National Security and Investment Bill

Lord West of Spithead Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Thursday 4th February 2021 Lords Chamber

[Lord West of Spithead (Lab)]

My Lords, first, I congratulate my noble friend, no longer in his place, on his maiden speech. I have to say, though, that Jeremy Corbyn is not my cup of tea, but clearly my noble friend Lord Woodley is a decent fellow, because he is an ex-sailor.

For several years, a number of us have been concerned about the impact of inappropriate takeovers and dual ownership of firms that were key to our critical national infrastructure and essential sovereign capability of cutting-edge research, technology, and equipment production and control. Some seven years ago, the ISC became very aware of this, and it was clear to it that national security issues around investment decisions were not properly being taken into account, so it said to the Government that they should take some action. I am therefore pleased to see this Bill progressing through Parliament. The legislation is vital to protect the UK’s security across a range of areas.

Having waited seven years for the Government to bring forward legislation, it is beholden on us and them to get it right, and there is one rather large hole in the Bill: there is no proper oversight by Parliament. In Clause 61, there is provision for an annual report to this House, but that report will contain the bare minimum of detail. The Minister has told the other place that the BEIS Select Committee will provide further oversight, and indeed that is the case when it comes to the economic aspects of decision-making. The BEIS Select Committee cannot see detailed classified national security material and, by their nature, decisions made under this legislation will require deep engagement with sensitive material and a clear-eyed understanding of the possible conflict between encouraging business and protecting our national security.

There is currently no provision for oversight of national security material on which decisions will be taken. The ISC was established in 1994 to provide exactly that oversight: to examine matters that Parliament could not, because they are too sensitive to be discussed in public. It is therefore surprising that the Bill, as drafted, does not provide for oversight by the ISC. The investment decisions that the Bill covers are currently taken, in modified form—as has been mentioned by a couple of previous speakers—by national security elements within the Cabinet Office. Therefore, they are within the purview of the ISC. As these decisions will move to BEIS, that oversight will now be removed, so the Bill is in fact a step backwards.

During the passage of the Bill through the other place, it was proposed that the ISC should receive an annual report on the sensitive issues covered by the Bill. In response, the Minister said that the ISC could always request that information from his department. That is, frankly, not good enough. As my colleagues on the ISC have already noted, without statutory provision for routine ISC scrutiny in the Bill, there is a possibility that, no matter how well intentioned this Government may be, future Governments may refuse to provide such information to the ISC. The Minister had already argued in the other place that the ISC’s remit does not extend to oversight of BEIS work, which undermines his later claim that the ISC can request information.

Therefore, unless the Minister says something to change my view, I intend to submit an amendment that would expand the current reporting requirements to include reporting to the ISC, incorporating details of the national security decision-making process into the existing annual report in Clause 61, allowing the Secretary of State to redact those matters from the report laid before Parliament and instead provide them to the ISC by way of a secret annexe. I hope the Minister will acknowledge that this is a constructive approach, in that it would lessen the burden upon the new BEIS investment security unit. If, for some extraordinary reason, the Minister is unable to accept this, the alternative would be to assure this House that the work of the new unit will be brought within the remit of the ISC by including it within the memorandum of understanding that sits underneath the Justice and Security Act.

It is critical that there is oversight of matters that Parliament itself cannot oversee. This House should not be passing legislation that allows for action in the name of national security without providing for oversight of that action.