Lord Goodman of Wycombe:

Moved by Lord Goodman of Wycombe

81: After Clause 89, insert the following new Clause—“Review: cost of complianceWithin one year of the day on which section 15 of this Act comes into force, the Secretary of State must lay before Parliament a review of the financial impact on regulated clubs of complying with the provisions in this Act.”

My Lords, I beg leave to move this amendment on behalf of my noble friend Lord Maude. I will also speak to my own amendments, Amendments 91 to 93, 94A and 94B, which are consequential on the Government’s Amendment 90. What all these amendments have in common is that they are all about post-legislative review. To explain them, I go back very briefly to when, in Committee, I tabled a sunset clause suggesting an independent review that would report to the House, with a power to recommend that the regulator either continue, continue under certain conditions or cease to operate. While I am not at all sure that there was a consensus for the sunset clause, there was very clearly a consensus across the Committee for better post-legislative review.

On that score, I am delighted to see government Amendment 90, because it contains, to my mind, some of the key objectives I was seeking to put forward in the sunset clause. If noble Lords read the clause that the Government have tabled, they will see that it sets out a review, it sets out that the objectives of the regulator will be reviewed, and it will even be seen whether the regulator’s objectives remain necessary. This is a very big concession by the Government. If the tone of debate on Report has been better than in Committee, I think it is partly because the Government have moved on several very important elements, one being growth and another being this. I gather that it is extremely rare to put a post-legislative review of this kind into a Bill, and I think the Government should be congratulated on that. I read it as an escape clause for the Government. In the event of the regulator going wrong, there will be this fundamental review, so I think the Government are being prudent in so doing.

My amendments to government Amendment 90 simply seek to ensure that the review is carried out by independent persons—the same sort of independent people I named in the sunset clause—who would then report to the House. My noble friend Lord Maude’s amendment specifically proposes an examination of the financial effects of the regulator on clubs, because he fears they will be damaging. Once again, I am very grateful to the Government for their Amendment 90 and I wait with interest to see what the Minister will say in response to these amendments.

My Lords, I rise briefly to thank the Government for Amendment 90. It is the sort of thing that improves a Bill, improves the ongoing process of a Bill and means that it is not just dead when it finishes going through its parliamentary life. There probably should be far more of these in legislation, so I thank the Government.

My Lords, I will speak to Amendment 94D and in so doing echo the welcome that the House has given to the Minister on introducing Amendment 90. Amendment 94D focuses on the role of the FA and recognises that when the 2023 White Paper was written and supported by both sides, it expressly backed delegation as a good idea. We understand that the shadow regulator would also welcome the ability to both formally and informally delegate functions to competition organisers, especially around first-line areas such as monitoring and administrative elements of licensing.

My amendment does not require the Government to do more at this stage than recognise that, following the review of the Act, if that report concludes that the regulator’s objectives could be achieved more effectively by delegating an IFR function to the Football Association, at least on the face of the legislation, that would be possible. As I say, it recognises that in the White Paper the Government saw merit in sharing or delegating regulatory responsibilities in certain circumstances. It also begins to address the current complete severance of the umbilical cord between the role of the FA, as the national governing body of football in this country, and the contents of this legislation, and goes at least one step towards addressing the fact that it is imperative to protect and preserve the independence of the FA, not least in accordance with the FIFA and UEFA statutes. We know that legislation that compromises the FA’s autonomy as the primary regulator of football in England would be non-compliant with these statutes. This amendment at least opens the door a little to the FA undertaking its role as the sole regulator of football, which has otherwise been stripped bare by the other clauses.

My Lords, I rise, rather unusually, to congratulate the Minister. I think this amendment is very important. I am not going to congratulate the shadow Minister, the noble Lord, Lord Parkinson, only because he has been congratulated all night on Newcastle’s win, and I think, “Do me a favour; it’s not him that did it”. Anyway, I wanted to get that out and about.

We have heard some genuinely fine speeches in Committee and even on Report—some of the best I have heard since I have been in the Lords. Just today, the speeches by the noble Lord, Lord Birt, and his colleagues, by the noble Baroness, Lady Brady, and by so many others were passionate and reasoned, with oodles of evidence, and so convincing. But sometimes the speeches have felt a bit more desperate, as though we were banging our head against a brick wall, tearing our hair out, with a tone of, “Is anyone listening? Do the Government understand the genuine concerns about this Bill? This is not just people messing around for sectarian reasons”. So I think it is important to acknowledge a couple of glimmers of hope.

Government Amendment 18 from the other day, saying that the IFR needs to have regard before it imposes any restriction and must consider whether it is necessary and whether a similar outcome could be achieved by less burdensome means, defangs a lot of the things that worry me about the Bill. It at least gives the regulator pause. Yet some of us, especially after today’s debate, are still very nervous about unintended consequences, anticipate trouble ahead and genuinely worry about what is going to happen to a game that has all the jokes about Newcastle and its fans and what it means to them. Imagine a whole nation being disappointed by this Bill if it does not deliver as they think it will and, not only that, damages the game that they are so passionate about.

Amendment 90 is very important. It is important to assess the extent to which the objectives intended have been achieved. I think, though, that it is important that the Government are not just allowed to mark their own homework there. It is one thing saying that there is a review, but who the reviewers are and the form of that review seem rather key questions.

It really is incredible that in the Bill we have a review that is going to ask whether the objectives remain appropriate after a few years; in other words, the objectives of the regulator can be completely changed. What is more, it asks whether those objectives could be achieved more effectively in another way. My answer now—before a review—is yes, which is why we do not really need the regulator in the first place. At least someone somewhere is asking that question.

This matters, and I think it shows that the Government and the Minister have been listening. I therefore urge the Minister to listen now to the smaller amendments in this group that enhance what the Government are trying to do with a little bit more detail. Will she accept this amendment as we finish Report and say, “Yes, I have listened, and we are not going to be an overbearing, overweening supporter of a regulator that will destroy football. We are going to do our best not to do that and will accept these amendments”?

My Lords, I will stick to what I know about, and for that reason I will make no comment on football. I too commend the Minister for bringing forward Amendment 90 in response to the debate in Committee. This is a wholly positive development.

As I said then, the House of Lords Constitution Committee in its 2004 report Parliament and the Legislative Process recommended that Bills, once enacted, should be subject to post-legislative scrutiny—a recommendation endorsed by the Law Commission. In 2008, the Government accepted that Acts should normally be reviewed three to five years after enactment, with reviews sent to the relevant departmental Select Committees in the House of Commons.

Since then, not all Acts have been reviewed. Practice in recent years has been somewhat patchy. Some departments have been good at reviewing Acts, others not so. I commend those departments that have undertaken thorough post-legislative reviews and have made Written Ministerial Statements when they have done so.

The Minister said in a recent Answer that some Acts were not reviewed following correspondence with the chairs of the relevant Select Committees. I am not sure how the chairs will know whether or not a review is necessary if they have not carried out a review. This is something I may pursue. However, I am keen to commend those departments that do undertake post-legislative reviews, and I especially welcome this amendment that puts the review on a statutory basis. There are precedents, but not many—as my noble friend Lord Goodman indicated—so I am delighted that we have another.

In essence, the amendment reproduces the normal practice for a review, although it goes a little further in prescribing a draft report and stipulating bodies to be consulted, which constitutes a significant concession. Given that, the amendment is to be welcomed, and I hope it will be emulated by other departments.

I have sympathy with the amendments tabled by my noble friend Lord Goodman; I can see why he wishes to commission a report by an independent body. I suspect the Minister will point out that bodies can carry out reviews if they wish to anyway and doubtless will.

As far as the amendment goes, I think it is to be wholly welcomed. It is a very good development, and it is very positive in showing how the Government have responded to the debate in Committee, which shows the value of this place. I hope the message will go out to other departments to follow suit.

My Lords, I have tabled amendments asking that Parliament should fulfil its role of scrutinising regulators across the board. I am glad that, in this one respect, my noble friend the Minister has taken that on board with this particular regulator in terms of the review that the noble Lord, Lord Norton, has just referred to. Very often, the problem has been that Parliament itself has not been proactive enough. This amendment ensures that Parliament will have to take some notice.

My Lords, I will briefly touch on a subject I raised at length in Committee and which we have not touched on at Report: costs and compliance. The Minister, very helpfully—I say “very helpfully”, but I am going to add a “but”—wrote to all relevant noble Lords on 6 March. I have a feeling that this is just the sort of thing that will come up for review once the IFR is in operation.

On costs, I know that what is identified in the letter of 6 March is merely an indicative possible route. But in itself I can see the potential for costs of any number of hours of legal time being employed to argue what proportion should be allocated to what division, particularly the indication that the six highest-revenue Premier League clubs will be charged more than other Premier League clubs. That is an interesting concept.

There are two other elements I will touch on. First, on page 2 of the letter, it says:

“The IFR is expected to take a club’s specific circumstances into account to relieve potential burdens where possible”.

That regulators will take specific circumstances into account is a new concept to me. Surely the broad principle of a regulator that it will treat people in one category in exactly the same way. I realise that it may vary from the Premiership to the Championship and down to the National League, but the letter implies that there will be specific circumstances taken into consideration. I will be amazed if that is actually the case.

Secondly, I do not understand the distribution of full-time equivalent burdens for the larger clubs and smaller clubs. I think it will come back in one form or another.

My final comment is on the observation in relation to the burden. On the third page, the 6 March letter says

“we anticipate these additional activities are expected to be shared across several roles and levels of seniority” in the higher levels of the pyramid. However,

“further down the pyramid, a club secretary is most likely to undertake these tasks associated with compliance”.

It seems to me that it is the same burden but there is no difference in terms of the size of the club. It says that work will be taken away from a group of people in the larger clubs, but they are already doing work. It is not as though you are dealing with it by moving the problem to somewhere else. It does not happen like that in business, and I am seriously concerned about the approach that appears to be implied: that the compliance costs and burden will be put on somebody who can do it because they have the time. In business, if you do not have the time to do it, it is an extra cost and an extra burden.

When we come to the operation of the IFR, I have no doubt—as I indicated in my comments in my previous contribution—that the views of clubs will vary enormously depending on their level. At that point, they really will start fighting and employing lawyers.

My Lords, the noble Baroness, Lady Fox, is right that the congratulations that have been coming my way for Newcastle are entirely misplaced. However, I am sure that the cross-party support the noble Baroness and I gave them on the first day of Report buoyed the team and their success, but it had nothing to do with me. But I can reassure noble Lords that my uncle Barry was probably the person cheering the most loudly at Wembley last night.

I also agree with all those who have welcomed the Government tabling Amendment 90. In Committee, there was cross-party support for looking at how this will all work in practice, from those who are keen to see the regulator up and running swiftly to those who are more sceptical. We had support from the chairman of the Hansard Society and my noble friend Lord Norton of Louth, who watches legislation very carefully. I join the welcome expressed to the Government for bringing forward Amendment 90.

My noble friend Lord Goodman of Wycombe has argued throughout the passage of the Bill, from Second Reading onwards, that greater oversight and post-legislative scrutiny would be needed. I therefore hope that the Minister will look at the further helpful amendments that the noble Lord has tabled today, arguing that it would be better for an independent body to conduct the review of this independent regulator. Again, my noble friend has been very constructive in the points that he has raised.

Amendment 81, tabled by my noble friend Lord Maude of Horsham, which leads this group, covers the same area that my noble friend Lord Hayward has just touched on in his contribution: the cost of compliance with the new regulatory regime. Clearly, since the Bill that was brought forward in the last Parliament, we have seen new things such as increased employer national insurance contributions, the increase in the minimum wage and the further costs to business that will be coming through the Employment Rights Bill. The financial position of smaller clubs takes place in an even more difficult economic environment. We on this side of the House remain concerned that imposing a levy and further regulatory costs on top of these will likely make clubs less financially sustainable, not more.

My noble friend Lord Hayward points once again to the impact assessment, which does not account for the increased costs of hiring. It says that clubs will have to hire more staff to comply with the extra regulation but does not consider that those extra employees will cost more now than they would have done even when we first looked at the Bill. This is particularly severe when it comes to the smallest clubs in the National League. The general manager of the National League, Mark Ives, and the chief executive of Dagenham and Redbridge, Stephen Thompson, have both warned of the potential for the Bill to create onerous consequences for National League clubs which are not only financial but bureaucratic. Mr Ives said:

“We are concerned about the costs … The expectation of how much it is going to cost clubs at a National League level is a huge concern—it may be a small amount of money, but it is a lot to the clubs”.

National League clubs operate with a very small number of staff, with many in Mr Thompson’s words working on only

“two or three people and some volunteers”.

There is a real risk that some of these smallest clubs will struggle with the further burdens that are placed upon them, so I hope the Minister will look at these amendments.

My Amendment 94, which is in this final group, seeks to ensure that the review takes into account the effect of the regulator’s activity on ticket prices. We had a good debate on this during our first day on Report and indeed a Division which was very conclusive, so I will not say anything further about that issue other than to thank the Minister for all the engagement that she has given during and since Committee, ahead of Report and during our two days on Report. We are all very grateful.

I thank the noble Lord, Lord Goodman, for his amendments and for speaking to the amendment in the name of the noble Lord, Lord Maude of Horsham, and other noble Lords who have spoken during this short debate.

In Committee, Peers across the House raised the topic of evaluating the impacts, efficacy and success of the regulator. I thank the noble Lord, Lord Norton, in particular, for his expertise and time in discussing the topic despite his complete lack of interest in football. I have sometimes found that those noble Lords who have an interest in the details relating to legislation or a regulator come at this topic with a slightly different perspective, which is really helpful, and I welcome his contribution tonight. I am keen to continue discussions on this and other topics with noble Lords across your Lordships’ House—although I must admit that I am quite pleased to be reaching the end of Report.

We agree that it is good practice for the impact of regulation to be monitored and evaluated post-implementation. I am grateful to noble Lords across the House for welcoming government Amendment 90, which will require the Secretary of State to carry out a review of the operation of the Act and its impact on the industry. This must be completed no later than five years after the full commencement of the licensing regime. Among other things, the review will look into whether the regulator has been effectively achieving its objectives or whether they might be better achieved in a different way. This includes explicitly considering whether delegation might be appropriate, for example, to an independent industry body.

As part of looking into the impacts of the regulator on the market, the review will also consider interactions with industry rules and any resulting burdens. It will also be a set opportunity for the Secretary of State to formally consider and set out whether the competitions in scope of the regulation remain appropriate. The report will be laid before Parliament and will lay long-term scrutiny of this regime by this House and the other place.

The noble Lord, Lord Hayward, has been a champion of clubs in relation to costs throughout. In relation to compliance costs and the statutory review proposed, a separate review of compliance costs alone might be unnecessary, duplicating the work of the post-implementation review and creating additional costs. The statutory review will offer an opportunity for a more complete and detailed view of the regulator’s performance, per se, and will therefore be more useful in understanding the costs and benefits of regulation to clubs. It will also capture compliance costs that are more reflective of ongoing costs instead of the initial costs of the first year of familiarisation, although we expect that, in its annual report, the independent football regulator will have due regard to these issues.

I thank the noble Lord, Lord Goodman of Wycombe, for tabling his amendments. I completely understand their intent—namely to introduce more independent scrutiny of the legislation and its effects—but, unfortunately, we do not think it is appropriate for an external third party to carry out this review of the Act. As is common practice, it should be carried out by the Government, particularly because the review may inform future government policy and because its conclusions may include recommendations to add, amend or repeal primary legislation. The Government introduced this legislation, and, in our view, it should be the Government which review whether it has achieved what it intended. However, we completely agree that there should be additional scrutiny, and the intention is that this review will facilitate that scrutiny, for example, by a relevant committee of Parliament. However, it is not for this Act or the Government to direct Parliament to undertake that scrutiny.

On Amendment 92, we have not taken the approach anywhere in the Bill of prescribing specifically where publication must be done. Clearly, the norm these days is for publication online. However, there is no need to mandate where online, as to do so would risk the legislation becoming outdated.

I appreciate the intention of Amendment 81, tabled by the noble Lord, Lord Maude of Horsham: to ensure the regulator is offering value for money and not unduly burdening clubs financially. Ensuring efficiency and avoiding unnecessary costs have been at the heart of the Bill’s development, but the proposed amendment would duplicate the Government’s statutory review amendment and would therefore impose unnecessary additional costs and burdens on the regulator.

On Amendment 94, in the name of the noble Lord, Lord Parkinson, we are acutely aware that ticket prices are a key issue for fans. That is why the Bill explicitly requires clubs to consult their fans on this point. It may well be that the regulator also chooses to look at ticket pricing as part of the “state of the game” report. However, as it is a commercial decision, the regulator will not intervene beyond this. I again reassure the House: we do not believe that an increase in ticket prices would be a proportionate reaction to the cost of the regulator. The levy will be distributed proportionately, and no club will be asked to pay more than is fair and affordable.

An industry that earns over £6 billion a year in revenue and spends hundreds of millions of pounds on player transfers every year cannot legitimately say that it has no choice but to pass the cost of regulation on to fans, particularly since the cost faced by any one club will be relatively low and proportionate to their financial resources. However, if the regulator were to lead to higher ticket prices, this in our view would be captured within the review, which must look at the impacts of the regulator on football in England and Wales.

I turn finally to Amendment 94D in the name of the noble Lord, Lord Moynihan. As I have set out, one aspect of the statutory review will be to consider whether delegation might be beneficial. However, we do not believe that the power to delegate should be provided for in the legislation at this stage. We should not pre-empt the findings of the review, particularly as there is no way of predicting what delegation might need to look like or to whom that delegation might be. We have been clear, as the previous Government were clear, that independent regulation is needed in English football because the industry has shown itself to be incapable. Any decision to delegate back to the industry is not a decision that should be taken lightly, nor should powers established by an Act of Parliament be transferred to private third parties without proper parliamentary process. I am surprised that the noble Lord has tabled this amendment, given the concerns that he has raised repeatedly on delegated powers.

For these reasons, I hope that noble Lords will not press their amendments, and will accept government Amendment 90 when we come to it.

My Lords, I am grateful to the Minister. This has been an extremely positive debate. The noble Baroness, Lady Fox, was right to point out in detail that the Government prepared, in Clause 90, a potential line of retreat. Whether they have or have not, the Government have certainly listened to calls across the House for greater post-legislative scrutiny. I particularly enjoyed the distinguished contribution of my noble friend Lord Norton, who has long displayed a great interest in these matters. Given what the Minister said, I have no intention of pressing Amendment 81 —or the other amendments—to a vote this evening.

Amendment 81 withdrawn.

Clause 91: Regulations

Amendments 82 to 85 not moved.

Clause 92: Minor definitions etc