Lord Birt:

Moved by Lord Birt

58: Clause 57, page 47, line 5, leave out “following conditions” and insert “conditions in subsections (3) to (6)”

My Lords, in truth, my family, unlike that of the noble Lord, Lord Parkinson, does not have to look back 70 years to find any trace of silverware, but I congratulate him and Newcastle on a thoroughly deserved victory yesterday.

If anybody doubts the intensity of fans’ feelings about their clubs, they should have been with me last night on a Tube train, where we were packed like sardines. For some reason, all the Liverpool supporters had gone home and I found myself in a carriage completely composed of Newcastle supporters. The sheer joy was manifest, as well as the sweetness and kindness of the Geordie nature, including taking pity on a disappointed Scouser.

Amendments 58, 59, 64, 65, 67, 72 and 77 in my name, and in the names of the noble Lords, Lord Burns and Lord Pannick, and the noble and learned Lord, Lord Thomas of Cwmgiedd, together define a wholly new process for determining fund flow from the Premier League down to the EFL in the event that the backstop measure is triggered. A wholly new approach is needed because the current process defined in the Bill is in almost every respect unfit for purpose. I will touch on why as I explain the alternative proposal that I and my colleagues place before your Lordships today.

Step 1 in the negotiation process that we have designed is the amassing of evidence in the “state of the game” report to inform the negotiation about every material aspect of the English game, including evidence about all the circumstances affecting the health and effectiveness of clubs in the major English leagues, including: a breakdown of their sources of revenue; how they invest and manage their finances; the balance between their equity and their debt; and evidence of how the English league performs financially and on the pitch compared with other European leagues. This is not an exhaustive list. Evidence should be the first building block of a sophisticated fund flow negotiation. Yet the Bill as it stands does not mandate an up-to-date “state of the game” report to begin, or to form part of, the backstop process.

Step 2 in our design is the appointment of a panel of three, experienced in mediation and arbitration, to manage the negotiation between the Premier League and the EFL. With all parties in the room, the panel would interrogate proposals and ensure that all relevant issues are surfaced, explored and bottomed out.

Step 3 would establish clear criteria against which the panel can assess the proposals coming from each league. The criteria that we lay out in our amendments include: maintaining the global appeal and competitiveness of English football; ensuring competitive balance within individual leagues; enabling well- managed clubs to rise up the football pyramid without risking financial instability; and ensuring long-term investment in stadium and facilities. Remarkably, the Bill as it stands is all but devoid of criteria to apply to determining the appropriate level of fund flow down the English leagues.

Step 4 is a process of binding arbitration spread over 100 days, with proposals from both leagues presented in defined stages. For example, after 75 days both sides table their final offers. If no agreement is reached by day 85, the panel makes the determination and announces it before day 100. In the original Bill, negotiation was planned to last only 28 days, a wholly inadequate timeframe for such a complex and critical negotiation. Also, in the current Bill, if the two sides fail to agree, a completely different group, the so-called expert panel—uninvolved in the process up to that point and with no exposure to the dialogue and debate thus far—must choose between one of the two deals; this is the so-called binary mechanism.

The expert panel cannot amend, adjust or find middle ground. In practice, for both leagues it is a game of Russian roulette. I guarantee that the binary mechanism in the Bill will incentivise gaming, not collaboration, compromise and the building of consensus. Seasoned professionals steeped in mediation and arbitration shake their heads in disbelief when this process is explained to them, not least because this is not a negotiation between two remote monoliths; rather, it is between two sides of the same family, where each year, in the top two leagues, six clubs out of 44 move from one side of the family to the other.

Our proposal for the backstop process is based on up-to-date evidence, the application of clear criteria, pro-longed dialogue and challenge, and a final determination by wholly engaged mediators if agreement is not reached. None of these factors is present in the current Bill.

We can applaud the remarkable success of the Premier League but I am not blind to the problems in English football. I trust that regulation will address them. For example, there are strong arguments for parachute payments. We have just heard some of them. However, the competition within the Championship needs to be assessed. There are good arguments for increasing the quantum of solidarity payments flowing down from the Premier League to the Championship but how those funds will be invested—in stadia, for instance—needs to be identified. Fund flow also needs to be considered in the context of how the Championship is managed.

In the last season for which data are available, the top club in the Championship had revenues five times greater than the bottom club—not a recipe for fair competition. In 2021, Championship clubs spent 125% of their revenues on wages, which is not a sign of good management. One-third of the teams that are currently in the Premier League were promoted from the Championship in the past 10 years. This is evidence of the system working. However, Burnley has been promoted to and relegated from the Premier League three times in the same period. The reasons for the recent yo-yoing of clubs up and down between the two leagues need to be understood.

I cite these examples to illuminate the complexity of the issues that the regulator will have to address, and which should be an integral part of that process for determining fund flow down the leagues. I hope that these examples also illustrate that a far more sophisticated backstop process is needed to address them than is contained in the Bill.

The fingerprints of both main parties are on the design of the backstop process. I hope that both will recognise that there is a far better way. I beg to move.

My Lords, I congratulate the noble Lord, Lord Parkinson, on Newcastle’s win yesterday. As a season ticket holder of Sunderland in the late 1950s, I had to live through the humiliation of Newcastle winning three cup finals, in 1951, 1952 and 1955. I got my own back when I got to Wembley for the finals in 1973 and 1974. In 1973 Sunderland beat Leeds and in 1974 Liverpool beat Newcastle—rather convincingly. Putting aside my advancing years, I have to say that yesterday I was supporting Newcastle and delighted with them, probably for the first time in my life.

The noble Lord, Lord Birt, has explained some of the problems in the proposed final offer mechanism in the Bill and has presented an alternative proposal. I do not propose to go into the details but want to make some general points and emphasise the extent to which the criteria for any decisions on the distribution of revenues must be much broader than has been indicated so far.

During the debate, many noble Lords have reminded us how our integrated football pyramid is a very important part of our football arrangements; hence it is essential that the leagues work closely together. This is crucial. It is crucial when it comes to negotiation, particularly about the distribution of revenue. As the noble Lord, Lord Birt, said, we are dealing with two parts of the football family. Indeed, over time, many teams will move between the leagues. We therefore need a constructive mechanism to resolve differences that will work over several periods in the future.

The main point I want to make is that whatever process is in place, the criteria for making the choice between final offers should be as clear as possible and it should be relevant to the issues facing the football pyramid. Amendment 72 seeks to provide additional clarity on this. I too am grateful to the noble Baroness, Lady Twycross, for the number of meetings that we had to discuss this, at which she listened very carefully.

Given the commercial success of English football, it is inevitable that deciding on the distribution of revenue will be difficult and complex. There are many factors that are relevant to this decision, and, generally, they are interrelated. It is not easy to simply state one or two factors upon which decisions can be taken. Clearly, the distribution should protect the overall financial soundness of clubs. Much of that task of maintaining financial stability is down to the risk appetite of the clubs themselves, taking account of their access to capital. It is right that well-managed clubs should prosper. The likelihood of financial failure increases when organisations take excessive risks, and I welcome the emphasis in the Bill on prudential management.

However, I doubt that this can be achieved simply by passing more money down the pyramid. It has to be done in a much more structured way. We need to see competitive balance within and between the leagues, so that fans can watch attractive and competitive football. We want the Premier League to continue to thrive financially and for its clubs to be successful in international competition, but a successful pyramid surely means that clubs should also be able to move successfully between divisions without creating life-threatening financial crises.

As we have seen in recent years, an additional source of risk is that when there is too great a disparity between the financial rewards in one league relative to another, one gets strains and stresses. Getting the right balance between the leagues will be crucial in reducing risk. Decisions of the panel will have to be analytical, balanced and well argued. As the noble Lord, Lord Birt, pointed out, they need a good database from which to work and to interrogate this really closely.

My own experience both as a regulator and being on the receiving end of regulatory decisions is that clarity of the regulator’s remit is crucial, particularly when it comes to decisions on issues that can be challenged in the courts or tribunals. My worry is that, as it stands, the Bill is not sufficiently clear about the criteria to be used, particularly if the panel is eventually forced to decide between two final offers. In the amendment, we have tried to set out more clearly some of the factors that we suggest should be considered and the data that should be monitored over time.

For many of us, it is evident that there are issues to be debated about the present state of the game. Without being dragged too far into the detail, there are some stresses and strains in the pyramid today. On the positive side, several smaller clubs with limited spectator revenues are now performing well in the Premier League, and we continue to see remarkable attendance rates at matches and television viewing figures. Matches, as has been said today, are generally finely balanced. Despite this, it remains very difficult for all but a few Premier League clubs to make an impact on the top six positions of the league. For the second season in a row, it is likely that the three promoted teams will be relegated after one season in the Premier League; and, as last year, the combined number of points of the bottom three teams could be heading very close to a record low. These are signs that the competitive balance is moving in the wrong direction with regard to individual leagues and the Premier League as relative to the Championship.

In the Championship, there are concerns about increased dominance of clubs which are in receipt of parachute payments. These are clearly designed to protect relegated clubs financially, but they also give the appearance of the Premier League favouring its own members. The consequence is that parachute payments are harming the competitive balance of the Championship and making it more difficult for other Championship clubs to be promoted. In addition, the high wages in the Premier League—the consequence of the League’s commercial success—are putting additional strain on the finances of Championship clubs which are not receiving parachute payments but find themselves competing in the same labour market.

None of this is easy to correct without the risk of creating adverse consequences elsewhere. The expert panel, or whoever will make this decision, will require all the analytical help it can muster, along with very clear criteria. This is a complex challenge. The amendments, which I support, are seeking changes to the mechanism for finding agreement on financial distributions that are less adversarial, less combative and based on clear criteria that can be monitored over time.

My Lords, it is a privilege to add my name to this Amendment. I am not going to venture into the world of football, coming from the nation from which I do. But I want to draw on my experience of dispute resolution, where I have spent most of my life.

I do not need to add to what has been said about two of the essentials of dispute resolution criteria: principles and evidence. That has been done by the noble Lords, Lord Burns and Lord Birt. I will make five points, drawn from my experience and that of many others, about a dispute resolution process.

First, and most important, is the examination of the subject matter of the dispute that will arise if there is no settlement. If one looks at what is in the Bill and the process that has been selected, I accept that it is seen to work in the context in which it is used for settling a baseball player’s salary, a tariff rate or some kind of price or rate, but it is not fit for the purpose of what this is designed to deal with, which is a careful, calibrated and, above all, fair evaluation of the distribution of substantial sums of money. Everyone has said so far that this has to be fair and careful; the final offer resolution system used in the context I described does not do that.

Secondly, experience has shown that the best panel for dispute resolution is where one party chooses one arbitrator, another party chooses the other arbitrator or member of the panel, and the experienced lawyer chairs it. There are two reasons for that. First, the ability of a party to appoint gives that party confidence in the tribunal—it is constituted by that party’s assent. Secondly, I fear that there may be a misapprehension as to the role of a lawyer. The point of having a lawyer as chair is that he is experienced in guiding a dispute resolution process; it is not legalistic, though some may think so. I can assure noble Lords that if you have a highly contested dispute overseen by someone without experience—as I regret is likely to be the case if one gets to dispute resolution in this—disaster ensues.

Thirdly, it is important to bear in mind one other point. Even if after expert mediation you cannot reach a resolution that is acceptable to both, you must recall that there will be a loser and a winner; and the loser has to live, in this particular context, in a good long-term relationship with the victor. That is particularly important where the dispute is not the price of something, or who is right and who is wrong, but what is a fair distribution. For a decision to be seen as fair by the loser, which is particularly important if you are a decision-maker because you want the loser to feel he has had a fair process, the panel must be able to reach its own independent judgment and not be bound by one or other of the offers that are on the table; and ex hypothesi, it will be the offer of the winner that has triumphed, and that will not be seen as fair.

Fourthly, experience of businesses where there is outside investment shows how important it is for a dispute resolution process that affects the business to be seen—and it is perception here that matters—to be based on a fair process and the independent judgment of the panel that resolves the dispute, and not the kind of Russian roulette process, as I think it has been described, in the Bill. Applying that experience, it seems to me that the procedure for dispute resolution, in the context we are talking about, will encourage investment.

Finally, there must be a safeguard. The Bill has a safeguard in one sense: there are the procedures in Clause 81 and 82 and Schedule 10 for a review. However, what this amendment has is a fine-tuned procedure, which is must more precise and very limited.

It seems to me that, if you look at those five highlighted points, the only conclusion you can come to is that the procedure in the Bill as a matter of dispute resolution is not fit for purpose, whereas that which is in the amendment is.

My Lords, I support the Amendment from the noble Lord, Lord Birt. As I said in Committee, I believe that the binding arbitration model that his amendments set out is unquestionably better than the proposed backstop mechanism in the Bill currently. In particular, Amendment 72 fills a glaring hole in the current process: that is a transparent and clear set of criteria against which the expert panel in this process will make its decision.

It is clear that the noble Lord and his colleagues have thought very deeply about their proposals and have tabled a comprehensive package of amendments. Indeed, their contributions have shown a breadth of experience and expertise that they have brought in developing them. Therefore, I very much hope that, even at this late stage, the Minister will accept these amendments, and her colleagues in the other place can use the passage of the Bill to finesse and improve them if the Government are concerned, for instance, about certain elements of drafting. I commend these amendments to the Minister and hope she will look on them favourably.

My Lords, I offer support for the broad approach of the noble Lords led by the noble Lord, Lord Birt, who have tabled the amendments in this group. I do not agree with every element of the proposed new process, but I appreciate that this idea, to replace the current mechanism with a structured commercial arbitration process, would be a substantial improvement on the current flawed and high-risk process —a process designed largely by the previous Government and not a mechanism recommended by the fan-led review. I believe these amendments would deliver a better process for the EFL as well as for the Premier League—better for all of football—because they would make the backstop process more transparent, more predictable and therefore lower risk.

In Committee, the noble Lord, Lord Birt, made an incisive and compelling case for change, as did the noble Lord, Lord Burns. He has done so again today, demonstrating the virtues of balance, nuance and good sense—all qualities that are excluded from the operation of the existing backstop process. The current backstop mechanism is fundamentally flawed. For example, the 28-day mediation process amounts to little more than mandating a conversation between parties, and of course then the parties have to go back and discuss those conversations with their clubs, which takes a lot longer than 28 days. It also creates no structure to identify areas of compromise, nor does it establish proper incentives for genuine negotiation. It does not even require both parties actually to make a proposal, so neither party’s position is flushed out. In practical terms, it means we might as well jut skip directly to the final decision.

The current process will leave the expert panel examining two highly divergent proposals, which will come out of the blue, with no arguments properly aired ahead of that decision. By contrast, the Amendment before us introduces significant advantages. First, the three-person panel, with two representatives selected by both the Premier League and the EFL alongside an independent chair, mirrors successful approaches used throughout football arbitration. Crucially, the same panel would make the final decision, having heard all the arguments throughout. Secondly, an extended 90-day arbitration period would allow for proper engagement rather than the perfunctory approach currently proposed. Thirdly, and crucially in my view, the requirement for structured offers to be put forward, scrutinised and then defined, introduces a dynamic entirely absent from the current model.

By identifying areas of compromise and providing feedback, the panel would progressively narrow the scope of disagreement. By the time you reach the final decision point, many contentious issues will have already been resolved and taken off the table. What is particularly attractive about that stronger structure is that, even if the Government retained a binary final offer process, it would already have significantly de-risked such a decision by narrowing down the points of contention.

This would address one of my major concerns with the current backstop: that it could enable wholesale changes to financial structures that sustain the entire football pyramid, against the will and the interests of one of the parties. Clearly, to maintain the growth and success of English football, we need a system that delivers evolution, not revolution.

I do have some reservations. For example, the criteria for making the final decision are too prescriptive in my view. Similarly, I do not agree with some of the revisions to the “state of the game” process, and I do not believe it should be up to the regulator to decide how long the parties should be able to contract for. However, in the end, the current process is so flawed that we should not let the perfect be the enemy of the good. The core process outlined by the noble Lords’ amendments would represent a substantial overall improvement. It is a proven, knowable process; it is fairer and would reduce legal, political and economic risks.

The health of the entire pyramid matters profoundly to all of us, which is why we need a mechanism that respects its complexity, not one that is reductive, crude and intolerably risky for both sides. I hope these amendments and the debate they are encouraging can be an important step in creating a process that is fairer for all sides, more balanced in the outcomes it delivers, and more respectful of football’s intricate financial architecture, as well as the rights and interests of all parties.

My Lords, I support this Amendment. I should declare my interest: I am passionate about football. Wembley has been mentioned, and I remember my first trip there was in 1968 to see my team, Manchester United, win the European Cup—alas, that may not happen again for a while. Like the noble Lord, Lord Burns, my former boss, I was at Wembley in 1973 and 1974; unlike him, I was playing, but it was not quite the same crowd, because it was the Oxford v Cambridge match, but I was there.

I will not repeat all the excellent arguments of the noble Lords, Lord Birt and Lord Burns, and the noble and learned Lord, Lord Thomas, but I support them all. We are now observing the Government having issues with regulators, saying they are not taking due account of growth. I think this tells you, when setting up a new regulator, to think very carefully about what you want them to consider. These amendments go into detail about that; that is absolutely important, because the current process has this absurd system where there are two numbers and you have to choose one. When they are trying to work out the right balance, they need to take account of these factors, and these factors should be made clear.

There are two aspects to this. The first is to make things clear. The second is: if you want fairness and competitiveness to be really important, you also need guidance about trade-offs. In my experience dealing with regulators, those are some of the most difficult issues—that is where politics gets involved—so we need to be clear what we are asking the regulators to do, what they should be doing and what they should be referring to others.

We need clarity on the role of the regulator, guidance on inevitable trade-offs and, ultimately—I agree with many here—we need fairness. We must keep the Premier League at the pinnacle of the global game. If we succeed in that, then Premier League clubs will repeat Manchester United’s 1968 performance and win the European competitions.

My Lords, I begin by asking the Minister, when she responds to this debate, to identify specifically whether she intends to accept the amendments in the names of the noble Lord, Lord Birt, and others now or to change anything for Third Reading. I believe that we need absolute clarity of the position both for this and future debates.

I suggest that the Minister should look at the people proposing this Amendment. This is not some party operation: we have a former head of broadcasting organisations who, as he identified, spent his time negotiating the original football broadcasting rights; a former Lord Chief Justice; a former senior civil servant; and a current senior lawyer. It is important that the Minister asks herself why it is impossible for her and her team to accept the carefully considered and detailed amendments that we are debating.

When I spoke at Second Reading, I identified a willingness to consider the proposal as it is in the Bill because, unlike the noble and learned Lord, Lord Thomas, I have faith in people, other than just lawyers, able to take an impartial decision. I speak, as I have identified previously, as somebody who has spent many years negotiating with trade unions—and I use the word “with” deliberately, as I was across the table from them. I always regarded it as a failure if we did not get to an agreement between management and the trade unions.

I have considered what we are talking about carefully. I have not discussed it with my colleagues, but have looked at my industrial experience and asked myself whether the proposal put forward by the Government or that put forward by the noble Lord, Lord Birt, is better. There is an inherent misunderstanding of what we are talking about here. As the noble and learned Lord, Lord Thomas, identified, we are not talking about two sides. Earlier today, the noble Baroness, Lady Taylor, referred to the different levels of the competition—the Premier League, the Championship and the lower leagues—so it is not a question of one versus the other because, as sure as eggs are eggs, once you get into the discussion about allocation of resources, you discover that there are not two sides and a pendulum that swings from one direction to the other. There is a series of different interests all the way up the league table to the absolute top. Therefore, you cannot ask us to accept a process that awards to one side or the other, when there are not in fact two sides but several sides, which will respond very differently depending on where they are in the league structure in any season.

I started by asking the Minister a very serious question, which I will repeat: can she please give a very clear indication to the Chamber of what the Government’s view is of the very serious, excellently drafted and well-debated proposal from the noble Lord, Lord Birt, and others?

My Lords, I want to say a few words, because the whole House acknowledges that the noble Lord, Lord Birt, is trying to be constructive here. He, with his colleagues, has produced some incredibly detailed amendments, and that is partly what concerns me. I am not saying that there is no merit in his approach, but I think that some of the conditions are potentially overburdensome.

Will the Minister remind the House of the purpose behind the backstop? As I understand it, the backstop was there to encourage parties to come together, discuss the situation and try to reach agreement. That is so important, because we have had the absence of agreement in recent years because, I think, of the stubbornness of one party.

I therefore worry that the amendments from the noble Lord, Lord Birt, and his colleagues are overprescriptive. He mentioned several of the problems that exist in football today, such as the level and unsustainability of players’ wages and the need for stadium improvements. All are relevant and important to those of us who are concerned about the future of football but, if we are going to be prescriptive about what comes in at that last stage, we may get into difficulties. I hope that the “state of the game” report, which he mentioned and which is extremely important going forward, will deal with some of these issues.

I would like to agree with the noble Lord that all of football is two sides of the same family, but I am not sure that that has been the experience of the last few years in the negotiations between the Premier League and the EFL. It certainly is not a balanced debate or discussion in terms of their powers. I understand the noble Lord’s wish to have levels of arbitration, but we must be careful not to cause delays or take the pressure off parties to come to an agreement between themselves.

My Lords, I added my name to my noble friend Lord Birt’s series of amendments and thank him for the time and effort that he has devoted to producing them. I also thank the Minister, the Bill team and the Secretary of State herself for the amount of time that they have devoted to discussions with me and many other noble Lords on this complex topic of the distribution of revenue and the resolution process.

I entirely support what has been said today by my noble friends Lord Birt and Lord Burns and by my noble and learned friend Lord Thomas: a formidable forward line—the Pelé, Messi and Bobby Charlton of this debate. I will add a response to the concerns that some noble Lords and perhaps the Minister have about these amendments, which have been expressed by the noble Baroness, Lady Taylor, and are in the briefing to noble Lords from the EFL. There are two main concerns that need to be addressed.

First, there is a concern that we have agreed that the Bill is to be light-touch regulation when we have a complex series of amendments here—and they are complex. My response is that the distribution of revenue and the resolution process are complex matters. We are addressing the distribution of millions of pounds, which is vital to the financial stability of clubs outside the Premier League, and this money is to be extracted from Premier League clubs. The mechanisms for that process have to be effective and fair. They need to set out how this is to occur in detail and by reference to what substantive principles. As has been said, with all due respect to those who drafted this Bill, the current provisions lack proper detail on evidential basis and procedures that are adequate to ensure a fair result, and they do not contain the substantive criteria that are required. Yes, we could regulate this important matter in a much simpler manner, but the detail is absolutely vital in this context to ensure efficacy and fairness.

The second criticism that has been made is that expressed by the EFL in its briefing document. The EFL is worried that the Birt amendments will result in an invasion of lawyers—as they put it, “in particular, expensive lawyers”, God forbid—who will be briefed by the Premier League. The EFL says that it will not be able to compete. As the EFL has expressed this concern, it needs to be addressed in this debate.

I of course declare my interest as a lawyer and, on a good day, an expensive lawyer. Speaking from 45 years of experience as a practising barrister, I would say to the EFL that expensive lawyers are not necessarily the most effective lawyers in a particular context; other counsel are available. It is also important to note that the issues in dispute in the present context are not legal issues. We are concerned with an assessment of the appropriate sum—based on the football factors set out by the noble Lord, Lord Birt, in his Amendment 72 —if the mediation phase, where lawyers are completely useless, does not produce a result. That result will depend less on legal expertise than on solid football experience: in particular, the needs of the non-Premier League clubs. This is a context where expensive strikers will be less effective on such a muddy pitch than experienced defenders.

If the noble Lord, Lord Birt, is going to press his amendments to a Division today, he will certainly have my support—but, like the noble Lord, Lord Hayward, who made what I thought was a very wise Intervention, I hope that we will not get to that stage. I hope that the Minister, having thought about this matter and having listened to this debate—she has always engaged with what has been said on this Bill during the course of these debates—will feel able to tell us today that this is a topic on which she and her officials would like to think again. I hope she will tell us that, as it is such a difficult and important topic, she wants to see whether the Government, on reflecting further on the amendments from the noble Lord, Lord Birt, might wish to improve the Bill by incorporating at least some of those amendments and bringing back a further amendment at Third Reading.

In light of the debate that we have had, I hope the Minister will think that that is an appropriate step to take today. In my view, that would be in the interests of what we are all seeking to promote: the interests of football.

My Lords, I will just add a penny’s worth. In the Bill, there is a backstop. Let us remember the history: the backstop was brought in to sort out the trade agreements after Brexit, and how Brexit would operate in Northern Ireland. Few people understood what a backstop was, and that was part of the trouble. We had to find a better way than what the backstop suggested.

Listening to the wonderful words of the noble Lord, Lord Birt, as well as the noble and learned Lord, Lord Thomas, and the noble Lords, Lord Pannick and Lord Burns, I hope noble Lords will forgive me for saying that they sounded to me very much like what Saint Paul writes in his letter to the Corinthians, chapter 13. The Corinthians were fighting among themselves. Who was better? Who had more gifts? “I’m for Paul”. “I’m for Apollos”. “No, I’m better than you are”. And Paul says, “Okay, fine. Let me show you a better way”. He talks about love. He talks about faith. He talks about hope. That was the better way.

What is being proposed by these noble Lords is a better way—a better way of resolving disputes that have to do with football. As I said before, football clubs are tribes. They think theirs is the best. Of course, we have to congratulate Newcastle. I live in that part of the world. I shouted a lot, even though I was watching on television, and lost my voice in the process. Football clubs have a tradition and a history; they are tribes. If you give them a backstop, you may be there for I do not know how long. The dispute resolution that has been recommended would be a better way of doing it.

Since we are doing regulation as a new thing, which has not happened in this country before, people need to have confidence that what you have written is not another sham rock on which this ship will find itself broken apart. A backstop sounds good but, in practice, I am afraid it has not worked so far, because everybody abandoned it.

So, I urge the noble Lord the Minister—she may feel “No, I haven’t got the authority to oppose this”—that it would be much better, when you come to respond, to say that you will take this Amendment away and bring it back again at Third Reading. She may still reject it then, but it would be worth giving this some thought. It would help the House not to go through a system of rejecting every amendment. I have voted against some amendments because I was not sure they were helping the Bill—but if this one is pressed to a vote, I will definitely vote for it. But I agree with the noble Lord, Lord Pannick, that that is not the better way. The better way would be for the Minister to take it away and have a think about it so that, at Third Reading, it will come back.

My Lords, we have heard a great deal of eloquence. This is a subject where there has been an almost seductive charm coming at me. There has also been the novelty of the noble Lord, Lord Pannick, applying for a pay cut; that is beyond belief.

What has always struck me is that this is a complicated process, where you have a big beast and a smaller one. The Government’s attempt has been to bring this forward. It may not be the most elegant solution but, let us remember, it is supposed to stop you getting there.

We have had years of this. Anybody who has been following this Bill, waiting for it to come forward, has had years of people not agreeing. We have had years of entrenched positions, of people thinking, “Oh, you have to have us as the greatest league in the world, otherwise it doesn’t work”. No—you have to be profitable. You cannot guarantee that the Premier League will be in a dominant position. That is what competition is. You have to have something that works, where people have to come together and talk.

Is the Government’s solution better than the one from the noble Lord, Lord Birt? I think the thump of hard reality is something we need. I will quote the noble Baroness back to her. I said that all sport tends to suffer from people sitting in darkened rooms, talking about themselves to themselves. The Minister said, “No, in this case, it’s people sitting in darkened rooms refusing to talk to each other”.

That is something I have carried through on. We have had people defending entrenched positions and people saying, “It is not fair”. They have changed over the course of this long debate. The first people to really irritate me were those in the EFL, two or so years ago, when they started on this. There has been no compromise here, no movement and no understanding of the family. If it is a family, it is in a soap opera somewhere.

So the Government’s position is the one that I would prefer, although I would not say that I am terribly happy with either. I look forward to what the Minister has to say. At the moment, I am slightly more in favour of what the Government are bringing forward.

My Lords, I rise as a supporter of AFC Wimbledon, a noble club, the great romantic story of the 20th century in British football—a club that was stolen, and a club that restarted and reinvented itself. That is the spirit that football is all about: the local clubs, with local supporters. Those clubs need protection, and they need to have it explicitly stated that they and their interests will be carefully considered. That is why I support this Amendment. I draw noble Lords’ attention to the criteria set out in proposed new subsection (3) in Amendment 72. That is what would give the lower-league clubs the protection that they need. The people who hire the young people we train are dependent on those revenues and on support in this kind of way. I urge noble Lords to support this amendment.

Over many days and probably 300-plus amendments we have discussed many points, but in my opinion this is probably the most important and significant of them all. Unlike any other regulator, this set of clauses gives this regulator the power to take money from one part of the organisation and give to another. You do not see a regulator being able to take from Severn Trent and give to Thames in the water industry, or from Barclays to NatWest in the banking space. Without doubt, this is the most important thing that we are talking about here: giving power to a regulator that is unheard of in any other domain.

I must admit that I was taken aback by the Government’s suggestion. Again, in all this there is no doubt that everyone is trying to get the best approach and that we all sincerely want what is best for football, but I hear the point made by the noble Lord, Lord Birt, that the pendulum mechanism really is untried in this domain. There is a real risk of gaming and, as mentioned, Russian roulette.

Instead, as an alternative, we have here a very thoughtful approach—maybe not put forward by a Pelé, a Bobby Charlton or a Messi, but put forward by a former BBC director-general who dealt with many media sports rights; a former Lord Chief Justice; a former head of ofcom; a former head of the Civil Service; a former Archbishop of York; a distinguished economist; and a distinguished and sometimes expensive sports lawyer. I think we would all agree that we probably have a Pelé, a Messi and a Charlton of this subject matter before us today, and that we would be very wise to take on board all the comments, knowledge and vast experience that they bring.

That is why for me the key question was put by my noble friend Lord Hayward: whether the Minister is willing to consider this further. I know that she has spent a lot of time on this subject, as have the Secretary of State and other Ministers, and we are grateful for that, but it is worthy of further time, given the importance of what is before us today. I request that this be brought back as a commitment at Third Reading.

I am nervous that we will just get an undertaking that this will be considered, because of course it still needs to go through the other place, and we know that the other place has a large government Majority without the benefit of the learned Cross-Bench Peers we have heard from today. I will listen carefully to the Minister’s words and the response to them from the noble Lord, Lord Birt, but I note that any Peer is able to divide the House. From our side, if we do not feel we have the undertaking that this will be brought back at Third Reading, we will seriously consider dividing the House.

My Lords, I thank the noble Lords, Lord Birt, Lord Pannick and Lord Burns, and the noble and learned Lord, Lord Thomas of Cwmgiedd, for tabling the amendments in this group. It is indeed an impressive team, as the noble Lord, Lord Pannick, stated. I particularly thank the noble Lord, Lord Birt, for his considered engagement and persistence, and for the time he spent considering ways in which we could improve the backstop process for the good of football, which is what the Bill is intended to provide.

I am grateful for the contributions from other noble Lords co-sponsoring the amendments and other noble Lords from across your Lordships’ House who have contributed to debates and engaged constructively during discussions and during this debate. We have had a series of productive meetings exploring some of the aspects of the model that were not discussed in detail in Committee.

If I may give a personal view, as someone who has learned a huge amount through the passage of the Bill and been on an incredibly steep learning curve, I think it is unfortunate that the tone and nature of the debate in Committee at times prevented these sensible discussions taking place on the Floor of your Lordships’ House. However, I am grateful to the noble Lord, Lord Birt, and others, as they have raised a series of important questions that have helped to inform our government amendments in this area. I genuinely appreciate his and other noble Lords’ time and expertise. I particularly appreciated how the noble Lords, Lord Birt and Lord Burns, viewed the draft legislation with the regulator and the regulated in mind, using their considerable relevant experience to provide fascinating and useful insights.

We have heard the view of the noble and learned Lord, Lord Thomas, with his experience in dispute resolution. The IFR needs effective tools and, as the noble and learned Lord said, the tools and the approach should be fair and careful. I add to his point that they also need to be seen to be fair.

The noble Lord, Lord Hayward, asked for a specific commitment. While I recognise his concerns, we do not think it would be possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that, while we are sympathetic to the intent of the amendments tabled by the noble Lords and the constructive way in which they have engaged, their approach differs significantly from existing drafting. We therefore do not think there is enough time to conclude discussions on these important differences at this stage or before Third Reading. We kept the model—

I thank the Minister for answering as she has, but implicit in what she said is that the Government might find a way to introduce amendments when the Bill goes to the other place. Can I please seek clarification as to whether that is what she intended to say, or whether that was just something that would take it further down the road?

The only commitment I will give is the one I have in my speech. We do not think it is possible to reach an agreement before the conclusion of Report or Third Reading in the Lords. Our current position is that while we are sympathetic to the intent of the amendments, they differ significantly from the existing drafting.

As I started to say, we kept the model chosen by the previous Government. This model is intended to create the right incentives. A number of noble Lords, including my noble friend Lady Taylor, spoke of the intention behind the current model. The final offer mechanism is designed specifically to address unequal negotiations between parties with power imbalances such as those that naturally arise in the football industry. The noble Lord, Lord Addington, said it was designed for people not to get there. It is actually designed not to be used.

The process as it stands in the existing legislation heavily incentivises reasonable proposals, since an unreasonable proposal has a very high chance of rejection when compared to a more sensible competing offer. We must maintain this incentive—

My Lords—

If I may, I will get through the points and finish; I am happy to give way if I do not answer the noble Lord’s point.

Our objective is to ensure that the backstop effectively pushes leagues to co-operate—the point that I think my noble friend Lady Taylor of Bolton was driving at. This was, and remains, the rationale for the existing drafting and model adapted by the previous Government, and in the Bill brought back by this Government to your Lordships’ House.

Alongside this, we want to ensure that the model is light touch—to echo a point made by the noble Lord, Lord Pannick—low cost, flexible and has a clear process. In considering strengthening the model, we must also ensure due consideration, and that appropriate engagement with the relevant stakeholders takes place.

We recognise the intent of the proposed amendments in supporting these objectives, including how the process is triggered, how mediation is conducted and how a final decision is made, including the criteria for a decision. I know that the noble Lords’ proposals have the best interests of football at heart and are based on the huge amount of experience of all those who have signed the amendments. The department will continue working to ensure that the backstop delivers the right balance and the right result for football. This is our shared goal.

I understand that the noble Lord may still wish to divide the House, given that I cannot give a firm commitment at this stage or commit to bringing something back before Third Reading. But throughout the Bill’s passage and consideration of amendments in the Commons, we are very happy to engage with the noble Lord, Lord Birt, and noble Lords who have signed up to his amendments, as well as with other noble Lords with an interest in this area, with the hope of reaching a more amenable compromise before Royal Assent. With that in mind, I ask the noble Lord to withdraw the Amendment.

If I may, I will make what I hope is a helpful suggestion. The Minister mentioned the lack of time ahead of Third Reading. It is my understanding that it is within the Government’s power to delay Third Reading in order to give sufficient time for this. Given that one of the previous amendments said that we would not put forward measures that would have an impact during a season, and given that we all accept that this legislation will not be passed before the beginning of the new season, there is no practical difference in terms of timing and what that will mean. We have a real opportunity here, which will not have any timing impact on football but will give us the opportunity to seek the better way mentioned before.

There are currently no plans to move the timing of Third Reading in your Lordships’ House, but I commit to ongoing discussions with the noble Lord, Lord Birt, and others, who have been extremely considerate in the time they spent discussing their concerns about the current model with me, the Bill team and others. We wish to continue those discussions in the spirit I described previously.

St Paul, Messi—the compliments have been flying around. For the avoidance of any doubt, despite having two of the leading lawyers in the country on the team, no fees were paid during the preparation of these amendments.

I have to say that if was not a party to this debate, I would have been sitting listening with my jaw dropping open at the quality of the contributions from right across the House. I am genuinely grateful to everybody who spoke—without exception. Forgive me if I particularly mention my noble and learned friend Lord Thomas. If I had been the Minister, I would have said, “I am going to give up straight away”, because his arguments were so completely devastating and convincing.

I am surprised and disappointed by the Minister’s response, which I had not expected. As she knows, I had no desire to divide the House. I had hoped, given the strength of the arguments she has heard, that she would adopt a more conciliatory and supportive line. I ask her, if she does not mind, recognising that time is not on our side and the Bill is going to go to Another place: is she willing to accept my colleagues and I and others from around this House having a meaningful debate about the re-engineering of the backstop, in line with the arguments heard from all over the House today? It is possible that I am not clear on what it is that she is saying.

I apologise to the noble Lord if I was not clear. I am very keen to continue to have ongoing debate and dialogue with the noble Lord and his co-sponsors of the Amendment, in a similar vein to the conversations we have had up until now. I apologise if I did not make that clear in my speech. That is absolutely the intention, but unfortunately, I cannot commit to bringing something back before Third Reading.

Obviously, I do not expect the Minister to commit, but she has always been very generous in the past at inviting people in for talks. Let us be honest, there have been some changes to the Bill, although not many. Does she think there is a reasonable chance that we can fundamentally re-engineer the backstop process?

I am really sorry but I cannot commit to that, but I can commit to the ongoing discussions.

I am afraid that I do not think the Minister gives me any choice. I will test the opinion of the House.

Ayes 175, Noes 207.

Amendment 58 disagreed.

Amendment 59 not moved.