A bid to severely limit foreign state investment in UK newspapers was defeated by peers tonight.
Paving the way for the takeover of The Daily Telegraph and Sunday Telegraph, the House of Lords blocked an attempt to prevent passive shareholdings being raised to 15 per cent.
It is the latest turn in a tumultuous two-year takeover process for the 170-year-old business.
It comes after the previous Conservative government put a 5 per cent limit in place amid fears the Telegraph could be bought by RedBird IMI, a firm majority-owned by the UAE, in a £500million deal.
But following a consultation, Labour proposed a higher cap to enable newspapers to access crucial finance.
Tory Baroness Stowell said the 15 per cent cap supports the ‘much bigger principle of Press freedom’ and told the Lords: ‘While we all care about protecting a free Press, upholding that principle will serve little purpose if our news industry can’t survive – and their economic conditions are worsening.’
The previous Conservative government put a 5 per cent limit in place amid fears the Telegraph could be bought by RedBird IMI, a firm majority-owned by the UAE, in a £500million deal
Tory Baroness Stowell (pictured) said the 15 per cent cap supports the ‘much bigger principle of Press freedom’
Liberal Democrat peer Lord Fox had tabled a rare ‘fatal motion’ to block the proposals, despite approval by the Commons.
But it was defeated by 267 votes to 155.
RedBird Capital, the US junior partner in RedBird IMI, agreed a deal in May to buy a majority stake in the newspaper for £500 million.
Abu-Dhabi’s IMI will look to buy a minority stake as part of the consortium.
