(1 week, 6 days ago)
Lords ChamberMy 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.
The previous Government also made clear before the election that they would put in place exceptions to encourage investment by sovereign wealth and other state-owned investors and issue a consultation. To clarify —in response to the point from the noble Lord, Lord Forsyth—this exception applies only to a very narrow group of public bodies: sovereign wealth funds and public pension schemes or similar. It does not apply to states themselves or other state bodies, so a foreign Government cannot buy and own a newspaper.
The responses received, including from News UK, said that the proposed thresholds were overly complex and drawn too tightly. We broadly agree with this assessment; we believe that a higher 15% threshold is appropriate and would meet their concerns. However, this would not weaken the regime. The 15% threshold would still be below the level that the CMA considers typically gives rise to material influence when assessing jurisdiction under the Enterprise Act 2002, meaning that the risk of influence would be low.
Noble Lords have raised questions about whether an investor with up to 15% of shares or voting rights can really be a passive investor. The regulations include a strict requirement that the state-owned investor must hold the investment passively. They must have no right or abilities to appoint or fire directors or other officers, and they must have no ability to direct, control or influence a newspaper’s policy or activities. These are continuing requirements that must be satisfied every day the shares are held. The exceptions should be seen as a privilege and not a right.
The legislation requires the Secretary of State to refer a merger to the CMA if she suspects that a state-owned investor is not entitled to the exception or is not complying with these requirements. If the CMA advises that the investment does not comply and concludes that a foreign state newspaper merger situation has arisen, the Secretary of State must take action to unwind the transaction or to block it. This is a very significant penalty and safeguard.
As noble Lords will be aware, the Government published a further draft SI for consultation last week to deal with two specific concerns that noble Lords raised about the draft regulations, which we laid on 15 May. First, the changes proposed by the draft SI would close off any risk of multiple state-owned investors acting on behalf of different states, each being able to hold up to 15%. This change would be applied retrospectively from 13 March 2024 to ensure that there is no regulatory gap.
Secondly, we have addressed concerns around the lack of a notification requirement on state-owned investors who plan to take significant shareholdings. This second draft SI proposes a new requirement for direct investments by state-owned investors of more than 5% to be notified to the Secretary of State as a condition of the exception. If the notification is not made, or made late, the investment would not comply with the exception and would be prohibited.
Following a consultation, which will run until 16 September, the Government will aim to lay, in draft, the second statutory instrument by the end of October. The new notification requirements will come into force after the second regulations are made. The changes proposed in the second draft SI, while important, are not fundamental to the operation of the exceptions and not so critical to the FSI regime that we should delay these regulations and leave newspapers—which are publicly calling for us to act—to a further period of uncertainty. I thank the noble Baroness, Lady Stowell, for her constructive engagement with the Secretary of State and DCMS officials on these issues. I hope that she and other noble Lords who have raised these concerns feel that this safeguard fully deals with the issue.
I will now address the constitutional questions that arise from the amendment to the Motion in the name of the noble Lord, Lord Fox. The second regulations to follow later this year will strengthen protections and put the issue of multiple-state ownership beyond doubt. As I explained earlier, the provisions on multiple-state ownership will be backdated to 13 March 2024 to ensure that there is no regulatory gap.
It is also important to recognise that existing sovereign wealth fund investments at any level made after March 2024 in a UK newspaper may trigger the Secretary of State’s requirement to intervene under the FSI regime. We are very concerned that a protracted delay in putting exceptions into place would prolong the uncertainty this creates for investors and the wider investment climate. I appreciate that the noble Lord’s amendment comes from concerns around the impact of the FSI regime on the British press. I have not come to the same conclusion that he has, and I will of course reflect very carefully on the points that he and other noble Lords make during this debate.
It is perfectly legitimate for your Lordships’ House to debate the fatal amendment before it today, but it is a very firm convention that the power to annul is not used. In this specific case, the FSI exception regulations have been expected since the passage of the digital markets Act last year. They have been subject to consultation and extensive parliamentary engagement and have now been approved in another place. This Government have come to a different conclusion to the previous Government on thresholds. Although the threshold is slightly higher, it is also simpler and supplemented by additional safeguards. I have set out our reasoned arguments for settling on 15%, including why we gave weight to the views of UK newspaper groups that are directly affected.
When noble Lords debate legislation, a small but significant phrase is sometimes heard: that Parliaments cannot bind their successors, and commitments made by one Government cannot bind any future Government. While the 5% and 10% split threshold was announced by the previous Government during the debate on the digital markets Bill as a possibility, and subsequently featured in the consultation, it was not a settled matter. It was left open at the time of the general election last year. It is both right and responsible for the Government to look at this afresh. However, we agreed that in some sensibly managed circumstances, an exception to the regime was reasonable. Our intention in doing so is to make a decision which protects press freedom from foreign state interference while not, in the words of one consultation respondent, creating a chilling effect on the investment the British press tells us it so badly needs.
To conclude, I urge Peers from all sides to look at these issues in the round. The Government believe these regulations provide the certainty that UK newspapers desperately need and have asked for. They will, in spite of suggestions to the contrary, guard against foreign state influence while allowing our news media to face the future with confidence. I hope noble Lords will accept the rationale I have presented to the House in support of this important package. I beg to move.
Amendment to the Motion
Before my noble friend leaves the point, would she just pick up on what the noble Lord, Lord Fox, said? She just described the plight of the Daily Telegraph and other newspapers, basically saying they are struggling to be viable. So why would a foreign Government pay a premium price to invest in them? Are we assuming that foreign Governments are profligate with their money and that they do not invest to get a return? The noble Lord’s point was that the reason why they are prepared to pay £500 million or whatever it is for the Daily Telegraph, when other people are prepared to pay only £300 million or whatever, is that they are buying influence.
As my noble friend knows and as I have already described, we are now in a different situation from that which we were facing in March of last year, when there was a real prospect that a foreign Government could be the owner of a British newspaper. That matter has been dealt with. What we are dealing with now is state investment funds and, as I am going to come on to talk about, the question is whether the safeguards in place are sufficient.
I am grateful to Lisa Nandy for meeting me on several occasions over the past few months and I am pleased that, because of pressure from me and other noble Lords, the intolerable prospect of multiple foreign powers each owning 15% of a newspaper will be ruled out in the supplementary regulations that the department published in draft last week. Let us be absolutely clear: the 15% must be an aggregate cap. But how on earth that loophole went unnoticed is hard to understand and, once it was pointed out to them, it is baffling, as well as hugely regrettable, that the Government took two months to find a way to close it and chose to do so via additional regulations, instead of immediately withdrawing the regulations before us today and relaying a comprehensive set, so that we could tie all this up in one go before the Summer Recess. I would be grateful if the Minister could tell us why they could not do that. I know she has told us that they plan to lay the supplementary regs by the end of October, but I would like to know why it was not possible to do what I advised them to do back in May.
This foot-dragging and apparent incompetence have given rise to legitimate questions about who or what has really influenced the Government’s approach to this incredibly important matter. If the Government were acting only in the interests of the press industry, we would have sorted all this and resolved the Telegraph’s ownership long before now.
Although I can accept a 15% aggregate cap for state-owned investment, it will require rigorous government oversight of the boundaries that passive investors must not extend, and Parliament will need to be better equipped and more active in holding Ministers to account. In my view, it was frankly unacceptable for the Government to stay silent for 11 months on the matter of the secondary regulations and on what they were doing to safeguard the Telegraph’s future ownership during that time.
Noble Lords may have seen, and indeed have heard already from the Minister, that the supplementary regulations that are to follow these include a new notification requirement, meaning that any state-owned investor that acquires more than 5% must notify the Secretary of State within 14 days of that acquisition to be eligible for the exemption status. In my view, as a follow-on to that, the Secretary of State should be required to notify Parliament twice yearly about any or nil such notifications, together with information about action taken by her as a result. In future, we are going to need more information. Can the Minister ensure that this additional requirement of accountability to Parliament be added to the supplementary regulations the Government are now consulting on?
Although parliamentarians must respond to any failings by Ministers, when it comes to upholding press freedom, the most important line of defence is the newspaper proprietors. They are who and what must provide a strong shield between newsrooms and illegitimate pressure or demands from investors and advertisers. They know that not doing so undermines public trust in journalism, and that would damage the value of their investment.
It is not for Parliament to dictate how proprietors should discharge their responsibility, but in a media world that includes the presence of state-owned investors, clarity and some transparency about what proprietors are doing to protect their newspapers’ independence and editorial freedom becomes important. This is particularly so where proprietors are new to the newspaper industry or are private equity funds. Can the Minister tell us, therefore, what such demands the Government will make of the new Telegraph owners if and when that transaction is completed? Can she confirm that the Telegraph deal, once finalised, will be subject to detailed scrutiny by the CMA before it is completed?
If the noble Lord, Lord Fox, pushes his amendment to a Division, I will vote against it. Of course, as a former Leader of your Lordships’ House, I have a general aversion to this Chamber seeking to block legislation. Indeed, it was me, as Leader, who was the last Minister at that Dispatch Box defeated by this House on a piece of secondary legislation. But I am not against this amendment for any kind of constitutional-like reasons of convention or tradition, important though they are. Believe me, if I thought that supporting this amendment was the right thing to do, I would. But I do not.
While I respect those who are framing this debate as a battle over the future of press freedom, actually, if it is a battle about anything, it is over the future of a financially viable press. We do not just need our newspapers to be editorially independent; we need them to survive.
When it comes to the Telegraph, of course I would have loved someone serious to have come along with a consortium that could offer investment and honour a cap of 5%. Indeed, I would have loved it if this sorry saga, which has been so destabilising to the editorial team at that newspaper and has gone on for more than two years, could have been avoided altogether. But, as I have already argued, this is not just about the Telegraph; it affects all newspaper titles.
The regulations before us set the cap at 15%. As long as the Government follow through with the supplementary regulations to close that loophole and are prepared to give the necessary undertakings to ensure that that cap will be enforced, I am willing to accept them. Everyone else gets to fight another day; let us make sure the same applies to the Telegraph Group and the wider UK press industry.
Of course, if the noble Lord, Lord Fox, withdraws his amendment and supports mine instead, noble Lords can express their regret and record their dissatisfaction with how the Government have handled this matter by supporting my amendment.
If a company has a series of 5% ownership stakes it will have a plurality of shareholders and therefore a mix of influence, but if you own a 15% stake you have a much higher share in the company and are probably entitled to a single board member.
Is it not that there is a difference between 5% being held by a foreign government and 5% being held by a national wealth fund or something of that kind?
I entirely agree with the noble Lord. I do not understand why the noble Lord, Lord Knight, is raising what seems to be a pretty obvious issue.
The British public deserve to know that their morning newspaper delivers journalism guided by British values and editorial independence, not the preferences of foreign powers.
Briefly on this House’s conventions: the guidance issued in the 2006 report from the Joint Committee on Conventions—which was mentioned by noble friend Lord Fox—is still current, despite the 2015 Strathclyde review. It concluded:
“On the basis of the evidence, we conclude that the House of Lords should not regularly reject Statutory Instruments, but that in exceptional circumstances it may be appropriate for it to do so. This is consistent with past practice, and represents a convention recognised by the opposition parties”.
Subsequently in March 2007, with strong support from the then Archbishop of Canterbury I succeeded with a fatal amendment that prevented a super- casino being located in east Manchester. Since then, in January 2013, the noble Lord, Lord Bach, succeeded in defeating a legal aid order. I welcome what the noble Baroness, Lady Stowell, had to say about the existence of the convention.
Those were exceptional circumstances and so too are today’s. The ownership of our press is a matter of great public policy importance, and we are fully entitled to defeat these regulations. I urge noble Lords to support my noble friend Lord Fox’s fatal amendment. Let us send a clear message that the integrity of the British press is not negotiable: 5% is sufficient, but 15% is a doorway to influence that, once opened, may prove impossible to close. I commend the amendment to the House.
We on these Benches also oppose the draft Enterprise Act 2002 (Amendment of Section 58 Considerations) Order 2025 and the draft Enterprise Act 2002 (Definition of Newspaper) Order 2025, which have been tabled for approval today. These orders propose extending the ambit of the Enterprise Act to encompass digital media and broadening the definition of “news media” to explicitly include online news, websites and broadcasting. If we were at one on the question of media ownership then this would be a welcome extension. However, expansion at this time, while fundamental concerns regarding foreign ownership of traditional newspapers remain unresolved—or, indeed, are potentially being dangerously broadened—is illogical and dangerous, and we will not support these draft orders.
My Lords, I always pay careful attention to the advice given to me by my Chief Whip. The advice—which I am not sure I am allowed to reveal—is that we should not support this amendment on the grounds that we do not vote for fatal Motions. I was very impressed by the speech by the noble Lord, Lord Fox. In fact, I agreed with every single word. That is a real first for me on something coming from the Liberal Benches.
Until quite recently, I told people that I have never voted for a fatal Motion, but in fact I discovered that I did some six weeks ago, as the noble Lord pointed out. We had a fatal Motion, and quite rightly so, because it was on a matter that we thought was in the national interest: the position of the Government on their treaty on the Chagos Islands. So both I and the noble Baroness, Lady Stowell, have voted for fatal Motions in very recent history, so I am a bit confused by the suggestion that we should deal with this matter on the basis of some kind of procedure. We have heard the nature and seriousness of the arguments. If this House now feels that it cannot vote on a matter of this seriousness because of some mythology about fatal Motions, what is the point of us being here at all? What is our purpose? This is a central issue.
The other reason why I am a little confused is that, when we amended the legislation last year under the previous Government, my noble friend Lord Parkinson mentioned an amendment being made at Third Reading and said:
“We will amend the media merger regime explicitly to rule out newspaper and periodical news magazine mergers involving ownership, influence or control by foreign states”.—[Official Report, 13/3/24; col. 2042.]
I emphasise “foreign states”. He said:
“Direct investment in newspapers of any size will be banned … We will therefore introduce an exemption for investments where the stake is below 5% of the total … This would apply to passive investments by … sovereign wealth funds, pension funds or similar”,
not by foreign states. That was primary legislation passed by this House. There was no vote because there was unanimity across the whole House about the importance of banning foreign Governments from owning parts of newspapers.
There was also consensus across the House for extending that to other media services, which the other instruments refer to. The noble Lord, Lord Clement-Jones, quite rightly points out that they would, I think, be supported by the House were it not for the fact that they change the ownership rules to allow foreign Governments to be involved not just in our newspapers but in other news media organisations.
My noble friend Lord Parkinson also said that the Government recognised the
“risks that foreign state ownership of … the UK’s newspapers and news magazines could pose to democracy and to free speech”,
allowing them to
“over time corrode trust in our media as a whole”.—[Official Report, 26/3/24; cols. 584-85.]
What has changed in the past 12 months about those principles? The Government have changed, but that is not a reason to change one’s principles on this side of the House. This Government have sought to take secondary legislation and use it to change not just the intention but the effect of primary legislation. Now they are the Government—we lost the election.
On that point of the use of statutory instruments, does my noble friend agree that many of the problems he has identified arise from the fact that statutory instruments cannot be amended? Is it not bizarre that in the autumn we are going to have a remedial statutory instrument, the terms of which could be incorporated into the present statutory instrument if we were able to amend it?
As always, my noble friend makes an excellent point, but it takes me slightly off the subject. I am kind of arguing that these procedural arguments are trounced by the fact that what is being done here is that primary legislation is in effect being amended by secondary legislation—to which, as he says, we cannot make an amendment. That is completely wrong. If we allow this to go forward, there will be other examples. This is the Executive thumbing their nose at the Parliament. This is the Executive taking power.
I believe that these regulations abandon an important principle. In her introduction, the Minister deftly avoided and elided the suggestion that investment was needed from foreign Governments. I have no objection to national wealth funds. Indeed, we amended the legislation, and the 5% had nothing to do with foreign Governments. As I recall, it was introduced to allow the Norwegian pension fund to be able to continue its existence. That was an exception to the rule, necessary because of the nature of those funds. Now we have regulations that allow 15% to be held by foreign states; that is what is at stake here.
Notwithstanding the powerful advocacy from my noble friend Lord Black for the Daily Telegraph, this has nothing to do with the Daily Telegraph. This is about a general principle that foreign Governments could take a stake in our newspapers and other media assets. When I say that it is nothing to do with the Daily Telegraph, I am slightly suspicious, just to take my noble friend’s point, that we are being asked to do this at such speed, in such a hurry. It is nothing to do with the Daily Telegraph bid, I am sure. Why did the Government not just withdraw the amendments and table new ones, which we could discuss at length in the autumn? Could it be to do with some other business going on with the Daily Telegraph? I may be cynical, and perhaps I am being unfair, but it feels like that.
I took the liberty of sending to colleagues—I promise not to do it very often—an article written by Fraser Nelson, whom I hold in the highest regard as a political journalist. I have circulated it to a number of colleagues. It tells the inside story from his ringside seat of what has been going on with the purchase of the Daily Telegraph. I commend it to noble Lords because, if they read that article, they will certainly vote for the amendment in the name of the noble Lord, Lord Fox. It is completely unacceptable that our parliamentary procedure should be overwritten and that we should create an open door for foreign Governments to get into our media services to meet a particular bid.
The remarkable thing is that when you ask the Ministers why they are making this change, they say that it is nothing to do with the Daily Telegraph—it is because they had a consultation exercise. As the noble Lord pointed out, they had all of four people responding to this consultation exercise, which made them change their minds. Who were the people who responded to the consultation? They actually said that they were not going to tell us—it was going to be kept secret, because it was so embarrassing to discover that it was the newspaper owners themselves.
Of course, it is always very dangerous to cross newspaper owners, especially if you are in politics, which is why Fraser Nelson is to be commended on his excellent article today. If we have foreign Governments owning newspapers, as opposed to foreign investors, there will be a conflict of interest between our journalists and their proprietors, because our journalists might want to write unpleasant things about some regimes that may or may not be allowed to own the newspapers. For this House, if it is a choice or conflict, which are we going to support, the freedom of the journalists or the financial interests of the proprietors? There can be only one answer: we have to support the freedom of the journalists, even if they do not always reciprocate in respect of this House.
There is one further point I would like to make, and it is about RedBird. I do not have a clue where RedBird’s money is coming from; it is not disclosed. How can we possibly feel comfortable with that? I know that the noble Lord, Lord Alton, who has been so spectacularly successful in arguing in this House for freedom, not just in this country but all over the world, has grave concerns about the relationship between RedBird and the Chinese Government at the highest level. I know nothing about RedBird, and therefore I feel even more despairing that the Government should be bringing forward these regulations, instead of the Secretary of State having by now instituted for the MMC to carry out an inquiry into precisely those matters.
It is with great pride and pleasure that I shall support the Liberal amendment, not because it has been made by the Liberals, although I have huge respect for the noble Lord, Lord Fox, but because I believe that he is speaking for the whole House as it was before the election, when almost unanimously, without a vote, we upheld the principle, which these regulations seek to undermine, that foreign states should not be allowed to own newspaper assets in this country.
My Lords, last year I went to the Department for Culture, Media and Sport with the noble Baroness, Lady Stowell, in a small delegation to make representations about the lack of any regulation at that time to prevent foreign Governments buying stakes in British newspapers. In the subsequent debate I certainly supported her view, and I liked very much what she has said today. The consultation may well have produced only four newspaper contingents giving their views, but a lot of other people have given a lot of thought to it in the meantime, as I have.
The question for the House today is whether we accept the compromise of 15%, higher than 5% but lower than the 25% that would have given the statutory controls, or go for a fatal amendment, getting close to what would be regarded as the edges of the constitution. I think that the Government have given a fair account, and I have discussed it and debated it at the same time. I have changed my mind. I think the safeguards that are available and the 15% are reasonable, and I believe we should therefore vote against the fatal amendment.
I do not think any of us are concerned about sovereign wealth funds; we are concerned about Governments. As far as I know, the United States Government do not have any interest—hopefully—in any of the social media organisations the noble Lord is referring to.
My Lords, it is an honour to follow the noble Lord, Lord Udny-Lister, who is an old friend and old colleague. I declare my interest as former editor of the Evening Standard¸ deputy editor of the Telegraph and the Daily Mail and independent director of Times Newspapers.
As an editor, I met many newspaper proprietors, and I know that the very rich who want to invest in newspapers do so primarily because they want to have influence. I have the highest regard for my noble friends Lady Stowell and Lord Black of Brentwood, and I commend their contributions to this debate.
However, while I know that, sometimes, there is need for pragmatism and compromise at times of political and financial crisis, when it comes to freedom of the press, there can be no compromise. There is a principle to fight for.
Several noble Lords have reminded us that in March last year this House came to the conclusion that foreign states should not own newspapers. State control undermines free speech. We have heard the splendid speech from the noble Lord, Lord Alton, who is one of the great masters of this subject. On that basis, the then Government compromised and agreed that arm’s-length sovereign wealth funds could indeed own a maximum stake of 5%. We are now offered a variation whereby a foreign state can own a maximum of 15% of a newspaper.
However, in the statutory instrument, there is no limit on the number of states that can each own 15%—we have heard the argument. In other words, a coalition of states could each own 15%, thus having a majority ownership and the ability to exercise control. Once the Secretary of State was alerted to this possibility of multiple 15% ownership over six weeks ago, the Government could have been fleet of foot and pushed through a second SI to ensure the spirit of the first SI was not abused. But no, we waited and waited. Only last week was a second SI brought forward closing the loophole—but not immediately or as part of the first SI, but with a possible date in the autumn.
Therefore, the SI has a giant loophole, and this is what we are debating today. Would any savvy business sign a deal with a giant loophole only with a promise to close that loophole sometime in the future? No, of course they would not. Either we want to protect our freedom of speech and freedom from foreign state control, or we do not. That is the principle.
What is the justification to vary the 5% ownership other than that a foreign state wants more control or to save face? We have not been told.
Arguing against the fatal amendment on the grounds that the Telegraph urgently needs the deal to be agreed is an unacceptable compromise. This House is not here to consider transactions. This House is here to consider a point of principle. Will the Telegraph fold if a foreign state is not legally allowed to own 15%? I do not know. None of us knows, but that is not the point. I do not accept that we should rely on the Government’s promise of a second statutory instrument—which we have heard it might actually not even be possible to introduce after the legislation—to close the loophole sometime in the autumn. There is no legal or parliamentary reason why the Government could not have pushed through the second SI by today, so I have grave doubts about this promise.
If we agree to today’s regret amendment, there is in theory and in practice nothing to stop, say, four foreign states buying 15% each, making the Government’s promise for the autumn irrelevant. The Government will say that we can rely on the regulator—the CMA, perhaps, or Ofcom. We have all seen the failure of regulators—just think of the water regulator or the City regulator. When it comes to freedom of the press, only the law protects, not regulators. To protect newspapers from any foreign state influence, I will support the fatal amendment.
That is not in my speech, but I have an answer for the noble Baroness. We think that it is a reasonable suggestion. We need to work out how we can do that. There was a suggestion, for example, that it might require primary legislation. Obviously, that feels a little bit heavy-handed in terms of where we would want to get to. If the noble Baroness is content, I will come back to that. We think that it is a good point and it is worth doing, but I am not able to commit until we have clearer legal advice on how we could achieve that.
Going back to the other points, we have listened carefully to the concerns raised by noble Lords. I thank many noble Lords for the time that they have taken to meet me and the Secretary of State as well as officials. On the new regulations that we put out for consultation on 16 July, we have committed to change the legislation to eliminate entirely the risk that was identified by the noble Baroness, Lady Stowell, and others, and to backdate this change to 13 March last year, which is the date on which the foreign state influence regime came into effect. I give noble Lords an absolute commitment that we will lay regulations in the autumn. I am not allowed to say that we will do it by the end of October; I am allowed to say that we will aim to do so by the end of October.
Some noble Lords queried the difference between sovereign wealth and government control. I want to be explicitly clear: for the avoidance of doubt, this is not state ownership. It is not about Governments owning or influencing our media. We do not want that to happen either. The term “state-owned investors” refers to a narrow group of organisations that will need to be different and distinct from the Government who sponsor them. Foreign Governments will not be allowed to hold a direct stake. Key is the requirement that they make or manage investments, including international investments, as their principal activity. I agree with the point made by the noble Lord, Lord Udny-Lister, that this is not necessarily about influence. I give way—
The Minister has just made an absolute commitment that “Foreign Governments will not be allowed”. That is what I understood her to say, so why does she not incorporate that in the regulations?
My understanding is that that is what the regulations would mean in effect. The noble Lord shakes his head, but I want to be explicitly clear that this is not going to allow foreign Governments to buy newspapers. This is about state-owned investors, which, as I made clear in my opening remarks, is a different matter.
If that is what she thinks the regulations already say, she will not have a problem with making it explicit.
We have the regulations before us. I cannot be more explicit than I have already been.
To continue, investment by single or multiple state-owned investors will be capped at 15%. The regulations that we aim to bring in by the end of October will require a state-owned investor taking a direct holding of shares or voting rights of more than 5% to notify the Secretary of State of the transaction. This will enable her to quickly review any cases where there are suspicions that the shareholding may be more than a passive investment and to refer appropriate cases to the CMA for advice on whether a foreign state merger situation has emerged. This will be a condition of the state-owned investor exception. A failure to make this notification or making it late will mean that the investment in question is prohibited.
The noble Lord, Lord Fox, asked about the redactions in the consultation responses and why they were not published earlier. I have already outlined my acceptance of the criticism from the noble Baroness, Lady Stowell. DCMS has now published the responses. One organisation asked for its views not to be attributed and for some information to be redacted on the grounds of commercial confidentiality. The original consultation by the previous Government specified that responses would not be published and respondents would not be named. This Government’s current consultation makes it clear that they will be.
The noble Lord, Lord Newby, asked about the Secretary of State’s role. The legislation requires that the Secretary of State must refer a merger to the CMA if she suspects a state-owned investor is not entitled to the exception or is not complying with this requirement. This should provide protection in the interim, and was why we did not think the original SI defective. The one in draft was published in response to concerns, not, in our view, to correct an error, although it puts everything beyond reasonable doubt and was a reasonable request.
The noble Lord, Lord Fox, asked about the protections we have against hostile states trying to acquire influence or control. The FSI regime strengthens the Secretary of State’s powers and sits alongside her powers to intervene in a relevant merger situation on the basis of public interest concerns. These powers can be applicable in acquisitions involving state-owned investors within the threshold set by the draft regulation. Taken together, the existing legislation, draft regulations and second statutory instrument would allow the Government to act to guard against the kind of malign interference with UK democracy and press freedom about which noble Lords are concerned.
Additionally, the National Security and Investment Act 2021 can enable the Government to call in and, if necessary and proportionate, block, unwind or impose conditions on acquisitions of control over UK newspapers, including acquisitions that may give rise to national security concerns.
(2 weeks, 5 days ago)
Lords ChamberMy Lords, why are the Government inviting the House to vote for secondary legislation that they have now admitted is defective in so far as it allows foreign Governments to own 15% and several foreign Governments collectively to own an additional 15%? Although the Government may have tabled amending legislation today, which will have retrospective effect, what is the reason for the speed of this, and why are the Government using secondary legislation to reverse what was clearly understood before, which is that foreign Governments could not hold stakes in our newspapers and media interests? Now, they are allowing foreign Governments to do so, despite undertakings given when the primary legislation was passed that that would never be allowed.
On the regulations and the exception, I want to be clear: this is a privilege, not a right. It is about passive investment, which is why the level has been set at 15%. The Government have published the second set of regulations today, to put it beyond doubt that multiple states cannot act in concert to take a stake in a UK newspaper that is bigger than 15%. The FSI regime gives the Secretary of State a specific duty to intervene and to refer to the CMA for investigation merger cases that she suspects may have resulted, or may result, in foreign state control or influence over a newspaper enterprise’s policy. So these safeguards are in addition to what we would already consider to be quite clear duties on the part of the Secretary of State.
(1 year, 5 months ago)
Lords ChamberThe noble Baroness is right that these are eye-watering figures. As people live longer and the pressures on local authorities to deliver social care grow, we can see the implications for their budgets and spending. Those are part of the conversations that the Government have with local authorities all the time. As I said, just last month another £500 million was announced to support local authorities with the cost of social care, which we know is rising. Overall, local authorities’ core spending power is set to increase by 7.5% this year. We continue to have discussions to make sure that there is money available to local authorities to deliver that statutory responsibility and to continue to support the wonderful arts organisations, charities and others for which they do not a statutory responsibility but which can be part of delivering their statutory obligations by looking after people in so many ways.
My Lords, does my noble friend the Minister recognise that the problems facing charities because of the rise in the minimum wage also affect hundreds of thousands of small businesses up and down the country? Furthermore, by increasing the minimum wage, surely there is a saving to the Government on benefits, such as housing benefit. Can that saving not be deployed in the interests of those charitable bodies addressed by this Question?
The Government follow the recommendations of the independent Low Pay Commission. The evidence to date shows that the national living wage has given a pay rise to millions of people and reduced inequalities, without significantly harming employment prospects or having other adverse impacts. There are implications for businesses and charities—the Low Pay Commission’s impact assessments provide that evidence—but we are proud that, through the increase that comes in on 1 April, we will be giving a pay rise to around 3 million workers in this country.
(1 year, 5 months ago)
Lords ChamberAt end insert “but this House regrets that the Bill does not make provision concerning the ownership and control by foreign governments of newspapers in the United Kingdom”.
My Lords, this is the Media Bill; it is 176 pages of very good stuff, as the Minister, my noble friend Lord Parkinson, said. It is a pleasure to follow the noble Baroness, Lady Featherstone, on this occasion, when I can agree with almost everything she says. It is 176 pages, but it does not address the elephant in the room, which is not foreign ownership of newspapers and media outlets. The elephant in the room is foreign Governments being able to own media outlets, including newspapers.
My noble friend, very helpfully, said he would make a few remarks on the amendment, and said it is outwith the scope of the Bill. How can it be outwith the scope of the Bill? Surely, it is an absolute principle that foreign Governments should not be able to own newspapers. In his opening remarks, my noble friend said that there are various procedures whereby the Secretary of State can assess national security or other matters. Surely, the most important matter that concerns us is the freedom and integrity of our press, the jewel in our nation’s crown, which we have always revered.
I owe the House an apology. I feel like something of a hypocrite, because I do not like tabling regret amendments at Second Readings of Bills. I have done so only because I could find no other way of drawing the seriousness of this matter to the House’s and the Government’s attention. I am most grateful for the comments from the Labour Front Bench: that across and in every corner of this House, noble Lords are concerned at the idea that the Daily Telegraph could fall into the ownership of a foreign Government. Yet the Government are doing nothing about it in the Bill, which I believe they could.
Without wishing to upset my colleagues who are responsible for our diplomacy, I can think of few other countries less suitable—totally unsuitable—to own a newspaper than the UAE. I know that my former colleague George Osborne and others have been very active, arguing that it is not the Sheikh or a foreign Government, because they have set up a structure to own it. We have a saying in Scotland: “He who pays the piper calls the tune”. In this case, the amount being paid is very considerable. It is a while since I did valuations of companies, but I would struggle to get beyond £400 million for the Daily Telegraph and the Spectator, and very considerably more than that is being paid. That does not strike me as an investment opportunity; it strikes me as an influence opportunity, and that is what I believe is behind the acquisition, and why a substantial premium is being offered.
Do the Government really believe that this can be right for a Government of a country like the UAE, which has a dreadful record on censorship and editorial influence, and which is noted for its threats to free expression and accurate presentation of news? It is a country that locks journalists up because they say things with which the Government disagree, and a country which—I believe—is listed as 145 out of 180 countries on the freedom index. Is it really going to be our Government’s role and our role as a nation to achieve the distinction of being the first country in the world— I believe—to allow a quality newspaper with a large readership to be owned by a foreign Government?
I hear what my noble friend says about the scope of the Bill. I confess that another reason why I have moved this amendment is that I am having an interesting dialogue with the Public Bill Office as to whether an amendment can be made which is within the scope of the Bill. As my noble friend pointed out, I have never seen a Bill with a Long Title like it—it is like a shopping list. Included on that shopping list is the repeal of Section 40 of the Crime and Courts Act. I am not sure whether I voted for that; I suspect I did, because, as noble Lords know, I am a very loyal supporter of the Government. I am sure I voted for it, and I am sure it was explained to me that it was essential to have some independent ability to look at the conduct of our newspapers. I seem to recall that there was a bit of a row, and the newspapers—and others—argued that it was essential that we should not have newspapers or other publications in our country subject to government control. I am at a loss to understand why, if the Bill provides for removing that, it is impossible as a consequence to discuss the impact of allowing a foreign Government to have ownership of a newspaper when those controls have been removed because the Bill provides for the abolition of Section 40. I am not a clerk; I am not even a lawyer. However, it seems to me to be completely illogical, and I cannot understand why the Government are going along with this view. The Government’s duty is to maintain a free press in our country and to make sure that our press is not subject to undue influence, which I presume is why this provision is in the Bill in the first place. Taking it away removes any possibility of independent regulation— I support that, even if I voted for it before out of loyalty to the Government. Allowing foreign Governments to have ownership without that protection seems to be very difficult to justify.
A free press is a central part of a free country. If we allow the UAE today, why not other states tomorrow? Why not North Korea? My noble friend might say that the Secretary of State will look at that, but there is a principle here. It is a principle which ought to be clearly in the Bill. I do not want to take advantage of the fact that I am moving an amendment to the Bill to exceed the speaking time, so I beg to move.
My Lords, I do not think I need to test the opinion of the House because every single speech has supported the view that foreign Governments should not be able to own British newspapers. I thank the Minister for the excellent way in which he summed up the debate. I might just suggest to him that there is a distinction between the Secretary of State acting in a quasi-judicial capacity on this proposal that has come for the Daily Telegraph and what I was trying to convey, which is that this should be a matter for Parliament, not an individual, to decide.
The issue is whether, in principle, it is right or wrong for foreign Governments to own our newspapers; that is a matter for the Government as a whole. I have a splendid suggestion to make, which is that the Government can release us all from this quandary by simply accepting the amendment from my noble friend to another Bill. When the Minister says that it is a matter for other Ministers, it is not; it is a matter for the Government as a whole, and it is perfectly clear from what has happened tonight that he can convey to his colleagues that there is unanimous support for the idea that we should prevent foreign Governments acquiring British newspapers.
I say to my noble friend Lord Vaizey that I would not encourage him in the process of tabling regret amendments—it is a very unusual procedure. The reason that I did it was to convey to the Government the strength of feeling on all sides of the House about this. Having said that, I beg leave to withdraw my amendment.
(1 year, 6 months ago)
Lords ChamberI hope the noble Baroness will forgive me, but I think it is important that I and other Ministers do not opine on anything while the Secretary of State is making her decision in the capacity she is making it in. As I say, it is important that there should be no perception that she is taking into account any political or presentational considerations. She is, of course, considering all of the relevant information as set out under the Enterprise Act.
My Lords, I declare an interest, as many years ago I had to make decisions as a Secretary of State in a quasi-judicial capacity and I understand the difficulties the Minister has. But, for goodness’ sake, it is an absolute no-brainer that you do not wish a national newspaper to be owned, however indirectly, by what is proposed. Why should it take so long for Ofcom and everyone else to come to the obvious conclusion and put us all out of our misery?
Ofcom and the Competition and Markets Authority have functions set out under the Enterprise Act. They are carrying out those functions at the moment. The Secretary of State looks forward to receiving their reports by the deadline that she has set out. She will then take into account what they recommend to her.
(2 years, 6 months ago)
Lords ChamberHas my noble friend, as well as having the experience of reading a contract, had the experience of trying to communicate with these providers? You sit on the phone for hours and hours and then get passed from pillar to post. Can we do something to make sure that their customer relations are rather more efficient?
On that, my experience was indeed a bit more painful. It is obviously for commercial providers to decide how they provide services to their customers in a way that allows them to keep costs down and keep bills down while satisfying people so that they want to stay with them.
(3 years, 1 month ago)
Lords ChamberMy Lords, could my noble friend help those of us who are struggling to understand what exactly media literacy means? Is it about the truthfulness of content or about how to access content, and what on earth can the Government do about that?
It is about equipping users to decide for themselves what is truthful and giving them the critical skills to look inquisitively at the material that they see online, which often conflicts with other sources, and make their mind up. That was an important skill long before people received information from the internet. It applies just as much to traditional media, such as books and other areas of learning, but is particularly important online.
(3 years, 2 months ago)
Lords ChamberMy Lords, I declare my interests as the president of the Steam Boat Association, an owner of a steamboat and a customer of the Welsh mine which the noble Lord has just mentioned. Can we take this very seriously indeed? If the Government really believe that we need to improve our security of supply, we have Welsh steam coal, which is the best in the world and vital not just for steamboats, but, as has been said, for tourism industries and the rest. It seems completely mad to argue that we should import coal from elsewhere, with all the green negative consequences.
My noble friend gives a very good example of the wealth of experience in your Lordships’ House. He is right about the importance of this issue. Obviously, there is a particular short-term factor here regarding the situation in Russia and Ukraine, but we are very mindful too that this is an important year for the sector as it recovers from the period of closure during the pandemic. That is why, through our tourism recovery plan, we are supporting not just the heritage steam industry but the wider visitor economy, and why we are continuing to discuss this with the sector.
(3 years, 3 months ago)
Lords ChamberThe noble Lord is absolutely right; there are many issues of detail which of course we cannot cover in a 15-minute exchange on a Private Notice Question. The White Paper will set out more detail and legislation will be brought forward to enable both Houses to have their say on all those points of detail. It is our intention to publish the White Paper in the coming weeks.
My Lords, does my noble friend not think it extraordinary that people who constantly complain about the need for more public expenditure are opposed to a policy which will result in revenue for the Exchequer, and more importantly, enable Channel 4 to grow and expand without competing for resources with the health service and other groups?
I heartily agree with my noble friend. Of course, the production companies in the independent sector, which are privately owned and run, are a shining example of how private investment can deliver the content which is enjoyed by people not just across the UK but around the world.
(4 years, 6 months ago)
Lords ChamberThe noble Lord, Lord Adonis, has withdrawn, so I call the noble Lord, Lord Forsyth of Drumlean.
My Lords, I do not wish to detain the House at this stage in the Bill, especially following that excellent speech by the noble Lord, Lord Alton. I do not wish to repeat many of the arguments that have been put at an earlier stage in the Bill and the information which has been made available to the House about the atrocities which are happening in China today—not just among the Uighur people. The noble Lord, Lord Alton, has set out in great detail the arguments which I would have thought would persuade any Government of the virtues of this amendment.
I join him in paying tribute to my noble friend the Minister, who has worked hard to find a way through this. I appreciate that collective responsibility means that it is not always possible to deliver what Ministers might wish to achieve. However, following on from the remarks the noble Lord made about the debate on Tuesday next week on the all-party amendment on genocide, I think it is absolutely outrageous that those of us who wish to speak in that debate are unable to do so unless we appear in person at the House.
I have just received a letter from the Clerk of the Parliaments advising me that it is very undesirable for Members to come to the House, as indeed it is from a wider social point of view. At the beginning of each sitting, the Chair has indicated that all Members will be treated equally. It seems that the procedures that operate under ping-pong are preventing Members of the House carrying out their duties while being socially responsible and while following the advice from Public Health England and Scotland. I hope very much that this can be looked at before next Tuesday, so that we are all able to carry out our duties to the House of Commons and meet our responsibilities to our fellow citizens.
The noble Lord, Lord Alton, seemed to indicate that he would not press this amendment to a Division. Had he done so, I would have happily supported him, because I believe that it is a sensible amendment for the reasons put forward in earlier stages of the Bill. However, as I have said, I will not detain the House other than to indicate my support for the noble Lord and my admiration for the enormous energy that he has put into defending human rights and championing the cause of those people in China who, unbelievably, are experiencing what we have always been told after the events in Germany during the 1930s and 1940s would never be allowed to happen again.
My Lords, I too start by paying tribute to the noble Lord, Lord Alton, for his commitment and persistence. He is so often the conscience of this House on human rights abuses globally, and once more he has made a very powerful speech.
How can anyone who watched the ceremony to mark Holocaust Memorial Day, which was broadcast last night, not be deeply moved. It made plain how propaganda led to persecution and, step by step, to the appalling slaughter of the Jews and others in the Holocaust. It has been said, “Never again”, and international measures were put in place to try to counter such atrocities and bring people to account, yet there have been genocides in Cambodia, Bosnia, Rwanda, Darfur, Myanmar and so on. As the Holocaust memorial event also mentioned, we are now hearing appalling accounts coming out of China, especially in relation to the Uighurs, including of forced organ harvesting, the sterilisation of women and the re-education camps. We hear credible reports, as the noble Lord, Lord Alton, mentioned, of slave labour. We know that, in Germany, the chemical and pharmaceutical industries, in which the country had an international lead, drew on such slave labour, as did others.
We have seen worrying signs in the UK and across Europe more generally, and especially whipped up recently in the United States, of propaganda and discrimination being exploited by those seeking power. It has been an object lesson in how these things can happen, step by step, and how constant vigilance is always required. We knew it then, and we know it now, so the mover of the amendment and those speaking to it are right that, even here, in this limited Bill covering a specific area, the test should be applied as to whether an operator could be using infrastructure to breach human rights.
I am glad to hear of the efforts being made by the Minister to seek to address this, as the Government also did in the Medicines and Medical Devices Bill, and there managed, working with the noble Lord, Lord Hunt of Kings Heath, and others, to bring forward a relevant amendment. In her letter to us, the noble Baroness cites the actions of the Foreign Secretary in relation to Xinjiang. We are waiting to see the results of this translated into targeted sanctions, as the noble Lord, Lord Alton, mentioned, and the persuasion of other countries, starting with the EU, to follow suit. Sanctions are most effective if they are undertaken collectively.
We will shortly be considering the National Security and Investment Bill, and I am sure that these issues will be raised again. Prior to that, we have the Trade Bill. Surely if the Government are committed to this issue, when we get to that Bill, it is obvious that the Government must accept the amendment on genocide. How could we possibly agree to trade with a country that is committing genocide?
I thank the Government for their engagement, including that of the noble Lord, Lord Ahmad, with Sir Geoffrey Nice, the chair of the China Tribunal, on forced organ harvesting, and I look forward to further engagement. However, that engagement needs to turn into specific action. We cannot turn a blind eye, and I am sure that the noble Lord, Lord Alton, will make sure that we do not.