Questions are being raised about the government's willingness to allow essential physical infrastructure to fall into the hands of foreign states but not newspapers.
Government minister Lord Parkinson told the House of Lords yesterday: “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.”
Legislation is being introduced specifically to prevent The Telegraph newspaper group from being bought by RedBird IMI, a fund backed by the United Arab Emirates.
It is not yet clear, however, how far the new law could stretch. The intention is that it applies only to newspapers and news magazines. But are they really more important than water companies, electricity companies and power stations?
The Chinese state was allowed to have an influence in the development of Hinkley Point C nuclear power station but has been blocked from further involvement in the UK nuclear programme amid security concerns.
However, the UK government has been wooing the UAE to step in to help fund Sizewell C in place of China.
Campaigners against Sizewell C see the Telegraph intervention as grounds to block UAE investment in British nuclear power, on the basis that nuclear power stations must be at least as important to national security as newspapers.
"If the government is prepared to ban foreign state ownership of newspapers because of the UAE's bid for the Telegraph, ministers must now block UAE investment in Sizewell C in the interests of national security. That deal should also be dead in the water: there is no place in our critical national infrastructure for a regime that does not share our views and values," said a spokesperson for Stop Sizewell C.
There already exists legislation that could be used to prevent a foreign state having influence in critical infrastructure – the National Security & Investment Act 2021 and the National Security Act 2023 have sought to respond to foreign state interference.
Lord Parkinson told parliament yesterday: “We intend to expand on the current definition of ‘foreign powers’ used in the National Security Act 2023 to ensure a broad definition that also covers officers of foreign governments acting in a private capacity and investing their private wealth.”
That could put the skids under a whole host of utility companies.
However, rather blurring the message, the minister concluded: “I should note that the government remain committed to encouraging and supporting investment into the United Kingdom and recognise that investors deploying capital into this country rely on the predictability and consistency of our regulatory regime. The UK remains one of the most open economies in the world, which is key for the prosperity and future growth of our nation. Our focus here is not on foreign investment in the UK media sector in general; this new regime is targeted and will apply only to foreign states, foreign state bodies and connected individuals, and only to newspapers and news magazines.”
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