Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025

Tuesday 22nd July 2025 Lords Chamber

Motion to Approve

15:27

Moved by

[Baroness Twycross]

That the draft Regulations laid before the House on 15 May be approved.

Relevant document: 27th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Baroness Twycross) (Lab)]

My Lords, I shall also speak to the Enterprise Act 2002 (Amendment of Section 58 Considerations) Order 2025 and the Enterprise Act 2002 (Definition of Newspaper) Order 2025.

This set of regulations will broaden the scope of media merger regimes and strengthen the public interest protections, as well as setting the scope of exceptions that will apply to foreign state influence in UK newspapers. Taken together, these are the most significant changes to the media public interest regime since the Communications Act 2003. I know that many noble Lords have sincerely and strongly held views on the matters to be debated today and I am grateful to those across your Lordships’ House who have met me, the Secretary of State or officials to discuss them. It is good to see the noble Lord, Lord Fox, back in his place.

I will go back to first principles to place the new measures in their proper context. Fundamental to this is the need for us all to consider the very real risks to the survival of UK newspapers, including very high-profile names, and the wider news media. I understand and share noble Lords’ concerns about the growing threat of foreign state actors seeking to undermine our institutions and our democracy. There is a risk that this might translate into efforts to interfere with our media and freedom of the press. This is not the only risk, although it is a risk that these measures seek to manage.

The far greater risk is how UK news media, national and local, face significant, genuinely existential—I do not use that word lightly—challenges as their business models move away from print towards digital, and new technologies emerge. Publishers have sought to consolidate and make efficiencies in response, with three publishers accounting for over 80% of national print copy sales in the UK, and three accounting for about 70% of the local news market. There have been some notable successes for newspapers that have been able to develop and deliver a strong subscription offer, but others have fared less well. Some are struggling in an economy where good-quality news content does not always translate into the revenues that our news media needs to prosper and innovate.

The issue is seen most starkly in our local media, a particularly trusted news source that has consolidated to survive, and in many places local newspapers have had to reduce journalist numbers to a bare minimum. While it is vital that we support stronger protections for UK newspapers and other news media, we need to make sure that we do not inadvertently make it harder for newspaper groups to survive.

A UK-wide free press, which I know all noble Lords value—the type of press landscape we are rightly proud of in this country—also has to be sustainable. Let me be clear: the Government are unequivocal supporters of a free and plural news media, even when it does not agree with us. A free media is an essential safeguard that ensures accountability and effective government. The measures being debated strongly support this objective.

[Lord Forsyth of Drumlean (Con)]

Is the Minister seriously arguing that the survival of our newspapers, both national and local, depends on changing the law, as she is doing, to allow foreign Governments to have ownership of them?

[Baroness Twycross (Lab)]

It is important to distinguish between foreign Governments and state-owned investors. If the noble Lord will allow, this is covered in my opening remarks.

The first set of measures extend the scope of the media merger regime to online news publications. The Enterprise Act 2002 (Definition of Newspaper) Order 2025 will amend the definition of “newspaper” in the Enterprise Act 2002 to encompass both print and online newspapers and periodical news magazines. Crucially, this will enable the Secretary of State to intervene on public interest or foreign state influence grounds, subject to jurisdiction, in the acquisition of an online-only newspaper. Until now, she has not had the power to do so. The Enterprise Act 2002 (Amendment of Section 58 Considerations) Order 2025 creates the term “news media”, which captures newspapers, as newly defined, and news programmes that are broadcast. The order extends key public interest considerations in Section 58 of the Enterprise Act 2002 to all news media.

Noble Lords have long called for these changes, and Ofcom recommended them in its 2021 and 2024 media ownership rules reviews. The definition of newspaper order also ensures that the foreign state influence regime introduced in May last year will be extended such that foreign powers will now also be banned from acquiring control or influence over the policy of an online newspaper or an online news magazine enterprise.

Let me now turn now to the draft foreign state influence exception regulations, which are the subject of the fatal amendment in the name of the noble Lord, Lord Fox, and the regret amendment in the name of the noble Baroness, Lady Stowell of Beeston. The FSI regime, for which, as noble Lords will be aware, the previous Government legislated in May last year, bans foreign states from having any control or influence over the policy of UK newspapers or news periodicals. The legislation includes a wide definition of foreign power that includes sovereign wealth funds and public pension funds, among the largest investors globally, whose objectives are to seek long-term, stable investment opportunities in sectors requiring new capital for growth.

The previous Government also made clear before the election that they would put in place exceptions to encourage investment by sovereign wealth and other state-owned investors and issue a consultation. To clarify —in response to the point from the noble Lord, Lord Forsyth—this exception applies only to a very narrow group of public bodies: sovereign wealth funds and public pension schemes or similar. It does not apply to states themselves or other state bodies, so a foreign Government cannot buy and own a newspaper.

The responses received, including from News UK, said that the proposed thresholds were overly complex and drawn too tightly. We broadly agree with this assessment; we believe that a higher 15% threshold is appropriate and would meet their concerns. However, this would not weaken the regime. The 15% threshold would still be below the level that the CMA considers typically gives rise to material influence when assessing jurisdiction under the Enterprise Act 2002, meaning that the risk of influence would be low.

Noble Lords have raised questions about whether an investor with up to 15% of shares or voting rights can really be a passive investor. The regulations include a strict requirement that the state-owned investor must hold the investment passively. They must have no right or abilities to appoint or fire directors or other officers, and they must have no ability to direct, control or influence a newspaper’s policy or activities. These are continuing requirements that must be satisfied every day the shares are held. The exceptions should be seen as a privilege and not a right.

The legislation requires the Secretary of State to refer a merger to the CMA if she suspects that a state-owned investor is not entitled to the exception or is not complying with these requirements. If the CMA advises that the investment does not comply and concludes that a foreign state newspaper merger situation has arisen, the Secretary of State must take action to unwind the transaction or to block it. This is a very significant penalty and safeguard.

As noble Lords will be aware, the Government published a further draft SI for consultation last week to deal with two specific concerns that noble Lords raised about the draft regulations, which we laid on 15 May. First, the changes proposed by the draft SI would close off any risk of multiple state-owned investors acting on behalf of different states, each being able to hold up to 15%. This change would be applied retrospectively from 13 March 2024 to ensure that there is no regulatory gap.

Secondly, we have addressed concerns around the lack of a notification requirement on state-owned investors who plan to take significant shareholdings. This second draft SI proposes a new requirement for direct investments by state-owned investors of more than 5% to be notified to the Secretary of State as a condition of the exception. If the notification is not made, or made late, the investment would not comply with the exception and would be prohibited.

Following a consultation, which will run until 16 September, the Government will aim to lay, in draft, the second statutory instrument by the end of October. The new notification requirements will come into force after the second regulations are made. The changes proposed in the second draft SI, while important, are not fundamental to the operation of the exceptions and not so critical to the FSI regime that we should delay these regulations and leave newspapers—which are publicly calling for us to act—to a further period of uncertainty. I thank the noble Baroness, Lady Stowell, for her constructive engagement with the Secretary of State and DCMS officials on these issues. I hope that she and other noble Lords who have raised these concerns feel that this safeguard fully deals with the issue.

I will now address the constitutional questions that arise from the amendment to the Motion in the name of the noble Lord, Lord Fox. The second regulations to follow later this year will strengthen protections and put the issue of multiple-state ownership beyond doubt. As I explained earlier, the provisions on multiple-state ownership will be backdated to 13 March 2024 to ensure that there is no regulatory gap.

It is also important to recognise that existing sovereign wealth fund investments at any level made after March 2024 in a UK newspaper may trigger the Secretary of State’s requirement to intervene under the FSI regime. We are very concerned that a protracted delay in putting exceptions into place would prolong the uncertainty this creates for investors and the wider investment climate. I appreciate that the noble Lord’s amendment comes from concerns around the impact of the FSI regime on the British press. I have not come to the same conclusion that he has, and I will of course reflect very carefully on the points that he and other noble Lords make during this debate.

It is perfectly legitimate for your Lordships’ House to debate the fatal amendment before it today, but it is a very firm convention that the power to annul is not used. In this specific case, the FSI exception regulations have been expected since the passage of the digital markets Act last year. They have been subject to consultation and extensive parliamentary engagement and have now been approved in another place. This Government have come to a different conclusion to the previous Government on thresholds. Although the threshold is slightly higher, it is also simpler and supplemented by additional safeguards. I have set out our reasoned arguments for settling on 15%, including why we gave weight to the views of UK newspaper groups that are directly affected.

When noble Lords debate legislation, a small but significant phrase is sometimes heard: that Parliaments cannot bind their successors, and commitments made by one Government cannot bind any future Government. While the 5% and 10% split threshold was announced by the previous Government during the debate on the digital markets Bill as a possibility, and subsequently featured in the consultation, it was not a settled matter. It was left open at the time of the general election last year. It is both right and responsible for the Government to look at this afresh. However, we agreed that in some sensibly managed circumstances, an exception to the regime was reasonable. Our intention in doing so is to make a decision which protects press freedom from foreign state interference while not, in the words of one consultation respondent, creating a chilling effect on the investment the British press tells us it so badly needs.

To conclude, I urge Peers from all sides to look at these issues in the round. The Government believe these regulations provide the certainty that UK newspapers desperately need and have asked for. They will, in spite of suggestions to the contrary, guard against foreign state influence while allowing our news media to face the future with confidence. I hope noble Lords will accept the rationale I have presented to the House in support of this important package. I beg to move.

Amendment to the Motion

Moved by

[Lord Fox]

To leave out from “that” and to insert “this House declines to approve the draft Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025, as the proposal to allow foreign states to own up to 15 per cent of UK newspapers constitutes a direct threat to the freedom of the British press; and is contrary to the policy intention of the Digital Markets, Competition and Consumers Act 2024.”

[Lord Fox (LD)]

My Lords, I thank the Minister for her kind words and the time that she gave to meet virtually.

Your Lordships will see that this is a fatal amendment. I know that this House is not in the habit of supporting such actions, but to do so is perfectly in order. The Joint Committee on Conventions 2006 report concluded that

“in exceptional circumstances, it may be appropriate”

for the House of Lords to reject statutory instruments.

“This is consistent with past practice and represents a convention recognised by opposition parties”.

I shall seek to demonstrate that this instrument is indeed an exceptional issue, that ownership of our press is a matter of great public policy importance and that we are fully entitled to defeat this statutory instrument.

I was encouraged by the fact that His Majesty’s loyal Opposition tabled and voted for a fatal Motion regarding the Chagos treaty on 30 June this year. Clearly, they also believe that some issues warrant fatal Motions. I am deeply grateful for the support and friendship of colleagues right across party lines, including Conservative, Labour, Cross-Bench and independent Peers. We all understand how serious it is for the Lords to take such an action. We cannot sit by and watch this happen before our eyes.

I remind fellow noble Lords that the Government’s planned secondary legislation deliberately reverses the explicit will of your Lordship’s House: to be specific, the then Digital Markets, Competition and Consumers Bill, debated in the House of Lords in March 2024. Hansard is clear regarding the intention of amendments made to the Bill. At Third Reading, your Lordships loudly welcomed a complete ban on foreign Governments having either ownership of or influence on our press. This was greatly motivated by Members’ concerns about the proposed acquisition of the Telegraph Media Group that included a stake from a company ultimately controlled by a member of the United Arab Emirates Government. Subsequently, the then Government said that they would use secondary legislation to introduce an exemption for shareholdings of up to 5%. This was introduced to avoid unintended consequences. Then there was the consultation, to which the Minister referred, run by the Department for Culture, Media and Sport—DCMS—on the threshold.

Your Lordships’ Secondary Legislation Scrutiny Committee singled out DCMS for its decision to treat information about the respondents to a public consultation confidentially. It was critical, and it noted that

“this is an unusual approach”.

Indeed, it is. It took freedom of information requests to ensure that the Government published the consultation responses just a few days ago, with redactions. It should not have been necessary to resort to FoI requests, especially given the weight the Government place on this consultation, but it is easy to see why DCMS was reluctant to publish the results, as there is a strong vested interest that runs through the responses. Three of the four responses—yes, there were just four—were from parts of the newspaper sector that are almost certainly seeking foreign investors.

The Government said that they have carefully considered the consultation responses and introduced this instrument as a result. DCMS explains that the

“new threshold responds to feedback received during consultation from newspaper groups affected by the new regime”.

This is hardly surprising, given the nature of the handful of respondents and their obvious hunger for investment.

15:45

At the heart of the Government's defence of these 15% ownership tranches is that the ownership will be passive. Traffic humps are passive, but they certainly change the way we drive. It seems that the Minister’s view is that the investors will just sit back, not caring about the business and editorial direction their considerable investment will be taking. This is just not plausible. Anyone who has managed investor relations will tell you that having an investor with a 15% stake in your business is not something that the executive team can ignore. Even if the stake does not come with a director, the stakeholder will have access to the CEO and the executive team. The Minister tries to cloud the issue by saying that funds with government links will not be able to buy these stakes. It is very clear that some of the funds that will be allowed by this statutory instrument will have direct links with foreign Governments.

Who will police this? As it stands, the Secretary of State will be required to intervene in cases where it is suspected that a foreign investor has directed or influenced a newspaper’s policy. As the Secondary Legislation Scrutiny Committee puts it, how will the Secretary of State be

“reliably able to detect, and, if necessary, prove that the”

state-owned investor

“can exert this influence”?

With her traditional succinctness, the noble and learned Baroness, Lady Butler-Sloss, asked last week,

“how on earth would the Secretary of State know”,

to which the Minister’s answer contained the following:

“if a newspaper took a radically different position or there was a nuance change—it is likely she”—

the Secretary of State—

“could intervene in that regard”.—[Official Report, 17/7/25; col. 1827.]

“Likely” and “could” are interesting words. The truth is that the Government will not be able to detect influence, and what is the burden of proof to determine “nuance change”? Can the Minister say what level of judicial review they expect as a result of trying to define nuance?

Let us look at why such transactions are happening in the first place. Normally, when a financial investor puts their money into something, their primary intention is capital growth or an income: they are looking for a return on that investment. I expect speakers, either explicitly or implicitly, to say that the newspaper industry has more or less exhausted the possibilities of attracting many classes of investor. The Minister herself used the word “desperate” at least once, if not more, which is why the sector is so desperate to access funds such as those we see in the Telegraph bid. I also expect these speakers to use this desperation to justify supporting the 15% access for foreign influence funds.

State-owned investment operations are run by clever people, people who understand the financial world. Why on earth would they be keen to invest in British news media when the conventional investment community seems to be reluctant, if we believe what the Minister has just said? To me, it is clear that they are looking, at least in part, for a different return on that investment. They seek influence, especially at a time when the information space is so vital. It is strategic.

This whole debate is complicated by the specific issue of the Telegraph and the RedBird bid that includes a 15% United Arab Emirates interest. It is the Telegraph bid that seems to be driving the Government’s unseemly haste on this. By easing an outright ban on foreign-state ownership, Secretary of State Nandy’s plan is clearly meant to help improve British relations with this wealthy Gulf state. I think the Government have another agenda in this regard, and it would be helpful to understand what it is.

However, whether the Government are trying to deliver capital to the sector or mending a diplomatic fence, in doing so they are parlaying foreign influence. Whatever the side deals, those are not worth the cost of press freedom. There has also been a wider debate about the ownership of the Daily Telegraph. I will not detail these concerns, as I am sure that others in this debate will. I just note that there are calls, which I support, to launch a full investigation into the sources of funds behind RedBird’s bid and to assess its scope for influence.

My final point sheds light on what I regard as the poor preparation of this statutory instrument. When I and the noble Baroness, Lady Bonham-Carter, met Stephanie Peacock MP, the Minister for Sport, Media, Civil Society and Youth, on 15 May, one of the first questions that we asked was whether the statutory instrument would allow multiple tranches of 15% from multiple countries. Despite the obviousness of this question, there was clearly no prepared answer. Lisa Nandy’s plan, as it stands, would allow different state-owned investors to each acquire up to 15% in the same UK newspaper. Whether this was deliberate or accidental, on 18 June Minister Peacock announced during the Delegated Legislation Committee debate in the House of Commons that

“the Government intend to lay, in draft, a second statutory instrument in the autumn”—

we heard that from the Minister just now—

“to amend the foreign state investment exemptions”.—[Official Report, Commons, Third Delegated Legislation Committee, 18/6/25; col. 5.]

and fix the issue. We are being asked to approve a statutory instrument that the Government already know is flawed.

But we must be under no illusion. When the possibility of multiple states owning a single media asset is eliminated, there remains the option of one state being able to exert its influence with a 15% stake. It is also worth noting that there is nothing in the proposed legislation that prevents one state-owned investor from owning 15% of more than one UK media asset—possibly all of them—thereby securing very broad influence on British public life. The upcoming statutory instrument is just tinkering with something that is essentially very wrong. The only way to stop this is to vote for the fatal amendment.

We have here a piece of secondary legislation that seeks to completely disobey the clear intention of primary law that was approved by your Lordships 15 months ago. I think that is treating Parliament with contempt. It opens up British media to foreign government influence and contains no meaningful safeguards. By letting the Government defy the will of Parliament, there will likely be a domino effect, with other major media groups also receiving foreign government-directed investment. This statutory instrument is clearly designed to wave through the Daily Telegraph bid, which itself raises other major additional questions.

Finally, this secondary legislation is so badly drafted that the Government are already planning to correct it in the autumn. We owe a debt to the noble Baroness, Lady Stowell, who helped to lead the process that got us to where we are today. She said in March, and I agree, that

“the threshold for indirect foreign-state passive investment in the UK news industry by the likes of sovereign wealth or state pension funds – which play an important role in the industry’s economics - should be set at 5pc”.

This statutory instrument is so fundamentally flawed that a regret Motion is not strong enough, as it would include acceptance of 15% foreign ownership of our media. The sector may need investment, but it does not need investment of this kind.

If an investment fund directly controlled by a serving UK Deputy Prime Minister were proposing to take a 15% stake in a UK newspaper, what would the reception be? Well, why on earth are we allowing a fund that is led by the United Arab Emirates equivalent of Angela Rayner to do just that? There is a serious debate to be had on this issue, but using an unamendable secondary instrument that subverts primary law is not the way to do it. Let us have a debate, with the Government introducing new draft primary legislation. We can talk about the difficulty of defining what funds are in and what funds are out in a proper setting. We must act to reassert Parliament’s role and to prevent us from crossing this Rubicon. I urge your Lordships not to let this measure pass. Please support this fatal amendment. I beg to move.

[The Deputy Speaker (Lord Geddes) (Con)]

My Lords, I must inform the House that if the amendment in the name of the noble Lord, Lord Fox, is agreed to, I will not be able to call the amendment in the name of the noble Baroness, Lady Stowell of Beeston, for reasons of pre-emption. The Question I therefore have to put is that the amendment in the name of the noble Lord, Lord Fox, be agreed to.

[Baroness Stowell of Beeston (Con)]

My Lords, although I take a different position on this from the noble Lord, Lord Fox, I too would like to welcome him back to his place, and I am pleased to see that he is making a good recovery from his accident.

Last year, the House protected and guaranteed press freedom by forcing the Government to change the law and put beyond doubt the risk of a foreign Government owning, controlling or influencing a British newspaper. None the less, we accepted that it would be necessary to allow limited exemptions to state-owned investment funds to ensure the industry’s financial viability. So the principle of what we are debating today is not new. Although I do not endorse how the noble Lord, Lord Fox, depicted some of the differences, we certainly cannot deny that the regulations before us today present a different model from the one we were promised over a year ago. The cap is, as we have heard, 15%, not 5%, and instead of distinguishing between different states’ investment funds so that only some are permitted, all are included but limited to passive investment only.

The other thing we should not ignore is how badly the Government have handled this whole process and made arriving at a solution far more complicated than it needs to be. I will come back to that in a moment, as well as raising some questions for the Minister to address when she comes to wind up.

The question I have grappled with is whether a 15% cap, restricted to passive investment only, still supports the much bigger principle of press freedom that we fought hard to protect. I have concluded that, with some safeguards, it does, and in reaching my view, I have not just considered what is best for the future of the Telegraph, I have very much taken account of how we need to safeguard the future of the whole news industry. Because, while we all care about protecting a free press, upholding that principle will serve little purpose if our news industry cannot survive, and its economic conditions are worsening.

Last year, when I brought forward my amendment, the Communications and Digital Committee was conducting a major inquiry into the future of news. It was plain to see then that the news industry was in jeopardy and its business models threatened like never before. The Minister has already outlined how the pace of technological change, as well as fierce and unfair competition from the tech sector, has eaten away at advertising revenue for many years. But the situation has accelerated since last year. The sharp decline in traffic to news websites from AI-generated news summaries via search pages or models such as ChatGPT, never mind the ongoing uncertainty over copyright law, which the House has debated many times in the last few months, presents an existential threat—I repeat that phrase which the Minister used, because I genuinely think that is real.

By the way, it is also worth pointing out that the major foreign tech platforms, which curate news stories based on algorithms and provide these AI summaries, are far more powerful and potent in shaping public opinion than any British newspaper. They have access to all the investment capital they need, without any constraints as to where they source their funds.

The news industry needs to invest heavily to compete with the tech sector, yet its routes to readers and revenue streams are shrinking rapidly. Subscription is not a viable model for all organisations, with the mid-market red-tops and local news at gravest risk. But, even though market consolidation is likely and conditions are bad, we can be confident that our action last year dealt with the threat of several British newspapers or news organisations ending up in the hands of foreign powers. Now, we need to make sure that the UK news industry itself can respond to the challenges it faces.

16:00

It is for the Government to set out their case for the solution they have brought forward and to explain some of the detailed and technical differences from what we were expecting last year. The Minister has already covered a lot of that in her opening remarks. The industry was pushing back against a 5% cap on state-owned investment a year ago, arguing then that it was far too restrictive and that it would need to be higher. I find it so frustrating that it has taken the Government a year to get to this point and, as we have already heard, we still need a further set of regulations to be laid to address a serious loophole that exists in the ones before us.

[Lord Forsyth of Drumlean (Con)]

Before my noble friend leaves the point, would she just pick up on what the noble Lord, Lord Fox, said? She just described the plight of the Daily Telegraph and other newspapers, basically saying they are struggling to be viable. So why would a foreign Government pay a premium price to invest in them? Are we assuming that foreign Governments are profligate with their money and that they do not invest to get a return? The noble Lord’s point was that the reason why they are prepared to pay £500 million or whatever it is for the Daily Telegraph, when other people are prepared to pay only £300 million or whatever, is that they are buying influence.

[Baroness Stowell of Beeston (Con)]

As my noble friend knows and as I have already described, we are now in a different situation from that which we were facing in March of last year, when there was a real prospect that a foreign Government could be the owner of a British newspaper. That matter has been dealt with. What we are dealing with now is state investment funds and, as I am going to come on to talk about, the question is whether the safeguards in place are sufficient.

I am grateful to Lisa Nandy for meeting me on several occasions over the past few months and I am pleased that, because of pressure from me and other noble Lords, the intolerable prospect of multiple foreign powers each owning 15% of a newspaper will be ruled out in the supplementary regulations that the department published in draft last week. Let us be absolutely clear: the 15% must be an aggregate cap. But how on earth that loophole went unnoticed is hard to understand and, once it was pointed out to them, it is baffling, as well as hugely regrettable, that the Government took two months to find a way to close it and chose to do so via additional regulations, instead of immediately withdrawing the regulations before us today and relaying a comprehensive set, so that we could tie all this up in one go before the Summer Recess. I would be grateful if the Minister could tell us why they could not do that. I know she has told us that they plan to lay the supplementary regs by the end of October, but I would like to know why it was not possible to do what I advised them to do back in May.

This foot-dragging and apparent incompetence have given rise to legitimate questions about who or what has really influenced the Government’s approach to this incredibly important matter. If the Government were acting only in the interests of the press industry, we would have sorted all this and resolved the Telegraph’s ownership long before now.

Although I can accept a 15% aggregate cap for state-owned investment, it will require rigorous government oversight of the boundaries that passive investors must not extend, and Parliament will need to be better equipped and more active in holding Ministers to account. In my view, it was frankly unacceptable for the Government to stay silent for 11 months on the matter of the secondary regulations and on what they were doing to safeguard the Telegraph’s future ownership during that time.

Noble Lords may have seen, and indeed have heard already from the Minister, that the supplementary regulations that are to follow these include a new notification requirement, meaning that any state-owned investor that acquires more than 5% must notify the Secretary of State within 14 days of that acquisition to be eligible for the exemption status. In my view, as a follow-on to that, the Secretary of State should be required to notify Parliament twice yearly about any or nil such notifications, together with information about action taken by her as a result. In future, we are going to need more information. Can the Minister ensure that this additional requirement of accountability to Parliament be added to the supplementary regulations the Government are now consulting on?

Although parliamentarians must respond to any failings by Ministers, when it comes to upholding press freedom, the most important line of defence is the newspaper proprietors. They are who and what must provide a strong shield between newsrooms and illegitimate pressure or demands from investors and advertisers. They know that not doing so undermines public trust in journalism, and that would damage the value of their investment.

It is not for Parliament to dictate how proprietors should discharge their responsibility, but in a media world that includes the presence of state-owned investors, clarity and some transparency about what proprietors are doing to protect their newspapers’ independence and editorial freedom becomes important. This is particularly so where proprietors are new to the newspaper industry or are private equity funds. Can the Minister tell us, therefore, what such demands the Government will make of the new Telegraph owners if and when that transaction is completed? Can she confirm that the Telegraph deal, once finalised, will be subject to detailed scrutiny by the CMA before it is completed?

If the noble Lord, Lord Fox, pushes his amendment to a Division, I will vote against it. Of course, as a former Leader of your Lordships’ House, I have a general aversion to this Chamber seeking to block legislation. Indeed, it was me, as Leader, who was the last Minister at that Dispatch Box defeated by this House on a piece of secondary legislation. But I am not against this amendment for any kind of constitutional-like reasons of convention or tradition, important though they are. Believe me, if I thought that supporting this amendment was the right thing to do, I would. But I do not.

While I respect those who are framing this debate as a battle over the future of press freedom, actually, if it is a battle about anything, it is over the future of a financially viable press. We do not just need our newspapers to be editorially independent; we need them to survive.

When it comes to the Telegraph, of course I would have loved someone serious to have come along with a consortium that could offer investment and honour a cap of 5%. Indeed, I would have loved it if this sorry saga, which has been so destabilising to the editorial team at that newspaper and has gone on for more than two years, could have been avoided altogether. But, as I have already argued, this is not just about the Telegraph; it affects all newspaper titles.

The regulations before us set the cap at 15%. As long as the Government follow through with the supplementary regulations to close that loophole and are prepared to give the necessary undertakings to ensure that that cap will be enforced, I am willing to accept them. Everyone else gets to fight another day; let us make sure the same applies to the Telegraph Group and the wider UK press industry.

Of course, if the noble Lord, Lord Fox, withdraws his amendment and supports mine instead, noble Lords can express their regret and record their dissatisfaction with how the Government have handled this matter by supporting my amendment.

[Baroness Boycott (CB)]

My Lords, I rise to support the Government on this measure. I think that 15% passive ownership is perfectly okay. I very much support a lot of what the noble Baroness, Lady Stowell, said about the roles of proprietors. I have edited three national newspapers, so I know a lot about proprietors. Indeed, my last proprietor sold our newspaper to a man who had made his money out of Big Ones and Asian Babes. If that is considered a good way to pass things on, I would really question this.

A passive investment is perfectly okay and, as the noble Baroness, Lady Stowell, said, the power and influence of a newspaper is absolutely about the proprietor. The proprietor will appoint an editor who is more or less in line with them. If this investment is passive, the Government have done something valuable because we have a lot of problems in our press and with various things. For instance, the Independent is highly linked financially to Saudi Arabia. I declare an interest as Geordie Greig, the editor, is a friend of mine. We have discussed this endlessly. He says that you cannot find any influence of Saudi Arabia within his newspaper, and I agree. The fact that it does a Saudi Arabian issue is its business. I am not saying I like it, but it is making a newspaper, which many of us read, available free at the point of delivery, and all sorts of good things that are otherwise going to disappear.

Rupert Murdoch is a very complicated proprietor. A lot of the stuff to do with phone hacking is still not resolved. It is very rich of the noble Lord, Lord Fox, to say that everything is going to fall apart if we get some investment in the Telegraph. Proprietors have politics and they want things to be done their way. The Government have a right, indeed, a duty, not only to make sure that this passive investment is kept that way, but to look at the whole question of proprietors. Obviously, they are going to want influence, so it is very important that the Government carry on if this is going to be about general press and, indeed, media regulation, which looks also at online regulation. Heaven knows where the money for all of that is coming from.

We need to have very firm standards here. In the meantime, I thoroughly support what the Government are proposing today, and a fatal amendment against it would be a real mistake.

[Lord Black of Brentwood (Con)]

My Lords, it is a pleasure to follow the noble Baroness. She and I probably have not always agreed on everything, but I echo every word that she said today.

I have thought long and hard about whether to take part in this debate, but as it touches on two subjects very close to my heart—the sustainability of an independent free press and, in practical terms, the future of the Telegraph Media Group—I concluded that it would be irresponsible not to do so.

Let me declare my interests—and I mean that in the broadest possible sense. First, I hope that all noble Lords will recognise my unwavering commitment to press and media freedom, a cause that I have championed passionately for three decades. I have stood up consistently and robustly for it in this House, even when it has been deeply unpopular and unfashionable to do so, and I would never support anything that I believed would damage it. I stood almost alone in opposing the imposition of statutory controls in the Crime and Courts Act 2013, and what became Section 40. I campaigned for 11 years for its repeal, in the teeth of opposition from the Liberal Democrat Benches. I note with some irony, given that they have such a track record, that they are putting forward this fatal amendment today in the name of press freedom, and we should not fall for it.

Secondly, I have worked for the Telegraph Media Group for exactly 20 years this September, which is half my working life. I love the Telegraph, and the protection and promotion of its safety, security, editorial independence and freedom, and sustainability are etched into my DNA. I would never do anything to compromise that, and I declare my interest as its deputy chairman. It is for both those reasons, philosophical and practical, that I make these few remarks.

The news publishing industry in the UK does face— I will be the third person to say it—an existential crisis. We all know the reasons: the impact of digital and the voracious appetite of unaccountable, unregulated platforms have put enormous pressure on the revenues of all publishers. Tragically, many titles have closed, particularly in the local press, with thousands of reporters’ jobs lost. The future of many others hangs in the balance, and the analysis put forward by my noble friend Lady Stowell is absolutely spot on. The implications for our democracy are profound.

The situation has been made worse by the decisions of this Parliament; in particular, the data Act, which we have, with some reluctance, just passed. While publishers are fighting hard to remodel their businesses and build new revenues, the exponential growth of AI, unrestrained by effective copyright law, threatens the very future of all news brands, as I have pointed out with perhaps monotonous repetition in this House.

16:15

We should not make the same mistake again today. It really is five minutes to midnight for much of the British press; today this House can either try to ameliorate the situation or condemn it to precipitate decline.

The reason for that is simple: to survive in an intensely competitive global media marketplace, UK publishers need investment. They need to be able to raise capital to innovate and to compete with the platforms —which are subject to no onerous investment restrictions —and their unlimited resources.

Some of that capital will need to—indeed, must—come from global investment funds. It is simply not all going to come from UK markets. If it was going to materialise, it would have done so. Competition law in the UK has to recognise that reality. Publishers can access global capital, including from sovereign Governments and wealth funds, and survive, or they can sit back and await their fate.

Private equity investment, with significant expertise in growing media businesses, is here to stay. Indeed, at heart, our debate today is about growth, of both the creative economy and the media sector. Do we want it or not?

Of course, it would be quite wrong for a foreign state actor to be able to own outright part of the British media; nobody in this House disagrees on that point. State ownership of any form would be inimical to press freedom, but there is nothing wrong in a state actor having an ability to make a small, passive investment, carefully calibrated and restricted to ensure that it has no ability to influence editorial policy or restrict the freedom to report in any way.

These regulations—allowing such funds or companies to make an investment of 15%, capped to ensure that there can be no multiple purchases—recognise that, and I support them. The Government have got the balance right.

Of course, as my noble friend Lady Stowell has made clear, it would have been better for the Secretary of State to have set out all the rules in one complete set of regulations. But that failure to do so should not obscure the basic point that the passage of these regulations is vital to the future of the British press and, indeed, the media and the whole creative economy more widely.

If we back the amendment in the name of the noble Lord, Lord Fox, and block these regulations, we will condemn traditional British news brands, newspapers and magazines and their websites to terminal decline, by cutting off a vital source of investment and subjecting them to a burdensome investment regime—from which their global digital counterparts are spared—hobbling their ability to compete. I do not believe that is what anyone in this House really wants, but it is what would happen if we simply turn our back on the raw, harsh realities of the media market.

Quite apart from these commercial realities and the matters of principle that they raise, the decisions of this House will, as we have heard, impact on the future of the Telegraph Media Group, a vital part of the UK’s media ecosystem.

All noble Lords know that this is a long-running story. Much ink has been spilled chronicling it. It is a saga that has been dragging on now for more than two years, sapping the morale and energy of the exceptional team that produces incredible content day in, day out, despite all the difficulties, as my noble friend Lady Stowell said. I pay huge tribute to them for their fortitude and perseverance.

An end to that saga is now in sight, if the US company RedBird is allowed to complete its deal with a small passive stake from the UAE and other UK investors. As noble Lords will know, RedBird is one of the foremost investors globally in the media industry and, I believe, plans to invest to make the Telegraph even more successful and profitable. Undaunted by the decline of print, it is embracing the realities of the industry. It is my personal view that it has a clear understanding of the importance of stewardship—that this great institution will be its to cosset, to secure and, one day, to pass on in a stronger position than that in which it was found—as well as of the need for editorial independence and integrity.

I do not know whether that deal will go ahead if this House fails to pass these regulations today. It may, or it may not. It would, in my view, be deeply damaging to the future of the Telegraph if a sale does not happen soon. Of one thing I am absolutely certain: our decision today will send a clear signal to any potential investor, in either the Telegraph or any other part of the British media. It will signal either that the UK media has a bright future and that this Parliament will support it with a modern and practical regulatory framework that reflects the realities of the global media market and is focused on growth, or it will signal that the UK media is closed for business, and that this Parliament is unprepared to back its future by allowing media businesses the freedom to attract investors from across the globe to compete and grow. In that case, the media will decline and fall. The consequences for our democracy are incalculable.

As someone who believes passionately in the future of our free press, I know which side I am on and that is why I will be voting against the amendment in the name of the noble Lord, Lord Fox. I would urge all others who want to secure a sustainable, optimistic future for our media to do the same.

[Lord Clement-Jones (LD)]

My Lords, I strongly support my noble friend Lord Fox’s fatal amendment. When this House welcomed a complete ban on foreign government ownership at the Third Reading of the Digital Markets, Competition and Consumers Bill last March, the then Government proposed a 5% exemption for passive sovereign wealth fund investment. The noble Baroness, Lady Stowell, and the noble Lords, Lord Forsyth, Lord Robertson and Lord Anderson, deserve huge credit for securing this change, alongside the then Minister, the noble Lord, Lord Parkinson.

Yet in a remarkable about-face, this Labour Government propose allowing foreign state-owned investors to hold up to 15% stakes, tripling the previously proposed threshold. As we have heard, 15% is not trivial. Even a 15% stake can provide extraordinary leverage, board representation, veto powers over key decisions and a very real influence over editorial policy.

The Competition and Markets Authority guidance on mergers’ jurisdiction and procedure makes it clear that there is no exhaustive list of relevant factors. Even one board seat may suffice, depending on circumstances. The regulations currently allow multiple foreign states each to acquire a 15% stake. Nothing would stop a consortium of foreign regimes stacking up a controlling interest in a British newspaper. The Government acknowledged this flaw in their letter of 21 July, admitting, as we have again heard, that this will need correcting in the autumn. But why proceed with these regulations when the Government admit that they are fundamentally flawed? The 15% threshold contrasts starkly with international best practice. Australia sets just 5% for media companies.

There has been some argument today, notably from the noble Lord, Lord Black, that our struggling newspaper industry needs foreign investment. Even the Minister talked about existential threats. But if conventional investors are reluctant, as the noble Lords, Lord Fox and Lord Forsyth, say, foreign state investors clearly seek a different return: influence. Should we mortgage editorial independence when the price is erosion of public trust?

The consultation process was deeply problematic, with only four responses, primarily from newspaper groups seeking foreign investors. This hardly justifies tripling the threshold. The Government claim they can intervene if passive investors become active, but how does one monitor passivity and detect influence? As the Secondary Legislation Scrutiny Committee noted, it is an impossible task to determine nuanced changes indicating influence. In matters of press freedom, we must err on the side of caution.

I see that the noble Lord, Lord Black of Brentwood, came out in yesterday’s Telegraph, and today, with all guns blazing. His attack on the Liberal Democrat position fundamentally mischaracterised what the Press Recognition Panel actually does. The PRP is not a statutory media regulator that controls editorial content. It is an independent body that recognises voluntary press regulators, such as Impress, while IPSO deliberately chooses not to seek recognition to avoid meeting proper independent standards. This system protects press freedom by ensuring that regulatory bodies themselves meet robust standards for independence and effectiveness.

The characterisation of this amendment by the noble Lord, Lord Black, as “onerous statutory controls” is the same misleading tactic used by media proprietors to avoid genuine accountability while maintaining maximum commercial freedom. The position of these Benches is entirely consistent: genuine press freedom requires protection from all forms of external influence, whether political interference, proprietorial control or foreign state investment. Our support for Leveson-compliant independent regulation and opposition to foreign state media investment both serve the same principle: to ensure editorial independence from external pressures.

The stakes could not be higher. As the noble Lord, Lord Black, has mentioned, this legislation is clearly drafted to facilitate deals such as the potential takeover of the Telegraph by RedBird Capital, whose Chinese connections are subject to concern. A 5% cap strikes the right balance, allowing for genuine commercial investment while preventing the accumulation of influence that will strangle press freedom. The British public deserve to know—

[Lord Knight of Weymouth (Lab)]

As ever, the noble Lord has made a good case. He made his point—as did the noble Lord, Lord Forsyth—around what a percentage stake might mean if the returns are not going to be great. What difference is there between 5% and 15% in respect of the argument he is making about influence? If someone wants to invest 5%, surely they are doing it on the same basis as 15%.

[Lord Clement-Jones (LD)]

Perhaps the noble Lord has never been on the board of a public limited company. There is a huge difference between a 5% and a 15% ownership stake.

[Lord Knight of Weymouth (Lab)]

There is a difference, but the argument the noble Lord is making is that people are seeking to get influence rather than a financial return. If you are taking 5%, you are doing so for a financial return. Why would investors not also be looking for a financial return on 15% in just the same way?

[Lord Clement-Jones (LD)]

If a company has a series of 5% ownership stakes it will have a plurality of shareholders and therefore a mix of influence, but if you own a 15% stake you have a much higher share in the company and are probably entitled to a single board member.

[Lord Forsyth of Drumlean (Con)]

Is it not that there is a difference between 5% being held by a foreign government and 5% being held by a national wealth fund or something of that kind?

[Lord Clement-Jones (LD)]

I entirely agree with the noble Lord. I do not understand why the noble Lord, Lord Knight, is raising what seems to be a pretty obvious issue.

The British public deserve to know that their morning newspaper delivers journalism guided by British values and editorial independence, not the preferences of foreign powers.

Briefly on this House’s conventions: the guidance issued in the 2006 report from the Joint Committee on Conventions—which was mentioned by noble friend Lord Fox—is still current, despite the 2015 Strathclyde review. It concluded:

“On the basis of the evidence, we conclude that the House of Lords should not regularly reject Statutory Instruments, but that in exceptional circumstances it may be appropriate for it to do so. This is consistent with past practice, and represents a convention recognised by the opposition parties”.


Subsequently in March 2007, with strong support from the then Archbishop of Canterbury I succeeded with a fatal amendment that prevented a super- casino being located in east Manchester. Since then, in January 2013, the noble Lord, Lord Bach, succeeded in defeating a legal aid order. I welcome what the noble Baroness, Lady Stowell, had to say about the existence of the convention.

Those were exceptional circumstances and so too are today’s. The ownership of our press is a matter of great public policy importance, and we are fully entitled to defeat these regulations. I urge noble Lords to support my noble friend Lord Fox’s fatal amendment. Let us send a clear message that the integrity of the British press is not negotiable: 5% is sufficient, but 15% is a doorway to influence that, once opened, may prove impossible to close. I commend the amendment to the House.

We on these Benches also oppose the draft Enterprise Act 2002 (Amendment of Section 58 Considerations) Order 2025 and the draft Enterprise Act 2002 (Definition of Newspaper) Order 2025, which have been tabled for approval today. These orders propose extending the ambit of the Enterprise Act to encompass digital media and broadening the definition of “news media” to explicitly include online news, websites and broadcasting. If we were at one on the question of media ownership then this would be a welcome extension. However, expansion at this time, while fundamental concerns regarding foreign ownership of traditional newspapers remain unresolved—or, indeed, are potentially being dangerously broadened—is illogical and dangerous, and we will not support these draft orders.

16:30

[Lord Forsyth of Drumlean (Con)]

My Lords, I always pay careful attention to the advice given to me by my Chief Whip. The advice—which I am not sure I am allowed to reveal—is that we should not support this amendment on the grounds that we do not vote for fatal Motions. I was very impressed by the speech by the noble Lord, Lord Fox. In fact, I agreed with every single word. That is a real first for me on something coming from the Liberal Benches.

Until quite recently, I told people that I have never voted for a fatal Motion, but in fact I discovered that I did some six weeks ago, as the noble Lord pointed out. We had a fatal Motion, and quite rightly so, because it was on a matter that we thought was in the national interest: the position of the Government on their treaty on the Chagos Islands. So both I and the noble Baroness, Lady Stowell, have voted for fatal Motions in very recent history, so I am a bit confused by the suggestion that we should deal with this matter on the basis of some kind of procedure. We have heard the nature and seriousness of the arguments. If this House now feels that it cannot vote on a matter of this seriousness because of some mythology about fatal Motions, what is the point of us being here at all? What is our purpose? This is a central issue.

The other reason why I am a little confused is that, when we amended the legislation last year under the previous Government, my noble friend Lord Parkinson mentioned an amendment being made at Third Reading and said:

“We will amend the media merger regime explicitly to rule out newspaper and periodical news magazine mergers involving ownership, influence or control by foreign states”.—[Official Report, 13/3/24; col. 2042.]


I emphasise “foreign states”. He said:

“Direct investment in newspapers of any size will be banned … We will therefore introduce an exemption for investments where the stake is below 5% of the total … This would apply to passive investments by … sovereign wealth funds, pension funds or similar”,


not by foreign states. That was primary legislation passed by this House. There was no vote because there was unanimity across the whole House about the importance of banning foreign Governments from owning parts of newspapers.

There was also consensus across the House for extending that to other media services, which the other instruments refer to. The noble Lord, Lord Clement-Jones, quite rightly points out that they would, I think, be supported by the House were it not for the fact that they change the ownership rules to allow foreign Governments to be involved not just in our newspapers but in other news media organisations.

My noble friend Lord Parkinson also said that the Government recognised the

“risks that foreign state ownership of … the UK’s newspapers and news magazines could pose to democracy and to free speech”,

allowing them to

“over time corrode trust in our media as a whole”.—[Official Report, 26/3/24; cols. 584-85.]

What has changed in the past 12 months about those principles? The Government have changed, but that is not a reason to change one’s principles on this side of the House. This Government have sought to take secondary legislation and use it to change not just the intention but the effect of primary legislation. Now they are the Government—we lost the election.

[Viscount Hailsham (Con)]

On that point of the use of statutory instruments, does my noble friend agree that many of the problems he has identified arise from the fact that statutory instruments cannot be amended? Is it not bizarre that in the autumn we are going to have a remedial statutory instrument, the terms of which could be incorporated into the present statutory instrument if we were able to amend it?

[Lord Forsyth of Drumlean (Con)]

As always, my noble friend makes an excellent point, but it takes me slightly off the subject. I am kind of arguing that these procedural arguments are trounced by the fact that what is being done here is that primary legislation is in effect being amended by secondary legislation—to which, as he says, we cannot make an amendment. That is completely wrong. If we allow this to go forward, there will be other examples. This is the Executive thumbing their nose at the Parliament. This is the Executive taking power.

I believe that these regulations abandon an important principle. In her introduction, the Minister deftly avoided and elided the suggestion that investment was needed from foreign Governments. I have no objection to national wealth funds. Indeed, we amended the legislation, and the 5% had nothing to do with foreign Governments. As I recall, it was introduced to allow the Norwegian pension fund to be able to continue its existence. That was an exception to the rule, necessary because of the nature of those funds. Now we have regulations that allow 15% to be held by foreign states; that is what is at stake here.

Notwithstanding the powerful advocacy from my noble friend Lord Black for the Daily Telegraph, this has nothing to do with the Daily Telegraph. This is about a general principle that foreign Governments could take a stake in our newspapers and other media assets. When I say that it is nothing to do with the Daily Telegraph, I am slightly suspicious, just to take my noble friend’s point, that we are being asked to do this at such speed, in such a hurry. It is nothing to do with the Daily Telegraph bid, I am sure. Why did the Government not just withdraw the amendments and table new ones, which we could discuss at length in the autumn? Could it be to do with some other business going on with the Daily Telegraph? I may be cynical, and perhaps I am being unfair, but it feels like that.

I took the liberty of sending to colleagues—I promise not to do it very often—an article written by Fraser Nelson, whom I hold in the highest regard as a political journalist. I have circulated it to a number of colleagues. It tells the inside story from his ringside seat of what has been going on with the purchase of the Daily Telegraph. I commend it to noble Lords because, if they read that article, they will certainly vote for the amendment in the name of the noble Lord, Lord Fox. It is completely unacceptable that our parliamentary procedure should be overwritten and that we should create an open door for foreign Governments to get into our media services to meet a particular bid.

The remarkable thing is that when you ask the Ministers why they are making this change, they say that it is nothing to do with the Daily Telegraph—it is because they had a consultation exercise. As the noble Lord pointed out, they had all of four people responding to this consultation exercise, which made them change their minds. Who were the people who responded to the consultation? They actually said that they were not going to tell us—it was going to be kept secret, because it was so embarrassing to discover that it was the newspaper owners themselves.

Of course, it is always very dangerous to cross newspaper owners, especially if you are in politics, which is why Fraser Nelson is to be commended on his excellent article today. If we have foreign Governments owning newspapers, as opposed to foreign investors, there will be a conflict of interest between our journalists and their proprietors, because our journalists might want to write unpleasant things about some regimes that may or may not be allowed to own the newspapers. For this House, if it is a choice or conflict, which are we going to support, the freedom of the journalists or the financial interests of the proprietors? There can be only one answer: we have to support the freedom of the journalists, even if they do not always reciprocate in respect of this House.

There is one further point I would like to make, and it is about RedBird. I do not have a clue where RedBird’s money is coming from; it is not disclosed. How can we possibly feel comfortable with that? I know that the noble Lord, Lord Alton, who has been so spectacularly successful in arguing in this House for freedom, not just in this country but all over the world, has grave concerns about the relationship between RedBird and the Chinese Government at the highest level. I know nothing about RedBird, and therefore I feel even more despairing that the Government should be bringing forward these regulations, instead of the Secretary of State having by now instituted for the MMC to carry out an inquiry into precisely those matters.

It is with great pride and pleasure that I shall support the Liberal amendment, not because it has been made by the Liberals, although I have huge respect for the noble Lord, Lord Fox, but because I believe that he is speaking for the whole House as it was before the election, when almost unanimously, without a vote, we upheld the principle, which these regulations seek to undermine, that foreign states should not be allowed to own newspaper assets in this country.

[Lord Robertson of Port Ellen (Lab)]

My Lords, last year I went to the Department for Culture, Media and Sport with the noble Baroness, Lady Stowell, in a small delegation to make representations about the lack of any regulation at that time to prevent foreign Governments buying stakes in British newspapers. In the subsequent debate I certainly supported her view, and I liked very much what she has said today. The consultation may well have produced only four newspaper contingents giving their views, but a lot of other people have given a lot of thought to it in the meantime, as I have.

The question for the House today is whether we accept the compromise of 15%, higher than 5% but lower than the 25% that would have given the statutory controls, or go for a fatal amendment, getting close to what would be regarded as the edges of the constitution. I think that the Government have given a fair account, and I have discussed it and debated it at the same time. I have changed my mind. I think the safeguards that are available and the 15% are reasonable, and I believe we should therefore vote against the fatal amendment.

[Lord Alton of Liverpool (CB)]

My Lords, I hope to be able to persuade the noble Lord, Lord Robertson, who knows that I have enormous respect for him, that the safeguards are not good enough and that he should reconsider before we get to a vote on this amendment. The noble Lord, Lord Forsyth, at the end of his remarks, commented about Fraser Nelson’s article this morning. It is a long article, but I will just read a sentence from it:

“But the Emiratis and others are using their state investment vehicles as levers of political power”.


That is the democratic threat. It is one that Parliament has protected us from, but that protection is now compromised.

That is why we are here today. None of us speaking in this debate wants eagerly to support a fatal amendment. I, the noble Lord, Lord Forsyth, and others have not supported fatal amendments on any kind of regular basis, but this is an extraordinary set of regulations that we are being asked to approve and these are extraordinary times. I agree with the noble Lords, Lord Forsyth, Lord Fox and Lord Clement-Jones, and others who have expressed opinions outside your Lordships’ Chamber, including the noble Baroness, Lady Kennedy of The Shaws, and the noble Lord, Lord Blencathra, and I have arrived at the same conclusion, albeit reluctantly.

16:45

One of those others is the former leader of the Conservative Party, Sir Iain Duncan Smith. For the record, I remind the House that Sir Iain and I, along with five other parliamentarians including the noble Baroness, Lady Kennedy of The Shaws, have been sanctioned by the Chinese Communist Party regime. As the noble Lord, Lord Forsyth, suggested in a curtain-raiser at the end of his remarks, I will talk about the influence it is seeking to exert in this country and beyond.

Let us be clear: these regulations fundamentally contradict the intentions of Parliament expressed just months ago, as we have heard, in the Digital Markets, Competition and Consumers Act. That Act, as the noble Lord, Lord Forsyth, reminded us, was underpinned by overwhelming cross-party consensus that foreign Governments must not own or influence our press. As Fraser Nelson points out, influence is the issue here. Yet these draft regulations, hastily brought forward, would allow precisely that.

I agree with the noble Baroness, Lady Stowell, with whom I am grateful to have had conversations outside the House, that the defects should have been ironed out beforehand and that we should not be asked to agree these regulations today in the expectation that there will be amendments in the autumn. I agree with the noble Lord, Lord Fox, on the importance of new primary legislation. That is how the House should do it, not through these unamendable regulations and orders, as we have been reminded.

As we have heard, we are being asked to agree something that permits multiple foreign state investors to acquire up to 15% of a UK newspaper without, as it stands, cumulative limits—a defect in these regulations that will not be addressed until the autumn. That is not a safeguard but a revolving door through which foreign interest may reach into the heart of our democratic discourse. And for what? It is to facilitate one single deal. The timing is no coincidence. We are being asked to rewrite press freedom protections not for principle but for expediency. The noble Baroness, Lady Twycross, said when she kindly invited me to meet her last Thursday that she cannot comment on who the sources of the funding are or on whether RedBird’s bid is fully funded and ready to go. So much for the transparency to which we are entitled before coming to a conclusion on these issues.

I say gently to the noble Lord, Lord Black of Brentwood, that the proposed acquisition of the Telegraph Media Group by RedBird Capital Partners is not merely a commercial transaction but a matter of national interest and democratic integrity. To be clear, the chairman of RedBird, John Thornton, is a board member of Chinese state-backed companies including Lenovo and the China Investment Corporation. He has openly advocated for China to “get into” English language media. By the way, he has received the PRC’s highest honour for foreigners—from a regime accused by the House of Commons of genocide in Xinjiang and which has incarcerated over 1,000 pro-democracy advocates in Hong Kong, including Jimmy Lai, the British national who has been such a champion of media freedom and paid such a price for it. Let us not forget: the CCP has long understood that controlling the narrative is as vital as controlling the army. Zhao Qizheng, a senior Chinese official, put it bluntly in saying that they

“need to … try to dominate the overseas media. Our goal is to have the overseas media follow our steps”.

According to the Centre for European Policy Analysis, China spends up to $10 billion annually on international propaganda. That is not soft power: it is sharp power, designed to erode trust, manipulate information and bend foreign societies toward the CCP’s interests. With all we now know about the PRC’s global ambitions and influence operations, are we really prepared to allow a known intermediary of Beijing—a man described by Chinese state media as “a modern-day Kissinger”—to acquire a seat at the table of one of Britain’s most influential newspapers? To allow that would be the abdication of our duty to Parliament, democracy and the people we serve.

The Government argue that further regulations will come in the autumn to address this “cumulative” problem. This raises the obvious question: if the regulations are defective now—and they are—why not fix them now? On Thursday, I asked the Minister to withdraw them and do just that. Why rush them through with full knowledge of their flaws?

I also wish to use this opportunity briefly to make a formal representation to the Government. Under the Enterprise Act 2002, as amended by the DMCC Act 2024, the Secretary of State has a legal duty—not a discretion—to issue a foreign state intervention notice if there are reasonable grounds to suspect that a foreign power may gain influence over a UK newspaper. Given the extensive ties between RedBird Capital Partners and the Chinese state, including Mr Thornton’s affiliations with PRC institutions and even co-investments with Chinese military-linked firms, there is clear evidence that meets the statutory threshold. Under Schedule 6B, even indirect influence or the ability to shape policy may suffice. Parliament’s intention in passing the DMCC Act was precisely to prevent this. Therefore, the Secretary of State is bound by law to investigate and cannot lawfully ignore the risk of PRC-linked influence over the Telegraph Media Group. This position is supported by a legal opinion from Tom Cross KC, which I know the Minister has seen. I ask her to confirm whether that opinion will be formally considered and if the Secretary of State will now act.

Democracy dies not in thunder but in whispers. It dies when we look the other way and convince ourselves that 15% here and 15% there means nothing. It dies when influence becomes indistinguishable from ownership and when we abandon the courage to act in defence of a free press. Let us remember the words of the noble Lord, Lord Forsyth, during the passage of the digital markets Bill. He said that there should be a

“complete ban on any foreign Government having either ownership or influence over our press”.”.—[Official Report, 26/3/24; col. 588.]

I agreed with him then and I agree with him now. That was the will of Parliament. Let us not allow it to be undone by stealth. I commend the noble Lord, Lord Fox, for his clarity and conviction. This is the time to act, and I support his fatal amendment.

[Lord Lansley (Con)]

I will make brief points about each of the regulations, not only those relating to newspaper mergers. On that, I very much agree with my noble friend Lady Stowell. We are in the unhappy position of being presented by the Government with regulations that do not adhere to the policy intention. A number of noble Lords made it perfectly clear that the statute prohibits foreign powers having any stake in our newspapers, but it allows the Government to make exceptions. It was clear that the policy intention, outlined by my noble friend Lord Parkinson of Whitley Bay, was to bring in such exceptions by reference to a shareholding of 5% for this purpose.

However, the 15% figure, as the noble Lord, Lord Alton, has just explained, is not the only condition. Schedule 6B presents other conditions that need to be met. Indeed, condition 4 makes it very clear that if there is control or influence over the newspaper that is not related to the shareholding, it can be the basis on which a foreign state influence intervention notice is presented. Although we appear to be debating only the shareholding, it is in fact only one of a number of potential issues, as the noble Lord, Lord Alton, set out.

For my part, I agree with my noble friend Lady Stowell that we cannot vote for the fatal amendment—not for constitutional reasons, but simply because we would arrive at a position where we would not be giving effect to the policy intention because we would not be making any exceptions, even for investments that are not exercising any control or influence. I share my noble friend’s view on this subject.

I turn to the other regulations, which I welcome; I do not object to them, as the noble Lord, Lord Clement- Jones, did. They take the definition of “newspaper” in our public interest media merger regime to where it ought to be; that is, publications that concern news-related material, both in hard copy and online.

However, I put it to the Government—I have discussed it with Ministers; I know that it is for further consideration in future—that because the definition of “newspaper” includes

“news-related material which is subject to editorial control”

and “editorial control”, among other criteria, includes that it should be first published by that publication, it excludes online news aggregators. I will give noble Lords a very simple example. I am sure that many of us use Google News or Apple News—I use the latter—which are news aggregators. I do not think that we should, for a minute, accept that they do not exercise control of our media. They have editorial teams to determine the most important stories that we should see each day. As many here will know, setting the agenda is an essential part of a political process. If we have news aggregators setting the agenda online for millions of people, for whom that source is one of the most trusted online sources, the control of that online news aggregator is an extremely important issue.

News aggregators are currently excluded from our public interest media merger regime because they do not first publish the material that they put online and present to their millions of subscribers. I put it to the Government—I hope that they will take this on board—that the definition should be amended to identify that kind of online news aggregator and include it under the public interest media merger regime.

[Lord Shinkwin (Con)]

My Lords, I listened carefully to the remarks made, and I thank my noble friend Lord Forsyth of Drumlean and the noble Lord, Lord Fox, for making such a compelling case.

If only this were about the survival of specific newspapers; however, as we have heard so clearly today, it is about the survival of the fundamental freedom of our media from Governments, as Fraser Nelson has argued so persuasively. It is the insidious nature of the threat contained in this statutory instrument that alarms me and that should, I believe, alarm us all. That is why I urge all Members of your Lordships’ House to support this fatal amendment.

[Lord Cromwell (CB)]

My Lords, two practical things are puzzling me. First, if we swallow the ideas that 15% does not bring influence and that it can be checked, monitored and proved—both of which are quite big mouthfuls to swallow—what action will actually be taken? What penalty will be imposed that will not damage the very publication that we are talking about?

Secondly, we are asked to allow this investment because there is, in essence, an existential threat. That feels to me like a bailout. What will happen if that cash runs out and more is needed? Will there be pressure for, perhaps, a further 5% to be added? Alternatively, will we have another discussion about what an acceptable level of shareholding will be to bail out that newspaper again? I do not have complex conspiracy theories in mind, but that seems an obvious trap. If you give money to a struggling business, it is likely to ask you for more later, which will give you more control.

[Lord Udny-Lister (Con)]

My Lords, I oppose the Motion from the noble Lord, Lord Fox. In so doing, I have a non-pecuniary declaration I must make: I am the co-chairman of the UAE-UK Business Council, so I am fully aware of the situation there.

The Government’s proposal would allow a minority, non-controlling stake of up to 15%. I cannot see any issue with this, for this is not a majority control nor is it a back-door granting of our press to be editorially censored by foreign state actors. We are simply discussing the ability for our national newspapers to seek investments needed to survive in this interconnected world in which we now operate.

17:00

Anybody who knows anything about the sovereign funds in any of the countries in the Gulf will know that they are all hard-nosed financial institutions that are getting involved in investments because they believe they can make money out of them. It is not about influence; it is about a commercial transaction—that is the point. We are getting a bit too carried away with the belief that because a foreign sovereign fund is making an investment, it is seeking editorial control—that is far from the case. I would make the point that they are reliable and secure countries.

I also make the point that the UK media landscape has always had foreign fingerprints. As we have already heard from other people in this debate, the vast majority of people today take their news and media from social media giants that are almost entirely American-owned and remain largely unregulated. Where is the outrage about them?

[Lord Forsyth of Drumlean (Con)]

I do not think any of us are concerned about sovereign wealth funds; we are concerned about Governments. As far as I know, the United States Government do not have any interest—hopefully—in any of the social media organisations the noble Lord is referring to.

[Baroness Fleet (Con)]

My Lords, it is an honour to follow the noble Lord, Lord Udny-Lister, who is an old friend and old colleague. I declare my interest as former editor of the Evening Standard¸ deputy editor of the Telegraph and the Daily Mail and independent director of Times Newspapers.

As an editor, I met many newspaper proprietors, and I know that the very rich who want to invest in newspapers do so primarily because they want to have influence. I have the highest regard for my noble friends Lady Stowell and Lord Black of Brentwood, and I commend their contributions to this debate.

However, while I know that, sometimes, there is need for pragmatism and compromise at times of political and financial crisis, when it comes to freedom of the press, there can be no compromise. There is a principle to fight for.

Several noble Lords have reminded us that in March last year this House came to the conclusion that foreign states should not own newspapers. State control undermines free speech. We have heard the splendid speech from the noble Lord, Lord Alton, who is one of the great masters of this subject. On that basis, the then Government compromised and agreed that arm’s-length sovereign wealth funds could indeed own a maximum stake of 5%. We are now offered a variation whereby a foreign state can own a maximum of 15% of a newspaper.

However, in the statutory instrument, there is no limit on the number of states that can each own 15%—we have heard the argument. In other words, a coalition of states could each own 15%, thus having a majority ownership and the ability to exercise control. Once the Secretary of State was alerted to this possibility of multiple 15% ownership over six weeks ago, the Government could have been fleet of foot and pushed through a second SI to ensure the spirit of the first SI was not abused. But no, we waited and waited. Only last week was a second SI brought forward closing the loophole—but not immediately or as part of the first SI, but with a possible date in the autumn.

Therefore, the SI has a giant loophole, and this is what we are debating today. Would any savvy business sign a deal with a giant loophole only with a promise to close that loophole sometime in the future? No, of course they would not. Either we want to protect our freedom of speech and freedom from foreign state control, or we do not. That is the principle.

What is the justification to vary the 5% ownership other than that a foreign state wants more control or to save face? We have not been told.

Arguing against the fatal amendment on the grounds that the Telegraph urgently needs the deal to be agreed is an unacceptable compromise. This House is not here to consider transactions. This House is here to consider a point of principle. Will the Telegraph fold if a foreign state is not legally allowed to own 15%? I do not know. None of us knows, but that is not the point. I do not accept that we should rely on the Government’s promise of a second statutory instrument—which we have heard it might actually not even be possible to introduce after the legislation—to close the loophole sometime in the autumn. There is no legal or parliamentary reason why the Government could not have pushed through the second SI by today, so I have grave doubts about this promise.

If we agree to today’s regret amendment, there is in theory and in practice nothing to stop, say, four foreign states buying 15% each, making the Government’s promise for the autumn irrelevant. The Government will say that we can rely on the regulator—the CMA, perhaps, or Ofcom. We have all seen the failure of regulators—just think of the water regulator or the City regulator. When it comes to freedom of the press, only the law protects, not regulators. To protect newspapers from any foreign state influence, I will support the fatal amendment.

[Lord Vaux of Harrowden (CB)]

I want to ask a very quick question of the Minister. Why 15%? A number of noble Lords have said very clearly that 15% does not give influence, but they are missing a very important legal right that cuts in at 10%. That is because when acquiring a company, if you are able to get 90%, you can compulsorily acquire the remaining 10%—it is called the squeeze-out procedure. For that reason, in any takeover situation, typically you put in a condition that says that you will not acquire the company unless you reach 90% or more. If you hold 10%, you can block a takeover, so why was 15% chosen, not less than 10%?

[Baroness Bennett of Manor Castle (GP)]

My Lords, very briefly, I offer the Green group’s support for the fatal amendment of the noble Lord, Lord Fox—and I welcome him back.

I will make three brief points, one of which is drawing on my experience. I declare my position as a former editor of the Guardian Weekly newspaper, the international edition of the Guardian. Before I worked for the Guardian, I worked for the Rupert Murdoch-owned Times newspaper, and I was the page 1 sub-editor for a period in the early 2000s. There was a lot of interest at the time in what influence Rupert Murdoch had on what the Times did. That was something of interest to me, and I watched it very closely. There was only one specific case where it was widely known that Rupert Murdoch had explicitly intervened in the Times’ coverage. What I saw regularly, evening after evening, was senior editors agonising, asking: “Would Rupert like this?” or “Would Rupert not like that?” This was the point made by the noble Lord, Lord Clement-Jones, about the provision here whereby the Minister can intervene if they see influence. How are you going to see influence such as that? It is not a visible action—nothing is even said.

My second point is that my support for the fatal amendment is in no way support for our current media ownership arrangements. The Green Party has long worked with the Media Reform Coalition, focusing on the extreme concentration of our media in a handful of right-wing media tycoons. What is being proposed here is not going to improve that situation.

Thirdly, reflecting on what the noble Lord, Lord Alton, said about Chinese influence, I draw the House’s attention to a ruling this morning in the European Court of Human Rights on a case brought by three former MPs, one of whom is former Green MP, Caroline Lucas. They did not win their case over the Brexit referendum in 2016, but the court in Strasbourg did find that there were shortcomings in the UK’s initial responses to allegations of Russian interference in the Brexit referendum campaign. As Caroline Lucas said afterwards:

“It’s hugely significant that the court has found in favour of our case that foreign interference is a threat to our right to free and fair elections”.


I would add that it is a threat to free and fair democratic debate.

[Baroness Wheatcroft (CB)]

My Lords, I will be brief. I am sure that noble Lords feel that they have heard enough from newspaper editors already. As another former newspaper editor, I was going to sit quietly, but I must take issue with the comment from the noble Baroness opposite that Rupert Murdoch was always an unseen influence on what senior editors wrote. As a former senior editor there who disagreed vehemently with Rupert Murdoch over very many things, I can say that that was not at all a consideration in what we wrote. I have no doubt that he told those at the Sun every evening what to write, and that they wrote it. It shows that newspapers are influenced by their proprietors if they wish to be, and if their audience is happy with that.

Listening to this debate, we seem to have lost the idea of what has happened to newspaper audiences. They are no longer what they were. The noble Lord, Lord Clement-Jones, talks about people having their newspapers delivered to their homes and those newspapers upholding British values. Maybe he has been reading the Daily Telegraph recently, but my reading of the Daily Telegraph is that it does not tally with my British values, and it may not tally with the British values of everybody here.

Newspapers have a role. It is no longer the role that it used to be. They are fulfilling it to the best of their ability, but competing with numerous other sources and not always succeeding. As others have mentioned, the web in various guises, particularly social media, provides the news for the majority of young people in this country. I contend that that is far more dangerous than any influence on a major national newspaper. If some major national newspapers were to influence the debate at all in this country, I do not think that Keir Starmer would be the Prime Minister today—it could still be Liz Truss. Newspapers do not have that much influence any more.

However, there is no doubt that the procedure that has brought us to this position has been flawed. I think the Minister accepts that the Government have not made the best job of this. If she can give the House some indication that the potential loophole between now and the autumn will be fully bridged, then we should support the amendment tabled by the noble Baroness, Lady Stowell, because there is sufficient regret over how this has been done. We should not pass a fatal amendment that looks to a history that no longer exists.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, this is not a media studies debate on proprietors and their influence over the press. This is about state ownership, which is what we voted on. It is not about whether Rupert Murdoch has an undue influence. The noble Lord, Lord Robertson of Port Ellen, explained the process through which he concluded that he had changed his mind, but he has not changed anyone else’s—nobody even asked whether we had changed our minds.

This is about subverting the primary law, that we all voted on, behind our backs. A decision that we made has deliberately been reversed. Everybody might have changed their minds, but that is not the point. If you are thinking about the constitution, it must be brought back as a debate. If it was not for the amendments, we would not be having this debate.

The final thing is the context. Everyone who has spoken has stood up and said, “We believe in press freedom”. In this country, press freedom is ultimate: each party declares that it is for press freedom. I will remind noble Lords of the context. I am still in shock at the revelations about the super super-injunction brought out by leading members of both parties—or brought out by one party and then supported by the other—that has completely slapped press freedom across the face in relation to the Afghan leak. The reason I mention that is that when people say, “Can you just trust us? We all believe in press freedom—this is not going to undermine press freedom”, press freedom is already under pressure. We have seen that, behind the scenes, the press can be denied the right to information that they should have had in relation to that Afghan scandal.

As far as I am concerned, in this instance I will be supporting the fatal amendment put forward by the noble Lord, Lord Fox, not necessarily for all the reasons that have been indicated by all the speakers from the Liberal Democrat Benches, but because we have to show that press freedom and parliamentary procedures cannot be subverted behind our backs.

17:15

[Lord Inglewood (CB)]

My Lords, I have been listening quietly to the debate, and I think I am the first person to rise who has actually chaired a newspaper company, albeit a small regional company, in this country.

It is my view that, where someone has 15% control, they have a presence in the boardroom; it depends on other circumstances exactly how that presence may work out. But nobody, with the possible exception of the noble Lord, Lord Lansley, has really addressed what is a very serious point, which is that people who own things—and everything has to be owned by somebody —can change their minds. There is an underlying assumption behind much of what we have heard this afternoon, that if you are a foreign state, you can say, “I won’t use my ownership to exercise influence”, or you might be one that thinks, “I want to promote my own country in the receiving country”.

Of course, the problem we face is that the investment market for media is international and most media, particularly some of the papers we have been discussing this afternoon, are essentially nationally focused. There is a disjunction between the regulatory regime and the realities of the capital markets that lie behind a lot of these projects. All I would say is that it behoves us to be very cautious. As the Queen said before the Scottish referendum, “Be careful”.

[Lord Newby (LD)]

My Lords, I never in my wildest dreams thought my last speech as leader of the Liberal Democrats in your Lordships’ House would be to express my concern about the future of the Daily Telegraph. Politics is a funny business.

The arguments that we have been hearing this afternoon fall under two broad headings: the substance and the procedure. On the substance, there is no need to rehearse the argument about why foreign influence on our media is thought to be a bad thing. There is agreement about that. The logical way in which we stop there being foreign influence is to make sure that there is no foreign ownership. But we have heard this afternoon, first from the Government and then from others, that it is better to have some foreign ownership than for the press to face an existential threat.

This argument, one would have thought, was not entirely new. Yet, when the digital markets Bill was being debated in your Lordships’ House, amazingly, our media did not face an existential threat—nobody argued that. So, in the course of a year, we have gone from a point where a 5% stake by a non-state foreign actor was thought to be acceptable to where we now find that our newspapers face an existential threat unless foreign Governments are allowed to own 15%. As the noble Lord, Lord Cromwell, asked—although he did not put it quite like this—if the stake has gone from 0% to 15% in a year, where are we going to be next year, given that we are told that the traditional media are on a slippery slope? I find that a very curious and uncompelling argument.

The question, though, is whether to accept the assurance that a 15% foreign-government stake will not influence or be allowed to influence the editorial stance of a newspaper. The first argument is that this 15% stake is merely passive: you are buying 15% in a newspaper in the same way that you might buy 15% in an oil company or conglomerate. However, given that we are told equally by the same people that these newspapers are facing an existential threat, is it likely that a hard-headed Government will decide that the best use of their funds is to buy a newspaper or part of a newspaper on a passive basis? Having looked all around the world, is that the best return that they will find for their funds? The answer is palpably “No, it is not”.

The next argument in defence of what is proposed is that there is a backstop and that the DCMS will be able to intervene when there is undue influence. However, as the Minister said only last week that, in those circumstances,

“it is likely she”—

the Secretary of State—

“could intervene”.—[Official Report, 16/7/25; col. 1827.]

I emphasise “likely” and “could”.

Suppose that the influence was being exercised in a manner to which the Government were sympathetic; would a Secretary of State intervene in those circumstances? If they did not, what pressure from whom would cause a Secretary of State to intervene? We know that influence over the way a paper presents itself is a subtle thing. In circumstances where you have a Government who are sympathetic to that influence, my contention is that those exercising the influence would get away with it. They amount to the substantial arguments against the proposition before us.

The question about procedure relates to how this has been undertaken. There was a consultation to which there were four responses. Normally, if a consultation receives four responses, you start again, because clearly more than four entities have a view. But, blow me, the four entities all have a similar and partial view, because they potentially stand to gain from this change, and the Government accept that as a reason to change their mind. This is extraordinary to me. I can think of no other consultation where four entities peddling their own argument would get a Government to change their mind. This is an extraordinary consultation, if we can think of it as consultation at all.

The next thing, as has been pointed out, is that this SI is amending primary legislation. I think everybody agrees that this question of press freedom is quite important, so what happened when this SI was debated in the House of Commons? Did they spend this sort of time on it? Did they have impassioned argument with people changing their mind? They spent 18 minutes on it, the vast bulk of which was the Minister at the start and the end. There were literally a couple of speakers in the entire debate. Either the House of Commons is not interested in the issue or it did not realise what was going on, because it is an SI and, as we know, MPs regard being put on an SI committee as a bit like being sent to Siberia for a month. So, in reality, this issue has not been debated at all in the House of Commons, which is extraordinary. If most MPs had realised what they had agreed to, without actually agreeing to it themselves, they would have opposed it.

The whole thing seems to be potentially very damaging and shows parliamentary scrutiny to be non-existent, except in your Lordships’ House in this case. For it to proceed would be bad for freedom of the press and for the way we deal with these things. When, on 3 June, the noble Earl, Lord Minto, urged people to vote for a fatal Motion on the Chagos Islands, he said that it was his

“duty to bring this fatal Motion to the House”.—[Official Report, 3/6/25; col. 614.]

We think that it is our duty to bring this fatal amendment to the House, and we urge noble Lords to support it.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, it feels like a long time since I stood at the Dispatch Box opposite, taking part in similar debates on what became the Media Act 2024 and the Digital Markets, Competition and Consumers Act 2024, but I have been genuinely heartened to know, from the contributions from across the House today, that the concerns raised in the passage of those Acts remain strongly at the forefront of noble Lords’ minds. As I said then, and as noble Lords have rightly said today, our free and independent press in this country is an absolute cornerstone of our democracy and a vital part of public discourse. It is right that we should devote so much time to making sure that it remains healthy, robust and independent.

Like other noble Lords, I am very glad to see the noble Lord, Lord Fox, back in his place and on fighting form. I wish the noble Lord, Lord Newby, well in his retirement as he vacates the leadership of his Benches. There is a slightly unfair characterisation of the Daily Telegraph as having a letters page that attracts contributions from the retired, fulminating against things. I look forward to the noble Lord’s green-ink letters. I wish him a happy retirement and thank him for his many contributions. I particularly enjoyed the closing words of his speech, which seemed to me to make the case against elected Houses and in favour of the power and independence of appointed ones. I shall leave that for further debates.

I start with what some have called the constitutional position, because it is important that we understand the unusual amendment that is before us. It is within the rights of your Lordships’ House to table, divide on and even, if it wishes, on rare occasion, to support fatal Motions, but those are serious steps, and the last of them, in particular, should be taken very sparingly and in exceptional circumstances. I am not convinced that the circumstances here warrant an action of that gravity.

I say that as somebody who has some skin in the game here. As noble Lords have reminded the House, I was in the position of outlining the beginning of the policy that the Minister is continuing today. I find myself in the position of seeing the Minister tearing up the words I uttered at that Dispatch Box, or at least signalling an intent to depart from them. She is entitled to do that because, shortly after I made those comments, there was a general election that ushered my party from power and brought hers in with a landslide result. She has been admirably candid about that. I tried to scribble down what she said in her opening remarks: “This Government have come to a different conclusion to the previous Government about the appropriate threshold”. They are entitled to do that, and your Lordships’ House is, of course, entitled to probe how and why they have reached that conclusion.

However, the new Government cannot ignore what Parliament has agreed to put on the statute book, unless they convince us to change the law. The last Conservative Government, I am proud to say, strengthened the powers available to Governments and to Parliament to protect this country and key sectors of our economy and society against malign foreign interference. We passed the National Security and Investment Act in 2021, the National Security Act in 2023, and, in our final weeks in power, following campaigning by noble Lords, particularly my noble friends Lady Stowell of Beeston and Lord Forsyth of Drumlean, amendments to the Enterprise Act regime, delivered through Schedule 7 to the digital markets Act. I pay tribute to my noble friends and all the other noble Lords, including the noble Lords, Lord Robertson of Port Ellen and Lord Anderson of Ipswich, who persuaded us to do that.

I am also grateful to my noble friend Lord Lansley for pointing out the other statutory provisions that are on the statute book compelling the Secretary of State to take action to protect our independent and free media. This is not just a debate about the difference between a 5% and a 15% shareholding threshold, important though that is for us to explore—as we have done. The question is, is the will of Parliament being ignored here? The change that I had the privilege of making to the statute book towards the end of the previous Parliament was delivered at Third Reading of a Bill after much debate. It was done in great sincerity, but also in the recognition that further work needed to be carried out and that secondary legislation would be brought before your Lordships’ House to implement it.

17:30

Had we won the election—or, as some noble Lords might think more likely, had the Parliament gone on a little longer—we would have carried out the sort of consultation that the present Government carried out. I do not know whether we would have concluded the same things. I do not know whether we might have been able to attract rather more than four respondents to the consultation. I do not know whether I would have found myself disappointing my noble friend Lord Forsyth from a different Dispatch Box—I hope not— but to a certain extent this was unfinished business when the curtain came down on the previous Government.

I do know that we would have listened very carefully to the views of existing British media companies, which said very clearly in the consultation that has now, belatedly, been shared publicly that they need investment, including from overseas, to continue to do their vital work for our democratic society. The consultation has, on occasion, been presented as a slightly shady exercise by anonymous forces, but thanks to the Government sharing it, under pressure from a Freedom of Information Act request and perhaps rather belatedly, we can read those submissions for ourselves and see that this is a call that comes not from shady characters overseas but from UK media organisations, which say they need more money and investment and to change the way they do their business if they are able.

The noble Baroness, Lady Wheatcroft, was among those who spoke with great authority from their experience about the changing role of our media landscape. We have had many debates in your Lordships’ House, not least thanks to the Select Committee chaired by my noble friend Lady Stowell, that have looked at the future of news and the many challenges that beset our news organisations. Even in a place such as this where we can walk down the corridor and pick up a hard copy of a newspaper in the Library of your Lordships’ House, I wonder how many of us read a newspaper in physical copy rather than online. Either way, we are part of an unusual and declining section of the community who consume our news in that way.

My noble friend Lady Stowell set out just a few of the trends that her Select Committee looked at about the way that news consumption is changing and the far greater threats to our democracy and to public discourse from social media, news aggregators, AI and the misleading links that are shared, particularly with younger readers. That is why we need to equip our young people with rigorous skills, inquisitiveness and a healthy scepticism about the news they encounter. It is why it is so important that your Lordships’ Communications and Digital Committee is now looking at media literacy, and I look forward to the recommendations that it brings forward on how we can strengthen the skills of young people to confront news in this changing landscape. It is why we also need a thriving and sustainable range of traditional and trusted titles as a bulwark against the free-for-all that we are increasingly seeing. That is why I think we should give great weight to the requests of our respected media organisations to have the injections of investment that they need to keep up with this changing and threatening landscape.

I agree with noble Lords, including my noble friend Lady Stowell, who say that this has been a sorry saga. I think we have taken far too long to get to this position. I think we may have reached a slightly different position. There has been much foot-dragging, and I think the Minister would agree. I saw and shared her frustration in the many questions that have been raised while the process was going on in the quasi-judicial manner that it has to under the regime. I think the Government have been a bit slow in responding to freedom of information requests and questions in Parliament. I think it has taken a circuitous route to get us here.

Like many noble Lords, I find it disappointing that even after this delay, there has to be a further statutory instrument closing off the loophole that noble Lords have identified about the potential for a number of state-owned investors to own stakes of up to 15% each. That has always struck me as a slightly unlikely event, but it is none the less right for Parliament to close it. I am grateful to the Government for bringing further regulations and making them retrospective to close it. It is not a neat process to behold, but I think it gets us to a reasonable position, even if it is not the one that I might have liked to set out had I still been standing at the Dispatch Box opposite. I am glad that noble Lords have taken the opportunity to ask some serious questions of the Government in doing it, and I hope the Minister will be able to answer them, including the question from the noble Lord, Lord Alton of Liverpool, about the legal opinion that he raised.

I hope the Minister will be able to answer the questions that your Lordships’ Secondary Legislation Scrutiny Committee has suggested that it would be helpful to have answers from the Government on, in particular how the Secretary of State will reliably be able to detect and, if necessary, prove that the state-owned investor can exert influence in cases where the Secretary of State will still be required to intervene within a 15% threshold. I hope she will be able to give us further assurances that the new increased threshold will not undermine the original intention of the foreign state influence regime to protect British newspapers against inappropriate foreign state influence. I think those are valid questions for the committee to ask on our behalf.

I hope the Minister is able to give the noble Lord, Lord Fox, the reassurance that he needs not to press his fatal amendment to a Division today. If he does so, I will certainly vote against it and encourage noble Lords to do so. I think there is much to regret in where we find ourselves, but I do not think it warrants outright rejection.

[Baroness Twycross (Lab)]

I thank all noble Lords who have participated for their contributions. In particular, I thank the noble Lord, Lord Parkinson, for his closing remarks and for his graciousness and support. I have appreciated the conversations we have had. Like him, I pay tribute to the noble Lord, Lord Newby. I know this is the noble Lord’s last speech as leader of the Liberal Democrat group, but his incredible contribution to your Lordships’ House will continue.

I am going to start, perhaps unusually, by accepting the criticism from the noble Baroness, Lady Stowell of Beeston, which was echoed by others, including the noble Lord, Lord Parkinson, about how long it has taken us to bring this matter before your Lordships’ House. I think it was right to consider the matter carefully, but I appreciate that the criticism is fair. We have the chance to enact this now, however, and I believe your Lordships should support the Government’s effort to act on this point. There is, no doubt, disagreement on how we achieve our aim, but the underlying theme throughout this debate has been the fundamental importance that noble Lords attach to media freedom and the sustainability of our free press. I know this is key to all noble Lords’ responses to this matter. We need to make sure that our news media has a vibrant future and not just a proud past that we can look at in the bookcases outside the House of Lords Library. It is essential to our democracy.

As many noble Lords will be aware, the media public interest regime we have now came from the work by my noble friend Lord Puttnam, now retired from this place, and other noble Lords in 2003 to persuade the then Government that there needed to be an effective public interest regime covering cross-media mergers. It is that regime that we are strengthening today.

I am slightly surprised that noble Lords appear to think that it is inappropriate for the Government to take on board the views of newspapers or the views of those such as the noble Baronesses, Lady Boycott and Lady Wheatcroft, or the noble Lord, Lord Black, who have huge track records in journalism; we take their positions and points seriously. I appreciate, however, that the noble Baroness, Lady Fleet, has taken a different view; I respect that as well.

At the heart of the debate today are the three statutory instruments before us, which, taken together, represent the most significant resetting of the media mergers regime since the Communications Act 2003. The regulations will broaden the scope of our media merger regimes, strengthen the public interest protections and, crucially, bring into effect a strong and practical regime to regulate against undue foreign state influence in UK newspapers.

The noble Baroness, Lady Stowell, and the noble Lord, Lord Alton, made specific reference to the Telegraph sale and foreign influence in that regard. The Government are committed to seeing the Telegraph thrive and want to see a sale that aligns with public interest considerations and the FSI regime. Thorough due diligence will be conducted on any advance bid to purchase the Telegraph. Should the Secretary of State have reasonable grounds to suspect that either the public interest or foreign state regimes are engaged, she would intervene.

The noble Lord, Lord Clement-Jones, suggested that legislation is designed to facilitate RedBird’s ambition. The legislation banning foreign state control or influence over UK newspapers seeks to preserve the freedom of the press. This is not about any particular country. Just as the press is independent from the UK state, we do not want any foreign state owning or influencing our newspapers or news magazines.

The noble Lord, Lord Alton, also raised concerns about China and set out his views about the transactions. I cannot comment on the circumstances of any particular case. That is for the Secretary of State. It is why I was not able to provide the noble Lord, Lord Alton, with answers to the specific questions that he asked about a quasi-judicial matter before the Secretary of State.

The suggestions made contradict the clear steer given by the House during previous Oral Questions that this is an important matter and that the Government should put the exception in place at the earliest opportunity. Without exceptions in place, there cannot be investment from any investment organisation with any foreign sovereign wealth shareholding.

A large number of points have been made during the debate. I will briefly address those made specifically on the slightly less controversial regulations regarding expansion of the media mergers regime and online news. These did not get a huge amount of coverage but are, in our view, very significant.

The noble Lord, Lord Lansley, raised the exclusion of online intermediaries. At present, the Government are focusing on the reforms to the media ownership rules suggested in Ofcom’s 2021 review, which did not recommend that online intermediaries, including social media platforms such as Facebook or X, should fall within the scope of this regime. At this point, it is important to note that Secretary of State does have powers to intervene. However, if an online intermediary buys a media enterprise, the Secretary of State does not have powers to intervene if it is an online intermediary that is being bought; so that is a distinction. Ofcom has to date not recommended that online intermediaries be brought into scope of the media mergers regime but continues to keep it under consideration. We will continue to monitor developments and respond to recommendations from Ofcom and others in this area. I think the noble Lord is correct in relation to where people are increasingly getting their news from.

The noble Baroness, Lady Fleet, and others asked why the new SI for multiple states is being introduced. Our policy intention has always been to prevent any foreign state influence over the affairs, activities and policies of UK newspapers and news periodicals. In theory, these could all be passive investors with no ability, at least on paper, to influence a newspaper’s policy but they could still collectively own the majority of the enterprise. Although the provisions prevent states acting in concert to secure control, the new SI will put matters beyond doubt.

The second draft SI also proposes a new requirement for direct state-owned investor investments of more than 5% to be notified to the Secretary of State as a condition of the exception. If the notification is not made, or is made late, the investment will be prohibited.

I will cover a number of other points made about the foreign state influence exception regulations now, as well as the fatal amendment in the name—

17:45

[Baroness Stowell of Beeston (Con)]

If the Minister is going to come back to it, I will happily sit down, but I asked her a question about those new notification requirements in the draft regulations yet to be made, and whether the Government would consider my recommendation that the Secretary of State be required to notify Parliament on a twice-yearly basis if she receives any such notifications, and about the actions that she has taken as a result. Is she able to give me a response to that?

[Baroness Twycross (Lab)]

That is not in my speech, but I have an answer for the noble Baroness. We think that it is a reasonable suggestion. We need to work out how we can do that. There was a suggestion, for example, that it might require primary legislation. Obviously, that feels a little bit heavy-handed in terms of where we would want to get to. If the noble Baroness is content, I will come back to that. We think that it is a good point and it is worth doing, but I am not able to commit until we have clearer legal advice on how we could achieve that.

Going back to the other points, we have listened carefully to the concerns raised by noble Lords. I thank many noble Lords for the time that they have taken to meet me and the Secretary of State as well as officials. On the new regulations that we put out for consultation on 16 July, we have committed to change the legislation to eliminate entirely the risk that was identified by the noble Baroness, Lady Stowell, and others, and to backdate this change to 13 March last year, which is the date on which the foreign state influence regime came into effect. I give noble Lords an absolute commitment that we will lay regulations in the autumn. I am not allowed to say that we will do it by the end of October; I am allowed to say that we will aim to do so by the end of October.

Some noble Lords queried the difference between sovereign wealth and government control. I want to be explicitly clear: for the avoidance of doubt, this is not state ownership. It is not about Governments owning or influencing our media. We do not want that to happen either. The term “state-owned investors” refers to a narrow group of organisations that will need to be different and distinct from the Government who sponsor them. Foreign Governments will not be allowed to hold a direct stake. Key is the requirement that they make or manage investments, including international investments, as their principal activity. I agree with the point made by the noble Lord, Lord Udny-Lister, that this is not necessarily about influence. I give way—

[Lord Forsyth of Drumlean (Con)]

The Minister has just made an absolute commitment that “Foreign Governments will not be allowed”. That is what I understood her to say, so why does she not incorporate that in the regulations?

[Baroness Twycross (Lab)]

My understanding is that that is what the regulations would mean in effect. The noble Lord shakes his head, but I want to be explicitly clear that this is not going to allow foreign Governments to buy newspapers. This is about state-owned investors, which, as I made clear in my opening remarks, is a different matter.

[Lord Forsyth of Drumlean (Con)]

If that is what she thinks the regulations already say, she will not have a problem with making it explicit.

[Baroness Twycross (Lab)]

We have the regulations before us. I cannot be more explicit than I have already been.

To continue, investment by single or multiple state-owned investors will be capped at 15%. The regulations that we aim to bring in by the end of October will require a state-owned investor taking a direct holding of shares or voting rights of more than 5% to notify the Secretary of State of the transaction. This will enable her to quickly review any cases where there are suspicions that the shareholding may be more than a passive investment and to refer appropriate cases to the CMA for advice on whether a foreign state merger situation has emerged. This will be a condition of the state-owned investor exception. A failure to make this notification or making it late will mean that the investment in question is prohibited.

The noble Lord, Lord Fox, asked about the redactions in the consultation responses and why they were not published earlier. I have already outlined my acceptance of the criticism from the noble Baroness, Lady Stowell. DCMS has now published the responses. One organisation asked for its views not to be attributed and for some information to be redacted on the grounds of commercial confidentiality. The original consultation by the previous Government specified that responses would not be published and respondents would not be named. This Government’s current consultation makes it clear that they will be.

The noble Lord, Lord Newby, asked about the Secretary of State’s role. The legislation requires that the Secretary of State must refer a merger to the CMA if she suspects a state-owned investor is not entitled to the exception or is not complying with this requirement. This should provide protection in the interim, and was why we did not think the original SI defective. The one in draft was published in response to concerns, not, in our view, to correct an error, although it puts everything beyond reasonable doubt and was a reasonable request.

The noble Lord, Lord Fox, asked about the protections we have against hostile states trying to acquire influence or control. The FSI regime strengthens the Secretary of State’s powers and sits alongside her powers to intervene in a relevant merger situation on the basis of public interest concerns. These powers can be applicable in acquisitions involving state-owned investors within the threshold set by the draft regulation. Taken together, the existing legislation, draft regulations and second statutory instrument would allow the Government to act to guard against the kind of malign interference with UK democracy and press freedom about which noble Lords are concerned.

Additionally, the National Security and Investment Act 2021 can enable the Government to call in and, if necessary and proportionate, block, unwind or impose conditions on acquisitions of control over UK newspapers, including acquisitions that may give rise to national security concerns.

[Lord Fox (LD)]

I thank the noble Baroness for giving way. As I recall from debates on that Bill, there was a huge annexe that listed all the things within the remit of the National Security and Investment Act, but I did not notice newspapers. Will the Government be bringing forward an amendment to that Act to include newspapers, as she has just suggested?

[Baroness Twycross (Lab)]

My understanding is that they already can, on the basis of the Act. I do not have the detail that the noble Lord has asked for, but I have been told definitively that that is an existing power within that Act. I can only commit to write to the noble Lord explaining where in the Act that comes.

The noble Lord, Lord Clement-Jones, suggested—the previous Government put this out for consultation—that the FSI threshold should be lower. We believe that the 15% cap we have arrived at is a more straightforward approach than the one consulted on. It strikes a careful balance, enabling newspapers and news magazines to receive investment from a wide range of sources, while ensuring that foreign states are not able to acquire control or influence over editorial and other decision-making through that investment.

The noble Lord, Lord Clement-Jones, asked how things could be truly passive. The legislation would not permit state-owned investors to acquire rights to directly or indirectly appoint or remove directors or other officers of the company. Nor would it permit a state-owned investor acting on behalf of a foreign power to hold the right or ability to direct, control or influence, to any extent, the policy or activities of UK newspapers. Interference in a newspaper’s editorial policy or personnel decisions about senior staff or feature writers is not permitted. Even if a state-owned investor has 15% of the voting rights, it cannot actively use those voting rights in a way that influences the company’s policy or activities, such as editorial direction. The investment must be truly passive to be permitted.

The noble Lord, Lord Newby, asked about the limited use of FSI. It is important to remember that this regime sits alongside the existing media public regime. This works in parallel so that the Secretary of State, as well as having to refer any case with reasonable grounds, can look at whether the transaction raises wider public interest concerns.

I repeat that it is important to give UK media and potential investors greater certainty about the overall regime. I appreciate that it has taken quite a long time to get here. Newspapers have been calling for this, and it will help end uncertainty and support the overall sustainability of the UK newspaper industry at a time when accurate news and public-interest journalism are more important than ever. I do not think it an exaggeration to say that there is an existential problem; I agree with the noble Lord, Lord Black of Brentwood, when he says that, effectively, it is five minutes to midnight.

The power to make exceptions is included in the Enterprise Act 2002, following the amendments made in the Digital Markets, Competition and Consumers Act 2024. We looked at the issue of thresholds and came to a different conclusion from the previous Government. It is different, but arguably not radically different, given that their upper limit for diversified businesses was 10%. I know that is arguable, and I am not sure I will convince all noble Lords. I have, however, set out our arguments as to why we settled on 15% and why—in my view, reasonably—we gave weight to the views of UK newspaper groups, which are directly affected by the FSI regime.

The issue of the exception threshold was left open by the general election last year. It is both right and responsible for the Government to look at this afresh; indeed, I am sure we would have been criticised by some noble Lords had we simply ignored the consultation. Our intention in coming to a final view on the 15% threshold is to balance the need to protect press freedom from foreign state influence with not setting the threshold so tightly that it deters investment in newspapers.

The ongoing dialogue with noble Lords has demonstrated commitment across all parts of the House to guarding against malign influence on UK democracy and press freedom, an aim this Government share. However, while it is entirely appropriate for the House to discuss the fatal amendment today and to raise the concerns noble Lords have expressed, there is a strong convention against exercising the power to annul. We feel that, when we were in opposition, we respected this.

Noble Lords will not be surprised that I agree with the noble Lord, Lord Lansley, and the noble Baroness, Lady Stowell, that it is also the wrong thing to do in terms of policy. We have listened and we have agreed to make changes to put the issues noble Lords have raised beyond doubt. Above all, we will have a robust, effective and operable regime that limits foreign state involvement in UK newspapers while providing the sector with the certainty it needs as it plans for the future.

[Lord Fox (LD)]

My Lords, I thank those noble Lords who made kind comments. It is good to be back and to participate in such an important and serious debate.

Just when I thought I was beginning to get to grips with what the Government are intending, the Minister introduced a whole new layer of ambiguity that is completely opaque. What is and is not permitted is not clear. Reading the SI and listening to the Minister, they are at odds, and this underlines why we should not be approving this measure.

This has thrown up many procedural arguments, which the Government confess to, and worrying aspects regarding the outcome of this measure. These problems and worries render a regret amendment, in my view, inadequate. That is why I wish to test the opinion of the House.

17:58

Division 1

Ayes: 155

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Liberal Democrat: 64
Conservative: 41
Crossbench: 34
Democratic Unionist Party: 5
Non-affiliated: 5
Green Party: 2
Plaid Cymru: 2
Ulster Unionist Party: 1
Bishops: 1

Noes: 267

---

Labour: 145
Conservative: 100
Crossbench: 17
Non-affiliated: 5

18:11

Amendment to the Motion

Tabled by

[Baroness Stowell of Beeston]

At end to insert “but that this House regrets that the draft Regulations do not distinguish between state investment funds that are directly or indirectly controlled by a foreign power; that the Secretary of State must be relied upon to intervene if a state investment fund does not act in accordance with the Regulations; and calls upon the Government to withdraw the draft Regulations and replace them before 15 September with Regulations which cap foreign state investment to a total of 15 per cent of the ownership of any newspaper, as opposed to 15 per cent per foreign power.”

[Baroness Stowell of Beeston (Con)]

My Lords, I do not have an awful lot to add to what I said during the debate. I think I covered all the important points. As I said, I have accepted that an aggregate cap of 15% for state-owned investment funds is necessary to ensure the financial viability of the news industry, but with some safeguards. I am grateful to the Minister for her gracious acceptance of the criticisms that I and others have levelled about the Government’s handling of this. It was good of her to do that, and I appreciate it.

I take the Minister at her word about bringing back the supplementary regulations to deal with the loophole. I am disappointed that she is unable to give us a guarantee that it will be before the end of October, but I hear that she says that that is the Government’s intention. As I say that back to the Front Bench, I am looking at the business managers there: the Government Chief Whip and the Leader of the House. They will know from listening to this debate—although I know they were not in the Chamber—the strength of feeling among all noble Lords that the loophole that currently exists in these regulations must be closed.

The Minister acknowledged my requirement that the new notification requirements that will be reflected in the supplementary regulations should also include a requirement on the Secretary of State to report to Parliament. I know that she was not able to give me a guarantee that they will be reflected in the regulations, but I hope very much that they can be. I find it surprising that the Government think that might require primary legislation—I am a bit baffled by that—but I am grateful for her commitment to explore that requirement. I hope that, between now and the Government laying those regulations, we can discuss that further and get it properly nailed down.

I will not detain the House any further by pushing this regret amendment to a Division, because the noble Lord, Lord Fox, has already made it clear that the Liberal Democrats would not feel it necessary to support it—even though they have been so roundly defeated—but I am grateful to all noble Lords who spoke. Some important speeches were made, even those by colleagues who supported the fatal amendment. I think we all recognise that, as I said earlier, this is a very important matter. If there is one thing we all share, it is our commitment to a free press. Today is about ensuring that it can survive.

Baroness Stowell’s amendment to the Motion not moved.

Baroness Twycross’s Motion agreed.