National Security and Investment Bill

Lord West of Spithead Excerpts

Consideration of Commons amendments
Wednesday 28th April 2021 Lords Chamber

Moved by

[Lord West of Spithead]

At end insert “and do propose Amendments 11B and 11C in lieu—

11B: Page 36, line 15, at end insert “, except for any confidential annex prepared under subsection (2B) while that subsection is in force”

11C Page 36, line 33, at end insert—
“(2A) Until the condition in subsection (2C) is met, each report must also provide, in respect of final notifications given, and final orders made, varied or revoked—
(a) a summary of the decision of the Secretary of State under section 26(1), and
(b) a summary provided by the Security Services of any national security risk assessment provided under section 26(3)(a)(ii) relating to each decision under section 26(1).
(2B) Until the condition in subsection (2C) is met, where the Secretary of State considers that publication of any information listed in subsection (2A) would be contrary to the interests of national security, those details may be excluded from publication and instead must be included in a confidential annex to the report provided to the Intelligence and Security Committee of Parliament on the same day that the rest of the report is laid before each House of Parliament.
(2C) Subsections (2A) and (2B) have effect only until a revised memorandum of understanding between the Prime Minister and the Intelligence and Security Committee of Parliament under section 2 of the Justice and security Act 2013 has been laid before Parliament which provides for oversight by the Intelligence and Security Committee of the activities of the Secretary of State under section 26 of this Act.””

[Lord West of Spithead (Lab)]

My Lords, the question put back to this House is not whether the Government should take national security risks into account when considering investment but whether Parliament should have oversight of that process—that careful balancing of our national security against our prosperity. This House delivered a very clear message to the Government on Report that if the Bill is to provide the Secretary of State for BEIS with wide-ranging new powers, it must also provide for meaningful oversight of those powers. That meaningful oversight of high-level intelligence can be conducted only by the ISC, as the body which Parliament established for that express purpose.

I thought the strength of feeling in this House on the matter had been very clear, and, indeed, the rugby scrum to which the Minister alluded which I gathered in support had unbelievable knowledge and background in this whole area of intelligence, security and the ISC. It is therefore very disappointing that my amendment was rejected in the other place yesterday. I remain of the view that, without that amendment, the Bill does not provide for meaningful oversight by Parliament. Nevertheless, I have sought yet again to offer the Government an opportunity to see common sense on this and, therefore, rather than insisting on the original amendment, I have tabled this amendment in lieu. It requests the same substantive material—a summary of the decisions by the Secretary of State and a summary by the security services of any national security risk assessment in respect of final notifications given and final orders made, varied or revoked, which can be provided to the ISC in a confidential annexe—but it now provides that that material need not be provided if and when those activities are formally added to the memorandum of understanding, at which point ISC oversight is provided for through that route.

I have already set out why the ISC must have oversight and why it can only be the ISC, so I have no wish to try your Lordships’ patience by repeating those arguments, or indeed those made by noble Lords from across the House who spoke in support of my amendment. The substantive point has been made, and I have to say that the argument has been won—I know that from having talked to people in the other place.

I wish to examine more closely the assertions made more recently by the Government in the other place, as I would not wish any of them to muddy the water on this issue. The Government’s starting point was that the ISC can already scrutinise the information provided to the ISU by the security services. That is indeed the case—we can require the security services to provide us the information which they provide to the ISU on the national security risks—but that is missing the point. What the ISC must be able to scrutinise is the balancing of those security risks against the business elements. It is that crucial balancing which is at the heart of the Bill. There is little point in seeing what the national security risks are if you cannot see what decision has been reached regarding those risks. That is precisely why my amendment makes reference to the decision of the Secretary of State.

Moving on to that decision, the Government’s next argument is that the ISC cannot oversee decisions made by the Secretary of State for BEIS because BEIS is not listed in the ISC’s memorandum of understanding. That is indeed the case but again that is, I am afraid, missing the point, deliberately or otherwise. As I have already explained to noble Lords, the Government gave a commitment to Parliament that the ISC would, through its MoU, oversee all security and intelligence matters across all of government. The seven bodies currently listed on the MoU are those that were carrying out security and intelligence matters in 2013. That list of bodies should be kept and updated, as the Government told Parliament was their intention. It would be very simple to add something such as BEIS to the list.

With that argument dispatched, the Government move on to their next line of defence—that decisions by the Secretary of State for BEIS must be for the BEIS Committee to scrutinise, and that the ISC should not encroach on that remit. That is, I am afraid, a direct contradiction of the Government’s own MoU. The Government have already expressly said that the ISC’s scrutiny will not affect the wider scrutiny of departments such as, for example, the Home Office, FCDO and MoD by parliamentary committees. The same would be true for BEIS. If the decisions by the Secretary of State for Defence or the Home Secretary can be scrutinised by the ISC, why are the decisions by the Secretary of State for BEIS any different? I am curious as to what it is about BEIS that sets it apart and means that the ISC should not oversee it?

At this point, the Government resort to their final argument. I have to say here that I find it rather tenuous to argue that the ISC does not need to provide oversight because the BEIS Select Committee can do it. The Secretary of State for BEIS has written to the chair of the BEIS Select Committee talking about confidential briefings in a most reasonable manner. However, we need to examine what that does not say, which is, “The Government will hand over our top secret information to you, your committee and your staff for you to hold, scrutinise, take notes on, discuss, question us about and report on”. That is because the Government cannot do that. The words being used belie the practicalities of the Government’s own security procedures—unless, of course, the Minister is going to tell us that the Government are prepared to breach their own security procedures.

The proposals do not amount to meaningful scrutiny. I say this with the greatest respect to the BEIS Select Committee, whose chairman, in a most thoughtful and measured speech in the other place yesterday, supported the ISC’s oversight of this area. The BEIS Select Committee does excellent work and should rightfully be the primary oversight body for the work of BEIS and the business elements of the work of the ISU. However, the ISC is the only body that can provide oversight of the intelligence elements and balance them with the business elements. The ISC is the only committee of Parliament that has regular access to protectively marked information that is sensitive for national security reasons. This means that only the ISC is in a position to scrutinise effectively the work of those parts of departments whose work is directly concerned with intelligence and security matters, as the Government have said repeatedly until now.

The Intelligence and Security Committee was created by Parliament to handle classified information where Select Committees could not. The Government committed to using the ISC to scrutinise all their intelligence and security functions. Now we are told that the BEIS Committee is able to do exactly that. In this instance, apparently, the ISC is no longer needed. Let me be clear: the ISC currently does oversee this area of work, so the Government’s proposal is deliberately removing it from ISC oversight. Is that what is going to happen in the future? Will security work be hived off successively to departments that will be told that the ISC cannot oversee them because it is not listed in a nine year-old MoU that the Government have failed to keep up to date?

I see the longer-term consequences of rejecting our amendments and wonder whether more areas of government are destined to follow suit. This could become a very slippery slope, denying Parliament and, indeed, the nation proper scrutiny of intelligence decisions if we do not take action now. For this reason, I have sought to offer the Government yet another opportunity. Rather than simply retabling my original amendment, I have offered them an alternative. Either the Government can provide the ISC with a classified annexe covering security and the Secretary of State’s decision, or they can add those decisions to the existing MoU.

My amendment is a reasonable attempt to provide the Government with a way forward and a way out. I know that the Minister opposite has been put in a very difficult position on this issue. While recognising the strength of feeling across this House, there must be meaningful oversight of these new powers, and that can only mean the ISC. I am not looking for more work for myself, I can tell noble Lords, but only the ISC can do it. I beg to move.

--- Later in debate ---

[Lord Callanan (Con)]

I thank all noble Lords who have contributed; it has again been a good demonstration of the quality of contributions from this House. I have listened very carefully to the points that have been made, in particular by the noble Lords, Lord West, Lord Campbell and Lord Butler, and by my noble friend Lord Lansley.

I will address the primary issue head on. This was raised by the noble Lords, Lord West and Lord Campbell, and the noble Baroness, Lady Hayter. It is the issue of whether the BEIS Select Committee will have access to “top secret” information. We will make sure that the BEIS Select Committee has the information that it needs to fulfil its remit and scrutinise the work of the ISU under the NSI regime. Much of this is unlikely to be highly classified and, where the Select Committee’s questioning touches on areas of high classification, it is likely that the relevant information could be given in a way that does not require as high a classification and provided to the committee confidentially. If, however, the BEIS Select Committee requires access to highly classified information, we will carefully consider how best to provide it, while maintaining information security in close collaboration with the committee’s chair.

Another point made by the noble Lord, Lord West, was that the current system for scrutiny is run out of the Cabinet Office and therefore comes under the ISC’s unit, so the Bill reduces the ISC’s remit. The Government’s main powers to scrutinise and intervene in mergers and acquisitions for national security reasons in fact come from the Enterprise Act 2002; the powers under that Act sit with the Secretaries of State for BEIS and DCMS, not in the Cabinet Office. Giving the BEIS Select Committee oversight of the new NSI regime is entirely in keeping with this and does not represent a reduction of the ISC’s remit.

A point made particularly by my noble friend Lord Lansley was about changing the memorandum of understanding, but the question here is not whether the MoU allows for the role proposed by noble Lords, but whether that role is appropriate. Our answer—and I appreciate that noble Lords will disagree—is no. The Government have made their case, which comes off the back of a resounding vote by the elected Chamber, that no change should be made to the Bill in relation to reporting to the Intelligence and Security Committee. We maintain our view that the BEIS Select Committee remains the place for scrutiny of the investment security unit and that the Intelligence and Security Committee remains the appropriate committee for scrutiny of the intelligence services, in accordance with the memorandum of understanding and the Justice and Security Act 2013. With acknowledgement to all who have spoken and with regard to the points that I have made, I appreciate the difference of opinion on this, but ask once again that the House does not insist on these amendments.

[Lord West of Spithead (Lab)]

My Lords, first, I thank those who spoke in support of my Motion. They have an incredible amount of knowledge about this issue. I find the Government’s position extraordinary and I feel sorry for the Minister opposite—for whom I have great respect—who has to parrot arrant nonsense. As an admiral and a captain who had defaulters in front of me, I have had people spouting arrant nonsense at me and I know how to spot it. This is arrant nonsense and I find that rather sad. It is unfortunate that he has to do this as I am sure that, deep down, he does not believe it, because he is an intelligent chap. I am appalled that the Government are not willing to give ground on this and I cannot understand why—I really cannot. This is not a great party-political issue or anything like that. It is quite extraordinary, so I am afraid that I will test the opinion of the House.