Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025
Debate between Baroness Twycross and Lord Fox(1 week, 3 days ago)
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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 The original consultation by the previous Government specified that responses would not be published and respondents would not be named.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.
UK Newspapers and News Magazines: Foreign Investment
Debate between Baroness Twycross and Lord Fox
Baroness Twycross (Lab)
My noble friend is right that local journalism is vital to local democracy. We are developing a local media strategy in recognition of the importance of this vital sector. DCMS and the Secretary of State hosted a round table recently with a group of local news editors to discuss our proposed approach to the strategy and how we can collaborate with industry for the benefit of communities across the country.
Lord Fox (LD)
My Lords, perhaps it might help your Lordships’ House if, rather than giving a specific answer, the Minister were able to give a process answer. Given that the purpose of this is to distinguish between two different sorts of investor, perhaps she could tell the House how the Government are going about making that separation of two different sorts of investor. Is the Government’s view as to how that process will be delivered materially different from the view that was clearly being formed by the previous Government?
Baroness Twycross (Lab)
I am going to frustrate and potentially annoy your Lordships’ House by not responding directly to that question. We are clear that we need to address the complex issues raised during the consultation. This is not about us not recognising how important the issue is; it is actually the opposite.
European Union: Trade
Debate between Baroness Twycross and Lord Fox
Baroness Twycross (Lab)
I thank my noble friend for raising the comments made by the leader of the Opposition. I understand she has criticised her predecessors for mishandling Brexit, saying that leaving the EU without a growth plan was a “mistake”. I hope this means that we can work on a cross-party basis on these issues, because resetting our relationship with the EU will be key to delivering our plan for change and our plan for growth. The Chancellor has been clear that removing barriers to trade with the EU is critical to support growth and help our businesses. As the Chancellor said recently in her Mansion House speech, our biggest trading partner is the EU. We must recognise that our markets are highly interconnected and ensure that our approach to the EU reset supports growth and delivers investment for the economy.
Lord Fox (LD)
My Lords, the Government have said on many occasions that they want to reset our relationship, and this Minister is no exception. Largely speaking, that means ruling things out as far as ruling things in. I understand that negotiating in detail in public is not a good practice. However, a good practice is telling your counterparty what you want. So far, there have been no specific demands or requests from the UK to Brussels. When will that start, and when will this reset actually happen?
Baroness Twycross (Lab)
The noble Lord makes an interesting point. We are not going to give a running commentary on negotiations.
Baroness Twycross (Lab)
The noble Lord suggests that he did not ask for that. However, if we were to start putting demands in the media, I am not sure that is resetting the relationship with our European friends and neighbours; it sounds like more of the same that we saw from the previous Government.
Ticket Sales: Dynamic Pricing
Debate between Baroness Twycross and Lord Fox(10 months, 3 weeks ago)
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Baroness Twycross (Lab)
Noble Lords will note that I have taken a deliberate decision not to quote song titles. The Minister of State, Chris Bryant, described people being able to access live events as “a joy”. The joy of live events should be available to everyone and that has to be reflected in fair pricing.
Lord Fox (LD)
My Lords, unlike the Front Bench, I am more of a Blur man myself. This all demonstrates that at the top of the tree there is a huge amount of money to be made, but every headlining band started life in small, independent music venues and it is those venues which are suffering. They are closing and really have their backs against the wall. Can the Minister tell us what plans the Government have to support the research and development of our great music industry in this country? Are they considering adopting the proposals for a smart fund whereby a small levy on tickets in big venues can be used to support the small venues that created the bands playing there?
Baroness Twycross (Lab)
In Labour’s plan for the creative industries we committed to supporting creative small businesses and defending existing grass-roots music venues, nurturing fledgling arts spaces and working to prevent the loss of cultural spaces. One of our top priorities is to work closely with stakeholders and across government to ensure that the live music sector is financially resilient, and to explore potential further opportunities for support.