National Security and Investment Bill

3rd reading
Thursday 22nd April 2021 Lords Chamber

Third Reading

13:30

Motion

Moved by

[Lord Callanan]

That the Bill do now pass.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I start by expressing my gratitude to noble Lords from across the whole House for their contributions to the passage of the Bill. In particular, I thank my noble friends Lord Grimstone and Lady Bloomfield for their steadfast help, guidance and support throughout its passage. I also place on record my thanks to the noble Baroness, Lady Hayter of Kentish Town—my commiserations on the results of the Lord Speaker election—and to the noble Lords, Lord Grantchester and Lord Rooker, for their constructive attitude and helpful challenges from the Opposition Front Bench throughout the passage of the Bill. I also thank the noble Lords, Lord Fox and Lord Clement-Jones, for their customary ability to ask the most difficult questions at totally wrong times during the passage of the Bill.

It would also be remiss of me not to thank some of my noble friends who have taken a particular interest in ensuring that we get the Bill right. I am thinking in particular of my noble friends Lord Lansley, Lady Noakes, Lord Hodgson of Astley Abbotts, Lord Leigh of Hurley, Lord Vaizey of Didcot, Lady McIntosh and others.

Noble Lords from across the House have rightly held the Government’s feet to the fire in a number of areas, in the finest traditions of this House, and I can honestly say that the Bill leaves the House in a better state as a result of that scrutiny. I extend my particular thanks to parliamentary counsel for their exemplary drafting and to the clerks and all the House authorities for shepherding us through these exceptional times. The smoothness with which proceedings flow masks the sometimes immense and exceptional logistical operation going on behind the scenes.

I also extend my thanks to the officials and lawyers within my department, who have worked tirelessly on the drafting and subsequent passage of the Bill, for their immense patience in explaining some of the difficult concepts to a mere simpleton such as myself. In particular, I thank Dr Sarah Mackintosh, Mike Penry, Danny McCarthy, Arash Abzarian, Alex Midgley and George Kokkinos, who embarked on their NSI journey before I was even a Minister in this department. In my view, they act in the finest traditions of our civil servants, and I am very grateful to them for all their expert help, support and guidance. Finally, I thank the wonderful Melissa Craig, in my private office, and the immense Yasmin Kalhori in the Whips’ Office, who is ever-helpful in feeding forward suggested speaking notes—not all of which I can use in this House.

I said at Second Reading:

“This Bill will keep the British people safe.”—[Official Report, 4/2/21; col. 2335.]


In the meantime, we have had lengthy discussions on fishing, lectures to insolvency practitioners and—in one memorable case—the makeup of a particularly hawkish rugby front row. These discussions and others have made me certain that the Bill will go a long way in ensuring that the UK’s defences are fighting fit, both now and long into the future.

I am heartened that, in the finest traditions of this House, all parties have recognised the Bill’s importance, even if we have disagreed on some of the detail. In that sense, it has genuinely been a cross-party effort, and I am grateful to all noble Lords who have participated. I beg to move.

13:34

[Lord Grantchester (Lab)]

From these Benches, it is a pleasure to thank the Minister, the noble Lord, Lord Callanan, for the way that he handled this important Bill and steered it through your Lordships’ House, so ably supported by the noble Lord, Lord Grimstone, and the noble Baroness, Lady Bloomfield. At the end of a long season and Session, it is very rewarding to examine the legislation of the noble Lord, who, with his team, engaged so positively with us and the House. This resulted in real and productive improvements to the Bill—especially on new public guidance, the expert panel and turnaround times, among other features, being included in the annual report.

I am grateful to the Bill team, ably led by Mike Penry, and the department, for their exemplary attention and courtesy shown to us at all times. The broadcasting team were excellent and managed our hybrid proceedings throughout without a hitch. I am also grateful to my lead and boss on the Bill, my noble friend and colleague Lady Hayter, who was disappointed that she could not see it through all its stages to the conclusion.

I would not have been able to step up to the grade without the support my very able legislative assistant in our office, Dan Harris, who, with Ellie Robson, was able to guide me over the hurdles, draft our amendments and take the negotiations with the Public Bill Office completely out of my clumsy hands. I am very grateful to them.

Our team is especially grateful also for assistance that came from outside the House—from the Russell group of universities, the CBI and the Wellcome Trust, as well as the Henry Royce Institute, the BioIndustry Association, the Law Society and the Law Society of Scotland. They have all provided insights and appreciation of the Bill’s likely workings and omissions, which proved invaluable to our attention within the House.

A clear feature of the Bill is how co-operatively the Minister and his team have worked with us and the House throughout, to understand and accommodate the pertinent issues in the Bill from our perspective. Of course, there is one clear divergence of opinion between the House and the Government, which we are sending to the Commons for their consideration. For the achievement of that task, I am very grateful to the front row team, marshalled into a complete scrum by our admiral, my noble friend Lord West, at roll call on Report. I am also grateful to my noble friend and colleague Lord Rooker, who guested as a heavyweight on the Front Bench for the occasion. It is very good to see him back in the Chamber and back to good health.

I trust that the positive engagement from across the House—including the Lib Dem and Conservative Benches —and the commitment shown by all noble Lords to a successful outcome, will give the Bill a fair wind to find safe harbour in the Commons.

13:37

[Lord Fox (LD)]

My Lords, there has never been any doubt that the Bill’s aims were supported across the whole of the House, and that has added to the quality of the debate from the start. That said, actually delivering a balanced approach to protecting the UK’s security, while ensuring that the necessary flow of investment will not be interrupted, will be a challenge. The debates that we have had have underlined the subtlety of that challenge.

However, the stakes are high. The UK has arguably been one of the most open economies in the world, and it is clear that this openness has let through some transactions that, in retrospect, should not have been permitted. The onus is now on the Government to act in such cases.

The skeletal nature of the Bill has informed quite a lot of the debate that we have had, and it is clear that, from the outset, the Government have sought to keep their options open. To my mind, phrases such as “We will take things on a case-by-case basis” have popped up too often. So I hope that, over time, there will be fewer “case-by-cases” and fewer exceptions—because people need clarity, and that clarity needs to be supported by strong communication. People need to understand how the decisions will be made. If this unit acts as a black box, that will not happen, and investment will definitely be discouraged.

Finally, before the long thank-yous, I apologise for coming back to the amendment on Report that set out the importance of climate change with respect to national security. I will say—with all due respect—that the Minister grudgingly went along with the thesis, but only to the minimum extent necessary. Perhaps his natural combativeness prevented him really appraising or acknowledging the risk.

Therefore, before the Minister moves from this Bill to his next important project, I recommend that he reads an op-ed in Politico by the NATO Secretary-General, Jens Stoltenberg, which came out today. In it, he says that it is clear that climate change

“is making the world a more dangerous place”,

with,

“rising sea levels and more extreme weather … increasing competition for scarce resources and fueling tensions and conflict.”

He states:

“Climate change threatens global security”.


Please note, Minister. That should be reflected in the activities of the new unit.

Of course, one outstanding issue between us remains, symbolised by the flankers here—the noble Lords, Lord West and Lord Campbell—and I hope that the Minister and the Secretary of State will see some sense on that. Otherwise we will be back for ping-pong.

That said, the passage of this Bill has been efficient, and, as the Minister has said, the overall quality of the Bill has been improved through that process. I commend the openness of the noble Baroness, Lady Bloomfield, the noble Lord, Lord Grimstone, and the noble Lord, Lord Callanan, who has shown his characteristic empathy in the process. The noble Lord listed the very considerable Bill team and all the support that has delivered the Bill, and I second, indeed third, that, because without them there would certainly be no Bill—and, of course, without many of them there would be no unit to make the Bill a reality.

I also thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Grantchester, for their engagement in this process, and I thank particularly the Members opposite. There are two representatives of them here—the noble Lords, Lord Leigh and Lord Lansley—but there are others, such as the noble Baroness, Lady McIntosh. They must have added to the pressure that the Minister feels: when the noises are coming from behind as well as in front, it makes it harder to resist.

As for the home team, I hope that my colleagues will not mind if I single out, first, Sarah Pughe in the Lib Dem legislative team, who has done a magnificent job supporting us. Among Members, I would mention the noble Baronesses, Lady Bowles, Lady Berkhamsted, Lady Northover and Lady Smith of Newnham, the noble Lords, Lord Bruce of Bennachie, Lord Campbell of Pittenweem, Lord McNally and Lord Purvis of Tweed, and, last but no means least, my noble friend Lord Clement-Jones, who has been here in support. I hope that we do not have to come back—I hope the Government see sense on that amendment. That said, the Bill leaves this House in a much better state than it arrived in.

13:43

[Lord Bilimoria (CB) [V]]

My Lords, from the Cross Benches I join previous speakers in thanking all the House of Lords officials and the Bill team.

As we have previously outlined, the Bill has a valid and important principle at its heart: the protection of national security and the lessening of economic interference in industrial control by hostile actors. Nobody would disagree with that intention, and the business community is no different. The CBI, of which I am president, supports those principles and stands ready to help make a success of the new regime. We have heard from a wide range of businesses likely to engage with the regime, many of which have complex international supply and value chains and all of which recognise the need for such regimes and already comply with counterpart regimes across the world.

However, to make a success of such a regime in a manner that reflects the approach of many of our international counterparts, the concerns of a wide subsection of the business community should continue to be heard. As I have noted previously, the extra- territoriality of the Bill, combined with no set de minimis function, could inadvertently lead to a real rise in bureaucracy at micro level and slow inward investment at macro level, so it is critical that the Government continue to engage with business and industry on the practical application of the regime. The fast-track processes and expert advisory panels that have been discussed are a very welcome move. The amendments moved by the noble Lord, Lord Callanan, on future reporting on the progress of the regime and on omitting the 15% threshold for significant control are also welcome.

Business welcomes the Bill, and I give credit to many noble Lords who have taken part, including the noble Lord, Lord Leigh, the noble Lord, Lord Clement-Jones, the noble Baroness, Lady Noakes, the noble Lord, Lord Lansley, and the noble Lord, Lord Hodgson —I could go on. The more detailed reporting requirements provide more clarity on the average processing or decision time for notifications, whether mandatory or voluntary. Business has been concerned about the transparency of the statutory process, so we welcome the Government’s reflection of that in the Bill. Moreover, the removal of the 15% threshold for significant control is welcome, as, while such a percentage may represent a critical investment in other areas, it is unsuitable when applied to significant control more widely.

Looking ahead, the spirit of dialogue that has allowed such amendments to be moved should continue to ensure that both business and government are equipped to make a success of the regime. This Bill shows the House of Lords at its best: it has greater strength by far in depth and breadth of world-class expertise than any other Chamber in the world. This Bill has seen this skill applied on a cross-party basis, enabling this House to play its role as a revising Chamber to help change legislation for the better. This can only happen, however, if the Government are prepared to listen—which they have. We are grateful to the Government, and long may the spirit of collaboration continue.

13:46

[Lord Callanan (Con)]

I thank noble Lords for their kind words and renewed support for the Bill. Empathy is not something I normally get accused of—I am sure that the noble Lord, Lord Fox, did not have his tongue in his cheek, so I will take that as a compliment. As I said earlier, there has been genuine cross-party enthusiasm for the Bill and, with the exception of one important detail, I have been heartened by the House’s desire to get it on the statute book. The debate has been excellent and shows the finest traditions of this Chamber.

I will certainly take up the suggestion made by the noble Lord, Lord Fox, for my considerable reading list. My in-tray is very high at the moment, but I will look at the article he referred to, and I am sure that it will enhance my understanding of the subject. For a final time, therefore, I beg to move.

13:47

Bill passed and returned to the Commons with amendments.