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

We can debate the number, but the issue is one of delay and bottlenecks. It could mean that the Secretary of State was timed out of calling in potentially harmful acquisitions and of imposing any national security remedies. Alternatively, if the initial assessment period following a notification was extended beyond 30 working days, which is not currently possible under the Bill, that could reduce certainty for businesses, which I know the hon. Lady and the hon. Member for Aberavon were also concerned about. Any delay to remedies addressing national security risks would be a problem. However, I assure hon. Members that the Secretary of State will eagerly seek expertise and advice from a wide range of sources, and we will work together to safeguard our national security. Having a slick and efficient call-in process is vital to that.

Amendment 4 seeks to require the Secretary of State to consult the Intelligence and Security Committee prior to publishing a statement on the exercise of the call-in power, known as the statement of policy intent. Clause 4 requires the Secretary of State to carry out such a consultation on a draft of the statement as he thinks appropriate, and to take into account the response to any such consultation during the drafting process. That process could include engagement with interested parties across the House, and I am delighted to learn that such esteemed colleagues as members of the ISC might wish to discuss the statement in detail. Parliament has been provided with the first draft of the statement, and we would welcome its view on its content.

I draw attention to the fact that clause 4 requires the Secretary of State to lay the statement before Parliament, as my brilliant hon. Friend the Member for West Aberdeenshire and Kincardine rightly pointed out. If either House resolves not to approve the statement within 40 sitting days, the Secretary of State must withdraw it. That provides Parliament, including members of the ISC, with plenty of opportunity to influence and scrutinise the contents of the statement, which I believe is the aim of the amendment and which I am therefore not able to accept.

Amendment 5 would require the Secretary of State to notify the Intelligence and Security Committee prior to making regulations under clause 6 and to enable the Committee to respond with recommendations. I welcome the contributions made by many members of the ISC on Second Reading, and I have since written to the Committee Chair, who unfortunately was unable to attend, to follow up on a number of the recommendations made by his colleagues.

Clause 6 defines the circumstances covered by mandatory notification. The Bill calls them “notifiable acquisitions” on the basis that they must be notified and cleared by the Secretary of State before they can take place.

Members are aware that any modern investment screening regime must provide sufficient flexibility for the Government to examine a broad range of circumstances, bearing in mind the increasingly novel way in which acquisitions are being constructed and hostile actors are pursuing their ends. The regime needs to be able to respond and adapt quickly. Regulations made under the clause will be subject to parliamentary approval through the draft affirmative procedure, giving Members ample opportunity to ensure that mandatory notification and clearance regimes work effectively.

The draft affirmative procedure means that regulations may not be made unless a draft has been laid before Parliament and approved by a resolution of each House. I am pleased to advise esteemed members of the ISC that in developing the regulations the Secretary of State will take the greatest care, and will consult as widely as is judged appropriate, while ensuring he is able to act as quickly as needed. I see no need for a formal consultation mechanism. Indeed, such a mechanism between the Committee and the Secretary of State would be unprecedented.

For the reasons I have set out, I am not able to accept the amendments, and I hope that the hon. Member for Newcastle upon Tyne Central will not press them.