within our rights to table amendments. If the Opposition party does not agree with the Government, that is their decision to make.
The Chair
Order. Interventions should be short, snappy and relevant to the amendment we are discussing.
Stephanie Peacock
I am grateful, Ms Butler. I completely appreciate the point the shadow Minister is making, but he seems to be missing the point I am making that this part of the Bill has not changed from the previous one. I will now outline why we do not think amendments 99 or 100 are appropriate.
We do not think it is right to remove the ability of the regulator to require additional information from clubs during the application process for a licence. It is only right that the regulator can specify any further information or documentation it may need in order to properly assess whether a club needs the test for a provisional operating licence. It may require further information to assess a club’s circumstances and whether it will need to tailor any mandatory licensing conditions, or attach any initial discretionary licence conditions to the club.
Specifically on amendment 100, the criteria listed in the Bill are non-exhaustive, and the regulator should have the flexibility to request additional information from a club regarding its business plan when necessary. In line with the regulator’s principles, any request for information will, of course, be proportionate, and the regulator will co-operate and engage practically with the club. The regulator will not be asking for any information that is not in the scope of the provisional licence; there would be no reason for it to do so. However, there is an appeals process.
To end with an example, if a club puts forward a business plan and something seems out of the ordinary, the regulator may wish to ask where the funds are from. We think that that is perfectly reasonable, and it was in the previous iteration of the Bill.
Mr French
I appreciate the points that the Minister is making. Another point that I made—this is not political—was about the standardisation of requests, which would allow clubs to prepare on the basis of what they expect the regulator to ask and ensure consistency between clubs. Will the Minister tell us how that might work?
Stephanie Peacock
Standardisation is not appropriate in this context, because the extra information may relate to discretionary licence terms, which will be tailored to a club. It is therefore not relevant.
For the reasons I have given, I hope that the hon. Gentleman will withdraw the amendment.
Mr French
We are concerned about unchecked powers, as we have explained at some length, and believe that the House should be able to check those powers. We are concerned about the lack of standardisation. I fear that, by treating clubs differently depending on their circumstances, the regulator will be left open to legal challenge. Some clubs have the financial resources to challenge a league, and will have the resource to challenge a regulator. We have seen that with certain clubs in the Premier League—I will not mention the cases, for legal reasons. Some football clubs are willing to challenge their regulation in court. We fear that, without standards for what is asked of clubs, there could be more legal challenges down the line. For those reasons, we will press the amendment to a Division.
Question put, That the amendment be made.
Stephanie Peacock
The introduction of the football regulator into a previously unregulated sector will be a substantial change to the industry, but it is necessary to safeguard the future of English football. To provide for a gradual transition to being fully licensed, a club will initially apply to the regulator for a provisional operating licence. We see this as a natural step to attaining a full operating licence. That will give clubs time to adapt to the regulatory system and make the necessary changes without being unfairly penalised for being unable to raise standards overnight.
The application for a provisional licence requires basic information on a club’s owner or owners, officers and senior management, as well as a strategic business plan detailing such things as estimated costs of the club and how they are expected to be funded. A personnel statement will identify each of the club’s owners and officers, the club’s ultimate owner, and the job titles and roles performed by those people. A strategic business plan is a document containing information about the operation of the club, the estimated costs, how those costs will be funded and the source of such funding.
Mr French
I beg to move amendment 101, in clause 17, page 11, line 27, leave out subsection (9) and insert—
“(9) The IFR must make the decision whether to grant a regulated club a provisional operating licence within the period of one month.
(10) The IFR may extend the period in subsection (9) by no more than two weeks if it requires more time to consider the application due to—
(a) unusual staffing pressures, or
(b) discrepancies or abnormalities with the application.
(11) If the IFR extends the period as per subsection (10), it must give a notice to the relevant club stating—
(a) that the period has been extended,
(b) the length of the extension, and
(c) the reasons for the extension.”
This amendment places a time limit of one month for the IFR to decide whether to grant a provisional operating licence.
The amendment would require the independent financial regulator to make the decision whether to grant a regulated club a provisional operational licence within a period of one month. The independent football regulator would be able to extend the period by no more than two weeks if it required more time to consider the application, whether that be due to staffing or other issues. If the independent football regulator extended the period, it would have to give notice to the relevant club explaining why.
Clause 17 is where we find the initial provisions that give the Government’s regulator the power to grant provisional operating licences and the conditions that must be satisfied for a football club to be granted a such a licence. The Government’s regulator must be satisfied that the club applying will comply with the free-standing duties on clubs as set out in part 4, comply with the mandatory licence conditions set out in schedule 5, and operate a relevant team.
On the face of it, the clause seems necessary. There should be a safety net for clubs that have uncertain futures but cannot afford to pause operations while a full licensing determination is made. In that sense, the provisional licence acts as a regulatory bridge which, if implemented properly, can be an essential tool for avoiding the kind of cliff-edge collapses that we have sadly seen in years gone by. Clubs such as Bury and Macclesfield, where administrative or ownership crises rapidly spiralled and led to total collapse, might have benefited from such a mechanism. I pay tribute to all the fans and campaigners who have fought so hard for a regime that intervenes earlier rather than only when it is too late. As I have said, I believe that all Members would have preferred football to have got its act together and for our not to be doing this today, but we are where we are.
Although I support clause 17 in principle, I want to raise concerns about how it is drafted and how its powers might be used in practice. First, the clause gives the regulator significant discretion in determining whether to issue a provisional licence and under what conditions. Subsection (1) provides that a licence may be granted—not must—even where a club applies in good faith and has satisfied the initial criteria. That may be appropriate in some circumstances, but it raises the risk that clubs could be left in a holding pattern, awaiting a decision for weeks or months on end with no firm timetable and no recourse to receive an outcome from the Government’s regulator.
Secondly, the measure allows the regulator to impose any conditions it considers appropriate when granting a provisional licence. We absolutely recognise the need for the independent football regulator to have flexibility, particularly when dealing with clubs that may be in financial distress or suffering from poor governance. However, as currently drafted, the clause presents a clear and present danger to English football. As I have highlighted already, we believe that imposing different rules on different clubs will create issues for the regulator going forward, legally and particularly in relation to independence and European competitions, but Members will be pleased to know that I will not go into that again. We must also guard against the risk of disproportionate or arbitrary conditions being imposed, particularly if they are unchallengeable or unclear for clubs. I would appreciate it if the Minister could confirm whether a club might, for example, be required to restructure its board to get a provisional licence? Would it be forced to accept certain ownership conditions, and would it be required to provide reams of documentation within a short period just for the provisional licence? These are not hypothetical questions but real-world concerns that clubs will have, particularly at the lower end of the football pyramid. Many such clubs, as I have already outlined, lack the administrative bandwidth to deal with complex regulatory demands at short notice.
That is why the official Opposition have tabled amendment 101, which would ensure that the Government’s regulator must reach a decision on a provisional licence within one month. We fear that, without a time limit, clause 17 risks becoming an instrument of delay, rather than one that supports and creates certainty for clubs by providing a regulatory bridge. Crucially, there is no requirement in the clause as drafted for the regulator to explain why a provisional licence has been refused or revoked. That, again, undermines transparency, and if a regulator is to command trust and credibility, particularly in the emotionally-charged world of football—in its good moments and its bad—it must be seen to be operating with both fairness and openness.
We understand that a decision can be appealed as a “reviewable decision” under clause 81. However, that does not provide transparency for fans, and an appeals process increases uncertainty for clubs. Fans and clubs deserve a Government regulator that acts swiftly, proportionately and, above all, transparently. Clause 17 is the beginning of that promise, but it must be shaped with care.
Jim Dickson
Does the hon. Member think that there is any contradiction between his desire, as set out in the amendment, to see decisions made incredibly quickly and his desire that he expressed earlier to see the number of people employed by the regulator limited to 50?
Mr French
No, I do not, and I think the hon. Member slightly misunderstands what the measure is about. It is about the provisional licence, not the full-fat licence. I am not asking the regulator to rush a decision on whether a club should be granted a long-term licence. We are asking for some certainty and some time limits to help with that bridging. We have already said that we are concerned about the size of the regulator, but we want clubs to have some certainty around timeframes and not to be left in limbo for too long.
Our belief that clubs should have certainty was why we tabled amendment 101, which would establish a time limit of one month for the Government’s regulator to decide whether it will grant a provisional operating licence. This is supposed to be the main focus of the regulator, so we believe that it is reasonable to expect that it fulfils that function efficiently. This would be an important and proportionate safeguard. It would not diminish the regulator’s authority, but rather ensure that it is exercised in a timely, effective and accountable manner. It is about introducing clarity, certainty and discipline into a process that, under the Bill as drafted, risks becoming needlessly opaque and potentially open-ended.
We must remember what the provisional licence mechanism is designed to achieve. It is not the final or comprehensive licence that will be granted to a club, as I have just said. It is a stopgap—a holding measure meant to ensure continuity of operation for clubs while their full licensing application is under assessment. In short, it is there to prevent disruption, not to prolong it. Thinking about the footballing element to this, a club that was held in limbo, unable to play, would create a lot of issues for the league and the season overall.
As it stands, the Bill provides the Government’s regulator with no firm timetable or obligation to act within any defined period when it comes to a provisional licence. That raises two concerns. First, it risks leaving clubs in regulatory limbo, especially those already in difficult situations. That is not just a matter of administrative inconvenience. For clubs living hand-to-mouth, as many sadly are, uncertainty over their licensing status could mean missed deadlines for investment, lost commercial deals or even delays in paying staff and suppliers. In the worst cases, it could trigger crises and the very things that the Bill was supposed to prevent.
Mr French
I thank the hon. Member for that point. Transfers are a key aspect. If a club is in limbo, it could arguably be at a much bigger disadvantage when the season starts if it had not been able to make transfers because it was uncertain about whether it could compete in the competition. The point is well made.
Secondly, the absence of a defined period creates a lack of accountability within the regulator itself. As we have discussed, the regulator cannot be scrutinised in the way that we would have hoped. We know that the Government do want it to be strong, but with strength must come accountability and transparency. If it is to command the trust of fans, clubs and local communities, it must be seen to act with purpose, not with delay.
We know from numerous examples across different industries that when regulators are left without timetables, backlogs just build up. I will not name examples because I am conscious of time, but we know that it happens. My amendment proposes a time limit of one month—a full 30 days—for the regulator to determine whether a provisional licence should be granted. That is not a rushed timetable; we believe that it is a reasonable one, especially considering that when a club applies for a provisional licence, the key facts will likely already be known by the regulator. Again, this is not designed to be a forensic financial autopsy, but a short-term stabilising mechanism.
Let me also be clear that the time limit does not bind the regulator to approve an application within a month; it simply requires a decision one way or another within that time. That allows the Government’s regulator to reject unsuitable applications if needed—hopefully not—but it removes the damaging uncertainty of a process that otherwise could drag on indefinitely. We must not forget who bears the cost of delay. It is not just the club executives and directors, but the fans, players and staff. We have just heard about transfers, which are a great example. It is about the people who turn up on a Saturday afternoon come rain or shine, the people who run the club shop and the ticket gates, and the people whose local economies benefit from having a club that is alive, operating and secure.
The amendment also supports the broader aim of stability in football. A system without timelines invites inconsistency and subjectivity. One club might be processed in a week, and another in six. That cannot be right. We owe it to clubs at all levels, from the top of the Premier League right the way down to the National League, to create a system that is predictable and fair.
Finally, good regulation is not just about the rules but about responsiveness. It is about a regulator that can act promptly, efficiently and in partnership with the people it is overseeing. Our amendment does not weaken the regulator; it makes it better. It strengthens the trust between the regulator and the regulated. It gives clubs the certainty that they need to plan, invest and survive. After all, that is what the Government say is the intention of this regulator. I hope that hon. Members will support the principle behind the amendment. We have heard some of the issues that may arise if not.
Stephanie Peacock
I thank the shadow Minister for tabling amendment 101. I will outline the reasons why we will not accept it, and then I will respond to some of the questions that he raised.
The Bill ensures that the regulator has the necessary flexibility to ensure that all clubs that meet the test for a provisional licence will be given one. Introducing an arbitrary statutory timeframe of one month for the regulator to make a decision on a club’s application would remove that flexibility. Only the regulator can know what the process of assessing applications might entail or how long it might take, so it should have the ability to set in rules the period within which it will make a decision, the period of any potential extension and the circumstances in which an extension will be granted. The regulator will engage with all clubs prior to the application for a provisional operating licence to ensure that the process is as smooth and efficient as possible, and its regulatory principles encourage it to act in a timely manner.
I turn to some of the specific points that the hon. Member made. There will be no requirement to restructure the board to get a provisional licence. As I outlined in my opening remarks, the regulator will take an advocacy-first approach. Clubs will be asked to submit basic information and documentation, and to show a readiness and willingness to work with the regulator. I draw the hon. Member’s attention to clause 17(4)(b), which says that if, for whatever reason, the regulator does not give a licence, it would have to give reasons. Even in that scenario, which I highlight is hypothetical, enforcement might take place, but it would not prevent the club from playing. For these reasons, I ask him to withdraw his amendment.
Lincoln Jopp
The Minister just said something that I am not quite clear about; perhaps, given my hon. Friend’s experience, he could explain it to me. If a club gets promoted to the English Football League—the happiest day of the club’s history—it then has to apply to become regulated, but if it does not have that licence by the beginning of the next season, the Minister just said that it can play. Where should I look in the Bill to understand the latitude that clubs have to play in the English Football League without regulation?
Stephanie Peacock
Of course. The shadow Minister referred more than once to clubs not being able to play. As I said, this is an advocacy-first approach; the regulator will work with clubs to make sure that they can reach the provisional licence requirements. It is a basic set of requirements, and they do not have to meet it to receive the provisional licence; they just have to show a willingness and an ability to do that. In the hypothetical scenario that they do not, enforcement may happen, but they will not be prevented from playing. However, we do not anticipate that happening, because at the provisional stage, the regulator will work with them to make sure that they can do that. I want to be very clear—perhaps the hon. Member for Spelthorne misunderstood what I said—that the regulator will work with teams to make sure that they can get that provisional licence.
Mr French
That was a rather long intervention, but I suspect it was probably needed. I appreciate the clarity from the Minister on that point, but in terms of the time limit, we are concerned about the impact of the uncertainty relating to the provisional element. In this situation, we would like that to be a focus of the regulator, given that it is being set up for exactly this kind of work. We will therefore press the amendment to a vote.
Question put, That the amendment be made.
Stephanie Peacock
The granting of a provisional operating licence will act as a first step towards a club gaining a full operating licence, and will allow the club to operate for a time-limited period. That will be up to three years initially, although it could be shortened or extended depending on the circumstances. This provisional period will allow the regulator time to assess the current standing of the club and determine what steps will need to be taken to attain a full operating licence, as well as giving the club the time to take those necessary steps. The club will provide a personnel statement and a strategic business plan as part of the application process, providing an overview of the club’s operations and financial information.
Once a club has a provisional licence, it will be required to meet basic requirements set out in the mandatory conditions, as well as to comply with the free-standing duties contained in the Bill. This will help to safeguard the club’s sustainability and heritage. There are three aspects to the test that the regulator will apply when deciding whether to grant a provisional operating licence. First, the club must operate a team in a specified competition, which effectively means that the club must be in scope of the regulator. Secondly, the club will comply with the mandatory licence conditions that will be attached to the licence by the regulator; full details of the mandatory licence conditions are in schedule 5. The third aspect is that the club will comply with the duties on clubs, as set out in part 5.
If the regulator is not satisfied that the club meets all the elements of the test, it must let the club know and give it an opportunity to engage with the regulator to rectify the issues identified before the regulator takes a decision. That collaborative approach will aim to ensure that clubs are given every opportunity to meet the requirements and gain a provisional operating licence.
The test for a provisional licence has been carefully designed to get clubs into the regulatory system as quickly as possible, and then to give them a transition period to raise standards, if necessary, and obtain a full licence.
Lincoln Jopp
The Minister said that clubs would still be allowed to play in the absence of a provisional operating licence. How long would they be allowed to play for before being granted such a licence?
Stephanie Peacock
We do not anticipate that happening. Enforcement would take place, but we do not want the regulator to stop clubs being able to play. I am outlining how the regulator will do everything it can. The information is fairly basic, and the aim is to move as quickly as possible, so we anticipate clubs being able to receive that provisional licence.
Clause 18 establishes the second step of a two-step licensing process designed to ensure a smooth transition to regulation. Being granted a full operating licence should be the aim of all clubs in scope of the regulator. The full licence means that the regulator is satisfied that the club meets all relevant requirements, including the threshold requirements. For a club to pass the test for a full licence, the regulator must be satisfied that the club
“meets the threshold requirements set out in Schedule 4”
and is complying with and
“would continue to comply with the mandatory licence conditions”
and the free-standing duties on clubs set out in part 5. Finally, the regulator must not have determined
“that any person who is an owner or officer of the club is not suitable”
for the position they hold.
The clause also details the power that the regulator has to extend the provisional operating licence for a club. That will be done only if the regulator believes that the club does not meet the bar for a full licence at present, but will do if given more time. Clubs will have had time and support, while provisionally licensed, to ensure that they can meet the higher bar for a full licence. Once the club has a full licence, it will not have to be periodically reviewed. Instead, the regulator will continue to monitor and supervise the club. There will be an annual touchpoint in the form of an annual declaration, in which the club will notify the regulator of any relevant changes. That will minimise burdens while still ensuring that the club continues to adhere to the necessary requirements, including requirements that ensure that fans’ best interests are at the heart of the club’s decision-making process. I commend the clauses to the Committee.
Mr French
The Minister has outlined clauses 17 and 18 at some length. We had a lengthy debate on clause 17 in relation to our amendment 101. We are naturally disappointed that the amendment, and the time limit that we seek for the provisional licensing, was not agreed to. However, in the interests of time, I will move on to clause 18.
Clause 18 sets out the process by which the Government’s regulator may grant the full operating licence to a club, which is a crucial stage in the proposed licensing regime, with significant long-term implications for the structure, stability and future of the English game. This clause is where the Government’s regulator transitions from assessing provisional eligibility to giving a formal stamp of approval for a club’s longer-term competition and compliance. However, the clause raises several questions that the Committee must interrogate, and that I hope the Minister will be able to answer—not least whether it achieves the right balance between regulatory assurance and operational flexibility.
Under the clause, the regulator may grant a full operating licence only if satisfied that a club meets the relevant conditions of eligibility. That is right and proper, and clubs should be expected to operate on a stable financial footing, meet appropriate governance standards and protect the game’s integrity. But I am concerned about the breadth and, in some respects, the open-ended nature of what those conditions of eligibility might come to mean in practice.
We must be alive to the risk of regulatory overreach, as the Opposition have highlighted, and we should all recognise that bad regulation is worse than no regulation at all. If clubs are to be subject to vague or ever-changing thresholds, with little recourse or clarity on what is required, we risk imposing a level of uncertainty that could deter vital investment, discourage long-term planning and undermine the very sustainability that the regulator seeks to ensure. That is why the Opposition will—as we already have done in Committee—continue to press for greater transparency around the costs and cumulative burdens that flow from the action of the regulator; and it is why we believe that the regulator should not have unfettered discretion to shift the goalposts without clear parliamentary scrutiny and approval. As I have said, we should not write blank cheques to a politically led regulator.
Another issue with the clause is timeliness. As we have explained, clubs will need to plan ahead, financially, structurally and operationally. If the licensing process drags on, it risks becoming a bottleneck and not a safeguard for clubs around participation. We tabled amendments that would ensure timely decision making on provisional licences, and the same principle must surely also apply to full licences. However, we appreciate the different context within which a full operating licence will exist. That is why we have not tabled an amendment to this clause with a specific deadline. We understand that full licences will take slightly longer.
Moreover, there is a danger that the full licence becomes a tool for undue influence. We have spoken about our concerns about the impact that that may have on the statutes of UEFA and FIFA—in the interests of time, I will not go into that again. If clubs feel under pressure to comply with this new licensing regime to be able to play in English football, there may be a concern about them breaching other regimes, such as UEFA and FIFA, and, again, they may fear expulsion from those competitions.
One club asked me this question, although it was a tongue-in-cheek comment, so I will not name them. If a Premier League club decided not to apply for a licence, would the Government look to exclude it? There is the risk that, if a club feels that it will not be able to compete in Europe, for whatever reason, it may choose what this Bill was originally intended to stop: the European breakaway league.
I am not sure that the club would do that, as it was a tongue-in-cheek comment, but what would happen if a club says, “We are not going to meet these conditions, and therefore we will not apply for a licence”? Would the Government or regulator be willing to kick that club out of the Premier League? Even though that question is hypothetical, we need to know where this might lead, because we are talking about a regulation that will have an impact. If the Minister can answer where she thinks that club might go, I would be particularly interested in that.
We are also concerned about the future interpretation of eligibility and how that may veer into what we believe to be subjective decisions, or where the Government’s regulator will take on new powers as it enters mission creep. As such, I would appreciate it if the Minister will confirm that there will be no demands, for example, on clubs to provide diversity quotas, net zero targets or enforced political campaigns, all of which stray beyond the regulator’s core remit of financial sustainability and good governance. Let us not forget that football clubs are not franchises, as they are in the American sport system. Our clubs are community institutions with long histories and unique identities. They are not all cut from the same cloth.
Melanie Onn
Would the shadow Minister consider the kick racism out of football campaign to be political activity that clubs and the regulator should not be involved in?
Mr French
I thank the hon. Lady for her intervention, but that is not the point I was making. I am talking about quotas, which is a slightly different thing. We do not think that the regulator should be insisting on quotas, and that is very different from Kick It Out, which has made incredible progress for football over the years. The hon. Lady has raised a very different point, so I will not go down that rabbit hole.
I am sure that the Minister would agree that what is best for Barnsley FC is not necessarily best for Bromley FC or Bristol Rovers. Each club has unique characteristics and should be treated as such. However, we feel that the Bill, as drafted, could lead to clubs being lumped in the same direction. We believe in the equalisation of treatment, but each club should not be treated exactly the same when there are clear differences, whether that be in league structures or financial positions.
We are concerned about parts of clause 18, but we believe that it is an important part of the licensing structure that must be implemented with care, proportionality and consistency. It is essential that the Government’s regulator operates with discipline, sticking to those statutory objectives, resisting the temptation to micro-manage and always keeping front of mind the importance of stability, continuity and respect of football’s unique heritage. We support the principles of the clause, but I would appreciate it if the Minister answered some of my questions about what may come in the future and what the Government would do if a club decided not to apply for a licence.
Stephanie Peacock
I am grateful to the shadow Minister for his comments. A number of the points that he made have been well debated over the last few days in Committee, so I will not be engaging in them. I will not be engaging in hypotheticals either. We have been very clear that we simply do not want scope creep. The two-step process of the provisional and full operating licence means that clubs do not need to make substantial changes in a short space of time. We absolutely appreciate that it could be difficult for some clubs to meet threshold requirements, and the regulator will very much work with them. The regulator will have a balanced and proportionate approach, centred around advocacy first.
Mr French
I appreciate that I was asking about a hypothetical situation, but it is an important hypothetical. We are talking about a structure going forward in which clubs will be required to have a licence, and we have had some exchanges on that. This is a serious question: what would the football regulator do if a club said that it did not want the licence, and it did not believe it had to have one? Where would that legally leave the club and regulator? Even though it is hypothetical, it is very important to what we are debating in the Bill.
Stephanie Peacock
I disagree that it is an important hypothetical. We can come on to talk about enforcement later on, but we are talking now about the regulator’s approach, which will be balanced, proportionate and centred around advocacy.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clause 18 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)