Football Governance Bill [ Lords ] (Seventh sitting)

Louie French Excerpts

Committee stage
Thursday 12th June 2025 Public Bill Committees

[The Chair]

Before we begin, I remind Members to switch all electronic devices to silent. We will now continue our line-by-line consideration of the Bill.

Clause 37

Matters relevant to determinations

[Mr Louie French (Old Bexley and Sidcup) (Con)]

I beg to move amendment 110, in clause 37, page 28, line 28, at end insert—

“(fa) whether the individual is a member of a proscribed organisation as per section (3) and schedule (2) of the Terrorism Act 2000.”

This amendment requires that IFR, in determining whether an owner or officer has the requisite honesty or integrity, to consider whether the person is a member of an organisation proscribed under the Terrorism Act 2000.

It is a pleasure to serve under your chairship again, Ms Butler. I welcome all Committee members back for day four. Amendment 110, tabled in my name, requires this Government’s regulator, in determining whether an owner or officer has the requisite honesty or integrity, to consider whether the person is a member of an organisation proscribed under the Terrorism Act 2000.

Clause 37 sets out the framework under which the Government’s football regulator must assess whether an owner or officer of a football club meets the required standards of honesty, integrity and competence. This is an important part of the Bill. Football clubs are not like ordinary businesses, as we have discussed; they are institutions rooted in community, tradition and even national identity. Those who control them must be held to the highest standards and supporters quite rightly expect that clubs should be fit to uphold those responsibilities.

The Government’s regulator’s task in clause 37 is to ensure that persons in positions of influence over our national game are financially sound and professionally competent. However, the clause as currently drafted leaves the test for honesty and integrity open to interpretation—arguably too open. That is why we have tabled amendment 110, which provides a clear and unambiguous requirement that, in determining whether a person has the requisite honesty or integrity, the regulator must take into account whether that person is or has been a member of an organisation proscribed under the Terrorism Act 2000.

Let me be clear: this is not about political views, past associations or guilt by implication, but about having a national minimum standard of moral fitness. It should be inconceivable that a person with demonstrable ties to a terrorist organisation could pass the fit and proper person test to own or operate a football club in this country. Football clubs are part of the fabric of British civil society. They are symbols of local pride and national values, and they have international reputations. To allow a person associated with a proscribed group, many of which pose active threats to our national security, public order and democratic way of life, to take a controlling interest in such an institution would be not only morally indefensible, but deeply dangerous.

This is not a hypothetical concern. We live in an increasingly globalised football economy and genuine questions have been raised in recent years about the sources of funding, ownership and political influence across the game. My amendment does not attempt to legislate morality in broad terms; it simply anchors the Government’s regulator’s assessment in existing law, specifically the Terrorism Act 2000, which provides a clear, publicly available list of proscribed organisations that Parliament has already determined pose an unacceptable risk to our way of life.

By incorporating that into clause 37, we do two things. First, we clarify the threshold for what constitutes a failure of the honesty and integrity test, giving both clubs and the regulator a clear reference point. Secondly, we send a signal to not just fans and communities here at home, but investors and foreign Governments abroad, that English football will not be compromised by individuals whose allegiances lie with organisations committed to violence, extremism or the subversion of our national interest.

Football is a global sport, but it must still reflect and uphold our national values. It is not alarmist or over-zealous to say that those who control our clubs must have a character as close to unimpeachable as possible. We are asking them not to be saints—unless, perhaps, they own Southampton FC—but to be the pillars of the community that we already expect them to be.

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)]

That was so bad.

[Mr French]

I have woken everyone up there.

Clause 37 is an important safeguard, but without amendment 110, it lacks a clear and necessary line in the sand. Parliament has already determined that proscribed organisations represent a threat to public safety and national order. That same logic must apply here. I urge the Government to accept this modest but essential amendment and, in doing so, to help to ensure that our clubs are not just well run and financially sustainable, but led by people whose values are consistent with the country, communities and traditions that they are entrusted to serve.

[Lincoln Jopp (Spelthorne) (Con)]

It is a pleasure to serve under your chairmanship, Ms Butler. I rise to support amendment 110. I suspect the Minister might say that we do not need to cover everything and that there is a general catch-all measure in the clause, so we do not need to make this amendment.

I will draw the Committee’s attention to a similar case in my own constituency, however, where a member of the public wrote to ask if I could please hurry up his EU settlement scheme application. When we checked with the visas and immigration service, it turned out that he had been subject to a deportation order in 2017, and had indeed been deported in 2017. He had somehow managed to get back into this country illegally and make an EUSS application. He is still subject to that deportation order, yet for some crazy reason, the Home Office still have to go through his application. That is the sort of thing that we should not have to legislate for and that we should not have to state, but sadly we do.

[Stephanie Peacock]

It is a pleasure to serve once again under your chairship, Ms Butler. I echo the welcome back from the shadow Minister, the hon. Member for Old Bexley and Sidcup, to Committee members.

I will respond to amendment 110. I reassure the shadow Minister that the intent of his amendment is already achieved within the current drafting of clause 37, which lists the matters that the regulator must take into account when it conducts its owners and directors test. We will discuss that in more detail when we consider the next group of amendments, but I will summarise briefly now.

When assessing an owner or officer’s fitness, the regulator must have regard to any criminal convictions and proceedings, in particular those included in schedule 1 to the Serious Crime Act 2007. Membership of a proscribed organisation is an offence under the Terrorism Act 2000, and that offence is included in paragraph 2A of schedule 1 to the Serious Crime Act 2007.

The regulator will seek information and expertise from relevant organisations to help it to stay alive to both national and international concerns. The shadow regulator is already building a strong relationship with the National Crime Agency and law enforcement in general to ensure that the regulator is in a strong position to gather the information it needs.

I also reassure Members that the regulator and its staff will have the requisite measures and security clearance to be able to receive information relevant to their functions. Consequently, the current provisions in the Bill deliver the intent of the amendment. On that basis, I would be grateful if the shadow Minister would withdraw it.

[Mr French]

I appreciate the Minister’s comments with regard to amendment 110, which I tabled. I have listened carefully to her arguments, but it is still unclear to those of us on this side of the Committee why consideration of the Terrorism Act 2000 was not included in the list of factors set out in clause 37. We believe that is an oversight and, consequently, that the clause lacks the clarity that the amendment seeks to deliver in the Bill and that those who refer to it will seek going forward—in other words, the regulator. We will therefore press the amendment to a vote.

Question put, That the amendment be made.

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When the regulator finds someone unsuitable to be an owner or an officer a club, it can direct them to leave the club in a specified timeframe. Additionally, the regulator can prohibit them from undertaking certain activities at the club in the interim. There is a risk that in doing so, however, the club will no longer be able to operate effectively—for instance, if the unsuitable officer was one of the few directors of the club. To mitigate or avoid that risk, clause 42 allows the regulator to appoint an individual as an interim officer at the club. The regulator can also require the club to redistribute responsibilities among its remaining suitable officers. Where the regulator appoints an officer, the club, owners and other officers must co-operate with that appointed officer. That gives the regulator the tools to ensure the continued effective operation of the club.

[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?

[Stephanie Peacock]

I thank the shadow Minister for his points, to which I will respond briefly. There are no changes in the bit of the Bill that we are talking about compared with the previous Bill, other than—as I referenced in my previous contribution—the removal of the requirement for the regulator to

“have regard to the foreign and trade policy”

of the Government. We think that removal strengthens the independence of the regulator, and I reiterate that we do not have any concerns in relation to UEFA.

The shadow Minister asked some specific questions. There are no thresholds in the Bill, but the regulator will need to act fairly and proportionately. There are robust appeals processes through the Competition Appeal Tribunal. The shadow Minister made points about the publication of information. In order to ensure that sufficient protections are in place, relevant parties will be able to express their views before the regulator makes a decision. Once the decision is made, it will take these views into account, and the regulator must publish a notice of that decision, including the rationale behind it.

Question put and agreed to.

Clause 38 accordingly ordered to stand part of the Bill.

Clauses 39 to 42 ordered to stand part of the Bill.

Clause 43

Ownership removal orders

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[Stephanie Peacock]

As set out previously in the debate on clauses 38 to 42, the regulator will be able to direct an unsuitable owner to leave the club in a specified timeframe and to prohibit them from undertaking certain activities at the club in the interim. However, there is a risk that an unsuitable owner does not comply with these directions. For instance, they may refuse to leave the club or continue to use their position as an owner to damage the club. In these situations, the regulator will need sufficient powers to directly remove the unsuitable owner from the club. That is why clause 43 gives the regulator broad discretion in such cases.

The regulator can make an order containing such provision as the regulator considers appropriate to secure the unsuitable owner’s removal. For example, that could include appointing trustees, empowering the trustees to sell the club and requiring the unsuitable owner, or any other person, to comply with the trustees’ directions. However, the regulator can use this power only against unsuitable owners who have demonstrated that they are willing to flout regulatory requirements, or if they fail to comply with the directions that the regulator has made to protect the club from harm. As set out previously, in certain situations the regulator will have the power to make an ownership removal order containing whatever provision is appropriate to ensure that an unsuitable owner leaves a club.

To ensure that there are sufficient safeguards in place, clause 44 sets out the process that needs to be followed by the regulator. In particular, before issuing an ownership removal order, the regulator must publish a notice that it intends to issue the order and allow a period for interested parties to express their views. After this, the regulator must decide whether to make the order, and must publish a notice of its decision including its rationale. This helps to ensure that the views of those affected are taken into account in the decision-making process. Separately, the regulator may make rules requiring unsuitable owners to pay costs associated with an ownership removal order, such as costs incurred by a trustee appointed by an order. This power helps to ensure that the costs are borne by the unsuitable owner.

[Mr French]

Clauses 43 and 44 set out how ownership removal orders are to be made, and the legal consequences of non-compliance. Clause 43 matters hugely because it allows the regulator to force an individual to sell their ownership stake in a club. That is a serious and intrusive power, so we must ensure that it is used sparingly, lawfully and with robust safeguards. On process and fairness, we welcome the requirement in clause 44 to notify the person and allow representations to be made before an order is issued. However, is that enough? Will representations be meaningful, or will this just be a procedural tick-box exercise?

I have some questions for the Minister. Will the regulator be required to give full written reasons for the proposed removal? Will the owner have access to the evidence relied upon? Is there a statutory right of appeal or review, and if not, why? Secondly, on liability and legal exposure, clause 44(6) imposes the liability for costs incurred by non-compliance with an order on to an owner. What types of loss are envisaged for owners? Are they just financial, or reputational and contractual? Who decides whether a loss is caused by the non-compliance, and is causation clearly defined? Could this lead to vexatious or opportunistic claims in the future? How will this work with ownership groups, when there are multiple owners of a club?

On commercial realities, forcing the sale of a football club is not simple; in most cases, these are not liquid assets. The value depends on market conditions, the timing of the economy and sale, and obviously buyer availability and demand to purchase a football club. I therefore ask the Minister: will the regulator have a duty to ensure fair market value is preserved during a forced sale? What happens if the regulator’s actions or any delays cause the value of a club to fall? Could we see a situation where the regulator is frequently appearing in court on such claims? Fourthly, on the broader principle, the clause is in effect a power to force the sale of a privately-owned business. That is a major constitutional step. Property rights in this country matter, due process matters, and so does the rule of law. We need real safeguards, not just procedural gestures.

We want to keep football in safe hands, but the clause needs to be clearer, fairer and more restrained in its use. It must not give the regulator quasi-judicial power without necessary oversight of Parliament. That is not regulation; we believe it would be overreach. I would be interested to hear the Minister’s comments on my questions.

[Stephanie Peacock]

I echo the shadow Minister’s comments about the power being used clearly, robustly and fairly. I think all of us on the Committee can agree that that is absolutely right. On his question about whether the reasons would have to be written, the regulator will have to give the owner enough reasons for its decision to enable them to understand why it has been taken. That has one of the strongest appeal routes in the Bill; it can go directly to the Competition Appeals Tribunal and be heard on its merits. We think there are robust protections in place here already.

Question put and agreed to.

Clause 43 accordingly ordered to stand part of the Bill.

Clause 44 ordered to stand part of the Bill.

Clause 45

Duty not to operate a team in relation to a prohibited competition

Question proposed, That the clause stand part of the Bill.

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[Mr Betts]

I want to raise one small point with the Minister. Some time ago, when we debated clause 6, I raised the ability of the regulator to take a view about the impact of new competitions, particularly the world club championship, on the legacy of important domestic competitions like the FA cup. Those competitions will now be constrained for time, with replays being abolished, because a few clubs had to go and do more things in Europe, depriving the majority of clubs of their traditional way of playing in competitions. The Minister’s answer at the time was that a regulator cannot deal with competition matters.

The headings for part 5 and clause 45 include the word “competition”. Indeed, the fan-led review came about because of the European super league, and the then Prime Minister deciding it was so awful that we needed to do something about it. Given that competition can be looked at by the regulator, does the Minister want to have another think, perhaps before Report, about whether, without putting this in the Bill, the regulator should be able to consider such matters, when clubs’ finances and their fanbases’ enjoyment are particularly affected by a competition for a few that prevents more competition for the many?

[Mr French]

The hon. Member for Sheffield South East has stolen some of my lines. As always, he picked up the ball and put it in the net, as would be expected of the chair of the football all-party parliamentary group. There are inconsistencies in what is being discussed, and he was right to highlight them.

Clause 45 introduces a legal duty on clubs not to enter or operate a team in a competition deemed to be prohibited by the regulator. As has been discussed, the clause is clearly a response to the threat posed by breakaway leagues such as the attempted European super league a few seasons ago. While the intention behind the duty is understandable—to protect the structure and integrity of English football—the mechanism raises serious questions about competition and proportionality, as the hon. Gentleman just touched on.

First, on the principle, we agree that the pyramid structure of English football must be preserved wherever possible. Promotion and relegation are sacred principles of our game, and competition on and off the pitch must be upheld. The competitive nature of English football is what makes it so great. This season, certainly in the Premier League, has probably been slightly dimmer because it has been perceived to have not such great competition for the Championship and in relegation, as things were determined quite early in the season.

The Opposition have some sympathy with, in particular, the National League’s 3UP campaign, which has sought to close the gap between the National League and League Two. If we are looking at how to close the gap between the Premier League and the Championship, which has been the main argument from proponents of the Bill, we must also look at the bottom half of the pyramid to see how that competition can also be improved. That is a principle of fairness and competition for which I have a lot of sympathy.

[Lincoln Jopp]

Does my hon. Friend agree with the analogy that, although we are all very proud of having the Special Air Service as our elite forces, the SAS cannot be created without a very large Army underneath? While the Premier League is the jewel in the crown, it simply cannot exist on its own; it absolutely needs the game beneath it.

[Mr French]

I will not question the experience of my hon. Friend, whose military background is far greater than one I could even dream of on a PlayStation, let alone in practice. He makes a valid point that English football is much more than just the Premier League. We take enormous pride in all the leagues in our country, as we do for British football more broadly. They are some of the most watched leagues in the world, with amazing clubs and competition. Competition across the pyramid is what we seek to promote and preserve going forward.

The proposed European super league rightly provoked outrage from fans, clubs and Parliament itself, and rightly collapsed after pressure from all those groups, but we must be cautious about giving a regulator the power to prohibit competitions on open-ended grounds. As the Minister has said, the Premier League probably would not exist in its current form if we had sought to prohibit it around 30 years ago.

[James Naish (Rushcliffe) (Lab)]

Does the hon. Gentleman recognise that, as there is not a level of regulation, there is increasingly a welfare issue around the amount by which players are required to shrink their off-season to continue to play football? The commercial imperatives of clubs will potentially have a detrimental impact on the quality of the game.

[Mr French]

I completely agree with the hon. Member’s sentiment. We will seek to debate that when we come to our player welfare amendment, because we are concerned about increasing the length of the season to generate further revenues. The tournament in America and the Asia tour that has just taken place at Man United are probably the prime examples of the impact that can have on players. The English team, in their performance the other night, sadly looked quite tired. There is an issue around player welfare that we must all acknowledge, particularly given the demands to generate more revenues for the financial fair play rules. I thank the hon. Member for making that point; I am sure we will come back to it when we reach the player welfare amendment.

On definitions and discretions in the clause, the Bill defines a prohibited competition in quite vague terms, and it is ultimately left to the discretion of the regulator. The explanatory notes state that subsection (5) sets out some factors that the IFR must consider when deciding whether to specify a competition as prohibited. What are the criteria for a competition to be deemed prohibited? Will they be set in primary legislation, by guidance from the Secretary of State or by the regulator? Is there a right of appeal if a competition is believed to have been unfairly designated as prohibited?

On international alignment, there is another issue that we must highlight. We must accept that football operates in a global ecosystem, as we have discussed. English clubs routinely participate in international and cross-border competitions, whether that be the Champions League, the Europa League or the Club World Cup, as does the national team. How does the clause interact with UEFA and FIFA competition rules? What happens if, for example, a competition is sanctioned by UEFA but deemed prohibited by the football regulator, or vice versa? This is a real issue for the regulation. We would like some clarity from the Minister on how such a conflict would be resolved, because it would put clubs in a very confusing situation.

On enforcement and penalties, clause 45 creates a legal duty not to participate, but what are the sanctions if a club does so? One assumes that it would lead to licence revocation, but what else? Would there be fines or points deductions? What penalties will the regulator look to enforce? Will they be proportionate? Will clubs be given prior notice and the chance to make representations?

On unintended consequences, we must avoid stifling innovation and competitive evolution in the sport. Not every new competition is a threat; some may bring financial or structural benefits, or benefits for fans. As I and the Minister have highlighted, we must remember that the Premier League was technically a breakaway league from the old First Division. If that happened today, we believe that the Bill and the regulator would be responsible for preventing that league, and all the attributes and characteristics that we celebrate in this country, from existing. We have to look at innovation carefully, and the answer must not always be no if there are clear benefits to the country and to the game of football itself.

We support the aim of preserving the integrity of English football, but the clause must be clearly defined, tightly drawn and fairly enforced. A law designed to stop the next European super league must not become a tool for bureaucratic overreach or political intervention by the regulator. The game belongs to its fans and its communities, not to the regulator or the governing body. I am interested to hear the Minister’s comments on my questions, particularly those about how the international system would interact with a prohibited competition.

[Lincoln Jopp]

I wish to build on my hon. Friend’s themes. Football has the unfortunate concept of the friendly; frequently, they are not very friendly at all. When I read the Bill, it was clear to me that the drafters had in mind the prevention of another flyaway European super league, which we have debated.

I would like the Minister to look at look at the example of a one-off friendly match. Many of our teams tour in the far east and in America, in their off-season, to generate additional revenues and expand their fan base and brand. Let us envisage a set of circumstances in which a North Korean has somehow managed to purchase an English football team, and they have the bright idea that they would like to play a “friendly” match in North Korea. It is a one-off match, but the Government in North Korea decide that they want to make a big deal of it, so it becomes the Pyongyang cup—a one-off match between the English team and the North Korean team. In the Minister’s view, would the regulator be justified in considering whether such a one-off match was a competition and therefore within the purview of the regulator?

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[Stephanie Peacock]

I am grateful to Members for their contributions and will take their points in turn.

The clause applies both to existing and to new competitions. If any competition breaches the criteria, it can be prohibited, but matters such as scheduling are for competition organisers.

On shadow Minister’s points, we will come on to player welfare, to which we are all very sympathetic, just as we are sympathetic to the 3UP campaign, but it is outside the Bill’s scope and is for organisers. He asked some specific questions on the criteria; that will be for the regulator to determine. It is expected to do so based on a predetermined, proportionate, objective and transparent framework based on factors listed in the clause. For example, if a competition is not merit-based, jeopardises the sustainability of existing domestic competitions, and is not supported by the fans, we would expect it to be prohibited.

[Mr French]

My hon. Friend the Member for Spelthorne and the hon. Member for Newbury highlighted the issue of friendlies. The Minister has indicated that she will come to that, but I do think we need some clarity as to what that might look like in practice. The end-of-season competitions are normally internationally designed, and although they may be endorsed by UEFA or FIFA, they would breach some of the conditions under the definition the Minister just gave. We need clarity about how this will work, because we do not want to put English football on a collision course with international football.

[Stephanie Peacock]

No, of course we do not. I totally agree. I was coming to that point. As I understand it, friendlies would be out of scope, but I am happy to write to Committee members if they would like greater clarity.

We have discussed the appeals and representations several times. The relevant competition organiser will be given a period in which they can make representations. If the organiser has concerns about the regulator’s decision to prohibit the competition, it will be able to appeal the decision. As has been discussed, the organiser can also appeal to the competition appeal tribunal.

[Mr French]

I thank the Minister for those remarks. I suspect that a letter of clarity would be helpful for all Members. There is a risk that FIFA, or UEFA, as we have seen with the Nations League in recent years, looks to introduce a new competition, whether at club or international level, that would contradict the regulator. As we have spoken about at length, and as the hon. Member for Sheffield South East has described, the different governing bodies of UEFA and FIFA are often in competition with our national competitions. We have to ensure that clubs are not forced to choose between a licence in the English game and partaking in international competitions. We fear that could drive acceleration toward a breakaway league, rather than prevent one.

[Stephanie Peacock]

I completely appreciate the shadow Minister’s comments. As I said in my opening remarks, we do not ban all international competitions automatically. We are mindful of enabling innovation in the market. I am happy to supplement my comments with a letter to Committee members.

Question put and agreed to.

Clause 45 accordingly ordered to stand part of the Bill.

--- Later in debate ---

[Mr French]

I am intrigued by the hon. Gentleman’s amendments. Similar sympathies apply to the situation at Reading, which is also still the case at Charlton’s Sparrows Lane training ground, which is owned not by the current owners but by two owners ago, as is the stadium. How would the hon. Gentleman’s amendments work with regards to the Everton example, where Goodison is now to be used for the women’s game? How would his amendments cover those kinds of properties? An owner might want to sell the women’s ground, even though the women’s game is technically outside the scope of the regulator.

[Mr Betts]

At this stage, my amendments cover the facilities that are within the scope of the regulator, so I do not think they apply to any properties that are outside the scope of the regulator. Obviously, the regulator cannot deal with things outside its scope.

I hope the Minister might give some consideration, even if the wording of my amendments are not absolutely right, to how the Bill can be better drafted to cover the point. Straying slightly on to amendment 83, there is a similar point about trying to ensure that, where there is a sale of certain assets, before they are sold, suitable alternatives are in place so that the club does not potentially lose its licence, as it has nowhere to play and train. I appreciate that I have strayed there; you have been very considerate, Ms Butler, in helping me to do that. I just thought it would help move proceedings along.

[Stephanie Peacock]

I thank my hon. Friend the Member for Sheffield South East for tabling his amendments. Prior to speaking to them, I would like to let him know that I have raised his points on a similar issue—on assets of community value—with the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Nottingham North and Kimberley (Alex Norris). I spoke to him following our Committee session on Tuesday, and he has committed to write to my hon. Friend as swiftly as possible, so I will follow up with him in a timely fashion.

Turning to my hon. Friend’s amendments, I hope I will be able to reassure him on the development of the reform. I understand the intention of his amendments, but I will explain why we intend to resist the changes to include specified properties. On extending the scope of clause 46 to include training grounds, among other properties, the legislation has carved out specific protections to safeguard home grounds against risky financial decisions or sales of the grounds. I will speak specifically to the mechanism of clause 46 and the approval process later, but the focus on the home ground is to reflect that it is often the most financially significant asset at the club. That does not mean that other assets such as training grounds or office space are not also important to the club, but that there is a specific consideration necessary for the home ground.

I understand that my hon. Friend’s amendments are likely in response to instances where owners have intended to asset strip or make reckless decisions. Members on the Committee have shared some examples, and we are all familiar with recent ones. I wish to reassure all that there are protections elsewhere in the Bill to safeguard against this. That includes an enhanced owners and directors test that will ensure that owners are prepared to be appropriate custodians of their club and its assets, as we discussed on part 4 of the Bill. If it were to become evident that an owner’s actions were likely to worsen the financial position of the club, the licensing regime gives the regulator power to place licensing conditions on the club. The regulator can also take enforcement action where such a condition has been breached or the financial plan has not been followed. Additionally, the regulator will have oversight of the financial plans and balance sheets of the regulated clubs, ensuring that the club is not putting itself in a risky position unnecessarily.

[Mr French]

On the point about risky situations and the risk-averse nature the Minister is describing, the Bill is clearer on disposable home grounds. I am intrigued to see how the regulator would deem a club either selling its freehold and then having a leaseback option, which we have heard has happened, or looking to move to a ground or stadium that it did not own and pay rent going forward. Would that be seen as a bad financial move or a good one by the regulator? It is not quite clear how it would work for non-disposable treatment of assets.

[Stephanie Peacock]

I do not want to get drawn into hypotheticals. As we previously discussed, there might be a perfectly legitimate reason for a club to move—or to move temporarily, such as for flooding. It is not an absolute power. We want to give the regulator discretion when clubs may need that for legitimate reasons. The amendment speaks to where we think clubs are asset stripping or acting in bad faith.

We would expect the power to include assets remaining in the club’s ownership and any plans to change its financial arrangements. It would be at odds with the sustainability of a football club for there to be no home ground or location to train. It is therefore implicit that the regulator would address that.

--- Later in debate ---

[Mr French]

I will not dwell on this point too much, but the implications of this amendment and the ones that we were just discussing are not hypothetical; we have seen real-life examples of where this issue has become a real one for football clubs. So, we seek some clarity from the Minister about how the regulator would act in such scenarios in the future.

As I said in my previous comments, I think the disposal of a ground is probably slightly clearer than the relocation of a ground. However, I will use the example of Coventry City football club. When they moved to the Ricoh Arena, I believe that the stadium was jointly owned by the local council and another group. I assumed that the club moved to a new stadium with the best interests of the club at heart. I had the pleasure of going to Coventry’s old stadium when Charlton played Coventry in the FA Cup, but that is a bit by the by. It was in need of improvements; most people would have thought that.

How would this measure work? We know that Coventry ran into a number of issues with the Ricoh Arena, which I believe is now owned by the Frasers Group. At that point in time, when the club moved, would that move have been deemed to be in the regulator’s purview of an inappropriate action by the previous owners? I ask that question because this is a real-life example of where it is not clear how this legislation would apply. As Parliament, we have to be clear how we intend the regulator to behave in such situations, because, as I say, that was a real-life example of how football clubs might seek to improve their stadia when they do not have the assets to do so themselves.

[Stephanie Peacock]

I am grateful to the hon. Gentleman for his comments. I draw his attention to the discretionary licensing addition that I have referred to: the regulator can react to different situations. I do not want to be drawn on individual cases, nor do I want to pre-empt the actions of the regulator.

--- Later in debate ---

[Stephanie Peacock]

I appreciate that point, but the sale of home grounds is a primarily financial decision, separate from the decision about where the club actually plays its games. That is why there is currently no requirement to consult or obtain approval. If the club has not actually relocated, it would be caught in clause 48 and would be required to consult fans. We will come on to discuss that later.

[Mr French]

I must admit that—like other members of the Committee, to judge from their facial expressions—I am slightly confused by the reasoning the Minister has given in response to the hon. Member for Sheffield South East on this clause, and where the distinction lies between the ultimate decision to relocate the ground and the sale of the ground. The decisions are clearly interlinked, and I would argue that fans would have strong concerns if a club owner was seeking to sell the ground, which would in a number of instances lead to either a relocation or an impact on the club’s heritage. The sale, for example, could lead to the renaming of a stadium, and the fans would clearly have a view on how that would impact their support for the club.

I ask the Minister to reflect on the hon. Gentleman’s points, because the clause seems to lack clarity on how that distinction is being made. I understand the point she is making about the financial considerations of owners, but the Government should reflect carefully on the argument against this clause, because it is not very clear to members of the Committee.

[Stephanie Peacock]

I appreciate the comments that have been made, and I will take them away and reflect on them, but I ask my hon. Friend the Member for Sheffield South East at this point to withdraw his amendment.

--- Later in debate ---

[Stephanie Peacock]

This clause sets out the duty on regulated and formally regulated clubs not to appoint an administrator without approval from the regulator. This is to ensure that administration is transparent, acts in the best interests of the club and its creditors and avoids any perceived or actual conflicts of interest. This will give all stakeholders, especially fans, confidence in the administration process.

As with clause 46, this applies to regulated and formally regulated clubs to avoid any risk of circumvention of the rules. The regulatory framework is not a zero-failure regime, so it is possible that football clubs may enter administration despite the best efforts of the regulator. There is already a legal framework for companies, including football clubs, to enter into administration, which is detailed in the Insolvency Act 1986. In many cases, the existing framework has enabled clubs to go into administration and re-emerge as solvent.

However, there are occasions where the administration of a club is not initiated by the creditors but the club itself, so it does not require a court to sanction the appointment in advance. In these circumstances, there have been occasions when some have had cause to question a relationship between the insolvency practitioner appointed as administrator and the football club. This is why, in specific circumstances, the appointment of an administrator requires the regulator’s approval to ensure that the process is transparent, and to avoid conflicts of interests or perceived bias in the appointment. By doing so, all stakeholders, particularly fans, should have more confidence that the outcome is the best one available in the circumstances for the individual club.

[Mr French]

Clause 47, as the Minister has just outlined, creates a new legal duty on clubs not to enter administration without the prior approval of the regulator. This is an unprecedented intervention: a regulator potentially blocking access to what is, in most sectors, a standard insolvency mechanism. We understand the intent to prevent abuse of administration as a means of dodging financial responsibility and to help protect club continuity. However, this clause raises serious concerns about the balance between corporate law and football regulation going forward.

As drafted, subsection (1) says,

“as soon as reasonably practicable after the body considers that there is a reasonable prospect of an administrator of the body being appointed”.

I would therefore naturally ask the Minister: what constitutes “reasonably practicable” and “a reasonable prospect”? We all appreciate that, in most examples, an owner’s wealth is generated not by the club itself but other business interests. It may become very difficult to determine what is “a reasonable prospect” if we are looking at business interests far from football.

Administration is recognised as part of UK insolvency law, which the Minister referred to, and it exists to help distressed businesses rescue viable parts and protect creditors where possible. Blocking access to administration could make things worse, not better, specifically if it delays actions or deters future buyers. Why are the Government confident that the regulator is better placed than insolvency professionals to determine when administration is appropriate?

On some of the practical risks, insolvency situations often develop quickly, and clubs may need to act fast to avoid a complete liquidation of assets. A duty to obtain the regulator’s approval would therefore add delay and could risk total collapse where speed might be essential. We have seen that in a number of club takeovers over the years. Will there be an emergency approval process for an administrator? Within what timeframe does the Minister expect the regulator to respond? Is there a default route if it does not respond in a quick enough time?

On consistency with company law, clause 47 effectively overrides the Companies Act 2006, creating a two-tier insolvency regime for football clubs. That is not a small step. It sets a precedent for sector-specific interference into commercial law. What discussions has the Minister’s Department had with the Insolvency Service and the Department for Business and Trade on this specific clause and mechanism going forward? Are there any comparable sectors in the UK where companies would be forbidden from entering administration without the regulator’s consent?

Lastly, on unintended consequences, could this provision make distressed clubs less attractive to investors who fear regulatory delays? I fear that it may. It may also push clubs to delay taking action, making outcomes worse for creditors, fans and staff in the longer term. It could also expose clubs to legal risks, if creditors challenge a failure to act promptly to directors. The Opposition support strong oversight, but clause 47 must not become a regulatory roadblock in moments of crisis. Football clubs must be able to act swiftly to protect their future. The football regulator should be a safeguard, not a barrier to survival. We urge the Minister to have a close look at some of those questions and hopefully provide some answers today. We fear that this clause, as drafted, may have a number of unintended consequences.

Ordered, That the debate be now adjourned.—(Vicky Foxcroft.)