Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025

Motion to Approve

That the draft Regulations laid before the House on 15 May be approved.

My Lords, I shall also speak to the Enterprise Act 2002 (Amendment of Section 58 Considerations) Order 2025 and the Enterprise Act 2002 (Definition of Newspaper) Order 2025.

This set of regulations will broaden the scope of media merger regimes and strengthen the public interest protections, as well as setting the scope of exceptions that will apply to foreign state influence in UK newspapers. Taken together, these are the most significant changes to the media public interest regime since the Communications Act 2003. I know that many noble Lords have sincerely and strongly held views on the matters to be debated today and I am grateful to those across your Lordships’ House who have met me, the Secretary of State or officials to discuss them. It is good to see the noble Lord, Lord Fox, back in his place.

I will go back to first principles to place the new measures in their proper context. Fundamental to this is the need for us all to consider the very real risks to the survival of UK newspapers, including very high-profile names, and the wider news media. I understand and share noble Lords’ concerns about the growing threat of foreign state actors seeking to undermine our institutions and our democracy. There is a risk that this might translate into efforts to interfere with our media and freedom of the press. This is not the only risk, although it is a risk that these measures seek to manage.

The far greater risk is how UK news media, national and local, face significant, genuinely existential—I do not use that word lightly—challenges as their business models move away from print towards digital, and new technologies emerge. Publishers have sought to consolidate and make efficiencies in response, with three publishers accounting for over 80% of national print copy sales in the UK, and three accounting for about 70% of the local news market. There have been some notable successes for newspapers that have been able to develop and deliver a strong subscription offer, but others have fared less well. Some are struggling in an economy where good-quality news content does not always translate into the revenues that our news media needs to prosper and innovate.

The issue is seen most starkly in our local media, a particularly trusted news source that has consolidated to survive, and in many places local newspapers have had to reduce journalist numbers to a bare minimum. While it is vital that we support stronger protections for UK newspapers and other news media, we need to make sure that we do not inadvertently make it harder for newspaper groups to survive.

A UK-wide free press, which I know all noble Lords value—the type of press landscape we are rightly proud of in this country—also has to be sustainable. Let me be clear: the Government are unequivocal supporters of a free and plural news media, even when it does not agree with us. A free media is an essential safeguard that ensures accountability and effective government. The measures being debated strongly support this objective.

Is the Minister seriously arguing that the survival of our newspapers, both national and local, depends on changing the law, as she is doing, to allow foreign Governments to have ownership of them?

It is important to distinguish between foreign Governments and state-owned investors. If the noble Lord will allow, this is covered in my opening remarks.

The first set of measures extend the scope of the media merger regime to online news publications. The Enterprise Act 2002 (Definition of Newspaper) Order 2025 will amend the definition of “newspaper” in the Enterprise Act 2002 to encompass both print and online newspapers and periodical news magazines. Crucially, this will enable the Secretary of State to intervene on public interest or foreign state influence grounds, subject to jurisdiction, in the acquisition of an online-only newspaper. Until now, she has not had the power to do so. The Enterprise Act 2002 (Amendment of Section 58 Considerations) Order 2025 creates the term “news media”, which captures newspapers, as newly defined, and news programmes that are broadcast. The order extends key public interest considerations in Section 58 of the Enterprise Act 2002 to all news media.

Noble Lords have long called for these changes, and Ofcom recommended them in its 2021 and 2024 media ownership rules reviews. The definition of newspaper order also ensures that the foreign state influence regime introduced in May last year will be extended such that foreign powers will now also be banned from acquiring control or influence over the policy of an online newspaper or an online news magazine enterprise.

Let me now turn now to the draft foreign state influence exception regulations, which are the subject of the fatal amendment in the name of the noble Lord, Lord Fox, and the regret amendment in the name of the noble Baroness, Lady Stowell of Beeston. The FSI regime, for which, as noble Lords will be aware, the previous Government legislated in May last year, bans foreign states from having any control or influence over the policy of UK newspapers or news periodicals. The legislation includes a wide definition of foreign power that includes sovereign wealth funds and public pension funds, among the largest investors globally, whose objectives are to seek long-term, stable investment opportunities in sectors requiring new capital for growth.

Moved by

To leave out from “that” and to insert “this House declines to approve the draft Enterprise Act 2002 (Mergers Involving Newspaper Enterprises and Foreign Powers) Regulations 2025, as the proposal to allow foreign states to own up to 15 per cent of UK newspapers constitutes a direct threat to the freedom of the British press; and is contrary to the policy intention of the Digital Markets, Competition and Consumers Act 2024.”

My Lords, I thank the Minister for her kind words and the time that she gave to meet virtually.

Your Lordships will see that this is a fatal amendment. I know that this House is not in the habit of supporting such actions, but to do so is perfectly in order. The Joint Committee on Conventions 2006 report concluded that

“in exceptional circumstances, it may be appropriate”

for the House of Lords to reject statutory instruments.

“This is consistent with past practice and represents a convention recognised by opposition parties”.

I shall seek to demonstrate that this instrument is indeed an exceptional issue, that ownership of our press is a matter of great public policy importance and that we are fully entitled to defeat this statutory instrument.

I was encouraged by the fact that His Majesty’s loyal Opposition tabled and voted for a fatal Motion regarding the Chagos treaty on 30 June this year. Clearly, they also believe that some issues warrant fatal Motions. I am deeply grateful for the support and friendship of colleagues right across party lines, including Conservative, Labour, Cross-Bench and independent Peers. We all understand how serious it is for the Lords to take such an action. We cannot sit by and watch this happen before our eyes.

I remind fellow noble Lords that the Government’s planned secondary legislation deliberately reverses the explicit will of your Lordship’s House: to be specific, the then Digital Markets, Competition and Consumers Bill, debated in the House of Lords in March 2024. Hansard is clear regarding the intention of amendments made to the Bill. At Third Reading, your Lordships loudly welcomed a complete ban on foreign Governments having either ownership of or influence on our press. This was greatly motivated by Members’ concerns about the proposed acquisition of the Telegraph Media Group that included a stake from a company ultimately controlled by a member of the United Arab Emirates Government. Subsequently, the then Government said that they would use secondary legislation to introduce an exemption for shareholdings of up to 5%. This was introduced to avoid unintended consequences. Then there was the consultation, to which the Minister referred, run by the Department for Culture, Media and Sport—DCMS—on the threshold.

At the heart of the Government's defence of these 15% ownership tranches is that the ownership will be passive. Traffic humps are passive, but they certainly change the way we drive. It seems that the Minister’s view is that the investors will just sit back, not caring about the business and editorial direction their considerable investment will be taking. This is just not plausible. Anyone who has managed investor relations will tell you that having an investor with a 15% stake in your business is not something that the executive team can ignore. Even if the stake does not come with a director, the stakeholder will have access to the CEO and the executive team. The Minister tries to cloud the issue by saying that funds with government links will not be able to buy these stakes. It is very clear that some of the funds that will be allowed by this statutory instrument will have direct links with foreign Governments.

Who will police this? As it stands, the Secretary of State will be required to intervene in cases where it is suspected that a foreign investor has directed or influenced a newspaper’s policy. As the Secondary Legislation Scrutiny Committee puts it, how will the Secretary of State be

“reliably able to detect, and, if necessary, prove that the”

state-owned investor

“can exert this influence”?

With her traditional succinctness, the noble and learned Baroness, Lady Butler-Sloss, asked last week,

“how on earth would the Secretary of State know”,

to which the Minister’s answer contained the following:

“if a newspaper took a radically different position or there was a nuance change—it is likely she”—

the Secretary of State—