Football Governance Bill [ Lords ] (Sixth sitting)

The Committee consisted of the following Members:

Chairs: Dawn Butler, Esther McVey, † Karl Turner, Sir Jeremy Wright

† Betts, Mr Clive (Sheffield South East) (Lab)

† Bonavia, Kevin (Stevenage) (Lab)

Dewhirst, Charlie (Bridlington and The Wolds) (Con)

† Dickson, Jim (Dartford) (Lab)

† Dillon, Mr Lee (Newbury) (LD)

† Foxcroft, Vicky (Lord Commissioner of His Majesty's Treasury)

† French, Mr Louie (Old Bexley and Sidcup) (Con)

† Jopp, Lincoln (Spelthorne) (Con)

† Martin, Amanda (Portsmouth North) (Lab)

† Naish, James (Rushcliffe) (Lab)

† Onn, Melanie (Great Grimsby and Cleethorpes) (Lab)

† Patrick, Matthew (Wirral West) (Lab)

† Peacock, Stephanie (Parliamentary Under-Secretary of State for Culture, Media and Sport)

† Pearce, Jon (High Peak) (Lab)

† Robertson, Joe (Isle of Wight East) (Con)

† Shanker, Baggy (Derby South) (Lab/Co-op)

† Wilkinson, Max (Cheltenham) (LD)

Aaron Kulakiewicz, Kevin Maddison, Committee Clerks

† attended the Committee

Public Bill Committee

[Karl Turner in the Chair]

Football Governance Bill [Lords]

Amendment proposed (this day): 137, in schedule 5, page 102, line 2, at end insert “including the club’s official charity.”—(Mr French.)

14:00:00

Question again proposed, That the amendment be made.

It is a pleasure once again to serve under your chairmanship, Mr Turner. I thank the hon. Member for Old Bexley and Sidcup for his amendment. He made some important points in his contribution, including his reference to the Kicks programme. He also pointed out an event in his area where he was able to see the Premier League trophy; that is a fantastic tour involving lots of grassroots and other clubs. I was really pleased to visit one such club in Mr Speaker’s Chorley constituency, and I will take this opportunity to wish Mr Speaker a very happy birthday. I am sure that other Committee members will join me in putting that on the record. We do not believe, however, that the change in amendment 137 is necessary. I will outline why and respond throughout my speech to some of the hon. Gentleman’s points. As drafted, the Bill gives flexibility to a club to detail what action it is taking to contribute “to the economic and social well-being of the local community with which it is associated”. This provision was introduced through a Government amendment made in the other place to allow the regulator to include clubs’ community contributions in its corporate governance code. The regulator will work with the industry to design the code to ensure that it is relevant to clubs, the challenges they face and the unique nature of the responsibilities associated with custodianship of a football club. If a club details, in its statement, its work with or through its official charity, that would of course be accepted by the regulator. That is the opposite of what the hon. Member for Old Bexley and Sidcup said. He referred to scaling back charity work, but that is absolutely not what we will see as a result of the proposals. Let me detail some of the specifics. If a club is donating to or funding bodies that are not its official charity, that is also a contribution to the community and could be included. We have tried to keep this as broad as possible. To share something from my constituency and town, Barnsley FC Community Trust is a great example of a charity that is closely connected to a club. The community trust held its conference on Monday, and I was pleased to send them a message. One purpose of that conference was to raise the charity’s profile across Barnsley. It helps between 10,000 and 15,000 people each year, who range in age from two to 100 years old. I will not detain the Committee by outlining the work that the trust does, but it ranges from education to health, social inclusion and sports participation, not just in and around the centre connected to Oakwell, but across the whole of Barnsley and my Barnsley South constituency. Barnsley FC could use their work with the trust to show how they contribute to the economic and social wellbeing of their community, and I put on record that they very much do that in my area. But it is not just Barnsley FC that do such work; many clubs carry out great work in their communities, whether through their official charities or not. Portsmouth FC’s Pompey in the Community and the Sheffield Wednesday FC Community Programme are just two examples; I am sure that hon. Members across the Committee have examples from their communities. It is important to shine a light on those contributions to the local community, and that is why a club’s report on their corporate governance will be published online to allow public scrutiny, so that they can be held accountable for their actions, or inaction. We believe that this will encourage transparency and, as with the approach to corporate governance more widely, encourage greater action in this space. Above all, that approach will allow flexibility for each club to comply in accordance with their resources and size in a way that is suited to the needs of their local community. Additionally, when the regulator publishes its corporate governance report on clubs, best practice can be shared with the industry. We therefore believe that the Bill, as drafted, sufficiently allows clubs to demonstrate the actions they contribute to their communities. I hope that the hon. Member for Old Bexley and Sidcup will withdraw his amendment.

It is a privilege to speak again under your chairmanship, Mr Turner. I congratulate you and the city of Hull on the Challenge cup victory at the weekend, which probably does not please Mr Speaker on his birthday, but such is sport. Moving back to football, before the lunch break, I explained why the Opposition felt the need for amendment 137. It is a technical amendment that would make it very clear that the official charities and trusts of the clubs would count towards the corporate governance structure. I have listened carefully to the Minister’s comments and appreciate the feedback that she has given. However, we would still like to see the amendment made to provide clarity to clubs, so we will press it to a Division. Question put, That the amendment be made.

27|0|5|11|The Committee divided:|Question accordingly negatived.||0|0

Amendment proposed: 136, in schedule 5, page 102, line 7, leave out sub-paragraph (e).—(Mr French.)

Question put, That the amendment be made.

28|0|3|11|The Committee divided:|Question accordingly negatived.||0|0

I beg to move amendment 131, in schedule 5, page 103, line 16, at end insert— “Agents fees 11A (1) An agents fees condition is a condition requiring a club employing an agent to cap their fees. (2) The agents fee cap will be set by Regulations subject to approval by both Houses.” My amendment proposes that clubs regulated by the Government’s new regulator should be required to cap the fees paid to agents, because, as many fans know, an ever-increasing amount of money is leaving the football pyramid to agents. The level of the proposed cap would be set through regulations, subject to the approval of both Houses of Parliament, and determined following consultation with clubs and leagues. Let me set out why we believe the measure is necessary—not as an attack on agents or their role in the game, but as a proportionate, reasonable step towards a more sustainable, transparent and responsible football ecosystem. If we are serious about football reform and safeguarding the long-term financial health of clubs up and down the pyramid, we must be prepared to tackle the excesses and distortions that have taken root in the sport. Few are more obvious or pressing than the spiralling sums paid to agents. According to the Football Association, in the year from February 2024 to February 2025, Premier League clubs alone paid more than £409 million in agent fees and intermediaries. That is more than the total broadcast revenue of a number of Championship clubs in 2022-23; or more than double the commercial revenue of several clubs for that season; or almost three times the matchday revenue of a number of Championship clubs in the same season. This is not wages or transfer fees, nor is it investment in the matchday experience for fans—it is money paid out purely for representation costs, often for work done on both sides of a deal. To put that into context, it is more than the entire annual income of many Championship clubs combined, and this is not just a Premier League problem. Although the sums are relatively smaller further down the pyramid, the pressures are arguably even more acute for clubs with less budget. My amendment seeks to introduce a straightforward principle—that there should be a fair and proportionate limit on the fees that clubs can pay to agents, and that the limit should be set by regulations made by the Secretary of State subject to affirmative procedure. This would help to ensure full parliamentary oversight and allow future Governments to adjust the cap based on changing market conditions, evidence from the Government’s regulator and broader economic factors in football. There is already a strong precedent for this kind of intervention. For example, FIFA’s agent regulations now attempt to impose limits on the commissions payable to clubs and players alike, but those rules remain subject to legal challenge and uneven enforcement across jurisdictions. In the absence of effective international enforcement, there is an opportunity for this to be included in the scope of the Government’s regulator as a core part of the financial sustainability of English football.

It is a pleasure to serve under your chairship, Mr Turner. I have sympathy with what the amendment is trying to achieve, but can the shadow Minister reflect on what it could do to transfers coming into the country? An agent working with Ronaldo could sell him either to an English club, where the fees are capped, or to an Italian, French or Spanish club, where the fees are not capped. Is there a concern that this would limit good players coming into the country?

I discussed that consideration with a number of people in the game before we tabled the amendment. The hon. Gentleman mentioned the French, who already cap agents’ fees at 10%. With this amendment, we are not seeking to say what the level should be—that should be determined by the game in consultation—but we are looking for the game to help to set the cap at a level that does not have the impact that he talks about. But it is a fair challenge. We must remember that the Bill is fundamentally about sustainability. Financial discipline is not just a boardroom concern, but a matter of public trust. Football clubs are more than private enterprises, as we have discussed. They are community institutions. They are the social glue in towns such as Bury, Scunthorpe and Southend, all of which have suffered financial distress in recent years. The idea that hundreds of millions of pounds can leave the game each year in opaque payments to third-party agents while clubs struggle to pay wages, maintain facilities or invest in their academies is becoming increasingly indefensible. Let us be clear: no one is saying that agents do not have a role. Many provide important professional services, such as legal advice, contract negotiation and logistical support, but the current system lacks transparency, consistency and limits. There are countless examples of agents receiving commissions from both buying and selling clubs on the same deal—a structure that would raise red flags in other regulated industries as a clear conflict of interest. Without a cap, there is little to stop the agents’ arms race escalating even further. Clubs are forced to pay inflated fees just to stay competitive in the transfer market. In some cases, they are backed into a corner by players who will not sign unless their representative is paid what they demand. That imbalance needs to be addressed, not with heavy-handed bans, but with clear, enforceable limits that ensure agent fees are grounded in reality and tied to the financial position of the English football pyramid. My amendment would allow for the cap to adapt over time, either up or down, depending on the financial context of the day. This debate also has a clear moral dimension. Football fans—the lifeblood of the game—see money flooding out of the system into offshore accounts while ticket prices rise, lower-league clubs fall into administration, as we have heard, and local facilities are left to deteriorate without needed investment. What message are we sending to those communities if we continue to turn a blind eye to this major issue? The problem is not new. Lord Sugar famously described agents as “ten percenters” during his time as chairman of Tottenham Hotspur. However, in recent years, that 10% has crept up; we now see cases in which agents walk away with fees amounting to 15% or even 20% of a transfer value, and in some instances with fixed payments that are totally unrelated to the value or complexity of the deal. That is not healthy, efficient or sustainable, and it is not a good use of fans’ hard-earned money. This amendment is about putting the interests of clubs, fans and the wider game first. In fact, we believe that clubs in the lower leagues would stand to benefit the most. Although some clubs in the top flight can absorb these costs through commercial revenues or broadcast income, those further down the pyramid often spend a disproportionate amount of their limited budgets on agents. That creates a vicious cycle: less money for youth development, community outreach and infrastructure, and more dependence on short-term deals brokered by intermediaries. By capping agent fees, we would take a meaningful step towards ending that cycle. We could help clubs plan more prudently, negotiate more confidently and operate on a fairer playing field. In doing so, we would strengthen the whole system, from the grassroots to the elite. Let us not forget that the purpose of the Government’s regulator is not to micro-manage football, but to restore public confidence and ensure long-term stability. Agent fees are a glaring blind spot in the current model. If we are willing to regulate ownership tests, financial reporting and fan engagement, surely we must also be willing to act on a financial outflow that directly threatens the viability of many clubs. This is a proportionate, sensible and timely amendment. It allows the Government to tackle one of the most visible and controversial financial issues in football; it helps preserve flexibility; it respects Parliament; and, most importantly, it places the interests of our clubs, fans and communities above those of unregulated market actors. We have an opportunity to help reshape the financial culture of English football for the better. Introducing a cap on agents’ fees is not only a necessary reform, but the right thing to do.

14:15:00

Before we move on, there are one or two points I want to raise. First, we are expecting Divisions on the business in the main Chamber. If there is a Division, we will suspend the Committee for 15 minutes for the first Division, and 10 minutes’ injury time thereafter if required. Secondly, it is a bit warm in this room, so Members are welcome to take off their jackets.

I thank the hon. Member for Old Bexley and Sidcup for his amendment 131. Football is a worldwide industry, and the activity of football agents continues to be a significant contributor to the financial pressures on English football, as well as internationally. We recognise that this is a key issue, which is frequently raised by the industry. Agent fees are a significant cost pressure, particularly on clubs in the Premier League and the Championship. The largest fees are often paid in international transfer activity, where regulation is especially difficult without a global framework. There are also concerns about dual representation and conflicts of interest, which can further inflate costs. However, the regulator cannot be the solution for all of football’s woes. The Bill establishes a club licensing regime with a tightly defined scope, in which agents are not included. The fan-led review recognised that and recommended pursuing an international and game-wide solution to football agents, rather than trying to address the issue in isolation. Acting unilaterally may end up being disadvantageous to English football. It is right that we follow the review’s recommendation not to try and address the issue in isolation, which reflects the unique scale and complexity of English football’s place in the global game. I want to make it clear that the Government acknowledge the importance of this issue, and will continue to work with the industry on agents and fees. We will work closely with governing bodies to support full compliance once legal proceedings conclude in the courts, and to drive forward our shared ambition for transparency, integrity and best practice across the game. We will keep this issue under review, but for those reasons, I ask the hon. Member to withdraw the amendment.

I have listened carefully to the Minister’s comments and acknowledge a number of the points that she made. The purpose behind the amendment was to have the discussion about the impact of fees on the game. I accept some of her points about the international nature of the transfer market. I would like to continue discussing this with her and the regulator once in situ, because I think there is something we can do here, either formally or informally, to move the game along so that it stops losing so much money to agents’ fees. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn.

I beg to move amendment 64, in schedule 5, page 103, line 18, after “specified” insert “from time to time by the IFR”. This amendment clarifies that the IFR may specify certain elements of the mandatory licence conditions from time to time. The regulator will attach four mandatory licence conditions—the financial plan, the corporate governance statement, a fan consultation and an annual declaration—to the operating licence, both provisional and full, of each club. This means that all licensed clubs will need to comply with those requirements. While the mandatory conditions are basic requirements that apply to all licensed clubs as standard, elements within them can be varied. For example, the regulator can specify when a club must submit and update a financial plan, or require that a plan contains additional information. As another example, the fan consultation condition can require that clubs consult plans at specified periods, which speaks to a point that my hon. Friend the Member for Sheffield South East raised earlier. Government amendment 64 simply makes it explicit that the regulator can respecify these elements to the mandatory licence conditions from time to time. The licensing regime is designed to be flexible and proportionate, and the mandatory licence conditions are no different. For instance, a Premier League club’s financial plan is likely to be more detailed than one for a National League club. If a club’s circumstances change—for instance, if it gets promoted or relegated—the regulator should have a chance to respecify the mandatory licence condition to ensure that it remains proportionate. The regulator also needs to be able to keep pace with developments in the industry and changes in best practice —for example, if there are innovations in financial plans or mechanisms for fan engagement. Government amendment 64 simply makes that explicit in the Bill. Amendment 64 agreed to. Question proposed, That the schedule be the Fifth schedule to the Bill.

The schedule outlines the mandatory licence conditions that the regulator will attach to all licences as standard, regardless of the club’s circumstances. Those conditions are related to core areas of financial management, corporate governance, fan engagement, and reporting. They will form the foundations for the overall improved standards and sustainability of a club. Long-term financial sustainability is at the heart of the Bill, and is vital to making clubs more resilient to financial difficulties. The financial plan condition requires clubs to present a plan that allows the regulator to understand the risk profile of the club and its plans for mitigating risks if necessary. That will include contingency planning and plans to wind a club back to a sustainable state if it faces unexpected financial difficulty. Those are not overly onerous requirements, but basic business planning that most well-run clubs will already be doing. It is anticipated that the regulator will help clubs update their plans if they exhibit unmanaged risk. If the updated plan still exhibits excessive risk, the regulator can place discretionary licence conditions on a club to help them meet the financial resources threshold requirement. That ensures that clubs can be ambitious but, equally, that failing to achieve those ambitions does not put the long-term financial sustainability of the club at risk. A key tenet of a well-run business is good corporate governance, and the regulator will look to instil that into all licensed football clubs through the mandatory condition. Corporate governance standards in the industry need improving, with many clubs lacking even the most basic of good governance arrangements, such as a proper, functioning board. In consultation with the Football Association and other relevant stakeholders, the regulator will prepare and publish a code of practice about the corporate governance of regulated football clubs. Through that condition, licensed clubs will be required to submit a statement detailing how they are applying the code of practice. That will include what action they are taking to improve equality, diversity and inclusion. Given the rich variety of clubs and fanbases, good supporter consultation will look different from one club to another. The fan engagement licence condition has been designed to reflect that, empowering the regulator to impose specific requirements on the form and frequency of supporter consultation where necessary. That mandatory licence condition works in tandem with the fan engagement threshold requirement, which is in schedule 4. The mandatory licence condition will be the minimum requirement for all clubs.

Will the Minister give way?

I will address some of my hon. Friend’s points, if he bears with me for a moment. If I do not, I will be very happy to give way. All clubs must regularly consult a representative group of fans or a group elected by the club’s fans to represent them on the relevant matters listed in the Bill. The regulator can specify that the group is formed via fan elections—an additional measure the Government added to ensure the fan group can be independent from the club. The threshold requirement in schedule 4 then empowers the regulator to go further on fan engagement, if needed. It allows the regulator to impose discretionary licence conditions on clubs relating to fan consultation. There are several types of fan engagement that could be used to meet that requirement. No one way has been specified on the face of the Bill in order to allow for a bespoke approach to be taken at each club. We expect, however, that we would likely look to utilise existing structures where appropriate. Those would likely be organisations such as supporters’ trusts or fan advisory boards, which are often key independent fan bodies. To address the points made by my hon. Friend the Member for Sheffield South East, for the most part, individual clubs will be in the best position to understand the demographics of their fans. The regulator will be able to provide guidance for clubs on how best to consult fans, which will include how to approach consulting across a widespread fan base. It is, however, vital that they engage with a representative group of fans, and therefore, if a section of the fan base has not been engaged with, the regulator has the ability to specify the club should meet with them. That will ensure that clubs have an appropriate framework in place that allows them to meet regularly and consult the group on key strategic matters and supporter interest. Clubs in the lower leagues will tend to have more a more local fan base, whereas larger clubs will tend to have fans from across the world. That diversity is part of the reason why the English football pyramid is so special. It is also why we want to implement proportional and flexible proposals that work for clubs across the pyramid. The regulator will implement a minimum requirement for fan engagement, which the regular fan consultations will be a significant part of, alongside protections for club heritage. I hope that answers my hon. Friend the Member for Sheffield South East. I am happy to give way if not, or he can contribute to the debate.

I will contribute to the debate.

Perfect. The annual declaration condition requires a club to submit an annual declaration to the regulator, which sets out all the notifications that the club has made, or should have made, to the regulator in the preceding 12 months. Broadly speaking, these notifications relate to changes in the circumstances affecting the club that the regulator needs to know about to regulate effectively. That includes any non-compliance related to the club. A club will also have to issue a statement even if there are not any matters to notify the regulator about. That will create a formal touchpoint each year in lieu of any licence renewal; the emphasis will be on clubs to declare all relevant changes in circumstances and compliance against which they can then be held accountable.

It is a pleasure to have you back in the Chair, Mr Turner. The Minister is doing all she can to deal with situations that will apply to most clubs. The problem is those owners that do not want to engage. They will try to avoid this responsibility because they see it as an infringement of their right to run their club in the way they want. I have to come back to Sheffield Wednesday because Mr Chansiri has a track record on this. He set up an engagement panel with fans, but he invited the fan groups he wanted to invite. Worse than that, once someone goes into a meeting with him, they have to sign a statement to say that they will not divulge any of the things that happen in that meeting. It is a closed shop. I sat down with a myriad of different groups including the supporters’ trust, which is the biggest fan group by a long way, and several other groups, including the women’s group and the 1867 group. We formed an umbrella group to try to bring all the fan groups together. The club spoke to the groups and said, “If you get involved in the umbrella group, you will not be allowed on the engagement panel.” It is either/or because that is seen as an attack on the club and the chairman. You could not make it up—well, you can make it up, because we can see how the club is run. That is the problem. How do we get around that situation? I was told the other day, “The chairman engages with fans. He has actually had two meetings of five hours each with fans.” But he does not answer any questions. When I asked one of the officers at the club why he will not answer questions, they said, “Well, they wanted to know what his business plan was.” It is not a bad question to ask, and that is exactly what the regulator is going to have the powers to do. I am still not absolutely certain on what happens when the club tries to control the situation. Does the regulator then arbitrate? Does the regulator come in and say what they think good fan engagement looks like? It would be very helpful if the Football Supporters’ Association were to be given some role in that, because it understands fan engagement and fan involvement better than anyone. It knows what happens on the ground, it knows the tricks that the clubs pull and it knows how genuine fan engagement can be developed and implemented. I am not sure a new regulator will necessarily have all that intrinsic knowledge about what happens at clubs. Some role for the FSA in this would be helpful. In particular, it would help when problems arise of the sort that I have just explained. I am sure Sheffield Wednesday are not the only club where owners do not really want fans around—they just want them to turn up, pay their money and go away. The Chair probably cannot get involved in the debate, but I can see you nodding, Mr Turner, because I am aware that there have been a few problems at Hull in that regard in the past. I ask that the Minister provide a bit more of an explanation and flesh this out further. In particular, sub-paragraph 8(2) reads: “So far as the condition requires consultation with persons within sub-paragraph (1)(a), the condition may require the club to constitute a group of such persons”. I know immediately how some clubs will constitute that group, and it will not be proper fan consultation.

I am grateful to my hon. Friend for his contribution. We would obviously expect the regulator to build on relevant expertise internally and via consultation. I have worked with and met representatives of the FSA a number of times. I pay tribute to the work they do, and I am sure that is the sort of group that the regulator will very much draw on. My hon. Friend will completely understand why I am slightly reluctant to comment on live examples. That does not mean that I am not sympathetic to the points he makes on behalf of his constituents. I draw his attention to my remarks about how, if a section of the fanbase is not being engaged with, the regulator has the ability to require a meeting with the club. Where an owner or a club are not engaging, or not engaging effectively, the regulator will be able to intervene.

It is helpful of the Minister to have elaborated on that. Would she go a bit further and say whether she anticipates that the regulator will engage with the Football Supporters’ Association when difficulties arise and there needs to be an independent look at fan engagement with a club?

14:30:00

We have talked about the regulator engaging with a wide range of stakeholders. We anticipate throughout the Bill—in lots of clauses, not just this one—that it will absolutely engage with relevant stakeholders. If a certain group of fans feel that they are being ignored or excluded, or that the owner is not engaging in good faith or appropriately, the regulator has the ability to step in and specify that they should be engaged with more frequently, and sanctions may be imposed if the owner is not behaving correctly. There are enforcement powers that the regulator can draw on. We are clear that, although the approach is flexible and bespoke for different clubs, the voices of fans should be heard. Question put and agreed to. Schedule 5, as amended, accordingly agreed to. Clause 21 Discretionary licence conditions Question proposed, That the clause stand part of the Bill.

The clause relates to the discretionary licence conditions. Where needed, the regulator will use discretionary licence conditions to bring a club up to the required level of compliance with the threshold requirements. That will mean that the regulator is satisfied that the club can currently operate sustainably, and will be able to continue to continue to do so, in the financial, non-financial and fan engagement areas. Those conditions will be in addition to the standardised mandatory licence conditions. When applied, they will be tailored to the club’s specific circumstances and identified financial risk. If a club is already meeting the threshold requirements set by the regulator, there will be no need to attach any discretionary licence conditions to that end. That means that the regulator can be light touch where appropriate, and that it does not need to directly intervene if a desired outcome is already being met. Discretionary licence conditions could also be used to protect and promote the financial resilience of the football system. They will be used to resolve risks that might not threaten any one club significantly, but whose aggregated, correlated or multiplied effects may pose a significant risk to large parts of the football system or the pyramid as a whole. I commend the clause to the Committee.

The clause formally sets out the regulator’s powers to attach, amend or remove discretionary licence conditions, which could bring a club toward meeting a threshold requirement or mitigate financial risks. It raises some concern about mission creep, so I hope the Minister will assure us that the regulator’s powers do not extend beyond those objectives. Should the regulator use the powers to effectively create new burdensome regulatory requirements, that would significantly change the purpose of the regulator. Will the Minister please clarify what engagement the regulator will have with clubs to ensure they are aware of the discretionary licence conditions? Will there be any consultation or engagement with clubs prior to attaching or amending a discretionary condition? Will clubs have the ability to request a variation or removal of a condition? In what timeframe will that be processed? If a club feels that a discretionary licence condition has been placed arbitrarily or punitively, how can it appeal or challenge the condition? What will the process look like, and what timescales will be used? Will the timescales be standardised, or will they be at the regulator’s discretion? Although some larger clubs may have the resources and budgets to appeal a condition, what support will be given to smaller clubs? Have the Government considered the potential merit of a tiered application based on the club’s size? Aside from the concern about mission creep, it is important that these powers are exercised proportionately and based on evidence. Will there be any oversight of their use to ensure that happens? Subsection (4) states: “The IFR may vary a discretionary licence condition where…the IFR considers that the condition is no longer effective, or…there has been a material change in circumstances”. However, it fails to define what constitutes a material change in circumstances. The lack of such a definition leaves the door open for the Independent Football Regulator to vary conditions without sufficient reasons or evidence. We ask those questions now because we are concerned about future legal cases if there is a lack of consistency and transparency surrounding how the conditions are applied. I would appreciate some answers from the Minister.

I am grateful to the shadow Minister for those questions. Throughout this process, we have been keen to reiterate that discretionary conditions must be proportionate to the club’s size and the league it plays in. We absolutely expect the regulator to engage thoroughly with a club before applying any discretionary licence conditions. Perhaps I could just draw on the conversation that we had in the previous debate in terms of fan engagement: I am hesitant to get into hypothetical scenarios, but it might be that, if a club is not effectively engaging with fans, that could be a discretionary licence condition if there is an obvious gap in what the club is doing. If the club does not believe the regulator has made a correct decision, it does have recourse through the appeals process, which is set out in part 9. We want this to be a flexible regime so it can be light touch where appropriate. If the regulator does not need to attach extra conditions, it will not, but it will have that ability to make sure that all clubs are meeting the conditions they need to. Question put and agreed to. Clause 21 accordingly ordered to stand part of the Bill. Clause 22 Scope of powers to attach or vary discretionary licence conditions

I beg to move amendment 107, in clause 22, page 14, line 35, leave out subsection (a). This amendment prevents the IFR from being able to set licence conditions relating to internal controls.

With this it will be convenient to discuss the following: Amendment 108, in clause 22, page 14, line 37, leave out subsection (c). This amendment prevents the IFR from being able to set licence conditions relating to the overall expenditure of a club. Amendment 109, in clause 22, page 15, line 12, leave out subsection (5). This amendment removes the power of the Secretary of State to amend the discretionary licence conditions by regulations.

I rise to speak on clause 22 of this important Bill, which provides the Independent Football Regulator with powers to attach, amend and remove discretionary licence conditions for individual football clubs. At face value, this clause offers the regulator flexibility to respond to particular risks or circumstances on a case-by-case basis. However, as with all regulatory discretion, the true implications lie in how such powers may evolve over time, be interpreted, or be expanded. In this Committee, it is our role to ensure that what begins as a sensible framework for tailored intervention does not become the thin end of a wedge that risks overreach, centralisation and, ultimately, the erosion of club autonomy. I believe strongly that English football does need reform in certain areas, but I also believe in restraint, clarity of purpose and fidelity to the principle that football clubs, however commercial they may have become, are civic institutions first and foremost. They belong to their communities, not to Whitehall, not to arm’s length bodies, and certainly not to ministerial discretion. Clause 22, as drafted, gives the Independent Football Regulator a wide and open-ended ability to impose additional conditions on individual clubs—conditions that are not part of the baseline threshold requirements in the Bill, but which the regulator may, in its own judgment, decide are appropriate. We should acknowledge that there are circumstances in which such powers might be necessary. For example, where a club has narrowly avoided insolvency, has a particularly opaque ownership structure, or is operating under unusual financial pressures, the regulator may wish to impose temporary conditions to help safeguard the public interest, protect creditors or ensure better transparency. That flexibility has its place. However, it must be anchored in the principles of proportionality, accountability and predictability. It is for that reason that I want to speak to three amendments that have been tabled in my name, each of which I believe would help materially improve the Bill by preventing mission creep, protecting the distinct role of the leagues, and ensuring that Parliament, not the Executive, retains the ultimate authority over the scope of regulation. The first amendment would prevent the regulator from imposing discretionary conditions relating to a club’s internal controls—that is, the systems and procedures by which a club governs itself, monitors risks, approves spending and safeguards assets. These are matters properly for the board of directors, who have legal duties under company law, are accountable to shareholders and fans, and must answer to independent auditors. To allow the regulator to second guess those internal arrangements and dictate how a club structures its finance team or risk-management processes would be a significant intrusion into corporate governance territory. Let us be clear: there is a distinction between requiring that a club has adequate systems and mandating the precise nature of those systems. The former is reasonable; the latter, we believe, is excessive. We must also be mindful of the danger that the regulator could, perhaps with good intentions, begin to substitute its own preferred model of governance over the perfectly legitimate models that clubs themselves decide to adopt. For example, what works for a large Premier League club with international operations may not be appropriate or affordable for a League Two club or a community-owned side. Discretionary licensing conditions must not become a one-size-fits-all instrument that penalises innovation, tradition or diversity in club structures. I support this amendment because it would help ringfence those areas of internal decision making that are rightly matters for the club’s board—subject to transparency and good practice but not for centralised prescription. The second amendment that I have tabled would prevent the regulator from imposing licensing conditions relating to a club’s overall expenditure. Amendment 108 would prevent the regulator from imposing licence conditions relating to a club’s overall expenditure. This is a fundamental issue. English football operates within a competitive ecosystem, as we have discussed. Decisions about how much to invest in players, infrastructure, academies or commercial operations are matters of strategic importance for clubs. They should be driven by ambition, fan demand and commercial opportunity, not by the regulator’s view of what is appropriate spending. We must not fall into the trap of conflating good financial regulation with financial central planning. The role of the Independent Football Regulator should be to monitor solvency, ensure robust business plans, enforce transparency and intervene when there are clear risks of harm. It is not the regulator’s job, and it should never become its job, to determine how much a club is allowed to spend. There is a world of difference between assessing whether spending is sustainable and attempting to control outright the volume of that spending. Let us remember that the leagues themselves already impose cost controls. The Premier League has profit and sustainability rules. The English Football League enforces squad salary caps and financial fair play frameworks, and now has the new financial review panel. The regulator is not meant to replace those roles. It is not a shadow competition authority, nor should it seek to override club investment decisions, which often have complex justifications and long-term returns. Amendment 108 would help to ensure that the regulator cannot use its discretionary power to micromanage investment levels. Such a step would go beyond the spirit and the letter of what the Bill intends to achieve. The goal is to protect clubs from existential risk, not to homogenise them or stifle ambition. Amendment 109 would remove the Secretary of State’s power to amend the list of discretionary licence conditions by regulation. This is not a technical point; it goes to the constitutional heart of the Bill. The Independent Football Regulator must be just that: independent. Its scope, duties and powers must be defined by Parliament and subject to oversight. We cannot accept a model in which future Secretaries of State, by regulation and with minimal scrutiny, can expand the areas the regulator may interfere with. That would allow a future Government of any colour to alter the regulatory perimeter at will. Today, it might be internal controls; tomorrow, it might be club ticket pricing, political messaging or hiring policies. The clause must be narrowed to ensure that any expansion of discretionary licence conditions comes through primary legislation that is debated and approved by both Houses. Regulatory stability is vital not only for clubs but for fans, leagues and the broader football economy. Clubs, particularly those in the lower leagues, need to be able to plan over multiple seasons. Uncertainty about what new regulatory burdens might be imposed, or fears that the regime could be altered mid-season by ministerial decree, will have a chilling effect on investment, sponsorship and ambition. Regulation must be predictable and principled, not politicised or ever-shifting. Amendment 109 would safeguard its integrity. Clause 22 presents a risk of regulatory overreach, however well-intentioned it may be. The amendments would not strip the regulator of useful tools. They would simply place guardrails around its discretion and ensure that decisions of fundamental importance to club governance, financial independence and regulatory scope remain where they belong: with clubs, fans and Parliament. We need a regulator that enforces minimum standards, upholds transparency and ensures financial resilience. What we do not need is a regulator that micromanages club affairs or displaces the judgment of boards and owners. Football clubs must remain free to compete, to innovate and to fail or succeed on their own merits—within a fair framework, yes, but not under constant intervention. The amendments reinforce that principle. They are not ideological; they are practical, measured and consistent with the values that underpin the Bill. I urge the Committee to support them and, in doing so, to send a clear signal that we are legislating not to control football but to support it firmly, fairly and with the long-term interests of the game at heart.

I thank the shadow Minister for tabling the amendments, which I will take in turn in responding to the points that he made. Broadly, amendments 107 and 108 concern integral powers for a financial regulator. Limiting those powers by reducing the scope of the regulator’s discretionary licence conditions would jeopardise its ability to achieve its objectives. On internal controls, the conditions cover areas such as the completeness and accuracy of reporting and information from a club, and continued compliance with the rules and regulations. If the regulator had no power to intervene to improve those areas where it was deemed necessary, it would not be able to bring a club up to its non-financial threshold requirement, and therefore the club would be unable to obtain a full operating licence. Similarly, not allowing a financial regulator to require a club to limit its future expenditure to a sustainable amount, for example, would be self-defeating. This is a financial regulator, and it should have the power to intervene in a club’s finances if necessary, but—to respond directly to one of the points made by the shadow Minister —while it can direct the club to reduce expenditure, it cannot specify exactly how that is done, which is for the club to decide. The regulator may only set licence conditions in such areas if a club is not meeting its threshold requirements. Any condition must be proportionate to the issue identified. The regulator must also have regard to whether the requirement or restriction is necessary and to whether a similar outcome could be achieved by a less burdensome means, as per the principles.

14:45:00

On amendment 109, in order to future-proof the regulator’s regime, the Secretary of State will have the power to amend the areas that discretionary licence conditions may relate to. However, it is important to make it clear that that can only be done if the regulator makes a request in writing to the Secretary of State, having carried out a consultation first, and explains why the amendment is needed by reference to the purpose of the Bill.

We have also made it explicit in the legislation that the regulator must consult all regulated clubs, each specified competition organiser and other appropriate persons before requesting any amendments. That means that the Secretary of State will not be able to amend the regulator’s powers to attach discretionary conditions on their own initiative and against the wishes of the regulator. That very much answers the points that the shadow Minister made, and it will limit the risk of unwanted, politically motivated scope creep in future.

To take that ability away from the regulator would remove the future-proofing that will be imperative for it as the sector adapts and develops. The change would fundamentally risk the regulator being unable to deliver its objectives in the future. The necessary checks are in place to ensure that, if the scope were ever to change, scope creep would not occur. For the reasons I have set out, I hope that the shadow Minister will not press his amendments.

I will repeat my arguments, but I listened carefully to the Minister’s response and we remain concerned about various aspects of the clause. That is why we tabled not just one, but three amendments, to try to put some safeguards and guardrails around future powers of the IFR, as I said. Fundamentally, we believe that the ultimate responsibility for managing clubs should be that of the clubs themselves, while engaging with the fans, and we fear that without some of our amendments, the IFR will be too involved with the day-to-day running of clubs. That is why we tabled the amendments. We listened carefully to the Minister, but I am afraid that we are not fully satisfied, so we will press them to a vote. Question put, That the amendment be made.

29|0|2|13|The Committee divided:|Question accordingly negatived.||0|0

Amendment proposed: 108, in clause 22, page 14, line 37, leave out subsection (c).—(Mr French.)

Question put, That the amendment be made.

30|0|2|13|The Committee divided:|Question accordingly negatived.||0|0

Amendment proposed: 109, in clause 22, page 15, line 12, leave out subsection (5).—(Mr French.)

Question put, That the amendment be made.

31|0|2|13|The Committee divided:|Question accordingly negatived.||0|0

14:50:00

Sitting suspended for a Division in the House.

15:03:00

Question proposed, That the clause stand part of the Bill.

Clause 21 outlined the use of discretionary licence conditions, which can be used to bring clubs up to the threshold requirements for a full operating licence, if necessary. They can also be applied to clubs with a full licence if there is a risk that they might drop below the threshold requirements. Clause 22 sets out the scope of powers that the regulator will have to attach or vary a discretionary licence condition. Under the financial resources threshold requirement, discretionary conditions may address only four areas: debt management, liquidity requirements, restricting a club’s overall expenditure and restricting a club’s ability to receive illicit finance. The fourth area, which enables the regulator to restrict a club’s ability to access funding if it has reasonable grounds to suspect it is connected to serious criminal conduct, is integral. It will empower the regulator to limit illicit finance, which is inherently unsustainable for a club. Under the non-financial resources threshold requirement, conditions may relate to only one of three areas: internal controls, risk management and financial reporting. As outlined in clause 21, the regulator can also attach discretionary licence conditions to advance its systemic financial resilience objective. That objective is specifically to address systemic risks or structural issues by applying conditions to multiple clubs, or even to all licensed clubs. Clause 22 limits the scope of such conditions to those that relate to debt management or liquidity requirements, and those restricting a club’s overall expenditure. In order to future-proof the regulator’s regime, the Secretary of State will have the power to amend the areas that discretionary licence conditions may relate to. However, as we have discussed, that can be done only if the regulator makes a request in writing to the Secretary of State, having carried out a consultation first, explaining why an amendment is needed by reference to the purpose of the Act. We have also made it explicit in the legislation that the regulator must consult all regulated clubs and each specified competition organiser before requesting any amendments. That means that the Secretary of State will not be able to amend the regulator’s powers to attach discretionary conditions on their own initiative and against the wishes of the regulator, which, as I said, will limit the risk of unwanted, politically motivated scope creep in the future. I commend the clause to the Committee. Question put and agreed to. Clause 22 accordingly ordered to stand part of the Bill. Clause 23 Procedure for attaching or varying financial discretionary licence conditions Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following: Clause 24 stand part. Schedule 6. Clause 25 stand part.

Clause 23 sets out the procedure for attaching or varying financial discretionary licence conditions on clubs, which ensures that clubs and competition organisers are notified and given the appropriate opportunity to engage in advance when the regulator considers that a discretionary licence condition is needed. Where appropriate, the regulator will look to allow the relevant club and league to address identified issues and risks, so that the regulator does not have to formally intervene itself. That will allow the potential for the football industry to respond to issues, reducing regulatory intervention and producing a better regulatory response and outcome. The industry may be best placed to address specific issues within the overall context of a league’s own regulatory framework. Before any action is taken by the regulator, there will be a period in which leagues and clubs are able to make representations, and the competition organiser will also be able to give a commitment to take action in lieu of the condition being attached or varied as proposed by the regulator. Clause 24 explains in further detail the mechanism for commitments in lieu of discretionary financial licence conditions. It is a final, formal opportunity for competition organisers to offer a self-regulatory solution to a problem identified by the regulator, so that the regulator does not have to step in. It is another important aspect of the regulator’s approach, which emphasises engagement and working with the industry to minimise formal intervention where possible. The regulator will still have powers to step in if the issue is not resolved, but the mechanism will give a competition organiser the chance to present a football industry-led solution to an identified risk. The regulator can accept a commitment if it concludes that it should achieve the same results as the proposed discretionary licence condition and it does not conflict with the regulator’s objectives. The regulator does not have to accept the commitment, although, if it does not, it must provide reasons why. If a commitment proposed by a league will not achieve the regulator’s desired outcome, the regulator can reject it, and it will retain the power to intervene directly by imposing a discretionary licence condition on a club where any accepted commitment proves ineffective. Schedule 6 expands on clause 24 by outlining the procedure where a competition organiser gives a commitment that the regulator is minded to accept, or requests a variation to a commitment in force, in lieu of the regulator’s attaching a financial discretionary licence condition to a club. The intention, as I referenced earlier, is for commitments to provide a less burdensome solution for all parties and still address the identified risk. However, for that to be the case, it is important that there is a clear procedure for interaction between clubs, the relevant competition organisers and the regulator, and the schedule sets out that procedure in further detail. Clubs can make representations to the regulator before accepting a commitment from a competition organiser, as well as before a competition organiser is released from a commitment. Clause 25 sets out the procedure for the regulator to attach or vary a discretionary licence condition relating to the non-financial resources threshold requirement or the fan engagement threshold requirement. The regulator must notify the club and give it a period of no less than 14 days to make representations, but the clause allows the regulator to take more immediate action in situations that are more urgent and serious: if it thinks that giving a club notice and allowing a period for representations will jeopardise or risk jeopardising one of its objectives, it can apply the discretionary licence condition immediately and without prior notice. I commend the clause to the Committee.

Clause 23 sets out the process that the Government’s new regulator must follow when it wishes to attach or vary a financial discretionary licence condition, which are by definition additional obligations that the regulator may impose on clubs that go beyond the mandatory licensing framework. In doing so, the clause confers on the regulator considerable further discretion. As with other discretionary powers in the Bill, the risk is not merely that the regulator uses its discretion, but that it does so inconsistently, unpredictably or in a way that strays beyond its core remit. Given that the powers provided by the clause relate directly to the financial obligations of clubs, the implications for competitiveness, investment and long-term planning are significant. Although it is welcome that the clause does not set out a consultative process for how the financial conditions are imposed or amended, the process must not be a box-ticking exercise. Clubs should be able to challenge unreasonable conditions, and the regulator should be required to justify in clear terms why any new financial burden is necessary to meet the threshold requirements. It cannot become the case that discretionary conditions are routinely imposed as a back-door method of raising standards in areas for which Parliament has not explicitly legislated. The risk of regulatory mission creep is particularly acute in a sector like football, in which the boundaries between finance, governance and culture are easily blurred. That is why we will be looking closely at whether there are sufficient checks, balances and transparency mechanisms in the clause to protect clubs from arbitrary financial conditions. Will the regulator issue any guidance on financial discretionary licence conditions, and will that guidance be made public? Will the Minister consider requiring an annual report to Parliament detailing how many clubs have had such discretionary financial conditions imposed, varied or removed, and on what grounds those decisions were made? Without such checks, there is a real risk of an unequal competition taking place without fans and Parliament knowing, until it is too late and UEFA and FIFA have ejected us from their competitions. That is what I most fear may happen by accident. As we have discussed at length, the Bill is already flawed in this respect, and UEFA and FIFA would intervene if the regulator caused any impact on competitiveness. I only have to highlight the example of Crystal Palace, which is currently in the press, to demonstrate that UEFA and FIFA will stick to their rules rigidly, whether we like them or not. As I said when speaking to my amendment 97, any new licensing requirements introduced by the IFR must be meticulously aligned with existing UEFA and international frameworks. Does the Minister accept that clubs, as entities directly impacted by licensing regulations, must have a voice in the development and implementation of these requirements? As the clause stands, her new regulator will be able to attach or vary financial licence conditions that would that mean one club becomes more competitive than another. She has said that she intends for the regulator to be able to adapt to the circumstances of each club. However, we must be mindful that that would mean changing the level of competitiveness between clubs. That is the key risk. That is not a political point; it is sadly a risk and a fact of which we have to be mindful. Let me stress-test that with a hypothetical question for the Minister on the Bill’s impact. Brighton & Hove Albion and Aston Villa will both compete in the Premier League next season, both have been in that league for a number of years, and both also compete for European football. If her regulator decided, for whatever reason, that Brighton required stricter or simply more financial licensing conditions than Aston Villa, there would be a competitive imbalance between the teams. Does she accept that fact, which is plainly obvious, and recognise that such club-by-club tailoring of rules and licence conditions is potentially a violation of UEFA and FIFA rules on fair competition? To give her a bit of time, I ask her to respond to that concern after I have spoken about the other provisions in the group.

My hon. Friend the shadow Minister sets out his question very well. It sounds as though the situation could get very complicated, especially over time, as the regulator might impose certain conditions on certain clubs and severely distort the market. Does he have any comment on that?

That is exactly my concern. In trying to tailor the conditions that we are discussing, there is a risk of inadvertently impacting the ability of clubs to compete on a fair and level playing field. I am concerned that that should not happen inadvertently, as the regulator evolves. That is why I keep pushing for more parliamentary oversight, so that we understand the risks. At the end of the day, fans will not forgive us as Members of this House if this goes wrong. I do not believe in any shape or form that the Government are aiming deliberately to get it wrong—I say that openly—but I fear that there will be unintended consequences, and that is the broader point that we have been trying to make in a number of the Committee’s debates.

15:15:00

The provisions in clause 24 and schedule 6 introduce the concept of clubs making commitments in lieu of having formal financial conditions imposed, effectively allowing for a form of regulatory agreement, rather than an edict. On the face of it, that is a welcome nod to flexibility and pragmatism. However, it still raises a number of important questions.

First, the clause states that such commitments must be made in writing and be approved by the regulator. However, what is not clear is what happens if a club makes such a commitment in good faith but is later deemed to have fallen short, even when it believes that it is acting in the spirit of the agreement. Is there a clear process for appeal or arbitration in such cases, or could we see a scenario in which the regulator retroactively determines that a club has failed to meet a commitment and proceeds to impose harsher conditions than would otherwise have been applied?

Secondly, there is the issue of proportionality. If such commitments are to become a widespread feature of the regime, which might well be the case for clubs that fall just short of what is determined to be the threshold of appropriate financial resources, what safeguards exist to ensure that they remain proportionate and realistic and do not undermine the competitive balance that I was just talking about?

That point also links directly with schedule 6, which sets out how such commitments are to be made, varied, monitored and potentially enforced. The schedule allows the Government’s regulator to apply a wide range of powers to revoke commitments, impose conditions if a commitment is breached, and assess compliance on a continuing basis. Again, the question is how these powers will be exercised in practice going forward. Schedule 6, as drafted, effectively gives the regulator the ability to revert to hard-edge regulatory action if it decides unilaterally that a club is not delivering on its commitments. There may well be circumstances in which that is appropriate, but if clubs are to be encouraged to work co-operatively with the Government’s regulator, as this clause and schedule purport to ensure, we must also ensure that they are not penalised for taking a flexible and negotiated approach. Does the Minister agree that a regulator that penalises good faith co-operation will quickly lose the trust of clubs and fans?

Finally, there is the issue of consistency. As I have said, there must be a level playing field in how the commitments are offered and assessed, otherwise we may end up with two clubs in similar financial positions being treated entirely differently, on the basis not of risk but of regulatory discretion. That could not be allowed to stand. As I said earlier, I fear that a number of legal cases would follow if similar clubs are dealt with inconsistently by the regulator. Will the Minister commit to publishing guidance on that, or to instructing her regulator to publish such guidance?

In conclusion, we do not oppose the principle of financial discretionary licence conditions, nor the ability to agree to commitments in lieu, provided that they are used sparingly, transparently and with full accountability. These clauses touch at the very heart of the regulator’s discretionary powers; they give it tools that could be used to foster financial resilience and good governance, or, if mishandled, to impose burdens, inhibit innovation and entrench unfairness. It is essential that the Government’s regulator sticks to its remit.

Football oversight needs to be proportionate, predictable and principled; it does not need arbitrariness, conditionality or creeping micromanagement. We support the intention behind the clauses, but we will continue to scrutinise their use and press for guardrails that ensure that clubs are not subject to undue interference and that the English game remains open, competitive and self-confident, both on and off the pitch.

Clause 23 already tightly constrains the regulator’s ability to set discretionary licence conditions, and the shadow Minister’s earlier amendment sought to tighten that further, but it would have left the regulator unable to act as necessary to ensure financially sustainable clubs. It would have been unable to manage unsustainable debt or spiralling spending. The regulator must act in accordance with its objectives and duties at all times, which include transparency and consistency. It can tailor regulation to clubs that will not breach UEFA statutes. I draw hon. Members’ attentions to page 14 of the Bill, which outlines in detail the scope of the powers to attach or vary licence conditions. Of course, a discretionary licence condition relating to the financial resource threshold requirement may only, as I said earlier, “relate to debt management…relate to liquidity requirements…restrict the club’s overall expenditure, or…restrict the club’s ability to accept or receive funding which the IFR reasonably suspects to be connected to serious criminal conduct.” We expect the regulator to work with clubs. If they are acting in good faith, we have said all along that the regulator will work with them. I think that answers the shadow Minister’s points. In my opening remarks on this clause, I outlined in detail that there is a process available to come to a football-led solution. If the regulator thinks that giving a club notice or allowing for representations would jeopardise or risk jeopardising one of its objectives, it can apply the licence condition immediately, without prior notice. However, there is scope within the Bill and the regulator’s powers to reach football-led solutions in which it works together with clubs. Question put and agreed to. Clause 23 accordingly ordered to stand part of the Bill. Clause 24 ordered to stand part of the Bill. Schedule 6 agreed to. Clause 25 ordered to stand part of the Bill. Clause 26 Part 4: overview and interpretation

I beg to move amendment 75, in clause 26, page 19, line 20, at end insert— “(c) respects and promotes the protection of human rights and prevents modern slavery (as set out in section [Human rights and modern slavery considerations]).” This amendment is linked to NC8.

With this it will be convenient to discuss new clause 8—Human rights and modern slavery considerations— “(1) When considering whether a person (‘A’) satisfies the requirement in section 26(7)(c), the Regulator shall have regard to (among other things)— (a) whether A has been complicit in any egregious or consistent violation(s) of international human rights law, whether of any international human rights treaty, customary law, or other instrument, (b) whether A has been convicted, cautioned or reprimanded or complicit in any egregious or consistent violation(s) of domestic human rights legislation, including breaching provisions in the UK Modern Slavery Act 2015 or equivalent national legislation, (c) whether A has been subject to a Slavery and Trafficking Prevention Order, (d) whether A has been found liable in a civil claim relating to a human rights violation, (e) whether A has been convicted of an offence, cautioned or reprimanded for failing to comply with their human rights and modern slavery reporting and due diligence obligations under applicable domestic legislation, (f) any representations made by A or the club in accordance with the notice. (2) In subsection (1)— (a) where A is a body corporate or other non-corporeal entity (including a government or nation state), the Regulator shall consider the actions of anyone who controls that body corporate or entity (and “control” shall have the meaning given in section 255 of the Companies Act 2006). and (b) the Regulator shall have absolute discretion to determine whether conduct falls within any of the categories in paragraphs (a) to (d). (3) In respect of subsection (1)(c) and (d), a risk of disrepute shall not be valid grounds for disqualification of any person if such disrepute would, in the reasonable opinion of the Regulator, be unfounded. (4) In accordance with Schedule 2, Part 2, paragraph 15, the Regulator may establish a committee or committees to discharge its functions under this Clause.” This new clause would prohibit individuals with a record of human rights abuses from club ownership.

It is a pleasure to serve under your chairship, Mr Turner. The amendment would prohibit individuals with a record of human rights abuses from club ownership. Our national game is a source of huge pride to our country and everyone in this room. It should not be exploited by individuals and regimes that want to launder their reputations using some of our greatest cultural and sporting assets. Strengthening the proprietary tests for prospective owners and directors, with clear tests about human rights, would enable UK football to promote and protect what we know is special about our game and would promote and protect the liberal and democratic western values that we all hold so dear. It is wrong that we allow football to roll out the red carpet for despots. Let us consider a future in which the owner or potential owner of a football club is also the head of a state or a Minister in the Government of a foreign state that suppresses its own people or is involved in illegal military action, perhaps in a failed state. That owner is also clearly financially linked to activities that involve the plunder of that failed state’s mineral wealth. If that person were to be linked directly to such action, which breaches international human rights laws, would this Government, football and this country accept it? We think that we should not, and that is why we have tabled the amendment and the new clause.

I thank the Liberal Democrat spokesperson for explaining the objectives behind the amendment, which is aimed at preventing individuals with a record of human rights abuses from owning a club. My question for the hon. Member is about new clause 8(2)(b), which states that “the Regulator shall have absolute discretion to determine whether conduct falls within any of the categories in paragraphs (a) to (d).” In other words, it will have discretion to determine whether such conduct constitutes human rights abuses. Given we are talking about a football regulator, the obvious question to ask is about what qualifications the regulator would need to make such a decision. What information could they rely on? Would we be looking for Government involvement in that, given that that would probably provide the intellectual experience required? Does the hon. Member for Cheltenham think it might improve the new clause to include a route of appeal against such a decision, as a matter of natural justice, so we are seen to give individuals the right of appeal if they believe that they have been wrongly classified?

I have sympathy with the aims of the amendments, but I also have a few questions. I wonder whether the wording in the Bill about “requisite honesty and integrity” might cover the issue that the hon. Member for Cheltenham is trying to deal with in new clause 8. I note that amendment 75 would do more that protect against owners with a record of human rights abuses, because it would require them to promote human rights. I obviously have no problem with people promoting human rights, but the amendment would put a duty on an owner to do something positive to show that they are fit and proper. I wonder whether that is really the hon. Member’s intention.

It is once again a pleasure to serve under your chairship, Mr Turner. I thank the hon. Member for Cheltenham for tabling his amendments. It is absolutely right that clubs should have suitable owners, which is why the new statutory owners and directors test is a key focus of the regulatory regime. Because we have provided the regulator with statutory powers, including information-gathering powers and information-sharing gateways with other government agencies such as His Majesty’s Revenue and Customs, the regulator will be better placed to apply all elements of its tests than the relevant leagues. Unlike the tests used by the leagues, the regulator will assess owners’ and officers’ suitability in the round, as well as any relevant mitigating circumstances, leading to a better determination of whether an individual is suitable. A core part of the owners and directors test is the fitness test, which the hon. Gentleman’s amendments seek to expand. The individual ownership fitness test criteria—honesty and integrity, and financial soundness—have been carefully designed. The relevant matters the regulator must consider are listed in clause 37, which I will speak to in a later sitting. They are based on precedent, and are specifically relevant to whether someone is suitable to be an owner of a football club. All individuals will be tested against the same criteria. I reassure the hon. Gentleman that much of what his amendments seek to achieve is already delivered by the Bill as drafted. In line with the relevant matters listed in clause 37, if an individual has had legal proceedings brought against them, whether civil or criminal, including in the international courts, the regulator must have regard to that. The regulator will also look at whether the individual has had regulatory or disciplinary action of any kind brought against them. If that action has a bearing on their honesty or integrity, the regulator must take that into account and could potentially find them unsuitable on that basis. That means that offences under the Modern Slavery Act 2015 or equivalent legislation, whether in the UK or elsewhere, are already captured by the Bill’s owners and directors test, as are any behaviours that have given rise to legal, regulatory or disciplinary action against the owner in any forum, as well as egregious actions committed outside the UK that can be proven and that would have been criminal if done here. In addition, the regulator will consider whether any individual is sanctioned by the UK Government—for example, because of their connection to a foreign state. The regulator will take those things very seriously. Where the amendments go further than existing drafting, however, we believe they are not appropriate. New clause 8 gives the regulator absolute discretion to determine who is “complicit” in violations, but complicity is not a clear legal test. That would fundamentally undermine the general principle of how the test is applied, and would lead to a subjective decision. The Bill, as drafted, ensures that any negative determination the regulator makes must be evidence-based. It will test every individual against the same criteria. It is crucial that it remains that way. The new clause also states that the regulator can establish a committee to help make decisions about owners. We agree that it is important that the regulator can do that, which is why it is already possible under schedule 2, so there is no need for the amendment. The shadow Minister also spoke about appeals, which we will come on to when we debate clause 28. For the reasons that I have set out, I ask the hon. Member for Cheltenham to withdraw his amendment and not to move the new clause.

15:30:00

I am reassured by what the Minister has said. The points raised by Conservative Members are all valid and we will take them on board. On the point about honour and integrity, I suggest that the kind of people who commit these crimes will not admit to them readily. In cases that may arise, it may be obvious that something has happened only after some time, and individuals who we know have been doing something might end up owning football clubs. If that were to occur in the near future, we might reflect on today’s discussion and the powers that the regulator might have had. We do not intend to press the amendment to a vote—we recognise the numbers in the room—but I am glad that we have put the debate on the record. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss new clause 15.

We have seen too many instances of unsuitable custodians mismanaging clubs, taking risks that jeopardise a club’s long-term future, and disregarding the interests of fans and communities. It is evident that the industry’s existing tests have not been effective enough at screening and rooting out bad actors. Existing tests are conducted on a self-declaration basis, as the hon. Member for Cheltenham just mentioned. Consequently, those tests have allowed in owners who have long histories of business bankruptcies, and owners have later been imprisoned for crimes including money laundering. That is why part 4 of the Bill establishes strong, new statutory owners and directors tests, including by giving the regulator the power to test the suitability of prospective new owners and officers before they can enter regulated clubs, as well as the power to test incumbent owners and officers in certain circumstances. The clause provides an overview of part 4 and signposts to the rest of the clauses in this part of the Bill. I commend the clause to the Committee.

It is a pleasure to serve under your chairship, Mr Turner. I thank my hon. Friend the Member for Wokingham (Clive Jones) for tabling new clause 15. It is the result of close co-operation between local parliamentarians and the Supporters Trust at Reading, which I have mentioned previously. I thank it for its constructive approach to the Bill. The new clause mandates that individuals must notify the IFR if they are aware of any evidence that indicates a change in circumstances that could affect the ability of club owners or key personnel who are essential to the management and survival of football clubs to meet the statutory fitness criteria set forth in clause 26. It is widely recognised that whistleblowing is a vital tool for public scrutiny and accountability of individuals, and that wrongdoing and bad practice need to be called out. It is therefore essential that there are protections to encourage people to speak out. The new clause seeks to flesh out formal whistleblowing routes with regard to football ownership. Although I welcome and recognise the detail already included in the Bill on that, we need to go much further. We need to expand the list of groups and stakeholders who would be required to report any concerns that they have about the suitability of owners or officers, including the governing body for the relevant league, the football supporters’ trust and the Football Supporters’ Association. It is often the case that those stakeholders have more knowledge about the day-to-day operations inside a club than fans, due to their proximity to the club’s inner workings. As many fans do not have the same connection or influence as such organisations, it is vital to provide a strong and accessible voice for them when issues arise, particularly when evidence concerning the survival of a club comes to light. It is essential that the individuals listed in new clause 15 have the opportunity and route to escalate their concerns when necessary. If we take as an example my local EFL club, Reading, there may have been some people in the EFL and in the club itself who had suspicions about the deteriorating situation at the club long before those problems came to the surface and to the attention of the fanbase. If this new clause had been in place, it would have given stakeholders a formal route to raise such concerns and ensure that Dai Yongge was scrutinised properly. That could have gone some way to resolving the situation before the club ended up teetering on the brink; it is only recently that it has been sold and been able to recover. To conclude, new clause 15 would enable accountability and monitoring of owners during their time in charge. Football club owners are temporary custodians of heritage assets that are vital to our communities; at the very least they should face regular scrutiny. It is for those reasons that I hope new clause 15 is accepted.

Once again, I have some sympathy with the aims of the new clause and I see where the hon. Member is trying to go with it. However, as it is currently drafted, it has a lot of breadth and contains vagaries that could throw up all sorts of issues. I will just deal with those issues briefly. By the way, I like the idea of identifying “material change” to the extent that someone who may once have been considered fit and proper is no longer considered fit and proper, because of something that has happened or something that has been identified. I have a problem with imposing a duty, particularly on some of the groups set out in paragraphs (a) to (f) of subsection (2). For example, there would be a positive duty on “club employees”, which would include some very junior members of staff. In English law, imposing a duty on someone to do something is fairly exceptional. Although I could probably tolerate imposing a duty on “officers and board members”—if people have attained that level within an organisation, they should expect duties to come with it—I could not tolerate imposing a duty on all “club employees”. That is a difficulty I have. Also, that list is not exhaustive. Subsection (1) refers to: “ Individuals or organisations associated with a regulated club”. That could capture a lot more people than those listed in subsection (2). I am also slightly concerned that the duty for notification applies: “when they”— that is, the person— “have evidence or information that a material change in circumstances has occurred”. I suspect that that could open the floodgates and be misused as a means to try and potentially smear someone, or raise questions about whether they are fit and proper, based on some pretty spurious “evidence”. Such evidence could be pretty much anything—even a trivial matter. I would have hoped that there would be some sort of threshold, such as evidence that points to a strong or compelling case. “Evidence” on its own is a very, very low bar and could encourage all sorts of minor allegations that could make the job of the football regulator far bigger than it is intended to be. Otherwise, I broadly support what the hon. Gentleman is trying to achieve.

I thank the hon. Member for speaking to the new clause on behalf of his colleague, the hon. Member for Wokingham. The point that he made is very interesting and I have great sympathy with fans of Reading football club, who he referred to, and with fans of other clubs around the country that have fallen foul of their owners, who, I think it is fair to say, did not have the club’s long-term interests at heart. I say that as someone who has already referred to Charlton a number of times in this Committee—been there, done it, got the T-shirt. As I say, I have a lot of sympathy with fans of Reading and I hope that the future looks brighter for that club. Even before the election, I publicly supported strengthening ownership tests. I believe them to be part of one of the most fundamental roles that the regulator should play. We should ensure the consistency of those tests between the leagues, and we should ensure that up and down the country we have the best people in charge of such community assets, and that they have the long-term interests of clubs at heart, as I believe the overwhelming majority of club owners do. Those examples of where problems came to a head and caused significant damage to communities have proven that there is a difference in some of the tests applied by the leagues historically, with gaps and loopholes that individuals have looked to exploit. Such examples have also highlighted the need for ongoing review by the regulator about how it manages the information that comes to light. An owner might be deemed an appropriate and fit person to run a club in 2025, but changes to their financial circumstances—assuming that they have other business interests—could mean that they become more stretched, and they might be involved in other activity that comes to light, so it would be right for the review to take place as early as possible to minimise the potential damage to clubs. My hon. Friend the Member for Isle of Wight East posited a number of important legal challenges around this point of duty. I have sympathy with the broader objective of new clause 15, but this issue of duty poses a number of risks for people who are not board-level employees or in significant roles of influence. I think that all Members would seek to avoid a situation where people disengage from a process because they are concerned about that word “duty”, and what that could leave them exposed to legally if they were to come across information, for example, but did not feel confident in passing it on. That might arise in a variety of circumstances, but I am interested to hear the Minister’s comments on new clause 15 in particular and on how we can seek to deliver the broader objective of strengthening ownership tests, without having to go down the rabbit hole of this duty element.

I thank the hon. Member for Wokingham for tabling new clause 15 and the hon. Member for Newbury for speaking to it, but it is already open to anyone, including all those listed in the new clause, to share relevant information with the regulator. That is in addition to the existing requirements on clubs, owners and officers, which the new clause unnecessarily duplicates. I assure the Committee that the regulator will take credible reports about unsuitable owners or officers very seriously, whether they come from a whistleblower inside the industry or any other source. We do not need to create a separate obligation in the Bill for individuals to report information to the regulator. In fact, new clause 15 would place regulatory obligations on new individuals and organisations, thereby extending the effect of the regulator’s regime. It would take things a step further and create a duty—beyond the relevant owner, officer or club—for club employees, competition organisers, supporters trusts, the FSA and Fair Game to notify the regulator. As matters stand, anyone including owners, officers, club employees, competition organisers, the Football Supporters’ Association, trusts and supporters can notify the regulator if they have information regarding an individual’s suitability to be an owner or an officer. There is no need for any specific legislative provision to enable that. As the regulator will only regulate clubs, owners, officers and competition organisers, we believe that it would not be appropriate to obligate other persons to report any changes to the regulator. The new clause would extend the scope of the regulator. The key point is that we do not think that that should be a duty. It is of course open to all those whom I have listed, and indeed any others, to approach the regulator, which as I say will take any reports seriously.

I thank the Minister for the clarification, which I hope is helpful to the hon. Member for Newbury. In essence, is she saying that it is important for regulators to create an atmosphere of confidence, where individuals who have that type of information can share it with the regulator directly, irrespective of new clause 15?

Yes, absolutely. We very much want that confidence to be established. We simply do not think that regulating junior employees, supporters trusts or the FSA is appropriate or proportionate. On that basis, I would be grateful if the hon. Member for Newbury did not press the new clause to a vote.

Given the assurances of the Minister, I am happy not to move new clause 15. I thank the hon. Member for Rushcliffe for seeking clarification about the atmosphere that will be created. Question put and agreed to. Clause 26 accordingly ordered to stand part of the Bill. Clause 27 Duties to notify IFR of prospective new owner or officer Question proposed, That the clause stand part of the Bill.

15:45:00

The regulator’s owners and directors test has been designed to prevent unsuitable custodians from running or owning clubs. Therefore, the regulator needs to know who a club’s prospective new owners and officers are before they buy or join a club so that they can be tested. Clause 27 places duties on a person to notify the regulator when there is a reasonable prospect of them becoming a new owner or officer of a regulated club. This will ensure that the regulator receives advance notice that an application should be coming, and it will help the regulator prepare to act quickly when it receives the application. The clause also places the same duty on regulated clubs themselves, as another means of ensuring that the regulator will be notified. The regulator needs to know a person’s role at the club so that it can prepare to assess whether they are suitable to be an owner or officer of that club. That is why, where the notification relates to an officer, the notification must state their proposed job title or job description, and any senior management functions they will carry out. Enforcement measures, such as censure statements or financial penalties, are available to the regulator should it determine that this requirement has not been complied with without reasonable excuse. That will deter those who do not wish to comply with the regime. I commend clause 27 to the Committee.

As the Minister just outlined, clause 27 requires regulated clubs to notify about prospective new owners and officers if there is a reasonable prospect of such a change. It also requires an officer’s proposed job title, job description and senior management functions. If the football regulator is not notified before the change, the club must notify as soon as practically possible. I am slightly concerned that this could be a burdensome requirement on some clubs. Any large organisation, such as a football club, will often cast a wide net when considering such appointments, with people on the radar long in advance. I therefore ask the Minister to enlighten us on what she believes constitutes “a reasonable prospect”. For example, would media speculation that the right hon. Member for Houghton and Sunderland South (Bridget Phillipson) might move to the Minister’s Department be considered “a reasonable prospect”? There are non-political examples of how that might work too, but it would be interesting to hear what the Government believe to be a reasonable prospect.

I am grateful to the hon. Gentleman for his contribution. As with everything throughout this Bill, we would expect the regulator to act proportionately. Where there is a reasonable prospect, it is obviously very helpful for the regulator to be informed of that, because that will, of course, allow them to move as speedily as possible. We therefore think this is an appropriate provision. The hon. Gentleman tempts me to get into other examples, but I will resist that, if he does not mind. Question put and agreed to. Clause 27 accordingly ordered to stand part of the Bill. Clause 28 Determination of suitability required for new owner Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss clauses 29 to 32 stand part.

As we have heard throughout the passage of the Bill, football clubs hold unique importance to their fans and local communities, and it is these fans who lose out when clubs are exploited or mismanaged by unsuitable owners and officers. Clause 28 prohibits a person from becoming a new owner of a club unless the regulator has determined they are suitable to own that club beforehand. Prospective new owners will be required to provide an application containing information about how they propose to run a club and where club funding will come from. This will better ensure that prospective owners are clear from the outset about how they would deliver their plans for a club. Once a complete application has been provided, the regulator can only pass the individual owner if the following requirements are met. First, the individual must meet the individual ownership fitness test. This means that they have the requisite honesty and integrity and are financially sound. Secondly, they must have sufficient financial resources. Finally, the regulator must not have grounds to suspect that the individual has any source of wealth that is connected to serious criminal conduct, including crimes such as drug trafficking and fraud. This will better mitigate against illicit finance in the game by requiring new owners to undergo the regulator’s test. Clause 28 will prevent unsuitable custodians from ever becoming owners. Clause 29 prohibits individuals from becoming a new officer of a regulated club unless the regulator has determined that they are suitable beforehand. Once the prospective officer has provided a complete application to the regulator, it will assess them to ensure they meet individual officer fitness criteria. That means they must possess the requisite honesty, integrity and competence, and be financially sound. If the regulator is satisfied that the individual meets those requirements, it must find them suitable to be an officer of the club; otherwise, it must find them unsuitable. When making this determination, the regulator will take into account the matters listed in clause 37. By requiring new officers to undergo the regulator’s test, this clause will stop unsuitable individuals from becoming officers. It is possible that someone might take up a position at a club without first having undergone the owners and directors test. That may be a blatant and deliberate breach of the requirement to undergo the test before joining the club. A prospective owner may act in bad faith, hoping that once they are “in”, the regulator would be more hesitant to fail them. However, in some circumstances a person may fall within the definition inadvertently or have some other relatively innocent reason for the breach. This may occur, for example, when a person inherits significant equity in a football club. Alternatively, a person may dispute in good faith whether their actions bring them within the Bill’s definition of an owner. Therefore, where a person becomes a new owner or officer without the regulator having determined their suitability, clause 30 gives the regulator the power to respond decisively but flexibly. When the regulator becomes aware this has happened, it has two options: to either notify the new owner or officer that they are automatically treated as unsuitable, or require them to submit an application as though they were a prospective applicant. The regime cannot be allowed to be abused; the regulator must have the discretion and the teeth it needs to address harm to the sector. Clause 30 is an important step to achieving this aim. If the regulator is minded to fail a new or prospective owner officer, clause 31 requires the regulator to give that person and the relevant club the opportunity to make representations. This must take place before the regulator makes its final decision. That will allow a new owner, officer or relevant club an appropriate opportunity to argue their case before the regulator finds them unsuitable. This ensures the regulator has all relevant information available to it, allowing it to make better decisions so that the regime is more effective. Football is a fast-paced industry where clubs operate within constraints such as league seasons and transfer windows. Timely decisions about the suitability of new owners and officers is important for clubs’ financial sustainability. Without deadlines, we have seen league determinations drag on, unable to reach a decision. The regulator will need to conduct a thorough level of scrutiny of new owners and directors, but it also needs to make decisions in an appropriate timeframe to ensure clubs are not unnecessarily impacted. That is why the regulator will be subject to a statutory deadline when it tests the suitability of new prospective owners and officers, which clause 32 sets out. When a complete application is provided, the determination period starts. By the end of that period, the regulator must find an applicant suitable or unsuitable. As well as providing certainty to the industry, the deadline will incentivise new owners and officers to provide the necessary information the regulator needs to assess suitability in a timely manner. If the regulator cannot decide before the initial deadline is met, it can extend the determination period, and this will provide it with the necessary flexibility to gather more information to make well informed but timely decisions. The determination period, including the maximum amount of extra time, will be set by the Secretary of State in secondary legislation. This will ensure the regulator is bound by it—but there is still flexibility for the deadline to be amended in the future. If the regulator cannot make the decision before the period expires, the person is automatically determined to be unsuitable. This means that only owners or officers that the regulator is confident are suitable will be allowed to get involved with clubs. The measures set out in the group of clauses will form a key part in ensuring our clubs have suitable custodians, which in turn will help to safeguard the financial sustainability of football over the long term. Therefore, I commend the clauses to the Committee.

Clause 29 prohibits any person from becoming an owner of a regulated club without first applying to the independent football regulator and being determined suitable for that role. It requires any applicant to provide information on the proposed operation of the club, estimated costs, how those costs will be funded and the source of funding, which is a point that is been raised already in this Committee. The football regulator must make an affirmative determination regarding the application if the potential owner is considered to have sufficient financial resources and meets the individual ownership fitness criteria. I already spoken about why I believe it is important that these fitness tests are strengthened wherever possible, but there are a couple of questions I would like to ask the Minister on this clause first. What assurances can the Minister provide that this process will be completed swiftly and will not unnecessarily delay any ownership changes which, as we have already discussed, may need to happen very quickly when a club is under significant financial stress—to ensure wages are paid and to prevent further hardship when seeking a change of ownership? Clause 30 sets out what should happen in the event that a person has become an owner or an officer of a regulated club without first obtaining the suitability determination from the football regulator. The clause assumes that the football regulator “becomes aware”; is the expectation that there is a disclosure from the club, or will the IFR be probing clubs, looking at news reports, Companies House and so on? It would be helpful for Members to have an insight into how that might look, because this clause does not offer a specific timeframe within which the football regulator must act at once if it becomes aware of an unauthorised appointment at a club. It also seems that the football regulator can indefinitely extend the deadline for submitting such an application; the clause fails to clarify how many times and under what conditions. I therefore wonder whether the Minister has considered the potential effects on the stability of the club of the football regulator deeming an individual unsuitable: would that open clubs to legal or operational risk, and would there be financial consequences of those risks? It is vital that decisions taken by the regulator are independent and impartial, as already discussed, so what safeguards will there be to ensure that neither media nor political pressure is exerted on the football regulator to deem an owner unsuitable? Clause 31 states that the football regulator must “have regard to” representations from affected clubs or individuals. What does that constitute in reality—a response, or simply a consideration? Must the football regulator provide written reasoning if it rejects the arguments made in the representation? Does this clause not lack basic safeguards and, without a framework for how representations should be made or evaluated, does it not risk leading to inconsistent decision making? Again, I fear there would be various legal challenges, given the financial implications of such decisions. There is also no requirement, it appears, for the football regulator to consider other external stakeholders, which could include other directors or supporters’ trusts involved with the running of a club. Should an individual receive a negative determination, the legal and financial resources to make a strong representation within a specified timeframe might be considerable. Does the Minister envisage many applicants seeking legal aid or other advisory support mechanisms in such a scenario? Clause 32 outlines several points about the football regulator’s determinations after an individual makes an application under clauses 28 and 29. The IFR seems to be able to extend its determination periods several times, but the clause fails to outline for what reason an extension might be justified and how long it should or could be. Can applicants, for example, challenge or appeal those delays, if the reason for them lay with the regulator rather than the individual club? A delay by the regulator would risk unfairly penalising applicants who were not personally at fault for it. Will there be an obligation on the football regulator to inform applicants of approaching deadlines, to ensure that they know when the determination period is nearing its end, and what oversight will there be to ensure that extensions are not routine? Lastly, will there be monitoring of how often extensions are used and how long determinations typically take, so that clubs can start to plan for such instances where they occur? That would also give greater certainty to the leagues because, as I highlighted earlier, it is not just individuals, but clubs themselves at risk. If we think about not just the financial penalties imposed, but the points that can be deducted, there are major implications for the competitive nature of the league. I look forward to the Minister answering a few of those questions.

I am grateful to the shadow Minister for those questions. I reiterate, as I said in an earlier intervention, that the licensing is separate from the ownership. On some of his points about the extension, we have talked throughout proceedings about being collaborative and working with owners and clubs; if the regulator needs more information, it has the ability to provide an extension. Of course we would expect it to provide appropriate information of approaching deadlines or expected timelines. I will not repeat what I said in my main contribution on this group, but I did try to set out some examples where a breach is a genuine accident or someone has inherited equity, versus somebody trying to circumvent the regime. The regulator has that flexibility and a regime with teeth so that it can respond to both scenarios. The shadow Minister posed a number of questions, so I will double-check Hansard and, if I have not answered them all, I will write to him. Question put and agreed to. Clause 28 accordingly ordered to stand part of the Bill. Clause 29 to 32 ordered to stand part of the Bill.

16:00:00

Clause 33

Duties to notify IFR of change in circumstances relating to incumbent owner or officer

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss clauses 34 to 36 stand part.

It is important for sustainability that incumbent owners and officers continue to be suitable custodians of their clubs. That is why the Bill gives the regulator the power to test incumbents if it has grounds for concern about their suitability. That will help mitigate the risk of harm from individuals already in the system. Clause 33 places a duty on incumbent owners and officers, as well as regulated clubs, to notify the regulator where they consider there to have been a relevant material change in circumstance. Notably, this is a change of circumstances that could have an impact on whether the regulator would find the individual suitable to be an owner or officer of the particular club—for example, if an officer became subject to criminal or relevant civil proceedings that the regulator was not previously aware of, or if an owner’s source of wealth had changed in some way that is relevant to whether it is connected to serious criminality. The notification must explain the material change in circumstances and its relevance to an individual’s suitability. If this information gives the regulator grounds for concern about the incumbent’s suitability, it has the power to test them under clauses 34 or 35. Ensuring that the regulator is aware of relevant material changes will better enable it to ensure that incumbent owners and officers continue to be suitable. Clause 34 provides the regulator with the necessary powers to test incumbent owners already in place in clubs where there is concern about their suitability. This allows the regulator to tackle any risks to clubs from unsuitable owners already within the industry.

I just want to be clear about the grounds on which the regulator can investigate or intervene. We talked about the source of wealth being criminal, which has been clearly laid out. However, if the source of wealth is one that has diminished substantially, so the owner cannot now show that they can continue to run the club, is that a reason for the regulator to consider intervening?

There are different thresholds for new owners and incumbent owners; with new owners, it is grounds for suspecting, but with incumbent owners, it is the balance of probabilities. Of course, the latter is a higher bar, given the existing owner’s property rights. I do not know whether that fully answers my hon. Friend’s question, but I can write to him with some further detail.

It would be helpful if the Minister could write to me because this is a big question in football. There are owners who promise the world and then find that they cannot deliver it; indeed, they can deliver very little. I come back to Sheffield Wednesday, but there have been other owners, such as Ken Bates at Oldham, who set up a structure that could not then be financially maintained. It is important to understand whether the regulator has power in that circumstance to intervene.

Absolutely, and I refer back to some of our earlier conversations. If we take the regulatory regime as a whole, at the very basic level, owners need to have a business plan, consult their fans and be fit and proper—those three things work together. As we spoke about earlier, if the business plan does not match the source or amount of funds, the regulator can go back and direct them. Perhaps that provides a little more clarity, but I am very happy to add more detail.

I think the Minister and I are getting there. Obviously, the business plan and the source of funds come with a new owner and then continue. However, with an owner already in place, does that still apply? Can the regulator say, “Wait a minute. I need to see a business plan and a source of funds to ensure that you are a fit and proper person”?

In certain circumstances. I am hesitant to use the word “new” information, because the information may not be new. However, if relevant information comes to light for the regulator, which may be new or pre-existing but relevant, the regulator can look at it. I draw my hon. Friend’s attention to the difference in the threshold between new owners and existing owners.

I will make just one more point—I think it is important that we understand precisely what this means. Clause 33 talks about an owner or club having a responsibility to notify the regulator. Surely that does not mean that nobody else could notify the regulator, if relevant information came to them. Could they then pass it on for the regulator to look at?

Yes, absolutely. That goes back to the discussion that we had earlier on new clause 15. The regulator will take credible information seriously. Clause 34 provides the regulator with the necessary powers to test incumbent owners—those already in place—of clubs, where there is a concern about their suitability. It will allow the regulator to tackle any risk to clubs from unsuitable owners within the industry, while recognising that there are suitable owners already in the system who do not need to be tested. We want to ensure that the approach is not overly burdensome for the regulator, and we do not want to deter investment in the game. Incumbent owners can be assessed to ensure that they have the requisite honesty and integrity, and are financially sound enough, to own a club. If the regulator has information that gives it grounds for suspicion, incumbent owners can also be tested on their source of wealth. The regulator will need to establish if wealth is connected to serious criminal conduct, including crimes such as drug trafficking or fraud. The regulator will not remove incumbent owners because of a mere suspicion about their source of wealth. Rather, an incumbent owner must be treated as unsuitable if the regulator is more sure than not that their source of wealth is connected to serious criminal conduct. The clause will ensure that the regulator has the appropriate powers to test incumbent owners where a risk of harm arises. Clause 35 provides the regulator with the necessary powers to test incumbent officers—those already in place—of clubs, where a risk of harm arises. As with the provisions for owners in clause 34, testing of officers is limited to cases where there is concern about suitability. It allows the regulator to tackle any risks to clubs from unsuitable officers already in the industry. Incumbent officers can be tested to ensure that they have the requisite honesty, integrity, competence, and are financially sound enough, to continue in their role. The Government are aware that finding an incumbent owner or officer unsuitable would bring about significant consequences for that person, and may cause concern for clubs or fans. That is why, when the regulator is minded to fail an incumbent owner or officer, clause 36 gives the individual and the club concerned an opportunity to make representations before the regulator makes its final decision. That allows an officer or owner an appropriate opportunity to argue their case before the regulator finds them unsuitable. The regulator has the ability to test or re-test incumbent owners and officers, which will prevent unsuitable custodians from harming clubs over the long term, not just at the point of entry. That will help to ensure the sustainability of clubs over the long term, benefiting football now and into the future. I therefore commend the clause to the Committee.

Clause 33 places a duty on clubs to notify the Government’s new regulator of any change in circumstances relating to the current owner or an officer that could impact their suitability under the regime set out in part 4 of the Bill. On one level, it is an understandable provision. To fulfil its statutory duties, the regulator must be kept informed of material changes, as ensuring the fitness and propriety of owners and officers is a core part of its remit. However, the clause as drafted raises a number of serious and practical concerns about how such a duty will be defined, interpreted and enforced. The first issue with the clause is its vagueness. What exactly constitutes a “change in circumstances”? The explanatory notes prepared by the Government give a small indication of what such circumstances might include, stating that “Relevant material changes could include, for example, an officer becoming subject to criminal proceedings or regulatory action”. That is somewhat clear, but what qualifies as “regulatory action”? Could it be an Ofcom investigation, for example? The explanatory notes add that “new information coming to light regarding whether an owner’s source of wealth is connected to serious criminality” also qualifies as a material, relevant change. What qualifies as “new information”? Does it mean a full-blown criminal investigation or spurious claims, potentially made by activist groups against foreign owners? How the provision will work needs to be clarified. The Government and the new regulator must be up front, open and honest with fans and Parliament as to what those terms actually mean. We fear that the Government are deliberately muddying the waters around what the regulatory environment would look like under the Bill, and around the rules that the regulator will seek to apply. The Minister must answer whether a “change in circumstances” is limited to formal legal developments, such as bankruptcy, a criminal conviction, or something as small as a parking fine. I hope not the latter. Could the definition extend to more subjective matters such as personal, reputational issues, media allegations, or ongoing investigations? If so, I fear that the Government and their regulator would be on very shaky ground, not just because clubs would find themselves in the near-impossible position of having to second-guess what the regulator might later deem to be relevant, even when no formal wrongdoing has occurred, but because it would open up the regulator to spates of judicial reviews. As we see already, the wealthiest clubs would be able to hire the best lawyers, and those clubs that are already struggling would be subject to the personal diktats of the chairman of the Government’s regulator. That is not a sustainable, appropriate or moral way to regulate, and it is totally incompatible with the principle of legal certainty that should underpin any new statutory regime. Furthermore, clause 33 requires that the Government be notified “as soon as reasonably practicable” after a change has occurred. Again, the language is open to wide interpretation. What is “reasonably practicable” for a large Premier League club with extensive legal support may be entirely different for a National League side with minimal back office capacity. We must ensure that smaller clubs are not disproportionately penalised because they lack the administrative infrastructure to track and report such changes with the same immediacy as those international brands that sit atop the English football pyramid. We must also ask whether the sanctions for failing to report, which could be very serious, potentially leading to licence revocation, are proportionate to each breach. Clubs cannot become the regulator’s enforcement arm, expected to carry out continuous due diligence on their own officers and owners, with the threat of regulatory action hanging over them if they get it wrong. Clause 33 touches on a sensitive area: the relationship between clubs and their owners, and the role of the state in policing suitability. It is right to expect clubs to act responsibly and keep the regulator informed, but the duty must be clear, proportionate and fairly enforced to avoid lower-level staff being put in extremely difficult situations. We do not want to create a culture of regulatory paranoia, where clubs feel compelled to notify the Government’s regulator of every minor development just in case it is later deemed relevant, nor do we want smaller clubs punished for failing to meet standards that are de facto only achievable for the top tier. The Government must ensure that the clause is not a trapdoor for arbitrary enforcement, and that it supports predictability, stability and confidence in the regulatory framework. We understand the underlying principle, but we will continue to press the Minister to ensure the practical operation of the clause does not give rise to legal ambiguity, unjust outcomes or unaccountable discretion. Before moving on, I have a number of questions on clause 33. Could the Minister clarify what sorts of events would qualify as a “change in circumstances” under clause 33? Will guidance be issued by the football regulator to ensure consistent interpretation? Will the definition be limited to formal, objective legal changes? What level of evidence or certainty will clubs be expected to have before reporting a change? Will clubs be required to report allegations or media speculation? Will the football regulator consider good-faith failures to notify or take a strict liability approach? How will the regulator account for differences in club size, structure and resourcing when judging what is “reasonably practicable”? Will there be any threshold or scaling in terms of compliance expectations for clubs of differing means? What appeal or review mechanisms will be available to a club if the football regulator finds that it failed to notify as required? Will there be a formal process for representations or challenge before any enforcement action is taken? How does the clause interact with the broader principles of legal privilege and privacy? Will clubs be expected to disclose internal HR issues or ongoing internal investigations, even if there is no conclusion yet? Have the Government assessed whether the clause is compatible with UEFA and FIFA expectations of non-interference in the running of football clubs? I had a written response from the Minister this morning regarding her last meeting with UEFA and FIFA, which was 1 November. A lot of water has gone under the bridge since then, so we are still concerned about the broader point regarding UEFA. I would appreciate a response to that point today. Moving on to clause 34, it empowers the football regulator to determine whether an incumbent individual owner meets the fitness criteria or has wealth associated with serious criminal conduct, if the regulator has information that raises grounds for concern. It requires the regulator to inform the owner and club before making a determination and then notify them of the outcome. If passed, more than 100 English football clubs will be subject to the regulation. It is not specified in the Bill what level of information would raise grounds for concern regarding incumbent owners. If the bar is set too low, the regulator may be immediately burdened by reviewing multiple existing owners, causing unease in English football. What level of information is required to qualify as grounds for concern? There is also no time limit for the regulator to make its assessment, so how will the regulator ensure that the threat does not needlessly hang over existing owners? Clause 35 empowers the football regulator to determine whether an incumbent officer meets the fitness criteria if the regulator has information that raises grounds for concern. It requires the regulator to inform the owner and club before making a determination and then notify them of the outcome. As I said regarding the previous clause, more than 100 English football clubs will be regulated if the Bill passes. It is not specified in the Bill what level of information would raise grounds for concern regarding officers, of which there are even more to consider. If the bar is set too low, the regulator may be immediately burdened by the need to review multiple existing officers for each club. I ask the Minister again: what level of information will be required to qualify as grounds for concern? There is also no time limit for the regulator to make its assessment, so how will it ensure that this threat does not needlessly hang over existing officers? Lastly—you will be pleased to know, Mr Turner—clause 36 requires the football regulator to give advance notification to an incumbent owner or officer if it is minded to find them unsuitable. Before making a final decision, the clause requires the person and club in question to be allowed to make representations, which must then be taken into account. The clause stipulates that the regulator must inform incumbent owners and officers only that it is minded to find them unsuitable, not of the reasons why. Given the vital importance of these representations, should there not be a requirement for the regulator to disclose the reasons to the person and club so that they can fully engage? I would appreciate the Minister picking up the point about the reasons, because it is important. There is a broader point here about clubs that may be listed on the open market. My understanding of this clause is that, before a final decision is taken, the club would effectively become an insider from a trading perspective. It will be interesting to see how the Government will seek to manage that risk in terms of financial compliance, given that an issue with a particular owner or officer could have significant financial implications for a club and therefore potentially leave individuals inside that loop at risk of being involved with inside information from a dealing perspective. As we all know, if anyone is found to be in breach of inside information, it has very serious consequences. It will be interesting to see how the mechanism in this clause to inform clubs and individuals first will work with the broader notifications in the market where clubs are listed.

I will begin with the subject of UEFA. Once again, I can reassure the shadow Minister that UEFA is content with the Bill as drafted. He will note that, in answer to his written question, I detailed my last meeting with UEFA, which was after the Bill was published, and said that we continue to engage with officials on a regular basis. The shadow Minister asked a long list of questions to which I will respond in writing to ensure accuracy, as I did not get a chance to note them down. We have spoken about some of the points he touched on around appeals and enforcement and will come on to debate them in further detail. I draw the shadow Minister’s attention to the fact that, as I said in answer to my hon. Friend the Member for Sheffield South East, the bar is set differently for existing and new owners. I outlined points on new owners, grounds to suspect, incumbent owners, the balance of probabilities and the higher bar given existing owners’ property rights. The shadow Minister also asked a number of questions on what information would be relevant. A parking ticket, certainly, would not be relevant, but serious legal issues or an investigation or action by a regulator—things of that nature—would be relevant. The regulator will not immediately test information in every case just because it comes in. It will make its own decision about whether the information reaches a high enough threshold for it to take action. Information that gives the regulator grounds for concern could come in lots of forms. It does not need to be new information, as I outlined in my response to my hon. Friend the Member for Sheffield South East, but it has to call into question whether the individual is still suitable to be an owner or officer of a club. The information may be relevant if the club gets into difficulty or fails to comply with the regime. Information that is in the public domain or held by external organisations about incumbent owners could be considered grounds for concern to test an individual. It will be up to the regulator to decide whether the information meets the threshold for the incumbent to be tested. Question put and agreed to. Clause 33 accordingly ordered to stand part of the Bill. Clauses 34 to 36 ordered to stand part of the Bill. Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)

16:20:00

Written evidence reported to the House

FGB05 Football Supporters’ Association

FGB06 Northampton Town FC Supporters’ Trust (NTFCST) and co-signatories