National Security and Investment Bill

Debate between Richard Fuller and Anthony Mangnall

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

[Anthony Mangnall (Totnes) (Con)]

Thank you, Madam Deputy Speaker, for calling me in such an important debate. May I start by thanking the Secretary of State and the Minister for the time that they have given me, members of the Inter-Parliamentary Alliance on China and others to discuss the contents of the Bill and what it does?

As I understand it—I hope I get this explanation right—the Bill gives the Government the power to screen and call in acquisitions of assets deemed to pose a threat to national security. Those assets might include land, physical property or intellectual property. As a result, the Secretary of State will be given retrospective powers to consider investments made over the past five years.

I welcome the cross-party consensus on the Bill. It seems to me, as a new intake Member of Parliament, that this is one of those rare moments when there is consensus in the House to produce a truly remarkable piece of legislation. I hope that the Government will listen carefully to the comments that have been made already.

I welcome the sentiments of the Bill, and I hope that passing it into law will be our first step in attempting to match Australia’s Foreign Investment Reform (Protecting Australia’s National Security) Bill and America’s Foreign Investment Risk Review Modernisation Act of 2018. But—and there is a sizeable “but”—we have, as other Members have made clear, a long way to go before this legislation reflects the comprehensive laws that many of our Five Eyes nation colleagues have in place.

The UK seeks to be a competitive, free and fair economy. I believe that that is sacrosanct and that we must do everything we can to ensure that businesses and people around the world look at our country as an attractive destination for investment. A stable democracy, a highly skilled workforce, league table topping universities, the rule of law and world-class industries such as photonics and FinTech all make the UK an attractive place to invest that benefits investors and British citizens alike.

Our laws are balanced as a result, encouraging foreign investment and adherence to UK laws and national interests. That balance has become all the more challenging with rapid technological change, internationalist agendas and our own failure, if I may say so, to hold a strategic dependency review. In short, the threats to our national security are numerous, real and present, and they come in a multitude of forms.

The narrow scope of the Bill limits its impact. It fails to address the threats that the UK is currently facing, and it holds the potential to see us become complicit with businesses and organisations that violate human rights. The national security that the Secretary of State spoke of remains ill-defined, to the detriment of the objectives of the Bill. Added to that, under the screening mechanism outlined in the Bill, a number of sectors are not addressed, such as education—a core part of the UK’s economy and an attraction to thousands of foreign students across the globe, with institutions that undertake research and development programmes in myriad areas, including defence, development and foreign affairs. A recent study found that 10 UK university laboratories are now dependent on significant investment from Chinese defence firms, yet our universities have not been specified in the scope of the Government’s consultation on sectors to which mandatory notification applies. How can that not be considered a national security risk?

The pharmaceutical sector is a global success story, with many companies basing their operations here in the UK, but there is nothing in the Bill that would have stopped or reviewed the Chinese takeover of Bio Products Laboratory. At a time when we face greater and graver challenges around the health of mankind, the Government must rethink what needs to be included in the scope of their consultation.

I have touched on two sectors but said nothing about the UK’s nuclear sector or water industry. Both need to be given the cover to protect our national security. Our core infrastructure, which is intimately connected to our national security, is routinely being placed in the hands of foreign owners. That should be a cause of great concern to the whole House. My hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) mentioned the 23 out of 117 Chinese acquisitions of UK firms—if less than 20% of Chinese acquisitions are being scrutinised under this legislation, we need to rethink parts of the Bill and strengthen it where possible.

[Richard Fuller]

I think it would be helpful for us to decide whether we are talking about foreign ownership of assets or Chinese ownership of assets. Obviously there is a gradation between them, but I am hearing from some of the contributions that we just do not like foreigner ownership of assets, which I am sure is not what my hon. Friend means at all.

[Anthony Mangnall]

It is important to recognise that China has a poor track record in this case, which has not been addressed, but of course we are not against foreign ownership. We want to ensure that the structure is in place to scrutinise these acquisitions in the correct way that protects opportunity in this country. I thank my hon. Friend for his intervention.

A few months ago, I broke cover early on to vote against the Government over the proposals to see our 5G network built by Huawei—and I have not lived it down yet! I did so because our core infrastructure should never be compromised by foreign investment, and that was a severe threat to our national security. I welcome the fact that the Government have moved so significantly and plan to phase out Huawei by 2027.

I also did so because of the reports of human rights violations by Huawei. The success of my right hon. Friend the Member for Maidenhead (Mrs May) in passing the Modern Slavery Act 2015 is a proud moment for the UK, but it is worthless unless we use this Bill to stop dealing with companies that are reported to be using slave labour and looking to invest in the United Kingdom. Nothing in the Bill prevents companies that are complicit in gross human rights violations from investing in the United Kingdom, and that is a huge oversight. It would be an injustice and morally wrong for the UK ever to look the other way as money created from slave labour was invested in this country.

We have been told that this is not the right Bill for such provisions, but with all due respect, that is the same excuse used by the Whips on every single occasion that I have raised concerns about a piece of legislation. If we are going to bring forward the correct pieces of legislation, let us bring them forward. If not, the Government should not be surprised if we try to tack on amendments to address the issues that so many Members across the House feel strongly about.