National Security and Investment Bill

Steve Baker Excerpts

Consideration of Lords amendments
Monday 26th April 2021 Commons Chamber

[Dr Lewis]

The ISC, on behalf of Parliament, is able to scrutinise the input of the intelligence agencies into these processes. It would not be able to scrutinise how that input is then handled, and the trouble is that because that input is top secret, the BEIS Committee would not be able to scrutinise it either. That means that there would be a scrutiny gap between what was being scrutinised by us as it went into the process of the new unit and what was being scrutinised by BEIS minus that sensitive material, so there would be no effective parliamentary scrutiny of the process whereby, as I said earlier, the highly sensitive security requirements were being balanced and offset against the commercial imperatives. Indeed, that may be the very reason why the Government are so reluctant to let the ISC see what is going on.

[Mr Steve Baker (Wycombe) (Con)]

I fear that my right hon. Friend may have just answered my question before I ask it, but I am most grateful to him; he is making his speech with tremendous passion and is very persuasive. I just looked up the definition of “top secret” and I am wondering what will be missing from the output of the process that would mean that there are some scrutiny gaps. I think he has just explained that he wants to scrutinise the process and I can see why he would make that case, but will he just give us some indication as to what he expects would be top secret in that analysis, if that is at all possible?

[Dr Lewis]

If I gave an example of something that would be top secret—even if I were in a position to do so because we had started the work that we are not being allowed to start—I would then immediately be breaking the Official Secrets Act so, no, I cannot, and I would not even if I could. However, what is a certainty is that where there are circumstances where the intelligence agencies are advising on the security aspects, for example, of a potentially hostile state buying, overtly or covertly, into a strategically important asset, such as buying up a company engaged in cutting-edge technology. This unit will have to balance that against the possible commercial advantages of major investment from that other country.

The fact is that nobody on behalf of Parliament will be able to scrutinise that process unless either these amendments are accepted or the ISU—this new unit—is added to the list of units already on the memorandum of understanding. As I have said before and say again, if at any time the Minister wants to give me the assurance that it will be added, I am happy to let these amendments go from the face of the Bill.

As I explained, this is the reason that the ISC was set up as it is. If any Committee could do what the ISC does, it would not be necessary for the ISC to have all those unique facilities and arrangements. That is why paragraph 8 of the memorandum of understanding between the Government and the ISC categorically asserts:

“The ISC is the only committee of Parliament”—

I will say that again:

“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 the Agencies”—

and please listen to these next few words—

“and of those parts of Departments whose work is directly concerned with intelligence and security matters.”

A footnote to that sentence helpfully explains:

“This will not affect the wider scrutiny of departments…by other parliamentary committees. The ISC will aim to avoid any unnecessary duplication with the work of those Committees.”

With that machinery already in place, it is all the more baffling that the Government are now refusing to use the very body they created. Without including oversight by a properly structured and fully cleared security body, the Government are not placing security at the heart of the Bill.

The Government’s third and final argument is that if the ISC had a role, it would encroach on the BEIS Select Committee’s remit. This, too, is baffling and not borne out by experience. The Government’s own MOU already expressly states that the ISC scrutinises the classified parts of some Government Departments, leaving the remainder to the corresponding departmental Select Committees. That is what has always happened, perfectly harmoniously, in respect of a number of other Departments, so it is, again, bizarre that the Government now see this as a problem when they themselves have already made express provision for it.

The ISC can work seamlessly with the BEIS Select Committee on oversight of the Investment Security Unit, as it already does with other Select Committees such as the Defence Committee and the Home Affairs Committee, and in respect of the work of the Foreign, Commonwealth and Development Office. Far from being an “overreach” of our remit, in this particular case the ISC is trying to prevent its existing scope from being reduced. The unit that currently carries out investment security work is based in the Cabinet Office. Consequently, it is already overseen by the Intelligence and Security Committee. The ISC already scrutinises these activities in their current form in the Cabinet Office, so it cannot be “overreach” to do in future something that we already do. If the Government do not maintain this existing ISC scrutiny when the new Investment Security Unit takes over, it will be a step backwards from the current position.

If national security really is at the heart of the Bill, the ISC, as the national security oversight body, must be allowed to oversee it. The Government gave assurances to the House in 2013 that the ISC would oversee all security and intelligence matters. It is as simple as that. The sensible solution is that which was proposed and accepted in the other place—namely, the amendments that we are now being asked to reject for, as I have demonstrated, no good reason.

If, for some reason we have not been told, the Government cannot accept provision for oversight on the face of the Bill, there is the other solution that I have previously indicated. The Justice and Security Act and the memorandum of understanding linked to it set out the ISC’s role and remit, which the Government expressly told Parliament was the oversight of all intelligence and security matters across Government, now and in the future. The memorandum of understanding mechanism was rightly described by the security Minister at the time, my right hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), as “flexible” because

“it can be changed much more easily than primary legislation.”––[Official Report, Justice and Security Public Bill Committee, 31 January 2013; c. 98.]

The matter before us today is exactly as described in 2013: an area of Government in respect of which the ISC has oversight responsibility has been moved to a different Department. The memorandum of understanding could therefore be updated to reflect this, by way of a simple exchange of letters, to add the Investment Security Unit to the list of bodies covered by the MOU. The ISC would happily accept a commitment from the Minister to this effect tonight, in lieu of the amendment. Either method will ensure what is needed: real oversight of the national security elements of this legislation by the only body constituted and equipped to carry it out, rather than what might be described as “scrutiny in name only”.

--- Later in debate ---

[Paul Scully]

I very much appreciate the spirit and detail with which this issue has been covered in the Chamber today and the consideration that has come from the other place. I am glad that we have been able to bring forward a number of amendments to improve the Bill, ensuring that we can keep the certainty for business and are responsive to the needs of business, while clearly keeping that central focus on national security. It is so important that we keep the flexibility in the definition of “national security”, in order to future-proof the Bill, while none the less making sure that businesses and potential investors in this country know exactly the competitive regime we have here.

That goes to the point made by my hon. Friend the Member for Gravesham (Adam Holloway) about PsiQuantum. Quantum computing is an exciting technology. The Bill tackles national security, but we must also ensure that the UK is a competitive, good home for technologies such as quantum computing, not least by making sure that we can unleash innovation, and make the UK the science superpower that is the envy of the world, with people wanting to come to build quantum technology units here in the UK, through our use of research and development and by ensuring that we are competitive in all our offerings, while being able to protect businesses for our national security.

I appreciate the kind words of the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), and indeed those of the hon. Member for Aberdeen South (Stephen Flynn) when he talked about my coming to this place. Indeed, not only did I follow my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) in leading on this Bill, but I stole his flag for my office, for fear of missing out otherwise when I am on my Zoom calls, because that does symbolise the vaccination process and the fact that the Union has come together—the UK has come together—in an amazing programme.

I am really keen to tackle two more points. The hon. Member for Richmond Park (Sarah Olney) talked about flexibility versus scrutiny, which I have already talked about. She mentioned that she did not want other countries or other businesses to undermine the UK economy. Clearly, we do not have to go that far to have people undermining the UK economy; we have only to go to the Liberal Democrats for that. It is important that we do not allow that speculation—the sort of muckraking we heard from that contribution—to detract from what is a really important Bill for the UK national security regime, and from that optimism and confidence that is needed for attracting investment within this country.

I understand the concerns of my right hon. Friend the Member for New Forest East (Dr Lewis), but I reiterate the fact that it is for the BEIS Committee to oversee the work of the Department. The Committee is particularly well placed to consider how effectively and efficiently the regime interacts with business communities and investors.

[Mr Steve Baker]

I thought my right hon. Friend the Chair of the ISC really made an open and shut case, and I hope that he will not mind my saying so. If the Minister will not amend the memorandum of understanding, will he be really clear why he will not do so, because my right hon. Friend made an open and shut case that he should?

[Paul Scully]

I appreciate my hon. Friend’s intervention, and I will come back to that. Let me first develop the point about scrutiny. Clearly, the BEIS Committee has business expertise and is able to determine whether the regime is effective in scrutinising relevant acquisitions of control. I do question some of the narrative that I have heard that suggests that the BEIS Committee is not well placed to scrutinise the NSI regime. Furthermore, there are no restrictions on the ISC requesting further information from the unit or the Secretary of State where it falls under the remit of that Committee. There is no barrier to the BEIS Committee handling top secret material or other sensitive material subject to the agreement between the Department and the Chair of the Committee on appropriate handling.

As part of its role, the BEIS Committee can request information that may include sensitive material from the Secretary of State for Business, Energy and Industrial Strategy, including on the Investment Security Unit’s use of information provided by the intelligence and security agencies. The Select Committee already provides scrutiny over a number of sensitive areas, and there are mechanisms in place for it to scrutinise top secret information of this kind on a case-by-case basis.

As the Secretary of State for Business, Energy and Industrial Strategy explained in front of the BEIS Committee last week, and indeed in his letter to the Chairman of the BEIS Committee, which was copied to my right hon. Friend the Member for Tunbridge Wells (Greg Clark), Chair of the Science and Technology Committee, there are three Committees that should act in collaboration. The BEIS Committee provides the primary work of scrutinising matters within BEIS competence, but two important additional Committees—the Science and Technology Committee and, indeed, the ISC—were acting in an auxiliary capacity, making sure that the essential cross-cutting nature of the Investment Security Unit benefits from the rigour of those Committees, with expertise in each area that the unit covers.

The Government therefore do not believe that we need to update the existing memorandum of understanding, because it is flexible and it does still pertain. As I have said, there is no dilution of the ISC’s work in this. The current arrangements are sufficient to ensure that we can have the correct scrutiny of this.