Lord Parkinson of Whitley Bay:

Moved by Lord Parkinson of Whitley Bay

36: Schedule 2, page 85, line 37, at end insert—“6A No person may be appointed to the Board if that person currently has any broadcast or media interests or any role in a television or media broadcast which relates to football.”Member's explanatory statementThis Amendment prohibits any person who currently has any interests or roles in a television or media broadcast that relates to football from being appointed to the Board.

My Lords, I will also speak to my Amendment 40. This flows from the discussion we have just had about financial conflicts of interest but looks at the broader issues of a person who has a current broadcast or media interest, or any role in a television or media broadcast relating to football, being appointed to the board of the independent football regulator. It seeks to prevent conflicts of interest relating to those who take part in television, radio and podcasts that are linked to football.

The concern here is that any person with that sort of involvement in such media or broadcasts would have, by the very way that they carry it out, publicly held opinions about the game that they would be expressing frequently and sometimes in a live environment where questions could be put to them. We would not want to see people with vested interests that might conflict with the proportionate and reasonable exercise of the regulator’s functions put in a position where their thinking about how they carry out their duty is scrutinised in that forum and in that way.

As my noble friend Lord Markham pointed out on a previous group, this is a new regulator that will have enormous power to determine the specifics of the rules and regulations that football clubs will have to abide by. That includes the levy rules set out in Clause 53, which states that the amount the regulator will be able to charge clubs is to be determined in rules established by the regulator. Again, the details are not set out in the Bill but are to follow. There are some limits on what that levy could be, but the exact amount that will be charged and how that levy will be scaled to take account of the different financial situations of clubs are to be established and amended by the future board of the new regulator.

So the level of intrusion into the affairs of clubs is not entirely settled by this Bill. It will be decided by the people who are appointed to run and oversee this regulator. That is why we will be interested to know who these people are in due course. We wish all those who have applied to take on these important roles good luck in their efforts to be the inaugural holders of their posts. However, it is very clear that the board and, specifically, its chief executive will in very large part set the direction of the regulator, its tone and the means by which it goes about its work.

That is why it is important that we make sure that nobody can be appointed to the board, particularly in the first cohort, who has any conflicts of interest or who might be swayed once in office. Of course, in doing that we do not want to preclude anybody who has experience of the operation of football clubs or great knowledge of the game being appointed to the board. Those sorts of skill sets will clearly be needed. If we have people who have been involved in the running of football clubs, they may be quite powerful and important people to speak out against excessive regulation and mission creep. I hope that through this amendment we can have a debate about the public-facing elements of their role and the way they go about it.

Amendment 40 seeks to limit the remuneration that can be given to members of the board. As currently drafted, the Bill does not place any limit on this. It simply states that the Secretary of State will decide the remuneration of the non-executive members and that the pay of employees, including the executive members of the regulator’s new board, will be decided by the non-executive members. It is important that we try to curb spending to begin with and put some limit on the threshold. I have chosen in Amendment 40 to set it at £172,153 per annum, which might seem a curious number but I believe it is the current salary of the Prime Minister, who I am sure the noble Baroness thinks is doing an excellent job and is great value for money. I would be interested whether she thinks that employees and board members of this new regulator ought to be paid more than him in carrying out this duty, or whether she shares my concerns about the currently unlimited amount that they could be paid under the Bill. I beg to move.

I am not sure the noble Lord has made his case for why somebody who has an interest or a role in television should not be a member of the board. I am sure that there are commentators who may say things from time to time with which the noble Lord may disagree, but that is irrelevant. We are talking about people who have a degree of expertise about the game, and I cannot see why somebody whose job it is to comment on the game of football cannot have a role in this.

I am happy to say a bit more. This is a probing Amendment, and I am keen to hear the views of others. My concern is about how public facing a figure this new regulator is to be. I am mindful of comparisons with debates on legislation that I have taken through. We benefited in the scrutiny of the work of ofcom and the new online safety regulatory regime from having the noble Lord, Lord Grade of Yarmouth, here in your Lordships’ House. He attended and sat through all our debates in Committee and on Report but did not speak because he felt that it was important that he heard the views of Parliament but did not actively participate in the debate about the regulatory regime that Ofcom would be following once Parliament had given it its instructions. The self-denying ordinance that he applied and the rules of debate in your Lordships’ House made it easier for him than it might have been had he been a commentator on television or frequently appearing on television and in media interviews and being asked about the work.

I am sure we want to see the regulator held accountable publicly as well as to Parliament, and I look forward to our debates on later groups about how we ensure greater accountability to Parliament for the work that it does. I am sure that fans will have strong views about the work of the regulator, just as they do about how referees conduct their duties during matches. However, I wonder whether somebody who is taking on this role, potentially one with a large and unlimited salary, should be combining that with ongoing media interests in which they have a commercial interest in adding to the drama and to public debate about the game. I will be grateful for the Committee’s views on that matter.

I imagine that this could be a rather tricky area, for the reasons we have just heard. I can see that someone who has great expertise —an ex-international, for example—would be useful on a board and may be asked occasionally to comment, which would not mean a great deal of compensation or money. I am sure the noble Lord does not want to see those sorts of people excluded.

My Lords, Amendment 36 seems to be taking a sledgehammer to a nut. If you have some expertise and you are commentating, you may well be qualified to be in that role. There is a balance to be struck here. The Minister might ask, “What would be an unacceptable position within the media that would exclude you from this role?” If you are a senior executive with Sky, in the current situation, that would exclude you, but what if you happen to be a commentator, say, for a local paper dealing with your own local team, and possibly going on further? Would that exclude you? I would be interested to know if the Minister or the Government have an opinion on this, because there is clearly a balance here, as the noble Lord has just pointed out.

This is exactly why we want to have these sorts of debates in Committee. Funnily enough, I put my name to this Amendment. As noble Lords know, when I talk about media interests, I do so as a former director of a pay TV company. I was thinking about media interests less in relation to broadcasting and more that—the noble Lord, Lord Birt, will know this—when you are making sports media rights bids, all information is good information. You would then be party to a lot of privileged, and maybe even inside, information.

I agree that there is a balance to be struck, because these are exactly the sort of people you want involved in the regulator as well; but if they have a current role that involves them bidding for media sports rights, that would probably rule them offside—if you will excuse the pun. Again, that is exactly why we bring issues such as this to Committee to discuss.

There is a potential conflict on both sides. There are many different roles in media but obviously, it is a single role that might be filled here. I would feel very uncomfortable if someone were sitting in both camps, were I to be in the decision-making capacity ever again in a broadcast organisation.

My Lords, I shall address Amendment 40 in the names of the noble Lords, Lord Parkinson and Lord Markham.

Before I do, I have remained silent for the last few days, taking in what has been said. I have a problem with Amendment 40, which I will come on to in a moment, but I want to reflect on the role of the regulator and the CEO. We are now on day three in Committee. It is important that both sides—I am trying, as a Cross-Bencher, to act as an honest broker—work productively and do not lose sight of what the Majority of us want, which is to establish a new regulator with a clearly defined remit that does not stray into areas of overregulation or overreach.

That is not to say that issues such as environmental sustainability, CSR, women’s football or player welfare are not important; they are, but if we do not focus tightly on the core responsibilities of the regulator, I fear we are going to end up with a very complicated Bill that lacks pragmatism and leaves the regulator, whose salary I will come on to in a moment, in a pretty unworkable and unpopular role, at increasing expense to the football clubs in terms of the licence fees. I am thinking here particularly of the clubs in tiers 3, 4 and 5.

I would like to bring back a bit of financial perspective to this debate. Remember, financial sustainability is really what brought us here. Yes, there is fans’ engagement, but we have rather lost sight of that. The Premier League is the richest and most-watched league in the world, a fantastic creator of jobs and a multibillion-pound generator of exports. However, we have warning lights flashing on our dashboard that we ignore at our peril.

Total debt across the Premier League is fast approaching £4 billion—not the £2 billion that one of your Lordships mentioned on Monday—and that figure comes from the University of Liverpool. Losses across the Premier League are running at close to £1 billion per annum, per season. As we have heard, typically, 16 to 17 of its clubs generate losses, while in the Championship 80% of clubs have negative equity, and not one of those clubs generates an operating profit outside of player trading.

Having said that, I appreciate that we need to strike a balance and not interfere unnecessarily. I have listened carefully, this week and last week, to the noble Baroness, Lady Brady, among others, when she spoke about the danger of overreach and the need to be careful that we do not kill off the ambition, aspiration and calculated risk-taking of clubs—in other words, that we do not kill off the excitement and jeopardy of the game, which of course involves financial risk. That is a really important point.

Taking that into consideration, we need to be disciplined and define the parameters of the IFR with an eye on realism, pragmatism and effectiveness. The Bill runs to 120 pages, with 99 pages of Explanatory Notes. We have 340 amendments, which, thankfully, are reducing—and I think we are still on page 4. That is not a great advert for productivity.

Anyway, that is enough background from me. I return to Amendment 40. We are going to need a CEO of the highest calibre for the regulator, and that CEO is going to have to show great leadership skills and profound and relevant domain experience. Capping his or her salary at £172,000 per annum will simply make the recruitment of a high-calibre CEO that much more difficult. I appreciate that we need to control costs, but that is not the area in which to do it.

I echo the comments of the noble Lord, Lord Birt, about a conflict of interest. I take the point made by the noble Lord, Lord Addington: making small or one-off contributions because you have been asked to, given that you hold that particular role, is very different from having a specific and clear role in the media. There would be a conflict of interest if you held both positions and were contributing on a regular basis. I cannot see that it would be perceived by the average fan as acceptable to have someone who held both positions.

My noble friend Lord Parkinson has included in his Amendment the word “currently”. I assume that he would accept someone giving up one role specifically to take up another—I think that is what he is referring to—but I certainly take the view that any substantial media interest would be utterly unacceptable for someone in these circumstances. Millions of football fans would take the view that they were pro a particular point of view at any given point.

I share the view of the noble Lord, Lord Londesborough, on salaries, particularly because it is always dangerous to put a salary in legislation. What happens if you have inflation? First, you have to change the primary legislation, and there is no indication of inflation adjustment in the amendment.

Those are small observations, but I agree with the noble Lord, Lord Birt, and the direction of my noble friend Lord Parkinson’s amendment—that there should not be a prima facie case of conflict of interest in these circumstances.

I thank the noble Lord, Lord Parkinson, for tabling these amendments and thank all noble Lords who have contributed to what I thought was a very thoughtful discussion. As with the previous discussion on this matter, the Government would like to reassure noble Lords that the Bill already sufficiently makes certain that the regulator will be free from conflicts of interest, irrespective of sector. This is supported by public law principles and non-legislative measures already in place. As I said previously, the Bill requires members of the board to declare their interests, and this declaration is to be recorded.

Taking Amendment 36 first, we are confident that there are comprehensive safeguards to root out and manage conflicts of interest appropriately. For example, a board member would not be permitted to take part in any discussion relating to a matter if they had a significant direct or indirect interest in it. Failure to declare an interest would also be a breach of the board member’s terms of appointment. In response to noble Lords who asked me for a definitive view, my view is that beyond these comprehensive existing provisions we do not think it is necessary or appropriate arbitrarily to rule out specific sectors or sector interests such as television, broadcast or media.

On Amendment 40, we acknowledge the importance of the regulator offering value for money. It will be required to lay its annual accounts before Parliament and the Comptroller and Auditor-General for scrutiny. The regulator will also be subject to pay remit guidance in the same way central government departments are to ensure pay rises are justifiable. This will ensure value for money for taxpayers. However, having a maximum salary in legislation risks the regulator being unable to attract the right talent, potentially leaving it without the skills and expertise it needs to deliver its objectives—a point the noble Lord, Lord Londesborough, made very succinctly. We agree with the point around the need to control costs. A fixed salary in legislation is also inflexible to inflation and market changes, and it could become rapidly outdated, as the noble Lord, Lord Hayward, pointed out. For these reasons, I am unable to accept the noble Lord’s amendments and ask that he withdraw or not press them.

I am very grateful to the noble Baroness for that response and to noble Lords who took part in the debate. This is a strength of the Committee stage—I can see the furrowed brows with the opinions being weighed up and I am grateful to noble Lords who have engaged with the probing Amendment I tabled in this way. I hope, if nothing else, it has been useful to the Secretary of State who, as we know from the Minister’s responses in the previous group, is soon to make her decision about who ought to chair this new regulator and who should be on the board. I hope that the points that noble Lords across the Committee have made will be taken back and inform her deliberations.

I take on board what the noble Baroness said and indeed the point that the noble Lord, Lord Londesborough, raised about the need to make sure we are paying enough to attract the calibre of person that is going to rise to the task ahead of them. On pay and salary, I am grateful as well to the Minister for what she said and was struck particularly by what she said about pay restraint. I know from my ministerial experience that, when public bodies want to push for pay rises above what would be normal in the private sector or across the economy more generally, then that comes to Ministers. If there is that sort of oversight and check and balance in the system to ensure that the regulator’s salary costs are not spiralling as quickly as we feared, then that would be a good thing. With gratitude to the Minister and to all who took part, I beg leave to withdraw my amendment.

Amendment 36 withdrawn.