Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) (No. 2) Regulations 2025

Motion to Approve

Moved by

That the draft Regulations laid before the House on 30 October be approved.

My Lords, the foreign state influence regime is designed to prevent foreign states controlling, influencing or owning our newspapers and news magazines. It is essential that we safeguard our free press and a pluralistic media landscape for the sake of our democracy. Newspapers remain a vital trusted news source. The Ofcom survey News Consumption in the UK: 2025 reported that 73% of regular news users consider newspapers trustworthy, which is more than any other media.

However, noble Lords are aware of the considerable challenges faced by the news media industry. Newspapers require investment to grow and thrive. Balancing this need for investment with protecting news from the influence of a foreign state is at the heart of the foreign state influence regime. This is what underpinned the three statutory instruments that we made in July. We made regulations to amend the foreign state influence regime to allow 15% of shares or voting rights in a newspaper or news magazine to be held by a state-owned investor provided that they are investors with no right or ability to control, direct or influence the newspaper’s policies. The 15% threshold is below the level where the Competition and Markets Authority typically considers that material influence may arise.

The foreign state influence regime, rightly, has a low bar for intervention. The Secretary of State is given no discretion. She must intervene if she has reasonable grounds for suspecting that a foreign power may hold the ability to influence or control the policy of a UK newspaper enterprise as a result of a merger. This is regardless of whether there is an intention to influence. When we introduced the previous regulations earlier in the year, colleagues in your Lordships’ House and the other place challenged us on whether they had the unintended consequence of permitting multiple foreign powers, investing through state-owned investment vehicles, to each invest 15%. The argument was made that it would be possible for the majority of a newspaper enterprise to be owned by state-owned investors, albeit passively.

We were clear that this is a remote risk. However, we understood the concerns of your Lordships’ House. The Government committed to bring forward an additional statutory instrument to put the matter beyond doubt. That is why we are here today, following our consultation in the summer and the response published on 30 October. I take this opportunity to thank the noble Baroness, Lady Stowell of Beeston, for her invaluable engagement on this matter. I recognise the excellent role that your Lordships’ House so regularly plays in scrutinising and improving legislation.

Noble Lords may find it helpful for me to set out the detailed effect of these regulations. First, the regulations ensure that a 15% cap applies to the percentage of shares or voting rights that may be held in a newspaper by state-owned investors acting on behalf of foreign powers. This means that we are now putting it in statute that multiple state-owned investors, acting on behalf of different states, will not be able each to hold up to 15% in one newspaper. The 15% cap will apply to the combined total of direct and indirect holdings of shares or voting rights. We are introducing a specific and narrow exception for stakes of 5% or below in quoted companies. The exception affects the calculation of whether the 15% cap has been reached in cases where multiple state-owned investors from different countries or territories all have investments in the same newspaper. The exception catches only small shareholdings, and its purpose is to avoid a chilling effect on investment.