Football Governance Bill [Lords]

Public Bill Committee, 10 June 2025.

Jeremy Wright (Conservative, Kenilworth and Southam)

We are now sitting in public and proceedings are being broadcast. I remind all Members to switch their electronic devices to silent. We now resume line-by-line consideration of the Bill.

Threshold Requirements

Clive Betts (Labour, Sheffield South East)

I beg to move amendment 14, in schedule 4, page 98, line 20, at end insert—

“(d) the home ground threshold requirement (see paragraph 4A)”

See explanatory statement for Amendment 15.

Jeremy Wright (Conservative, Kenilworth and Southam)

With this it will be convenient to discuss amendment 15, schedule 4, page 99, line 41, at end insert—

“Home ground

4A (1) The home ground threshold requirement is met, in relation to a club, if the club—

(a) has security of tenure over a home ground for at least the minimum period; and

(b) the home ground is suitable for the club's use for footballing purposes.

(2) In subsection (1)(a), the minimum period is 20 years, or such other period as the IFR may determine in respect of a particular club (where there are compelling reasons why it should be shortened).

(3) In determining whether subsection (1)(b) is satisfied in respect of a club, the IFR shall have regard to the specified competition and league in which a club plays and whether the facilities satisfy the requirements set out by the relevant competition organiser(s), as well as any other factors that it deems relevant.

(4) In this paragraph 5, “home ground” shall have the meaning given to it in section 46(10)(a).”

This amendment specifies what constitutes the home ground threshold requirement.

Clive Betts (Labour, Sheffield South East)

It is a pleasure to be back with you in the Chair, Sir Jeremy.

This might be termed the Dejphon Chansiri clause—though there are a number of those as we go through the Bill, and they could also apply to other owners of football clubs who have over the years behaved in ways that we might find unacceptable.

Within the Bill—and credit to my hon. Friend the Minister for this—there are clear requirements for clubs wanting to move grounds to properly consult and demonstrate that there are good footballing reasons to do so. There will occasionally be good reasons, when clubs should move as it is in their commercial and footballing interests to do so.

The problem with the Bill as it stands, however, which I have talked to my hon. Friend about on a number of occasions—she is probably fed up of hearing me on the subject—is where the owner has divested the ground separate from ownership of the club. The ownership of the ground is often therefore in a different place and with a different company. It is often, as in the case of Sheffield Wednesday, owned by the same person as the club, but in a different format, so the club could be sold but could be left with no ground.

There probably would not be many people who would want to buy a club in that situation, but we can see the possibilities for owners who do not have the best intentions to do things that are not acceptable. That has been starkly illustrated in the last two weeks, as supporters at Hillsborough have got angrier and angrier with the chairman and he has now gone on record on social media to say, “If you keep on protesting, I can find better things to do with this ground and make more money by building a supermarket or housing”. He has actually put that in writing and said it, so I think we have to cover off those situations. With Sheffield Wednesday, I think the club has a lease on the ground and he would be legally challenged if he tried to do that, but the fact is that owners will try many things to maximise their personal financial interests.

Coming back to the content and intention of the Bill, it is right we are going to have a licensing system; we will come on to that in more detail in due course. The intention is that to get a licence, the owner has to show that they are a fit and proper person and demonstrate that they can run the club financially. If it is proper that the owner has to show that they have the financial resources to run the club, surely they need to show that they have a ground to play on. This amendment is almost as simple as that.

The English Football League rules as they are partly cover this issue, because the EFL requires clubs to demonstrate they have the 20-year use of a ground as part of their conditions. There is an overlap between what the regulator’s powers are going to be and what the leagues do, but we want to make sure there are no gaps and that we cover off those with bad intentions. I am sure Mr Chansiri has the best of intentions—perhaps for himself and his family, I hasten to add—but nevertheless it is also true of clubs like Derby and Charlton and others, and we have seen in the past the sad case of Wimbledon, having to move halfway across the country because the owners got rid of their ground, Plough Lane.

We saw Brighton wandering homeless around the country for many years when the Goldstone Ground, which I remember going to several times, was sold for a supermarket there. Mr Chansiri is obviously following in those footsteps. That left the club in an awful situation. Let us not go there again; let us anticipate what might go wrong and put measures in place to stop it. That is what I am trying to do with my amendments. Even if the Minister cannot accept the precise wording, I hope that she will, at least, understand and recognise the problems that could exist, which need addressing at this stage.

Louie French (Conservative, Old Bexley and Sidcup)

It is a privilege to serve under your chairmanship, Sir Jeremy, and to speak on day three—is it day three? Time flies when you’re having fun!—of this Bill Committee.

The hon. Member for Sheffield South East has explained in quite lengthy detail the aims of the amendment; I will not repeat what he has said, because it is his amendment, but I have great sympathy with his arguments. Examples, as he says, include Derby, Sheffield Wednesday, Coventry, Wimbledon—for us slightly older football fans—and of course my home club, Charlton, where as I understand it the person who owned the club two owners ago retains ownership of both the stadium—The Valley—and the training ground.

That creates a number of challenges for clubs, not only on the playing side, but behind the scenes and on the academy side. It is a real issue in football. The hon. Member highlighted some of the tensions it causes, particularly with fans, and the great uncertainty about the future of the game and the participation of those clubs. It is always extremely disappointing and frustrating when a small number of owners clearly do not have the best long-term intentions for the club or the community that they serve.

I am interested to hear the Minister’s response to the amendment and how it might work if it is agreed to. I would also like to understand how it would work for good owners who look to invest in their communities and grounds, and who ensure that clubs have new stadia, for example. The most obvious example, going into the new season, is Everton’s new stadium. We in the Opposition do not want to restrict clubs from increasing capacity and investing in communities around the country; I am sure that we will see a lot more of that, going forward, as clubs seek to increase their revenues and the capacity of stadia. Nevertheless, I have great sympathy for the arguments made by the hon. Member for Sheffield South East.

Jonathan Pearce (Labour, High Peak)

It is a pleasure to serve under your chairship, Sir Jeremy. I would like to make a declaration of interest as a member and former chair of the RamsTrust. The history of Derby County and its football stadia has been raised by both the shadow Minister and my hon. Friend the Member for Sheffield South East. In 2003, three owners bought the club for £1 each and decided to sell it to a company based in Panama. We then had to lease it back for £1 million a year. It took years to bring the club and its stadia back together. More recently, under Mel Morris, the club and its stadia were again separated. It was only this summer that they were brought back under one legal ownership, thanks to the new owner, David Clowes.

As a fan of a club that has moved from the old Baseball Ground to Pride Park, I believe the shadow Minister is entirely right that clubs must be able to move stadium. That is absolutely clear. However, it is also clear that, for many fans, the stadium is part and parcel of the community and the way of life. What I would give to be able to go back to the Baseball Ground and relive my childhood! I cannot overstate how important an emotional attachment to the stadium is. It is impossible, in most fans’ minds, to separate the two.

James Naish (Labour, Rushcliffe)

Overnight, I had a message about the City Ground, where Nottingham Forest play—England will be playing there tonight against Senegal in their friendly, which I very much welcome. The message said, “Please make sure that Nottingham Forest continue to play at the City Ground.” There have been discussions about moving elsewhere. My hon. Friend is right that the grounds are central to the community, so does he agree that it is essential that fans have a say in where teams play?

Jonathan Pearce (Labour, High Peak)

Absolutely. As a Derby fan, for once I can probably agree with a Notts Forest fan. It is vital that fans have a say. Fans will always want their clubs to do better and to drive forward, and there will be cases where it is right for a club to move; but where there is malign interest, the fans need to have the ability to keep their stadia and clubs together.

Stephanie Peacock (Labour, Barnsley South)

It is a pleasure to once again serve under your chairship, Sir Jeremy. I look forward to day three of Committee. I thank my hon. Friend the Member for Sheffield South East for the amendments; I am never fed up of hearing from him and I know he is very passionate about this issue.

The Government recognise the intent behind the amendments to ensure that football continues to be played at a club’s home ground. The Bill already has a number of strong protections to safeguard home grounds against reckless sales or ill-thought-out relocations. I will respond to a couple of points made in the debate and will then outline why we will not be accepting the amendments.

Fan consultation was mentioned. Clubs must consult their fans on any plans to change or move their home ground as per the fan engagement threshold condition. The shadow Minister, the hon. Member for Old Bexley and Sidcup, made an important point about how it will sometimes be necessary for clubs to relocate their home ground, for a number of reasons, such as the ground being too small, facilities no longer working or the ground being sold. We recognise that we need flexibility in that approach, but fans will have a say.

For clubs that do not own their stadium or have already sold the stadium, due to the scope of the Bill and existing property law, it is not always possible for home grounds that are not owned by the club to have the same protections as home grounds that are. This point was recognised in the fan-led review. However, alongside the fan engagement requirements, there are also protections under the national planning policy framework for sports grounds and existing assets of community value, and there is work under this Government, as well as an ongoing Law Commission review of security of tenure that has the scope to address sports grounds. Those powers will all work alongside the soft powers and levers of the regulator to look to protect home grounds, as far as possible.

My hon. Friend the Member for Sheffield South East also referred to the fact that leagues have requirements for tenure, and clubs are prevented from entering the league if they do not meet them. Leagues also have enforceable standards regarding the quality of the grounds. These vary from league to league and can get into the specifics of grass length on matchdays, for example. Given those requirements, we do not feel it is necessary for the regulator to duplicate rules. Instead, it will work alongside the leagues.

It should be noted that clubs may not own their home grounds—I have responded on that point—and therefore they would require the agreement of their landlord to meet the additional licensing requirement we believe that the amendments would lead to. These amendments would place a requirement on clubs to guarantee something that may not be within their control, as well as duplicating pre-existing league requirements for home grounds.

We recognise that the fan-led review recommended that the Government explore the viability of introducing security of tenure property rights for football clubs. I hope I have explained why we do not feel we can do that.

The Law Commission is now in the process of reviewing the Landlord and Tenant Act 1954, including an assessment of security of tenure for all commercial properties, including football clubs. Following the review, the Ministry of Housing, Communities and Local Government will consider the recommendations and publish a full response.

For those reasons, I am not able to accept my hon. Friend’s amendments and would ask that he withdraws them.

Clive Betts (Labour, Sheffield South East)

I am still not quite sure why my amendments would cause so many problems. I understand the difficulty where a club does not actually own the ground but leases it, but the amendment is about security of tenure. There does not have to be ownership; it could be a secure lease, as the English Football League requires, for a 20-year period. That is implied by the amendment.

I was not quite sure what the Minister was saying about how the review by the Law Commission and implementation by MHCLG Ministers would secure the position for football clubs, and what else is being looked at in terms of the planning framework. Is she able to say any more on those points to get on the record what further safeguards might be in place?

Stephanie Peacock (Labour, Barnsley South)

On the point in the amendments about 20 years, we appreciate that not all the leagues go that far, but we think that the point is addressed by the league rules. On the consultation by MHCLG, it might be helpful if I ask my counterpart there to write to my hon. Friend and to share that letter with the Committee, because that ongoing work falls in that Department.

Clive Betts (Labour, Sheffield South East)

The Minister often completely convinces me—on this occasion, she goes a little way towards being convincing. I want to read what MHCLG is going to say. In the end, it is not how we do it, but what we achieve in terms of the safety and security of grounds for the fans. That is what this is about. If what MHCLG is going to do moves us in that direction, as the Minister indicates it will, I am happy to await that correspondence from it before pushing this further. I hope that we can get a response from MHCLG Ministers before Report—if the Minister could encourage them to write in that time period, it would be helpful.

Stephanie Peacock (Labour, Barnsley South)

It is a disappointment that I am not able to convince my hon. Friend fully. Not all of what he asks is in my gift, but I commit to the Committee that I will do my very best to get a response from the Department before Report, and if possible earlier.

Clive Betts (Labour, Sheffield South East)

On that basis, with the Minister going as far as she can this morning, I am happy not to press the amendment. I beg to ask leave to withdraw the amendment.

Louie French (Conservative, Old Bexley and Sidcup)

I beg to move amendment 104, in schedule 4, page 99, line 31, at end insert—

“(f) the club’s political statements and positions.”

This amendment ensures that clubs have to engage their fans on the political statements a club might adopt.

Jeremy Wright (Conservative, Kenilworth and Southam)

With this it will be convenient to discuss new clause 16—Duty to consult fans on political statements—

“(1) A regulated club may not publish any political statements, political opinions, or issue an items with party political connotations unless it has taken reasonable steps to establish that such statements, opinions or items are supported by the majority of the club’s fans in England and Wales.

(2) A regulated club may not permit any officers or employees, when acting in an official capacity, of the club to engage in political activities or publish political statements or wear any item with political links unless it has taken reasonable steps to establish that such activities, statements, or items are supported by a majority of the club’s fans in England and Wales.”

This new clause would give fans a say on the political positions adopted by regulated football clubs.

Louie French (Conservative, Old Bexley and Sidcup)

Amendment 104 would amend schedule 4 to insert

“the club’s political statements and positions”,

to ensure that clubs have to engage their fans on any political statements that the club might adopt. New clause 16 introduces a duty to consult fans on political statements and is an expansion of what that means in practice. As everyone can see the amendment paper, I will move on to my speech.

Schedule 4 sets out the threshold requirements that a club must meet to be granted a licence by this Government’s regulator. In essence, those are the baseline criteria that every club must pass before the Government allow them to play football. Never before has a Government been involved in deciding who can play football. This is a huge moment for English football, its governance and, most importantly, its fans. On the face of it, few would argue against the principle of minimum standards, but as is so often the case with regulation, the devil lies in the detail. In this case, the sheer breadth and flexibility that the Bill hands to the Government’s regulator raise real and pressing concerns.

I start with a central and unarguable point: clubs must be well run. No one disputes that, and thankfully, the vast majority of clubs in the country are. However, we have seen hard-working communities let down by reckless owners and weak governance—from Bury and Derby to the recent struggles at Reading, which the hon. Member for Newbury mentioned. The purpose of this legislation should be to help to protect footballing communities better and to ensure that all clubs are not only sustainable, but rooted, responsible and resilient. However, there is a clear difference between ensuring prudence and exercising control over a club.

My concern, and that of many clubs and fans, is that schedule 4 risks crossing that line. Under paragraphs 2 to 7 of schedule 4, the Government’s regulator is empowered to set requirements for financial resources, suitable governance structures, appropriate corporate plans and the ability to comply with all relevant obligations. On the surface that might seem sensible, but the provisions are broad, vaguely defined and, in practice, leave almost every detail to be filled in by a politically led regulator at a later date via licence conditions.

Let us take paragraph 4, for example, which sets out:

“The fan engagement threshold requirement is met, in relation to a club, if the club has adequate and effective means by which—

(a) the club consults its fans about the relevant matters, and

(b) the club takes the views of its fans into account in making decisions”.

However, it does not tell us what constitutes “adequate” or “effective”. Can the Minister tell us what those terms mean, or when we can expect to be told? Who defines those terms? Is this another instance of the regulator being able to set its own definitions, terms of reference and standards? Paragraph 3(2)(c) states that the Government’s regulator must have regard to a club’s “corporate governance arrangements”. I ask the Minister: what does that actually mean? We are not told, and again it is not clear. Does it mean formal board structures, independent non-executive directors and complying with the UK corporate governance code, or something else entirely? Could the Minister please clarify that for the Committee?

We fear that this schedule hands a blank cheque to the regulator to determine how football clubs, from Premier League giants to National League sides, must structure their affairs, able to coerce them into restructuring their club to fit a narrow regulatory framework that has not been voted for by the fans of any club. This is a serious transfer of power from clubs and their owners to a Government body, and we must ask: is it proportionate? Is it justified?

That is why we have tabled amendment 104—to say that clubs must engage their fans on the political statements that a club might adopt. As fans ourselves and elected representatives of other fans, we know that football clubs are not just businesses; they are often local institutions, deeply embedded in the identity of their local communities. When a club takes a political stance, it does so not just with the authority of its owners or boardroom, but with the badge and history of an entire town or city associated with it. That makes it all the more important that such decisions are not taken unilaterally or imposed from the top down. We have seen in recent years a growing trend of clubs aligning themselves with particular causes or campaigns —often well intentioned, but rarely uncontroversial. Fans might not expect to be consulted on every tweet or armband, but they do deserve to be heard when a club takes a stance on an issue that goes far beyond the pitch.

This amendment is not about silencing values; it is about ensuring consent. It would embed a simple principle into the threshold requirements—that when a club speaks in the name of its community, it should first listen to that community. That is the hallmark of good governance and of genuine respect for the supporters who make football what it is. The amendment would not bind clubs to the decision of fans on political matters, but would ensure that they had a voice on an important issue.

New clause 16, also in my name, would ensure that fans had not only a voice on these matters, but a meaningful say in the political positions adopted by their clubs. This is a modest but necessary step to ensure that clubs remain accountable not just to their owners, but to the communities that they represent. Football clubs are not private playthings; they are social institutions, embedded in the life of their towns and cities and with supporters whose loyalty often spans many generations. When a club chooses to make a public statement on a political or social issue, it does so in the name of those fans. It is only right that they should have a voice in that process.

Max Wilkinson (Liberal Democrat, Cheltenham)

Would this new clause preclude the owner or chairman, or some other executive officer or member of staff, of a football club from standing for election? I can think of one example: a former chairman of my club Southampton, the hon. Member for Great Yarmouth (Rupert Lowe). He stood for the Referendum party in the Cotswolds in 1997, shortly after he had become the chairman of Southampton football club, and he is rumoured to be joining those on the Conservative Benches soon. I wonder whether the hon. Member for Old Bexley and Sidcup would be against that sort of thing.

Louie French (Conservative, Old Bexley and Sidcup)

I will try to stick to the footballing part of the question and not stray into the transfer market, which I believe opens today or tomorrow. When we have people camped outside Conservative Campaign Headquarters on deadline day, I will know that the hon. Member for Great Yarmouth has sent them there. In all seriousness, what we are looking to do is to talk about representations made by a club in an official capacity rather than a personal capacity. I think that there is an important distinction with what a person does in their own time. What was the party—the Referendum party? The hon. Member for Cheltenham is showing his age.

Max Wilkinson (Liberal Democrat, Cheltenham)

Some would regard wearing rainbow laces for Pride as a political statement. In the hon. Member’s ideal world of football governance, would a club have to go to a referendum of its fans to work out whether its players and the club could wear rainbow laces for Pride, for example? Would that not be more pointless bureaucracy?

Louie French (Conservative, Old Bexley and Sidcup)

We are not suggesting a referendum. We are saying that fans should be involved in the decision-making process. There is a debate around Pride and other issues, but that is not the point we are trying to make. We are trying to make sure that football clubs, wherever possible, stick to the game and that fans have a say. I have already said that we are not trying to bind clubs and prevent them from addressing initiatives that are often taken by the leagues rather than just individual clubs, but we are trying to ensure that fans have a say.

Amanda Martin (Labour, Portsmouth North)

Does the hon. Member believe that this would include involving fans in political-financial decisions like that made by West Ham United, who donated to the Conservative party? Should fans be involved in that type of decision, or is it a decision that the board should just be able to make?

Louie French (Conservative, Old Bexley and Sidcup)

I appreciate the point that the hon. Lady makes. I am not aware of the financial example that she gives—genuinely I am not—so it would not be appropriate for me to comment, but the crossover between politics and football is one that we have to acknowledge, regardless of party allegiance. The vast majority of fans, when they go to the football at the weekend or midweek, go to watch football and in many ways to switch off from the harsher realities of life. I am personally a big believer in politics staying out of sport, as I have said on a number of occasions.

Amanda Martin (Labour, Portsmouth North)

Just for the record on those donations, in 2016 the club contributed £12,500 to the Conservative party, and in 2022, it contributed £9,000.

Louie French (Conservative, Old Bexley and Sidcup)

The hon. Lady’s comments are on the record, and I will have a look—I was not aware of those.

Clive Betts (Labour, Sheffield South East)

This is a serious point, because football is about our communities. It reflects what goes on in our communities and tries to improve it. Football has a very good record of tackling racism in this country, right from the top, with the Football Association and the leagues, through to the clubs. Young kids walk on the pitch and there are “kick racism out of football” banners, and football has done good work on homophobia as well. Is the shadow Minister saying that all those matters should be put to a club’s fans in a referendum, or would we expect a club to do those things as a matter of good practice?

Louie French (Conservative, Old Bexley and Sidcup)

I completely appreciate the hon. Member’s point. As he highlighted, clubs have done a lot of this good work themselves, so I do not believe that the Government or their regulator need to dictate on terms where clubs have that good practice already. My new clause tries to draw a line so that fans will have a say on any such issues and, in particular, on contentious ones. I do not personally believe that kicking racism out of football is a contentious issue. The vast majority of fans would absolutely support that, and have supported for many years the work that that campaign has done.

Max Wilkinson (Liberal Democrat, Cheltenham)

Will the hon. Member give way?

Louie French (Conservative, Old Bexley and Sidcup)

I am going to try to make some progress.

Max Wilkinson (Liberal Democrat, Cheltenham)

I have a really important point about a referendum.

Louie French (Conservative, Old Bexley and Sidcup)

Yes, okay.

Max Wilkinson (Liberal Democrat, Cheltenham)

New clause 16 specifically says that the club must establish that there is support from

“a majority of the club’s fans in England and Wales.”

That is really difficult to establish. Committee members will have been in football grounds and heard a number of opinions expressed in vociferous terms from the stands. I challenge anyone to say that it is possible to establish that a majority of fans either support or do not support any kind of political statement that might be made by a club. I just do not think the new clause works.

Louie French (Conservative, Old Bexley and Sidcup)

I am not sure what to say about that, but the hon. Member can have his say when the Committee votes on the matter shortly. He has stated his belief.

In recent years, we have seen clubs wade into contentious debates, sometimes with noble intentions, without any formal engagement with their supporter base. Whether we are talking about a statement on a foreign conflict, domestic legislation or ideological campaigns, such interventions can divide opinion and risk alienating the people who pay their money, wear the shirt and keep their club alive. Nobody is arguing that clubs should be barred from speaking on social matters, but they should be expected to act with consent, not presumption. Fans should not wake up to find their club being used as a platform for views that they had no part in shaping. The new clause would not restrict freedom of expression; rather, it would enhance democratic accountability in football.

Kevin Bonavia (Labour, Stevenage)

Will the shadow Minister give way?

Louie French (Conservative, Old Bexley and Sidcup)

I will make some progress because I am conscious of the Chairman’s time. The new clause would ensure that where a club proposes to adopt a political stance not directly related to football or the club’s commercial interests, it must first engage with its supporters through an appropriate consultation mechanism. This is about strengthening the bond between club and community, not weakening it. New clause 16 would be a simple safeguard to protect the cultural neutrality of our national game, and to ensure that football remains a source of unity, not division.

The cumulative effect of the Bill’s provisions, as they stand, is that they give the Government’s regulator enormous latitude to impose an ever-growing set of compliance obligations on clubs with little oversight or scrutiny from Parliament or fans. It is entirely possible, perhaps even likely, that clubs could find themselves constantly revising governance arrangements, redrafting financial documents and hiring compliance staff simply to keep up with the regulator’s demands—demands that are funded by the clubs. That is a concern for the entire football pyramid, but it is a particular burden for the lower leagues, where administrative budgets are tight and every pound spent on compliance is a pound not spent on the pitch or in the community.

Let us be clear: good regulation is about balance. It is about ensuring standards without stifling initiative, protecting clubs without disempowering them and learning from the past without writing off the future. There are a number of ways in which the Government could help to strike that balance.

First, we ask the Government to publish a clear definition of what each of the threshold requirements entails. It is not good enough to provide for “appropriate” arrangements. The regulator should be guarded by Parliament’s intent, not left to interpret sweeping language.

Secondly, we must ensure transparency and account-ability. If the regulator decides to change the threshold requirements—say, by requiring new climate disclosure standards or mandating support or representation on the board—that is a major policy shift. We believe that, as a sovereign Parliament responsible for passing this legislation, we should be able to scrutinise and, if necessary, prevent the Government’s regulator from making law by regulation. It should come back to the House, not be slipped through in the shadows.

Finally, we must keep a watchful eye on the cost burden. As we argued in previous debates, the Government’s regulator will not be cost-free. It is expected to fund itself through levies and fees imposed on clubs, so every layer of compliance—every extra form, every extra process —has a price tag. That price will ultimately be paid by the very fans we are trying to protect.

Kevin Bonavia (Labour, Stevenage)

I thank the shadow Minister for giving way, and it is a pleasure to serve under your chairship, Sir Jeremy. The shadow Minister is talking about cost, yet here is another proposal that would add more cost and is effectively unworkable. This Bill is in Committee at the moment. If a club saw the changes here and wanted to lobby us to say, “We are not happy with this,” how on earth would it do that if it had to consult its fans? How do we define a political move by a club? It just does not work, does it?

Louie French (Conservative, Old Bexley and Sidcup)

I hear the argument that hon. Gentleman is making, and he will be able to vote on the amendment shortly. Again, I appreciate your time, Sir Jeremy.

It is a shame that the Government would not accept our earlier amendment to ensure that fans know the true impact of the regulator on the price of their tickets. Football is not a normal business. It is a great national institution built on history, local pride and community loyalty. However, that does not mean it should be run by quangos. Clubs should be encouraged to improve their governance, not be coerced into uniformity. They should be supported to succeed, not strangled by red tape.

Schedule 4 is one of the most important parts of the Bill, because it defines the gate through which every club must pass before they can be allowed to simply play football. We owe it to those clubs and their fans to ensure that the gateway is firm but fair, principled but practical, and clear, not vague. That is why we will be seeking further assurances from the Minister that the Government’s regulator’s use of these powers will be proportionate, transparent and subject to proper scrutiny. Without that, we risk creating a regime that may prevent future failures, but at the cost of stifling ambition, independence and the very lifeblood of our national game.

Jeremy Wright (Conservative, Kenilworth and Southam)

I should make it clear that it is not my time; it is the Committee’s time, and the Committee can use it in any way it wishes within the confines of the programme order. Secondly, the hon. Gentleman has slid ever so slightly into a debate about schedule 4 more broadly. I have not intervened to stop him, but I know he will not want to repeat all those points when we get to the debate on schedule 4 stand part.

Stephanie Peacock (Labour, Barnsley South)

I will begin with a couple of brief points in response to the shadow Minister. However, as Sir Jeremy has just outlined, some of the shadow Minister’s points relate to schedule 4 more broadly, which falls under group 38, and the points on fan engagement fall under group 48. I will make some quick comments, but I am happy to take some points away and elaborate further when we come to those groups.

The shadow Minister asked a specific question about what constitutes “adequate” and “effective”. The Bill is intentionally designed to allow for each club to have its own approach to fan engagement. That is why a specific form of fan engagement is not mandated in order to meet the benchmark of adequate and effective. Instead, we expect that the regulator will look at a number of factors to assess fan engagement at clubs, and publish guidance for clubs on what will be expected. Across all of that, the regulator will look to uphold proportionality, taking into account the size and make-up of each club and what is appropriate. We will revisit those issues when we move on to groups 38 and 48. Of course, the debate on ticket pricing has been well rehearsed. This Government added an obligation to consult fans on ticket prices, which will strengthen the fan voice on that issue.

Amendment 104 seeks to add a requirement for a club to consult fans on any political statements or positions that it makes or takes, and new clause 16 seeks to mandate fan approval prior to any political statement or political activity being made by the club, its players or staff. It is not the place of a statutory regulator tasked with financial sustainability to limit or add additional approval processes for political speech or action. Clubs and leagues here and abroad take positions on a variety of issues that could be deemed political, and that is their right.

However, it is not appropriate for an independent statutory regulator to take subjective positions, or opine on the positions of others, in the same way—especially not a regulator tasked only with a tight mission of financial sustainability, to which political statements bear no relevance. It may be that clubs wish to consult their fans in this regard as part of their regular fan engagement. We would not expect the regulator to have any issue with that, but it is not something that it will require of clubs.

The Bill is intended to ensure that fans have a voice in key decisions regarding their club, but we must ensure that this is proportionate. That is why we have not listed every possible issue on which clubs should engage their fans in minute detail. We also do not want to inhibit the free speech of players or any representatives of the club. It is also notable that many sporting personalities have used the attention that the sport gets to protest relevant issues that concern them. We do not want to inhibit the free speech of any of those individuals.

Max Wilkinson (Liberal Democrat, Cheltenham)

Is the Minister concerned about inhibiting the free speech of Members of the House of Lords, for example Baroness Brady, who made significant and very valuable comments in the debate on the Bill in the other place, and then repeatedly made similar statements in the press and other media? She is, of course, a representative of West Ham and the Conservative party, as was noted by the hon. Member for Portsmouth North. Would we seek to retain her freedom of speech and freedom of expression by voting down new clause 16?

Stephanie Peacock (Labour, Barnsley South)

The hon. Gentleman puts his point on the record. We had a full debate in the other place, in which many Members took part.

Ultimately, the amendments have no relevance to the regulator’s purpose and will not help it to deliver its objectives. Rather, they would serve only to stifle freedom of speech. For those reasons, I ask the hon. Member to withdraw them.

Louie French (Conservative, Old Bexley and Sidcup)

I beg to move amendment 112, in schedule 4, page 99, line 34, leave out “crest” and insert “badge.”

My amendment raises a point that may seem technical, but I believe it is important if the Bill is to respect the history and traditions of our great national game. There is reference in the proposed legislation to the “crest” of a football club, but as any student of heraldry or loyal football supporter will tell us, that term is often misunderstood. In fact, the correct term in almost every case should be the “badge”. A crest is a specific heraldic element part of a full coat of arms traditionally appearing above a shield and regulated under royal prerogative through the College of Arms.

That distinction may seem academic, but it is not. When clubs are challenged on their intellectual property, or when supporters are concerned about the commercialisation or alteration of the symbols that represent generations of loyalty, it matters enormously that we use the correct terminology. We are not just talking about branding. We are talking about something deeply symbolic: an identity that lives on scarves and gravestones, and in the hearts of whole communities. My noble Friend Lord Parkinson raised this point in the Lords with great care and I believe he was right to do so. He proposed that the Bill use the term “badge”, not “crest”, to ensure accuracy and to avoid the legal and cultural confusion that can arise when the wrong term is used.

Joe Robertson (Conservative, Isle of Wight East)

Another reason to include the word “badge”, my hon. Friend would presumably agree, is not only that is it technically correct, but it is a word used in football. It is a word that fans use. It is always helpful if legal documents in a Bill can reflect both technical and everyday wording. If the two are the same, that seems like an obvious answer.

Louie French (Conservative, Old Bexley and Sidcup)

I thank my hon. Friend for making that point. I must admit, as a long-term football fan, that I have never heard a player say that he kissed the crest of his club when celebrating a goal. The footballing term is as accurate as the legal one, as he highlights.

This may seem a modest amendment, but it speaks to something bigger: the importance of precision, respect for history and an understanding of football not just as a product but as a tradition. If we are going to regulate the game, let us do it properly with the right words and the right respect.

Stephanie Peacock (Labour, Barnsley South)

The hon. Member’s amendment follows the extensive debate regarding heraldic terminology in the other place. I can reassure him that the Government have worked closely with the College of Arms to ensure that the term “crest” is used consistently with heraldic law, and with the FA to ensure accuracy and cohesion with industry norms, as the term “crest” is the key term within its existing heritage rules. The Government amendments made in the other place make sure the legislation remains in step with both the FA and heraldic law, and that is in addition to changes to the explanatory notes, to further clarify the point.

Although the word “crest” is used colloquially in the industry, “crests” have a very specific meaning in heraldic law. Crests can only be granted by the College of Arms and only a select few clubs have been granted one. For that reason, the legislation refers to crests, but also needs to capture other clubs and circumstances. That is why the Bill uses “emblem”.

When making these changes, the Government explored the use of “badge” instead of “emblem”. However, it was felt that “badge” would risk unintentionally only capturing the image on shirts. In examples such as Arsenal or Liverpool, the shirt features only one element of the club’s emblem, such as the cannon or the liver bird. In those instances, “badge” might capture only those elements and thereby not deliver on the policy intent of protecting the heritage associated with the entire emblem. Given those comments, I ask that the hon. Member for Old Bexley and Sidcup withdraw the amendment.

Stephanie Peacock (Labour, Barnsley South)

Schedule 4 sets out the three threshold requirements—financial resources, non-financial resources and fan engagement—that clubs will have to meet in order to be granted a full operating licence. As I set out last week, to apply for a licence, a club must submit a business plan and a personnel statement. These are basic requirements that any club should be able to complete. As I have made clear, the regulator will support them with their applications wherever needed.

Before discussing the requirements for a full operating licence, I would like to correct a point I made last week regarding the hypothetical scenario where a club is not granted a provisional licence. I want to clarify that once a provisional licence is in force, a club must have a licence to be able to play in a specified competition.

As I have set out, to receive a provisional licence, a club must submit a business plan and a personnel statement. We think these are basic requirements that any club should be able to complete, and the regulator will support them with their applications where needed.

Lincoln Jopp (Conservative, Spelthorne)

The Minister mentioned the two criteria of the business plan and the personnel statement. I thought from our discussions last week that giving the regulator any form of information that the regulator so requested was an additional condition.

Stephanie Peacock (Labour, Barnsley South)

The two I mentioned are the basic points. The regulator has the ability to ask for further information should they want it. I think I gave the example that if the regulator is unsure about the source of funds, or whether there is enough, it could ask for more information. That will be at the discretion of the regulator—we had a well-rehearsed debate on that point last week.

We think that the requirements for a provisional licence are basic requirements that any club should be able to complete. As I was really keen to stress in the debate last week, the regulator will be keen to work with clubs to do everything it can to help them to meet those requirements.

The regulator needs to be satisfied that a club will be able to meet the mandatory licence conditions and duties on clubs once it has been granted a licence. This is a forward-looking “would comply” test. The expectation is that the provision of information and documentation, as well as the engagement with clubs as part of the application process, will be sufficient to satisfy the regulator. It should be straightforward for all clubs to obtain a provisional licence. Once they are in the regulatory system, a club will have time to improve standards up to the necessary requirements for a full licence, with the support of the regulator as needed.

Louie French (Conservative, Old Bexley and Sidcup)

One of the points we were slightly unclear about when we had the discussion of provisional licences before was what would happen if a club decided it did not want to apply for a provisional licence. There are several clubs that are very publicly concerned about the regulator. What would happen if they were to form, say, a union and go against the regulator and refuse to apply for a provisional licence? How would that work in practice? Would they be kicked out of the league?

Stephanie Peacock (Labour, Barnsley South)

The Government envisage that licence refusal or the revocation of a licence would be in extreme circumstances, but there will come a point when the regulatory system switches on and a licence will be needed in order to play. That is the point that I am keen to clarify. Yes, ultimately a club can be stopped from playing if it does not apply for a licence, but I stress that, with the provisional licence, it does not have to be meeting it; it has to be willing to meet it.

The regulator will do everything it can to work with clubs, because it is in no one’s interests for a club to be unable to play—that would be completely contrary to the purpose of the Bill. The purpose of the Bill is to improve club sustainability once the regime is in force. There must be a consequence for extreme cases, which is the point that the shadow Minister is making, but the club must be given every opportunity to meet the standards if it has failed to do so. Once a club is licensed, the regulator will have a range of other escalating enforcement tools. We will come on to enforcement, so I will not elaborate on that now—I do not want to test your patience, Sir Jeremy.

I turn now to the threshold requirements in schedule 4. There are three main areas of the regulator’s licensing regime that build on the freestanding duties in the mandatory conditions. Meeting the threshold requirements will mean that the regulator is satisfied that the club can currently operate sustainably in its financial, non-financial and fan-engagement areas and will continue to do so.

Although the threshold requirements are principles set in legislation, what each club must do to meet the threshold will not be the same. For example, what constitutes appropriate financial resources for a Premier League club will be very different to a League One club. A club may already meet the threshold requirements, for example, through naturally good operations or by complying with competition laws. In such cases, the regulator will not need to directly intervene. But if not, the regulator can apply discretionary licence conditions to bring the club up to the required threshold, which was the point that the hon. Member for Spelthorne referred to.

The structure will allow for a proportionate, light-touch system, with requirements tailored to clubs. The threshold requirement for financial resources means that clubs need an appropriate level of financial resources to support their long-term financial sustainability. The regulator will be able to consider any relevant factors to determine whether the club’s financial resources are appropriate relative to its circumstances and the risks it faces. For example, that might include which competition the club competes in, its financial relationship with its owners, and the wider economic context that it operates in. In particular, the regulator should take into account the club’s financial plan, and its contingency plan for dealing with financial shocks.

In essence, a club must have the financial resources to match the business it is operating—and plans to operate. If a club does not have the finances to back up its plans, or does not have plans in place for how it would manage foreseeable risk, it would need to do one of two things: either demonstrate that it has access to the necessary funding, or reconsider its plans and risk appetite. If it does not, then the regulator can impose discretionary licence conditions to bring the club’s finances back in line with its operations and risk level.

For non-financial resources, a similar threshold requirement and process applies. Non-financial resources could include things such as internal control systems and policies, as well as the information and people that a club has available to it. Although not financial in nature, these are important resources for any well-run club and need to be adequate. When assessing whether these resources are appropriate, the regulator might consider the skills and experience of senior managers, its plans, and its corporate governance arrangements.

The financial and non-financial resources of a club both need to be appropriate. For example, a club needs to have the financial means to back up its plans, and on the non-financial side it needs to have a contingency plan and risk-management processes to mitigate potential financial shocks.

Melanie Onn (Labour, Great Grimsby and Cleethorpes)

Is it the Government’s expectation that financial and non-financial resources will be proportionate to the size of the club?

Stephanie Peacock (Labour, Barnsley South)

My hon. Friend makes an important point; it will be proportionate. I have met with all the leagues a number of times, and this was of particular concern to the National League. It will be proportionate, and the regulator will take that approach when dealing with the different clubs and leagues.

Louie French (Conservative, Old Bexley and Sidcup)

I appreciate the Minister’s comments about proportionality; we will look to review that as the Bill goes forward. One question I have is about how the regulator will interact with the existing rules. The most obvious ones that come to mind are the financial fair play rules that are already in existence in the Premier League. What analysis of, and crossover with, the existing league investigations and restrictions to clubs will there be?

Stephanie Peacock (Labour, Barnsley South)

Those will be an issue for the leagues; where the leagues have rules, clubs will continue to comply with them. That is not something that the regulator will be involved with. Where there are league rules, that is for the leagues to enforce. I am happy to write to the hon. Gentleman to outline that further.

Louie French (Conservative, Old Bexley and Sidcup)

If the Minister could outline that further, it would be really helpful. At the end of the day, we are keen to ensure that there is no confusion in the regulations for clubs, nor any duplication of purpose for the regulator. We would like to understand how that will work in practice, and I would appreciate that in writing.

Stephanie Peacock (Labour, Barnsley South)

I will give way to the hon. Member for Spelthorne.

Lincoln Jopp (Conservative, Spelthorne)

I am sure that the Minister realises that one of the variants in a club’s business plan is whether its matches are selected for being televised. It is an incredibly haphazard process and difficult to predict, because they are decided within season. What guidance will the Minister give, as the appointer of the regulator, as to reasonable assumptions in the business plan regarding expected television revenue in season?

Stephanie Peacock (Labour, Barnsley South)

I think that it is an issue for the leagues, but I will happily write to the hon. Gentleman. I will check that point, but I am pretty confident that it would be left to the leagues. It is similar to what they deal with now. I will write to the hon. Members for Spelthorne and for Old Bexley and Sidcup further to their points, because it is helpful to get clarity in writing. Where there are league rules, they are for the leagues to enforce, but I will add further detail in writing, if that is helpful.

I would like to move on to the final point, about the requirement for clubs to adequately and effectively consult and consider the views of fans when making decisions relating to certain specified matters. Those relevant matters are listed in the Bill and cover key “off pitch” decisions, which the fan-led review highlighted as important to fans across specified leagues. The Government have made it explicit that that will include ticket pricing, as mentioned already, which is an issue of importance for many fans.

The threshold requirement is designed to work in tandem with the fan consultation mandatory licence condition. Through that condition, all clubs must regularly consult with a representative group of supporters to discuss the relevant matters listed in the Bill. That must be in place by the time a club is granted a provisional licence. Appropriate fan engagement will look different at every club and will partly be based on the size and complexity of the club’s fanbase, as I touched on in my earlier contribution.

James Naish (Labour, Rushcliffe)

This point is slightly tangential, but it is related to fan engagement. England are playing Senegal in Nottingham later today. With the support of the FA, we have run a competition for primary and secondary school children to design a new England shirt. Would the Minister be happy to congratulate Albie, Dylan, Joshua and Mikey on their contributions?

Jeremy Wright (Conservative, Kenilworth and Southam)

Order. That is not slightly tangential; it is very tangential. Just a brief answer, Minister, and then we must return to the schedule.

Stephanie Peacock (Labour, Barnsley South)

With the indulgence of the Chair, I will speak to the hon. Gentleman after today’s sitting. I would like to write to those who took part in such a wonderful competition.

I would like to complete my remarks by talking briefly about the threshold requirement, which has been designed to allow the regulator to recognise the inherent variation between clubs, while ensuring that standards are raised where necessary. It also allows the regulator to impose discretionary licence conditions on clubs relating to fan consultation.

Fans are the foundation of any club, and putting in place a supporter engagement threshold requirement recognises that they must be consulted on key decisions that affect their club. The Government have also looked to protect fan views, even in the worst-case scenario of a club entering administration. That includes the addition of a requirement to continue taking the views of fans into account when making decisions in insolvency proceedings, as long as the club retains the power to make decisions about the relevant matters.

Clive Betts (Labour, Sheffield South East)

On a general point, when we talk about fans and fan groups, who defines who they are and the relevant ones? That is a really important point. Coming back to our club, Sheffield Wednesday, we have more than 20 different fan groups. That is also true of other clubs. Talk to the EFL, because it often struggles to engage or know who actually represents fans, as opposed to two or three people who have got together to name themselves as a group. How are we going to deal with that? As fans become an integral part of the process, who decides who the relevant groups are?

Stephanie Peacock (Labour, Barnsley South)

I appreciate that point. We will come on to discuss that in relation to schedule 5, and I will give a fuller response then.

Clause 19 - revocation and cessation of operating licence

Louie French (Conservative, Old Bexley and Sidcup)

I beg to move amendment 106, in clause 19, page 13, line 19, at end insert—

“(c) inviting the club to make representations about the proposed revocation, and

(d) specifying the means by which, and the period within which, such representations must be made, which must be a period of not less than one month beginning with the day on which the notice under subsection (3) is given.”

This amendment allows clubs to make representations about the proposed revocation of their operating licence.

Clause 19 concerns the revocation and cessation of an operating licence granted to football clubs. That is understandably a crucial provision that goes to the heart of how the Government’s new regulator will exercise its most serious power, the ability effectively to remove a club from the regulated football pyramid by taking away its licence to operate. Let me clear from the outset that we support an independent regulator that can intervene when standards are seriously breached but, as with all powers of this kind, the devil is in the detail. Our task in this Committee must be to ensure that the regulator’s powers are proportionate, transparent and accountable.

Clause 19 provides that the regulator may revoke a licence if the club in in breach of licence conditions or if there are grounds to believe that the licence should never have been granted. In principle, that is entirely reasonable, but the consequences of revocation, for clubs, fans and communities, are potentially devastating. This is not the revocation of a licence to sell alcohol or to host events late into the night; it is the revocation of a licence to participate in the life of a community—in many cases, the cultural soul of a town or city. That power should not be exercised lightly, so I must raise several matters with the Minister.

First, what thresholds and safeguards are in place to ensure that revocation is used only as a last resort? Will the Government’s regulator be required to consider less draconian alternatives—such as conditional compliance periods, fines or a change in ownership—before resorting to the total revocation of a licence? Secondly, what procedural protections exist for clubs facing this threat? As it stands, there is no right of appeal, which is why I tabled amendment 106, which would allow clubs to make representations about the proposed revocation of their operating licence.

These are serious matters. The Government’s regulator is empowered to act in the interests of the game and to uphold high standards of governance, transparency and financial responsibility. But with such powers must come robust safeguards, and that is where the clause as drafted falls short. As it stands, there is no explicit requirement for the regulator to notify a club of its intention to revoke the licence, or to invite the club to make representations, before such action is taken. In effect, the regulator could move straight to revocation, without a formal process that allows the club to defend itself, explain its actions or offer remedial steps. That is not due process, it is not natural justice, and in any other regulated sector such an approach would be wholly unacceptable.

Melanie Onn (Labour, Great Grimsby and Cleethorpes)

The shadow Minister talks about there not being due process, but the Bill talks about a club’s failure being persistent and says that a failure is persistent if it has occurred

“on a sufficient number of occasions for it to be clear that it represents a pattern of behaviour or practice.”

It is not a one-off that results in revocation.

Louie French (Conservative, Old Bexley and Sidcup)

I understand the point that the hon. Lady makes, but we still believe that clubs have a right to representation and to appeal, which is what this amendment seeks to put into the Bill.

My amendment would fix the problem. It would require the Government’s regulator, before making any decision to revoke a licence, to provide the club with written notice of its intention to do so, and not just stating that it will be revoked but setting out the reasons and the evidence relied on. The club would then be entitled to respond—to make representations within a reasonable timeframe, to challenge the basis of the proposed revocation and to outline any mitigating circumstances or corrective measures.

Such a mechanism would not just be fair; we believe that it is necessary. The consequences of revocation of an operating licence are profound. It would prevent a club from competing in the regulated pyramid, as has been highlighted already. That would be likely to trigger financial collapse, job losses and irreparable harm to the club’s standing and its local community. Therefore, the decision to revoke must be taken only after the fullest consideration, and that cannot happen if one side is not allowed to speak.

There is a broader point about public confidence in the Government’s new regulator. For it to earn the trust of clubs, fans and the wider footballing ecosystem, it must be seen to operate fairly and transparently. Due process, consultation and the right to be heard before sanctions are imposed are all basic principles of good governance and the basis of justice. By incorporating my amendment in clause 19, we would be helping to enshrine those values at the heart of the regulator’s enforcement powers.

I urge the Committee to consider the precedent being set. If we allow revocations to occur without a statutory right to respond, we risk creating a regulatory regime that is reactive rather than reflective—one that punishes rather than reforms. That would be to the detriment of the game as a whole, particularly if clubs are chucked out or have their licence removed midway through a season. That would cause a much greater ripple across the league system.

Let me be clear: this amendment does not seek to tie the regulator’s hands. It does not require the regulator to delay action indefinitely or to overlook serious misconduct. What it does do is ensure that any action is taken with the full knowledge of the facts and with the benefit of a fair and balanced process. As we have heard already, clubs, especially those in lower leagues, do not have legions of lawyers or vast compliance departments. Despite best intentions, they may make genuine mistakes or fall foul of complex regulations. We must allow them the chance to explain, to engage and, where appropriate, to put things right, before the ultimate sanction is imposed.

This is a measured, sensible and proportionate amendment. It aligns with principles that Members across the House support, and I hope that the Committee will support it. If we are serious about building a strong, fair and sustainable regulatory regime, we must ensure that justice is not only done but seen to be done. On my broader concerns about the drafting of the clause, I ask the Minister what transparency will apply in such situations.

Lincoln Jopp (Conservative, Spelthorne)

Does my hon. Friend agree that his amendment is very much in the spirit of football? We have seen many injury time winners, when all the odds are stacked against a club, but in the dying moments they manage to rescue an almost impossible situation. So it is not only in the spirit of fairness, but in the spirit of football.

Louie French (Conservative, Old Bexley and Sidcup)

I thank my hon. Friend for putting it very poetically. He talks about the spirit of football. I am not sure how many last-minute winners Chelsea have scored over the years, but he might have misbehaved on the terraces with joy and jubilation when it has happened. His description was much nicer than calling it the VAR amendment, which would not have been so popular across the House. His point is well made.

Will the regulator be required to publish clear criteria and case-by-case justifications for any licence revocation, so that Parliament, the press and the public can understand why the decision was taken? What consideration will be given to the fanbase—the loyal supporters who may find their club’s future in jeopardy through no fault of their own? How will we be acting in the interest of fans of English football if we do not have transparency?

We must also bear in mind the risk of regulatory overreach. Such a power as this, unless it is tightly constrained, could inadvertently create uncertainty and instability in the football ecosystem. Clubs, owners and investors must know where they stand. A stable regulatory environment, not a reactive or arbitrary one, is essential if the Government’s new regulator is to command respect, not just fear. I hope the Minister provides more clarity on how her new regulator will apply clause 19 in practice and on what guidance will be issued to ensure that the power of revocation is exercised only with great caution and care. When dealing with a matter as serious as extinguishing the operating licence of a football club, we owe it to the game and to the people who love it to think through every safeguard properly.

Jeremy Wright (Conservative, Kenilworth and Southam)

The hon. Gentleman was sneaking slightly into clause stand part territory.

Stephanie Peacock (Labour, Barnsley South)

As you say, Sir Jeremy, we will speak in detail about the revocation or suspension of an operating licence when we debate clause 19 stand part, so I will save my detailed remarks for then.

To respond directly to the shadow Minister’s questions, there is an appeals process, and clubs can make representations; I will outline how. I thank him for his amendment, but the Bill already provides sufficient opportunity for a club to make representations ahead of its provisional licence being revoked. If a club persistently fails to meet the test for a full licence, clause 18(4) requires the regulator to give it notice inviting it to make representations.

There is a high bar for the revocation of a provisional licence under clause 19. The regulator must be satisfied of three things: first, that the test for a full operating licence is not met; secondly, that the club in question has persistently and without reasonable excuse failed to take reasonable steps to meet the test; and, finally, that there is no reasonable prospect of the club meeting the test within a reasonable period, even if it is given more time. In the unlikely circumstance that that high threshold is met, clause 18 sets out requirements to notify the club and allow it to make its case one last time. Specifically, if the regulator is minded to revoke a club’s provisional licence, it must give the club notice explaining why and invite it to make representations.

Only after that, if the regulator is still convinced that there is no reasonable prospect that the club will obtain its full licence, even given an extension, it can revoke the club’s provisional licence. In every case, the club will have been given adequate opportunity to make formal representations on the issue, in addition to the informal constructive engagement that we expect the regulator to have with the club regularly throughout this period. It is not necessary or proportionate for the club to be given another opportunity to make further representations as the amendment proposes.

If, after all that, the club believes that the regulator has taken the wrong course of action, there is further recourse through the appeals process. The club will be able to request that fresh decision makers at the regulator reevaluate the decision through an internal review. Alternatively, the club may appeal directly to the Competition Appeal Tribunal. If the tribunal decides to hear the appeal, it will do so on the merits of the case, so it will reconsider the evidence and may substitute its own decision for that of the regulator; it may, therefore, reverse the decision to revoke the club’s licence. That is another way that the regulator can be held to account and its decisions can be scrutinised. For those reasons, I ask the hon. Gentleman to withdraw his amendment.

Louie French (Conservative, Old Bexley and Sidcup)

The Minister has outlined the initial process before revocation is determined by the regulator. As I explained in my lengthy speech, which I will not seek to repeat, the amendment would give clubs a say if they believed a decision reached by the regulator was wrong. The Minister was clear about the tribunal approach if a club is not happy with a decision, but as I have outlined previously, my fear is that clubs will end up spending more time in court than they will focusing on the pitch and on the game. The official Opposition believe that an appeal process at that point would be more beneficial than a legal route.

Stephanie Peacock (Labour, Barnsley South)

As I said, clubs can make representations to the regulator and ask the regulator to look again, and beyond that there is the appeals process. As with all aspects of appeals process, the key considerations are the expertise of the judiciary, the tribunal’s experience and familiarity with the policy, speed and cost. We think the Competition Appeal Tribunal is the best option for balance. It is an internationally well-respected tribunal which offers time and cost-efficient options, with flexible case management to expedite urgent cases and bring in appropriate expertise. We believe that that avenue and the internal review process make adequate provision in the Bill and that the hon. Gentleman’s amendment simply is not needed.

Louie French (Conservative, Old Bexley and Sidcup)

I thank the Minister for that lengthy response. To be blunt, I disagree, and rather than delay the Committee any longer, I will press the amendment to a Division.

Stephanie Peacock (Labour, Barnsley South)

Clause 19 details revocation of a club’s provisional operating licence for failing to progress to a full licence, and a licence ceasing to have effect. For the revocation to occur, the regulator must satisfy itself of three things: first, that the test for a full operating licence is not met; secondly, that the club in question has persistently and without reasonable excuse failed to take reasonable steps to meet the test; and finally, that there is no reasonable prospect of the club meeting the test within a reasonable period, even if given more time. The regulator should engage with the club throughout this period. We expect that, through constructive dialogue, a solution can be found that avoids this drastic step in all but the most serious of cases.

The regulator must notify the club of its decision and provide its reasoning. Revocation must not take place before the end of the current season, to reduce as much as possible the impact on ongoing sporting competitions. A licence automatically ceases to have effect only when a club stops operating a team in specified competitions, the most likely cause being that the club is relegated from the specified competition and is therefore no longer in scope of the regulator.

Louie French (Conservative, Old Bexley and Sidcup)

I am trying to get clarity. Again, I will happily accept it in writing if the Minister does not have the answer today. Waiting until the end of the season before revoking a licence is entirely sensible, but what would that mean for relegation and promotion? For example, if a club is mid-table and the regulator decides its licence should be revoked, that will have a direct impact on the competitive nature of the league. Has any thought been put into whether, for example, that may mean only two teams are relegated that season, because one has lost its licence? How might it work in practice?

Stephanie Peacock (Labour, Barnsley South)

Where possible, we want to reduce any impact on ongoing sporting competitions. The hon. Gentleman presents me with a hypothetical scenario. I think it would be best if I respond in writing to him.

Regarding the circumstances when a licence automatically ceases to have effect, it will only happen when the club stops operating a team in specified competition. The most likely cause of that is a club having been relegated and therefore no longer being in scope. I commend the clause to the Committee.

Louie French (Conservative, Old Bexley and Sidcup)

I will not rehash the debate we have already had on the amendment. We were seeking greater transparency and a greater say for clubs at risk of losing their licence, which, as I have explained, is the ultimate sanction and would cause enormous damage to clubs and the communities in which they operate through job losses, and impact on the game and on fans. I would appreciate the Minister giving more clarity on how this will work in practice. These situations are hypothetical, but realistic, and would have serious consequences for not just the individual clubs, but the leagues and how they operate.

We believe strongly that promotion and relegation should be based on competition on the pitch. However, in the extreme example of a club breaching the licence so significantly that it is revoked, which might more realistically happen at the lower end of the pyramid, we need to have a greater understanding of what that means for relegation. All clubs deserve transparency in that regard. We have seen much speculation in recent years around change of ownership—I will not mention the clubs involved as some of the legal cases are ongoing—what that might mean for relegation and the significant financial consequences it may have for other clubs. It would be greatly appreciated if the Minister provided guidance on that in writing so that all Members can have a greater understanding of how it will work in practice.

Baggy Shanker (Labour/Co-operative, Derby South)

Will the Minister say whether a good licensing regime and, if necessary, revocation of licences would prevent clubs from going into full administration—as in the example of Derby County that my hon. Friend the Member for High Peak described—and the knock-on effect of that on supporters, suppliers and the local community? A licensing regime should prevent full administration and be able to deal with problem clubs at a much earlier stage.

Stephanie Peacock (Labour, Barnsley South)

My hon. Friend raises an important constituency point. I do not want to comment on particular clubs and predict the action the regulator may or may not take. We hope that the Bill will raise the bar across the board and prevent clubs from getting into difficulty, but I do not want to be drawn on the specifics.

We have been clear that this is not a zero-fail regime. I will endeavour to write to the shadow Minister regarding the complex, but important, hypothetical situation he has proposed.

Louie French (Conservative, Old Bexley and Sidcup)

I appreciate the Minister committing to that. The example just mentioned by the hon. Member for Derby South needs fleshing out as well, because clubs get into financial difficulty as a matter of course; points are therefore deducted mid-season, as we have seen, or, in the worst cases, the club goes into administration. The tests for the licence are about financial prudence and sustainability, so the hon. Gentleman makes a fair challenge.

What would happen if a club went into administration? Would the regulator seek to change the owner to allow the operating licence to continue, for example, or would the club, having lost the licence, then reapply via a new owner? The consequences would be dramatic. One would automatically assume that a club that no longer had a licence would have to start at the bottom of the football pyramid and come back up again, as we have seen in the past. Can the Minister add clarification of that important example to her letter?

Stephanie Peacock (Labour, Barnsley South)

Absolutely. We will come on to the owners and directors test later in the Bill Committee; perhaps we can explore this further at that point. The one point I would make to the shadow Minister and to my hon. Friend the Member for Derby South is that the aim of the regulator is always to minimise disruption to ongoing sporting competitions. I will add clarification on that when I write to the shadow Minister about the complex scenario he proposed.

Clause 20 - Mandatory licence conditions

Stephanie Peacock (Labour, Barnsley South)

The clause requires the regulator to attach full mandatory licence conditions to the provisional and full operating licences for all licensed clubs. These are basic and fundamental requirements of the whole regime and so apply to all licensed clubs, regardless of their individual circumstances.

The mandatory conditions vary in their aims. They are set out in schedule 5, so we will cover them in more detail, but to summarise briefly, the conditions on financial plans and annual declarations are about ensuring that the regulator has the relevant and timely information it needs to regulate effectively. That includes financial risk assessments, plans for managing financial risks, details on income and expenditure, and contingency plans in the event of a shock such as relegation.

The corporate governance condition introduces basic requirements to report against the club corporate governance code of practice published by the regulator. This reporting mechanism will mean that clubs are transparent about board structures, decision making processes and equality, diversity and inclusion.

The fan consultation condition establishes a baseline level of fan engagement that requires clubs to consult fans on specified matters. This will ensure that clubs have a framework in place to regularly meet and consult a representative group of fans on key strategic matters at the club, and on other issues of interest to supporters. This will work in tandem with the freestanding duties, such as those protecting club heritage and other key areas.

The annual declaration condition requires the club to submit a declaration on any matters that should have previously been notified, or to confirm that there are no such matters. I commend clause 20 to the Committee.

Louie French (Conservative, Old Bexley and Sidcup)

As outlined by the Minister, clause 20 requires the IFR to attach four mandatory licence conditions to the each club’s operating licence, whether provisional or full. This includes a requirement for the club to submit a financial plan, either annually or at more frequent intervals. I would be interested to hear the Minister’s views on how frequent she believes is reasonable; is that semi-annually, for example?

The club must also submit and publish a corporate governance statement explaining how it is applying the IFR’s corporate governance code, and regularly consult its fans. I think we need some clarity about how that will work in practice. The hon. Member for Sheffield South East raised the example of Sheffield Wednesday and multiple fans’ groups claiming to represent the club. I think that that needs some fleshing out so that the regulator is clear about what that consultation looks like. Obviously, that will be different for each individual club, which should, hopefully, know its fans better than anyone else.

Last, there is a requirement to submit an annual declaration of any material changes in circumstances affecting the club. Again, we would argue that that needs to be very clear to clubs, particularly if there is any—

Jeremy Wright (Conservative, Kenilworth and Southam)

Order. I hesitate to interrupt the hon. Gentleman, but, just so that he is reminded, we will get to the detail of all of this in schedule 5. Clause 20 simply introduces the schedule, so the hon. Gentleman might want to keep some of his powder dry for the schedule 5 debate.

Louie French (Conservative, Old Bexley and Sidcup)

I hear your words and I appreciate them, Sir Jeremy. I was just going to finish by saying that we would like to see some clarity around that. I am sure that we can pick that up again in the later debate.

Stephanie Peacock (Labour, Barnsley South)

I appreciate the shadow Minister’s comments. I will address them in detail when we come to the relevant debate.

Schedule 5 - Mandatory Licence Conditions

Clive Betts (Labour, Sheffield South East)

I beg to move amendment 7, in schedule 5, page 100, line 19, at end insert “(e) an enforcement condition.”

See explanatory statement for Amendment 8.

Jeremy Wright (Conservative, Kenilworth and Southam)

With this it will be convenient to discuss amendment 8, in schedule 5, page 103, line 16, at end insert—

“Enforcement

11A An enforcement condition is a condition requiring a club to incorporate and maintain within its Articles of Association (or equivalent constitutional document) provisions which—

(a) require any person in respect of whom the Regulator makes an order under section 43 to—

(i) transfer the shares and/or voting rights which are held, directly or indirectly, in the club by that person (or by the trustees or members referred to in paragraph 2(5)(a) of Part 1 of Schedule 1),

(ii) terminate that person's right (or that of the trustees or members referred to in paragraph 2(5)(a) of Part 1 of Schedule 1) to exercise, or cease to exercise, significant influence or control over the activities of the club, and

(iii) terminate that person's right (or that of the trustees or members referred to in paragraph 2(5)(a) of Part 1 of Schedule 1) to appoint or remove an officer of the club, and

(b) empower any director of the club, or any trustee appointed by virtue of an order under section 43, to complete, execute and deliver in the name of, and as agent and attorney on behalf of, the person referred to in paragraph 13(a) (or the trustees or members referred to in paragraph 2(5)(a) of Part 1 of Schedule 1) all documents necessary to fulfil that person's obligations under paragraph 13(a).”

This amendment creates an enforcement provision to better enable the removal of an unsuitable owner. It would require a club to amend its articles of association to include a standing set of compulsory share transfer provisions and restrictions on the usual powers of a majority shareholder.

Clive Betts (Labour, Sheffield South East)

This is actually quite an important issue—not that other things are not important—because it seems to me that it is at the heart of what happens when we try to get proper ownership into football clubs. It is a complicated legal issue, so I am not expecting the Minister immediately to agree with every word in my amendment, but I thank Fair Game for having a look at this and trying to come up with a solution.

The amendment relates to the case of Reading, a club that have had real difficulties recently: they had an owner who was not interested—they almost walked away from the club—and the EFL was in a difficult place because it eventually had evidence about behaviours, I think in China, that were not acceptable and meant that the owner was no longer a “fit and proper person”. What happens in that situation?

No one who is not a fit and proper person may run a club, so the club then cannot play in any competition it is currently in. That is the point that Reading almost got to. In the end, a sale was made just a few days before the EFL deadline day, which saved the club and allowed it to continue. But if the owner had been completely capricious, and had just decided, “It’s my club and I’m not selling, so what?” the club would have disappeared, and there is nothing that the EFL or anyone else could have done.

I am not sure the Bill says anything about what happens to a club if the current owner or owners were previously deemed to be fit and proper persons, but are no longer. Such persons cannot have a licence. Without a licence, the club cannot play in the competition. There is nothing that the regulator can do, as it stands, if the owner refuses to sell and give up their ownership. Where does that leave the club?

I am trying to find a way that gives the regulator powers—perhaps of appointing trustees—to enable the club to continue to operate with a licence in the competition they are playing in.

Jim Dickson (Labour, Dartford)

It is a pleasure to serve under your chairship, Sir Jeremy. We have all seen clubs driven into the ground by irresponsible owners. We have cited Dai Yongge at Reading, Mel Morris at Derby and Steve Dale at Bury, who disastrously led Bury into bankruptcy and eventually it disappeared. The dilemma will clearly be in how and when these powers are invoked and what criteria are used to invoke them. Would my hon. Friend say that this is about having backstop powers to enforce better behaviour by owners who may decide to engage in a course of action that brings a club to the sort of place that Reading, Derby and Bury have found themselves, rather than those powers always being exercised?

Clive Betts (Labour, Sheffield South East)

My hon. Friend is absolutely right. No one wants to see the regulator come in and compel clubs to change ownership. That is not the intention. Encouraging owners to behave better so that that intervention is not necessary is of course the ideal outcome, but history would teach us that not every power or potential use of power will compel some owners to behave properly. This is about what happens when they do not.

The whole purpose of these arrangements in the Bill is to stop the Burys happening again, or to stop the situation at Reading getting worse than it did. At this stage, I do not see where the power is for the regulator to do anything other than to say that someone is not a fit and proper person.

Lincoln Jopp (Conservative, Spelthorne)

Has the hon. Gentleman considered that, essentially, we are talking about the state seizing someone’s assets and giving them to someone else? If a club falls into administration, the administrator is governed by a very strict set of laws in terms of treating all creditors fairly. Is he not concerned that this power could fly in the face of existing powers for the administration of companies?

Clive Betts (Labour, Sheffield South East)

The hon. Member raises a worthwhile point for consideration. It may be that in the situation of Reading, if it had not changed ownership, the club would have gone into administration, because it would have had no income coming in because it could not play in the competition. That is entirely possible. It is possible that the chairman could just walk away and say, “Right, I am dissolving this organisation—I am off.” That would not be acceptable for fans.

That is why I said at the beginning that it is a complicated legal issue, and I am not saying that I have the only solution here. What I am saying is that there is a problem that does not currently appear to have a solution in the Bill. It is a problem. I keep going back to the situation at Sheffield Wednesday. We have a situation where an owner is running out of money. We do not even know where his money comes from. It clearly does not come from his companies, because his companies are loss-making. Is he being supported by his family? Is the Thai Union Group providing the money? Is the family trust providing the money? The regulator will have the power to find the source of funding, which might be quite interesting in some cases. We had a situation at Leeds a few years ago where we did not even know who owned the club.

Getting that information on the record and giving the regulator powers to find out who actually owns the club, what the source of funding is and whether the beneficial owner is the same as the owner who claims to be the owner are important issues, but then we get to the point where the owner is found to be not fit and proper. What actually happens? I do not know the answer. I have read the Bill many times and debated it many times, and still do not know the answer. There has to be an answer.

Lincoln Jopp (Conservative, Spelthorne)

My understanding of the Bill is that under those circumstances, they would lose their licence to operate.

Clive Betts (Labour, Sheffield South East)

They would, and therefore the club disappears. No one wants to see that. The whole purpose of the Bill is to stop clubs disappearing, to stop what happened to Bury, and so there is a gap in the legislation, because what happens in that situation? It nearly happened at Reading—the club nearly disappeared, but in the end it was a last-minute sale. If the owner had not sold it at the last minute, however, the EFL has no powers to deal with it, and the regulator will not either. The regulator has the power to say: “You shouldn’t be owning the club. You shouldn’t have a licence to operate the club, because of what you have done, you haven’t got the funds, your source of funds is inappropriate”—all those things—but then what happens?

I am saying to the Minister that the whole intention of the Bill is to ensure that the clubs that fans have supported for years, for generations—for communities, it is their club—do not disappear, go out of business or lose their place in the competition they are playing in. Clubs might get relegated, that is fine, but they should not lose their place because they have an owner who is not fit and proper, and does not meet the test. We have to find way of dealing with this, which the Bill does not do as drafted.

Stephanie Peacock (Labour, Barnsley South)

I thank my hon. Friend for moving the amendment and tabling amendment 8. To be the owner of a football club is to be the custodian of a treasured and historic community asset. That should be an honour, but it also comes with great responsibility. We recognise that in the past, however, it has typically been the actions of unsuitable custodians that have put our historic clubs at risk of collapse. It is vital that the regulator has the necessary powers to protect clubs and their fans from such owners. We therefore completely recognise the intent behind the amendments—to ensure that the regulator has the necessary enforcement mechanisms to back up its regime and guarantee protection from unsuitable owners.

I reassure my hon. Friend that the Bill already suitably achieves that. The regulator already has the power to require a club to make constitutional changes if the regulator considers that that is an appropriate way to secure an unsuitable owner’s removal. It has a range of strong powers to enforce against any non-compliance. The powers include the imposition of sanctions, such as financial penalties, all the way up to forcing divestment, which would force an owner to divest their stake in the club at no minimum price, directing them to take no part in the running of the club in the meantime. If necessary, the regulator can appoint an interim officer to assist the club operating effectively in the owner’s absence.

To respond to the point made by the hon. Member for Spelthorne in an intervention—a point made by my hon. Friend the Member for Sheffield South East a number of times—that ability to isolate and remove unsuitable owners and officers should mean that a club never has to have its licence suspended or revoked. A clubs’ fans should therefore not have to suffer the consequences of bad leadership. To be clear, because the licence is separate from the owner, the removal of an owner will not impact the club’s licensed status. We will come on shortly to discuss owners and directors, so I shall reflect on my hon. Friend’s comments ahead of that debate. I hope to provide him with reassurance, but we will not support his amendment.

Clive Betts (Labour, Sheffield South East)

Is the Minister saying that the regulator has the power to direct that someone else should be in charge of running a club and having operation of the licence that the club needs to compete in the competition, even if the owner is not a fit and proper person?

Stephanie Peacock (Labour, Barnsley South)

I am saying that the regulator may—I am not saying definitely will, because I do not want to get into hypotheticals of what it will do or not—appoint an interim officer to assist a club to operate effectively in the owner’s absence. To be clear, the club’s licence is separate from its owner, so the removal of the owner does not impact the club’s licensed status.

Clive Betts (Labour, Sheffield South East)

In further debate, we will come back to the issues of owners and directors, to which the Minister referred. As I said at the beginning, this was an exploratory amendment for discussion of the whole issue, which is important, but with her reassurance. at this point I will not press the amendments to a vote. I beg to ask leave to withdraw the amendment.

Clive Betts (Labour, Sheffield South East)

I beg to move amendment 16, in schedule 5, page 100, line 19, at end insert—

“(e) an Asset of Community Value condition.”

This amendment adds the requirement to attach an Asset of Community Value condition to each club operating licence.

Jeremy Wright (Conservative, Kenilworth and Southam)

With this it will be convenient to discuss amendment 17, in schedule 5, page 103, line 16, at end insert—

“Asset of Community Value

11A The Asset of Community Value condition is a condition requiring a club to either—

(a) obtain and maintain Asset of Community Value status for its home ground; or

(b) incorporate into its Articles of Association a restriction which substantially mirrors the restrictions placed on Assets of Community Value under the Localism Act 2011,

and the Secretary of State may create regulations detailing further the implementation of the Asset of Community Value condition.”

The amendment defines the Asset of Community Value condition that clubs are required to obtain for their home ground and is consequential on Amendment 16.

Clive Betts (Labour, Sheffield South East)

Assets of community value have been looked at in a number of different ways over time. Some clubs are already in this situation because their fans have moved to do this. That is true at Sheffield Wednesday, where fans moved some time ago to have the ground designated as an asset of community value. It does not provide a complete safeguard against an owner, who wants to cause mischief and upset for fans and the club, transferring the ground for another purpose, but it provides more of a safeguard than simply having it as a ground without any particular protection, as is currently the case.

The Minister referred to what the MHCLG might be doing in this area on the rules around planning. Is she prepared to look at using assets of community value to give further protection and to comfort fans that football grounds hold a different status to other assets that owners, from time to time, might want to change for another purpose?

Stephanie Peacock (Labour, Barnsley South)

I thank my hon. Friend for tabling the amendments. I know we have discussed this issue a number of times; it has always been a pleasure to do so, and I recognise its importance. Home grounds are often the most important asset that a club owns, so that is why I want to thank my hon. Friend for placing a real focus on them.

The significant financial and heritage value that grounds hold is why the Bill has strong protections to prevent home grounds being sold, used as collateral or relocated without the necessary considerations. Asset of community value status is another mechanism that a number of clubs and supporter groups have obtained for their home grounds. We would expect the regulator to welcome any club that wishes to gain community value status for an asset as another way to protect their home ground.

However, we are confident that the legislation will provide the necessary protections to address fan concerns and keep these important assets protected without mandating this status. Additionally, while assets of community value have proven beneficial for many clubs where no other protections have been in place, these amendments may place an unnecessary burden on clubs. As currently drafted, they would require clubs to either go through what can be a lengthy process with the relevant authority or make structural changes to the constitutional document of a club. Given that significant protections are already in place in the Bill that deliver the necessary safeguards, it is difficult to justify any additional measures for all regulated clubs, especially as a mandatory licence condition.

I really want to reassure my hon. Friend, as I know that home ground protections are of particular importance to him, that the Government have already committed to asset of community value reform in our manifesto, and this is something that the recent English devolution White Paper from the Ministry of Housing, Communities and Local Government commits to.

Louie French (Conservative, Old Bexley and Sidcup)

I have a lot of sympathy for the amendment tabled by the hon. Member for Sheffield South East. The Minister argues that this does not need to be addressed through the regulator, but will guidance be published for those fan groups who are keen to ensure the long-term future of their grounds? What guidance will be published to ensure that any fans in this situation have clear advice from the Government on the best routes to protect their ground?

Stephanie Peacock (Labour, Barnsley South)

I am saying that I am confident the legislation will provide the necessary protections to address fan concerns, but I also draw the Committee’s attention to the work of the Ministry of Housing, Communities and Local Government on the specific issue of assets of community value. Of course, that does not fall into my portfolio, but I am very happy to commit to speaking to my relevant counterpart and adding to the letter that I have earlier committed to writing. This is something that I am sympathetic to, but I do not have the ability to make that commitment today. I believe that the work the Ministry is doing is very interesting and relevant to what we are discussing. For that reason, I am unable to accept my hon. Friend’s amendment, and I ask that he withdraws it.

Clive Betts (Labour, Sheffield South East)

I thank the Minister for that reply; it is helpful in moving the discussion in the right direction. I appreciate that she cannot commit on behalf of another Department and other Ministers, but she has indicated that work is going on in this area. Again, it would be helpful if she could encourage her colleagues in the MHCLG to come forward with that further information before we get to Report. If they are going to write to us about the other issue, they could write to us about this as well. It would be extremely helpful if that could be done, but I beg to ask leave to withdraw the amendment.

Louie French (Conservative, Old Bexley and Sidcup)

I beg to move amendment 135, in schedule 5, page 101, line 20, leave out sub-subparagraph (ii).

Jeremy Wright (Conservative, Kenilworth and Southam)

With this it will be convenient to discuss amendment 136, in schedule 5, page 102, line 7, leave out sub-paragraph (e).

This amendment removes the requirement for the corporate governance statement to cover what action the club is taking to improve equality, diversity and inclusion.

Louie French (Conservative, Old Bexley and Sidcup)

My amendments would remove the requirement for clubs to include in their corporate governance statements an account of the actions they are taking to improve EDI. Although the intentions behind the provision may be well-meaning, we believe it is misplaced within the framework of a Bill that is rightly intended to stabilise the footballing pyramid, preserve our historic clubs and ensure sustainable financial conduct.

Let us be clear about what schedule 5 seeks to achieve. It introduces a requirement for clubs to prepare and publish an annual corporate governance statement setting out how the club is managed, its leadership and board structure, and the internal controls that ensure compliance with financial and operational rules. That is, at heart, a welcome and worthwhile measure that will support transparency and proper stewardship across the game. Those are principles that we have been urging the Government to apply to the regulator throughout the process of the Bill, but we believe in certain areas they have declined to do so. The inclusion, however, of a requirement for clubs to report on their actions to advance EDI veers into territory that is, at best, tangential to the core purpose of the legislation. This is, after all, a Football Governance Bill, not a vehicle for social policy experimentation.

Melanie Onn (Labour, Great Grimsby and Cleethorpes)

We talked about this briefly in a previous session. The requirements in schedule 5 are exactly what would be found in any business’s corporate governance report, alongside ESG expectations. Why should it be different for football, and is it particularly the “E”, the “D” or the “I” that the shadow Minister does not like?

Louie French (Conservative, Old Bexley and Sidcup)

In my previous career, I headed up sustainability on ESG, so I understand the hon. Lady’s point. If she will let me continue, I believe my points will answer her question.

This country’s football clubs are not arms of the state. They are private institutions, many of which are more than a century old, with proud identities shaped by the local community’s traditions and values. Their job is not to issue corporate platitudes on diversity but to serve their supporters, compete on the pitch and conduct themselves with financial integrity. Mandating EDI reporting risks turning the regulator into a cultural enforcer rather than a steward of good governance.

Importantly, however, we must also consider the burden it will place on clubs, particularly those in the lower leagues. Our amendments go to the heart of an argument that has served us time and again during the scrutiny of the Bill: the risk of regulatory overreach and overburden. Clubs in League One and League Two, National League outfits and even some Championship sides already struggle with the administrative requirements expected of them, from audit processes to licensing compliance. Adding more politically motivated reporting requirements, particularly in controversial and contested areas such as EDI, risks deepening the strain without any justification related to the Bill’s primary purpose: football. Some may argue that football has a responsibility to lead on matters of social justice, but cultural change should not be imposed by statutory mandate. Real change, where needed, comes from within; from clubs taking action because it is right for them and their supporters, not because a regulator demands it as part of its governance tick-box exercise.

We can see that with Forest Green Rovers, a club that chose, of its own accord, to take a distinctive approach to sustainability, ethics and inclusion not because a regulator told them to, but because it aligned with their leadership values and the identity they wanted to build. Whether or not one agrees with their choices, the point is that they were made voluntarily. That is the right way to foster progress in football—through leadership and initiative, not through regulatory coercion.

As we discuss schedule 5 and the role of corporate governance statements in football clubs reporting, it is important to recognise the significant work already underway in the game on EDI—work that is being driven voluntarily and effectively by the FA, Premier League, EFL and National League without an overzealous and politicised regulator interfering. The Premier League has developed its own EDI standard, known as PLEDIS. It provides clubs with a clear, structured framework to improve inclusion both on and off the pitch. It is not a mere tick-box exercise, as we fear the Government regulator will be. It is a rigorous programme of three levels: preliminary, intermediate and advanced. Clubs must earn all of those levels for evidence-based progress and independent assessment.

Max Wilkinson (Liberal Democrat, Cheltenham)

The shadow Minister referenced Forest Green Rovers, which is the rival club to my town’s club, Cheltenham Town. I have nothing against Forest Green Rovers. They have vegan catering, and many people view veganism as a political statement. That is, of course, a business choice that Forest Green Rovers made and it has served them well. Based on a previous amendment the shadow Minister tabled, would he suggest that the fans should have been consulted on the move from meat to vegan food being served in the grounds?

Louie French (Conservative, Old Bexley and Sidcup)

I am happy to answer that with a simple yes. They should have been consulted.

To date, 27 clubs have engaged with PLEDIS, and 18 have achieved the advanced level. Clubs such as West Ham United have demonstrated genuine leadership by embedding EDI principles deep within their organisation over multiple years without the need for Government involvement.

Beyond PLEDIS, the Premier League’s “No Room for Racism” campaign highlights a range of targeted initiatives, from supporting coaching pathways to enhancing representation among players and officials from diverse backgrounds. Premier League schemes such as the professional player to coach scheme and the coach inclusion and diversity scheme have supported more than 80 coaches into full-time professional roles. Meanwhile, thousands of grassroots participants benefit from programmes aimed at increasing access for under-represented communities in football, including the south Asian action plan.

Meanwhile, the English Football League has also taken proactive steps through its equality code of practice, which encourages clubs to set ambitious, measurable goals and recognise best practice through an awards system, with 10 clubs having attained silver status as of last year. The EFL’s community outreach includes programmes such as the Stronger Communities cup, which promotes social cohesion by bringing together girls from local communities and girls who have been forcibly displaced. The EFL Trust’s talent inclusion programme further demonstrates how clubs are creating pathways for young women from diverse backgrounds, ensuring that football’s future is open and accessible. All that work has taken place without the need for the Government’s regulator to interfere.

These efforts underline a key principle: real progress on equality and inclusion in football comes through leadership, commitment and initiative, not through bureaucratic mandates or additional regulatory burdens. Clubs are already stepping up in a meaningful way. That is why we argue against adding a new statutory reporting requirement on EDI in the Bill. We believe that this would risk distracting from the core purpose of the Bill—ensuring sound governance and financial sustainability within English football—while imposing burdens that may not add tangible value.

I urge hon. Members to recognise the existing achievements of football and to support my amendments, which would remove the unnecessary requirements for clubs to report on EDI action in their corporate governance statements. Fans do not attend matches to receive diversity statements. They go to support their team, share in the highs and lows, and pass on the tradition that means something to them and their community. They do so as part of a footballing community that is focused on the team they support, not the colour of a supporter’s skin, their religion or their sexual preference.

These initiatives reflect concerted efforts by the Premier League, the FA, the EFL and the National League to foster an inclusive environment in football. They demonstrate that meaningful progress on EDI can be achieved through voluntary, club-led actions rather than statutory mandates. What precisely do the Government intend that their regulator do with these EDI statements? Will they be assessed for adequacy and ranked against each other? Will penalties be imposed for perceived failure to meet EDI expectations? The risk is not just regulatory creep, but mission creep—the regulator may become an arbiter of social values rather than a guarantor of financial sustainability and good governance.

Let me be absolutely clear: we support inclusivity and fair treatment in football and beyond. Discrimination has no place in the game. Kick It Out and Show Racism the Red Card do important work, and we will continue to support that work, but not by putting extra burdens on clubs that are, in many cases, already struggling due to Labour’s decision to hammer businesses at every turn and twist.

Melanie Onn (Labour, Great Grimsby and Cleethorpes)

The shadow Minister spoke about initiatives that have already been undertaken in football. Clubs have a wider role of community leadership in local communities, and is that not precisely what these rules and regulations provide for? They will ensure that clubs deliver community leadership on things that are important, particularly around community cohesion.

Louie French (Conservative, Old Bexley and Sidcup)

As I have made clear, we believe that some of these issues are important, but we believe that they should be addressed on a voluntary basis, which is what has driven progress in the game. We do not believe that it should be mandated in statute at arm’s length by the Government. I have been clear in making that distinction in my comments.

Requiring clubs to report annually on their EDI action is not a proportionate or effective way to achieve those broader aims. It amounts to moral licensing, encouraging clubs to go through the motions rather than to take meaningful steps to foster a welcoming culture in ways that make sense for them.

My amendments would restore clarity to the regulator’s remit. They would ensure that schedule 5 is focused on what really matters: clear lines of accountability, proper oversight of directors and owners, and a robust governance structure that protects clubs from the kind of catastrophic mismanagement that we have seen in the past. Football has always been about community; it is in the dressing rooms, on the terraces and in the shared heritage of our towns and cities that the game’s values are lived. Let us not fall into the trap of thinking that they can be legislated for by line item in a regulator’s reporting requirements. It is for that reason that I tabled these amendments. I urge the Minister to reflect seriously on whether this part of schedule 5 is truly consistent with the aims of the Bill and the traditions of our national game, which is inclusive by default.

Stephanie Peacock (Labour, Barnsley South)

I thank the hon. Gentleman for the amendments, but I disagree with the attempts to remove the references to EDI from the Bill. I will outline why and then, towards the end of my contribution, I will respond to his specific questions.

The Government believe that equality, diversity and inclusion is a key part of good corporate governance. As my hon. Friend the Member for Great Grimsby and Cleethorpes outlined, it is common practice. Research shows that diversity on boards and in organisations promotes better governance, decision making and transparency, all of which, in turn, contribute to improved financial sustainability. The relationship between diversity and better corporate performance is recognised by the Financial Reporting Council and the Association of Chartered Certified Accountants.

The industry is already taking action in this space, and the shadow Minister shared some examples, which I will not repeat. In November 2024, the FA published its four-year equality, diversity and inclusion strategy, titled “A Game Free from Discrimination”. It set out a long-term commitment to celebrate and promote diversity in English football, as well as an ambition to tackle all forms of discrimination in the game.

At a club level, in May this year, Chelsea’s incredible work in that area was recognised, with the Premier League awarding them the advanced level of its equality, diversity and inclusion standard—the highest level that can be awarded. All clubs in the Premier League, and some that have since been relegated from it, engage with the Premier League equality, diversity and inclusion standard initiative.

The Bill does not put EDI in football—it is already there and it is being celebrated by the industry. It is therefore right that, as a regulator that will be introducing a corporate governance code and requiring clubs to report against that, it covers EDI. The regulator will look to work co-operatively with stakeholders, draw on the expertise of the sector and add industry initiatives.

As with fan engagement, this will be a statutory baseline. Clubs that already champion equality, diversity and inclusion will not have an additional burden placed on them, other than having to periodically report on those things. Under the corporate governance code, clubs will simply be required to explain how they are applying the code and what actions they are taking to improve equality, diversity and inclusion—and nothing more. That is not onerous; it is a very helpful transparency measure, and it speaks to the question that the shadow Minister posed. I want to be very clear: the regulator is not going to prescriptively micromanage each club’s board or set targets and quotas on EDI. That is simply not the role of the regulator and would cause a significant burden to both the regulator and clubs. Ultimately, this is only a reporting requirement that all clubs should be able to meet.

Louie French (Conservative, Old Bexley and Sidcup)

I appreciate the clarity provided by the Minister in outlining what she believes the regulator should or should not do. On quotas, can we be absolutely clear that the Government’s intention is not for there to be a mandated quota for clubs to have certain elements and different parts of the community on the board? Is that the clear intention in what the Minister is saying?

Stephanie Peacock (Labour, Barnsley South)

Absolutely. I will repeat the wording I just used in the Committee: to be very clear, the regulator is not going to prescriptively micromanage each club’s board or set targets or quotas on EDI. We will have that in Hansard twice now, so the intention should be very clear. Therefore, I hope that the hon. Member will seek to withdraw his amendment.

Louie French (Conservative, Old Bexley and Sidcup)

I appreciate the clarity that the Minister provided on quotas, because that particularly concerns Opposition Members. As I have mentioned—I will not seek to repeat my comments—we are concerned about mission creep and scope creep of the regulator and what the Bill is designed to do. I made it clear earlier that I believe that football is inclusive and that it has done amazing work, when we compare the state of football 20 or 30 years ago with where we are today. We see that on the terraces at most clubs every single week, and we certainly see that with the national team, which most of the country comes together to support, particularly in big tournaments.

Mandating EDI reporting and turning it into a bit of a tick-box exercise—that was highlighted in some of the Minister’s comments—moves away from what we believe to be the valuable part of this work, which is to drive forward inclusivity in clubs and increase the fan base, which is good for clubs, by expanding beyond some of the traditional support of the game. We fear that having this provision in the corporate governance code, in the way it is written, will lead to unintended consequences. It will drive certain agendas, and we fear that clubs will walk into a number of traps accidentally.

We have tabled these amendments because we believe that EDI reporting, especially in certain areas where it is contested, should not be put on clubs in this way. The voluntary scheme in football has worked much more powerfully over the years, and that is proven in the experiences at football grounds around the country.

Louie French (Conservative, Old Bexley and Sidcup)

I beg to move amendment 137, in schedule 5, page 102, line 2, at end insert

“including the club’s official charity.”

This amendment would make clear that the activities of a football club’s official charity can be counted towards it meeting the corporate governance code.

It is a pleasure to speak in favour of the amendment. The Bill as drafted does not specify that the activities of these charities—often known as community trusts—count when taking into account actions taken by the club in relation to meeting the corporate governance code, so I start by asking the Minister why the Bill does not contain explicit recognition, in the governance reporting requirements, of the work done by community trusts. I would appreciate it if she could pick that up in her comments.

As both the shadow Minister for sport and the Member of Parliament for Old Bexley and Sidcup, I am in a fortunate position: I get to see week in, week out how sport, and football in particular, can transform lives. I also get to see what that looks like in practice, not just in headlines or strategies, but on the ground—in local parks, youth centres and school halls across my constituency. I know that other Members will have similar experiences in their own.

In my constituency, we are lucky to benefit from the extraordinary work undertaken by Charlton Athletic Community Trust. It is no exaggeration to say that CACT, if we want to call it that—I do not really like that wording—has become one of the most respected and impactful community foundations affiliated with a professional football club anywhere in the country. It often wins awards at national level for that work. Its work extends far beyond the pitch and well beyond the borough of Greenwich, where the training ground and the stadium—the Valley—are located, and deep into my borough of Bexley, the wider south-east London area, and Kent. In fact, Charlton have been delivering services and support in Bexley for well over a decade.

Charlton’s community trust delivers youth services on behalf of Bexley council. It provides safe spaces and structured activities that help young people to develop skills, build confidence and stay on the right path. In today’s world, where young people, as most Members would recognise, face growing pressures and limited opportunity, that kind of work is more vital than ever.

Although Charlton are not a Premier League side just yet, one of the flagship initiatives that it runs is the Premier League Kicks programme, which operates across the borough in areas such as Thamesmead, Slade Green and Erith—places where young people often face the dual challenge of limited opportunities and exposure to risks—as well as in my area of Old Bexley, Sidcup and Welling. The Kicks sessions are free weekly football sessions, but they are about much more than just sport. They take place in safe and welcoming environments and are led by trained staff. Young people aged between eight and 18 can build confidence, learn leadership skills and receive mentoring from positive role models—often young adults who were once participants in the scheme.

What makes the Kicks programme in Bexley particularly valuable is its consistency and partnership working. Sessions are delivered year round in collaboration with the police, youth services and local schools. This is not a one-off scheme or a publicity stunt. It is part of a broader, integrated approach to youth engagement and early intervention that genuinely helps to steer young people away from things such as crime and towards the opportunities that football presents.

Charlton’s work goes far wider than just youth engagement, although I have seen that recently at Hurstmere school in my constituency and when Charlton brought the Premier League trophy to a local park. It was incredible to see the reactions of young football fans to the trophy. Just remember not to touch it—a mistake that I made on the day, and I was rightly told off.

In Bexley, Charlton are a contracted delivery partner for the council’s early help youth services—statutory support that has been delivered to a high professional standard for many years. Importantly, the trust has developed deep and lasting partnerships in Bexley and Greenwich, not only with the local authority, but with the NHS, local schools, the police and the voluntary sector. That joined-up approach is what makes its work sustainable and successful. As I said, I am sure that many other clubs around the country are doing such work.

Jim Dickson (Labour, Dartford)

The hon. Gentleman is outlining in great detail the amazing work done by Charlton Athletic through its club charity. Nearby Dartford football club are lower down the football pyramid, but is he aware that, none the less—typically of clubs around the country, be they in League One, the Championship, as Charlton now are, or lower down the pyramid—it does amazing work? Dartford FC educational charity does incredible work in the community. It has partnered up with ellenor hospice to raise money, and it has undertaken great public health work with Kent county council around stopping smoking. I am glad that he has mentioned Charlton’s work and given us an opportunity to raise the work done by our clubs.

Jeremy Wright (Conservative, Kenilworth and Southam)

Before the hon. Member for Old Bexley and Sidcup responds, it may be of assistance if I put on record that I am prepared to take it as read that all football clubs do good work. There is no need for Members to explain it in detail.

Louie French (Conservative, Old Bexley and Sidcup)

Thank you for your guidance, Sir Jeremy. You will be pleased to know that I am coming on to why my example is relevant to the amendment. I am grateful to the hon. Member for Dartford for raising the example of Dartford football club—a rival of one of my other local clubs, Welling United, which also do great work in the community.

In the light of your words, Sir Jeremy, I will move on to the amendment. Clubs do such amazing work around the country, and the amendment would ensure that that is recognised properly in the Bill. I hope the Minister agrees that work that such community trusts are delivering around the country, particularly in youth engagement, public health and crime prevention, should form part of a club’s social responsibility and how it is reported.

Why does that matter in the context of the Bill? Because we are legislating for a new governance framework for football, and the Government have decided that this Bill must reflect football clubs’ wider social responsibilities and recognise the real value of institutions such as the trusts, which deliver on the responsibilities in practice. As the Bill is drafted, there is a risk that such work will be seen as separate from clubs’ corporate governance responsibility, and there is a risk that a club will have to wind up its charitable organisation—God forbid—and bring it fully in-house to meet the requirements of the Bill. Allowing a club’s charities or community trusts to count towards that will allow the good work to continue growing while trusts benefit from their charitable status.

The Bill is a slight own goal, but I believe the drafting can be corrected. We believe it represents a missed opportunity for communities across the country, and our amendment would correct that by making it clear that clubs can include the work of their associated community trusts as part of how they meet their governance targets. That does not mean giving clubs an easy ride or allowing them to paper over poor performance elsewhere, but it does mean taking a more holistic, grounded approach to what good governance looks like in the real world.

When we are considering how best to shape football regulation, I believe the example set out by the Charlton trust should give us something to aim for across the country and across the football pyramid. It shows what football at its best can do when it is rooted firmly in its community and takes its social obligations seriously. Charlton Athletic may not be in the Premier League at the moment—give them another season—but through the community trust, they are leading the way in community impact. I understand that it is up for another national award this year.

That is why I believe the amendment is not only proportionate and practical, but in keeping with the spirit of the legislation. If we are serious about building a more sustainable and responsible football pyramid, we must also be serious about recognising clubs that take their community obligations very seriously, not through a statement of intent but through long-standing, properly resourced partnerships.

In Bexley, it does not matter whether you are an Addick yourself; you can come along to a Premier League Kicks session and be part of something bigger. The same is true of neighbouring Millwall, who do lots of great work in the Lewisham borough. We want this to be more than a box-ticking exercise.

There is a real risk that clubs will scale back some of that work if it is brought under the scope of the Government’s regulator. I am sure the Minister would agree that that would be an unintended consequence. Does she agree that allowing clubs to include their trusts’ work in their corporate governance statements would incentivise long-term investment in high-quality community programmes, rather than short-term or superficial schemes?

We hope that any new regulatory framework, including the establishment of the Government’s regulator, will recognise and protect the kind of local partnership work that I have described today. Will the Minister therefore tell us whether she believes that when it assesses a club’s performance, the regulator will be equipped to distinguish between high-impact, properly evaluated community work, such as I have described, and less substantive activity? Will she issue guidance that the regulator must have regard to outreach delivered through a club’s trust when assessing corporate governance?

Stephanie Peacock (Labour, Barnsley South)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Louie French (Conservative, Old Bexley and Sidcup)

I beg to move amendment 131, in schedule 5, page 103, line 16, at end insert—

“

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.

Lee Dillon (Liberal Democrat, Newbury)

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?

Louie French (Conservative, Old Bexley and Sidcup)

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.

Karl Turner (Labour, Kingston upon Hull East)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

Will the Minister give way?

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

I will contribute to the debate.

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

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?

Stephanie Peacock (Labour, Barnsley South)

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.

Clause 21 - Discretionary licence conditions

Stephanie Peacock (Labour, Barnsley South)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clause 22 - Scope of powers to attach or vary discretionary licence conditions

Louie French (Conservative, Old Bexley and Sidcup)

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.

Karl Turner (Labour, Kingston upon Hull East)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clause 23 - Procedure for attaching or varying financial discretionary licence conditions

Karl Turner (Labour, Kingston upon Hull East)

With this it will be convenient to discuss the following:

Clause 24 stand part.

Schedule 6.

Clause 25 stand part.

Stephanie Peacock (Labour, Barnsley South)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Joe Robertson (Conservative, Isle of Wight East)

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?

Louie French (Conservative, Old Bexley and Sidcup)

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.

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clause 26 - Part 4: overview and interpretation

Max Wilkinson (Liberal Democrat, Cheltenham)

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.

Karl Turner (Labour, Kingston upon Hull East)

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.

Max Wilkinson (Liberal Democrat, Cheltenham)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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?

Joe Robertson (Conservative, Isle of Wight East)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Max Wilkinson (Liberal Democrat, Cheltenham)

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.

Karl Turner (Labour, Kingston upon Hull East)

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

Stephanie Peacock (Labour, Barnsley South)

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.

Lee Dillon (Liberal Democrat, Newbury)

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.

Joe Robertson (Conservative, Isle of Wight East)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

James Naish (Labour, Rushcliffe)

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?

Stephanie Peacock (Labour, Barnsley South)

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.

Lee Dillon (Liberal Democrat, Newbury)

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.

Clause 27 - Duties to notify IFR of prospective new owner or officer

Stephanie Peacock (Labour, Barnsley South)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clause 28 - Determination of suitability required for new owner

Karl Turner (Labour, Kingston upon Hull East)

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

Stephanie Peacock (Labour, Barnsley South)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clause 33 - Duties to notify IFR of change in circumstances relating to incumbent owner or officer

Karl Turner (Labour, Kingston upon Hull East)

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

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

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?

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

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”?

Stephanie Peacock (Labour, Barnsley South)

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.

Clive Betts (Labour, Sheffield South East)

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?

Stephanie Peacock (Labour, Barnsley South)

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.

Louie French (Conservative, Old Bexley and Sidcup)

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.

Stephanie Peacock (Labour, Barnsley South)

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.

Written evidence reported to the House