Economic Activity of Public Bodies (Overseas Matters) Bill

Lord Verdirame Excerpts

2nd reading
Tuesday 20th February 2024 Lords Chamber

[Lord Verdirame (Non-Afl)]

My Lords, I am broadly supportive of this Bill, but I have a number of concerns.

First, I share the concern expressed by other noble Lords that Clause 4 as currently drafted might have a disproportionate impact on freedom of expression, and in particular on political and academic speech. I understand the reassurances found in the Explanatory Notes—we heard to that effect from the Minister earlier —but it seems to me that principles as important as those need to be protected in the Bill rather than in the Explanatory Notes. I look forward to ways of improving the clarity of the terms of Clause 4, in particular.

Secondly, I am concerned about the impact of the Bill on universities. I declare an interest, in that I am a professor at King’s College London. I echo the concerns that the noble Lord, Lord Willetts, expressed on universities. At the heart of the Bill is a new duty to

“not have regard to a territorial consideration”

in a manner that would indicate

“political or moral disapproval of foreign state conduct”.

As Universities UK noted in its written evidence, universities, in their relationships with overseas higher education institutions, as well as with foreign businesses and states, are already subject to a number of duties, particularly with regard to national security, that require them to take into account foreign state conduct. We have to be sure that the new duty in the Bill does not create confusion around these other duties which are intended to protect universities and our country from the influence of unfriendly foreign actors, not least actors such as Iran, which are keen to set foot in our universities, radicalise students and propagate anti-Semitism.

My third concern mirrors the point raised by my noble and learned friend Lord Etherton and goes to paragraph 6 of the Schedule. There was some discussion in the other place about the legal opinion on the legislation by Mr Hermer KC, which was mentioned earlier by the noble Lord, Lord Hain. In that opinion, he identified the problem with paragraph 6 as clearly as anyone until, of course, my noble and learned friend spoke. He wrote:

“The fact that the United Kingdom is in breach of its obligations under an unincorporated international treaty (e.g. the UN Charter) does not normally create a foundation for a claim in domestic law before the UK Courts. Here though the Bill provides a ‘domestic foothold’ through paragraph 6 of the Schedule”.


He observes, rightly, that domestic courts are normally reluctant to review the conduct of foreign states, but the Bill would oblige them to tackle the issues because they will have to do so to determine the legality of the impugned decision. I agree with his conclusion that, paradoxically, paragraph 6

“will very materially increase the prospects of a domestic court pronouncing on the legality of various aspects of the occupation”.

He is, of course, referring to the Occupied Palestinian Territories in Israel, but the Bill goes much further than that. It would apply to any foreign situation where there is a territorial consideration. It would apply to Western Sahara, the Turkish Republic of Northern Cyprus and maritime disputes. In fact, it would apply simply to any question of foreign policy in relation to a territory because of the breadth of the definition of “territorial consideration” in Clause 1.

It is true that we do not normally implement international obligations in this open-ended way. We normally have primary and sometimes secondary legislation that is designed to ensure that the UK state, including its various organs, both local and central government, is acting consistently with international obligations. Paragraph 6 operates fundamentally differently. The effect is to create a sort of open invitation to any public authority to pick an argument with the Government of the day on a potentially wide range of foreign policy issues. If that happens, if a public authority invokes the international law exception, the Government will then have to decide either to do nothing, in which case they will be left with more of a problem than the Bill is designed to solve, or to pursue enforcement, in which case the question will be submitted to the courts with all the risks of litigation of issues that otherwise would not be submitted to judicial determination that come with that.

There is an evident tension between the stated purpose of the Bill, which is to make sure that the Government are in greater control of foreign policy, and what could happen as a result of paragraph 6 in the Schedule. At a minimum, this provision will need a lot of tightening, but I really wonder why it is there. The guidance on procurement, which has been in place since the 2016, simply states that unless the Government have put in place formal legal sanctions, embargoes or restrictions, there should be no scope for a regime of trade sanctions or embargoes to be developed surreptitiously through public procurement. I am not sure what has changed since then that has led to the introduction of paragraph 6.