The government’s proposed new football regulator would create a “closed shop” of top sides, West Ham United vice chair Karren Brady has warned.

The Football Governance Bill, which would lead to the creation of a regulator, was debated in the House of Lords on Wednesday.

Baroness Brady, who has held senior positions at clubs for 30 years, told peers there were “dangers lurking in this bill”.

“Aspects of this legislation risks suffocating the very thing that makes English football so unique, the aspiration that allows clubs to rise and succeed in our pyramid system. The ambition that means fans can dream,” she said.

The government wants a regulator to be able to “improve the resilience of club finances, tackle rogue owners and directors and strengthen fan engagement”.

The bill was introduced after a similar measure by the previous government ran out of time to be made law before the general election.

But Conservative peer Brady said planned “extreme redistribution” would “replace our brilliant but brutal meritocracy with the likelihood of a closed shop where survival not aspiration becomes a ceiling”.

Supporter groups and the English Football League are among those to have welcomed the bill, though the Premier League has insisted there is no need for an independent regulator.

Labour’s Baroness Fiona Twycross defended the bill.

“Irresponsible owners, unsuitable financial models and inadequate regulation have cast a shadow over too many of our clubs and too often it is fans who have had to fight to protect their club’s identity, heritage and even its very existence,” she said.

“The football industry has not gone far enough in tackling these issues, despite many opportunities to do so. That is why we are bringing forward this bill.”

Independent crossbench peer Baroness Tanni Grey-Thompson was concerned by the lack of women’s football as a consideration in the bill.

“There is an obvious exclusion and that is the women’s game,” the Paralympian said.

“If the aim of this bill is to ensure financial sustainability for the future of football, should this not be for the whole game?

“There will be many who will say that no regulator is required, but I believe that the exclusion of the women’s game from this bill could actually hinder its growth, so that it will continue to be an afterthought when it should be at the forefront of football’s innovation.”