National Security and Investment Bill

Baroness Bennett of Manor Castle Excerpts

Committee stage & Lords Hansard
Tuesday 2nd March 2021 Grand Committee

[Baroness Noakes (Con)]

My Lords, at Second Reading, I said that I felt that a lack of definition for national security was a problem, and I still feel uneasy about that. I understand the need for flexibility to take account of how threats evolve over time. My noble friend the Minister said at Second Reading that national security was not defined in other legislation, but I am not sure that is quite good enough, given that this legislation will have a particularly big impact on commercial transactions, and what the business sector needs is certainty. Other uses of the term have not had that sort of impact on business transactions. I completely understand the difficulties of definition—problems of being too restrictive or insufficiently comprehensive. I think Amendment 13, in the name of the noble Baroness, Lady Hayter, is a better approach than Amendment 1 with its objective clause, but I am concerned that it may still carry some of the defects that I outlined when I spoke to Amendment 1.

The statement that the Secretary of State will make under Clause 3 will certainly help businesses and their advisers but, at the end of the day, national security is the big overarching concept in the Bill which is left without further detail. Several noble Lords have already referred to the letter from my noble friend the Minister to all Peers, which came out while he was speaking earlier. I have had an opportunity to have a quick look at it on my iPad, and I do not think that any Member of the Committee will find that it advances our consideration of the Bill this afternoon at all: it just says that there is a lot more work to do.

If there is no definition or further elaboration of what national security means in the context of the powers created in the Bill, the Government will be giving the courts a blank sheet of paper if, as is probably likely, at some stage a challenge to the use of the powers under the Bill is mounted in the courts. We must remember that we have an activist judiciary, especially over the road in the Supreme Court, and the Government really ought to be alert to that fact and try and proof legislation against what can be done there. I shall be listening very carefully to what my noble friend says are the reasons for leaving national security as such a completely open issue in the Bill, and I look forward to hearing his remarks.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I should perhaps begin by noting my position as the co-chair of the All-Party Parliamentary Group on Hong Kong. The noble Lord, Lord Fox, in opening this Committee, said that most of the amendments were seeking better to describe national security. The noble Baroness, Lady Hayter, said that, without a definition, the Bill is missing a vital ingredient. It would indeed be interesting if, as the noble Baroness, Lady McIntosh of Pickering, said, we were to continue to use the EU definition. My personal position is that we should keep as close to the EU as possible, but that has not seemed to be the Government’s position.

The noble Lord, Lord Fox, noted how successive Governments of different hues had taken a hands-off approach to mergers and acquisitions, those involving both national and international assets. We have had, to an extent matched by few other countries in the world, a “Robber barons welcome” sign out in the process of selling off the family silver in a veritable orgy of privatisation and financial isolation. That has clearly had an impact on public order and national security.

I will not let rip with a Second Reading speech—something that the noble Baroness, Lady Noakes, expressed concern about—but will point out that “have regard to” clauses are at the very core of democracy. If the Government are taking new or extending existing powers, for there to be democratic oversight there surely needs to be an outline of how those powers will be used, a legal framework against which a Government can be held to account, should they go off the rails. As the noble Baroness, Lady Noakes, just said, that does not reflect an activist judiciary; rather, it is one doing its job and fulfilling its constitutional role.

We know that the Government do not like to have such oversight, both democratic and legal, but it is surely the responsibility of this Committee to attempt to insist on it—for nothing more than national security, because of the degree to which it was not secured by previous Governments, having been exposed by the Covid-19 pandemic and imminently threatened by the climate emergency. I will address some of those national security concerns in my Amendment 93, which we will get to later, but I speak now on Amendment 13, in the name of the noble Baroness, Lady Hayter. I thank her for her clearly careful and detailed work on it. I will not address all its elements, but focus on a couple of paragraphs, particularly proposed new paragraph (b)(iv),

“enabling a hostile actor to … corrupt processes or systems”.

There is grave concern about the impact of big money on our quasi-democratic processes, particularly in the age of social media. These are so well known that I do not need to expound on them at length, but I will point to how the 2010 national security strategy already referred to such concerns, and they have obviously greatly grown since. Even in our conventional media, we have a quite astonishing concentration of media ownership, often foreign or offshore. That surely needs to be acknowledged as a national security concern. I note the comments of the noble Baroness, Lady Hayter, about how Amendment 2 seeks to address such issues.

I also point to proposed new paragraph (f) in Amendment 13, which is about

“the likely impact of the trigger event on the United Kingdom’s international interests and obligations, including compliance with legislation on modern slavery and compliance with the UN Genocide Convention”.

This has obviously been of great concern to your Lordships’ House; we reflect on the debate around the Trade Bill. These are surely national security concerns. They are not just moral issues, but of great effect to our national security. A stable world, in which no one is subject to genocide or held in slavery, is a world that is far more secure for every citizen of the UK and the nation as a whole.

I come to proposed new paragraph (g) on

“organised crime, money laundering and tax evasion”.

The security of funding for schools, hospitals, roads, police and all the other services on which we rely depends on companies in our society paying their taxes. When it comes to money laundering, we have seen, in many aspects of our society and internationally, the disastrous impact of dirty money—something that, in some societies around the world, has led to almost a total state breakdown.

Overall, having such a set of definitions, as many noble Lords have said, has been of help to the Government, giving the relevant Minister a list against which their decisions can be checked. Without such a list providing an explanation against its clauses, how can a Minister avoid accusations of corruption, malfeasance or simple neglect of duty?

I am pleased to attach my name to Amendment 83 in the name of the noble Baroness, Lady Hayter, also signed by the noble Baroness, Lady Northover, which refers to the integrated defence review. It is a great pity that we are forced to debate the Bill without that. It is a situation in which we find ourselves in many areas of government work. The reasons for ensuring that we have a tight interlinking between the review and the Bill have been clearly outlined by the noble Baroness, Lady Northover, so I will not go into them further.

--- Later in debate ---

[Baroness McIntosh of Pickering (Con)]

I am delighted to move Amendment 6 and I thank my noble friend Lord Hodgson of Astley Abbotts and the noble Lord, Lord Clement-Jones, for lending their support to this amendment. I also thank the Law Society of England for its help in drafting the amendment, and I very much look forward to my noble friend Lord Callanan keeping up his good efforts this afternoon in responding to this debate.

We have not so far succeeded in coming up with a definition of how to limit our understanding of a definition of national security, so I shall approach it by a different route, which is to try to understand, define and limit what constitutes a trigger event. In the view of practitioners, as expressed by the Law Society of England, this amendment is needed as it would ensure that “national security” in the Bill will not be conflated with other issues of political or industrial concern which cannot be seen to relate to security but would still be flexible enough to allow for genuine national security threats to be deemed to be trigger events. I suppose this relates to my noble friend’s earlier comment in summing up a previous debate when he said that trigger events or national security relate to the whole economy, not just parts of it.

The purpose of Amendment 6 is to understand what constitutes a trigger event that would be deemed to lead to or constitute a security risk. It is in terms of being critical to investor confidence in the United Kingdom that the new regime is seen to be focused clearly on national security concerns and free of industrial or electoral influences not relating to national security. Therefore, the Bill would benefit from a clause such as this, explicitly stating the factors that should not be taken into account in assessing whether a trigger event would give rise to a national security risk. I set out here that the factors that would be excluded would cover any,

“adverse effects on levels of employment in the United Kingdom”,

or,

“the existence or extent of opportunities for persons resident or established in the United Kingdom to invest in, or make sales in or into, another jurisdiction”,

and the desire to protect UK businesses from international competition.

I accept that the amendment might not be necessary if we had established a definition for national security but, given that we have not achieved that, I am keen to press this as a probing amendment and include a clause such as this in the Bill, thereby making clear that certain factors such as employment effects, reciprocal investment and trade, and protectionist connections would not be deemed to be trigger events. With that brief explanation, I beg to move.

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady McIntosh of Pickering, with whom I am often in agreement—although, I am afraid, not in this case.

In my little over a year in your Lordships’ House I have noticed a strong tendency for Members to sign up to speak on amendments that they support and not those that they oppose. However, this has a clear and damaging effect, and slants the debate. Proponents get to put their case and the Government attempt to bat it away, often on merely technical grounds, and only one side of the argument is put. That sets the tone of the debate beyond just that day; it unbalances it. There is also the issue that, on Bills such as this, as a noble Lord said earlier, we often have an accountant followed by a banker followed by a lawyer. That is not a representative sample of society or opinion. It is for that reason that I signed up to speak on the amendment and express my strong opposition. I will be brief but clear.

The earlier groups of amendments on which I spoke, including Amendment 2, sought to define the national security on which the Bill seeks to allow the Government to act. The amendment does the very opposite by seeking to restrict the Government’s hand. The former amendments were “have regard to” amendments. This is a “shall not be taken into account” amendment. It is extremely ideological and seeks to assert the primacy of the market and the interests of business—which, by definition, given the nature of the Bill, is almost certainly big business, giant multinational companies—over what might be regarded as a key concern of the Government regarding employment. That is also, I would strongly argue, a national security issue—certainly a public order issue—with regard to Amendment 2.

The market is a human creation, not some natural process or action such as photosynthesis or the tides. To say that the market should have primacy over the well-being of society is a profoundly ideological argument that would have been very strange for most of the 20th century and reflects a particular neoliberal political position. Again, we are back to talking about investor confidence and the idea that we have to be a competitive nation—the very ideology that led us to the 2007-08 financial crash.

[Baroness Noakes (Con)]

My Lords, I respect the opinions of the noble Baroness, Lady Bennett of Manor Castle, but she will not be surprised to find that I do not agree with a single word of what she said. I agree with the sentiments behind Amendment 6, but I expect that the Minister will say that the amendment is unnecessary because the items listed in it could never be considered to be national security considerations. If I am correct in that assumption, I hope that he will make a very clear Dispatch Box statement to that effect, with no hedging about or qualification.