Clause 61 - Annual report

National Security and Investment Bill – in the House of Commons at 4:44 pm on 28th April 2021.

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Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London) 4:44 pm, 28th April 2021

I beg to move,

That this House
disagrees with Lords amendments 11B and 11C.

The amendments made in the other place concern what is in effect a reporting requirement to the Intelligence and Security Committee in respect of the national security and investment regime. They incorporate the text of Lords amendments 11 and 15, which were considered in this House on 26 April. In addition, they would end the reporting requirements on the Secretary of State for Business, Energy and Industrial Strategy provided for by Lords amendments 11 and 15 should the memorandum of understanding that governs the remit of the Intelligence and Security Committee be amended to bring the Secretary of State’s activities under clause 26 into the scope of ISC scrutiny.

This House has already offered a view on the substance of amendments. It is disappointing that the other place has not heeded the clear and carefully considered message from this Chamber that the amendment to provide for a reporting requirement to the ISC is neither necessary nor appropriate. I welcome the Lords’ continuing attempts to find compromise, but I respectfully disagree with them. The Secretary of State has written to confirm plans for scrutiny with the Chair of the Business, Energy and Industrial Strategy Committee, Darren Jones, and the Chair of the Science and Technology Committee, my right hon. Friend Greg Clark. The ISC remains able to scrutinise the work of the intelligence services where it falls within the memorandum of understanding and in accordance with the Justice and Security Act 2013.

As we rapidly approach the end of this Session, it is essential that this vital Bill on the UK’s national security does not fall as a result of our failure to agree that the BEIS Committee will continue to scrutinise the work of the Department for Business, Energy and Industrial Strategy. I therefore urge the House to reject amendments 11B an 11C from the other place and reiterate its message about the will of this democratically elected House, to help ensure that the Bill becomes law without delay.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport)

I again thank colleagues in the other place who have worked tirelessly to improve the Bill.

Labour is the party of national security and has long called for a new regime to deal with the evolving national security threat arising from mergers and acquisitions, as the Bill seeks to do. The Bill was much improved in Committee, as the Minister acknowledged in Monday’s debate; however, as Members from all parties highlighted then, it still lacks an appropriate level of oversight for critical national security decisions. Labour believes that Intelligence and Security Committee scrutiny is essential to provide the robust and sensitive oversight and accountability that matters of national security require. The Bill gives significant new powers to BEIS, a Department traditionally lacking in national security experience.

On Monday, as the Minister indicated, the Government rejected Lords amendments 11 and 15, stating that

“it is appropriate and sufficient for oversight and scrutiny of decisions made by the Secretary of State for BEIS to be conducted by their departmental select committee”— that is, the BEIS Committee. The Lords have responded with amendments 11B and 11C, which would allow the Government to add the Investment Security Unit into the Government and ISC memorandum of understanding, thereby removing the obligation to provide the ISC with a confidential annexe.

We maintain our position: that the BEIS Committee does not have the security clearance necessary to provide scrutiny. In Monday’s debate, the Chair of the Committee, my hon. Friend Darren Jones, said clearly that the Committee

“does not have the access to the intelligence information that it would need in order to adequately scrutinise the Investment Security Unit in the BEIS Department.”—[Official Report, 26 April 2021; Vol. 693, c. 164.]

As the Minister indicated, the Secretary of State has said that classified information could be shared with the BEIS Committee on a case-by-case basis, but the retaining, recording, discussing or reporting of that information after the fact would constitute a security breach, somewhat limiting the Committee’s actions.

In this afternoon’s debate in the other place, the Government said that they will “carefully consider” ways in which classified information could be provided so that the Committee can do its job. Why do we need careful consideration when we have, through the Intelligence and Security Committee, an existing and functioning mechanism for parliamentary scrutiny on issues of national security? Earlier this afternoon, the Government were again defeated in the other place, this time by an even greater margin, showing that, despite the Minister’s efforts, support for Intelligence and Security Committee oversight is growing. I feel that it is becoming an issue of intransigence and stubbornness—or, as former Conservative Health Secretary Lord Lansley put it today, “arrogance”—by a Government refusing to prioritise national security in the National Security and Investment Bill, and determined to overturn common sense for reasons that are unclear to us all.

It is clear to us that there is a need for Intelligence and Security Committee oversight. Indeed the Chair of the ISC, Dr Lewis, said:

“The setting up of the new Investment Security Unit in BEIS”— a function of this Bill—

“is…precisely the situation that the Government assured the House”—[Official Report, 26 April 2021; Vol. 693, c. 157.]

would mean that there was ISC oversight, under the memorandum of understanding between the Government and the ISC. Today’s amendment provides for ISC scrutiny until an amended MOU resolves the confusion that appears to exist—on the Government’s part, at least.

If the Government are serious about protecting the UK’s national security through this Bill, they will not force through legislation with such a significant blind spot. Labour, the Chair of the Intelligence and Security Committee, the Chair of the Business, Energy and Industrial Strategy Committee, many Government Back Benchers and cross-party consensus in the other place all agree that the ISC is best placed to provide national security oversight. Why are the Government determined to stand alone in risking our national security in this case?

Photo of Owen Thompson Owen Thompson SNP Chief Whip

I will be very brief. Earlier this week, my hon. Friend Stephen Flynn made the case very clearly that we broadly support the principles of the Bill, but still have concerns over the levels of scrutiny, as we have heard from other Members. We have attempted to be constructive at all stages, and have tried to support the Government to find a balance between the needs of business and national security, particularly in relation to small and medium-sized enterprises.

Many amendments have been accepted, which will help to achieve this; we welcome the Government’s steps in that regard. However, the scrutiny process remains vital and we are not yet satisfied that it has been taken fully into consideration. The comments made by the Chair of the ISC earlier this week certainly highlighted that. I urge the Government to heed those words and those of my hon. Friend the Member for Aberdeen South.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I am grateful to hon. and right hon. Members for their contributions and considerations in this debate and others. I will make a couple of brief points in response.

The nub of the remarks made by Chi Onwurah was the question of whether the BEIS Committee will have access to top secret information. We will make sure that the Committee has the information it needs to fulfil its remit and scrutinise the work of the ISU under the NSI regime. Much of the information is unlikely to be highly classified, but where the Committee’s questioning touches on areas of high classification, it is likely that relevant information could be given in a way that does not require as high a level of classification, and that this could be provided to the Committee on a confidential basis. If, however, the Committee does require access to highly classified information, we will carefully consider how best to provide this while maintaining information security in close collaboration with the Committee’s Chair.

The Government’s main powers to scrutinise and intervene in mergers and acquisitions for national security reasons comes from the Enterprise Act 2002. The powers under the Act sit with the Secretaries of State for BEIS and for Digital, Culture, Media and Sport, not with the Cabinet Office. The BEIS Committee’s oversight of the new NSI regime is entirely in keeping with this and does not represent a reduction in the ISC’s remit, so there is no barrier to the Committee handling top secret or other sensitive material, subject to the agreement of the Department and the Chair of the Committee on appropriate handling.

This House should continue its excellent work of speeding this Bill towards becoming law for the benefit of the UK’s world-leading investment environment, as well as of protecting the nation’s security. I therefore urge the House to disagree with the Lords in their amendments 11B and 11C.

Question put, That this House disagrees with Lords amendments 11B and 11C.

Division number 283 National Security and Investment Bill — Clause 61 - Annual report

Aye: 357 MPs

No: 269 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

The House divided: Ayes 358, Noes 269.

Question accordingly agreed to.

Lords amendments 11B and 11C disagreed to.

The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.

Ordered, That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments 11B and 11C;

That Paul Scully, Michael Tomlinson, Jo Gideon, Lucy Powell and Stephen Flynn be members of the Committee;

That Paul Scully be the Chair of the Committee;

That three be the quorum of the Committee.

That the Committee do withdraw immediately.—(Mike Freer.)

Committee to withdraw immediately; reasons to be reported and communicated to the Lords.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

In order to observe social distancing, the Reasons Committee will meet in Committee Room 12.