Labour plan to let UAE own Telegraph stake faces ‘fatal motion' in Lords
Labour's plan to allow the United Arab Emirates to own 15pc of The Telegraph faces a Lords rebellion intended to block the pivotal laws.
Hours after Lisa Nandy, the Culture Secretary, revealed her intention to permit the Gulf state to hold the stake, the Liberal Democrats said they would seek to dismantle the legislation via a rare 'fatal motion'.
Ms Nandy has introduced a statutory instrument to ease an outright ban on foreign state shareholdings in newspapers, which was introduced by the Conservatives before the general election.
Such secondary legislation is typically waved through Parliament, but the Liberal Democrats said her decision to allow the UAE to own up to 15pc of The Telegraph was an 'insult' to press freedom.
Max Wilkinson, the party's Commons culture spokesman, said: 'Our free press is the cornerstone of British democracy – it can never be for sale to foreign powers. In 2024, it seemed there was cross-party consensus on this.
'This move insults all of those working to maintain the centuries-old British value of press freedom. It must be reversed.'
The Conservatives had planned to allow foreign states to own no more than 5pc of British newspapers. The exception was mostly intended to allow sovereign wealth funds to trade in media companies listed on the stock market.
However, following lobbying over many months from the publishers of the Daily Mail and The Times, Lord Rothermere and Rupert Murdoch, Ms Nandy has decided to treble the threshold. She said a 15pc maximum would still protect press freedom but 'remove a potential chilling effect on press sustainability' by providing greater access to a significant source of international capital.
The Liberal Democrats' move is likely to drive a split in the Conservative Party, which has traditionally enjoyed the support of The Telegraph.
Julia Lopez, who was media minister when the ban on foreign state ownership was introduced last year, branded Ms Nandy's decision a 'Labour sell-out'.
In a post on X, she said: 'I worked very hard with peers like [Baroness Stowell] to uphold a simple principle: that in a free and open democracy, press should never be owned by government.
'That's why we banned foreign countries from buying up our newspapers and news magazines. To protect press freedom.
'There were parts of government that didn't like that, worried about diplomatic relations or deterring foreign investment. But the prime minister [then Rishi Sunak] ultimately overrode those to uphold that simple principle. Parliament backed us.'
The Liberal Democrats said that if the Conservatives back their fatal motion they will have the votes to block Ms Nandy's plans. However, figures close to Kemi Badenoch, the Tory leader, are likely to oppose the rebellion.
For instance, Lord Johnson, the party co-chairman, was the only government figure to speak in favour of the UAE-backed bid for The Telegraph.
In November 2023, as investment minister, he praised the UAE as a 'first-class and extremely well-run country' and labelled The Telegraph a 'so-called treasured asset'. Lord Johnson, who founded a hedge fund with former trade secretary Sir Jacob Rees-Mogg, suggested opposition to the attempted takeover was 'sentimental'.
The Conservatives are yet to announce a position on the Liberal Democrats' fatal motion. However, a senior party figure said they would not support it as 15pc is below the level viewed as granting control.
The brewing row comes as the latest attempt to secure the ownership of The Telegraph enters a critical phase. RedBird IMI, the UAE-backed venture that was blocked from taking control, is in talks to hand the newspaper to RedBird Capital, a US private equity firm.
RedBird Capital is the junior partner with the UAE in RedBird IMI, accounting for 25pc of its funding. The rest comes from Sheikh Mansour bin Zayed Al Nahyan, the Emirati royal.
Under the new structure, IMI, Sheikh Mansour's media investment vehicle, is expected to seek to retain 15pc of The Telegraph if and when Ms Nandy's decision is made law. Any deal would be subject to scrutiny from the media regulator Ofcom and the Competition and Markets Authority.
Gerry Cardinale, the founder of RedBird Capital, has been spearheading the discussions, which also include other potential non-state minority investors. It comes after a failed auction and almost two years after The Telegraph entered a state of strategic and legal limbo when its previous owners, the Barclay family, lost control in a dispute with Lloyds Banking Group about their overdue debts.
Wrangling over the legislation risks becoming an argument about the authority of Parliament. The outright ban on state ownership was introduced as primary legislation agreed by both houses.
The attempt to ease the ban via statutory instrument more significantly than initially planned has raised questions over the legislative process.
Fraser Nelson, a Times columnist who fought RedBird IMI ownership of The Spectator as its editor at the time, warned in a blog post that the UAE had 'defied Parliament and clung on, waiting to see if Keir Starmer's Government might be more biddable'.
Ms Nandy said: 'We are fully upholding the need to safeguard our news media from foreign state control whilst recognising that news organisations must be able to raise vital funding.'
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