National Security Bill

Lord Ponsonby of Shulbrede Excerpts

Committee stage
Monday 16th January 2023 Lords Chamber

[Lord Anderson of Ipswich (CB)]

My Lords, my Amendment 81 is a bit wider than that of the noble Baroness, Lady Ludford, who is certainly a heavyweight in my book. I agree with what she has had to say about that.

Post-legislative scrutiny can take many forms, but where powers are exercised on the basis of secret intelligence, the options are more limited. Select Committees can do little, because they lack access to classified information. The Intelligence and Security Committee has that access, but its remit is focused on the intelligence agencies themselves. It is not equipped to review the operation by police and prosecutors of the new criminal offences in Part 1 of the Bill—or the new procedures in that part—or, indeed, to concern itself with the questions of damages and legal aid in Part 4.

The Independent Reviewer of Terrorism Legislation—its origins dating back to the 1970s—is the solution arrived at in one part of the national security landscape. The independent reviewer is an independent person with full security clearance—but without bureaucratic apparatus—reporting to government. Reviewers serve Parliament and the public by reviewing operational matters which, for national security reasons, neither they nor the usual inspectorates can scrutinise themselves. Their findings are often referred to by the courts and their recommendations taken on board by police, agencies and government.

The independent reviewer has spawned two imitators, in Australia and, more recently, in Ireland. I mention that because the independent monitor in Australia and the planned independent examiner in Ireland—the Bill has recently been published—are each entrusted with scrutinising the operation of national security law in its entirety, not just counterterrorism law. The same principle should apply here. The use of laws governing hostile state activity can be both as secretive and as sensitive as the use of laws against terrorism. That, no doubt—as the Minister said in the last grouping—is why the Government have already agreed to extend the jurisdiction of the independent reviewer to Part 2 of the current Bill, which is all about foreign power threat activity rather than terrorism.

Equally compelling, I suggest, are the arguments for independent review of Part 1. Part 1 is a complete recasting of the law against espionage, sabotage and acting for foreign powers. The offences and police powers are novel and untested; the risk of unintended consequences must be high. The offences will presumably be the subject of prosecutions. However, there is no mechanism for systemic oversight, either of the offences or of the far-reaching powers of entry, search, seizure and, in particular, detention, which are the subject of Clause 6, Clauses 21 to 26 and Schedules 2 and 6 to the Bill. Powers such as these can be controversial in their application: they are the meat and drink of the independent reviewer’s work.

Part 4 is all about terrorism and so falls even more naturally within the existing powers of the independent reviewer. History has shown the value of the scrutiny of the independent reviewer, not least in the years after 9/11, during which my noble friend Lord Carlile performed the role with such distinction. It is all the more necessary in this ever-questioning age. Indeed, something of this nature is a prerequisite for what has been called the “democratic licence to operate” that our secret state requires. The current independent reviewer, Jonathan Hall KC— who performs the role with imagination and acuity—has been consulted on this amendment. He is the obvious person to review Part 4 because of the terrorist connection. I suspect he could take on Parts 1 and 2 as well: our counterterrorism law is neither novel nor, for the most part, as controversial as it once was. But in case his apparently infinite energy should ever flag, my amendment—inspired by Clause 54, which it replaces—gives government the flexibility to appoint a different person to review Parts 1 and 2.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I do not have anything more to add other than to say that we support Amendments 80 and 81. The noble Lord, Lord Anderson, summed it up in his closing comments: the current Independent Reviewer of Terrorism Legislation, Jonathan Hall, has been consulted on this amendment and agrees that it would be a suitable way forward. I look forward to the Minister’s response.

[Lord Murray of Blidworth (Con)]

My Lords, Amendments 80 and 81 propose having an independent reviewer to cover more than Part 2 of the Bill. The Government have committed to consider this idea in the other place, and the speech made by the noble Lord, Lord Anderson, was compelling on this point.

The Government have been considering whether extending the oversight of the independent reviewer could be done in a way that does not duplicate or unhelpfully interfere with the responsibilities and functions of the existing oversight mechanisms governing both the UK intelligence agencies and the police. For example, we must consider how extending oversight of the Bill would interact with the Investigatory Powers Commissioner’s role in overseeing the powers referred to in Clause 27. Should we decide to extend oversight of the Bill beyond Part 2, it is important that we do not create any confusion or uncertainty as to the appropriate reviewer.

It is proposed that Part 4 of the Bill should be reviewed by the Independent Reviewer of Terrorism Legislation. Of course, Part 4 contains measures to freeze civil damages awarded to claimants seen as representing a real risk of using their award to fund acts of terror, and measures to restrict access to civil legal aid for convicted terrorists. As a result, these matters are already in the IRTL’s remit to review. An explicit commitment to oversight of Part 4 of the Bill is therefore unnecessary and would duplicate the Independent Reviewer of Terrorism Legislation’s existing discretion to review and report on terrorism-related legislation.

As a point of clarification on a point made by the noble Lord, Lord Anderson, the Government are not extending the purview of the Independent Reviewer of Terrorism Legislation to cover Part 2 of the Bill—rather, they are creating a new independent reviewer role entirely.

With these points in mind, while the Government cannot accept these amendments, we are committed to making a decision on extending oversight of the Bill at the next stage of its passage.

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[The Parliamentary Under-Secretary of State, Home Office (Lord Sharpe of Epsom) (Con)]

My Lords, this group responds to the amendments tabled in relation to the political influence tier of the foreign influence registration scheme and separate amendments tabled regarding guidance on the scheme, impacts of the enhanced tier on the higher education sector and the exemption for legal activities. In addition, it introduces a number of minor government amendments to the scheme, which I will cover shortly.

Before I address the amendments and clauses specifically, let me say that we are not yet able to publish a policy statement relating to the power taken in Clause 77(1), which we committed to do in the Bill’s delegated powers memorandum. The Government are in the process of carefully considering feedback from industry and the important scrutiny in this House. As such, we believe that publishing a policy statement now would only muddy the waters when the Government’s focus is rightly on listening to Peers’ concerns.

It is the first duty of government to protect its people, the country they live in and the integrity of their democratic institutions. The political influence tier of the foreign influence registration scheme will play an important role in delivering on this agenda. Dialogue between policymakers and the rest of society is an essential feature of our democratic system. It provides parliamentarians and Ministers with important information and expert analysis, helping us to become more informed. It allows decision-makers and the public to be exposed to diverse opinions and voices, including from the international business sector. It can be a positive contribution to healthy and robust public debate, and will continue to be welcome in the UK.

However, when communications or disbursements are not transparent, it can lead to corruption or give certain groups an unfair advantage. It can be seen as a way for powerful interests to exert excessive influence on political and governmental processes, potentially at the expense of the British public. It is particularly important to be able to identify foreign influence. The UK Government and the British people are entitled to know when foreign interests seek to influence public policy and public opinion. We should be able to identify foreign influence and evaluate those contributions properly, including the aggregate impact over time. Some foreign lobbying presents risks to national security. Members of the Committee will have heard Ken McCallum, in his annual threat speech in November, discussing the challenge from state threats. He said:

“The West is in a contest in which our security, values and democratic institutions are at stake.”


The Intelligence and Security Committee discussed political influence and state threats in its 2020 Russia report, calling for a scheme like the one delivered through the political influence tier of FIRS, which we are debating here today. The political influence tier of FIRS will play a role in strengthening openness and transparency in those processes, with the additional aim of deterring foreign powers that wish to pursue their aims covertly through agents and proxies. Noble Lords will be aware that some foreign states increasingly seek to influence how we think, vote and feel. Such states view themselves as being in a long-term contest with the West and take a much broader view of what they are interested in than simply national security matters. Covert political influence from state actors can damage our democratic processes, institutions and wider societal cohesion.

The foreign influence registration scheme will require those acting covertly with malign intent to make a conscious choice between registering their activity and publicly declaring their provenance, or not registering and risking prosecution. This raises the cost of conducting such activity and will be a significant deterrent to those who seek to harm our democracy.

Before we move on to the main debate, I will very briefly explain the government amendments in this group. Amendments 82, 89, 99, 100, 101 and 102 make minor technical changes to ensure consistency in the use of “arrangement” and “agreement” across the foreign influence registration scheme provisions. These amendments will assist with the clarity and understanding of the scheme.

Government Amendment 92 amends the existing provisions regarding public communications in the political influence tier of FIRS. This amendment provides that where a public communication is reasonably clear that it is being made by a foreign principal on its own behalf, it will not need to be registered. The Bill already provides an existing exclusion from registration requirements where it is reasonably clear that the public communication is made at the direction of a foreign principal. This is in keeping with our commitment to ensure that the scheme is proportionate and does not impose any unnecessary burdens.

During the last day in Committee, the noble Baroness, Lady Hayter of Kentish Town, raised a number of questions regarding the foreign power condition, which we dealt with at some length last week, and the foreign influence registration scheme. I thank her for her letter and will deal with the core of her questions now, to ensure that this is on the record. On the question of whether a member of this House will need to register when entering arrangements, the responsibility to register under the political influence tier of FIRS will lie with the foreign principal carrying out the activity in the United Kingdom, or with the person in an arrangement with the foreign principal to carry out activities in the United Kingdom. There will be no requirement on the person whom the foreign principal is seeking to influence to register activities. As such, Members of this House would be required to register only if they entered into arrangements with foreign principals to carry out political influence activities in the United Kingdom. This applies equally for arrangements with any foreign entity, including political parties in government or in opposition.

There was also a question in relation to the foreign power condition of why “a governing political party” has been included in the meaning of “a foreign power”. It addresses situations where there is a dominant political party or parties within a country to such an extent that it may be difficult to disentangle whether harmful activities have been carried out on the direction of the ruling party or the Government. The noble Baroness posed the question of what constitutes a governing political party. It is right that this will vary in different countries. Clearly we cannot legislate for every different administrative structure. Rather, in criminal proceedings where this was an issue, the prosecution would have to prove beyond reasonable doubt that a political party was the governing political party based on the facts of the case. Therefore, any political party with no members holding posts in the Government would not be in scope. The definition in Clause 30(2) means that a political party is a governing party only if individuals within that party hold posts in the Government or part of the Government. For example, the Democratic Party runs the US Administration and sets the direction of government policy. It is therefore the governing political party in the US.

To omit Clause 30(1)(e) as the noble Baroness suggested and to rely entirely on the other aspects of the definition of “a foreign power” risks creating a loophole whereby sophisticated state actors could claim to act on behalf of the ruling party but not the Government. To be clear, foreign powers, including governing political parties of a foreign Government or their members acting in their capacity as a member, do not have to register their own activities. However, those in arrangements with foreign entities—including governing political parties—to carry out political influence activities in the UK will need to register those arrangements.

I will be listening very carefully to the remarks made on this group and will respond to the amendments directly in my closing comments. I look forward to this important debate.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, in his opening statement, the noble Lord said that the Government plan to publish a policy statement and that the reason they were not doing so now, in anticipation of Committee, was that they did not want to muddy the waters. Can I ask the noble Lord whether he plans to publish that policy statement and make it available before Report?

[Lord Sharpe of Epsom (Con)]

That is certainly my intention, yes.

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[Lord Ponsonby of Shulbrede (Lab)]

I thank the noble Lord for making that clear. It will have an impact on the way we address this whole group, because it is a very extensive group and many different groups from different sections of society have contacted us all, I suspect, and raised their concerns. I have been contacted by groups from business, the legal profession, universities and political parties. Some 400 NGOs have written to me, as I am sure they have to other noble Lords.

My Amendment 88, also in the name of the noble Lord, Lord Wallace of Saltaire, would ensure that guidance is provided on the foreign influence registration scheme. Other noble Lords have gone into more specific concerns and explorations of what particular definitions might mean.

I thought it might be most helpful in opening this group, in a sense, to raise two particularly powerful concerns that have been raised with me. I want to cite two groups that have contacted me. The first is the company AstraZeneca, which sent around an email that I thought it worth citing to show this company’s concerns, which illustrate other, wider concerns. It said:

“Clause 70, as drafted would, we believe, impose a requirement for persons in our overseas operations to register each and every dealing with not just Members of the UK Government … but also in Government Agencies such as the Medicines and Healthcare Products Regulatory Agency, The National Institute for Clinical Excellence, The Environment Agency and others where we have regular contact”


on medical issues. AstraZeneca is asking a very profound question about how far these requirements will go and how much impact they will have on its day-to-day business. The email goes much further, but that is the gist of the concern raised.

The other group that emailed me is the Law Society. Of course, all these groups, including the Opposition, support the broad aims of the registration scheme but are concerned about the practical impact and whether it will have a cooling effect on their ability to conduct their existing business. The Law Society email says:

“The Law Society supports the Government’s ambition to protect national security and ensure public safety. However, we are concerned that the proposals in this Bill could have serious implications for access to justice … Law Society members have shared significant concerns with us about the potential impacts of FIRS more generally. These include concerns … that the scheme risks damaging the UK’s largest exporting industry (financial and professional services) and its reputation as one of the world’s most attractive jurisdictions for cross-border business and trade and destinations for foreign investment.”


I have given just two examples, but there are many others. This whole scheme has raised a lot of questions in other sectors; we have heard about political parties and universities. I look forward to this being a wide-ranging debate and the noble Lord giving as full an answer as he can in summing up, but I am grateful for his confirmation that the policy will be available before Report so that, if we choose to, we will have ample time to take matters further.

[Lord Anderson of Ipswich (CB)]

My Lords, while I very much welcome the fact that this policy is under review, I hope your Lordships will agree, in view of the great interest that has been expressed in this subject outside this place, that we take the opportunity to express, at least in summary, the very grave concerns that some of us have about this part of the Bill.

In that spirit, I shall speak briefly to the five stand part notices in my name, signed also by my noble friend Lord Carlile, the noble Lord, Lord Wallace, and the noble Baroness, Lady Hayter. They would leave intact the enhanced tier, which I believe to be of real value for our national security, but if carried they would remove Clauses 66 to 70, the so-called primary tier of FIRS.

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Moved by

[Lord Ponsonby of Shulbrede]

83: After Clause 63, insert the following new Clause—
“Definition of “specified persons”Within 60 days of this Act being passed, the Secretary of State must make regulations under section 63 to define “specified persons”.”Member’s explanatory statement
This amendment means that the Government must define “specified persons”.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, Amendment 83 provides that the Government must lay secondary legislation to define “specified persons” within 60 days of Royal Assent. A specified person under this Bill is a person who engages another for foreign activity arrangements. The purpose of the amendment is to probe who that could involve and whether they must be representative of a national Government or state. This amendment is further intended to probe the unintended consequences of the FIRS scheme and to illustrate that the legislation as drafted creates uncertainty as to who it applies to.

The Government have also tabled amendments as part of this group to clarify that activities being carried out must be registered at the time that they are carried out. A separate government amendment in this group limits the circumstances when affirmative procedures must be used in relation to defining “specified persons”, removing a layer of scrutiny. I beg to move.

[Lord Sharpe of Epsom (Con)]

My Lords, government Amendments 85, 86, 87, 94, 95 and 96 are minor and technical amendments that will make it clear that a current—rather than a previous—registration, is required to meet the registration requirements of either tier of the foreign influence registration scheme. This will mean that, where previously registered activities are resumed, a current registration will be required rather than a person within scope of the scheme being able to rely on the fact that the activities had previously been registered. This will support the need for the register to remain accurate and up to date, providing the best possible insight into the scale of foreign political influence activities, and activities of specified entities.

Government Amendment 121 ensures that that the clauses are as clear as possible and accurately reflect our intent. To specify an entity on the enhanced tier, the Secretary of State will have a regulatory making power as per Clause 63. Under subsections (5) and (6) of Clause 92, this power to specify will be subject to an affirmative procedure. The amendment adds wording to clarify that the affirmative procedure applies where a new entity is being specified. Where an entity is being de-specified, or an already specified entity is being re-specified—for example, because it has changed its name—a negative procedure will apply, under Clause 92(4). This will ensure that both the specifying and removal of entities from the enhanced tier will be subject to the necessary level of parliamentary scrutiny.

Amendment 83 seeks to require the Secretary of State to define “specified persons” within 60 days of this Act being passed. “Specified persons” are defined within Clause 63 of the Bill; I therefore interpret this amendment as being intended to set a requirement on the Government to specify any entities to which the enhanced tier will apply within 60 days of the Act being passed. The specification of a person will mean that individuals or entities will have to register any arrangements with the specified person to carry out activities in the UK. It will also set a requirement for specified entities themselves to register their own activities. I am sure the House will recognise that these are far-reaching requirements, and it is therefore vital that the designation of a specified entity is done following appropriate consideration and on the basis of circumstances that exist at the time, and the most up-to-date and comprehensive evidence. A blanket requirement to designate all specified entities within 60 days would impede the careful case-by-case basis consideration that is required and would be a disproportionate approach to the specification of persons under this tier. I therefore do not believe that this amendment is necessary, and I encourage the noble Lord to withdraw it.

[Lord Ponsonby of Shulbrede (Lab)]

I beg leave to withdraw my amendment.

Amendment 83 withdrawn.

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The question is: how do we identify this, and how much are we putting on the—often small—businessman, whoever he may be, to try to discover who really owns the company with which he is dealing? Who is the source behind the people to whom he is talking? If the Government are putting that absolutely on the individual in Britain, whose political antennae for what is happening in Malaysia, Kazakhstan or Uzbekistan may not be as high as they might be, then this will be a very difficult Act to implement. I beg to move.

[Lord Ponsonby of Shulbrede (Lab)]

The noble Lord, Lord Wallace, has raised an interesting but complicated question to answer. He has given various examples of the complications involved in trying to identify the owners of companies. From my own experience as a part company owner and director, I did not know who the shareholders in my own company were, once the ownership was traced back. This is a very difficult and involved question, and I look forward to the Minister’s response.

[Lord Murray of Blidworth (Con)]

I thank both noble Lords for their contributions; it is indeed a complex issue. Amendment 83 seeks to provide that, where an entity receives 25% or more of its revenue from a foreign power, it can be considered as subject to control from a foreign power and eligible to be specified under the enhanced tier of the scheme. I commend the spirit with which this amendment has been made. The noble Lord’s aim of increasing transparency supports the objectives of the scheme, but it is vital that we strike the balance of proportionality.

It is important that we maintain a distinction between funding, or donations, and control. However, I hope the noble Lord will be reassured that where, in practice, funding does result in a foreign power directing or controlling the activities of the entity, a condition for foreign power control already given in Schedule 13 will still be met. Where this condition is met, it will be possible to specify the entity under the enhanced tier.

We recognise that it is imperative that this scheme maintains the flexibility to adapt, should a foreign power seek to take action to evade the scheme’s scope and requirements. Part 3 of Schedule 13 provides this necessary flexibility by allowing for the conditions of control to be amended for permitted purposes by regulation. For these reasons, the Government cannot accept the proposed amendment and invite its withdrawal.