National Security Bill

Baroness Hayter of Kentish Town Excerpts

Committee stage
Monday 16th January 2023 Lords Chamber

Option 2, the clause stand part propositions in my name, acknowledges that the repairs to these clauses are too extensive to be done in-flight and that they are an unnecessary part of a necessary Bill. Yes, our lobbying laws need tightening, but this is not the way to do it. These clauses risk diminishing our national standing without enhancing our national security. We can attempt a last-minute fudge, but I wonder whether that could really be a substitute for a clear and considered plan. We should keep the enhanced tier by all means—it is important—and put the primary tier out of its misery.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I declare my interests, as I did before, as a board member of the ABI and a member of the Labour Party.

I thank the Minister for his preliminary responses to my letters. Given that I sent them to him on a Sunday, I am immensely impressed that he has already given us some answers today, even though I found the answers staggering and more worrying. There is an expression about using a sprat to catch a mackerel; I rather think that the Government are using a whale to catch a minnow. They have this completely the wrong way around.

However, in the spirit of that very rapid response to my letter, I hope that on the specific issue of political parties the Minister will agree to meet, not just with the Labour Party but with representatives of the other parties, to discuss how this could work in practice, because some of the things he said about parties influencing other parties could have absolutely nothing to do with national security. The example I gave before was that, as a member of an international party organisation, we might indeed be thought to influence who would be chosen as, for example, president of the Party of European Socialists. That has absolutely no national security implications but, clearly, from what the Minister has said, it would be caught by this. So if, when he comes to respond, he could agree to meet with the political parties, that would be helpful.

Turning to what is in front of us, as the noble Lord, Lord Anderson, said, I have added my name to the proposition that Clauses 66 to 70 should not stand part of the Bill. I am very conscious of the fact—as I am sitting quite close to the noble Lord, Lord Wallace—that some of this sounds very much like familiar territory. Before the Minister was in the House, when I was on the Front Bench, I tried to amend the lobbying Bill to ensure that it included in-house lobbyists, not simply consultant lobbyists, which might have tackled some of issues that now concern the Government—that is, knowing who is lobbying Ministers. That surely is the important aspect of it, although the present Bill goes much further than that. The then Minister, the noble Lord, Lord Wallace of Saltaire, absolutely and I think very unwisely declined to take my amendments to give that Bill some real teeth. I think we got them past this House, but they were kicked back and he would not agree to them. I am therefore delighted that he is about to speak after me and I hope he will do a “mea culpa” at that point and admit that “we was right” and he was wrong.

However, today we are talking about far more than just lobbying—although it is interesting that that was how the Minister introduced this group. We are now seeing an attempt to set up an enormously enlarged register, compared with what was set up under the domestic Act. It would not only encompass dealings with a wide range of opinion formers or decision-makers, and in fact a large number of non-decision-makers, but require registration or reporting—the Minister’s answer to me earlier was about registration; I also asked about reporting—from a swathe of bodies and individuals from across the globe.

We have heard, as my noble friend has already mentioned, of concerns from business and academia, but there are also concerns from visiting party officials, international NGOs and many others. If I have read government Amendment 98 correctly, however—which we will come to in a later group—the list of UK persons with whom communication could be classed as a “political influence activity” covers our own employees, if you are lucky enough to have any. It also includes an officer, trustee or agent, and even some members of a political party, which could even include a constituency vice-chair, whom those of us in political parties know is quite a minnow within the political hierarchy. It could include an election candidate, even in a hopeless seat—not that Labour has any hopeless seats these days. Does that mean all election candidates? It is the most extraordinary catch-all that the Government are setting their sights on. We are going to come back to that list later, but it is relevant because it explains why we are concerned about the clauses that some of us would like taken out of the Bill.

As the noble Lord said, I referred last week to Clause 30 and political parties, even those coming from our close allies in NATO. They were defined as being “foreign powers”—although, as he said, there were some exemptions if you were in government. That means that Opposition parties seem to be in a worse position, even though they may have no power in that country, because they would have to register if they tried to influence any of us or our employees, local government and all sorts of other people. So we have more questions and, if the Minister agrees to a meeting, we could discuss what exactly they are trying to get at. Is it that all political parties are bad, or are we interested in the issues on which they are trying to lobby? It would be useful to know what exactly this is aimed to catch.

In relation to business, very serious concerns have been raised by member firms of the ABI, by banks, by the pharmaceutical industry, as we have heard, and by other major importers, exporters, service providers and investors. Needless to say, many of their overseas colleagues and partners will meet with influencers, opinion formers and decision-makers while they are here in the UK. That is not just visiting politicians but many of those who turn up, for example, at our party conferences or at seminars held by a wide range of organisations. While they are there, they tend to bump into people like you and me, because that is where we are also going. So, as soon as they come here and go to a meeting and find that one of us is there, they are liable to have to report that, even though that was not the purpose of their visit.

So the question really is: do the Government really, in the name of national security, want us to either ourselves record, or ask those people coming in to record, all those exchanges, on pain of criminal sanction if we fail to do so? I know this is an aside, but this is coming from a party that has perhaps not been too fussy about the amount of money it has taken from people with very close Russian contacts. It is a little bit odd.

The Minister did refer to Russia but why, if we are aiming at Russian influence, are we going for that enormous wide range? It was this Government who refused my attempts to stop expats being able to fund our political parties. Again, if we want to cut influence on our political parties, why not go at that and overseas money rather than try to catch all the exchanges that take place in everyday life?

Whether this is a whale rather than a minnow—or whichever way round—this feels to me not even like a sledgehammer to crack a nut, but like a great big sledgehammer aimed at a tiny seed. If the Government are worried about Russian, Chinese, ISIS or North Korean activities, why not go for them? Why are we looking at Swedish investors, Belgian NGOs, Dutch political parties, EU visitors, Spanish bankers or German academics, all of whom could be caught up in this?

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[Lord Purvis of Tweed (LD)]

Before the noble Baroness sits down, would she perhaps give permission for us all to receive the Minister’s response to her letter? He is saying from a sedentary position that he will circulate it; if that is acceptable to her, it would be very helpful. He said at the outset that if we, as Members of this House, carry out activities for a foreign organisation of which we might be a member which receives direct support from a foreign principal—we could be a trustee of an organisation funded by the Gates foundation, for example, and there are many other examples—for us to engage with each other, we will now have to register. That is why I think the response to her letter could be so significant, as that is what I took from his comments.

[Baroness Hayter of Kentish Town (Lab)]

The Minister will understand that I cannot possibly answer this question because then we would have to record the conversation. To be serious, in fact, my letter to the Minister, which included a lot of questions, did ask that he circulate it to the Committee and not just to myself.

[Lord Wallace of Saltaire (LD)]

My Lords, my name is on several of these amendments. I should perhaps say that I welcome and support those in the name of the noble Baroness, Lady Noakes. Two amendments of mine are also concerned with ensuring that the interests of charitable bodies, commercial bodies, universities and policy researchers should be specifically catered for and excluded from some of the purposes of the Bill.

However, I want to talk more generally about Part 3 as a whole. I thank the noble Baroness for her back-handed compliment. There are, of course, parallels between the transparency of lobbying Bill in 2013 and this Bill. There were those who pushed me as the then Minister to exclude a substantial number of bodies and persons from that Bill; others were pushing for the inclusion of a lot more than we had. It was not easy to strike the appropriate balance between ensuring full transparency on what was going on and not pulling too many people into the net. The question of identifying who the lobbyists were was one of the more difficult elements with which we had to be concerned. On that occasion we agreed to pause the Bill.

I should also say that it was not simply the Labour Opposition; indeed, concern about that Bill was very much on the Cross Benches, led by Lord Ramsbotham, sadly no longer with us, and the noble and right reverend Lord, Lord Harries of Pentregarth. We paused the Bill for three months, consulted more widely and came back with amendments. The Bill was then carried in an improved form. It was not perfect; it is impossible for a Bill of that sort, or this sort, to satisfy all accounts because we are trying to strike a balance between a range of different objectives. It would be wise for the Minister to manage the policy statement and the pause for greater consultation; they should take up rather more time than is currently considered.

The Minister will have seen the Politico report last Thursday that suggested widespread concern in commercial and business circles about this Bill. The noble Lord, Lord Ponsonby, has already said how many comments and criticisms we have had from a range of different circles. I came to the Bill entirely from the point of view of think tanks, universities and the policy research sector. I had not expected to get such immediate responses from the City, law firms and others. We are now all aware of the widespread concern that the Bill will catch more than it was originally intended to. But there is more than that. I shall quote from one of the letters I have had: the Bill

“is essentially the proposed bureaucratisation of lawful and useful non-hidden international engagements. Influence is not covert just because it is not public: all policy makers and organisations rely on private interactions.”

I was thinking, as I looked at my newspaper this morning, what those Brits who will be attending the Davos Forum will do about what they report back, as one has private conversations with a range of people. Perhaps we should make sure that Keir Starmer and whoever else is going do indeed fill in all the forms as they come back.

Before I go further, I should comment on the Minister’s insistence, in our last sitting, that the Daniel Houghton case justifies the inclusion of the Netherlands alongside North Korea, China, Iran, Russia and others in the primary tier of foreign powers. I see that the case was in 2010. I have said at previous sittings that the issue of dual nationals and diasporas, both in Britain and elsewhere, is one of the complications of the Bill that I hope the Minister will address in our consultations. I mark, in passing, that Daniel Houghton was a Dutch-British dual national. He was a computer engineer employed by the SIS. He downloaded some SIS files and tried to sell them to the Dutch intelligence authorities. They immediately informed the British and he was arrested, convicted, given a 12-month sentence and served six months in prison. I am not sure that this one case justifies the imposition of the full regime on the Netherlands, in the same way that it is imposed on other countries.

I pick the Netherlands because traffic between it and the United Kingdom is probably closer than any other county apart from Ireland, even more than the United States, because it is so near. I recall being told by some senior Dutch politicians that a great many members of the Dutch elite have second homes in the south-east of England and send their children to British universities. I remember being told by a chief constable from North Wales Police that he needed to have more than one police officer who spoke Dutch because, when camper-vans break down in the summer, they need to have someone who can interpret. The extent to which British companies depend on the Netherlands has been increased by our leaving the European Union. I was told at a meeting of donors to my party the other week that several of them have opened offices or warehouses in the Netherlands to be inside the EU. It is not a country with which we have limited interaction.

To say that we need to have all the interactions which may involve political influence recorded is almost to suggest that, to find the needle in the haystack, you need to examine each strand of hay separately and then in time you will find the needle. You would of course destroy the haystack and damage the hay, and detract immensely from the normal business of the farm. To that extent, it is grossly disproportionate, and our concern with the Bill is that aspects of it are grossly disproportionate.

I read again through the supplementary Explanatory Memorandum over the weekend and I remain confused about many aspects of the Bill. I am worried about the imprecision of some of the language—the “informal” arrangements, the indirect control and those other phrases which, not being a lawyer, I do not entirely understand. I seek some reassurance from our legal colleagues that it is possible to make sense of some of these provisions. There is a reference at one point to the “scheme management unit”. I wonder if the Minister could tell us how large the Home Office thinks the scheme management unit will need to be when all these reports flow in. I suggest that it will need to be extremely large.

I am not entirely clear on how the specified persons come into the expanded bit. Can the Minister give us any rough idea of how many of the 190-plus UN member states it is envisaged would be specified by the Secretary of State in this? Would it be 10? Would it be 100, 150 or 190? That would clearly make a great deal of difference to the sort of regime which we are likely to have imposed. These are real concerns for those who are looking at the Bill from the outside.

The examples did not reassure me in understanding the Bill. Funding for UK think tanks is mentioned, as are NGOs from abroad attending all-party parliamentary groups and some of the activities of foreign academic institutions. All apparently come into the net. This requires much further consultation. We all recognise that there are serious foreign threats to this country, that some of these threats are new because technology and communications have enabled new methods of subversion, and that we need to deal with them. But we also recognise that the United Kingdom is an open society and an open economy, and we need to preserve the best aspects of our openness to the rest of the world. That is the balance that we have to strike.

One category left out appears to be multinational companies not controlled by foreign states, along with foreign foundations and the super-wealthy. I argue again that these are also, potentially, sources of severe foreign interference in UK politics which may well be hostile to UK interests. If one is talking about British interests in the broadest sense, as the Bill does, I recall that major tobacco companies have funded institutes in Britain to lobby against tighter control of tobacco selling and health regulation. Oil companies have funded think tanks and others to lobby against measures on, or even to deny, climate change. Foundations with political agendas have supported the establishment of new right-wing societies in British universities. Those are also threats which we should not necessarily ignore.

I suggest strongly to the Minister that, in view of the concerns which have been so widely expressed across the commercial and non-commercial worlds, we should take the time now to ensure that the Bill strikes the right balance, that we get it right and that we do not get it through necessarily as fast as the Government would have liked.

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[Lord Hope of Craighead (CB)]

My Lords, perhaps I could just add a footnote to what the noble Lord, Lord Clement-Jones, said—not along the lines that this paragraph of the schedule should be withdrawn but to draw attention to what I think is a defect in it, which illustrates the point that some of the details of this scheme have not been thoroughly thought through.

The point I want to make arises under paragraph (5)(4)(d), which exempts, as part of an example of “legal activity”,

“acting as an arbitrator or mediator.”

The exemption applies only if the person acting as an arbitrator or a mediator is a lawyer within the definition provided in paragraph (5)(3). Many people who act as arbitrators in technical cases are engineers or architects—people who are not qualified as lawyers but provide a valuable service in the whole scheme of arbitration on technical issues. It is quite common to find a panel of three arbitrators where one is them, perhaps, is a lawyer and the others are people with particular skills. I do not understand why, if there is going to be an exemption in relation to acting as an arbitrator or mediator, it should not cover anybody acting as an arbitrator or mediator, whatever his or her qualification might be.

Perhaps the Minister could explain at some point why it is only in the case of lawyers that arbitrators or mediators are to be exempted from the requirement to register. It would be interesting to know the reason because, otherwise, we will inhibit commercial activities and that would seem to be undesirable. I throw this out just as an example of what was referred to by some commentators as a rather slapdash approach to drafting. This issue needs to be looked at so that we can understand exactly what the purpose of this exemption is.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, as we are in Committee, I think one can intervene a second time. I just want to ask the Minister about one of the questions I put about political parties; I think it also arises now, from what the noble Lord, Lord Carlile, said. It concerns the confidentiality of all these masses of reports. What privacy protections will be there if this measure goes ahead?

[Lord Purvis of Tweed (LD)]

My Lords, the best estimate of cost is £47.8 million. The high estimate is £62.4 million. In addition:

“FIRS could discourage business activities if the costs of compliance are considered too high. There is a risk of negative reputational impacts from inclusion on a public register. Other countries may introduce reciprocal measures to regulate the overseas activities of government and businesses. Persons could be prosecuted if engaged in unregistered activity, even if the activity itself is legitimate.”


“Benefits were not monetised … While there are many entities which would fall within the definition of a ‘foreign principal’ or ‘foreign power’, it is difficult to determine how many people are being directed to undertake registerable activities on their behalf, or how many people would qualify for an exemption under the scheme … There is also a lack of understanding around how likely the positive and negative impacts are … it is not known how likely it is that the benefits or impacts will occur, or how significant they are likely to be. It is also important to note that much of this feedback was provided before the scope and exemptions within the scheme were finalised.”


“It is acknowledged that the number of people who would be affected by the scheme in terms of registration and familiarisation is unknown … Due to the offences and penalties associated with non-compliance with the scheme, organisations that are ultimately out of scope will still need to be aware of the FIRS regulations to ensure they are out of scope, both currently and for future activities … members of the public will need support in fulfilling their registration requirements.”


“There is a risk that the scheme may have a disproportionate impact on small or micro-businesses (SMBs). There is a risk that SMBs, without established regulatory compliance procedures, won’t register with the scheme and could then be prosecuted. It is not known how many SMBs will be in scope of FIRS … With more time, a more extensive commission could have been sent to departments.”


The high estimate is that more than 371,000 individuals will need to be familiarised with the scheme, but:

“Home Office anticipate that there will be a relatively small number of cases per year for FIRS (less than five).”


Those are all direct quotes from the Government’s impact assessment on this scheme from October 2022. That impact assessment is the least ringing endorsement of any piece of legislation that I have seen in this House for 10 years. More than 371,000 people will need to be familiarised with a scheme that will have five potential cases per year and, of course, the scheme was not consulted on. To be fair to the Home Office, I read the consultation document from 2021. The principle of a FIRS was in it, but this scheme was not. It is in many parts a direct lift from FARA in the United States, or the FIT scheme.

However, the Government have been very coy about the areas where they have not chosen to follow. The noble Baroness, Lady Noakes, indicated the commercial enterprises. The Government have not said why they chose not to follow the United States’ example of the exemption of bona fide commercial activity and other activity not serving predominantly a foreign interest. Therefore, the whole gamut of the points that she and others have made in this House will be covered by this scheme and not that scheme, but why is not indicated. In fact, the Government’s own impact assessment goes beyond that, saying that they do not know how many small businesses will be affected by it, yet the impact assessment of the overall Bill and of this scheme says that there will be 25 people in London operating the scheme at a cost of nearly £50 million. This spider’s web is a very expensive one, and not many hornets will be covered, as the noble Lord, Lord Anderson, said.

The other exemption that the Government have not indicated having referenced before concerns the US exemption on religious, scholastic, academic, fine arts or scientific pursuits. There has been no indication as to why the Government have chosen not to follow that route. There is not a bishop on the Bench, but any Anglican community in or established church from another country interacting with one of our bishops will have to register on this scheme, because there is no religious exemption for it. Any community in this country carrying out what they believe the Pope has asked them to do for campaigning, on what they believe are humanitarian grounds, will have to register under the scheme. Any of us, or any MP, who is encouraging others to support a Ukrainian NGO charity, as the noble Lord, Lord Carlile, indicated, asking us to support Ukrainians for the resettlement scheme will have to register on the scheme.

This is likely to be a scheme that helps oppressors around the world far more than it helps our Government to secure national security. It is no surprise to me that both Hungary and El Salvador cited with great enthusiasm the US scheme as a mechanism to find out what those in other countries are doing to encourage human rights and civil liberties at home.

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The Australian scheme includes former Prime Ministers—we heard the concerns about Kevin Rudd. Why did this Government choose to cut and paste from Australia but exclude former Prime Ministers?

[Baroness Hayter of Kentish Town (Lab)]

There are a lot of them.

[Lord Purvis of Tweed (LD)]

There are a few, but 25 members of the Home Office are going to be monitoring this database, and a fair amount of their time might be taken up with David Cameron’s and Tony Blair’s international activities. What was the reason for differentiating from the Australian scheme?

We have heard concerns about the British Academy, universities, INGOs and NGOs, trade, and those seeking contact with FDI and the ABPI. It will render the work of our Prime Minister’s trade envoys that much harder when any interaction with an entity from a country with which we are seeking a better trading relationship now has to register in advance their contact with a trade envoy, not only for perfectly legitimate activities but for activities encouraged by the Government. We have also heard the concern from the ABPI that it will have to register the preparation and planning of meetings beforehand.

At the start of Committee, I indicated that our Benches did not see this part of the Bill as having been properly prepared. The details have not been consulted on and we believe that the Government should pause it. We said at the start of Committee that it may find a better home in the Economic Crime and Corporate Transparency Bill, if it is being reworked. It may be that we move for this to go to a Select Committee for further consideration or to be taken out of the Bill. We do not want to disrupt the Government’s moves to improve national security or to weaken the ability of our country to have national security. We also do not want to weaken our interaction with trade, investment and human rights, or—I say this as someone with no faith—our proper interaction with many faith groups, which will now have to register all of this activity within the Bill.

I hope that the Minister will say today that the Government are going to think again, pause and come back, not just by saying that more information will follow but with a commitment to consult on the specific schemes and work with us to bring back workable solutions.