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.

--- Later in debate ---

[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?