Lords approve law that would block UAE Telegraph takeover

Foreign state influence over British newspapers will be outlawed after the House of Lords voted to effectively block the UAE bid for The Telegraph.

Peers passed an amendment to rule out the “ownership, influence or control” of newspapers and periodical news magazines by foreign governments.

Lord Parkinson, the culture minister, announced that the law would later be extended to online newspapers.

RedBird IMI, a fund 75 per cent backed by Sheikh Mansour bin Zayed Al Nahyan, the UAE vice-president, had positioned itself to take control of The Telegraph and The Spectator magazine by repaying the debts of the Barclay family, the current owners.

The takeover had been in limbo under scrutiny from the Government, using existing powers to protect press freedom, but MPs and peers across Parliament demanded tighter laws against foreign state control.

Lord Parkinson said: “We have heard the strength of concerns expressed in Parliament on foreign state ownership of UK newspapers and news magazines.

“His Majesty’s Government agrees that the importance of these publications to our democracy cannot be overstated.

“We are therefore taking steps to preserve the freedom of the press, recognising the risks that foreign state ownership of the UK newspapers could pose to democracy and free speech. Foreign state ownership… may over time corrode trust in our media as a whole.”

He added that the Government would hold a consultation on whether to extend the law in future to online news sites.

“This will bring the regimes up to date in order to reflect modern news consumption habits and better to protect the freedom of our media,” he said.

Earlier this month, Lord Parkinson revealed plans to “explicitly rule out newspaper and periodical news magazine mergers involving ownership, influence or control by foreign states”.

Baroness Stowell, the Tory peer whose campaigning persuaded the Government to lay the amendment, said in the House of Lords that she supported it.

“In my view, it deals with the legal uncertainty that the RedBird IMI proposed deal to buy The Telegraph titles and The Spectator has exposed when it comes to the involvement of foreign powers in our news media,” she said.

“It’s worth restating that, as concerning as the UAE financial backing via IMI in that case is, the issue is bigger than that one deal and is a matter of principle.”

Lord Forsyth, another Conservative peer, said recent revelations about attempted Chinese hacking of Western interests showed why the new law was needed, adding: “After yesterday’s events, it’s unconscionable that the Chinese government could own one per cent of a British newspaper.”

The new law – which still needs to pass the Commons and receive Royal Assent – will be made by an amendment to the Digital Markets Bill. It will change the wording of the existing Enterprise Act, and should become law within weeks.

The consultation on extending the law to online news sites is set to begin in June. It is not expected to be retrospective, so is unlikely to apply to the Independent, which is part-owned by Saudi Arabia.

The Telegraph was seized from the Barclay family by Lloyds Banking Group in a dispute over £1.2 billion of overdue debt.

RedBird IMI helped repay the family’s debt in December with a new loan that it aimed to convert into ownership of The Telegraph and The Spectator.

The Barclay family regained ownership, but are barred by law from exercising any control over the titles, which are being run by independent directors.

The involvement of the UAE in Red-Bird IMI had triggered concerns to be raised about press freedom by MPs and peers from across political divides.

The new laws received cross-party backing. Lord Clement-Jones for the Liberal Democrats said: “This is a matter of principle, it isn’t about a particular country.”

Lord Bassam, for Labour, said: “It is not about one newspaper group – there is a fundamental principle issue involved here.”