Oral Answers to Questions

Debate between Bob Seely and Nadhim Zahawi

Monday 14th March 2022 Commons Chamber

[Bob Seely (Isle of Wight) (Con)]

14. What assessment he has made of the potential impact on education outcomes of an education investment area on the Isle of Wight.

[The Secretary of State for Education (Nadhim Zahawi)]

I was delighted to announced that the Isle of Wight will be an education investment area, which will receive a range of support to improve schools. We will boost the rate of children meeting reading, writing and maths standards by 2030, ensuring that opportunity is as equally spread as talent is in our country.

[Bob Seely (Isle of Wight) (Con)]

The Island has made good progress in improving its education in recent years, which I am delighted about. I am very keen to get as much out of the education investment area as we possibly can, in order to drive up standards further. That ambition was evident in my recent visit, only a few days ago, to Christ the King College, where I talked to students and pupils. The Education Minister has had many invitations today, so will the Secretary of State please come to the Isle of Wight so that he can see the excellent work being done at the Isle of Wight College and at our schools?

[Nadhim Zahawi]

That invitation is far too tempting to turn down, so I shall make time to visit the Isle of Wight with my hon. Friend. Of course, I will be saying more about the work we are doing in the schools White Paper.

National Security and Investment Bill

Debate between Bob Seely and Nadhim Zahawi

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 20th January 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Nadhim Zahawi)]

May I add my congratulations to President Biden and Vice-President Kamala Harris, and their national security team?

I thank all hon. Members who have tabled amendments and new clauses and have spoken to them so eloquently: the hon. Member for Dundee East (Stewart Hosie); my right hon. Friend the Member for New Forest East (Dr Lewis); the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah); my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat); the hon. Member for Aberavon (Stephen Kinnock); the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), who spoke so pithily; my hon. Friend the Member for South Ribble (Katherine Fletcher); the right hon. Member for North Durham (Mr Jones); the hon. Member for Ilford South (Sam Tarry); my hon. Friend the Member for Arundel and South Downs (Andrew Griffith); the hon. Member for Strangford (Jim Shannon); my hon. Friend the Member for Isle of Wight (Bob Seely); the hon. Member for Liverpool, Riverside (Kim Johnson); my hon. Friend the Member for Beckenham (Bob Stewart); the hon. Member for Warwick and Leamington (Matt Western), my neighbour; and of course my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes), who reminded us of the words of the great Edmund Burke.

National security is an area of utmost importance, and that has been reflected in a sober and considered debate, with the excellent contributions that we have heard today, and, indeed, over the past few months. I will take this opportunity to respond to some of the points raised this afternoon.

New clauses 4 and 5 create a non-exhaustive list of factors that the Secretary of State must have regard to when assessing national security risks arising from trigger events. In fact, the Secretary of State has joined us to demonstrate how important this Bill is to him. I congratulate him on his elevation to being my new boss at BEIS.

As currently drafted, the Bill does not seek to define national security or include factors that the Secretary of State must or may take into account when assessing national security risks. Instead, factors that the Secretary of State expects to take into account when deciding whether to exercise the call-in power are proposed to be set out in the statement provided for by clause 3, a draft of which was published alongside the Bill. The Secretary of State is unable to call in an acquisition of control until that statement has been laid before both Houses. It is clear from the debate today, and also from conversations with colleagues, that these are the amendments on which there is strongest feeling in the House, and in the Foreign Affairs and Development Committee, so I will take care to set out the Government’s case.

The Bill’s approach reflects the long-standing policy of Governments of different hues to ensure that powers relating to national security are sufficiently flexible to address the myriad risks that may arise. As we heard from my hon. Friend the Member for Beckenham, national security risks are multi-faceted and constantly evolving, and what may constitute a risk today may not be a risk in the future. Indeed, the Foreign Affairs Committee, chaired by my hon. Friend the Member for Tonbridge and Malling, said in its own excellent report that

“an overly specific definition of national security could serve to limit the Government’s ability to protect UK businesses from unforeseen security risks.”

[Bob Seely]

Does the Minister accept that what is being proposed is not a limiting arena of what constitutes national security but a baseline of what constitutes national security, and that there may be a reason to adapt it over time? Indeed, paragraph (h) of new clause 4 makes an assumption that it can be expanded.

[Nadhim Zahawi]

My hon. Friend makes an important point. As I mentioned, the statement that the Secretary of State has laid with the Bill takes in much of the direction of travel of this amendment from the Foreign Affairs Committee.

I acknowledge that the Foreign Affairs Committee is pushing for more detail rather than less, but I would reassure them that the Government agree with their main conclusion that the Secretary of State should provide as much detail as possible on the factors that will be taken into account when considering national security. Importantly, however, that is only up until the point that the detail risks the protection of national security itself. That is why the Government have taken this approach in the draft statement provided for by clause 3. In that statement, we identify three types of risk that are proposed to form the basis of the call-in national security assessment. These are: the target risk, which considers the nature of the acquisition and where it lies in the economy; the trigger event risk, which considers the level of control and how it might be used; and the acquirer risk, which covers the extent to which the acquirer raises national security concerns.

I would like to address each of the arguments made in the report, so that I can ease the concerns of hon. Members across the House. First, there are concerns that without a narrow definition of national security, the investment screening unit would be inundated by notifications, hampering its ability to deliver its crucial role. I acknowledge that, for business confidence in the regime, it is essential that we deliver on our statutory timeframes for decisions, which is why it is so essential that we do not allow any broadening of the assessment done by officials as part of the regime to occur, whether by inexhaustive lists, as my hon. Friend the Member for Isle of Wight has just said, or by any other form. To include modern slavery, genocide and tax evasion as factors that the Secretary of State must take into account as part of national security assessments, as these amendments propose, would not reduce the demands on the investment security unit but potentially increase them.

Secondly, there is concern that ambiguity could hinder the success of the regime. Let me be clear that this regime is about protecting national security—nothing more, nothing less—hence its real focus. Thirdly, the Foreign Affairs Committee report suggests that the staff responsible for screening transactions may lack sufficient clarity on what kinds of transactions represent legitimate national security risks, leading to important transactions being missed or to a large volume of benign transactions overwhelming the investment security unit. I want to assure hon. Members, and my hon. Friend the Chairman of the Foreign Affairs Committee, that the investment security unit will be staffed by the brightest and best, with many of them being recruited on the basis that they have essentially written the book on national security.

--- Later in debate ---

[Nadhim Zahawi]

They will be able to draw on all the experience, culture and, of course, resources of Government to be able to do their job properly, I assure the right hon. Member of that.

The report sets out a fear, as we have heard elsewhere, that without a definition of national security in the Bill, interventions under the NSI regime will be politicised. I wholeheartedly agree that it is crucial for the success of the regime that decisions made are not political but rather technocratic, dispassionate and well judged. I repeat the words of my right hon. Friend the Member for Reading West (Alok Sharma), the former Business Secretary, who on Second Reading assured the House that:

“The Government will not be able to use these powers to intervene in business transactions for broader economic or public interest reasons, and we will not seek to interfere in deals on political grounds.”—[Official Report, 17 November 2020; Vol. 684, c. 210.]

Indeed, if the Secretary of State took into account political factors outside the remit of national security, the decision could not be upheld on judicial review. It is with this in mind, and our focus on protecting foreign direct investment, which so many colleagues are concerned about, especially as we come out of the covid challenge, that politicised decisions will not be possible under the NSI regime. I hope right hon. and hon. Members feel I have sufficiently explained the Government’s approach. We have sought to deliver what the Foreign Affairs Committee and the Opposition recommend.

[Bob Seely]

I will not labour the point beyond this. The Minister says that tax evasion will not be a bar. I accept that the Government made that statement. Does he accept that, in Australia, tax evasion is one of those significant elements? He rather implies that tax evasion and tax evaders will not be opposed in buying UK companies, so how high will the bar be set on criminality or on unsavoury characters—maybe people close to Russian Presidents and oligarchs and questionable companies?

[Nadhim Zahawi]

As colleagues have said, the Bill has been a long time in gestation, from 2017 to the 2018 consultation and White Paper and now today. We look at what other countries do, and I think we have reached a proportionate position. Of course, as I say, the Secretary of State’s statement sets out exactly how he would assess the risks to national security. I hope I have addressed that.

My final point of reassurance is that there will be further scrutiny on this point. As I explained in Committee, the statement provided for by clause 3 will go out to full public consultation prior to being laid before Parliament, and the Government will listen carefully to any proposals for further detail.

Amendments 1, 2, 3 and 6 broadly seek to ensure that the scope of the regime as a whole is right, that mandatory notification covers the right sectors and that both the statement and the notifiable acquisition regulations are reviewed within a year. Amendment 1 would require notifiable acquisition regulations to be reviewed within a year of having been made, and once every five years thereafter. It is right that the Secretary of State keeps a constant watch on these regulations. Indeed, it is vital that he has the flexibility to reassess and, if needed, seek to update the regulations at any time. The nature of his responsibilities under the regime creates sufficient incentive for this regular review.

Amendment 2 would, in effect, introduce two further trigger events to the regime. It would mean that a person becoming a major debt holder would count as a person gaining control of a qualifying entity. The amendment would also mean that a person becoming a major supplier to an entity counted as a person gaining control of a qualifying entity.

We on the Government Benches believe that access to finance is crucial for so many small businesses and large businesses to grow and succeed. They will often take out loans secured against the very businesses and assets that they have fought so hard to build; I did just that when I started YouGov. That is why the Bill allows the Secretary of State to scrutinise acquisitions of control that take place where lenders exercise rights over such collateral, but the Government do not consider that the provision of loans and finance is automatically a national security issue. Indeed, it is part of a healthy business ecosystem that enables businesses to flourish in this country.

Oral Answers to Questions

Debate between Bob Seely and Nadhim Zahawi

Tuesday 12th January 2021 Commons Chamber

[Nadhim Zahawi]

I am grateful to my hon. Friend not just for his characteristic support and encouragement, but for his championing of his constituents. I can confirm, as the Secretary of State has said, that all his constituents will be no more than 10 miles away from a vaccination centre, and I am pleased that the Sturdee Road health and wellbeing centre, which is a little over 10 miles away from Lutterworth, is administering vaccines now.

[Bob Seely (Isle of Wight) (Con)]

What recent assessment he has made of the adequacy of the scientific evidence base underpinning the Government’s response to the covid-19 outbreak.