National Security and Investment Bill

Baroness Smith of Newnham Excerpts

Committee stage
Tuesday 16th March 2021 Lords Chamber

[Lord West of Spithead (Lab)]

My Lords, I am going to be using secondary rather than main armament for this particular amendment.

I see Amendment 91 as more of a probing amendment than anything else. It is in fact a direct recommendation from the HCDC report, Foreign Involvement in the Defence Supply Chain, which came out last month:

“The Ministry of Defence’s open and country-agnostic approach to foreign involvement means that the defence supply chain has been open to potentially hostile foreign involvement, with reports of companies being owned and influenced by foreign Governments whose values and behaviours are at odds with our own”.


That is, of course, part of the whole point of this Bill. It also said:

“The Ministry of Defence should publish a list of countries it considers friendly and from whom investment should be encouraged. All those countries falling outside of this list should be barred from investing in the UK’s defence supply chain”.


The committee’s reasoning was that these companies, particularly the SMEs and smaller companies, need to know because they do not have the ability to initially assess the risk of dealing with some of the countries with which they often come into contact, and it was felt that this needed to be made clear. This would mean that time and money would not be wasted pursuing contracts and deals that were not going to be allowed. It all relates to that high degree of certainty to which so many of the amendments discussed today have related. I need say no more than that.

[Baroness Smith of Newnham (LD) [V]]

My Lords, this is my one foray into the National Security and Investment Bill, and I am speaking to Amendment 91, in the names of the noble Lords, Lord West of Spithead and Lord Alton of Liverpool, and myself.

As the noble Lord, Lord West, pointed out, this is in many ways a probing amendment, but it is very important. The relevance is clear: the HCDC report talks about the presence of Chinese business already in the defence supply chain. It goes slightly wider than that; anyone who has been in the armed services or happens to be in the Armed Forces Parliamentary Scheme might have looked at the labels of the uniforms—the camouflage—and noticed that they were made in China. I have always thought it slightly strange that NATO-issued uniforms should be made in China, but that seems to be the case. That does not necessarily endanger our national security, but it does raise some very odd questions about what we are actually doing and why we are purchasing kit from China. The HCDC notes that seven companies in the defence supply chain have been acquired by Chinese companies; that at least needs to be looked into.

This is a very modest amendment, which asks for a report. It does not go quite as far as the HCDC recommendation, because it does not say that other countries should be barred from investing in the supply chain, but will the Minister consider what signals the current approach to allowing investment in the defence supply chain sends, particularly on the day that the integrated review has been published?

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

The next speaker on the list, the noble Baroness, Lady McIntosh of Pickering, has withdrawn from the debate, so I call the noble Lord, Lord Fox.