Clause 29 - Publication of notice of final order

National Security and Investment Bill – in a Public Bill Committee at 2:00 pm on 8th December 2020.

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Amendment proposed this day: 27, in clause 29, page 19, line 39, leave out paragraph (a) and insert—

“(a) would be likely to prejudice the commercial interests of any person and where the publication would not be in the public interest, or”—

This amendment would prevent the Secretary of State from redacting notices of final order (and information within them) on commercial grounds if redacting is contrary to the public interest.

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

I had been just about to conclude by saying that a key reason for the amendment moved by my hon. Friend the Member for Ilford South is that it asserts and requires the supremacy of the public interest over commercial interest in the Secretary of State’s actions in reporting on final notices. I hope that the Minister will accept the amendment.

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

With your permission, Sir Graham, I will speak to clause 29 stand part before turning to the amendment. The Committee has heard about the careful balance that the Government are striking in this regime by allowing for a discreet and commercially sensitive screening process wherever possible, while requiring transparency at key junctures where not to do so could disadvantage third parties.

Clause 29 is a key clause, the purpose of which is to deliver that essential but carefully chosen transparency. It places a duty on the Secretary of State to publish a notice of the fact that a final order has been made, varied or revoked. The main purpose of publishing notice of those facts is to ensure that third parties who may have a financial interest in a trigger event are not disadvantaged by the provision of information only to the parties involved. Examples of relevant third parties might include shareholders, suppliers or customers of the target entity, and other investors who may be considering investing.

The clause will provide important reassurance to the business community and the wider public about the circumstances in which final orders are made, varied and revoked. It specifies what information must appear in a notice, including, crucially, a summary of the order, revocation or variation, its effect, and the reasons for it. Similarly to the approach on orders, subsection (3) allows the Secretary of State to exclude information from the notice when he considers it commercially sensitive or national security sensitive. The clause is complemented by the requirement in clause 61 for the Secretary of State to report annually to Parliament on the use of the powers in the Bill. Clause 61(2) sets out an extensive list of the aggregate data that the annual report must include. Together, those provisions will help investors and businesses to understand the regime, and will ensure that Parliament can hold the Government to account on their operation at both individual and aggregate levels.

I will now turn to amendment 27 to clause 29. I remind the Committee that the clause requires the Secretary of State to publish a notice when a final order has been made, varied or revoked. As drafted, subsection (3)(a) provides that the Secretary of State may exclude from that public notice anything that he considers likely to prejudice the commercial interests of any person. The amendment would prevent the Secretary of State from excluding such information, unless he considers that publishing it would not be in the public interest.

The Committee has heard about the careful balance that the Government are seeking to strike in this regime, to allow, as I mentioned earlier, for a discreet and commercially sensitive screening process wherever possible, while requiring transparency at key junctures when not to do so may disadvantage third parties. As I set out, this is a key clause, the purpose of which is to deliver that carefully balanced transparency. Inherent in the clause is the degree of flexibility afforded to the Secretary of State to redact information when he judges that to be appropriate, whether for commercial or national security reasons. I hesitate slightly to return to a somewhat recurring theme—the difference between “may” and “shall”—but the fact that the Secretary of State “may” redact information provides him with the flexibility to decide case by case whether that is the right thing to do.

The hon. Member for Ilford South seeks to ensure with this amendment that the Secretary of State will not disregard the public interest when using the flexibility on deciding whether to redact information. The hon. Gentleman need not worry; that is my message to him. The Secretary of State will always seek to serve the public interest in this Bill and in all that he does. I can therefore assure the hon. Gentleman that the Secretary of State will carefully consider any redactions made and that he will not take the decision to exclude information lightly.

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

I suspect that the hon. Member for Ilford South may wonder why, if it makes so little difference, we do not include his amendment and formalise the importance of considering the public interest. I suspect that that is also the point on which the hon. Lady wishes to intervene.

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

The Committee recognises the importance of giving the powers in the Bill to the Secretary of State in the interests of national security. The powers of redaction are, or could be, in the interests of commercial sensitivity. Does the Minister agree that national security and the public interest should be supreme over commercial sensitivity? Why will he not make that clear?

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

I thought I had made that clear. The Bill strikes that balance between commercial sensitivity and national security.

I return to my reassurance on the importance of considering the public interest. In addition to the general principle that one should avoid amending clauses that, essentially, fulfil their objectives—if it isn’t broken, don’t fix it—I suggest that the Bill is not the place to begin adding references to the public interest. While the Secretary of State cares profoundly about the public interest, this specific regime is intentionally and carefully focused on national security. Although it may be an attractive proposition to certain hon. Members, my strong view is that by introducing ideas of wider public interest into the Bill, we would risk confusing and stretching its scope beyond its carefully crafted calibration. I have a tremendous amount of sympathy with what hon. Members seek to achieve with the amendment but, for the reasons I have set out, I must ask that the hon. Gentleman withdraws it.

Photo of Sam Tarry Sam Tarry Labour, Ilford South

It is a pleasure to serve under your chairmanship, Sir Graham, in these temperatures, which are positively balmy compared with the Siberian ones that we experienced this morning.

I thank the Minister for his comments, but I would say that there is no stretch too far on national security. It is positive to hear that the Minister agrees that the focus on national security is crucial, and that we are driving at the interests of national security in our amendment.

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

Was my hon. Friend as confused as I was when the Minister spoke about this Bill not being the place to introduce public interest? The Government, however, have introduced commercial sensitivity. We are not seeking to modify national security; it is the introduction of commercial sensitivity that requires the introduction of public interest. We are talking about modifying the importance of commercial sensitivity, not national security. Will my hon. Friend join me in rejecting the Minister’s assertion?

Photo of Sam Tarry Sam Tarry Labour, Ilford South

I agree wholeheartedly with my hon. Friend. We have been clear that the amendment is simply about preventing the Secretary of State from redacting notices of final order on commercial grounds, if redaction is contrary to the public interest. The whole point of this Bill is to together public interest, national security and commercial interest because they are one and the same. National security is our highest priority, but in the post-Brexit scenario we want to be a country that is as open and positive as possible towards investment from international partners if they share our values and our objectives of supporting and building Britain. It feels as though the Minister is agreeing with us in part, but he is not prepared to accept this amendment. For that reason, I will press the amendment to a vote.

Question put, That the amendment be made.

Division number 14 National Security and Investment Bill — Clause 29 - Publication of notice of final order

Aye: 4 MPs

No: 10 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

The Committee divided: Ayes 4, Noes 10.

Question accordingly negatived.

Clause 29 ordered to stand part of the Bill.