National Security and Investment Bill

Baroness Laing of Elderslie Excerpts

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

[Mr Kevan Jones (North Durham) (Lab)]

I supported the Bill on Second Reading and continue to do so, because, of course, in terms of putting on the statute book the protection that we need, it is a vital piece of legislation, but, as the right hon. Member for New Forest East (Dr Lewis) said, it is possibly some seven years late. That highlights the conflict that takes place within not just this Government, but all Governments, between wanting national prosperity and national security. We had this during the coalition Government—the hon. Member for Tonbridge and Malling (Tom Tugendhat), I think, referred to it as the “golden age”, or, as the Australians would call it “a Government full of panda huggers”—but that has clearly changed. What has also changed since even 2013 is that we have a better understanding of how states are using their economic power not only for defence purposes, but to project their power to change the international world order.

It has come as a great shock to many people that, in the past few years, the international rules-based order, which we have all accepted since the second world war, has come under threat not only from hostile states, but from individuals who basically want to throw everything up in the air and see what lands.

Clearly, when it comes to China, to mention one nation, its investment strategy, including belt and road and other initiatives, is clearly being used not just in terms of projecting its economic power, but for geopolitical reasons. If we look at the long list of Chinese individuals on various standard-raising bodies—whether it be UN bodies or standard setters in the telecoms industry—we can see which areas they want to influence. The Bill is very important in ensuring that we protect that critical national infrastructure. There will be that debate—as Members will see if they read the ISC’s report, in 2013—between prosperity and security. For me, security has got to be the key cornerstone of this legislation, but it will, I think, lead to some very difficult decisions having to be taken.

As I say, I broadly welcome what is being put forward in this Bill, and I will come on to some of the new clauses in a minute, but can I first refer to new clause 7? It has already been spoken to by the Chair of the ISC, the right hon. Member for New Forest East, in terms of oversight. The ISC is not looking for work, I can tell hon. Members that. I have been a member of it for a few years now, and we have a lot on our plate. We do not actually want to be a regulator or in any way to have to decide what should go ahead and what should not—that is the role of Government—but I think it is crucial that those decisions, some of which will be very controversial but taken for perfectly good security reasons, do need to have oversight from outside the Executive.

As the right hon. Gentleman has outlined, that cannot be done by the BEIS Committee. Again, I would not want to take away from any of the work it is doing, but we are the only Committee of all the Committees we have that has the levels of security clearance—it has STRAP clearance—to look at the evidence that will have to be put forward for taking these decisions. I think this would give the public confidence in the Bill, and when such decisions are being taken in future, the public can actually have confidence that there is some oversight of the reasons why they are being taken. So I do support new clause 7, but I accept what my Chairman says about wanting some indication of the Government wishing to take this on board. May I also raise the fact that this is not just for this Bill? I am also serving currently on the Telecommunications (Security) Bill Committee, and it is an issue—exactly the same issue—there as well.

I think the Minister is sympathetic to this, but I can tell him now—and I do not want him to admit it—that he will be getting a lot of pushback from the Cabinet Office, because the Cabinet Office somehow sees it as its role to prevent the ISC from seeing anything. As the right hon. Member for New Forest East said, it hides behind the Justice and Security Act 2013, but as he very eloquently outlined, there is already a mechanism to allow us to look at this. This is going to be an increasing problem. If hon. Members read the Act, they will see that it does not actually say that it is about actual Departments; it is about access to sensitive and secure information. That is going to be an increasing issue, whether for this Government or future Governments, because, as that is used by more Departments, it is important that Parliament and the public at least have some oversight of it.

I do not want to bash the Cabinet Office, but hon. Members will remember, if they look at the 2013 ISC report, that it is the same Department that, even though it was told by BT that BT was going to contract with Huawei, somehow conveniently forgot even to tell Ministers until much later. So, I think it is important to ensure that we have robust oversight. I look forward to the Minister’s response on whether he is going to agree to this letter. If he can give such an indication today, or even when it goes to the other place, that would be welcome, and if that is the case, I think it would be quite right not to press new clause 7. I think this is something that is missing from the Bill.

May I now refer to other new clauses? New clause 4 stands in the name of the hon. Member for Tonbridge and Malling and others, and I congratulate his Committee on its report. I accept what the hon. Member for South Ribble (Katherine Fletcher) has just said about defining national security. Putting that on the face of the Bill, as new clause 5 does, limits what can be done, although it is good to have a debate on this. New clause 4 is slightly different, however, because it sets out a framework within which these decisions can be taken.

The Bill does not define national security or the list, and I understand why: because we cannot list the entities, and, as the hon. Lady said, something might come up in the future that is critical national infrastructure but that we have not yet thought about. We need sufficient flexibility to be able to address such situations.

New clause 4 also covers the following important area:

“(g) the potential of the trigger event to involve or facilitate significant illicit or subversive activities, including terrorism, organised crime, money laundering and tax evasion; and

(h) whether the trigger event may adversely impact the safety and security of UK citizens or the UK.”

We see good examples of states that are making strategic investments for geopolitical or security reasons or in order to acquire technologies, but, as came out in the ISC Russia report, many states are increasingly using fronts and other individuals to acquire such assets, and, having not an exhaustive list, but a framework that covers this would also flag up such matters to the Department.

We talk about critical national infrastructure being things such as power stations, electricity grids, gas mains and telecoms, but might we also say that our food distribution network, for instance, is a part of critical national infrastructure? In the early 2000s we had the fuel delivery lorry drivers’ strike, which led to a critical situation, and control of such events could fall under this. These things might be done not by a state, but by individuals related to it, perhaps acquiring large property portfolios in certain areas. Although new clause 4 is not perfect, it covers these matters.

I accept what my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) is trying to achieve in amendment 7. She wants this unit to have the resources to ensure that it can do its job, and that is very important. However, we also need to ensure that there are no untimely delays, because we do not want this to be a hindrance to business.

Amendment 7 also raises the issue of the personnel who are going to perform this task. I have a huge concern, which I have raised already in terms of the Telecommunications (Security) Bill, about the type of individuals we are going to get in that unit. It is vital that we have people with not only the necessary security clearances but also the right security mindset. Some reassurance on that from the Minister would be welcome.

Overall, however, I welcome this Bill. It takes a huge step in the right direction. As my Chairman, the right hon. Member for New Forest East said, it is strange that we wait for seven years and then get two Bills very quickly, and I also look forward—I hope in the near future—to a further Bill, the hostile state actors Bill, which is another recommendation from our Russia report.

I thank the Minister for the constructive way he has taken this Bill forward—and I will be cheeky and just say to him that if he can deliver extra vaccines in Chester-le-Street this week, that will be very welcome.

[Madam Deputy Speaker (Dame Eleanor Laing)]

We now go over to Sam Tarry—oh no, he’s here!

[Sam Tarry (Ilford South) (Lab)]

I am indeed, Madam Deputy Speaker; I hope you are not too confused that I am here physically. Thank you very much for kicking me off.

I spoke at length on this legislation in Committee, where I moved a number of Opposition amendments to try to strengthen it and where we heard salient and wide-ranging witness statements and testimony on this crucial legislation. Indeed, as many Members across the House have said, the Bill is an important and, frankly, long overdue piece of legislation that will provide more robust powers for the Government to intervene when corporate transactions threaten national security, as the Labour party has long demanded. That is why we support the Bill and have tabled amendments to make it more robust.

--- Later in debate ---

[Andrew Griffith (Arundel and South Downs) (Con) [V]]

May I first take the opportunity today to congratulate our friends in the United States? They are one of our longest and most enduring partners, including in the domain of investment, where we are each one of the largest investors in each other’s economy. In fact, 1 million people in the UK go to work every day for an American company, and 1 million Americans work for British companies.

Unlike many of the other speakers in this debate, I want to talk about investment. This Bill should not be about the NHS or employment law or foreign policy, but it is—or at least it should be—about the world-liberating, poverty-alleviating force that is the global movement of capital to make a profitable return. We are all deeply vested in its continued success. The UK economy is one of the most open in the world, and our prosperity depends on that. The salaries and pensions of one in every three nurses, doctors and teachers depend on the cyclotron of capitalism that combines our world-leading science and intellectual capital with human talent from all over the world to invest in and create economic activity here in the UK. So I am pleased that the Minister, who I know is a great friend of business, has once again confirmed that the Government will always enthusiastically champion free trade and provide the warmest of welcomes to overseas investors. He is right to remind us that, since 2011, over 600,000 new jobs have been created in our economy, thanks to over 16,000 foreign direct investment projects.

In putting forward new clause 5, Opposition Members put forward a veritable laundry list of subjective factors that are at odds with the clarity and certainty that investors need from this Bill. They would put the UK into a concrete overcoat at just the moment of our greatest opportunity. From the buoyant top, we would plummet to the depths of the world rankings in attracting international investment. It is almost as if Opposition Members do not want the British people to taste the fruits of the successful Brexit that they tried to thwart.

From an external perspective, the British economy is a highly attractive investment prospect: a stable, pro-free enterprise democracy with tariff-free access to European markets, close links to the faster-growing Commonwealth countries and native use of English, the universal language used by the fastest-growing sectors and economies of the world. The opportunity is the stability of Switzerland, combined with the dynamism of Singapore.

As net zero champion, I see examples daily of entrepreneurs and investors pursuing opportunities in the expanding clean growth sector. British-based firms are exporting electrolysers to Europe and fuel cells to Asia. The City of London is a world-leading hub for green finance, while our airports and airlines are the same in sustainable aviation. Elsewhere, similar opportunities exist in artificial intelligence, quantum computing, the life sciences, satellites, aerospace and FinTech, where the UK science and research base positions us very strongly. It is not just rhetoric; economists rightly forecast that UK growth this year will outstrip the US, Japan and the EU.

I urge Opposition Members to withdraw their amendments to the Bill and to allow it to go forward today. Having allowed the golden goose of the UK economy to continue to prosper, we can engage in a legitimate debate about how best all may share in the fruits of that success. [Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We cannot have Members sitting here in the Chamber—under the cover of masks, so I cannot see their mouths moving—making comments about things that people are saying virtually. It just does not work and, quite frankly, it is not fair. We really must watch the level of behaviour while we are trying to balance this difficult situation in the Chamber.

[Jim Shannon (Strangford) (DUP) [V]]

Thank you, Madam Deputy Speaker, for allowing me the opportunity to speak this afternoon. I have followed with great interest every stage of the Bill. I do so with a somewhat vested interest. That is not that I have investment portfolios or similar, because I do not, but because I am fully aware of the potential that exists within Northern Ireland for foreign investment from the positive advantage we now have.

As the previous speaker, the hon. Member for Arundel and South Downs (Andrew Griffith), said, Brexit has given us some opportunities for investment for the future. I see potential for that, as he does, and hopefully as others do, too. Northern Ireland has become the cyber capital of Europe, with our low business rates, superfast broadband in urban areas, wonderful global connectivity—before the pandemic, at least—and a highly skilled local workforce. It is little wonder that more people have decided to make Northern Ireland the home of their global business, and the opportunity is there for much more.

For that reason, I have followed the Bill closely to ensure that it protects our nation as a priority, and I am firmly behind the Government in that aim. I support the objectives that others have set out, and that the Secretary of State will set out at the end of today’s debate. I also want to ensure that the Bill is not overly prohibitive to companies that see opportunity to invest in my constituency of Strangford and in the Ards council area, but have concerns about the mechanism through which the Secretary of State can put a hold on investment for certain reasons.

I share the concerns of my colleagues that more detail is needed on what constitutes a reason for the Secretary of State to become involved. It is my desire that, rather than a substantive statement by the Secretary of State coming after the passing of the Bill, one should be appended to it. I seek some clarification on this matter. That would enable investors and those businesses seeking investment to know the parameters within which they are working.

I must be clear: I do not wish to water down the aims of the Bill—that is not my intention whatsoever. However, I share the concern of some Members that Chinese companies are under an obligation to share information with the Chinese Government. I remain concerned about overly onerous legislative commitments for small investments and small firms, but I must accept the evidence of the loopholes that foreign investment companies have made their way through by purchasing intellectual property rights and the like. I see how our system has been abused thus far, and I stand with Government on the need for an overhaul, which is the purpose of this legislation. However, I believe that we need the detail to have the strong and all-encompassing legislation required to keep our nation safe. I again implore Ministers to consider this. The safety of the nation has been spoken about by many Members, and it is certainly a priority for me and my party.