National Security and Investment Bill

Ed Miliband Excerpts

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

[Edward Miliband (Doncaster North) (Lab) [V]]

May I begin by adding my congratulations to the new Secretary of State? Promotion to the Cabinet with such an important role as Secretary of State for Business, Energy and Industrial Strategy must be a proud moment for him, and it is in the interests of the country that he succeeds, so I offer him my warmest congratulations. I also take the opportunity to pay tribute to his predecessor, the right hon. Member for Reading West (Alok Sharma). We all wish him incredibly well in his important job as the full-time president of COP26. He and I approached our exchanges in a constructive spirit, meeting, I hope, the mood of the times, and I hope that I can have the same relationship with the Secretary of State.

If you will allow me to, Mr Deputy Speaker, I extend our congratulations to President Biden and Vice-President Harris; I think it is right to, as they came to office only in the last hour. The world already feels a better, fairer, and safer place than it did yesterday.

In this Third Reading debate, let me make it clear that we welcome and support the Bill as a necessary step in protecting our national security interests. It is important that we legislate to ensure that our national security is preserved in the face of evolving geopolitical, economic and, in particular, technological threats. Our country has been behind the curve on this issue and behind our allies, so action is long overdue. The Bill represents a belated recognition that the country requires a stronger regime to protect its national security.

Protecting national security is the essential, first duty of any Government, but it is only the first building block of an industrial policy. Before I discuss the Bill in more detail and how I hope it will be improved in the other place, I emphasise to the Secretary of State that while it is welcome, it forms only one part, though a particularly important part, of protecting, developing and nurturing key sectors of our economy. There are much wider lessons on which we still need to act on industrial policy. That forms the essential context for the Bill, and I flag it to the Secretary of State, as it is early in his tenure.

I say this in the constructive spirit that I mentioned at the beginning of my speech: I gather that the Secretary of State has said that he is a convert to industrial policy after, if I can put it this way, his wilder, free-market days. The days of his notorious pamphlet, “Britannia Unchained”, are apparently over, but there are important lessons that we have to draw on; the most fundamental is that good words from Government on strategic, mission-led industrial policy are welcome, but too often they are still not matched by deeds. That has been clear during this economic crisis.

One example is the scale of support provided to our manufacturing sector. Time after time, I have spoken to manufacturers who look enviously at support in other countries and say that the Government are simply not in the same league. We see it, too, in plans for a green recovery; I am afraid that the stimulus offered by France, Germany and others puts us in the shade. Indeed, while we have been debating the Bill, President Biden has, on being inaugurated, made a $2 trillion commitment to the green economy.

Our takeover regime is not fit for purpose when it comes to matters well beyond national security, either, as events over the last decade have shown—for example, there was Pfizer’s attempted takeover of AstraZeneca, and SoftBank’s takeover of Arm.

It is clearer than ever that when it comes to the big challenges facing this country, from national security to the climate emergency and our future prosperity, an active industrial policy will be one of the most important tools in our arsenal. The challenge for the Secretary of State is to match his words on industrial policy with deeds, and we will judge him on that. We certainly need to drop the tired, failed cliché that all the state can do to support the economy is get out of the way, deregulate, and cut workers’ rights. If that is the Secretary of State’s view of how best to support our economy, let me tell him that we will fight him every step of the way.

On the Bill, we have approached the task of legislating constructively, and I am grateful to the Secretary of State for acknowledging that. I pay tribute in particular to my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) for the brilliant job she has done in taking the Bill through the House on behalf of the Opposition. I also put on the record my thanks to my right hon. Friend the Member for North Durham (Mr Jones), and my hon. Friends the Members for Southampton, Test (Dr Whitehead), for Ilford South (Sam Tarry), for Warwick and Leamington (Matt Western), and for Aberavon (Stephen Kinnock), for their work on the Bill. I acknowledge the role of the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stratford-on-Avon (Nadhim Zahawi), who has a big and important task relating to public health, and has also done an assiduous job on the Bill.

As we saw on Report, there are three particular ways in which Opposition Members believe that the Bill needs to be improved. I will briefly put them on the record, because they represent unfinished business for the other place. First, there is the issue of the definition of national security, and how it can be clarified for use in the Bill. We recognise, as we have said on a number of occasions, the difficulty of providing a comprehensive definition, given the evolving nature of the threats we face as a country. However, the Bill can and should provide greater clarity, not least for potential investors in the UK. I agree with the Secretary of State that it is important that our country be open for business.

That definition could be provided in the Bill or in other ways, and would be an essential source of reassurance for inward investors. The Foreign Affairs Committee published an excellent report on this yesterday, and as we saw on Report, there is agreement between the Opposition and that Committee on these issues. We hope the Government will continue to listen, and will act on this in the other place.

Secondly, support for business, particularly small and medium-sized enterprises, is vital if they are to navigate this new regime. As my colleagues said on Report, SMEs will account for an estimated 80% of mandatory notifications under the new system, according to the Government. Many small firms will struggle to navigate this new system. This comes at a time when hundreds of thousands of SMEs across the country are in perilous circumstances. That is why we called for dedicated help and support for SMEs—to ease the burden as this new system comes into effect. If we are serious about nurturing cutting-edge businesses in sectors such as robotics and quantum technologies, it is critical that SMEs in these industries are supported through the process.

Thirdly and finally, there is the crucial issue—it is worth spending time on this—of the resourcing, accountability and scrutiny of the newly created unit in the Department and its work. We all know from the experience of both parties in government that good intentions can be overwhelmed by challenges of practical delivery. Under this regime, the Government expect that there may be up to 1,830 notifications by businesses and individuals, with a further 70 to 100 being called in by the Secretary of State. The number could well be higher than that as businesses adjust to the new system. The Secretary of State has a big, profound responsibility, as I am sure he recognises, to make sure this system works.

It is also vital that the new regime be scrutinised and monitored. As we have said throughout the passage of the Bill, that should include a role for the Intelligence and Security Committee in providing an oversight mechanism, through which there is regular reporting to the House, and regular scrutiny of the working of the new unit. Secretary of State, our international allies do exactly that. The US, for example, requires oversight of CFIUS in exactly this way. The Chair of the ISC, the right hon. Member for New Forest East (Dr Lewis), said that the Committee is open to this idea. It is not about simply saying to the ISC that it can have a look at this if it wants to. It needs a proper, acknowledged role in this. It is in all our interests, and indeed the Secretary of State’s, that the ISC performs this role. That would reassure businesses in this country that there is proper scrutiny—undertaken in the right way, given the constraints around national security—of the working of this new regime. I hope the Secretary of State will ponder this matter and keep it under review. I am sure that it will be raised in the other place.

To conclude, we support the Bill as a necessary measure to protect our national security interests from evolving threats. We do so hoping that the Government have heard the constructive concerns that we have raised throughout the passage of the Bill and will continue to raise and that Members in the other place will raise, because I believe we can build on and improve the Bill as it progresses. We believe—I emphasise this point—that this is the first step for the active industrial policy that our country needs. It only marks the start of what is required.

[Mr Deputy Speaker (Mr Nigel Evans)]

I would like to add my congratulations to the 46th President of the United States of America. In the past, I have worked on three presidential elections. I congratulate both Joe Biden and his Vice-President, Kamala Harris. I am certain that when they visit the United Kingdom, they will be guaranteed a very warm welcome.