National Security and Investment Bill

David Johnston Excerpts

2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020 Commons Chamber

[David Johnston (Wantage) (Con)]

It is a pleasure to follow my hon. Friend the Member for North East Bedfordshire (Richard Fuller), who always brings a lot of expertise to debates about business matters in this House. I welcome the Bill, and I say that as a supporter of open trade and investment, not as a supporter of protectionism, not least because I want to see companies and products from the UK in every country in the world.

The Government’s No. 1 job is our national security, as is any Government’s. The regime for assessing that through an investment lens was designed in 2002. We can all pick something from 2002 that indicates just how long ago that was, but I have opted for the fact that it was in 2002 that President George W. Bush declared Iran, Iraq and North Korea as being the “axis of evil”. Whether or not we think he was right to do that and that those were the right countries, it illustrates just how much geopolitics has changed in that time and shows that we were not thinking about the threats we now face, at least in the same way, in 2002. It is therefore right that the Government now update the regime that we use to assess these matters. It is also right to have a system of mandatory notifications in the 17 areas that have been defined. In 2002, we did not even understand how artificial intelligence or advanced robotics might improve our lives, never mind the ways in which they might be used by hostile states to endanger our national security.

It is right that the Secretary of State will have a five-year period in which to call in trigger events after they have happened. That will enable him or her to perceive a threat that may not have been immediately obvious at the time of the trigger event. The Government rightly say that this Bill is not about one country or one threat—we should not be looking through the lens of 2002 for the current regime; we should make legislation now based on which countries we think are the threats in 2020. But I was one of the people concerned about the position we had got into with Huawei, which is, in many ways, a good example of why we need that retrospective power. Difficult though it may be to unwind some decisions, there are times when we have to do so. It is also right that there is no turnover threshold. If it relates to national security, it relates to national security. Turnover simply should not be a factor.

Unusually, I found that a lot of criticisms of the Bill that I looked at before this debate were actually in its favour, although a number of Members have actually made great contributions today about the ways in which we might further strengthen the legislation. The fact that we might, by the Government’s estimate, see between 1,000 and 1,830 notifications made says to me not that the new regime is too strong, but that our old regime has not been strong enough. Maybe it will end up at that number and maybe it will not, but having only had 12 assessments done in the period since 2002 suggests to me that we are not dealing with a strong enough set of tools to assess these situations. The fact that 100 instances might have to go through a full national security assessment and that we might seek to impose remedies on 50—again, by the Government’s assessment—just underlines why this legislation is important and why we need a much stronger regime.

It is right that national security is not defined in this legislation, as that will enable the Government—and, importantly, our security services—to interpret it as broadly as they can, and to perceive threats that they may not have perceived before. It is also right that the Secretary of State makes the decisions. I have seen some pooh-poohing of the role of politicians in this process, with the idea that they might use it for political gain or domestic considerations that are not really about national security, but we elect politicians to make judgments about national security. They are the ones who are truly accountable, rather than officials. It is right that that role should sit with the Secretary of State.

I welcome the way in which we have borrowed from international examples: mandatory notifications such as those in the US and Japan, and a retrospective period such as that in France and Germany. This suggests that we have looked at examples around the world, and borrowed from them all to try to get the best system for us. Of course, it also underlines the fact that we are behind a number of our partners—both the Five Eyes and our western European partners—and therefore the importance of passing this legislation quickly.

I will continue to welcome foreign investment and foreign trade, but I will never do so with any risk to national security. Given the actions that we see from hostile states through their investment decisions on a weekly basis, the passage of this Bill cannot come quickly enough.