National Security and Investment Bill

Baroness Northover Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 4th February 2021 Lords Chamber

[Baroness Northover (LD) [V]]

My Lords, the Bill addresses the real concern of the need to safeguard UK national security and reflects the changing nature of threats to that. Indeed, there is much concern now about the rise of China, as my noble friend Lord McNally has just noted. There are clearly both opportunities and threats here. The debate over Huawei reflected this concern, as did Chinese involvement in our energy infrastructure. The concern that our technology might be stolen is also a huge area.

Devising a legal structure that deals with these potential threats has clearly been a challenge. The Law Society of Scotland points out that:

“It is a complex task to create a system which will balance the need to maintain an open business environment and promote fair competition with the need to protect national security.”


There is a real risk that the Bill will constrain investment into the United Kingdom—as the noble Lords, Lord Leigh and Lord Bilimoria have just said—at a time when, post Brexit, that is necessary, or that the EU might regard us as protectionist and penalise us. Clarity and transparency are therefore clearly vital.

As my noble friend Lord Clement-Jones and the right reverend Prelate the Bishop of St Albans pointed out, national security is not defined, and this therefore leaves much in the hands of Ministers. Difficult as it will be, a definition is surely required. There is huge scope in the 17 sectors which fall under the Bill. Given all the other pressing matters that the Government will have to deal with post Brexit and post coronavirus, their unit is likely to be overwhelmed. On this point, I agree with the noble Baroness, Lady Noakes—a rare event for me. Companies and their lawyers are indeed likely to err on the side of caution and refer themselves in. The Government have probably made a gross underestimate of the number of cases they will need to assess here. The Government have said that they will bring detail through secondary legislation, but that is itself concerning, as this is presented to Parliament on a “take it or leave it” basis.

As for where we see security challenges, we have already seen concern during the pandemic about overreliance on China; for example, for PPE. Who would have thought that cotton could be seen as a national security question? We must add in the Foreign Secretary’s recent announcement that businesses must, rightly, examine their supply chains and not source from the labour camps of Xinjiang or other centres of human rights abuses. We cannot rely on such appalling sources. Given that much PPE may have originated there, the challenge becomes even clearer.

The integrated review of the defence and security of the United Kingdom should surely have preceded this legislation, so that we could see what the Government think are the major threats facing the country: whether cyber, pandemics or other threats. Will the noble Lord tell us when that review is now expected, so that we can look at it alongside the Bill? The pandemic and Brexit have indeed shown us the risks of outsourcing as much as we now do.

How does the Bill sit with any industrial strategy? As my noble friend Lord Clement-Jones noted, we need that too, to understand better the key areas in the UK economy and the threats to them. In 2012, when my right honourable friend Vince Cable drew up his industrial strategy, he emphasised the biosciences. Investment in the Crick Institute, Oxford, Cambridge, Imperial, and elsewhere was increased, and that has paid off in spades in this pandemic, where we have led the world in genomics, vaccine research and much else.

We understand that the integrated review will also emphasise the UK as a science or bioscience power. Tackling climate change must also be part of that, for the UK but also globally. However, we also know that these are areas where China intends to excel, and surely has the resources to do so. China has disproportionate control, for example, over the minerals required for electric vehicle batteries and wind turbines. So, are these areas where our security is at risk? If so, how will the lines be drawn? How will our universities and research centres be impacted by the Bill, as others have asked? The Russell Group points out that they drew in investment worth over £1 billion in 2018-19, and they are concerned about the scope of the Bill, about uncertainty and delays.

This is a challenging area. There are, indeed, new threats to the UK that were not anticipated when the Enterprise Act was passed in 2002. The balance between encouraging investment and maintaining security needs to be carefully considered. As other speakers have said, there are questions here whether the structures proposed will manage adequately to support that investment while also defending national security. I therefore look forward to the Minister’s response.

National Security and Investment Bill

Baroness Northover Excerpts

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

[Baroness Northover (LD) [V]]

My Lords, the noble Baroness, Lady Hayter, laid out in her opening remarks the necessity for clarity about what risks this Bill seeks to address, arguing for a definition of national security in Amendment 13. There are indeed arguments for such a definition, as the Law Society of Scotland, and that for England and Wales, have laid out, lest the Government might, for example, respond to political, economic or electoral pressures to define risks which should not be brought within the scope of this Bill. Others see risks associated with such definitions and further legal minefields. However, the Law Society of England and Wales sees a risk in Amendment 2—that extending the scope of the clause to cover “public order and public safety” could give rise to similar concerns, unless these terms could be strictly defined so as not to include political motives. However, I hear what the noble Baroness says about her aim here, and about the risks to our democratic processes.

I speak here particularly to Amendment 83 in the names of the noble Baronesses, Lady Hayter and Lady Bennett of Manor Castle, which I have also signed. The amendment is extremely restrained. The Government have made much play of the importance of their proposed integrated review of security, defence, development and foreign policy. From time to time, these reviews are made. There was one after the general election of 2010, and another after the 2015 general election. Of course, that latter one included pandemic as a risk, and emphasised how important it was to the United Kingdom, economically and strategically, to be at the heart of the EU, through which, as it put it, we amplified our power and prosperity.

One might say that a new assessment is indeed desperately needed. It was due last year but was knocked off course by the pandemic, which did not stop the Government pre-empting its conclusions by merging DfID with the FCO and cutting aid, even though in 2015 this was seen as a mark of our global reach—global Britain, you might say. In addition, the Government announced spending levels for the MoD before Christmas, none of this waiting for a proper strategic review.

So now we have this Bill on threats to national security, without that review having been published. We hear that it is imminent. Could the noble Lord update us? Is it indeed being buried by the Budget coverage? We have certainly heard that it has got thinner and thinner, perhaps one-fifth the length of the 2015 one, and that it is large on rhetoric and small on how it is to be achieved. Nevertheless, this should be an important statement of what the UK identifies as threats and ambitions. Therefore, this should have preceded this Bill and underpinned what it was trying to do, if the Government are to be joined up.

Amendment 83 asks that, when the review is finally published, the Government publish a statement that outlines how provisions in the Act will align with the UK’s long-term security priorities and concerns as identified in the review. The amendment states that this should be

“As soon as reasonably practicable”,


a generous phrase that Baroness Hayter used in tabling this amendment, more generous than the one I would have used.

Perhaps, because there is little confidence in the review, as one would have thought these areas would definitely be covered, this statement should also include how the Bill will respond to emerging threats, new technology, biological weapons, cyber, misinformation and military developments by the UK’s adversaries. One of the successes of the 2015 review was certainly the emphasis on cyber and the subsequent and important expansion of UK capacity in this area. I am sure that this will not be neglected in the new review. The amendment asks the Secretary of State to lay a statement before Parliament. It is surely the least that the Government should do to try to ensure that the Bill is aligned with whatever comes forward in the strategic security review. The Government should be able to simply accept the amendment, and I look forward to the Minister’s reply.

[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.