A Whitehall battle over the sale of the Telegraph newspapers could break out owing to a power vacuum created by the absence of the cabinet secretary, the Guardian understands.
Efforts by the culture department to investigate an Abu Dhabi-backed bid for the newspaper group risk being steamrolled by the Foreign Office, which is eager to bolster Britain’s relations with the United Arab Emirates, sources said.
Senior figures at the Foreign Office had already sought to “take the edge off” a letter from Lucy Frazer, the culture secretary, in which she laid out her intention to have the bid examined by Ofcom, sources claimed.
But with no cabinet secretary to intervene in a potential squabble between departments, as Simon Case is on medical leave, scrutiny of the deal could “fall through the cracks”, it has been claimed.
Rishi Sunak is to visit the UAE for the Cop28 climate summit next week after hosting figures from the country at Hampton Court Palace in London for the government’s Global Investment Summit on Monday, part of a drive to attract foreign investment.
Frazer wrote to the Abu Dhabi-backed fund, RedBird IMI, which is trying to buy the Telegraph and Spectator titles in exchange for repaying the Barclay family’s £1.15bn of debts to Lloyds Banking Group.
In her letter on Wednesday Frazer said she was “minded” to have the bid examined closely through a public interest intervention notice (PIIN) – a formal investigation that could take months to resolve – because of concerns about its implications for editorial independence at the newspaper and its related titles.
Now, culture department officials fear the Foreign Office may push to have this process shut down to smooth the path for the bid.
This led officials at the culture department to escalate their concerns about the intervention to the Cabinet Office. However, there is no clear leader on such issues while Case, the most senior civil servant and adviser to the prime minister, is on an extended period of medical leave, the Guardian has been told. Case is not expected to be back at work before Christmas and there is no date set for his return.
RedBird IMI is led by Jeff Zucker, a former chief executive of CNN. It is mostly funded by Sheikh Mansour bin Zayed Al Nahyan, vice-president of the United Arab Emirates and owner of Manchester City football club.
Zucker told the Financial Times that competitive bidders had been “slinging mud” at his efforts and that IMI would “remain a fully passive investor” and would “not exercise any control of the Telegraph or Spectator”.
The tensions between the culture department and the more powerful Foreign Office risk becoming “increasingly messy”, with competing government priorities, such as ensuring a free press, set against a drive to increase dwindling levels of foreign investment into the UK, sources said.
“The role of cabinet secretary is a vital part of government machinery,” said Alex Thomas, programme director at the Institute for Government, a Whitehall thinktank. “Part of the job is having to broker between departments with something like this.”
The prime minister’s spokesperson told reporters on Friday that it was “standard practice for the Foreign Office to provide advice to other government departments. But to be very clear, this matter and decision is solely one for the culture secretary.”
The spokesperson added that no decisions had been made about whether to pursue a PIIN and it was still under consideration.
Sir Simon Fraser, who headed the Foreign Office from 2010-15, is advising RedBird on its bid. Fraser is now a managing partner at consultancy Flint Global. Flint declined to comment on its involvement.
Other senior figures from Whitehall and Westminster have been linked with the effort to buy the Telegraph. These include Nadhim Zahawi, who was chair of the Conservative party until he was sacked after the Guardian revealed he had had to pay a penalty to HMRC early this year.
RedBird IMI has confirmed that as part of its proposed deal, it would repay debts of the Barclay family, the former owners of the Telegraph group, to Lloyds bank. The Telegraph titles were bought by Sir Frederick Barclay and his late twin Sir David in 2004, but they were seized by the bank in June in a bitter row over the unpaid debts.
Several other suitors are interested in buying the titles, including a consortium led by Sir Paul Marshall, the hedge fund boss who is a shareholder in the GB News channel, as well as the owner of the Daily Mail and the Metro and the publisher National World.
An auction to sell the titles was paused earlier this week after the Abu Dhabi-backed consortium pledged to repay the Lloyds debts.
If Frazer does decide to intervene by issuing a PIIN, the Competition and Markets Authority would also look at the change of ownership of the Telegraph to assess any potential competition concerns.
