‘Limit foreign press stake to 5pc’

FOREIGN states should not be allowed to own more than a 5pc stake in a newspaper even if acting as indirect or passive investors, a Tory peer has said.

Baroness Stowell, the chairman of the Lords communications and digital committee, is satisfied a new law designed to prevent foreign government ownership of British papers was robust enough but the maximum threshold for passive minority stakes must be low.

The peer led a rebellion after a United Arab Emirates-backed attempt to take over The Telegraph that was instrumental in forcing the Government to introduce the legislation. Ministers have now published an amendment to a Bill that will block foreign states from buying or investing in British newspapers unless they are passive investors – for example, sovereign wealth funds taking a small share in a listed company.

Baroness Stowell said: “The point of the exemption is to allow only legitimate passive investment like that which already happens. In my view, the threshold for indirect foreign-state passive investment in the UK news industry by the likes of sovereign wealth or state pension funds … should be set at 5pc”.

In a letter to peers last week, the culture minister Lord Parkinson said: “The ability of governments, domestic or for- eign, to acquire UK press publications runs the risk of eroding trust in the independence and integrity of this unique sector of our economy and society.”

Redbird IMI, a fund 75pc backed by Sheikh Mansour bin Zayed Al Nahyan, the UAE vice-president, had positioned itself to take control of The Telegraph and The Spectator by repaying the debts of the Barclay family, the current owners. The takeover has been under scrutiny from the Government using existing powers to protect press freedom, but MPS and peers across Parliament have demanded tighter laws against foreign state control.