Digital Markets, Competition and Consumers Bill

Lord Forsyth of Drumlean Excerpts

Report stage
Wednesday 13th March 2024 Lords Chamber

This is not simply about the Daily Telegraph or the Spectator magazine, but what that case has done is illustrate the vulnerability that we have, in this modern world, to the way in which foreign Governments might seek to impose their views and attitudes on the British public. I do not intend, given that Sky News has already told me that the Government are giving in, to make a huge issue of this here. As the noble Baroness said, I will listen with great interest to what the Minister says and what the department has told Sky News in advance; if that is right, we will all be satisfied, and the United Kingdom will be a safer place as a consequence.

[Lord Forsyth of Drumlean (Con)]

My Lords, I congratulate my noble friend on her skill and thank the splendid, clever people in our Public Bill Office who enabled her to find a way through this legislation to have an amendment that is in scope—because, for a very long time, we thought that would not be possible. I tried with the Media Bill, and the best I could come up with was a regret Motion on the Second Reading that showed there was widespread support. The noble Baroness, Lady Stowell, deserves considerable credit for making that navigation and getting us to the point where, in her courteous way—she is much more diplomatic than me—she gives the Government an opportunity to do the right thing and support an amendment to this Bill to protect the freedom of the press in our country and, with that, the very foundations of our democracy.

I will say something about the Telegraph bid made by this curious organisation called RedBird IMI—it is a very odd bird indeed. We are told that Sheikh Mansour, the vice-president and Deputy Prime Minister of the UAE, is acting in a purely private capacity by those who wish to advance this so-called investment. Now I am a banker, but I do not really understand how you can have an investment strategy that involves paying multiples of the value of the asset and, in carrying out the bid, briefing the press to the effect that you would be prepared to have a minority interest and, presumably, not have a vote—that strikes me as an odd investment strategy indeed.

What it is, is what it is: an influence strategy. The payment of a rich price is about getting influence through the medium of the Telegraph and the Spectator magazine—it is not a commercial issue. Money talks, of course, and ownership matters. One of the very few things that I disagreed with Mrs Thatcher on was that she tended to the view that ownership did not matter. Ownership does matter, and the freedom of our press should never be up for sale.

I said in an earlier debate that he who pays the piper calls the tune—but this is not a melody. The very idea of an autocratic state with a poor record on human rights owning or holding any influence in a major British daily newspaper is utterly surreal: a country that hosts Putin, greets him as dear friend and purchases oil as he circumvents sanctions and conducts his blood-soaked regime and brutal, illegal war in Ukraine; a country whose laws ban any direct criticism of their rulers through the Government’s national media council, where citizen journalists and bloggers are targeted for criticising the regime and accused of defamation, insulting the state and posting false information with the aim of damaging the country’s reputation; a country that puts journalists in jail, deports critics and closes down any criticism; a country that is bottom of the class in international freedom tables; a country where, according to Amnesty International, at least 26 Emirati prisoners remain behind bars because of their peaceful political criticism.

The bidders at IMI promise editorial independence, just as they did in the case of CNN Business Arabic. According to the Times report of 12 January, Sultan Al Jaber, chairman of IMI, put pressure on CNN Business Arabic to avoid negative news about the UAE, despite promises to preserve journalists’ editorial independence. The Times reported that the editor-in-chief was forced out within months of his appointment for refusing to submit to requests from Al Jaber for positive coverage. Al Jaber was previously head of the UAE’s censorship agency, so had much experience in this area.

I hope I have convinced the House—I do not think I need to try very hard—that this bird cannot fly, but it is not just about this particular bird, as the noble Lord, Lord Robertson, said. No insult was intended earlier—I was just pulling his leg. There is a principle here. Foreign Governments should be nowhere near the ownership of newspapers and magazines. In fairness to the Government, no one could have predicted how this utterly bizarre bid would come to pass. I know of no democratic country that would allow a foreign state to take ownership of key national newspapers. I now regret my regret amendment. Perhaps it was a little unfair to criticise the Government for not including measures in the Media Bill and drawing the Long Title so tightly that it was impossible to amend the Bill in that respect. The debates in this House showed universal opposition. The poll by Lord Ashcroft, which has been mentioned, reflects that in the country.

This amendment may not be perfect. It is an old trick of Sir Humphrey to say, “Well, I accept the amendment in principle but unfortunately the drafting is not quite right”. From my experience of talking to Minister Lopez and from the work done by my noble friend Lady Stowell, I believe the Government are working sincerely to try to find a way of having an amendment that will produce what I believe everyone in the House would like to see. They should continue to work with my noble friend and the other sponsors to ensure that the Bill leaves this House amended. Nothing less than a complete ban on foreign Governments having any role in the governance, ownership or financing of our media is acceptable. It is, as I have said before, a no-brainer.

[Lord Moore of Etchingham (Non-Afl)]

My Lords, I refer your Lordships to my entry in the register. I have been on the staff of the Telegraph Media Group since 1979, so this interest bulks large in my mind; I had to confess it at once. I am very grateful for everything that has been said and to the noble Baroness, Lady Stowell, for moving this amendment. I am also very pleased that this has been a cross-party affair coming from all sides of the House.

My only regret so far is that the Government were inclined to regard this as a technical matter that had to be looked at in terms of rules. It is important to look at the rules, which DCMS is doing, but it is not really about that. As has been said by the noble Lord, Lord Forsyth, and all other speakers, this is a very important matter of principle. The delay involved has been very difficult for newspapers in general, and particularly for my own and for the Spectator, because while you do not know what will happen you cannot really get on with doing your journalism. That tends to erode things if you are not careful, so it is very important that we have got to the heart of it.

I endorse absolutely everything that the noble Lord, Lord Forsyth, said about the Abu Dhabi bid, but I am quite glad that I do not have to say it myself, because if we had had such a rule and such clarity from the start, people would not have had to get into this issue of saying rather difficult truths about many regimes across the world. We would simply have been able to say, “No, sorry, the rule is the rule, and that’s that”. I hope we can learn something from all that.

I have seen the leak, if that is the right word, so I have a rough idea about what we might hear later. I want to make two important points. One is that I hope the Spectator, and magazines like it, will be properly included in any decisions, because, as I understand the rules at present, they refer to national newspapers and not automatically to national news magazines, and I think precisely the same point should apply.

There is room for possible problems about minority ownership. It is possible, in the way that ownership works in companies, that an ownership of less than 50% can amount to a controlling interest; that can be done in a covert way or sometimes in an open way. If it were the case that, for example, RedBird IMI took a minority stake, that would be better than a majority stake but would not automatically solve the problem. I hope the Government will address that.

At the Daily Telegraph we have always been proud advocates and practitioners of a free press, but we have not particularly enjoyed having to advocate it quite so hard and so repeatedly to get the message across. I am glad to sense that the message has got across, and I am grateful to noble Lords on all sides of the House. I hope we can now move forward with due expedition.

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I should note that the Government remain committed to encouraging and supporting investment into the United Kingdom and recognise that investors deploying capital into this country rely on the predictability and consistency of our regulatory regime. The UK remains one of the most open economies in the world, which is key for the prosperity and future growth of our nation. Our focus here is not on foreign investment in the UK media sector in general; this new regime is targeted and will apply only to foreign states, foreign state bodies and connected individuals, and only to newspapers and news magazines.

[Lord Forsyth of Drumlean (Con)]

I am very grateful for what my noble friend has said. Could he clarify the position on minority stakeholders? He used the word influence. Would that mean having a small number of shares?

[Lord Bassam of Brighton (Lab)]

My Lords, in order to help, can we be absolutely clear that this covers minority ownership and control? We need clarity on that. The noble Lord, Lord Moore, made that point. It would help the House for the avoidance of doubt.

Digital Markets, Competition and Consumers Bill

Lord Forsyth of Drumlean Excerpts

3rd reading
Tuesday 26th March 2024 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, we are at Third Reading and this is not a time for long speeches, but I want to congratulate my noble friend and his colleagues on having listened to what was said. He remarked that I had gone from moving a regret amendment to signing an amendment. I gently point out that it is not me who has moved position.

I am struck by how the attempts to get this dealt with under both the Media Bill and this Bill came across the problems of the Long Title of the Bill and getting it in order. Going from an amendment that was 16 lines long to one that is 16 pages long tells us how much hard work has gone into this with the civil servants in both departments that are affected. It is fashionable to be rude about this place and the work it does, which I believe is outstanding, but it is even more fashionable these days, even among some Ministers, to criticise the Civil Service. To turn this around in this period, and to do it with such diligence and careful consideration, is a great tribute to the officials in those departments. It just goes to show that, contrary to what is believed, if Ministers give a clear view of what needs to be done, the Civil Service is more than capable of delivering that.

The noble Baroness, Lady Stowell, has done a fantastic job on this. I agree with everything that she said, and I see no need to repeat it. My understanding—I am very conscious of Pepper v Hart here—is that what the Minister has said from the Dispatch Box is absolutely clear. I have to say that, when I read the amendment, I thought, “Is this secondary legislation a Maginot line that will enable a future Government to get around the clear principle that no foreign Government should be able to own or influence in any way a newspaper or a news magazine?” The words that have been stated from the Dispatch Box make me confident that that is not the position. That has to be right. After yesterday’s events, it is inconceivable that the Chinese Government could own 1% or even one share of a British newspaper.

The carve-out is sensible, if sensibly applied, and there will be an opportunity for this House and the other place to consider it. I very much look forward to this legislation receiving Royal Assent, which will mean that there is a complete ban on any foreign Government having either ownership or influence over our press. That must be right in a free and democratic society.

[Lord Faulks (Non-Afl)]

My Lords, I also pay tribute to the Government, Ministers, officials and lawyers for their speedy response to the amendment put down on Report by the noble Baroness, Lady Stowell, and others. I declare an interest as the chair of the Independent Press Standards Organisation, which regulates 95% of the printed press and its online manifestations.

I shared with many other noble Lords concern about the prospective acquisition of the Daily Telegraph and the Spectator by the United Arab Emirates—or at least the acquisition of a substantial part of those important titles. It seems to me that this amendment will make this sort of acquisition much more difficult, if not impossible, as soon as the Bill becomes law.

I agree with other noble Lords that it is most important in framing the necessary secondary legislation that the driving principle behind the amendment, which is to prevent foreign state ownership of newspapers, is reflected appropriately. There is a risk that too tightly drawn definitions might catch wholly benign investors who might have a very modest and non-active interest in newspaper organisations. Sovereign wealth funds have already been mentioned, and the noble Lord has given assurances in this area. I do not entirely agree with the noble Lord, Lord Forsyth, in his citation of Pepper v Hart and its importance, but none the less we will be much reassured by anything the Minister might say. I also ask him to consider the position of banks which may provide a newspaper organisation’s finance. Banks are often part of a consortium, and one part of a consortium may well be a bank with a connection to a foreign state. It is important that that is not captured.

There has been a deliberate choice by those drafting these amendments to change the language of the Enterprise Act 2002, which speaks of “material influence” to provide in the amendment that a relevant merger situation arises where one party acquires “influence” over another. That is plainly a much lower bar. I imagine that the change is designed to protect against somewhat unconvincing assertions by prospective acquirers of an interest in newspapers that editorial independence is protected by some form of editorial board or other Chinese wall. I welcome the Minister’s clarification on this.

The definition of a newspaper in the amendment is,

“a news publication circulating wholly or mainly in the United Kingdom or in a part of the United Kingdom on any periodic basis”.

That seems to exclude news websites or broadcasters. News websites are increasingly a source of news for consumers, many whom have deserted conventional newspaper models. It may be that more power and influence can in fact be obtained there than in the traditional format. I hope that the Minister can continue to reassure the House that these websites are in the Government’s sights, simply on the basis of consistency. I venture to suggest that the Media Bill might provide an appropriate parent for relevant provisions to bring websites into the same category as newspapers. I welcome clarification on that.

The provisions make it clear that the Secretary of State must—I emphasise the word “must”—

“make an order … reversing or preventing … the foreign state newspaper merger situation”.

There is no discretion here. That makes it all the more important that any exemptions should provide that remote or benign interest in newspapers by various emanations of foreign states will not necessarily fall foul of these provisions.

I would like to make it clear that I am entirely in favour of the thinking which animates this amendment, but it is inevitable that when an amendment is drafted, at considerable pace, at a late stage in the progress of a Bill, there may be gaps or ambiguities. Freedom from state interference is of fundamental importance. Our newspaper industry is not in anything like the healthy state it once was, and its vulnerability is what makes newspapers potentially prey to outside investment from foreign states which seek influence. However, important though it is to keep our newspapers free of such influence, we want them to survive and, indeed, to prosper. I hope that the amendment entirely comprehends that aim.

Finally, I simply ask for clarity—the drafting is impressive, but sometimes the meaning is a little hard to tease out—on how the Minister envisages parliamentary involvement in the case of a contentious merger situation.

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[Lord Parkinson of Whitley Bay (Con)]

My Lords, I am grateful to noble Lords for their support for these amendments and the work undertaken. I thank my noble friend Lady Stowell for commending the work of Julia Lopez, the media Minister, and indeed the department and the officials more broadly. My noble friend also acknowledged the specific quasi-judicial role of the Secretary of State in her ongoing determination of the case before her, but acknowledged that she obviously has a role in all this. On the broader question of media mergers, my right honourable friend the Secretary of State of course remains very much involved as well, but I thank my noble friend for her appreciation for both. I agree with my noble friend Lord Forsyth in his praise for the civil servants who worked thoroughly and quickly on this matter, including over Mother’s Day weekend. I am grateful for that recognition.

My noble friend Lord Forsyth rightly pointed out that he has not moved since tabling his regret amendment to the Media Bill. The Government have made explicit and put beyond doubt what was implicit and possible in the existing regime, as I set out on Report. We are very happy to take the opportunity to do that clearly, in the way that we do through these amendments, and, indeed, to set out now the new lower threshold. My noble friend Lady Stowell is right: we will set it at 5%, which is considerably lower than the existing threshold. I am glad that my noble friend welcomes that. She is right in the characterisation of what I said: anyone blocked at what she calls stage 1—the new automatic block on foreign state investment—will not be able to be exempted at what she calls stage 2. She is right, as well, to make the distinction between foreign investment and foreign state investment, and to make it clear, as I was very happy to, that the UK remains open for business. This is a discrete area and an important one in our national life, which is why we are acting in the way we have.

My noble friend Lord Faulks and the noble Lord, Lord Bassam, asked about the role of banks. We do not think that, in the ordinary course of events, debt and debt refinancing from foreign banks which have a state interest should be captured, unless the structure of the transaction gives rise to concerns about influence. We are considering precisely how debt and debt refinancing should be treated in cases where the structure of debt may give rise to concerns about foreign state investment organisations. But as I say, as we bring these provisions forward in secondary legislation, I am very happy to continue conversations with noble Lords and, indeed, to have conversations with those who will be directly affected.

My noble friend Lord Faulks invited me to set out what we are doing in consulting shortly on expanding the existing media mergers regime and the foreign state ownership provisions, to include online news websites. That will enable us to make changes that ensure that online news, whether from an established newspaper group or an online publisher, is covered by the media regime and the new measures we are introducing for foreign state media ownership.

The Secretary of State will maintain a quasi-judicial role in media mergers. The public interest regime will remain as it is, but we are adding a new parallel foreign state intervention regime. The Secretary of State will not have discretion under that; she will have to follow the report of the Competition and Markets Authority, both on whether there is a foreign state merger and an exemption. She would need to lay an order before Parliament to block a transaction, which would be under the negative procedure. We will debate what I have announced in the provisions that we will bring forward after Royal Assent, setting out an exemption for investments where the stake is below 5%, and noble Lords will have the opportunity to scrutinise that under the affirmative procedure.

I am grateful to noble Lords who have engaged with us and our officials in recent days as we work on these amendments. I am glad that they have your Lordships’ support. I beg to move.

[Lord Forsyth of Drumlean (Con)]

Before my noble friend sits down, when can we expect the secondary legislation to appear?

[Baroness Stowell of Beeston (Con)]

Can I ask a question as well, to save the Minister from getting up several times? I do not think that he said anything about broadcasting. Where is the department on reviewing policy in that area?