A Conservative MP is urging ministers to extend a probe into the prospective takeover of The Daily Telegraph, warning that the Abu Dhabi-backed vehicle which wants to acquire it may already be exerting “material influence” over the newspaper.
Sky News has learned that Neil O’Brien, a former health minister who sits on the Tory backbenches, wants the culture secretary to issue a public interest intervention notice (PIIN) which encompasses RedBird IMI’s repayment of a £1.2bn debt to Lloyds Banking Group on behalf of the Barclay family.
Mr O’Brien said that while Lucy Frazer had been right to issue a PIIN focused on the conversion of that debt into ownership of the Telegraph newspapers, she should go further by also subjecting the debt repayment to scrutiny from Ofcom and the Competition and Markets Authority.
This would, he said, be the only way to ensure that RedBird IMI could not challenge any subsequent action that the government may wish to take in relation to the deal.
“It is clear that the Secretary of State is carefully considering the important issues around press freedom and national security raised by this deal,” he said.
“I am, however, deeply concerned by recent reporting that RedBird IMI told the Telegraph’s independent directors that it will determine the future ownership of the paper, even if their bid is blocked.
“This raises worrying questions about the level of material influence RedBird IMI, and therefore a foreign power, already holds over the paper through the debt arrangements currently in place, as well as the control they will still be able to exert even if the bid is blocked.
“It is vital that the government retains control over the process and its ability to protect the free press in this country.
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“In light of these new developments, I think it’s crucial that the Secretary of State uses her powers to scrutinise this complicated deal by issuing a separate PIIN into the initial purchase of the debt.
Image: Lucy Frazer is being urged to broaden the inquiries she has ordered. Pic: PA
“Doing so will give myself, parliamentary colleagues, Telegraph readers, and staff, full confidence in this process.”
Mr O’Brien’s comments come just two days before a deadline imposed by Ms Frazer for Ofcom and the CMA to submit their preliminary findings to her department.
Image: Neil O’Brien is pictured during an appearance on Sky News last year
Many observers expect that the debt-for-equity swap will be referred by the CMA to a more in-depth Phase-II investigation that could leave the Telegraph’s future mired in uncertainty for months.
Sky News revealed recently that the Telegraph’s parent company’s independent directors had been notified by RedBird IMI that it intended to determine the titles’ future ownership even in the event that it is prevented from taking control of its shares.
The Gulf-based investor – a joint venture between RedBird of the US and Abu Dhabi-based IMI – had been keen to dispel the idea that either the independent directors or the Barclay family, the newspaper’s beneficial owners, would oversee any future auction.
Because RedBird IMI also owns a call option which can be exercised in exchange for ownership of the media assets, it believes it would be “in total control” of any process should the government block the acquisition, a source told Sky News earlier this month.
“In such an eventuality, RedBird IMI would be free to sell the loan and call option to whoever they wished,” they added.
Scores of MPs and peers have lined up to oppose the takeover, arguing that the UAE has a poor record of upholding journalists’ ability to report impartially.
A string of prominent Telegraph writers, as well as the editor of The Spectator – which also forms part of the transaction but is not subject to the PIIN – have complained publicly about the prospect of the Abu Dhabi-backed vehicle gaining control of influential British media assets.
However, RedBird IMI – whose bid is spearheaded by Jeff Zucker, the former CNN president – remains confident that the editorial protections that it has submitted to Ofcom will address any concerns and pave the way for the deal to be approved.
Under the terms of the PIIN issued by Ms Frazer, RedBird IMI is prohibited from exerting any influence over the titles while investigations by the competition and media regulators are ongoing.
That includes the removal of key executives and editorial staff or any attempt to merge the Telegraph with other assets.
However, Cormac O’Shea, the Telegraph finance chief, has since stepped down, and there is mounting speculation that Nick Hugh, the newspapers’ chief executive, is about to follow suit.
The Telegraph’s holding company was forced into receivership by Lloyds Banking Group last year, following a long-running dispute over the repayment of a £1.16bn debt.
The loans and interest were repaid in December after the Barclay family structured a deal with RedBird IMI, which is majority-owned by Sheikh Mansour bin Zayed Al Nahyan, the ultimate owner of Manchester City Football Club.
The Times reported last month that TMG’s independent directors had alerted Whitehall to possible irregularities in the accounts of the family’s media assets, with the National Crime Agency reportedly informed.
RedBird IMI’s move to fund the loan redemption circumvented an auction of the Telegraph, which drew interest from a range of bidders.
The hedge fund billionaire and GB News shareholder Sir Paul Marshall, Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, had all hired advisers to assemble offers for the newspapers.
And they’re off! Bridget Phillipson was first away in her two-horse race with Lucy Powell in the Labour deputy leadership stakes.
Facing a rival who was sacked from the government nine days earlier, the education secretary said the deputy leader should be a cabinet minister, as Angela Rayner was.
Launching her campaign at The Fire Station, a trendy music and entertainment venue in Sunderland, she also vowed to turn up the heat on Nigel Farage and Reform UK.
She also repeatedly called for party unity, at a time when Labour MPs are growing increasingly mutinous over Sir Keir Starmer’s dealings with sacked Washington ambassador Lord Mandelson.
Despite Ms Phillipson winning 175 nominations from Labour MPs to Ms Powell’s 117, bookmakers StarSports this weekend made Ms Powell 4/6 favourite with Ms Phillipson at 5/4.
But though the new deputy leader will not be deputy prime minister, a title that’s gone to David Lammy, Ms Phillipson praised the way Ms Rayner combined the two roles and rejected suggestions that as a cabinet minister she would be a part-time deputy leader.
“What can be achieved under a deputy leader with a seat at cabinet, just look at Angela Rayner,” Ms Phillipson told her enthusiastic supporters.
“Angela knew the importance of the role she had. There was nothing part-time about her deputy leadership.
“Last year I campaigned up and down the country to get Labour candidates elected – I’ve not stopped as education secretary – and I won’t stop as deputy leader.
“Because with local elections, and with elections in Wales and Scotland right around the corner, that role is going to be more important than ever.
“So that’s why, today, I pledge to continue Angela Rayner’s campaigning role as deputy leader.
“Continuing her mission to give members a strong voice at the cabinet table.
“Her ruthless focus on getting our candidates elected and re-elected, alongside her total determination to drive change from government. Because what mattered was not just what she believed, but that she could act on it.”
Ms Phillipson pledged to run a campaign of “hope, not grievance” and claimed the party descending into division would put the chances of children and families benefiting from Labour policies at risk.
But admitting Sir Keir Starmer’s government had made mistakes, she appealed to party members: “You can use this contest to look backward, to pass judgement on what has happened in the last year, or you can use it to shape positively what happens in the run-up to the next election.
“Back me so I can unite our party, deliver the change we want to see and beat Reform. Back me so together, we can deliver that second term of Labour government.”
Image: Phillipson with Labour supporters at her campaign launch on Sunday. Pic: PA
Starmer’s candidate vs Manchester mayor’s
As she did in a speech at the TUC conference last week, Ms Phillipson spoke about her upbringing “from a tough street of council houses in the North East all the way to the cabinet”.
At the TUC, she said she grew up – “just me and my mam” – and told how when she was nine, a man who’d burgled the house turned up at the front door with a baseball bat and threatened her mother.
Ms Powell, who enjoys the powerful backing of Labour’s ‘King of the North’ Andy Burnham, called this weekend for a change in culture in 10 Downing Street, with better decisions and fewer unforced errors.
His backing has led to the deputy contest being seen as a battle between Sir Keir’s candidate, Ms Phillipson, and that of the Greater Manchester mayor, seen increasingly as a leadership rival to the prime minister.
And like all the best horse races, with the betting currently so tight, when the result is declared on 25 October the result could be a photo-finish.
Appointing Lord Mandelson as the UK’s ambassador to the US was “worth the risk”, a minister has told Sky News.
Peter Kyle said the government put the Labour peer forward for the Washington role, despite knowing he had a “strong relationship” with convicted sex offender Jeffrey Epstein.
It is this relationship that led to Peter Mandelson being fired on Thursday by the prime minister.
Image: Lord Mandelson and Jeffrey Epstein. File pic
But explaining the decision to appoint Lord Mandelson, Business Secretary Mr Kyle said: “The risk of appointing [him] knowing what was already public was worth the risk.
“Now, of course, we’ve seen the emails which were not published at the time, were not public and not even known about. And that has changed this situation.”
Speaking to Sunday Morning with Trevor Phillips, he rejected the suggestion that Lord Mandelson was appointed to Washington before security checks were completed.
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He explained there was a two-stage vetting process for Lord Mandelson before he took on the ambassador role.
The first was done by the Cabinet Office, while the second was a “political process where there were political conversations done in Number 10 about all the other aspects of an appointment”, he said.
This is an apparent reference to Sir Keir Starmer asking follow-up questions based on the information provided by the vetting.
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‘We knew it was a strong relationship’
These are believed to have included why Lord Mandelson continued contact with Epstein after he was convicted and why he was reported to have stayed in one of the paedophile financier’s homes while he was in prison.
Mr Kyle said: “Both of these things turned up information that was already public, and a decision was made based on Peter’s singular talents in this area, that the risk of appointing knowing what was already public was worth the risk.”
Mr Kyle also pointed to some of the government’s achievements under Lord Mandelson, such as the UK becoming the first country to sign a trade deal with the US, and President Donald Trump’s state visit next week.
Mr Kyle also admitted that the government knew that Lord Mandelson and Epstein had “a strong relationship”.
“We knew that there were risks involved,” he concluded.
PM had only ‘extracts of emails’ ahead of defence of Mandelson at PMQs – as Tories accuse him of ‘lying’
Speaking to Sky News, Kyle also sought to clarify the timeline of what Sir Keir Starmer knew about Lord Mandelson’s relationship with Epstein, and when he found this out.
Allegations about Lord Mandelson began to emerge in the newspapers on Tuesday, while more serious allegations – that the Labour peer had suggested Epstein’s first conviction for sexual offences was wrongful and should be challenged – were sent to the Foreign Office on the same day by Bloomberg, which was seeking a response from the government.
But the following day, Sir Keir went into the House of Commons and publicly backed Britain’s man in Washington, giving him his full confidence. Only the next morning – on Thursday – did the PM then sack Lord Mandelson, a decision Downing Street has insisted was made based on “new information”.
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Vetting ‘is very thorough’
Speaking to Sunday Morning with Trevor Phillips, Mr Kyle said: “Number 10 had what was publicly available on Tuesday, which was extracts of emails which were not in context, and they weren’t the full email.
“Immediately upon having being alerted to extracts of emails, the Foreign Office contacted Peter Mandelson and asked for his account of the emails and asked for them to be put into context and for his response. That response did not come before PMQs [on Wednesday].
“Then after PMQs, the full emails were released by Bloomberg in the evening.
“By the first thing the next morning when the prime minister had time to read the emails in full, having had them in full and reading them almost immediately of having them – Peter was withdrawn as ambassador.”
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4:48
Government deeming Mandelson to be ‘worth the risk’ is unlikely to calm Labour MPs
The Conservatives have claimed Sir Keir is lying about what he knew, with Laura Trott telling Sky News there are “grave questions about the prime minister’s judgement”.
The shadow education secretary called for “transparency”, and told Sunday Morning with Trevor Phillips: “We need to understand what was known and when.”
Image: Laura Trott says there are ‘grave questions about the prime minister’s judgement’
They believe that Sir Keir was in possession of the full emails on Tuesday, because the Foreign Office passed these to Number 10. This is despite the PM backing Mandelson the following day.
Ms Trott explained: “We are calling for transparency because, if what we have outlined is correct, then the prime minister did lie and that is an extremely, extremely serious thing to have happened.”
She added: “This was a prime minister who stood on the steps of Downing Street and said that he was going to restore political integrity and look where we are now. We’ve had two senior resignations in the space of the number of weeks.
“The prime minister’s authority is completely shot.”
But Ms Trott refused to be drawn on whether she thinks Sir Keir should resign, only stating that he is “a rudderless, a weak prime minister whose authority is shot at a time we can least afford it as a country”.
If you want to know why so many Labour MPs are seething over the government’s response to the Mandelson saga, look no further than my mobile phone at 9.12am this Sunday.
At the top of the screen is a news notification about an interview with the family of a victim of the notorious paedophile Jeffrey Epstein, saying his close friend Peter Mandelson should “never have been made” US ambassador.
Directly below that, a Sky News notification on the business secretary’s interview, explaining that the appointment of Lord Mandelson to the job was judged to be “worth the risk” at the time.
Peter Kyle went on to praise Lord Mandelson’s “outstanding” and “singular” talents and the benefits that he could bring to the US-UK relationship.
While perhaps surprisingly candid in nature about the decision-making process that goes on in government, this interview is unlikely to calm concerns within Labour.
Quite the opposite.
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For many in the party, this is a wholly different debate to a simple cost-benefit calculation of potential political harm.
As one long-time party figure put it to my colleague Sam Coates: “I don’t care about Number Ten or what this means for Keir or any of that as much as I care that this culture of turning a blind eye to horrendous behaviour is endemic at the top of society and Peter Kyle has literally just come out and said it out loud.
“He was too talented and the special relationship too fraught for his misdeeds to matter enough. It’s just disgusting.”
There are two problems for Downing Street here.
The first is that you now have a government which – after being elected on the promise to restore high standards – appears to be admitting that previous indiscretions can be overlooked if the cause is important enough.
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4:48
Government deeming Mandelson to be ‘worth the risk’ is unlikely to calm Labour MPs
Package that up with other scandals that have resulted in departures – Louise Haigh, Tulip Siddiq, Angela Rayner – and you start to get a stink that becomes hard to shift.
The second is that it once again demonstrates an apparent lack of ability in government to see around corners and deal with political and policy crises, before they start knocking lumps out of the Prime Minister.
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Sir Keir Starmer is facing questions over the appointment and subsequent sacking of Lord Mandelson as the UK’s ambassador to the US.
Remember, for many the cardinal sin here was not necessarily the original appointment of Mandelson (while eyebrows were raised at the time, there was nowhere near the scale of outrage we’ve had in the last week with many career diplomats even agreeing the with logic of the choice) but the fact that Sir Keir Starmer walked into PMQs and gave the ambassador his full-throated backing when it was becoming clear to many around Westminster that he simply wouldn’t be able to stay in post.
The explanation from Downing Street is essentially that a process was playing out, and you shouldn’t sack an ambassador based on a media enquiry alone.
But good process doesn’t always align with good politics.
Something this barrister-turned-politician may now be finding out the hard way.