Football Governance Bill [ Lords ] (Third sitting) Debate
Full Debate: Read Full DebateMax Wilkinson
Main Page: Max Wilkinson (Liberal Democrat - Cheltenham)Department Debates - View all Max Wilkinson's debates with the Department for Digital, Culture, Media & Sport
(2 days, 23 hours ago)
Public Bill CommitteesI beg to move amendment 97, in clause 7, page 5, line 27, at end insert—
“(d) conflicts with any regulations or rules of international football governing bodies, including FIFA and UEFA.”
This amendment requires the IFR to exercise its functions so as to avoid conflicts with the regulations and rules of international footballing bodies.
It is a pleasure to serve under your chairmanship, Mr Turner, and to open day 2 of the Committee’s consideration of the Bill. On day 1 there was extensive debate about an issue that I am sure we will also get into today. We Opposition Members were keen to ensure that the Government’s new football regulator will improve transparency, help reduce costs to clubs and fans and stop political interference in football. It was disappointing that Government Members did not support those objectives.
Amendment 97 seeks to ensure that there are no conflicts with any of the regulations and rules of international footballing governing bodies, including FIFA and UEFA. It clearly requires the Independent Football Regulator
“to exercise its functions so as to avoid conflicts with the regulations and rules of international footballing bodies.”
As we know, UEFA has written to the Secretary of State to set out its concerns with the Bill. The letter came after the Government introduced the expanded version of the Bill. It is disappointing that the Government continue to refuse to publish it so that all Members can have an informed debate about the risks that UEFA outlined. I will not go over that debate again—I might get a yellow card if I do. The amendment would require the Government’s regulator to exercise its functions in a way that avoids conflicts with the rules, statutes and regulations of international football governing authorities, especially FIFA and UEFA.
The amendment is designed to protect the regulator’s ability to carry out the functions that the Government have assigned to it without inadvertently triggering consequences that could seriously damage English football’s standing in the international game and, in the worst-case scenario, lead to English clubs being removed from the Champions League and—perhaps more seriously—the national team being banned from competitions such as the European championship and the World cup. Let us make no mistake: if the Government’s regulator were to exercise its powers in ways that contravene the established framework of global football governance, the ramifications would be swift and severe.
A particular area of concern stems from one of UEFA’s fundamental requirements, which is that there should be no Government interference in the running of football. As hon. Members might know, under FIFA’s rules, any form of what is deemed undue third-party interference in the affairs of a national football association can result in disciplinary action. That can include suspension of the football association itself, exclusion of clubs from European competitions or the ineligibility of players to represent England in FIFA-sanctioned tournaments such as the World cup.
It is a pleasure to serve under your chairship, Mr McCartney—[Interruption.] I am sorry, Mr Turner. Let the record show that I am living in the past—perhaps not as far in the past as some Opposition Members. My concern about what the shadow Minister is saying is that the Opposition seem to be keen on setting a higher bar for football than they would for areas of general law when we are talking about interactions across national borders, with the European Court of Human Rights and the European Union in mind. Will he reflect on that?
The Lib Dem spokesman makes an interesting comparison. As I said in the Committee’s debate on Tuesday, my focus is on football, and I am outlining with this amendment my concerns about the interactions of a sport with other international competitions. I will come on to explain why football in particular is interwoven with international principles. The majority of fans want to focus on the sport, rather than politics. I am sure that there are many more debates to be had on issues such as the ECHR in the rest of this Parliament. I will stick to football today, but I appreciate the hon. Gentleman’s comments.
UEFA’s ultimate sanction would be excluding the federation from UEFA and teams from competitions. That risk is very real: it has happened before and can happen again. In 2006, the Greek football federation was banned from European competition. People might argue that I am trying to scaremonger, but I am trying to highlight that this is a real risk.
It is important to clarify what FIFA and UEFA mean by “third-party interference”. It is not a casual term; it is clearly defined in their statutes. It refers to instances where public authorities, including Governments or regulators created by Government legislation, exert influence over how football is run in a way that compromises the independence of football associations and clubs. Examples include dictating the appointment or removal of club directors—which the Bill does—influencing the outcome of football disciplinary procedures and imposing governance models that conflict with internationally recognised standards.
Any new licensing requirements introduced by the IFR must be meticulously aligned with existing UEFA and national frameworks. It is therefore important that the IFR’s licensing criteria are complementary to football and created in full consultation with clubs and any other affected parties. Does the Minister accept that clubs, as entities directly impacted by licensing regulations, must have a full voice in the development and implementation of those requirements? What consultation are the Government or their regulator currently undertaking on these regulations?
Let me be clear: I understand that the creation of the IFR in and of itself is on the borderline of what constitutes third-party interference. We are taking great care to help the Government to redesign a regulator that is fully independent of Ministers and professionally competent. However, in the absence of clear statutory guidelines to avoid conflicts with international rules, there is a risk, or perhaps even an inevitability, that the Government’s regulator may, at some point in the future, cross a line drawn by UEFA or FIFA.
My hon. Friend the Member for Newbury has suggested that that approach means that the Conservative party is happy being a rule taker, after all. Is that the case?
Does the hon. Gentleman agree that the way in which our FA has been involved in the making of those rules is a little bit like some other supranational organisations that we were a member of in the past—for example, the European Union?
I would argue very strongly that when the English football team finally wins the World cup, it will get much more out of FIFA than this country would ever get out of the European Union.
English football does not exist in a vacuum, but the Bill acts as if it does. The global football ecosystem is fantastically complex, but the Bill is simple, clunky and—I am afraid to say—full of holes, which would potentially leave English football to drown among its international competition. I also fear that it will create even more legal cases, whereby clubs end up spending more time in courts than they do focusing on the football matches themselves.
To act as if we can disregard those international rules, or to suggest that a domestic regulator can impose conditions without reference to them, would be to invite precisely the sort of jurisdictional collision that could see English football punished because of the good intentions of Members of this House. We cannot just pander to the politics; we must be practical about the potential havoc that the Bill will wreak across the English football pyramid.
If FIFA or UEFA were to exclude English clubs or the national team from international competitions as a result of perceived third-party interference, the consequences would be nothing short of catastrophic. As hon. Members will know, the Premier League generates more than £6 billion in revenue annually, with over £1.8 billion coming from overseas broadcasting rights alone. In fact, I understand that the Premier League is the first sporting competition in Europe to generate more from its international broadcasting rights than it does from its domestic rights.
The hon. Lady and I can debate all day what we think is political and our recollection of what FIFA has ruled or not ruled in the past. However, that is not relevant, because she and I will have no decision-making authority over the football regulator once the Bill is passed. It would be much better that we build into the system a requirement for the regulator to comply with FIFA and UEFA rules, whatever they may be, to secure the future of our domestic football teams in international tournaments.
I may have misread the documentation for this Committee, but I am pretty sure I read an Opposition amendment that would allow a football club’s political intervention or statement if the club had established that a majority of its fans were in favour of that political statement or intervention. That seems to be somewhat at odds with what is currently being argued.
No, I do not accept that. All the amendment does is to seek the compliance of the football regulator, which this Government are trying to set up, with the major international governing bodies—FIFA and UEFA. Any arguments about political interference and political symbols and how decisions on them are made will be a matter for FIFA, UEFA, the FA and the regulator, but we should want to ensure that the regulator is required not to do anything that conflicts with the rules of FIFA and UEFA.
I beg to move amendment 98, in clause 7, line 35, at end insert—
“(3A) The IFR may not redistribute revenue, income or any monies from one regulated club to another regulated club.”
This amendment prevents the IFR from redistributing any funds from one club to another.
Again, it is a privilege to speak under your chairmanship, Mr Turner. I promise that this speech will be slightly shorter than the last one—people will be pleased to know that.
Amendment 98 would make it explicit that the Government’s regulator should not engage in the practice of redistributing income or revenue from one club to another. This is a necessary and prudent safeguard and goes to the heart of how we preserve competitive integrity, protect private investment and ensure that the scope of the regulation does not veer into a form of creeping central planning in our national game. Nowhere in the Bill as it stands is it clearly ruled out that this new public body—run by an appointee of the Secretary of State, as we have heard—could compel the transfer of funds between clubs in the name of sustainability, redistribution or solidarity.
That is why the amendment is so important. It would place a clear statutory limit on the power of the Government’s regulator. It would ensure that the regulator could not, in any circumstances, divert resources from one privately owned club to help to subsidise another. It would preserve the principle that the money earned by clubs—through good management, fan support, on-field success or commercial acumen—belongs to those clubs, not to a central authority acting as some sort of financial equaliser. Although I am sure that hon. Members will say that that will never happen, it is important that we, as Members of this House, make sure that it never does. If Members believe that it will never happen, making this amendment to the Bill will not affect the operation of the Government’s regulator. There is no reason to oppose the amendment, other than political goal scoring.
This issue goes far beyond football; it touches on the fundamental principles of ownership, competition and economic freedom. As we have heard, private investment in English football has helped to transform the game. Whether in the Premier League or lower leagues we have seen owners, both domestic and international, commit hundreds of millions of pounds to develop stadiums, invest in training grounds, nurture local talent and grow their clubs responsibly. That investment has come in the expectation of fair competition and the ability to retain the fruits of one’s success. We all know that it has not always been done with the best intentions, but the Government have decided to bring in a regulatory sledgehammer to crack this particular nut. A small minority of owners should not be responsible for upending the entire English football system, which has stood and evolved over more than 100 years.
If the Government’s regulator is granted the power to override that and to redistribute revenues forcibly between specific clubs, that risks undermining the very conditions that made English football the most watched and commercially successful league system in the world. It sends a chilling message to investors that success may be penalised, ambition discouraged and financial reward diluted in the name of a central diktat. It would also, as I said when I moved amendment 97, demonstrate a total violation of the independence of English football from a Government regulator, which would assuredly constitute a violation of UEFA and FIFA rules, in turn leading to the expulsion of our clubs from competitions, as we have just discussed. UEFA states that mandating redistribution that affects
“the competitive balance in the game and wider European competition would be of concern to us. We also fear that having a third party intervene in redistribution would likely prevent amicable solutions being found.”
It is not difficult to imagine where that could lead. A well-run League One club, generating income from smart ticketing and loyal fan engagement, could find its revenues skimmed off to support a rival that has been less prudent or less entrepreneurial with its fan engagement. A Championship club breaking even through hard decisions and local investment could be told that its television share will be trimmed to subsidise losses made elsewhere by a less prudent board or chairman. That is not regulation, but redistribution by bureaucratic diktat.
Let me be clear: I am not opposed to the redistribution of moneys in English football. Voluntary redistribution negotiated by clubs, leagues and the FA is a long-standing and respected feature of the game, but there is a profound difference between clubs choosing to support one another and the Government’s regulator imposing that from above, using statutory powers to shift money between private enterprises without consent.
In some countries, television deals are struck directly between broadcasters and clubs. If that happened in this country in the future—were Manchester City, Arsenal or Liverpool to strike a direct deal—would we not end up in a situation where the regulator might have to consider redistributing directly from one club to ensure that the redistribution that the hon. Gentleman argues for can take place?
I understand the Lib Dem spokesman’s point, but in my understanding, that would be the responsibility of the leagues. That is not what we are trying to block with this amendment; we are trying to block club-to-club forced redistribution. That is an important distinction, and I will come on to explain why.
I do not believe that this is a theoretical concern. The regulator’s objectives include financial sustainability. One can easily imagine a future regulator interpreting this objective to mean that it should balance resources across the pyramid, effectively redistributing funds to prop up weaker clubs. Without this amendment, nothing in legislation explicitly prevents such a scenario.
Some may argue that redistribution is needed to make the game fairer—I understand that point—but fairness in football has always been earned through competition, not imposed through central control. We must be very cautious about importing the language and logic of equalisation into a sport that depends for its vitality on aspiration, competition and merit. Sporting competition is a hill that I am willing to die on.
It is also worth noting that forced redistribution between clubs would create perverse incentives. It would reward financial mismanagement and punish prudence, and it would create a moral hazard where clubs are less motivated to balance their books if they believe that the regulator will require others to bail them out. That is not a path to sustainability; it is a recipe for mediocrity, or worse, disaster.
The principle at stake is clear: the role of the regulator is to set standards, ensure compliance and uphold integrity, and not to act as a central accountant deciding who deserves what. If clubs wish to strike revenue-sharing deals through their leagues, they may do so. The amendment draws a line: it protects club autonomy and supports continued investment in the game, and it ensures that the Government’s regulator—whatever its remit ends up being—respects the rights of clubs to manage and retain their own finances.
It is a pleasure to serve under your chairship, Mr Turner—I got it right this time.
We support the amendment. We believe it is in the interests of the game to redistribute money further from the top to the Football League and further down the pyramid. We believe the only way that will be achieved is if, via the mechanism of the football regulator, there is regular reporting that then demonstrates what we know is true—that an increasing amount of money is being hoarded by the Premier League, while those lower down tend to miss out.
We know that over the past few years or decades, since the inception of the Premier League, more and more money floating around in football is being retained by the Premier League as a proportion of the amount of money that is available. That is not a good thing for football. It is not a good thing for the sustainability of the game. We believe that this simple reporting mechanism will give further oxygen to the discussion about why that is harmful, and will hopefully, over time, result in further redistribution. That is why we support and welcome the amendment.
I thank my hon. Friend the Member for Sheffield South East for the amendment. I understand its aims. We do not consider it necessary, as we are confident that the Bill already covers the issue. Per clause 10, the regulator will be obliged to look into the main issues affecting English football and any features of the market that risk jeopardising its objectives. If the existing distribution arrangement meets either of those criteria, the regulator will cover it in the state of the game report. I reassure my hon. Friend that the regulator has the ability to address distributions in the sector if the current scenario reaches a threshold, and we will discuss those powers when we get to part 6.
In general, we have not taken the approach of being overly prescriptive and listing every issue the regulator could and should look at here in the Bill.
Clause 10 provides for what is described as a state of the game report—a new mechanism by which the Government’s regulator is expected to take stock of the health, direction and trends within English football. It is, in theory, a very valuable exercise for both fans and clubs. Done well, it offers an opportunity to review not only the financial condition of the game but its accessibility, integrity and future direction. But for the clause to serve its purpose, the report must include those issues which matter most to the people who sustain our national game—the fans that it purports to protect. That is why I wish to speak to my amendments 123 and 122.
Amendment 123 would require the state of the game report to include an assessment of the impact that the regulator’s activities have had on ticket prices. Amendment 122 is tabled in a similar vein, and would require that same assessment to appear in the regulator’s annual report as well. These are modest and reasonable proposals, but they are also very important.
The cost of attending football in this country has risen markedly in recent years. For millions of supporters, particularly those attending with children or travelling away from home, football is no longer the affordable pastime it once was—we have seen those protests in the stands and outside grounds on a number of occasions this season. While the causes are complex, it is certain that increased regulatory costs, compliance burdens and mandated structural changes may be passed on, directly or indirectly, to the supporter at the turnstile. If we are to create a regulator with statutory powers over finance, governance, and club operations, surely it is not too much to ask that we track the real-world consequences of those interventions.
I think the hon. Gentleman is arguing that ticket prices are already going up anyway. Football clubs are raising their prices—in some cases, as fan groups have argued, in the case of Manchester United, for example, unnecessarily—and are discriminatorily against people who have disabilities. Certain concession tickets are being removed already. I wonder whether he might reflect on the free market as it currently operates in football, or whether that is failing already, so that the regulator actually is trying to solve some of these problems by ensuring that fans are properly engaged with on these matters.
I absolutely understand the point that the spokesman for the Liberal Democrats makes. One of the extreme examples, which he used, of Manchester United—if I remember correctly, the owner involved was one of the people who were coming out in support of a Labour Government before the last election, so it will be quite interesting to see what the Minister says about the behaviour of said advocate of the Labour Government in that regard. He makes an interesting point, because fans are being impacted by ticket prices; we all understand that. It is about, as I have consistently tried to say—it is a theme of our amendments—ensuring transparency about how the regulator is or is not impacting the game. We believe the amendment represents a fair and reasonable request—that someone marks the regulator’s homework so that we can understand the impact.
I rise as someone who currently has an invitation in my inbox to renew my season ticket for an eye-watering £950. I would love to know where all that money goes, as the shadow spokesman said, and why the price has gone in the direction it has.
The amendment should not be seen as counter to the regulator. There was significant pushback from the Government Benches when we tried to amend the regulator in terms of size and pay, and we also discussed the budget. If, in a regulated environment, the ticket price went up from £950 to, say, £980, then this amendment would ensure that fans were made aware that that 30 quid had gone on being part of a regulated industry. That is a perfectly reasonable thing for us to want to communicate with the viewing public. Equally, it would create a relationship between the fan and the regulator that might not otherwise be there, so I support the amendment.
We are strongly opposed to the amendment, for a few reasons. First, it will be impossible for the regulator to know whether its actions and costs are being reflected in ticket prices. It must be absolutely obvious to everyone that the cost of the regulator per club is dwarfed by the salaries of the first team of a Premier League club alone. A bit of back-of-a-fag-packet maths tell us that. I am aware that the hon. Member for Isle of Wight East is not keen on this, but it is important for us just to use some simple logic. It will be impossible for the regulator to know, so it will have to go to the football clubs and ask the owners, who, let’s face it, might have an interest in blaming the regulator for increased ticket prices, whether or not the actions of the regulator have been the cause.
The Liberal Democrat spokesman talks about dodgy owners. My season ticket is for a Premier League club; a season ticket for, say, Ashford Town (Middlesex) FC for the forthcoming season is £130. I think part of the function of this amendment is to make the regulator aware of the costs that it puts on well-run but smaller clubs. Simply making decisions and acting under this legislation without any sense of the financial impact and imposition that it is making on those clubs would be a very worrying way to do business, but the amendment would slightly redress the balance between club and regulator.
It is not clear to me that Ashford Town (Middlesex) would be one of the clubs covered by the regulator. I am not sure what division they are in, but I do not think they are in the top five at the moment, although I wish them well in the forthcoming season and their efforts for promotion.
I am not going to guess what league that club is in, but I am sure they are brilliant, whoever they are. I will not seek to offend anyone’s club by not knowing what league they are in. But the fundamental premise of the argument that the Liberal Democrats are making is that this amendment would give bad owners, if we can describe them as that, a get-out clause to blame the regulator for decisions that they are making. I think that is the argument, and the hon. Member is nodding, but this amendment would, if anything, help to shine a spotlight to stop them making that argument, because they can do that regardless of the amendment. We know that a regulator will come in. The Labour party has a huge majority; the regulator is coming, so the same owners, using the same principle he has just argued, could still make that argument, regardless of this amendment, because they know that they will have extra duties. The amendment simply seeks to ensure that fans and ticket prices are at the heart of the reporting that we see in the future, as Members and as fans as well.
We are seeking to avoid the guarantee that what has been described will happen. As I have said, I think it will be impossible for the regulator to know, so it will be putting a finger up in the air and saying, “We think it has been 50p per ticket in League Two” or in the National League, and it may be £1 per ticket in the Premier League. But the regulator will not know. We cannot know now; it will not know in the future. Only the people who own the football clubs will be able to say, and it is obvious what they will say; we will be giving them a get-out. We strongly oppose this amendment, for those reasons.
Once again, I am going to refuse the temptation to make a political point about back-of-a-fag-packet calculations by the Liberal Democrats. This amendment does not provide a get-out for clubs to blame the regulator for putting their ticket prices up. They could do that anyway. Clubs can, if they want, try to blame the regulator, regardless of whether the regulator has a power or a compulsion to assess its own impact on ticket prices. What the amendment seeks to do is just add a layer of transparency. Of course, it is up to the regulator to make its own assessment of its impact on ticket prices, and it may be that its assessment is that it has had a negligible effect. However, it seems entirely reasonable, in the interests of transparency, to compel the regulator to nevertheless make this assessment. At the end of the day, we should all be here in the interests of one group of people only—the fans—and it would be a great shame, indeed worse than that, if the regulator were to increase the cost of match tickets, which are already very high.