National Security and Investment Bill

James Wild Excerpts

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

[James Wild (North West Norfolk) (Con)]

It is a pleasure to be called to follow my hon. Friend the Member for Totnes (Anthony Mangnall) and make a contribution reflecting my time as an adviser in the Ministry of Defence, as well as in the Cabinet Office, where I was involved in national security issues and the investment regime.

In three years advising the Defence Secretary, there were issues with an increasing number of transactions that, typically, related to small firms involved in sensitive parts of the defence supply chain or in emerging technologies. The regime at that time, because of the threshold limit, did not allow the Government to impose formal remedies, let alone block transactions. Instead, we had to rely on a quiet word with those seeking to sell firms, to discourage them from such action. In more than one case, a suspicion was that a hostile actor, a state actor, was seeking to use a transaction to acquire key intellectual property to support their offensive military capabilities.

Persuasion did ensure that none of those transactions came to fruition, but the risk was clearly there. It is not acceptable to leave that gap in our powers. In the Cabinet Office I worked on measures to improve the Government’s ability to take a more strategic view of risks, and to understand the cumulative impact that my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and others have talked about, as well as bringing in the regulations to lower the threshold for military dual-use goods and advanced technologies. That dealt with some of the problems, but the case for comprehensive reform to strengthen the current legal framework is compelling.

In legislating, our role here today is to judge how best to protect national security while encouraging investment and maintaining the UK’s hard-fought reputation as one of the best places to do business. In my view, that is best done by having a regime that is targeted, predictable, transparent and efficient, so I welcome the Bill, which improves on the proposals set out in the White Paper. It gives more clarity on the sectors where the greatest risks to national security exist, and for which a mandatory approach will therefore rightly apply, subject to consultation.

However, investors must be assured that the regime is about national security; it is not a power to block transactions that Ministers do not like, or a back door to protectionism. There also needs to be an efficient screening system. It is crucial that the structures and resources are put in place to ensure that the timetables for review and assessment in the Bill are actually met. I know that the proposed investment security unit will sit within BEIS. Others have mentioned that issue. I should be grateful if the Minister would explain how the unit will work—for example, with the National Security Secretariat within the Cabinet Office—and whether there will be joint staffing, given the need for people with sufficient experience and vetting to provide the advice, because the success of the regime depends on being able to deal with the number of notifications coming forward. Will there also be additional resourcing for the agencies and other parts of Government that will provide those assessments?

The Bill represents a proportionate approach to provide the powers to screen transactions on national security grounds and ensures that the UK remains open for business—but not at any cost.

National Security and Investment Bill (First sitting)

James Wild Excerpts

Committee stage & Committee Debate: 1st sitting: House of Commons
Tuesday 24th November 2020 Public Bill Committees

[Andrew Bowie]

Thank you.

[James Wild (North West Norfolk) (Con)]

Q It is a pleasure to serve under your chairmanship, Mr Twigg. Mr Parton, I want to ask about influence. We have seen companies linked to hostile states hiring former diplomats, civil servants, parliamentarians and Ministers to provide a veneer of respectability. How can we do more to guard against that? Secondly, on the Bill, provided advice is drawn widely from the agencies and other parts of Government through the investment security unit in the way that you have described, do you think that having a quasi-judicial decision made by the Secretary of State guards against that influence and potential cronyism in the decision making?

Charles Parton: The question of elite capture is very important and very topical. First, I have called for this in various papers that I have written. The Cobra committee that makes decisions on employment after political or civil service careers definitely needs strengthening. I am not sure of the degree to which work on that is going on; in fact, I do not think much is. Certainly neither the provisions, nor the exercise of those provisions, have been sufficiently rigorous. It is very much a question of lengthening the amount of time between leaving a particular post and taking up a job where, in some cases, you are laundering the reputations of some of these companies. If that period is too small and the criteria are too weak, there is a great risk of people, while still in office or still in post, saying to themselves, “I’d better not be too harsh on this, because in a couple of years’ time, I might be approaching these people, or they might approach me for a job.” That is pretty crude, I know, but it is perhaps easier to see in the case of a defence company. If you were in the MOD, say, and you had to make a decision, one hopes you would make it entirely in the national interest, rather than with a view to possible employment by whichever company might be bidding for a contract, but that is one area that needs strengthening.

The other area in all influence problems, of course, is that sunlight and transparency is the one weapon we have, but if a Minister, an ex-Minister or a top civil servant is running a consultancy company, and let us say Huawei is employing that company—I choose this example by sheer chance—that should be known. That should be declared, because if such people—who are still influential with their old colleagues, whether parliamentary, ministerial or civil service—are urging a certain line, as I have heard some urge, it may not be disinterested; in fact, it certainly is not in some cases. That needs to be made clear. Sorry, could you just repeat the second part of your question?

[James Wild]

Q It was picking up on your point, which I think we all share, about ensuring that the investment security unit draws advice from the agencies and across other parts of Government. Provided it does that, having a quasi-judicial decision that is challengeable under judicial review by a Secretary of State in some ways guards against that soft influence or cronyism getting involved in a SAGE-type committee. Can you see the benefits of that model?

Charles Parton: Yes, but I think you have to be very happy and convinced that the Minister in charge is one whose future does not incline him or her to make a decision that is somewhat biased. It is not without precedent in the world, anyway, that some ex-Ministers have been under the influence of the Chinese Communist party for one reason or another, so you have to be quite careful about that, and it is a really important decision. That is why I would be more inclined to make sure it is very clear that it is not just within the purview of BEIS, because BEIS’s job is to push investment. That is perfectly fair, but there may be occasions—not now, but in the future—where people’s backgrounds, inclinations or futures incline them to be less than even in their judgment.

[The Chair]

This will probably be the last question, from Stephen Kinnock.

--- Later in debate ---

[Matt Western]

Q I want to pick up on a couple of points. You spoke about energy policy and, as we have seen over the past nine months, some of the risks and threats to our society and economy come from unexpected places. Do you think that the Bill does enough to recognise where those threats may come from and that they may be from a malign power?

I am thinking of the consideration of investments from China in our nuclear power stations and other infrastructure networks. Something as simple as road traffic signals or rail infrastructure might break down if someone decided they wanted that to happen. Do you think the Bill does enough to recognise the unexpected areas of investment that a malign state might want to attack?

Sir Richard Dearlove: Probably not is the answer. The Bill should take account of the complexity of modern technology and the difficulties that we could run into in the future if we allow foreign entities to have a strategic piece of our critical infrastructure. Relationships can change over time and you can cause huge difficulties by throwing a switch and engaging a piece of software that is deeply embedded in something somewhere and causing a huge problem.

I do not want to be too alarmist, but Chinese engagement and involvement in nuclear power is another area of terrific concern and worry. It is not something that we should take at face value. We need to think very carefully about some of these issues. I would much rather have a French company building a nuclear power station than a Chinese company.

[James Wild]

Q You mentioned Huawei. Were you involved in 2003 when BT was letting the contract for the network? Did you raise concerns at that point?

Sir Richard Dearlove: No, I was not. The first Huawei contracts were signed by BT in 2003 and, because BT was the primary provider, the relationship between BT and the intelligence community was, let us say, important; I will not go any further than that. BT was a successor to the General Post Office and, essentially, that was how the relationship came about.

At the time, people like myself were deeply concerned and shocked that we were signing deals with a Chinese company that looked to us to have strategic implications. Basically, as chief, I was not consulted. Basically, when I raised some questions, I was largely told, “It is nothing to do with you. These are issues we can control.” The relationship with Huawei took off without real consideration at the time that it would have a bearing on national security. I think that was extremely misplaced. I have written or said somewhere before that those of us who raised objections in 2003 were just disregarded.

[James Wild]

Q Well, the ISC report makes clear that Ministers were not informed about the contract at all at the time.

Sir Richard Dearlove: I knew about the contract and said I thought it was completely inappropriate.

[James Wild]

Q In the Bill, there are 17 sectors listed where mandatory notifications are required. They include transport and communications, as in some of the points that Mr Western was raising. Should others be added to that?

Also, do you think that although we need to look at the Bill as to what it does, we should also recognise that it does not solve all the problems and threats from hostile states—that the intelligence activity and other things we do to raise the cost of theft of IP need to be seen holistically across the piece, and that the Bill cannot solve all the problems?

Sir Richard Dearlove: The Bill is a step in the right direction. What is important about the Bill is that it raises parliamentary and public awareness of the issue. Everybody takes a big step forward in being sensitised to the problems in the future.

To be honest, I do not have any suggestions right now to add to the list, but I might look at that and see whether there are certain areas. For me, the Bill is almost a symbolic move—one that is long overdue and signals a change in attitude at Westminster and on the part of this and future Governments. It is a very healthy, pleasing and important development.

[Stephen Kinnock]

Q Thank you very much, Sir Richard, for the evidence that you have given us today. The Intelligence and Security Committee defines critical national infrastructure as

“certain ‘critical’ elements of infrastructure, the loss or compromise of which would have a major, detrimental impact on the availability or integrity of essential services, leading to severe economic or social consequences or to loss of life.”

Would the Bill benefit from having that definition of critical national infrastructure embedded in the middle? Linked to that definition, should special measures be taken to raise our guard even higher when it comes to any kind of investment in our critical national infrastructure?

Sir Richard Dearlove: I would certainly see that as advantageous, because it defines a clear area where you start and from which you can make judgments about the involvement of foreign firms being given space or activity in those areas. That is not a bad idea at all, actually.

National Security and Investment Bill (Fourth sitting)

James Wild Excerpts

Committee stage & Committee Debate: 4th sitting: House of Commons
Thursday 26th November 2020 Public Bill Committees

[Stephen Kinnock]

Q The Bill does not suggest a special regime, but it also seems to say explicitly that the state-owned characteristic should not be considered, because the statement of policy intent says that it is not inherently more likely to pose a national security risk. It does not seem to do either of the two things you are suggesting.

Creon Butler: I did not read it quite that way. I read it more as meaning that that is not a reason for having a special regime, but when it comes to doing the assessment, you look at whether there is a state element of ownership and from which country that state element of ownership comes. That would be a factor when you are examining the likelihood that that particular investor could pose a threat to us. I am not a lawyer; I just read it that way. If the way you are reading it is the correct way to read it, I do not think that is quite right.

[James Wild (North West Norfolk) (Con)]

Q Mr Butler, given your experience in the National Security Secretariat, I want to ask you a few structural questions. How you think the NSS should be linked into the new investment security unit in BEIS?

Creon Butler: It is a constantly evolving picture. The benefit that the NSS can bring is a strategic overview. When you want to put the element of national security protection in the context of broader economic security issues, it is really important that the NSS plays a key role. I do not know the precise detail of exactly what the linkages are between the new unit and the NSS. I would think, from the way I worked in the NSS, that they will be very close in term of people, exchanges, links and so on.

In terms of the respective roles, the strategic role is one that the NSS should play, looking at this element alongside all the other elements of national economic security. As I understand it, it is very important that this unit has a very strong operational focus and effectiveness, the skills that enable it to do this, and the space in which to do it. If I was in charge of designing the relationship, that is how I would design it.

[James Wild]

Q That is helpful. On the operational point, do you have a view on the timescales for turning round the reviews and assessments within the Bill as it stands?

Creon Butler: There is obviously a trade-off again. My sense was that the provisions that are there now are realistic and sensible, but we need to see how the thing evolves and fine tune it according to the experience that we have had. People have pointed out that this will lead to a lot more cases being looked at than before. I do not think that that is a criticism of what is happening; it is a reflection of the world that we are in. However, in the light of the experience of looking at a much broader range of cases, we should be ready to adjust the timeframes and so on, taking account of that experience.

[Matt Western]

Q I wonder, Mr Butler, if you would elaborate on, and give more examples of, the sorts of international threats that you see us facing, in terms of not just national security but economic security, and the links between the two.

Creon Butler: In my view of economic security broadly, the biggest existential threat is climate change, frankly. We are going through a ghastly pandemic. Fortunately, it looks like we can see the way out of it, but I do not think that at any point we felt that this particular virus was an existential threat to mankind more generally. My view of climate change is that it is, and it is very close. In any broad assessment of national and economic security, I would put climate change as one of the most important issues. That is why the accelerating efforts both within Governments and in the private sector to deal with it are crucial.

In terms of other kinds of threats, we have had this particular pandemic, which as far as we can see is not an existential one; there could be other pandemics that are. That is why infectious diseases have been so high on our risk register in the past. Steps to ensure that we do not face future pandemics that are even more serious than this one in terms of the threat to human life, or the economy, are a very important priority. Those are two examples of broader threats beyond hostile powers that we should incorporate in our approach to national and economic security.

National Security and Investment Bill (Fifth sitting)

James Wild Excerpts

Committee stage & Committee Debate: 5th sitting: House of Commons
Tuesday 1st December 2020 Public Bill Committees

[Chi Onwurah]

May I begin by saying what a pleasure it is to serve under your chairmanship, Mr Twigg, and what a pleasure and, indeed, honour it is to discuss this important Bill with the rest of the Committee?

This issue is important to Members on both sides of the Committee, and as we scrutinise the Bill line by line over the next two weeks I am sure we will get closer—or as close as social distancing allows. Labour Members look forward to a constructive and collegiate debate and recognise that Members on both sides of the Committee share the objective of making well-informed contributions. It was clear from speeches made last night on the Telecommunications (Security) Bill, the interests and ambitions of which overlap those of this Bill, that all Members share a belief in the critical importance of national security, and I am sure that will be reflected in our deliberations.

We agree on the importance of securing our national security, for which line-by-line scrutiny is vital. The Government’s impact assessment notes the need for change and says that national security is an area of “market failure” requiring some Government action. I found that statement somewhat shocking, and a marked difference between the views of Labour and Conservative Members. It is an astonishing claim, because national security is not a private concern first, and a Government after-thought second. There is no market in national security, which is the first duty of a Government and not a failed responsibility of the private sector. It ought to be the first priority of any Government to address it. It is not under-supplied by the market; it is outside the market altogether.

Although that claim is astonishing, it is unsurprising from this Government and the party that leads them. The impact assessment is a marker of a Government who have outsourced significant responsibility for national security; a Government who let Kraft take over Cadbury in 2012 because the market promised good behaviour by the acquirer, only for them to be embarrassed when the acquirer broke all its promises—national responsibility outsourced and British jobs and national interests handed over to the market.

[James Wild (North West Norfolk) (Con)]

Could the shadow Minister explain the national security issues with the Kraft takeover?

[Chi Onwurah]

I thank the hon. Gentleman for that intervention. I meant to say that national responsibility was outsourced—and British jobs—and the national interest handed over to the market. That was the concern with the Kraft takeover. If he wishes, I shall follow up with further examples, but the national interest and the responsibility of this Conservative Government for economic security have clearly been lacking. This is the Government who let the Centre for Integrated Photonics, a prized research and development centre, be taken over by Huawei in 2012—an event that our head of the National Cyber Security Centre said that in hindsight we would not wish to happen. National security was outsourced and the British interest again relinquished to the market.

--- Later in debate ---

[Dr Whitehead]

Rather late in the day, I will say what a pleasure it is to serve under your chairmanship, Mr Twigg. I am sure you are aware that we share an anniversary: we are among the few surviving Members of the 1997 intake—those happy days when Labour used to win elections. We came to this House in 1997 and have been here ever since.

The reason I emphasise that fact, Mr Twigg, is to underline just how many Bills you and I have sat on, led for the Labour party or been involved in over the years. I am unable to tot up the exact number but it is a considerable, and it is a great pleasure to be sitting on this Bill Committee. I have served on a large number of Bill Committees of late, the most recent being the Environment Bill Committee, which has just finished its deliberations. I was unable to be present for this Bill Committee’s witness sessions because I was finishing off the Environment Bill—well, trying to strengthen it rather than finish it off. I am grateful to my colleagues for asking a series of pertinent questions in the evidence sessions. We are all grateful for that and, indeed, to the expert witnesses.

I want to cite the amendment in the context both of the various Bills that have come through the House and of the witness sessions, which I have assiduously read, even though I was not present for them. I hope the Minister will accept that the amendment is entirely in line with the constructive way in which I hope we have gone about our business in this Committee. The amendment, which I shall unpack in a moment, strengthens not only the Bill but the ability of Ministers to do their job properly as far as its provisions are concerned. That is its intention.

The amendment seeks to replace subsection (1), which is a bald sentence:

“No more than one call-in notice may be given in relation to each trigger event.”

My time with Bills has taught me to look carefully through all of the different clauses to find the qualification. In my experience, tucked away somewhere in most Bills is a qualification. Sometimes it is about when a clause is to be implemented, sometimes it is a definition of the wording, and sometimes it is an additional provision that mediates the clause to which our attention was first drawn.

This clause has no such qualification. It is an absolutely straightforward statement. We have discussed trigger events to some extent in our evidence sessions, and they are elucidated and qualified in further clauses, as are call-in notices, but the fact that we get only one call-in notice per trigger event seems to be the central essence of this subsection. Our amendment seeks to put a question mark against whether that bald statement about the fact that we get one go per trigger event is the wisest formulation to have in the Bill.

The amendment makes a modest change to the clause, stating:

“No more than one call-in notice may be given in relation to each trigger event,”

and adding,

“unless material new information becomes available within five years of the initial trigger event.”

[James Wild]

From his experience of many Bills, I wonder what the hon. Gentleman made of the provisions in clause 22 on false or misleading information that has been given to the Secretary of State, whereby if he has been given that information he can change a decision he has previously given and can therefore issue another call-in notice.

[Dr Whitehead]

Yes, indeed. The hon. Member is quite correct to draw attention to clause 22, which concerns false or misleading information. It relates to where someone has, at the time of the trigger event, concealed or misled or sought to deceive those concerned with the trigger event about the nature of the event. I would suggest that that is a different case from what we are trying to establish today. It is not that anyone has tried to deceive anybody or maliciously mislead anybody at the time of the trigger event, but new material may come to light or become available within five years of the initial trigger event that might cause a further call-in notice to be introduced. According to the definition set out in the Bill, that looks like it might not be possible.

National Security and Investment Bill (Twelfth sitting)

James Wild Excerpts

Committee stage
Thursday 10th December 2020 Public Bill Committees

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I beg to move, that the clause be read a Second time.

It is a pleasure to see you back in the Chair, Sir Graham. I am also pleased that the Committee is now moving to the new expanses of new clauses. I see that Committee members have come fully prepared to deal with the environment in which we find ourselves. I should say, Sir Graham, that the previous Chair said that we should be able to put on as many coats as we liked. I think that that is much to be desired. Unfortunately, I left my office in a rush and forgot to bring my coat, as well as the Houses of Parliament Christmas jumper in which I invested only yesterday, in anticipation that it might be needed today. We shall have to take the temperature as an encouragement to press on.

Had we known that, regardless of the title of the Bill, it was actually the National and Security and Investment, and any improvements to the Enterprise Act 2002 we feel it is necessary to make, Bill, we might have ranged somewhat broader in our new clauses. We chose instead to focus on what we felt was absolutely critical to the good functioning of our national security framework. New clause 1 seeks to set out some of the factors that the Secretary of State may have regard to when making assessments under the provisions of the Bill. We recognise some of the implications of including a definition of national security. The Bill is called the National Security and Investment Bill, even if it does go somewhat beyond that title.

[James Wild (North West Norfolk) (Con)]

I note that the hon. Lady uses the word “may” not “shall” in the new clause. Can she explain why she opted for “may” in this instance?

[Chi Onwurah]

I am grateful for that intervention. First, it shows that the hon. Gentleman is paying attention, which in itself is something to be welcomed. If I may say so, it also shows that he is taking lessons from my hon. Friend the Member for Southampton, Test. We have considered the matter and this is the correct use of the term “may”. I shall go into more detail later, but this is not about prescribing what the Secretary of State must look at; it is about giving greater clarity, particularly to those who will come under the Bill’s remit. One of the expert witnesses put it very well. Those who will come under the Bill’s remit need to get a sense of what the Government mean by national security, not in a specific and detailed definition.

--- Later in debate ---

[Peter Grant]

I can assure the hon. Gentleman that I have been a supporter of small businesses significantly longer than he has perhaps. I did make it clear that this is a way that we can protect small businesses without in any way compromising the integrity of the Bill. There is nothing in the new clause that will in any way weaken the effectiveness of the Bill and protecting our national security. I would be happy at another time to debate the reasons why, for example, employment measures in Scotland should be taken by the Parliament and Government elected by the people of Scotland rather than somewhere down here, but that is not a debate for today. I expect, Sir Graham, that neither you nor anybody else would be too pleased if we started to take up time this afternoon on that subject.

[James Wild]

In clause 32, there is provision to look at whether a reasonable excuse exists in an individual case. The hon. Member’s amendment would give a blanket exemption to any small business by dint of being a small business. Is the case-by-case basis not a better way to approach the issue?

[Peter Grant]

That is a valid point, but I do not think it is. The difficulty with the case-by-case basis is that it creates uncertainty and worry for the small business concerned. We are talking about a period of only six months. I do not really think that hostile overseas investors are waiting to pounce during those six months to gobble up small businesses in a way that will damage our national security. Let us face it: if they were going to do that in the first six months, they would be doing it now or they would have done it in the last six months.

I hear what the hon. Gentleman is saying, but the new clause is deliberately worded to explicitly recognise the importance of small businesses, particularly during this period. The Bill is likely to come into force at the exact time that small businesses will be trying to get back on their feet. They need all the help they can get. There is a danger that the way that the Bill could be implemented and enforced will be an unintentional barrier to their growth.

All that we are asking is that, for a short period, until smaller businesses get used to the new legislation, it does not allow them to go ahead with transactions that are otherwise prohibited and would otherwise be blocked by the Secretary of State. The Secretary of State will still have the full power to block those transactions or to impose conditions on them. It does not mean that an acquisition is legally valid if it would otherwise be void under the terms of the legislation. The only difference it makes is that it removes the danger of small businesses or their directors spending time defending themselves in court when they should be developing their business and helping to get the economy back on its feet. On that basis, I commend both new clauses to the Committee.

--- Later in debate ---

[Chi Onwurah]

I will not take up the opportunity of a test. We have all learned a lot about air flows—in this room, at any rate—as we seek to maintain some heat. What we have not learned, though, is how the Minister believes the Bill can be improved. All our line-by-line scrutiny has yielded many assurances, compliments on our intention and, indeed, some letters, for which I am grateful, but no acceptance and not even the commitment to go and think about some of our constructive proposals, amendments and new clauses. I urge him to consider this new clause as an opportunity to show that he truly believes, as he said earlier, in the skills, experience and expertise of the Committee by reflecting on the potential for improvement.

The new clause returns to an earlier theme and would require—the Minister will be pleased to note that that is a “must”, not a “may”—an annual report to be prepared by the Secretary of State

“in accordance with this section”

and a copy of it to be provided

“to the Intelligence and Security Committee of Parliament as soon as is practicable after the end of that period.”

It sets out what should be in that report, such as the events, the number of entities, the nature of the risks and

“details of particular technological or sectoral expertise”

and so on. It would provide the Intelligence and Security Committee with information about the powers exercised under the Bill and allow closer scrutiny and monitoring.

The new clause reflects how we have consistently supported the need for the Bill. Our approach to the security threats we face is to push for change specifically to allow broad powers of intervention, but for those using those broad powers to be held to account by Parliament and through transparency. Our international allies do exactly that. The US requires CFIUS to produce a non-classified annual report for the public, alongside a classified report for certain members of Congress, to provide security detail to them, allowing congressional scrutiny while retaining sensitivity of information.

As I think the Minister acknowledges, the Government have been late in following where international allies and the Opposition have led with calls to better protect our national security, so he must not fall behind in following our calls for accountability and transparency. That is critical not just to ensure our security and wider parliamentary understanding of the nature of the threats we face but for accountability.

The Secretary of State is to be given sweeping powers. For the last time, I should say that we will go from 12 reviews in 18 years—less than one a year—to 1,830 notifications a year, which is more than five every single day. The Secretary of State will be able to intervene in every single such private transaction. It will be hard to bring claims against national security concerns in court, where the judiciary will understandably find it difficult to define national security against the Government’s definition. In that context, it is important to bring expert parliamentary scrutiny to the Government’s decisions. I do hope the Minister will reflect on that. Alongside a public report, the new clause would require the Government to publish an annual security report to the Intelligence and Security Committee so that we have greater accountability without compromising security.

I will say a few words about the evidence base and the reason for tabling the amendment. Professor Ciaran Martin said:

“I think that the powers should be fairly broad. I think there should be accountability and transparency mechanisms, so that there is assurance that they are being fairly and sparingly applied.”––[Official Report, National Security and Investment Public Bill Committee, 26 November 2020; c. 81, Q96.]

My understanding is that the only accountability and transparency mechanism is the public report, which may be published, and the prospect of judicial review, neither of which provide for expert scrutiny on the security issues.

I also ask the Minister to reflect on Second Reading, where member after member of the Intelligence and Security Committee stood up to say that they felt that their expertise would be useful and helpful in the working of the Bill.

[James Wild]

The hon. Lady said that the annual report “may” be published, but in clause 61 it “must” be laid before the House, so there is no question that the annual report will be published.

[Chi Onwurah]

The hon. Gentleman makes a good point. It must be published, but the details that it sets out are limited. The reporting on other information, as I think the Minister has said, is something that is intended but is not required. We have requested that several other pieces of information be published, but the Minister has said that they may be.

The hon. Member for North West Norfolk is absolutely right that there will be an annual report, but that is a public report that will provide only the limited information set out in clause 61(2). Obviously, it will not provide anything that might have an impact on national security. With regard to what is published in the final notifications, for example, that can be redacted to take out anything of commercial interest as well as of national security interest. There is no requirement to report on any aspect to do with national security. Given that the only report is a public report, that is understandable. That is why we are proposing that a secure sensitive report should also be published and shared with the Intelligence and Security Committee.

The hon. Member for Tonbridge and Malling (Tom Tugendhat), the Chair of the Foreign Affairs Committee said that

“there is a real role for Committees of this House in such processes and…the ability to subpoena both witnesses and papers would add not only depth to the Government’s investigation but protection to the Business Secretary who was forced to take the decision”.—[Official Report, 17 November 2020; Vol. 684, c. 238.]

A member of the Intelligence and Security Committee also said that

“we need mechanisms in place to ensure that that flexibility does not allow the Government too much scope.”—[Official Report, 17 November 2020; Vol. 684, c. 244.]

As I have already noted, CFIUS has an annual reporting requirement.