Labour plan to let foreign states team up to own newspapers sparks alarm

Yahoo

28-05-2025

Labour's plan to let foreign powers own shares in newspapers has sparked alarm that they could team up to gain sway over Britain's free press.
Lisa Nandy, the Culture Secretary, has proposed laws to allow states to hold passive stakes of up to 15pc in newspapers and news websites. There is no planned rule on what portion a group of foreign states could own, however, raising concerns in the House of Lords over 'where will it end?'
The legislation is partly intended to dispel the uncertainty faced by The Telegraph since a takeover bid led by the United Arab Emirates was blocked by the Conservatives over a year ago.
By easing an existing outright ban on foreign state ownership, Ms Nandy's plan is also meant to help improve British relations with the wealthy Gulf state, which were damaged by the saga.
The UAE is now expected to become a silent minority shareholder in a consortium led by RedBird Capital Partners, the US private equity firm which was previously the junior partner in its bid.
The Conservative Party leadership has said it will support a limit of 15pc. However, after analysing the proposed statutory instrument, the Tory peer Baroness Stowell, a pivotal figure in the rebellion that derailed the UAE bid, has written to Ms Nandy to demand changes.
Baroness Stowell, who has said she will not oppose single passive stakes of up to 15pc, told The Telegraph: 'Without a cumulative limit on foreign state shareholdings you have to ask where will it end?
'You could have countries teaming up to seek influence. I don't understand why this hasn't been addressed in the proposed legislation. It may be that there are other ways the Government believes it can address this risk. If so, let's hear it and debate it.'
Ministers have other powers to block foreign investments, such as those they believe are a potential threat to British security, under the National Security and Investment Act.
Lord Fox, the Liberal Democrats' culture spokesman in the Lords, backed Baroness Stowell's demand for a rethink and said there were 'glaring loopholes … ready to be taken advantage of by foreign states'.
He added: 'It's wrong that this Government has no qualms with multiple states owning unlimited aggregate stakes in British papers. The independence of UK media must not be made subject to foreign sway.
'We are pressing peers from right across the House to stand with us, block this legislation and defend press freedom.'
The Liberal Democrats have tabled a rare 'fatal motion' in the Lords to obstruct Ms Nandy's legislation. They argue that it would effectively overturn the ban on foreign state ownership approved by Parliament last year.
Some Conservative peers, led by Lord Forsyth, are expected to back the bid to block the legislation. He has said the idea that a stake of 15pc could be entirely passive was 'utterly naive'.
The Conservatives originally proposed a limit of just 5pc to allow sovereign wealth funds to make small passive investments in newspapers, such as via share index trackers.
Ms Nandy opted to increase the limit three-fold after lobbying on behalf of Rupert Murdoch and Lord Rothermere, the owner of The Daily Mail. She agreed with them that a 5pc limit would cut news publishers off from a potentially vital source of international capital at a turbulent time as the decline of print accelerates.
It is not clear whether any foreign state has already made an equity or debt investment in a UK news publisher.
The Independent news website, controlled by Lord Lebedev, sold a 30pc stake to a Saudi investor in 2017. A subsequent Ofcom investigation explored potential links between the investor and the Saudi state but did not draw conclusions. The Independent subsequently formed an editorial and commercial partnership with a Saudi state media company.
Under Ms Nandy's proposals, she will have a duty to trigger regulatory investigations when there are concerns of foreign state influence.
Baroness Stowell said there was a need to ensure MPs and peers had a bigger role, with a guarantee that questions about press freedom would be heard in the chamber.
Questions she attempted to ask about the fate of The Telegraph were rejected by parliamentary officials in consultation with the Government on three occasions.
Baroness Stowell said: 'My concern is that Parliament has all the tools it needs to protect freedom of the press. This is especially important given the proposals from the Government create an ongoing duty to monitor and investigate issues with foreign state investors.
'When it comes to press freedom it is critical that Parliament can ask any questions it sees fit.'
The Department for Culture, Media and Sport was asked for comment.
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