National Security Bill

Viscount Stansgate Excerpts

Committee stage
Wednesday 21st December 2022 Lords Chamber

[Viscount Stansgate (Lab)]

My Lords, I hope that I can intervene briefly to ask two questions. I support Amendment 44, but the questions I want to ask relate to government Amendments 38 and 42. If I understand the Minister correctly, subsection 2(c) of Amendment 38 inserts the word “reckless” in order to fill a gap. If so, why does the word “reckless” not appear in his other two amendments, 41 and 42? My second question relates to spiritual injury. What would be the effect if you left out the bit in brackets in subsection 2(e) of Amendment 42? In other words, why is the bit in brackets so crucial?

[Lord Purvis of Tweed (LD)]

My Lords, I will begin by raising a question with the Minister regarding his amendments, and will then support my noble friend, as a member of a fairly virtuous party, and my noble “also-friend”, who is equally virtuous but not in the party.

The noble Lord, Lord Carlile, rightly raised the question of causing spiritual injury. I would be grateful for a lot more clarification as to what the Government’s background justification and intent is in this regard. I would be happy if the Minister wrote to us before Report, because my reading of the new amendment is that causing spiritual injury to any person is now prohibited conduct, in light of the wording in brackets. As I have indicated previously, I have the great privilege of being able to travel extensively and, as the party’s spokesman on foreign affairs, to engage in many discussions on freedom of religion and no belief, on which the greatly respected noble Lord, Lord Ahmad of Wimbledon, leads in this House. That means that we are engaged in many discussions on the sensitive nature of religion and politics.

My reading of the amendment is that it could make it an offence for someone to engage with me and seek to persuade me of the view on the abolition of apostasy legislation in the Gulf, for example. The death penalty applies in Malaysia, a Commonwealth country, and in Qatar and the UAE, for example, for apostasy. Lobby groups who are campaigning for the abolition of the death penalty or the decriminalisation of apostasy, which has taken place in other Muslim nations, could well be defined by others as causing spiritual injury. Unless the Government have a definition of this—we do not necessarily need to rely on the Australian case, which I too saw on the same search as the noble Lord, Lord Carlile—then those people will be able to say that you are doing them spiritual injury if you wish to undermine their belief in Hudud law, which supports apostasy.

These are extremely sensitive areas which those in our intelligence community have to grapple with, because they are at the heart of the motivation of many people to take forward their political views. The situation is similar with those who seek to reform blasphemy legislation. Blasphemy is a very complex area that interacts with different faiths and laws. My concern is that subsection 2(e) of this amendment could cause considerable difficulties with blasphemy legislation, which has been a fairly delicate legislative area in the past, and with our interactions. I therefore hope that the Minister can provide much greater clarity on this. I would like to know what input the Foreign, Commonwealth and Development Office has had into the amendment regarding the convention on freedom of religion and belief. As a consequence of the amendment, some of our activities could be in contravention of the convention, which refers to freedom of religion and no belief. Therefore, the convention provides for the freedom to challenge what some may hold to be an authentic political view of a religion, but which others may believe to constitute spiritual injury. If the Government intend to prohibit debating political faith—political Islam, political Christianity—then we are on a very dangerous path. I hope that the Minister can reassure me on that.

Turning to donations and Amendments 44 and 43, I support the argument of my noble friend Lord Wallace of Saltaire. The Electoral Commission has been very clear in public statements that we have to make progress on tackling the lack of faith in politics. Lack of transparency in the funding of politics is key to that, which is why the Bill needs to be strengthened. There is now an overwhelming case for greatly enhanced due diligence on the part of political parties in working through the source of donations. As the noble Lord, Lord Carlile, said, there is a balance to be struck. There are those who seek to operate a healthy political system and engage in the political processes with those wishing to fund the parties; equally, we need transparency in those areas where undetermined income is the source of the donation. Importantly, this links to our previous discussions on “grey areas”.

At the moment, a political party could receive a donation from an individual through a bitcoin company which is operated by a national from another country—for example, it is based in the Cayman Islands but the donation comes through a UK national. That is perfectly legal, but there is no way of knowing where that income originated. That could be a live example: a Member of this House is on the global advisory board of a bitcoin company based in the Cayman Islands, so this is not theoretical. Looking at the interaction with the source of the income is important.

There is also a case to be made for enhanced diligence: asking whether companies have made enough money in the UK to fund that loan. I had a quick look at the Electoral Commission database for donations. Of the top 20 donations by companies to all political parties, a number have been through holding companies and there is simply a reference to a donation to the party. There is no mechanism to go beyond that: to state whether that company is solvent or making operating profits. Indeed, two of the companies in question made no operating profits for three years in a row but donated substantial sums to a political party. In other situations, having to investigate unexplained income would be important. We have other areas where due diligence applies—supply chain reforms, modern slavery statements and so on—and I do not see why there cannot be an equivalent regime when companies are interacting in the political realm.

Finally, one area where a very significant loophole needs to be addressed is for those countries which the Government themselves have said are at high risk of money laundering and terrorist financing. I took part in the debates on the money laundering, terrorist financing and transfer of funds regulations, which we have transposed into domestic legislation from the EU. In those regulations, we currently have a list of 25 countries for which it is the law that there is enhanced due diligence of any transactions because a company operates, through any business activities, within them. I remind the Committee that that list includes the Cayman Islands, Gibraltar and the United Arab Emirates.

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[Lord Sharpe of Epsom (Con)]

The simple answer is that I do not know, but I will find out and commit to write.

[Viscount Stansgate (Lab)]

The question I asked related to the bit in brackets. What effect would there be if you omitted that part in brackets?

[Lord Sharpe of Epsom (Con)]

I think I have already answered in significant detail why that clause has gone into the Bill. I have also answered the specific points that the noble Viscount raised at the start of the debate.

National Security Bill

Viscount Stansgate Excerpts

Committee stage
Monday 16th January 2023 Lords Chamber

[Baroness Noakes (Con)]

My Lords, I have not previously taken part in this Bill because I claim absolutely no expertise in national security. However, like many noble Lords, I have received a number of representations and briefings on the foreign influence clauses from those who have major concerns about their impact on business life, which is an area where I have some experience. I have tabled Amendments 89A, 89B, 89C and 92A in this group to raise those issues.

I have considerable sympathy with those opposing the Question that the clauses dealt with in this group stand part of the Bill. I would have added my name had there been space. A number of those making representations were very clearly of the view that the best thing to happen would be for the clauses to be put to one side and for there to be a proper consultation on them to expose all the practical issues across the many kinds of organisations that other noble Lords have referred to in this group.

My amendments are more modest and targeted, because I recognise that legislative opportunities do not come very often for the Government to put a scheme such as this in place. If there is any opportunity to improve the Bill before it leaves this place, we ought to encourage the Government to do so. To that extent, I was much heartened by the words of my noble friend the Minister at the beginning of this group. I completely accept that, as the noble Lord, Lord Anderson of Ipswich, said, this is not the whole answer; if we are trying to completely remedy these clauses, they will need more than my amendments. However, my amendments are directed particularly at the commercial aspect. I will speak relatively briefly to them.

Amendment 89A seeks to restrict the scope of the political influence clauses to organisations which are under the control of a foreign power. In that sense, it is like Australia. Clause 66 currently applies to any foreign organisation whether it has any connection to a foreign power; hence it applies to absolutely all foreign-operated corporations, as has been said, such as commercial companies and many other non-profit organisations, NGOs and the like.

Take the example of a company formed in one of our international friends—for example, a member country of the EU. Let us suppose that that company is thinking of investing in the UK in something we really want them to invest in, such as a nuclear power station or renewables. This provision is going to put a lot of hurdles in that company’s way. That company will inevitably have to have conversations about regulatory issues, licensing issues, planning and visas for specialist staff, which will involve meetings with officials and government Ministers. At some stage, government decisions may be needed in order to encourage that company to complete its investment. These are ordinary commercial activities but, under the Bill as drafted, that company will have to register as soon as it starts to make arrangements—for example, when it engages UK-based advisers. Of course, UK-based advisers will also have to register if there could be any chance whatever that that EU company wants to do anything that could be deemed to be a political influence activity.

As other noble Lords pointed out, that sends a pretty terrible message to potential overseas commercial partners. The UK’s position as a desirable location for inward investment cannot be taken for granted, and it could be dealt a very severe blow if all foreign companies are treated like potentially malevolent actors. It is hard to see the public policy justification for drawing the boundary of the new requirements to include such companies.

My Amendment 89A would extend the ambit of Clause 66 to UK-incorporated organisations. At the moment, if the EU company in my hypothetical example had a wholly owned UK subsidiary, that company would not be caught if it carried out the activities on its own behalf, rather than on behalf of its parent. That does not seem logical because the substance is unaltered by the corporate structure. However, if a UK-incorporated company is controlled by a foreign power, I would have thought that the Government would want to be able to track its influence activities for the countries about which they have concerns. But, at the moment, Clause 66 does not seem to require it, and I hope that my noble friend the Minister can explain its subtleties when he winds up.

Both Australia and New Zealand have significant commercial carve-outs, designed to allow ordinary commercial activities to carry on. That is why I put down Amendments 89B and 92A, which are aimed more directly at excluding commercial activities. Amendment 89B quite simply exempts commercial activities from the definition of “political influence activity” in Clause 68, trying to bring it closer to the Australian or American systems.

My Amendment 92A also includes a power for the Secretary of State to exempt other activities that do not involve a risk to national security—other noble Lords gave examples of those other kinds of activities outside the commercial sphere. The noble Lord, Lord Anderson of Ipswich, tabled Amendment 92B to my Amendment 92A, and I agree with his amendment because it would lessen the need for a backstop power for the Secretary of State, although I still think that such a power would be desirable because we cannot decide in advance all those circumstances where it is clear that no national security interest arises.

My last amendment in this group, Amendment 89C, also concerns the definition of “political influence activity” in Clause 68(2). Under Clause 68(2)(b), general communications are not caught if they make it “reasonably clear” that the communication

“is made at the direction of the foreign principal”.

But this does not apply to communications to Ministers, MPs and the like—the specified people who are now in the new schedule. My amendment basically asks: why not? What is the harm in communications that are clearly signposted at the behest of a foreign principal? In my example, if a company from the EU were trying to approach individuals or officials, as opposed to putting out a general communication, but it was quite clear for whom it was acting, what evil are we trying to deal with by making that a political influence activity in the Bill?

My remarks have focused just on commercial activities, and I have really focused on only one aspect of them: inward investment. If we drag the whole of commercial life into this regime, it will, at best, end up with a lot of non-value adding bureaucracy. At worst, it will swamp the Home Office with a tsunami of precautionary registrations and could do real harm to our economic prospects. I feel that, at the moment, the effect of the Bill is a bit like putting up a big sign saying, “No foreign businesses here” at the gates to the UK. I look forward to my noble friend the Minister’s response, and, as I said, I was heartened by his initial remarks.

[Viscount Stansgate (Lab)]

My Lords, it is a pleasure to follow the noble Baroness, not least because I want to make some remarks about the effect on other areas of life. I agree with her that her phrase “non-value adding bureaucracy” is an understatement, and I sometimes wonder whether the Government understand quite how much they have unleashed with the clauses we are considering in this group. I will, briefly, direct my remarks to Amendment 88, which sets out areas where it would be useful for the Government to provide guidance.

A number of Members have had a wide range of briefs of various kinds, and I draw the House’s attention to one from the Russell group of universities. In effect, I am referring to section (a) of the new clause that would be inserted by Amendment 88. In that briefing, the universities say that they fully

“understand that working with international partners is not without risk and take their responsibilities to protect national security seriously.”

They point out that they already work with the Government. However, they go on to say that the requirements of the foreign influence registration scheme

“could include a range of international activities from student exchange programmes to research partnerships, many of which are already covered in existing legislation. The potentially duplicative and complex nature of this arrangement could limit opportunities for genuine international collaboration and risk deterring global partners, which would in turn hinder national and local R&D led growth.”

Just as the noble Baroness was talking about the adverse effect on business and inward investment, similarly universities are telling the Government and the House that there would be adverse effects on international research collaboration. The briefing goes on to say:

“If university activity is to be included, the system must be clear and simple to use with accessible guidance that will ensure universities will not be penalised”—


or criminalised—

“for misinterpretation or misunderstanding the system.”

As we are talking about provisions which have a criminal aspect to them, that matters a great deal.

The other point I bring to the House’s attention is about charities, which is reflected in section (b) of Amendment 88. The amendment was tabled by my noble friend Lord Ponsonby of Shulbrede and the noble Lord, Lord Wallace of Saltaire, who incidentally referred to the fact that even all-party parliamentary groups may be caught by this provision. In about half an hour, I am due to chair an all-party parliamentary group at the other end of this building, and I sometimes wonder whether, in future, we will have to register an enormous range of activity. The noble Baroness used the word “tsunami”, and that is something we would like to avoid.

I will look at charities from the point of view of the scientific community in Britain. Many key scientific societies in this country are charities, including the Royal Society and the leading sectoral scientific societies, such as the Royal Society of Biology, the Institute of Physics and the Royal Society of Chemistry. They also have extensive international networks. All are international in their nature, organising international conferences all over the world and with international links the like of which is hard to describe. Science is a very international business, and so it should be. We benefit from that, and I hope that, in future, we will not lose some of the benefits that we have hitherto had with Europe.

In drawing that to the Committee’s attention, I would like to know what the Government’s intention is in respect of the activities of scientific societies. I do not suppose for a moment that they were consulted on the Bill; I think that many do not even know that there is a possibility that they might be affected. The Russell group is an example of at least one organisation which has been on the ball. The activity of normal scientific life in this country stands to be affected by the Bill. I am very interested to hear the Minister’s reply on that point, because I wonder whether that was ever intended to be in the Government’s purview when bringing forward this legislation. I do not think that the activities of our scientific societies really run the risk to national security that might otherwise be implied, so for that reason that I bring the point to the Minister’s attention.

[Lord Carlile of Berriew (CB)]

My Lords, I absolutely support the remarks that have been made by numerous noble Lords on the primary intention of this part of the Bill, which surely is to deal with those covert and hostile activities which may be committed by, or on the behalf of, foreign Governments—or foreign entities connected closely to foreign Governments—which might damage the national security of this country.

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[Lord Sharpe of Epsom (Con)]

The noble Lord has pre-empted the remainder of my speech to some extent, which I am afraid goes on for rather a long time; I apologise in advance for that. I will come on to the charities aspect in a moment. On the regulatory burden, I think I have been reasonably clear as to the simplicity we intend when it comes to complying.

The amendment from the noble Lord, Lord Anderson, would extend my noble friend Lady Noakes’s amendment to charitable activities, as was just described again by the noble Lord, Lord Purvis. I once more thank the noble Lord, Lord Anderson, for his scrutiny of the scheme. In essence, the question is: why is there not a charity exemption in the scheme and will this not make it harder for charities to carry out legitimate activity here in the United Kingdom? We believe that the ability of charities to campaign on issues relevant to their charitable mission is very important and crucial to our democracy. The scheme will not prevent this. It will ensure that the public are informed about the role played by overseas entities in this work, however.

We have also taken steps to minimise the potential burden on charities conducting legitimate activity as a result of FIRS. For example, making a public communication, campaign information or requests for support by a charity will be registerable only if it is not reasonably clear from the communication that it is made at the direction of a foreign power or entity. If such a communication is published for or on behalf of a foreign charity in its own name, it would not need to be registered. If it is published by a UK charity or PR firm at the direction of a foreign charity, it would not need to be registered if it is reasonably clear from the communication that it has been made at the direction of the foreign charity. I hope that is reasonably clear and has given some reassurance to the charitable sector.

[Viscount Stansgate (Lab)]

For the avoidance of doubt, have scientific societies in this country that are charities been consulted by the Government in respect of the legislation in any shape or form?

[Lord Sharpe of Epsom (Con)]

I assure the noble Viscount that I shall come to the substance of his comments and those of the noble Baroness, Lady Lister, shortly.

I turn to the probing amendment from the noble Lord, Lord Wallace of Saltaire, that provides for a public health emergencies exemption to the political influence tier. I agree that where an event such as a coronavirus pandemic arises, it is imperative that the sharing of key information does not face unnecessary regulatory red tape.

The scheme does not intend to impede the sharing of information relating to public health emergencies. Governments speaking to other Governments, and experts speaking with other experts, will not be caught by the scheme. Only where communication is carried out to influence a political matter will it be registerable. Where it is done to influence a political matter but the information is shared as part of an arrangement with the UK Government, the UK arrangements exemption will apply and no registration will be required. We would be happy to consider further the point that the noble Lord raised. As an aside to one of his other points, I say that the enhanced tier will be used only for those countries or entities responsible for the greatest state threats. I do not know how many that will be.

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Under the political influence tier, where political influence activities are to be carried out within the UK at the direction of a foreign power or foreign entity, or where the activity is to be carried out by a foreign entity, it will need to be registered. This will help strengthen the resilience of the UK political system, as discussed on previous subjects. I can reassure the noble Baroness that the British Academy will be consulted as part of our ongoing discussions and potential thoughts around things that may or may not change.

[Viscount Stansgate (Lab)]

I will reflect on what the Minister says when I read Hansard. I am glad that bodies such as the British Academy will be consulted, and I hope that the named organisations I mentioned earlier will be consulted. If we take the case of an international conference, held in one of many states around the world, is it the Government’s view that that international conference, which may or may not be sponsored officially by a Government but nevertheless takes place in what may be considered an unfriendly country, brings about the type of involvement in this scheme on the part of individual people attending, or does it not?

[Lord Sharpe of Epsom (Con)]

My Lords, I thought I was very clear on the precise specified persons tier here. A UK university would need to be acting at the direction of a specified foreign power or a specified foreign power-controlled entity before registration requirements could apply. I think that covers the set of circumstances just outlined by the noble Viscount.

National Security Bill

Viscount Stansgate Excerpts

Report stage
Wednesday 1st March 2023 Lords Chamber

[Lord Balfe (Con)]

My Lords, I think that this part of the Bill was drawn up by someone who had not travelled very widely. It really just does not make sense.

I speak particularly to Clause 32. I do not exactly spend all my time, but I do spend a good bit of it, talking to embassies in London, largely from European Union countries that I have known for some time. I also go to Brussels very regularly because I still have interests there. I meet many people from other parties and groups—for a time I was a member of the Belgian Christian Democrat party—and I wonder where this lands. Of course, in some countries—Belgium is one—you will always have a coalition; it moves around, but it is always there.

There are also many other groups—for instance, the Kangaroo Group in Strasbourg covers all of the European Union and exists to pull down barriers to trade. I am a member of that group still because it has a foreign membership category. What are we supposed to do? Incidentally, the Kangaroo Group was set up by Basil de Ferranti, a British Conservative—though it is now a long time since he has been with us. This is a bit of a mess.

I want to deal in particular with Germany, which has a long tradition of political foundations. It has the Konrad-Adenauer-Stiftung, which I do lectures for from time to time; I will be doing one later this month. It has the Friedrich-Ebert-Stiftung, which is the socialist, or social democrat, one. It has the Friedrich-Naumann-Stiftung, which is, if I remember rightly, the one from the liberal party, and it has the Heinrich-Böll-Stiftung from the Greens. They all engage in trying to hold international conferences and gatherings to put across their policies, and they also invite people like me, who are reasonably well known in Germany, to go and give lectures and talks to members of their Stiftung. Part of the reason for that is to educate their own citizens in overseas political practice; it is not all one-way. I think we have missed something out here.

The Minister will say that it will not mean this and it will not mean that, but other people have looked at this Bill and at the explanations. In particular, the German foundations have concluded, reading this draft law on entities acting on behalf of a foreign power—under the law, Germany is a foreign power; that is the definition —that, if they are to get money from their Stiftung to do any work in Britain, the Stiftung will have to satisfy the German Government that it is legitimate to accept and apply for that money.

According to the German lawyers, Clause 31(2)(c), which says that any work carried out

“with financial or other assistance provided by a foreign power for that purpose, or … in collaboration with, or with the agreement of, a foreign power”,

means that the Stiftungen will fall under the scope of the registration scheme. In other words, if the Stiftungen are to be able to operate and satisfy their funders, they will have to satisfy them about this clause in our legislation. This means that a German Stiftung—a political foundation—that receives German taxpayers’ money, or for that matter a cultural institute, Chamber of Commerce or any London-based NGO or think tank that receives money from Germany, is an agent of a foreign power and has to register, according to the definition, every single interaction with UK politicians or high-ranking officials within 28 days. They have described this as making their lives “impossible”. I say to the Minister that it is not what we say the law means; it is what it means to a lawyer, and in this case what it means to a German lawyer.

I cannot agree that the concept of “foreign principle” has been removed. It has been removed and replaced with “foreign power”, but this does not cover what is needed. The fact of the matter is that, in the Minister’s letter, he very carefully said:

“Foreign opposition parties are not classed as foreign powers (for example the French Socialist party).”


That is not the German interpretation of our law. The Minister can shrug his shoulders, but the sensible way forward would be to accept an amendment such as the one put down by the noble Lord, Lord Wallace, which makes it quite clear that these countries are not foreign powers for the purpose of this legislation. I invite the Minister to think carefully and come back at Third Reading with a much better definition. This general, catch-all “foreign powers” covers all of NATO but also, as has been mentioned, Australia, New Zealand and Canada. Where are we going? Please could the Minister think it out a bit better and clarify it, possibly along the lines of the amendment, but certainly so that the people we deal with every day, who are cheerfully telling me about the attitude of the British Government to the reconstruction of Ukraine—which is not quite what the British Government are saying but is what the diplomats are picking up—can continue to brief us and keep us on top of things?

[Viscount Stansgate (Lab)]

My Lords, I want to speak briefly to ask the Minister a question. I support what has been said by my noble friend Lady Hayter and the noble Lords, Lord Wallace and Lord Marks, but is Clause 32(1)(e) not possibly a case of government overreach? When it is listed that a political party involved in a Government of a friendly power should be included in the Bill in this way, does it imply that every member of that political party would be covered by this provision? Are we talking about the headquarters of a political party or the membership? That would involve so many people, I wonder whether the Government really mean to do that and, if so, whether they realise what an incredible extension and overreach that might represent.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, this has been a more wide-ranging debate than I was anticipating. The definition of a foreign power is an important issue. It was covered by the Minister in Committee, and I look forward to him expanding on what he said and particularly to address the points made by my noble friend Lady Hayter in her Amendment 74. I think I will leave it there because we have other business to deal with, and I look forward to the Minister’s response.

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[Lord Sharpe of Epsom (Con)]

I thank the noble Baroness for her comments. I am more than happy to continue engagement on this subject.

The final amendment in this group, concerning the definition of a foreign power, was initially tabled in Committee and has been retabled by the noble Lords, Lord Marks and Lord Wallace. It seeks to exclude members of NATO and other nations, via regulations, from the definition of a foreign power. I want to put it on record that we do not consider all foreign powers to be hostile. When this amendment was initially tabled, I put forth that the National Security Bill focuses on the harmful conduct undertaken by a person and not the foreign power they seek to benefit. I continue to believe that this is the right approach.

The Government do not seek to create gaps in the legislation which could allow states to act through proxies and thus undermine what the Bill seeks to do—to take necessary and appropriate action against harmful activity. Again, no doubt to groans, I will bring your Lordships’ attention to the case of Daniel Houghton. He is the dual British-Dutch national who attempted to sell sensitive information to the Dutch intelligence service in 2010. If this amendment were to be accepted, and NATO states excluded from the definition of a foreign power, cases such as Daniel Houghton’s would not be captured by the offences and measures in the Bill. This would not be an appropriate outcome which could undermine the Bill. I believe that the Dutch came to us on this particular occasion and I commend them for it. I ask again that these amendments tabled by noble Lords be withdrawn.

[Viscount Stansgate (Lab)]

I do not want to detain the House. I asked whether the definition of a political party in Clause 32(1)(e) means all members of it or not.

[Lord Sharpe of Epsom (Con)]

I thought that I answered this when I talked about direction by a foreign power. If members of a political party are directed by a foreign power, they would be covered.