Telegraph Media Group Ltd: Acquisition

Lindsay Hoyle Excerpts

Tuesday 30th April 2024 Commons Chamber

[The Secretary of State for Culture, Media and Sport (Lucy Frazer)]

With permission, Mr Speaker, I will update the House on the proposed acquisition of the Telegraph Media Group by RB Investco Ltd. I will refer to the Telegraph Media Group as the Telegraph and to RB Investco Ltd as the purchaser.

As the House will know, the sale of the Telegraph is currently subject to the media mergers process. Today, I would like to confirm that the purchaser has notified me of its intention to sell the call option agreement that gives it the ability to buy the Telegraph, in effect withdrawing from the purchase of the newspaper. This step follows the intervention I made on the merger situation on 26 January 2024, both to issue a public interest intervention notice, or PIIN, and to issue a pre-emptive action order. It also follows on from my announcement of 19 March on my assessment, following the reports of the Competition and Markets Authority and Ofcom, that I was minded to refer the merger to a further, more detailed phase 2 investigation. I have taken these decisions on the basis of the evidence in the case, and I will continue to do so.

I am now updating the House on the procedures and protections for the public interest that are in place in respect of the Telegraph, given the sale process that I understand will begin shortly. I have informed the parties that it would not be appropriate at this stage for me to take a decision on whether or not to make a phase 2 reference. In my view, the relevant merger situation remains in contemplation. I therefore continue to have powers, under the order, to prevent actions by the parties to the merger that might prejudice any phase 2 reference to the CMA or make it more difficult for me to take action as a result of my final decision following such a reference. The order prohibits the parties from making significant organisational and staff changes, including to the editorial team, without my consent. These restrictions remain in place. However, I have now agreed to derogations from the order that will give the parties the flexibility and regulatory space to make all reasonable preparations for the sale of the call option agreement.

It is important to be clear that I will not be engaging with prospective buyers, nor selecting the preferred bidder. The sale process will be run by RedBird IMI alone. My decision on any further derogation from the order that RedBird IMI will need to receive to complete the sale of the call option agreement will be made according to my powers and obligations under the Enterprise Act 2002, and it will be based on the public interest, rather than a qualitative decision on who should buy the titles. Any transfer to new ownership will also potentially be subject to the media mergers regime, as set out in the Act.

It is appropriate for me to say a few words about the underlying matters. I initiated this process under the powers I have under the Enterprise Act to protect the accurate presentation of news and the free expression of opinion in newspapers. These powers are vital. The freedom of the press to express opinions, to criticise and to hold power to account are all a fundamental part of our democracy. It is often said that the freedom of the press protects not the press’s freedom but ours.

It would not be appropriate for a foreign state to interfere with the accurate presentation of our news or the freedom of expression in newspapers. Although these powers under the existing media merger regime are broad, the Government have taken action to rule out newspaper and news magazine mergers involving any influence, ownership or control by foreign states. We have done that by amending the Digital Markets, Competition and Consumers Bill, which will shortly return to this House.

As a nation, we are a proud, open democracy and a strong trading power with a vibrant economy. Although we are rightly limiting powers to interfere with our democracy, as many other states do, in terms of foreign investment more generally we remain open for business.

I end by recognising the strength of feeling in this House and the other place, and by recognising the work done by the Minister of State, my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez), by the Parliamentary Under-Secretary of State, Lord Parkinson of Whitley Bay, and in particular by the right hon. Baroness Stowell of Beeston.

I commend this statement to the House.

[Mr Speaker]

I call the shadow Secretary of State.

--- Later in debate ---

[Lucy Frazer]

I am grateful to the hon. Lady for welcoming this statement on the position in which we now find ourselves. I reiterate her point that the UAE is an important trading partner. The legislation relates to all foreign states. We welcome our relationship with the UAE.

The hon. Lady says that this is an important point, and I have been very conscious of this matter since it first fell on my desk. From the outset, I have raised and dealt with the concerns in this case. Although she raises it now, and I am not looking at the complete record, I do not recall any occasion on which she has raised this matter either directly with me or in this House.

Freedom of the press is an important principle that we are upholding. As I said in my statement, I was already taking steps under the broad powers in the Enterprise Act in a quasi-judicial fashion, which limits the other measures that one can take.

On the timescale, I understand that certainty is needed for the publication and for those who work for it. I expect and hope that this process will be concluded in short order, understanding, of course, that it is important for the sale process to take place. This is a regulatory process, and I will update Members and the House at appropriate stages.

[Mr Speaker]

I call the Chair of the Select Committee.

[Dame Caroline Dinenage (Gosport) (Con)]

I welcome the Secretary of State’s statement and the decision of RedBird IMI, in effect, to withdraw from purchasing the Telegraph. Freedom and plurality are, of course, cornerstones of our media, and political interventions should always be the last resort, but I agree with her that it is absolutely unacceptable for foreign states to have the potential to interfere with the independence and freedom of our press. What is RedBird’s role during the period it takes for a prospective buyer to be found? Will it be able to hold a non-controlling stake in the Telegraph at the end of this process?

[Lucy Frazer]

The position on the governance of the Telegraph during this period is the same as it has been since I started this regulatory process. I have been concerned at all times to ensure that the independence of the directors, the managers and the editorial team remains. That is why I brought forward a pre-emptive order, which would restrict any changes in that regard. A sales process will now take place, and it will have to follow any regulations that are in force and that will govern it.

[Mr Speaker]

I call the Scottish National party spokesperson.

[Kirsty Blackman (Aberdeen North) (SNP)]

I thank the Secretary of State for advance sight of her statement. My Front-Bench colleague, my hon. Friend the Member for Perth and North Perthshire (Pete Wishart), and the SNP more widely are pleased about the decision and today’s announcement. It feels as though the protection of the independence and legitimacy of the media is something people feel strongly about across the House, no matter which party they represent. I am pleased that everybody is speaking with one voice on the blocking of foreign interference in our media outlets.

I wonder about the way in which this process has happened. Is she going to have a look at how it worked and whether or not RB Investco and the UAE were able to exploit loopholes to ensure that the process took longer than it could have taken in order for this decision to be made? Will she look at whether there are ways of tightening up the Enterprise Act and the legislation to ensure that those decisions can be made more quickly and loopholes cannot be exploited?

Legacy media outlets are struggling in a lot of ways, and many of them may be looking at alternative ways of funding what they are doing. Will she make it clear that, like us, she feels that that freedom of the press from foreign interference is incredibly important, no matter what the financial situation of the companies in question?