To ask His Majesty’s Government, further to the Written Answer by Baroness Twycross on 16 September (HL10228) and following media reports in August of Redbird Capital Partners’ formal notification to the Department for Culture, Media and Sport to acquire Telegraph Media Group, when they will update Parliament on action they are taking to resolve the Telegraph’s ownership and ensure compliance with Chapter 3A of the Enterprise Act 2002.
Noble Lords may have seen press reports that the department has received a formal request from RedBird IMI to progress the sale of the call option to own the Telegraph. Thorough due diligence will be conducted on the proposed transaction, and should the Secretary of State have reasonable grounds to suspect either public interest or foreign state influence concerns, she will intervene. The Telegraph Media Group remains protected under pre-emptive action order. The Secretary of State will inform Parliament when regulatory decisions are made, as is consistent with standard practice.
My Lords, I am grateful for the Minister’s confirmation that the formal bid has been received and that during this phase of scrutiny the existing protections for the Telegraph remain in place. I very much hope that the Secretary of State will soon be able to say that she is minded to involve the CMA and Ofcom in the scrutiny of this bid. That will be important, should she decide to give it the go-ahead, for our future confidence in the Telegraph’s editorial independence. Meanwhile, can the Minister please confirm that the regulations to prevent multiple 15% equity stakes from state investment funds will be laid before the end of this month and applied to this case? Will she also make clear—and confirm, I hope—that the 15% is an absolute cap, and that any financial arrangements such as debt or earnout on top of a state investment fund’s proposed 15% stake would go against the intention of those regulations?
I thank the noble Baroness for her engagement, not least with me, with the Secretary of State and with officials, which has enabled us to get to what I hope everyone agrees is a better place than where we were previously. I would like to reassure her that we still intend to lay the regulations preventing multiple foreign state-owned investors owning an aggregate of more than 15% of UK newspapers by the end of this month. This cap will apply to any live merger at the time it comes into effect. The cap means that state-owned investors can own up to a maximum of 15% of the total shares or voting rights in a UK newspaper, provided that their investment is passive. We are absolutely clear that the overall intention of the policy is that a foreign state should not have any control or influence. This is what the Secretary of State considers carefully when she looks at the details of each case.
My Lords, I associate myself with all the comments about the Lord Speaker—or, at least, with all those that we have heard so far.
As we know, a fund with Abu Dhabi money, and probably Chinese money, is acquiring what in global terms is a small media player. It is relatively small, but the Telegraph is significant in the UK, and the best explanation of their motives that I can come up with is that they are buying influence. With that in mind, will the Minister commit that her department will investigate any prima facie breaches of the orders protecting the Telegraph from influence by RedBird—breaches that may already have occurred? Will she commit to publishing the investigation’s findings?
It would be inappropriate for me to comment on any live merger case, as I am sure the noble Lord will be aware. Under the Enterprise Act this is a quasi-judicial process, and it is for the DCMS Secretary of State alone to exercise her statutory powers, based on the evidence and following the established regulatory process. As for publication, I will write to the noble Lord to clarify the points he raises.
My Lords, do we not need to review the whole issue of ownership of newspapers in the UK? Bearing in mind that papers such as the Express and the Mail are nothing more than propaganda, do we not need some balance in a democracy, to make sure that people who are rich do not influence our politics too much?
My noble friend raises an interesting point. The ownership of our media is an interesting area. The tradition of having a broad church of opinions expressed through our media is important, and is one of the cornerstones of our democracy.
My Lords, may I ask the Minister for some clarification? She talked about a 15% limit for a foreign state having an interest, but what if a number of foreign states got together and each bought up to a maximum of 15%? Is that also being considered by the Government?
The noble Lord’s point is exactly the point that the noble Baroness, Lady Stowell, has been raising with the Government. It will be addressed by the statutory instrument that is intended to be laid by the end of the month.
My Lords, will the Secretary of State, as part of her consideration, keep open the possibility of invoking the National Security and Investment Act in this case, given the indirect involvement of China in the consortium bidding for the Telegraph?
The Secretary of State’s consideration is for her alone. However, noble Lords will be aware that it is possible to have cases of this nature considered under the National Security and Investment Act if the transaction is deemed to raise national security concerns.
My Lords, we know from the witness statements released overnight that the Deputy National Security Adviser considers that China
“presents the biggest state-based threat to the UK’s economic security”,
but also that the present Government are
“committed to pursuing a positive economic relationship”
with it. Given that, and not in relation to the case under consideration but in general terms, can the Minister tell us what sort of percentage stake in a British newspaper the Government would be comfortable with a Chinese state investor obtaining?
I will not go into hypothetical examples. All the instances raised would be examined on a case-by-case basis. The noble Lord will be aware that we are deeply disappointed that the case he referenced has not gone to trial; we really did want to see prosecutions.
We have settled on 15% as the cumulative amount, and this House had the opportunity to debate it at some length in July. Whether that is one FSI, one state-owned investor or a number of state-owned investors, it will not exceed 15%. The Competition and Markets Authority has been clear that it does not consider that a material influence would be likely to occur below 25%, so 15% is well within that limit.