Football Governance Bill [ Lords ] (Seventh sitting)

Jon Pearce Excerpts

Committee stage
Thursday 12th June 2025 Public Bill Committees

[Mr French]

Clause 38 is one of the most consequential provisions in the entire Bill. It gives the Government’s football regulator the power to disqualify an individual not only from being an owner or an officer of a specific club, but from holding such a position in any regulated club going forward. That is an extraordinarily wide-ranging power, which amounts to a professional ban from participation in the administration or ownership of an English football club. That power must be exercised with the utmost care on the basis of clear evidence, robust procedural safeguards and fair opportunities for representation.

Under subsection (1), the regulator may issue a disqualification order if it is determined that a person is not suitable to be an owner of a particular regulated club. Subsection (2) extends that same power to issue a disqualification order against officers. The clause in effect makes the Government’s regulator the gatekeeper of who may or may not participate in the leadership of English football. While the Opposition accept the rationale, particularly in the light of past controversies and failures of governance, we must be careful about vesting that level of authority in a politically appointed body.

Three concerns arise. First, there is the question of proportionality. Not every failure of suitability in one club ought to trigger an automatic blanket ban from the entire football pyramid. A disqualification order is not a light matter in itself; it carries reputational consequences that may extend far beyond football. Will the Minister confirm what thresholds of seriousness must be met before a disqualification order is considered appropriate? How will the regulator ensure that such orders are not used disproportionately, particularly in cases where suitability determinations may be contested or borderline?

Secondly, there is the question of due process. The clause appears to allow the regulator to act not only in determinations it makes directly, but on decisions it is deemed to have made by operation of law. That introduces a grey area where someone might find themselves disqualified without ever having had a clear and fair hearing. There must be a full right to representation, explanation and appeal before such a decision takes effect. Will there be an express duty on the regulator to provide reasons in writing to allow for full and fair challenge after a decision has been made? Will the affected individual have the right to appeal to a genuinely independent body—one that is outside the Government’s regulator’s own structure?

Thirdly, there is a concern about consistency and transparency. The risk is of regulatory opacity. If a disqualification order is issued without published reasoning, or if standards vary from case to case, we will quickly see a collapse of confidence in the regulator’s impartiality. Will the Minister consider introducing a requirement for an annual report to Parliament listing the disqualification orders that have been issued in the preceding year, and for a publicly accessible register of disqualified individuals, with anonymised or redacted reasoning where appropriate, for transparency? Crucially, will the Minister confirm that this power cannot be used retroactively—that is, to punish individuals for matters known and previously tolerated under prior regimes, should there be a change of chairman, deputy chairman, chief executive or board members?

English football needs good owners—as a Charlton fan, I can say that with a great deal of confidence and with sympathy for other clubs that have been in similar situations. It needs competent, honest and engaged officers, and there must be consequences when individuals fall short of the standards we all expect, but clause 38 must not become a tool of regulatory vengeance, nor of political interference. The power must be used sparingly, lawfully and accountably.

[Jon Pearce (High Peak) (Lab)]

I declare that I am a member, and former chair, of the RamsTrust. Does the shadow Minister agree, on his point about Charlton, that we would want the use of this clause to err on the side of caution? As Rams fans, we went through a situation where an American businessman was passed by the EFL on the fit and proper person test, and the only reason he did not buy the club was because the money never turned up. This was after he had been approved as a fit and proper person. It turned out that he was a fraudster, and he is now serving 20 years in prison in the US, having passed the fit and proper person test. Contrary to the shadow Minister’s argument, it would be better if the provision was used quite strictly, because we only want the best people to be running our football clubs, which are so precious to communities across the country.

[Mr French]

I thank the hon. Member for that valuable contribution and for telling us his experiences as a Derby fan. There are many examples that have been drawn on in various aspects of the Committee’s debates, and I suspect that there will be more going forward. Just to be clear, we are not seeking to press the provision to a Division. The point we are making is that we want the strongest owners and fittest people to run clubs, but we also want to ensure that the regulator is seen to be acting lawfully and in a balanced way at all times, to avoid any issues of impartiality. I understand the point the hon. Member makes, which is why I have always supported strengthening ownership tests, even in the previous Parliament.

We do not believe that exclusion based on reputational judgment or politics should come into these kinds of judgment. The Government must not forget that they are regulating not just football clubs, but people’s lives, reputations and livelihoods. That demands humility, caution and a presumption in favour of freedom and innocence, unless the case for restriction is absolutely clear and overwhelming. Where there is doubt, the Government’s regulator must not fill in the blanks with its own qualifications or prejudices.

The Opposition support the need for disqualification in serious cases, but we continue to press the Government to ensure that the clause is not open to abuse, and that football remains a competitive, plural and fair environment, rather than one policed by the regulator, acting as judge, jury and executioner in uncertain circumstances.

Clause 39 empowers the regulator to give a removal direction in requiring an unsuitable owner to take all reasonable steps to cease being an owner by the end of a specified period. The exception to this requirement is when an owner did not have prior regulatory approval, and the regulator can exercise its power to make an ownership removal order within three months, starting from the determination day. The clause requires the football regulator to inform the owner of the club and relevant competition organiser before giving a removal direction. It also requires the football regulator to notify the owner and the club of the possible enforcement action for not complying with the direction.

It is because of powers such as these that the regulator must be seen as independent. If a Government regulator is to order the removal of incumbent owners, this could be seen by competition organisations as clear interference, which as we have discussed at length, and could cause many issues for English clubs, especially when competing in UEFA and FIFA competitions. I would be interested to hear some assurances from the Minister about how that might work in practice. If the Government’s regulator is to tell clubs that they must change ownership, how confident is the Minister that that will not breach the rules that we have discussed?

This goes back to a point I made in a previous sitting about something that is a theme of the clauses in this group. Giving the owner or officer of a club notice of a regulatory action that is coming will hopefully allow them the rights of representation and challenge, if they feel that they have been handled wrongfully, but it also opens up issues around insider information, particularly with regard to a club’s valuation. I suspect that all hon. Members appreciate that such a change, particularly at the top levels of ownership, will have a dramatic impact on the valuation of a club. We want to understand how the regulator will deal with that issue to ensure that insider dealing, in particular, does not become a widespread issue where the regulator is trying to enforce its actions, as provided for by these clauses. We want to understand how that will work in practice, to ensure that these clauses do not have unintended consequences.

Clause 40 empowers the regulator either to issue a removal direction to an unsuitable officer, requiring them to take all reasonable steps to cease being an officer by the end of a specified period, or to give such a direction to the relevant club, or both. It requires the independent football regulator to inform the owner, club, and relevant competition organiser before giving a removal direction. It also requires the IFR to notify the owner and the club of the possible enforcement action for not complying with the direction. I have the same question about this clause as for the previous one: how will the risk of inside information be managed?

Clause 41 empowers the regulator to prohibit an unsuitable owner or officer from carrying out specified activities or exercising specific rights and/or to issue a direction to the club requiring it to ensure that the unsuitable owner or officer does not exercise specified activities or rights. The clause provides a non-exhaustive list of such activities and rights, including any right

“to vote on any matter relating to the…club’s activities”;

appointing, terminating or changing the terms of appointment or responsibilities of any officer or employee; changing the corporate structure; and undertaking any specified actions without obtaining prior approval from the independent regulator.

Clause 41 also requires the IFR to notify the owner and the club of the possible enforcement action for not complying with the direction. Such action could seriously impair the ability of a club to function while it seeks a new owner or officers, as ordered by the regulator. As we all know, it takes a significant amount of time to find a new owner, and many may be deterred by perceived interference in English football, compared with other nations without a state regulator. Clause 41 may cause more damage to a football club than the owner, who the regulator cannot dismiss. How will the Minister ensure that the regulator uses these powers only if and when deemed strictly necessary?

Clause 42 relates to situations where directions under clause 41 would impede a club’s ability to operate effectively or comply with regulatory requirements. It empowers the IFR to temporarily appoint an officer to carry out a specified function, or redistribute functions among existing officers. It stipulates that those functions must be specified, must be for a specified amount of time, and can be revoked or varied by another order. It specifies that an interim officer is not subject to the duties and requirements placed on officers by the Bill. It also requires the IFR to notify the owner and club of the possible enforcement action for not complying with the direction.

Clause 42 adds to the fear that the regulator could erode the independence of English clubs and how they operate. It empowers the regulator to effectively govern a club while seeking to remove unsuitable officers or owners. Given the time that it takes to find new ownership, that situation could last for a considerable period and cause massive issues on the pitch with regards to investment and transfers—as we discussed in a previous sitting—and how the club functions. It would also leave the regulator wide open to criticism if its actions lead to relegation, for example, for a particular club. Does the Minister think that there is a risk that such a club could be barred from international competitions—as I suggested earlier—or that the Government’s regulator could be left wide open to legal challenge if it directly impacts a club’s performance on the pitch, or its financial performance off the pitch while such considerations, or changes of ownership, take place?