Baroness Twycross:

Moved by Baroness Twycross

17: Clause 8, page 6, line 6, leave out sub-paragraphs (i) to (iii) and insert—“(i) persons on whom it may impose requirements or restrictions, namely clubs, owners, senior managers and other officers of clubs, and competition organisers, and(ii) other persons who may be affected by its decisions, including players and fans;”Member’s explanatory statementThis amendment amends the regulatory principle in clause 8(b) so that the IFR should co-operate, and proactively and constructively engage, with persons who may be affected by its decisions.

This group contains a number of government amendments to the regulatory principles. I am grateful to noble Lords from across your Lordships’ House for the engagement we have had over the past few weeks both in Committee and in meetings. It has been helpful.

First, on Amendment 17, we all know that football without fans is nothing. It has always been the intention that the regulator would engage with fans and any others impacted by the regulator’s decisions, where they are relevant. It is vital to the Government that the essential value of players and fans to English football is demonstrated both in the legislation and the regulator’s engagement. I thank my noble friends Lady O’Grady and Lord Watson of Invergowrie for their engagement in ensuring that that value is reflected in the legislation, as well as my noble friends Lord Bassam of Brighton and Lady Taylor of Bolton, and the noble Lord, Lord Addington, for their support for this amendment. This amendment will clarify that intent and make it explicit in the Bill. It will both reflect the essential nature of players and fans to English football and ensure that the regulator is directed to engage with both groups.

Turning to Amendments 18 and 19 concerning light- touch regulation, I thank the noble Lord, Lord Pannick, for tabling his amendment and for his extensive discussion of this issue with me and officials. We agree wholeheartedly that light-touch regulation should be the aim of the regulator. It should have a bias—against unnecessary intervention, against excessive burdens on the industry, towards co-operation and engagement before intervention, and towards proportionate interventions that deliver real benefits. That is why I have tabled Amendment 18 to clarify the intention that the regulatory regime should be light-touch.

We carefully considered the best way to deliver this aim, including whether to use the term “light-touch” in the Bill. We believe the regulatory principles should be as clear and specific as possible. Each time the regulator acts, it should be clear whether it has met the Bill’s requirements; that is, whether it has had regard to the principles. That is why our new principle in Amendment 18 centres around a test of necessity and whether the same outcome could be achieved in a less burdensome way. These, like the existing Clause 8(c) test of proportionality, reflect concepts that are well understood in public law and will give clubs, leagues and the regulator appropriate legal certainty.

“Light-touch”, by contrast, is not typical legislative drafting. That could make it difficult for both regulator and regulated to be 100% certain of their legal positions. As debates in Committee made clear, one person’s “light-touch” regulation is another’s “overreach”. Allowing a margin of discretion is a less novel concept, but we none the less have concerns about its legal certainty.

In our view, the wording “necessity”, “consideration of alternatives” and “proportionality” are clear tests that will let both regulator and regulated act with confidence. That is what our regulatory principles and government Amendment 18 deliver. I can assure the House that the principles in Clause 8, including our Amendment 18, enshrine a light-touch approach in law.

Finally, on government Amendment 20, this minor drafting change seeks to clarify the regulator’s responsibility under this regulatory principle. Although it will not materially change the effect of the principle, an obligation for a public body to have “regard to” is well precedented and understood by the industry.

For the reasons I have set out, I hope that the noble Lord, Lord Pannick, will not move his amendment. I beg to move government Amendment 17.

My Lords, I would like to say a few words on Amendment 17 just moved by my noble friend the Minister. I tabled an amendment in Committee to try to ensure that the players appeared in the Bill, as originally they did not.

I very much welcome the fact that my noble friend has listened to the representations, not just by me and my noble friend Lady O’Grady but by the Professional Footballers’ Association and others, who have made the very reasonable case that, with the insertion of a reference to players as a group in this section, the regulator is expected to,

“so far as reasonably practicable, co-operate, and proactively and constructively engage” with players. In effect, they become statutory consultees of the IFR, which is only appropriate because there is of course no football without the players. I very much welcome the wording that the Minister has come forward with; it meets my concerns and those of others.

The other part of this is the fans. I also put forward an amendment in Committee proposing that the fans should be defined in some way. I have had discussions with my noble friend the Minister. It was always going to be difficult. I assume that it will soon become the job of the regulator to define what a fan is. I still hold to the belief that you need to have some address for a fan if you are going to consult them. That is why I proposed in Committee that season ticket holders should be the best way of deciding who the fans are for consultation purposes, but I accept that it has not been possible to reach any kind of consensus on that.

I welcome the wording in this amendment. Again, I commend my noble friend and the Government on listening to representations and coming up with wording as a result.

My Lords, I will not add very much to what my noble friend has already said about the importance and value of having players and fans recognised in the consultation process, except to say that it is probably the most important part.

I was worried at the outset of the legislation—with the Bill that the party currently in opposition put in place before the election—that there was absolutely no reference to players or fans. They are an essential part. Without them, where would the game be? We might not be able to define what fans are, but they are many things, in many different ways and places. We sort of know what they are without being able to define them.

My noble friend Lady Taylor and I also signed up to Amendment 18, because I think it is important that there is a clear statement in the legislation to the effect that the best way forward is usually without recourse to excessive bureaucracy and regulation. If the IFR can find a way to do things that does not have to resort to that, then all for the good. For that reason, while I am encouraged by the amendment of noble Lord, Lord Pannick, the noble Baroness, Lady Brady, and the noble Lord, Lord Birt, and it certainly touches on a rather important point, I think the Government have matched that point with their amendment. I am not sure it is easy to define “light-touch”—no doubt, the noble Lord, Lord Pannick, will tell me that it is—but it is not a term that is commonly used in legislation, certainly not regulatory legislation.

I am pleased that this issue is being properly surfaced, and I am delighted that the Government have responded to it in a really positive way. I hope that both fans and players will be pleased to see that they have been written into this legislation.

My Lords, I would like to ask the Minister on that point about engagement with fans. As I alluded to before the dinner break, sometimes those fans are in the tens of thousands. Can she share with us how the regulator will engage with those fans? If the regulator will refer to fan representatives, who would those representatives be on a case-by-case basis or club-by-club basis?

My Lords, I welcome Amendment 18, because it addresses in a very clear manner one of the main concerns which was expressed across the House in Committee. The concern was that the new regulator should operate with a light touch. I entirely accept what the noble Lord, Lord Bassam, said that it is not a phrase that is used in legislation, but we all know what it means—apart from the noble Lord, Lord Addington, and I will come back to the noble Lord in a moment.

The concern that was expressed repeatedly in Committee was that the regulator is operating in the context of a highly successful business that brings billions of pounds of revenue into this country every year and provides enormous amounts of pleasure and excitement to billions of people across the world—although the pleasure is not experienced at the Emirates Stadium if you are watching Arsenal on every occasion you attend a home match. Furthermore, in recent months this Government have expressed in other contexts a concern that regulators should not be a barrier to growth. There is, then, a vital need to put in this Bill a clause that requires the regulator to have regard to the need to exercise the very extensive powers that have been conferred only if it is really necessary to do so.

I mentioned the noble Lord, Lord Addington, because earlier this afternoon, in an earlier group, he expressed concern about light-touch regulation. He asked whether it really means “being asleep at the wheel”—that was his phrase—or acting only when a disaster occurs. I do not understand light-touch regulation to mean anything of the sort. It means, in the present context of a highly successful industry, being aware of the equal or greater danger of overregulation which could damage this very successful industry. There is—to use a sporting metaphor, which I hope is appropriate—a real danger of own goals by the regulator wherever it comes on to the field of play.

The Minister was sympathetic to this concern in Committee, and she undertook to go away with her officials to consider this important point. I am genuinely grateful to her and the Bill team for the amount of time they have spent discussing this issue with me and other Lords. I am very pleased that she has tabled Amendment 18, which adds this new regulatory principle to Clause 8. Under the amendment, a priority would be given in the Bill so that the regulator must

“have regard to whether the requirement or restriction is necessary and whether a similar outcome could be achieved by less burdensome means”.

Amendment 18 will make a considerable improvement to the Bill. I am very grateful to the Government for having listened and acted on this important topic.

The Minister today confirmed that the purpose of Amendment 18 is to clarify the intention for this regulatory regime. There are different views about that across the House, but she has clarified that the purpose of the amendment is to ensure that the regime will be implemented and exercised with a light touch. I think that we all understand what that means, even though, as the noble Lord, Lord Bassam, said, it is not appropriate or necessary to include that phrase in the Bill.

In the light of what the Government have brought forward and what the Minister has said, I do not intend to press my Amendment 19—although I am very grateful to the noble Lord, Lord Birt, and the noble Baroness, Lady Brady, for adding their support to it.

My Lords, I too will comment a little on the point about light-touch regulation. Before I do, earlier today—prompted, I think, by the noble Lord, Lord Parkinson—the Minister offered her good wishes to Newcastle in the Carabao Cup final at the weekend. I wondered whether she would also be willing to offer her best wishes to Liverpool at the weekend, with the due impartiality that is merited. We need a little help tonight, because we are 1-0 down at half time to PSG, so she might like to send her immediate good wishes before it is too late for that game.

Needless to say—I have said this before—I truly support the regulation of English football, and I will not repeat what I have said in earlier debates. As the noble Lord, Lord Pannick, made clear, the Government’s amendment is extremely helpful. He intends not to press his own amendment, but I did not see anything wrong with underlining the point with the addition of “light-touch”.

Throughout my career, I experienced the public benefits of effective regulation in broadcasting. However, we know that not all regulation has proved successful in the UK or in other countries, and we must learn from both the successes and the lack of success. As the Chancellor said just a month ago, our economy has “suffered” due to “stifling and unpredictable regulation”. Overregulation bequeathed us the absurdly expensive and long-delayed HS2. On the other hand, under- regulation brings us sewage flowing freely into Lake Windermere, so we have to get the right kind of regulation.

These amendments should oblige the regulator to practise considered and proportionate regulation, focusing on what really matters—and more than one thing really matters, as has come out again and again in this debate. Above all, effective regulation here means ensuring that English football clubs should be well and prudently managed.

My Lords, I thank the Minister for Amendment 17, which I signed. It says that players and fans should be regarded. When discussing professional sport, the two key elements are: somebody to play and somebody to watch. Both should be recognised within the structure of this legislation as important.

With the huge amount of appetite for football, players are clearly under pressure of being overplayed. How they should be looked after is an important factor that all sports are dealing with. I encourage the regulator, when it comes out, to take a serious look at this, as well as the rights of fans. We had great fun debating which diverse group should be consulted. Well, let somebody else figure it out—we could not.

When it comes to light touch, I will break a habit of mine and read out something from the EFL which I received, I think, yesterday:

“The EFL does not support the enshrining of ‘light touch’ as a regulatory principle in the Bill … Light touch is an extremely subjective term that the IFR will struggle to meaningfully define as it goes about its activities … It also risks limiting the effectiveness of Regulators once it is operational, which instead should have the ability to determine what is the ‘right touch’”— dozens of other expressions are available—

“to deal with any situation it is required to address”.

Hiding behind a mantra is never a good idea. What the Government have here is quantifiable at the very least, so I say yes to that. I hope that we can go forward, because the minute you get something like “It has to be light touch”, you will get it wrong. It has to be effective. I hope the Government and the regulator enshrine effectiveness from this point on; it does not matter if it is light or heavy, it matters if it works.

My Lords, I support the Government’s Amendment 18, which introduces a regulatory principle focused on necessity, proportionality and minimising regulatory burden. The Government deserve credit for this amendment. It is an attempt to recognise the concerns, expressed across the House during Committee, that this Bill outlines an overly complex and intrusive regulatory framework for football.

Indeed, I recall that the Government expressly ruled out a light-touch “watchdog” option in their impact assessment, in justifying the need for a more interventionist approach. We should bear in mind that this Bill overall is not easily described as “light touch”, but the Government’s amendment is an attempt to clarify Ministers’ intentions, which I believe are for a light-touch framework. We should note the obvious point that it is not an attempt to change the overall licensing framework, existing regulatory model, extensive range of powers, or broad suite of sanctions. Nevertheless, short of a wholesale change of approach and a much slimmer Bill, the tension this principle introduces is how the regulator exercises those powers, so it is welcome.

But I, for one, would like the Government to go further, both in the Bill and in guidance and their engagement with the shadow regulator. That is why I supported my noble friend Lord Pannick’s additional amendment detailing light touch, which I know he has now not moved. What I would like to suggest today is that Ministers enhance their amendment further by explicitly enabling different types of intervention approaches for different leagues, guiding towards greater reliance on leagues where appropriate.

The football pyramid is diverse, with varying risk profiles and governance capabilities. What is appropriate for Maidenhead United in the National League is very unlikely to be appropriate for Manchester United. The Premier League, for instance, has developed robust governance and regulatory structures over many years. It has built financial monitoring systems that effectively maintain competitive balance while ensuring club sustainability. I have not heard a single Minister or Peer in this House express any concern over the sustainability of Premier League clubs.

Steering the regulator more explicitly to tailor its approach to intervening based on a league’s governance standards, rulebooks and enforcement practices would be a very sensible approach. It would ensure regulatory resources target genuine areas of risk in the pyramid and would really help to bring about what I would describe as a “right-touch” regime—light touch where effective systems already operate, but more interventionist where they do not. I think this could deliver a more efficient model, as well as create positive incentives for leagues to strengthen their own governance frameworks.

Perhaps when the Minister responds, she could commit to working with me, the football authorities and the shadow regulator to encourage this common-sense approach, recognising the practical benefits that would be realised by working more closely with the leagues, by acknowledging the natural differences within our diverse football pyramid, and by steering the regulator to adopt a targeted, risk-based approach.

My Lords, I agree with my noble friend Lady Brady about the importance of a light-touch approach: not just the light touch in the way we do things today but the light touch in how we might innovate and take our game forward in the future. My wife and I spent Christmas in Oman, when the Gulf states were having their own little world cup. The key point there was how they are innovating, building a nation through football, breaking down barriers and changing the way things are done in football.

More of the same will not be the recipe for success for the English game as we look forward. I want to illustrate this with a story. Earlier this evening, I explained that I was a shareholder of Norwich City Football Club. About 30 years ago, the club auditors told us that a certain Alan Sugar—a Member of your Lordships’ House—had decided to move his players from the profit and loss and on to the balance sheet. It was the first time this had ever happened. At that moment, in the blink of an eye, English football changed.

What our noble friend did was turn a series of cottage industries—clubs that were grounded in local communities—into investable propositions. Whether he appreciated it at the time or not, it was that stroke of the pen that put British football clubs on the path to greatness. Overnight, football became better capitalised, becoming a magnet for investment and success. People say that Sky made the difference, but the truth is that it was our noble friend who made football so investible in the first place.

Can you imagine how an overbearing regulator might have reacted if this astonishingly innovative but unprecedented accounting proposal to move players from the P and L to the balance sheet had been made? We need this light touch. This was a huge innovation. Would it have happened if this regulator had been overbearing? Of course not. I have always found it strange that the noble Lord, Lord Sugar, has not been publicly recognised for what he did. Viewing his innovation through the lens of history has transformed the prospects of English football.

My purpose in telling this story is that the regulator must continue to be flexible and to adapt to the future as it can be—not just as it is today. The principle of the light touch is essential for us to maintain the leadership of English football at the forefront of our industry, being flexible and imaginative. Nobody owes us our place in history. We have to keep moving forward to survive. If we are overly fossilised in the system as it is today, we risk falling behind. So I am very focused on and supportive of a light-touch approach and I am pleased that it is on the amendments in front of us.

I start by not thanking the noble Lord, Lord Birt, for his update on the score, because I am hoping to catch the highlights at the end. So I hope that, when he speaks further on his amendments, we will have no further updates; that is a small plea.

On a more serious matter, I too add my thanks to the Minister for listening and bringing forward this series of amendments. They cover the sentiment of what I think we all agree the noble Lord, Lord Pannick, and others were trying to do with their light touch. I must admit that I am particularly taken by the points made by my noble friends Lady Brady and Lord Fuller around a variable-touch model. We will move on to talk on day two about some of the other things. There was a big consensus around the House on trying to promote independent and non-exec directors on the boards of these clubs. Again, this is something that will come up later.

What we want more than anything is well-run clubs and a system in which, if a club is well run and has independent non-exec directors who are making sure it is run in a good manner, we really do have a light-touch model. At the same time, we should have flexibility. If there are greater concerns, there should be a heavier touch. Again, we have precedent for this. We have so-called special measures in schools and situations such as those.

I thank the Minister for recognising that sentiment about a light touch and bringing it forward. As the Bill goes through the Lords, I would ask her to consider whether we can bring a variable touch so that there is not just a one-size-fits-all approach and that, if clubs show that they are well run and reputable, they will not need the same level of scrutiny and the same burdens placed on them as those that are in more difficulties. With that, I welcome these amendments and I wish to hear the Minister’s thoughts on the idea of a variable-touch model.

My Lords, this group and the discussion we have had reflect the value of the style of debate that we have in your Lordships’ House. I welcome the opportunity for us to work with noble Lords from across the House to refine the Bill. We thought the Bill was good when the previous Government had it; we thought our version was very slightly better; and we have the possibility of sending an even better version to be considered in the other place.

In starting my response to the comments made during this short debate, and with appropriate and due impartiality, I am very happy to pass on my best wishes to Liverpool FC—I will not comment on the score. Whichever team anyone supports, I think all noble Lords can agree that without players we would have no game. On that basis alone, it is right that they are included. I thank the noble Lords and my noble friends who have signed the Government’s amendment on that, and who took time to talk us through where it should sit within the Bill.

A lot of the discussion relates to definitions—whether about a light touch and what that means, or about fans and who they are. I want to say a little more about fans. The Government do not see themselves as the arbitrator of who counts as a football fan. That is something that fans and clubs themselves are in the best position to understand and discern. The makeup of a fan base differs from club to club; this diversity is part of the reason why the English football pyramid is so special. This is why the Government have introduced this legislation to protect English football by making it more sustainable and to help put fans back at the centre of their clubs, amplifying their voices on the issues that matter to them.

On the question from the noble Lord, Lord Evans of Rainow, about how the regulator will engage with fans, it will do so on a case-by-case basis. I would be happy to arrange for the noble Lord to speak to the shadow regulator team to provide him with more information about how it might do that. The regulator, once established, will be able to provide guidance for clubs on how to best consult fans. This will ensure that clubs have an appropriate framework in place that allows them to regularly meet and consult this group on key strategic matters and supporter interests.

The noble Lord, Lord Pannick, asked the key question about whether the regulator will have to ask itself whether intervention will address some substantial mischief, is likely to achieve some substantial benefit and is required because a similar outcome could not be achieved by a less burdensome means. That is our understanding. If that is the noble Lord’s understanding of where we are going with this amendment, that understanding is correct.

The noble Lord, Lord Birt, spoke about the risk of both underregulation and overregulation. This is about balance; we have added a new regulatory principle to achieve this aim, but we still think this will mean that the regulator will be effective. This is key, as both the noble Lord, Lord Birt, and the noble Lord, Lord Addington, made clear. The first part of this new principle of considering

“whether the requirement or restriction is necessary” directs the regulator towards a light-touch approach to intervention as a whole, acting only where it needs to. I do not think we are a million miles away from where the noble Baroness, Lady Brady, thinks we should be, and I am happy to meet with her again to talk this through a bit further should she find that helpful.

The second part of the new principle ensures that any intervention that is considered necessary is as light-touch as possible by directing the regulator towards the least burdensome mechanism available in the specific circumstances of the outcome sought. Amendment 18 facilitates the regulator to take a different approach to clubs, alongside the proportionality principle, to ensure that each action taken by the regulator is the least burdensome it can be. We have not chosen to call that light-touch in the regulation, but it is intended to be light-touch. With that, I commend Amendment 17 to the House.

Amendment 17 agreed.

This is where it could go to VAR.