Contribution
My Lords, I strongly support my noble friend Lord Fox’s fatal amendment. When this House welcomed a complete ban on foreign government ownership at the Third Reading of the Digital Markets, Competition and Consumers Bill last March, the then Government proposed a 5% exemption for passive sovereign wealth fund investment. The noble Baroness, Lady Stowell, and the noble Lords, Lord Forsyth, Lord Robertson and Lord Anderson, deserve huge credit for securing this change, alongside the then Minister, the noble Lord, Lord Parkinson.
Yet in a remarkable about-face, this Labour Government propose allowing foreign state-owned investors to hold up to 15% stakes, tripling the previously proposed threshold. As we have heard, 15% is not trivial. Even a 15% stake can provide extraordinary leverage, board representation, veto powers over key decisions and a very real influence over editorial policy.
The Competition and Markets Authority guidance on mergers’ jurisdiction and procedure makes it clear that there is no exhaustive list of relevant factors. Even one board seat may suffice, depending on circumstances. The regulations currently allow multiple foreign states each to acquire a 15% stake. Nothing would stop a consortium of foreign regimes stacking up a controlling interest in a British newspaper. The Government acknowledged this flaw in their letter of 21 July, admitting, as we have again heard, that this will need correcting in the autumn. But why proceed with these regulations when the Government admit that they are fundamentally flawed? The 15% threshold contrasts starkly with international best practice. Australia sets just 5% for media companies.
There has been some argument today, notably from the noble Lord, Lord Black, that our struggling newspaper industry needs foreign investment. Even the Minister talked about existential threats. But if conventional investors are reluctant, as the noble Lords, Lord Fox and Lord Forsyth, say, foreign state investors clearly seek a different return: influence. Should we mortgage editorial independence when the price is erosion of public trust?
The consultation process was deeply problematic, with only four responses, primarily from newspaper groups seeking foreign investors. This hardly justifies tripling the threshold. The Government claim they can intervene if passive investors become active, but how does one monitor passivity and detect influence? As the Secondary Legislation Scrutiny Committee noted, it is an impossible task to determine nuanced changes indicating influence. In matters of press freedom, we must err on the side of caution.
I see that the noble Lord, Lord Black of Brentwood, came out in yesterday’s Telegraph, and today, with all guns blazing. His attack on the Liberal Democrat position fundamentally mischaracterised what the Press Recognition Panel actually does. The PRP is not a statutory media regulator that controls editorial content. It is an independent body that recognises voluntary press regulators, such as Impress, while IPSO deliberately chooses not to seek recognition to avoid meeting proper independent standards. This system protects press freedom by ensuring that regulatory bodies themselves meet robust standards for independence and effectiveness.
The characterisation of this by the noble Lord, Lord Black, as “onerous statutory controls” is the same misleading tactic used by media proprietors to avoid genuine accountability while maintaining maximum commercial freedom. The position of these Benches is entirely consistent: genuine press freedom requires protection from all forms of external influence, whether political interference, proprietorial control or foreign state investment. Our support for Leveson-compliant independent regulation and opposition to foreign state media investment both serve the same principle: to ensure editorial independence from external pressures.
The stakes could not be higher. This legislation is clearly drafted to facilitate deals such as, as the noble Lord, Lord Black, has mentioned, the potential takeover of the Telegraph by RedBird Capital, whose Chinese connections are subject to concern. A 5% cap strikes the right balance, allowing for genuine commercial investment while preventing the accumulation of influence that will strangle press freedom. The British public deserve to know—