Clause 1 - Call-in notice for national security purposes

Part of National Security and Investment Bill – in a Public Bill Committee at 10:30 am on 1 December 2020.

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Photo of Nadhim Zahawi Nadhim Zahawi Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), The Parliamentary Under-Secretary for Health and Social Care 10:30, 1 December 2020

It is a pleasure to serve under your chairmanship, Mr Twigg, and to speak on this important Bill. I am grateful for the congratulations—or perhaps commiserations!—of the shadow Minister and all colleagues on my new role as the vaccines delivery Minister. I am obviously focused on the NSI Bill now, but I am also conscious of my responsibility for delivery, and I had a very good conversation with the devolved Administrations last night.

I hope that the Committee agrees that the Second Reading debate and the evidence sessions last week demonstrated the importance both of this legislation and of getting it right. I again place on record my thanks to the Opposition parties for the constructive way in which they have approached the Bill thus far, and I look forward to discussing the amendments that they have tabled to this part of the Bill.

Amendment 3 requires the Secretary of State to assess a multi-agency review or recommendation of the Intelligence and Security Committee before issuing a call-in notice. I remind hon. Members that it is vital for the Government to have the necessary powers fully to scrutinise acquisitions of control over entities and assets that may pose national security risks. To enable this, clause 1 gives the Secretary of State power to issue a call-in notice when he or she reasonably suspects that a trigger event has taken place, or is in progress or contemplation, and that that has given rise to, or may give rise to, a national security risk. It is entirely reasonable, as Committee Members have said, to want the Secretary of State to make full use of expertise across Government and Parliament to run the most effective and proportionate regime that he or she can. The amendment aims to recognise that.

To explain why the amendment would not achieve that noble aim, it would be helpful briefly to summarise the overall screening process. First, businesses and investors can notify the Secretary of State of trigger events of potential national security concern. In certain parts of some sectors, notification by the acquirer will be mandatory. Following a notification, the Secretary of State will have a maximum of 30 working days to decide whether to call in a trigger event to scrutinise it for national security concerns. For non-notified acquisitions, the Secretary of State may call in a completed trigger event within six months of becoming aware of it, both on a case-by-case basis and when developing his overall approach. The Secretary of State intends to draw on a wide variety of expertise from across, and potentially beyond, Government as is appropriate.

If the Secretary of State calls in a trigger event, there will be a detailed review. At the end of the review, the Secretary of State may impose any remedies that he reasonably considers necessary and proportionate to address any national security risk that has been identified. The Bill gives the Secretary of State 30 working days to conduct an assessment, but this may be extended for a further 45 working days if a legal test is met, and then for a further period or periods with the agreement of the acquirer. The purpose of the initial assessment of whether a trigger event should be called in is not to conduct a detailed review of the entire case, or to determine whether the trigger event in question gives rise, or would give rise, to a risk to national security. That comes later. It is simply a preliminary assessment of whether the trigger event warrants a full assessment. Prohibiting the Secretary of State from calling in a trigger event until a multi-agency review has taken place, or the Intelligence and Security Committee has provided a recommendation, could severely upset the process – as we heard eloquently from my hon. Friend the Member for South Ribble.