Telegraph Media Group Ltd: Acquisition

Lucy Frazer 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?

[Lucy Frazer]

The hon. Lady talks about tightening up the process. We significantly tightened it in the amendment that the Government tabled in the Lords and is coming back to this House today. That will indeed make sure that there can be no ownership, control or influence by a foreign state, because, as she makes clear, that is an important part of our democracy.

[Sir John Whittingdale (Maldon) (Con)]

My right hon. and learned Friend will be aware that at the end of this week we have World Press Freedom Day, so her statement is particularly welcome. I congratulate her on the scrupulous way in which she has undertaken her responsibilities. She will be aware that the Enterprise Act was written before the internet existed and that it is six years since Ofcom said that there needs to be fundamental review of our media merger regime. Will she therefore say what progress has been made on bringing the entire regime up to date to take account of the massive growth of online news distribution?

[Lucy Frazer]

I am very grateful for all the support my right hon. Friend gave me when he was in the Department and for the expertise he brought with him on the wider media and so many other matters. He makes an important point: the media landscape is changing. That is why we are looking at whether online news should be included in the scope of Ofcom’s powers.

[Sarah Owen (Luton North) (Lab)]

A number of staff at the Telegraph Media Group will be worried about their jobs, so what conversations has the Secretary of State had with trade union representatives of staff at TMG? I have just met the amazing bright, talented students at Luton Sixth Form College who are visiting today, some of whom may want a future in journalism, so will she say what impact this statement may have on media jobs and our ability to ensure a competitive media landscape in the future?

[Lucy Frazer]

One measure I took when issuing the public interest intervention notice and the pre-emptive order that followed it was to ensure that, whatever decision I took ultimately on this case, TMG was not prejudiced by the potential purchase. The pre-emptive order has always said that there should be no changes to the management or the editorial team of the Telegraph without my consent, to ensure that any changes in the interim would not be prejudiced by any ultimate sale, so I can give the hon. Lady the reassurance that measures are already in place to protect the staff at TMG in terms of this purchase. By the order today, I have highlighted that that pre-emptive order in relation to those staff continues.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I thank my right hon. and learned Friend for coming forward with this statement and for making the right decision. Does this whole process not demonstrate what my right hon. Friend the Member for Maldon (Sir John Whittingdale) said earlier, which was that we are dealing with a digital world with analogue tools and it takes far too long? It also led to the peculiar situation whereby both she and the Minister for Media, Tourism and Creative Industries, my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) have had to come to the Dispatch Box despite being unable to say anything in answer to any questions, which was slightly unfair on them. I know that an amendment is coming through on another Bill, but we really need to speed this process up by saying simply that no foreign state could own any of our media. We now need to look at the online elements of that as well if we can.

[Lucy Frazer]

Let me offer my right hon. Friend reassurance, because that legislation is coming to the House today. I know that a lot of Members of this House and of the other place raised those concerns, and it is right that we brought forward an amendment to put absolutely beyond doubt that fact that it would be inappropriate for a foreign state to own our news media. That is why we built on Baroness Stowell’s amendment to put that beyond doubt and to put it in a form that works well. I am grateful to Baroness Stowell for the work she is putting into her amendment. I recognise the other point my right hon. Friend made about online media and it is absolutely something we are looking at.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Thanks are due to the Secretary of State for this decision. The Spectator will be free from foreign influence and can carry on describing me as, “A languid old gent who represents a craggy constituency somewhere near Norway.” As she says, that is freedom of speech and one must put up with what one must put up with—good luck to these eminent publications. Does she realise, however, that also fundamental to democracy and freedom of speech is the continued survival of our myriad local newspapers the length and breadth of this sceptred isle? They are in difficulty and if they go down, we will be the poorer for it. I do not expect an answer now, but may I at least ask her to look at this issue as one that is important?

[Lucy Frazer]

I absolutely understand that and I have done a number of roundtables where I have talked to the local media sector. The hon. Gentleman will be aware that in the past we have had a local news fund. He will also be aware of the measures we have on business rates for local news media. I am very conscious of the need to support our local media, which play a vital role in ensuring that we have local democracy. He will also know that one measure we put in at the mid-term review was to ensure that where the BBC took steps in spaces where there was already a competitive media market, it should engage more widely with those it was affecting.

[Sir John Redwood (Wokingham) (Con)]

I strongly welcome the Secretary of State’s clear statement of policy that foreign states should not be allowed to take over press and media in this country, which is a welcome development. I hope that in the proposals for amending the law it will be clear that the policy relates not only to Governments but to nationalised industries, public authorities or companies in which states have significant influence because of their shareholdings. If that is not set out, such bodies may try to find ways around the law. I am sure my right hon. and learned Friend is up to that, but can we please have an amendment that absolutely nails press freedom in the way we want it to exist—free of influence from foreign states?

[Lucy Frazer]

I understand my right hon. Friend’s points. When we bring forward legislation, it is important that it does not have loopholes. As a Department, we thought very carefully about how we can protect against that. When the Bill comes back to this House this afternoon, he will see that we have defined foreign state ownership very broadly. We have extended the definition to include not only ownership but control and influence.

[Kevin Brennan (Cardiff West) (Lab)]

Further to the excellent point made by my hon. Friend the Member for Luton North (Sarah Owen), may I press the Secretary of State? In her statement, she said that the order prohibits parties from making significant organisational and staff changes without her consent, and that the restrictions remain in place. Will she agree not to consent to any deal that involves significant job losses?

[Lucy Frazer]

Obviously, it would be entirely inappropriate to say what decision I might take when exercising a quasi-judicial function without looking at the evidence, which is exactly what I would do.

[Alexander Stafford (Rother Valley) (Con)]

I welcome the statement, not because of the UAE—after all, the UAE is a great diplomatic and trading partner of the UK—but because it gets rid of foreign involvement in our media. Will the Secretary of State say more about how online and television media will be affected by the order, because those are the growing media outlets? We have talked about freedom of the press, but will she advise us of how we can get rid of disinformation? In the UK, we have outlets such as Press TV and China Daily, which are propaganda arms of quite nefarious regimes, operating and working here. What are the Government doing to stop those nefarious activities poisoning the minds of our young people?

[Lucy Frazer]

There is so much that one could respond to in my hon. Friend’s question. I remind him that we are looking at the online news space, which is vital. It is important to emphasise that Ofcom already has significant powers in the broadcast space. It has already taken actions in relation to foreign involvement in our broadcast media and banned certain entities from operating. We always need to look at how we tackle misinformation, and we are doing so across Government as a whole.

[Jim Shannon (Strangford) (DUP)]

I thank the Secretary of State for her positivity in her responses. Will she highlight what steps can be taken to ensure that the scrambling that took place to protect freedom of British speech and media from international corporations is not replicated? Will she consider providing legislative protection to that effect, which is vital as outside influencers seek to sway public perception for their own ends? That has to be recognised and protected against.

[Lucy Frazer]

It is important that we always have freedom of the press and that external forces do not interfere with that freedom. I will be making a speech to the Society of Editors this afternoon that the hon. Gentleman might wish to read, after I have delivered it. I am happy to consider the points he has made.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I welcome the statement and the decision by the Secretary of State. It is in our national interest to protect our free media. My question is about transparency and understanding the logic behind the decision. The Secretary of State said that she has taken into account the evidence. What key evidence did she take into account? What were the pertinent aspects of the evidence that led her to make that decision? Knowing that would give people outside the opportunity to look at the reasoning and rationale behind the decision.

[Lucy Frazer]

The first decision I took was that the threshold had been passed. I was concerned about interference with the accurate presentation of news and the freedom of the press. The evidence I saw enabled me to say that the threshold had been passed, and to ask Ofcom and the Competition and Markets Authority to look at the matter more broadly. They did that and they took some time to give me a very detailed report, which I further considered. In my letter sent in March, I set out the evidence from that report and my decision that I was minded to send the matter to phase 2 investigation. The letter in which I set out the evidence on which I relied has been published, I believe.

[Christine Jardine (Edinburgh West) (LD)]

As a former journalist and a former member of the Society of Editors in Scotland, I welcome the Secretary of State’s statement because press freedom is vital in a democracy, as she says. The insidious influence of foreign states has to be protected against, not just in newspapers but, as we have heard, online and in television and radio. Does she agree that the matter is not settled with this step? We have to be continually aware of the danger of foreign interference and the insidious growth of that influence in our media by all means. Will the Government take that on board and continue to monitor the situation on a regular basis?

[Lucy Frazer]

Of course, the Government always keep matters under review. I can reassure the hon. Member that we have a robust system to deal with interference with press freedom. We had that in the Enterprise Act; my powers as Secretary of State under that Act in relation to interference with the accurate presentation of news and the freedom of the press were clear and robust. I took various decisions at each stage to ensure those matters were fully investigated. The hon. Member can also take reassurance from the fact that the legislation that will be coming back to the House this afternoon will put beyond that doubt, and set out that a foreign state cannot interfere with our newspapers. Every hon. Member who has expressed a view across the Chamber is of the view, which I share, that a foreign state should not be able to control, influence or own a British newspaper.

[Richard Foord (Tiverton and Honiton) (LD)]

I welcome this intervention that means that the UAE cannot own Telegraph Media Group through RedBird IMI, but there is a suggestion that foreign Governments could potentially interfere with free speech at universities that host institutes partly funded by them. The Government-appointed director for freedom of speech and academic freedom has warned that foreign interference at universities is going on in the UK. What lessons, if any, will be instructive for the Government’s so-called university free speech tsar?

[Lucy Frazer]

I am wholly in favour of free speech and ensuring that people are not shut down for their views. The hon. Member needs to take up his points with those responsible for universities.