What steps his Department is taking to increase covid-19 testing capacity.
What steps his Department is taking to increase covid-19 testing capacity.
We are processing coronavirus tests on an unprecedented scale and expanding capacity further, having already met our testing capacity target of 500,000 tests a day by the end of October. We now have five Lighthouse labs operating across the UK, with two more announced yesterday, and significant progress on next-generation testing technologies.
I congratulate my right hon. Friend on the tremendous progress he has made over recent months on increasing our testing capacity, including the delivery of a new site in my constituency. The recent announcement regarding care homes is welcome. How quickly does he think the trial process can be concluded, so that we can roll out a nationwide scheme to ensure that those in care homes can finally see their loved ones again?
We have discussed many times in this House the importance of the use of testing because of the terrible dilemma of wanting to keep people safe in care homes, yet also wanting to allow visiting. Testing can help to resolve that. The pilots are ongoing in some parts of the country, and I very much hope that we can get to a position where we can offer testing to enable visiting across the country before Christmas
I welcome the testing pilots that are happening, including in Southampton. How will the Government be able to support local authorities and public health teams with the logistics of mass testing, particularly in large rural areas such as Hampshire?
Increasingly, the test itself is only one part of getting a high-quality testing system. The logistics around it are also vital. We are already funding local authorities across the country to support them to roll out mass testing, but we will learn from the pilots, including in Hampshire, to see what extra might be needed.
Testing, backed up by tracing and isolation, is key to avoiding further lockdowns. At the Secretary of State’s press conference yesterday, we heard that tier 1 has had “very little effect” and that the tiers must be strengthened. Can he confirm that it is the Government’s intention to impose a tougher set of restrictions on tier 1 areas post this lockdown?
It is too early to do the analysis that the hon. Gentleman requests, but of course, we remain vigilant.
We will soon be asked to make a decision on the future of the lockdown, so the earlier we get that information, the better Testing for NHS staff is crucial for dealing with the backlog in NHS care. Last week, we learned that 139,000 people are waiting beyond 12 months for treatment. We now know that 252,000 people are waiting beyond 18 weeks for orthopaedic surgery, which is often hip and knee replacements, and 233,000 patients are waiting beyond 18 weeks for eye surgery—many could go blind. People are waiting longer for gynae surgery and heart valve surgery, and many are languishing on trolleys in dangerously overcrowded A&Es. As well as testing NHS staff, Ministers have promised to give the NHS whatever it takes. Can the Secretary of State guarantee that the spending review will deliver the resources, beds and capacity to bring waiting lists down?
The good news is that we are managing to continue to drive through the backlog that understandably built up in the first peak. Instead of attacking the NHS, the hon. Gentleman should be backing the NHS and thanking it for the incredible hard work that it is doing right now and will be doing this winter.
What steps his Department is taking to increase NHS capacity for winter 2020-21.
The Prime Minister has announced £3 billion to support NHS capacity this winter. Among other things, that money funds our Nightingale hospitals, so that surge capacity is available, and the NHS’s ongoing access to additional independent sector capacity. It also supports the safe discharge of patients, helping to reduce pressure on beds. In addition, £450 million of capital funding has been announced to upgrade and expand A&Es across the country, to help prepare the NHS for winter, and that money is already being spent.
The £3 million announced to increase winter capacity in Dudley is hugely welcome, but will my hon. Friend also look at Dudley’s bids for capital funding for a hybrid theatre and reconfiguration of critical care? Will he join me on a visit to Russells Hall, so that he can see the transformative effect that those projects would have on care for patients in Dudley South?
I am delighted that my hon. Friend’s constituents will benefit from £3 million to increase capacity at Russells Hall Hospital in Dudley as part of the investment to upgrade A&Es ahead of winter. Future NHS capital spending will, of course, be determined at the upcoming spending review, but once our settlement has been confirmed with the Treasury, we will consider carefully how projects are prioritised within it. In the meantime, I encourage the Dudley Group NHS Foundation Trust to discuss its proposals with NHS England and NHS Improvement. I would be happy to meet my hon. Friend to discuss this, because I know how hard he campaigns on this issue, and I would be delighted to take him up on the offer of a visit when I am able to.
The NHS will only survive the winter if its workforce are valued and supported. The evidence from the British Medical Association to the Health and Social Care Committee this morning was stark. So does the Minister understand how demoralising it is for staff to hear reports that they may face yet another two-year pay freeze? I asked those on the Government Benches to rule this out last week. I got no answer, so I ask them again today: will they rule out a pay freeze for NHS staff?
I am grateful to the hon. Gentleman. He is quite right to highlight the amazing work that our NHS and social care workforce have done throughout this pandemic, as they do every year, and I pay tribute to them for that. As he will know, the NHS agrees with its staff multi-year pay deals set by independent recommendations, and we continue with that process.
If he will allocate additional funding to local authorities to support the roll-out of lateral flow covid-19 testing.
In addition to giving local directors of public health access to tests, NHS Test and Trace will provide access to training, clinical, operational and service design guidance, and communication and engagement support. In addition, all local authorities have funding available up to £8 per head of population to support the roll-out.
I welcome the allocation of lateral flow tests to both Kingston and Richmond in my constituency to allow for mass testing. Can the Secretary of State confirm whether, in addition to the support he has just outlined for the testing, there will be additional resources to support local tracing efforts and to support those who are found to need to isolate?
Absolutely, the funding to support people who need to isolate is in addition to the funding I just outlined, which supports both the roll-out of mass testing and local contact tracing, and we always keep these things under review.
What steps his Department is taking to ensure adequate supplies of personal protective equipment for (a) health, (b) social care and (c) other frontline services during the covid-19 outbreak.
What steps his Department is taking to ensure adequate supplies of personal protective equipment for (a) health, (b) social care and (c) other frontline services during the covid-19 outbreak.
We have a four-month stockpile of all covid-critical PPE in place. Thanks must go to the tremendous contribution from UK manufacturers, including Honeywell in Motherwell in Scotland, which now meet 70% of our PPE needs. We have distributed 4.7 billion items, ensuring health and care providers and others have access to the critical protective equipment that they need to help keep everyone safe.
According to Treasury figures, the UK Government have spent £15 billion to date on PPE contracts, and the majority to date have been awarded without open tendering, often to those with connections to the governing party or to companies with no PPE experience at all. Does the Minister consider it is acceptable that, instead of that resource being used to protect frontline healthcare staff, so much of it has been squandered on millions of items that are absolutely unusable because they do not meet NHS standards, and how does she propose to restore this Government’s reputation for competence, probity and openness in the tendering process?
The global pandemic presented us with unprecedented challenges in securing the volumes of PPE required. We moved swiftly in order to make sure that we kept people safe. We procured goods and services, and worked with extreme urgency in accordance with procurement rules and Cabinet Office guidance. All offers were prioritised based on volume price, clinical acceptability and lead time. I am happy to reiterate: we have four months’ supply.
The UK Government removed the zero VAT rating for PPE on 1 November, increasing costs by 20%. Social care and other frontline services are already having to pay higher prices and to buy larger quantities of materials, so why are this Government making it even more expensive to protect key workers during what is the second wave of covid?
I would like to thank the hon. Gentleman. In the main, many of our frontline operators are getting it free—social care, general practice, dentistry, optometry and so on. The relief was designed specifically to relieve the burden of VAT on sectors particularly affected by coronavirus while supply did not match demand. Now the Government are able to supply covid-related PPE across all sectors, the burden of VAT will still not fall on frontline providers for all covid-related PPE and demand will be met. Most businesses that make taxable supplies can recover the VAT that they incur on purchases of PPE as business expenses. They will therefore be able to reclaim all VAT after the 31st. But I reiterate: for the majority of frontline healthcare, it is free.
The price of an FFP2 mask bought by the Government increased by 1,400% in just six weeks to the end of May and gowns by 350%. I welcome all efforts by the Government to procure PPE, but I have concerns that we may not be getting a fair price. One company, PPE Medpro Ltd, was given Government contracts worth over £190 million. PPE Medpro Ltd had no previous experience and coincidentally was only set up on 12 May 2020. Reports have suggested that the company has substantial links to Conservative party donors, so can the Secretary of State or the Minister categorically assure the country that no Conservative party donors are profiteering from the pandemic?
Our plan on PPE has to be to stabilise the system and build resilience. That was outlined in the PPE strategy published on 28 September. [Interruption.] Children! Thank you.
Minister Churchill, I think that is down to me; you carry on.
I am sorry, Mr Speaker, but it is that old habit from being a mother of four We procure goods and services, as I have said, with extreme urgency in accordance with procurement rules and Cabinet Office guidance. We are confident of our supply, with four months’ worth of covid-critical PPE, over 70% of it now manufactured in the UK, providing UK businesses with jobs and ensuring that all health and care providers have access to critical protective equipment needed to keep patients and staff safe.
What progress his Department has made on building new hospitals.
What progress his Department has made on building new hospitals.
On 2 October, £3.7 billion-worth of funding was confirmed for 40 new hospitals, with a further eight schemes invited to bid for future funding, to deliver a total of 48 hospitals by 2030. Four in the programme are already in construction, and three others have commenced early, enabling works on site. The hospital building programme is, of course, in addition to significant upgrades to 20 hospitals, which will be complete by March 2024, and is part of a wider programme of investment.
I am grateful to the Minister for those clarifications, and I obviously welcome this programme, but before he came into office, in March 2018, his Department allocated £312 million for a major capital programme at the Royal Shrewsbury Hospital and the Princess Royal Hospital in Telford. Now that an independent reconfiguration panel has confirmed that these decisions were properly made and should proceed, the trust is seeking approval from his Department for advance of funds for enabling work by architects, structural engineers and others. Can he confirm when this requested £6.3 million will be forthcoming?
I am pleased to confirm to my right hon. Friend, a distinguished predecessor of mine in this office, at this Dispatch Box that £6 million-worth of funding has been approved in principle, allowing Shrewsbury and Telford Hospital NHS Trust to develop its plans and produce a business case for this scheme. The Department will continue to work closely with the trust to understand how the right support can be provided centrally to develop an affordable case for the overall scheme and to maximise the impact of this funding, and I will be writing to my right hon. Friend with more detail later today.
The independent reconfiguration panel overwhelmingly backed the plans for the development at the Epsom and St Helier trust; does my hon. Friend agree that the Labour party should take away the threat of a judicial review and allow this investment to take place so that my constituents and the constituents of south-west London can benefit from greater access and better-quality healthcare?
I am delighted that my right hon. Friend the Secretary of State recently gave these plans the green light following independent advice from the IRP, and I am pleased that this will mean my hon. Friend’s constituents and, indeed, many others will benefit from a new state-of-the-art NHS hospital in Sutton. Patients and the public will now be engaged in shaping the detail of the new services; I encourage all local people to participate positively in that process and the council and others to get behind that scheme and that record investment by this Government in his area.
What recent discussions he has had with the Chancellor of the Exchequer on reducing the economic effect of the covid-19 outbreak.
I have regular discussions with the Chancellor of the Exchequer and others. The best strategy for both health and the economy is to suppress the virus, supporting the NHS and the economy, until a vaccine can make us safe.
The economic effect of the lockdown on the hospitality sector in particular is severe. In large constituencies such as Thirsk and Malton, the infection rate can vary significantly across different districts. When my right hon. Friend moves us back to a tiered system on 3 December, will he look at allocating tiers by district rather than by county to keep the economy as open as possible?
Throughout the process of the tiered system, we have always looked at a level of granular detail, whether at district council level or, indeed, ward level in some cases, to make sure that we have the appropriate measures in the appropriate places. While it is too early to say exactly how we will proceed from 3 December, that is a commitment that I can make to my hon. Friend.
As I have highlighted previously, covid is spread not just by droplets but by airborne particles, so good ventilation is key to reducing the risk of spread indoors, such as in hospitality. On 20 October, the Secretary of State agreed to speak to the Chancellor about removing VAT from ventilation and air-purification systems to make them more affordable. Can the Secretary of State tell us what discussions he has had with the Chancellor and what the outcome was?
There has been work on promoting ventilation in government. The hon. Lady is absolutely right that ventilation is important and that the scientific evidence on the aerosol transmission of coronavirus has strengthened over recent months.
If that is the case, can the Secretary of State clarify whether we will hear an announcement from the Chancellor in the near future on supporting the installation of such systems? Even with the good news about potential vaccines, it will be a long time before most of the population are vaccinated, so what is the Secretary of State’s strategy to control covid over the coming year?
Our strategy is to suppress the virus and support the NHS and the economy until a vaccine can make us safe. Increased ventilation can help to reduce transmission, so it is an important consideration, among many others, for how we tackle this disease.
What recent assessment he has made of the effect of the covid-19 outbreak on (a) access to routine dental services and (b) early diagnoses of mouth cancers.
This Mouth Cancer Action Month is a timely reminder that everybody should seek advice if they are worried. Early in the first wave, dental services were suspended, but rapidly, over 600 urgent dental centres were set up to deliver care. Since June, dentists have continued to prioritise urgent treatment and vulnerable groups and to provide routine care across the dental network. They have worked hard to restore dental activities, while keeping patients and staff safe, owing to some aerosol-generating procedures that mean we have to take particular care in the dental sector.
I recognise the Minister’s comments that people are trying to get back to work in dentistry, but the reality is that there is massively reduced dental capacity; routine dental work is not going ahead as easily as people might imagine. Dentistry also plays a vital role in identifying mouth cancers. Following on from a previous question, I wonder what help the Minister can give dental surgeries to improve their capacity. Currently, they have to have an hour’s gap between patients. I understand that ventilation systems are available, which can help, but unfortunately they are very expensive. What help can Ministers give to enable dentists’ surgeries to purchase that equipment? Can grants be made available? This is a really urgent question.
I recognise the hon. Lady’s concern in this area. I assure her that I am working closely with NHS Improvement and the chief dental officer. I have held several meetings over the past week alone, and tomorrow I am meeting the chair of the British Dental Association. Some areas of challenge that she articulates, such as fallow time and so on, are things that we are actively working on at pace, as well as looking at specific testing solutions for dentistry. We are also looking at the issue of ventilation. I am happy to report when further work has been achieved.
What steps his Department is taking to support the development of covid-19 vaccines.
What steps his Department is taking to support the development of covid-19 vaccines.
Yesterday, the House will know that we secured 5 million doses of the Moderna vaccine, so we have now secured access to 355 million vaccine doses through agreements with seven separate vaccine developers. We have secured them for the whole UK.
I thank my right hon. Friend for that answer. What assessment has he done of the logistics necessary to deliver a vaccine to more rural areas, such as Cornwall?
We have done a huge amount of work. The deployment of the vaccine is, of course, being led by the NHS, which reaches into all parts of the UK. Our principled approach is that we will deploy the vaccine according to clinical need in every single part of the UK at the same time. That, of course, includes rural areas. A significant amount of work has gone into how best to deploy to rural areas, especially as some of the people who clinically will need to get the vaccine first are also those who might find it most difficult to travel. It is a very important question on which a huge amount of work is being done.
I thank my right hon. Friend and fellow one nation Conservative for his hard work and that of his Department in impossible circumstances this year. Kate Bingham and the vaccine taskforce have done an amazing job in securing so many doses of vaccines, as and when they become available, which will be centrally procured by the UK Government and equally available across all parts of our United Kingdom. Does my right hon. Friend agree that that shows the power of all parts of the UK speaking with one voice and working together for the good of our entire Union?
I feel very strongly about this, and I agree very strongly with my hon. Friend. We should take forward this vaccine and ensure it is available fairly and equally across all parts of our United Kingdom. Of course, it will be deployed in each of the devolved nations through the devolved NHS. I have been working closely with my counterparts, and the four NHS organisations have been working together. Ultimately, let us hope that should a vaccine become available—we still do not yet have one authorised—it will be a moment at which the whole country can come together in support of making sure that those who are clinically most vulnerable will get support first wherever they live.
What recent discussions he has had with the Secretary of State for Digital, Culture, Media and Sport on tackling anti-vaccination disinformation online; and if he will make a statement.
The Culture Secretary and I discuss regularly with social media platforms the action that is needed to tackle vaccination disinformation online. I am encouraged by the fact that social media companies who have attended meetings with us have agreed to commit to the principle that no user or company should directly profit from covid-19 vaccine disinformation and to ensure a timely response when we flag such content to them.
It is obviously tremendous news that a vaccine will be available and that the people in the UK may be among some of the first in the world to receive it, but it is important that there is public confidence in the vaccine. The anti-vaccine movement is damaging: it is a threat to public health. Does my right hon. Friend agree that social media companies should not just be taking down anti-vaccine material when they are notified of it, but proactively looking for it on the internet and removing it themselves?
Yes, absolutely. A critical part of tackling disinformation is providing accurate, fair and objective positive information, and my hon. Friend is absolutely right about this point. The social media companies are working—and we are providing content for them—to ensure that proper, accurate information that the public can trust from the NHS about the effectiveness of vaccines can be promoted, as well as taking action to remove information that is not accurate and not correct.
What steps his Department is taking to help ensure that family members can safely visit relatives in care homes during the covid-19 outbreak.
Visits from loved ones are what makes life worth living for many care home residents, yet, sadly, these have been too few over the last few months. Unlike the first lockdown, during this period of national restrictions, we want visits to be able to continue. That is why we published new guidance on 5 November advising care homes of the steps that they can take to allow safe visiting while there are high rates of covid in the community. Yesterday, we launched our visitor testing trial and plan to offer visitor testing to care homes across the country by Christmas.
There are almost 2,000 people living with dementia in Lewisham and for those in residential care, a lack of social interaction through visits can cause their condition to deteriorate. Testing for family and friends is the way forward, but the Government’s pilot for this was launched only this week and just 20 care homes are included. With the festive period rapidly approaching, why was this not done months ago, and is it not just another example of the Government delivering too little, too late?
We have been testing and have prioritised testing in care homes going back as far as May, and we have been carrying out whole care home testing. We are now testing over 500,000 staff and residents in care homes every week. Now, as testing capacity increases, we are launching the visitor testing trial with 20 care homes across Hampshire, Devon and Cornwall. We will use the lessons from that trial to roll out testing more widely across the country as fast as we possibly can.
I am afraid the Government’s pilot scheme simply fails to understand the scale or urgency of the task. The average time someone spends in a care home before they pass away is two years, so after eight months of not being able to visit, families do not have a moment to lose. If the Government believe that weekly tests make it safe for care home staff to go to work, why not just do the same for families? Will the Minister now agree that a proportion of the 157,000 tests that are currently spare capacity every day will be ring-fenced for family visits so that we can safely bring all families back together in time for Christmas?
I absolutely want to enable relatives to go and visit their loved ones in care homes, but we have to remember that we are against a backdrop where covid is incredibly cruel to those living in care homes. We have seen outbreaks that have gone from one resident across to almost all residents within a few days, with staff also affected, so we have to get the balance right. We have to make sure that we do this in a way that is safe to residents and staff. That is why we are carrying out the trial to learn the lessons, so that we do it right and so we can then safely roll out testing and more visiting across the whole country.
What assessment his Department has made of the effectiveness of the whole city covid-19 testing pilot in Liverpool.
The Liverpool pilot will help to inform a blueprint of how mass testing can be achieved and how rapid testing can be delivered at scale. We are now making mass testing available right across the country.
I thank my right hon. Friend for his reply. May I ask him to agree to extend the pilot for rapid testing to the whole of Derbyshire and Derby to give the pilot real work to compare our semi-rural area with the urban area of Liverpool?
We are now issuing test kits to 84 directors of public health across the country. I am very happy to work with Derbyshire and Derby to make sure that my hon. Friend’s request is taken up and we can make this happen.
What recent plans he has made for the distribution of covid-19 vaccines.
On top of the positive news this week of two vaccines, a covid vaccine will be deployed only once it has met robust standards on safety, effectiveness and quality through clinical trials and been approved for use by the Medicines and Healthcare Products Regulatory Agency or an appropriate regulatory body. The Government have asked the NHS to be ready to deploy any safe, effective vaccine as soon as it is available. Distribution arrangements must be flexible and include the make-up of the workforce needed to rapidly deliver a vaccination programme, training requirements, consumables and any supporting infrastructure. The key point, though, is that the Government have been clear they will do everything they need to do to roll out a successful vaccine.
Does the Minister agree that it is going to be a mammoth logistical effort, not only to do a vaccination-style thing as we do every year with flu, but to include everybody? Also, it looks as though, in order for the vaccine to be effective, people might have to have two injections rather than one, which doubles the number. Can she give any view at this stage, given the logistical efforts that are going in, of how long it will take us to safely vaccinate everybody in the country?
First, I would like to place on record my enormous thanks to Liverpool and its local leadership for how it has helped us with repatriating from Wuhan and with the mass testing. I am sure that Liverpool will once again step to the fore with any help we might need with deploying the vaccine. We will deploy it as fast as possible, but there is a process. We have to know that it is safe, through the regulatory framework. We then have to know that as it arrives from the manufacturers, we can distribute it at pace. We are aiming to do that, and every sinew is being strained to ensure that we can deliver as swiftly as possible. The entire population wants to get on with living a normal, or more normal, life.
What steps his Department is taking to protect care home residents during the covid-19 outbreak.
Sadly, covid is cruel to care home residents, and outbreaks are hard to prevent and control, especially when covid rates are high in the surrounding community. As we set out in our winter plan for adult social care, we have a regime of regular testing for staff and residents, we are supplying personal protective equipment to care homes, we have been offering training in infection prevention and control, backed up by Care Quality Commission inspections, and we are providing £1.1 billion to social care specifically to go towards the cost of infection prevention and control.
I know that my hon. Friend has already touched on this subject, but she will be aware that since April, many people have not been able to visit relatives and loved ones in care homes, so will she please tell the House again what is being done to improve testing and to roll out the flu vaccine to ensure that these visits can resume safely after the latest lockdown?
My hon. Friend is a great advocate for the care sector—for those who receive care and for the workforce—in Southend West. Yesterday we launched a trial of visitor testing, and we plan to offer this to care homes across the country during December. On his question about flu vaccinations, this year we are carrying out the biggest ever flu vaccination programme. So far, the majority of care home residents have been vaccinated, but there is further to go for care staff, and I urge any careworker who has yet to have their flu jab to ensure that they get it over the next few weeks.
What steps his Department is taking to support the adult social care sector during the covid-19 outbreak.
Our winter plan sets out what we are doing to support adult social care during the second wave of the pandemic, including supplying free PPE to meet social care’s covid needs across domiciliary care, day care services and personal assistance as well as in care homes, and includes a further £546 million of funding for the infection control fund, bringing the total we have provided to social care for infection control to £1.1 billion.
The new megalabs will open in 2021, one of which will be just down the road in Leamington Spa. This is very welcome news for the care sector in Stourbridge, which needs fast access to testing to carry out its amazing work, and let us not forget that these megalabs will bring thousands of jobs to the midlands. The UK is already No. 1 in Europe for testing capacity. With these new labs on stream, that capacity will double. Will my hon. Friend commit to prioritising the social care sector in this new capacity?
The answer to my hon. Friend’s question is yes. Adult social care has already been at the front of the queue for testing. Care homes in Stourbridge and across the country have had whole care home testing since May. We have now sent out more than 13 million test kits to care homes. Every week we are testing more than half a million staff and residents, with nearly 90% of results back within 72 hours. I will continue to make sure that social care is a priority, going beyond care homes to include domiciliary care and supported living as we increase testing capacity.
What steps his Department is taking to support the healthcare needs of newborn babies and their families during the autumn 2020 covid-19 lockdown.
What steps he is taking to support the healthcare needs of babies and families during the covid-19 outbreak.
The indirect impact of covid-19 has been significant for pregnant women and their young families. Support for families is a priority, and it means short-term and long-term harms can be prevented. Health visiting teams have continued to support and prioritise high-need families. We have also gone to great lengths to ensure that informal support networks that have been there in the past to support mothers and younger babies can remain and provide the support they were unable to give during the first wave.
I know that my hon. Friend is well aware of the desire of new families to return to face-to-face services as soon as is possible, but does she agree that the amazing work of so many in the early years sector to deliver online and digital services at this incredibly difficult time must not be lost? When we return to face-to-face services, we also therefore need to capture all the amazing learning on digital and make sure we can amplify support for new families in that way.
I absolutely agree with my right hon. Friend on that. First, may I pay tribute to her for the work she has undertaken throughout her career with families, parents and young babies, and on early years, particularly the first years of a child’s life? I am sure Members on both sides of the House are hugely anticipating and excited about receiving her review on early years and young families. She is right to say that using digital technologies has enhanced so many areas during the first lockdown and throughout our time with covid, not only in mental health, but with young families and children. In a way, it has been a catalyst whereby we have embraced technology in all areas across health service delivery. We are making sure that we continue to do that and we do not lose the moment.
Many low-income families have struggled to make ends meet during lockdown. Families with babies under one are entitled to Healthy Start vouchers of only £6.20 a week, which is not enough to buy any infant formula that I can find on the market. By contrast, Scotland’s equivalent provides £8.50 a week for Best Start foods. The all-party group on infant feeding and inequalities, which I chair, produced a report on the cost of infant formula in 2018. It recommended the uprating of Healthy Start vouchers, because the cost involved in buying formula means that families are watering down formula or feeding their babies unsafe alternatives. Will the Minister urgently consider uprating Healthy Start vouchers, to ensure that low-income families can claim their entitlement, because many do not?
I will take away the hon. Lady’s comments and we will look at them.
What steps his Department is taking to support the provision of non-covid-19 healthcare treatment.
What steps his Department is taking to support the provision of non-covid-19 healthcare treatment.
The Government are supporting the NHS’s ambition to continue to restore elective services for non-covid patients, while of course recognising the pressure on services from covid-19 infection control, with September statistics showing services already restored to about 80% of last year’s levels. Some £2.9 billion of additional funding has been made available from 1 October to manage ongoing covid-19 pressures, alongside recovering non-covid activity levels.
I thank my hon. Friend for his response. Given the difficulties faced by the NHS because of covid-19, what considerations are being given to additional initiatives or the management of existing resources to address patient demand and break the backlog of non-covid-related treatments, such as diagnostic interventions for cancer?
The NHS is working hard to maintain elective activity as far as possible during the second wave with extra funding, as has been set out. As shown in published September data, hospitals are carrying out more than 1 million routine appointments and operations per week, with around three times the levels of elective patients admitted to hospitals than in April, with many hospitals innovating to get through their lists. For example, Buckinghamshire, Oxfordshire and West Berkshire sustainability and transformation partnership has set up additional bespoke cataract units to deliver services. In addition, we have been making use of independent sector sites to assist the NHS with almost 1 million NHS patient appointments taking place within those facilities.
One adverse consequence of the first lockdown was that many people failed to seek treatment because they were afraid of the virus, but due to good planning and hard work, the staff of the Norfolk and Norwich University Hospital are able to treat covid patients while still undertaking the normal work of the hospital. Does my hon. Friend agree that the people of Broadland should continue to seek medical assistance when they need it, confident in the knowledge that it will be provided in a covid-safe and effective manner?
I share my hon. Friend’s fulsome praise of the staff at Norfolk and Norwich University Hospital and the work that they are doing. They have a strong champion in him. Indeed, I pay tribute to all the health and social care staff who have worked so magnificently throughout the pandemic. I can wholeheartedly agree with everything he says. My right hon. Friend the Secretary of State has been clear throughout this pandemic that anyone who needs medical help should continue to seek it in the knowledge that they will be treated in a safe and effective manner appropriate to their needs. To put it bluntly, it is a case of help us to help you.
For cancer care, we are still dealing with the backlog from the first wave, but we are now hearing of treatments being cancelled during the second wave. Extremely vulnerable immuno-compromised cancer patients need covid-free wards and staff need regular testing. Similar backlogs to the first wave could be the difference between life and death. I ask this at every Health questions but am yet to receive a persuasive answer. What will the Government do differently in order to restore cancer services?
I am grateful to the shadow Minister, who always asks measured and sensible questions. He is right to ask that particular question, but I am very happy for him to raise with me any specific incidents of where urgent cancer care is being cancelled in the current situation. We have worked extremely hard, as has the NHS, to ensure that treatments such as that and emergency and urgent treatment can continue. He asked what we are doing differently. We have learned a huge amount, as has the whole country, over the past six to nine months. We have increased capacity in our hospitals, which is why, with the measures that we have taken, we can continue far more surgery and far more treatments, particularly cancer treatments, than we could in the first wave.
Unfortunately, we do finish at quarter past 12, so I will start topical questions, slightly late, with Steve McCabe.
If he will make a statement on his departmental responsibilities.
We are seeing major scientific advances that will help to get things back to normal. We are expanding mass testing with the two mega labs that will add another 600,000 to our daily testing capacity and, on vaccines, we have secured an initial agreement for 5 million doses of the very promising Moderna vaccine and begun clinical trials of the Janssen vaccine.
It is now 41 days since I asked the Secretary of State whether he would stop the clock so that no one seeking access to fertility treatment loses out because of delays due to the pandemic. When does he hope that his Department will get around to answering?
The provision of fertility services is happening in the normal way in as many places as possible across England, but it is not happening everywhere because of the huge pressures on the NHS from the second wave of covid. As my hon. Friend the Minister of State was saying a moment ago, there are pressures on the NHS. There are now 15,000 people in hospital with covid across the UK, but the NHS is doing far more normal services that it was not able to do in the first wave.
I call the Chair of the Select Committee.
This morning, the Select Committee has been hearing about workforce burnout. Witness after witness said that the one thing that would make a big difference to NHS staff is knowing that we are training enough doctors and nurses for the future even if we do not have enough now. Nearly two years on from the NHS 10-year plan, we still do not have the workforce projections published—I know that the Secretary of State is keen to get them published. Can he assure the House that, when they are published, they will be the independent projections and not what the Treasury has negotiated with his Department as part of the spending review?
I am grateful to my right hon. Friend for that question. I can give him a couple of projections and a couple of facts. Over the past year, we have 13,500 more nurses in the NHS than we did a year ago, and thousands more doctors. Let me give him this projection, which I am sure that he and everybody on the Government Benches will buy into: we are going to have 50,000 more nurses in the NHS by the end of this Parliament.
Many of my constituents have taken part in the Liverpool mass testing pilots, but they need to know that the tests being used are accurate. Reports in The Times that suggest very high levels of both false positives and false negatives are deeply worrying, so can the Secretary of State tell us what steps he is taking to ensure that the tests being used in the mass testing are indeed accurate?
Yes; the lateral flow tests that are being used in Liverpool are accurate. They measure whether somebody is infectious and have a very high specificity. We publish all these statistics, having had them assessed at Porton Down in one of the best medical science units across the whole world, so I assure the hon. Gentleman—and, through him, his constituents —that the lateral flow tests have a quick turnaround and a high degree of accuracy regarding whether someone is infectious. I have not seen the reports to which he refers, but I assure him that the best thing that people can do if they are offered a test is to get one.
  I was delighted when the Secretary of State came to visit the Yeatman Hospital in Sherborne at the end of last year, but my constituents in West Dorset are becoming increasingly concerned that the Yeatman Hospital’s minor injuries unit has been closed for too long. Will the Secretary of State confirm that the MIU will not be permanently closed, and that it will reopen at the first possible opportunity?
I am very happy to meet my hon. Friend and to discuss with him how we can strengthen the services that are available across Dorset, especially as the population is not as dense as in some other parts of the country. We need to ensure that we get services out into the community, rather than just in the big cities.
Our home care workers have gone above and beyond during the pandemic. Tragically, they are some of the lowest paid workers in the entire labour market. Does the Secretary of State agree that there is a role for local government, as the commissioners of home care services, in strengthening enforcement of national minimum wage legislation to ensure that no home care worker, anywhere, is not properly paid for travel time between visits?
As a proud supporter of the Conservative Government’s introduction of the national living wage, I am a big fan of the pay increases that we have seen for some of the lowest paid people in the country, such as some of those working in social care including the home care sector, about which the hon. Member speaks. National living wage legislation is not a “nice to have”; it is mandatory, and all employers must follow it.
  I thank my right hon. Friend for his incredible hard work over recent months. I am delighted that Scunthorpe General Hospital has received significant funding, which will help with the short to medium-term pressures, but he knows that it is in need of a much more significant upgrade. When he is able to, will he meet me to discuss a way forward?
Yes; my hon. Friend has been a champion for Scunthorpe and for supporting Scunthorpe General Hospital. I am glad that we have been able to make an investment in that hospital, and I am happy to meet her to talk about what more we can do.
NHS Blood and Transplant has recently reported a dramatic reduction in some transplant operations. For example, living kidney donations are down three quarters on last year. What steps is the Department taking to ensure that patients who require an organ receive the life-saving operation that they so desperately need?
The hon. Gentleman and I share a passion for ensuring that organ donation is possible and is supported wherever it is needed. That is very close to my heart through personal experience—not mine, but that of a friend. The hon. Gentleman has raised this issue and driven a change in the law, and I am glad that the change in the law to an opt-out system has happened. However, during the first lockdown there was clearly a slowdown in the number of donations, and we do not want to see that. There are more services available in the second peak of this coronavirus crisis. I look forward to working with him and others to make sure that organ donation is as high as it possibly can be.
Royal Stoke University Hospital in my constituency has warned that the rising level of obesity is becoming an increasingly serious problem. With nearly one in seven adults considered obese in Stoke-on-Trent Central, does my right hon. Friend agree that tackling rising levels of obesity has never been more important for our public health and should remain a priority for our Government?
Yes, I do, and so does the Prime Minister. We feel very strongly about this. It is so important that we have the work across the country to tackle obesity; this has only been made more urgent because we know of the link between obesity and the risk of dying from covid. I look forward to working with my hon. Friend and others to make this happen.
York’s contact tracing work has proved to be incredibly effective, not just in its reach but in persuading people to isolate. However, it is not getting data through until around day five, when people are having a test, and it could be so much more effective if it had that data on day one. Will the Secretary of State look at York being a pilot for having immediate access to the data and the resources necessary to get on top of this virus and lock it down?
I am happy to work with the hon. Lady and the director of public health in York, and obviously with NHS Test and Trace, to make sure that the link-up is as effective as possible.
My right hon. Friend will be aware that nosocomial spread is high in the NHS and that transmission is sometimes via staff. In order to help the amazing teams at Royal Stoke University Hospital and the Hayward walk-in centre, will he give guidance that stops substantive staff working bank, agency and locum shifts in other hospitals, to help reduce transmissions?
I am very happy to look into that idea, while making sure, of course, that we also have the availability of staff, which is critical. We have just had two questions from Stoke-on-Trent. Let me say how much I appreciate the work of everybody at the Royal Stoke, who I know are doing so much. There are difficult circumstances there because of the second wave, which is quite significant in Stoke. I thank everybody at the Royal Stoke for all the work they are doing.
I was very pleased by the Secretary of State’s answer to me last week that the vaccine would be rolled out on a needs basis. As the House knows, I represent a vast and very remote constituency. What worries me is the thought of elderly and vulnerable constituents having to travel long distances to get the vaccine. Health is devolved in Scotland, of course, but what proposals does he have for England and Wales to take the vaccine to those people who are elderly and vulnerable, and will he share that methodology with the Scottish Government?
Yes, I would be happy to do that. We are proposing roving teams who can get out into rural communities across England. I know that there are ongoing discussions between those in the NHS in England and in Scotland who are responsible for the deployment of the vaccine. However, it is a critical principle that it should be deployed according to clinical need, not according to where people live across the United Kingdom.
Although covid has highlighted the value of our care workers, care remains generally low-paid, high-turnover employment. A route into nursing would give care workers more opportunity to progress and build a career. Would the Government consider fast-tracking a specialised training course for care workers seeking to go into nursing, which reflects the many transferable skills that they have?
Yes, I think that is a brilliant idea. Let us work on it together.
I welcome the news that the Secretary of State has secured 5 million doses of the Moderna vaccine, totalling 355 million dosages for the UK. Does he agree that it is key to putting this virus back in its box, and that it is down to the willingness of the great British public to step forward and to voluntarily have this vaccine so that we can all move on?
Yes, that is right. A vaccine will be approved only if it is both effective and safe, so when your ticket comes up, if you are asked to take the vaccine, then I and the whole serious clinical establishment—all of those who understand the vaccines and the value of them —will be urging people right across the country to get it, because it is good for you, it protects your loved ones and it protects your community. It is the primary route, alongside other things like testing, by which we will get out of this and get life back more closely to normal.
I welcome the Government’s substantial investment in hospital services in my area. The Secretary of State knows that I remain disappointed that Epsom, was not the NHS’s choice of location— rather than Sutton—but will he assure me that as the NHS reviews the impact of the pandemic and looks at future capacity needs, he will keep an open mind if that decision needs to be changed, because in the end Epsom represents better value for the health service?
I appreciate my right hon. Friend’s tenacity and doggedness in making the case for Epsom. I am a big supporter of the decision that has been made, and I am afraid, from his point of view, that the final decision on the location of the new hospital—in Sutton—has now been made. However, I am always open-minded to what further health services can be deployed in Epsom itself, and I suggest that my right hon. Friend and I work together on that.
Rising infection rates in Dudley are extremely worrying. The launch of the third covid vaccine trial in the UK this week is excellent news and I pay tribute to the volunteers and researchers involved in the trials, but does my right hon. Friend agree that it is still early days, so it is vital that all of us continue to play our part in doing everything possible to bring down that infection rate, particularly in areas, like Dudley, where it continues to rise?
Yes. Vaccines could not be approved if there were not volunteers who were willing to take them and play their part. I want to end this session, if I may, with a tribute to my PPS, my hon. Friend the Member for St Austell and Newquay (Steve Double), who, along with some other Members of the House, is taking part in a vaccine trial, and therefore doing his bit to make vaccines available to help everybody across this country.
The Health Secretary will remember—his hon. Friend the Member for St Austell and Newquay (Steve Double) was there as well—that we had a really good meeting on 2 October about the link between covid and vitamin D. Since then the PM even said, two weeks ago, that good news is on the way. Will the Secretary of State update us on what is happening? The Government are meant to be getting rid of dither and delay. We could be like New Zealand; they have only had 16 deaths in care homes in the whole of this pandemic. What can he do?
Yes, we are making progress on that and working on the clinical protocols. I look forward to updating the hon. Lady with more information when a final decision has been made.
In order to aid the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I suspend the House for three minutes.
Before the urgent question, I wish to make a short statement about Divisions. Last week, I announced that the number of proxies in operation meant that I could reduce the voting time before the doors are locked from 12 minutes to 10. I can now reduce the time further, to the normal time of eight minutes from the start of the Division. As at present, the occupant of the Chair may extend the time in a particular Division where there is evidence of delays or problems getting to the Division Lobbies.
(Urgent Question): To ask the Secretary of State for International Trade to make a statement on the proposed parliamentary scrutiny of future Continuity Trade Agreements.
In under two years, the UK Government have signed or agreed in principle trade agreements with 52 countries that account for £142 billion of UK bilateral trade. That accounts for 74% of the value of trade with non-European Union countries that we set out to secure agreements with at the start of the trade continuity programme. Since the transition period began, we have expanded the ambition of our programme above and beyond that original scope. In November we signed an enhanced deal with Japan, accounting for £30 billion of UK trade in 2019, and we expect to make significant progress in securing further deals before the end of the transition period. We believe that this is the largest set of parallel trade negotiations ever conducted by any country Parliamentary scrutiny is central to our continuity negotiations. All signed agreements would be subject to the statutory scrutiny process as set out in the Constitutional Reform and Governance Act 2010, providing a guaranteed period for Parliament to scrutinise and debate these agreements. Indeed, Parliament has held debates on six of our signed continuity agreements, and not one of those debates has carried a negative resolution. Further, we have voluntarily published parliamentary reports alongside all continuity agreements, explaining any differences from the predecessor EU agreements. I am pleased to see that our approach to scrutiny was praised in a recent report by the House of Lords EU International Agreements Sub-Committee, “Treaty scrutiny: working practices” As we approach the end of the transition period, it is possible that the scrutiny window for remaining agreements will extend beyond 1 January into the new year. That means that we may need to use provisional application for a short period, in order to guarantee continuity of trade relationships and avoid any cliff edges. I thank the right hon. Lady for her two letters on the subject to the Secretary of State last week. Provisional application is a well-established and widely used mechanism to give effect to treaties while domestic ratification procedures continue in parallel. Many EU trade agreements were or are being provisionally applied, including the comprehensive economic and trade agreement with Canada and the agreements with Ukraine and with the Caribbean Forum. I remind the right hon. Lady that those EU agreements have already been comprehensively scrutinised at EU level and by this Parliament. In fact, the Government published a technical note in Parliament last year setting out our assessment of provisional application and the circumstances in which it might be used We will always take the time necessary to negotiate the right deals. Any agreement we sign must benefit British consumers and businesses, preserve our high food standards and protect the NHS, and they must share wealth across all our nations and regions as part of our levelling-up agenda. We look forward to submitting further continuity FTAs to Parliament for scrutiny once signed, and we welcome further debates on our independent trade policy.
Thank you, Mr Speaker, for granting this urgent question on an issue that should never have become urgent. The Government have literally had years to protect our free trade with countries such as Canada, Singapore and Mexico, but with just six weeks to go until the end of the transition period, 15 of those continuity agreements have still not been secured, leaving £80 billion of UK trade at risk—two and a half times our trade with Japan. Those 15 agreements have been left so late that the Government will now have to ride roughshod over the rules of parliamentary scrutiny to implement them in time Why do we find ourselves in this sorry mess? Why were 20 agreements signed in 2019, but only four so far in 2020? Why have we heard Governments such as Montenegro and Cameroon saying that formal talks were held in September 2019, but then nothing for a full year afterwards? Why, in just the past week, have we heard the Prime Minister of Canada say that Britain has lacked the “bandwidth” to do a deal and the Government of Ghana express dismay that their UK counterparts would turn up late and badly briefed to meetings and then leave early with nothing resolved Those are all the hallmarks of Ministers who are simply not doing their job. How else do we explain why the agreement reached two weeks ago with Kenya has still not been laid before Parliament and cannot now receive the full 21 days of scrutiny? It is sheer bumbling incompetence, and instead of taking responsibility today, the Secretary of State has sent her Minister in her stead —a fitting symbol of a total failure to grasp this issue during her 16 months in office. It therefore falls to the Minister of State to answer my three final questions. First, what new steps is his Department taking to get these 15 agreements over the line before Christmas? Secondly, when will UK businesses be told if any of those agreements, including with Mexico, are definitely not going to be reached? Thirdly, how can Ministers continue to defend the adequacy of the rules for parliamentary scrutiny of trade deals after the absolute mockery that they have made of them today?
It is genuinely a pleasure to answer this question. Let me try to take in turn the different points made by the right hon. Member for Islington South and Finsbury (Emily Thornberry). First, may I say in general that we are working very hard on the remaining agreements? We have around 700 dedicated officials in the trade policy group who are working on the agreements, and the Secretary of State, the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire (Mr Jayawardena), and I are also working carefully on them Are we riding roughshod? No, we are not. CRaG would still be fully operating—[Interruption.] The right hon. Member for Islington South and Finsbury scoffs, Mr Speaker, but she voted the same way that I did for CRaG in 2010. She should have belief in what she voted for under the previous Labour Government As for provisional application, it is absolutely an accepted part of international procedure. It is under the—[Interruption.]
Order. I granted the urgent question in order for the question to be heard, but I cannot hear the Minister’s reply. I do not want a dialogue all the way through, please. I grant them on the basis that there is a need to listen to what is being said.
The Vienna convention has been around for a long time, and I mentioned that many agreements were provisionally applied by the European Union. I specifically mentioned the CARIFORUM agreement with the Caribbean Community countries and the Dominican Republic, which is also of course a Caribbean country. The reason I mention it is that it has been provisionally applied for the past 12 years. It was signed by the last Labour Government. If the right hon. Lady was happy with something signed by the previous Labour Government that is still provisionally applied today, she is making a bit of a mountain out of the remaining days that we are adding to the process, given the fact that that has been provisionally applied for 12 years. Kenya is a new deal; it is not the continuity of the pre-existing deal What steps are we taking? We are stepping up our efforts and working extremely hard. When will UK businesses be told? We are telling businesses all the time about the deals that we have done and landed The right hon. Lady mentioned Ghana. There is a deal on the table; it replicates the EU agreement and is consistent with the EU-Ghana stepping stone deal applied in 2016. We are not asking Ghana to do anything that it is not already doing The right hon. Lady said in her letter to the Secretary of State on 10 November, which she referred to, that representatives of countries from Cameroon to Montenegro have been communicating with the shadow International Trade team. I do not know whether it is quite right for the shadow Secretary of State to be correspondingly directly with our negotiating partners during negotiations that we have been carrying out on behalf of the whole country. I would urge her in the interests of transparency to release all that correspondence with our negotiation opposite numbers, which she referred to in that letter It is ironic that the right hon. Lady invokes Ghana, given the amendments to the Trade Bill that she supported on other countries’ domestic production standards. The very exports that she is so worried about would have been prevented under those Labour amendments from entering the country in the first place The irony in Labour Members complaining that we have not yet rolled over all these EU agreements is this: they did not support these agreements in the first place. They voted against EU-Singapore, they abstained on EU-Japan, and they split three ways on EU-Canada, so they are complaining about agreements not being rolled over that they never supported in the first place As we know, Labour has moved on from the right hon. Member for Islington North (Jeremy Corbyn) to the right hon. and learned Member for Holborn and St Pancras (Keir Starmer). The right hon. Member for Islington South and Finsbury is caught between them both, first geographically and now on policy. She cannot escape from this: when it comes to trade and trade agreements, successive Labour leaders cannot decide whether they want these agreements or not. In short, they are in complete chaos, and their approach deserves to be dismissed.
I thank the Minister for his detailed and full responses. With more trade equating to more jobs in Dudley North and across the country, will my right hon. Friend update the House on the upcoming trade deal with Mercosur countries in the light of the recent Joint Economic and Trade Committee with Brazil?
I thank my hon. Friend for that excellent question. I am aware of his background—I think he worked for five years in Brazil and knows the market extremely well. Mercosur is, of course, a very important partner for the United Kingdom, and there are significant opportunities for British business to do more trade, including with Brazil. Just last week, the Secretary of State and the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire, were pleased to host their first Joint Economic and Trade Committee with Minister Fendt from Brazil. They spoke about success to date in financial services and food and drink sectors. As there is not an EU-Mercosur deal in effect, any future UK-Mercosur deal is not within the scope of this programme.
The problem here is not simply the incomplete deals; it is the process we are following, which is not fit for purpose. MPs have no ability to vote to amend our negotiating mandate. As the Minister said, the Government report voluntarily, normally at the end of a negotiating stage to tell us that everything is great, but with no information about obstacles overcome or new obstacles emerging. Perhaps towards the end of a negotiation, the negotiators go into a tunnel from which no information emerges unless it is leaked to provide leverage, which is profoundly unhelpful. We are then offered a vote on a short take-it-or-leave-it debate—again, with no ability to amend or to reflect or represent constituents or sectoral interests. Finally, we find out, normally from the foreign press, as was the case with Switzerland and Norway, that the deal is not what the Government trumpeted it to be I ask the Minister, briefly, what action will he take to expedite the outstanding deals? What action will he take to mitigate the potential tariff and quota costs on some £80 billion of trade? More importantly, what action will the Government take because CRaG is not fit for purpose and we need a new system that allows MPs scrutiny and the ability to amend?
I thank the hon. Gentleman for the rather more thoughtful questions than those of the official Opposition. Of course, to be fair to him, he voted against CRaG. In fact, he, I and the right hon. Member for Islington South and Finsbury (Emily Thornberry) were all elected in the same year, 2005. He voted against CRaG, which is fair enough, and the right hon. Member for Islington South and Finsbury and I voted for it. I can understand his consistency in being opposed to the process. However, we are confident that it represents a robust way of ratifying trade agreements and of Parliament having its say Not only that, but we have added to the CRaG process by publishing a scoping analysis and a likely economic impact assessment in advance of the deal, made written ministerial statements after each round, and then publishing an impact assessment when the deal is finally done which gets sent off to the International Trade Committee and the EU International Agreements Sub-Committee in the other place. We have gone far further than CRaG. I will also say this about SNP Members. Once again, they are complaining about these deals not being rolled over, but they are all deals that they have either not supported or abstained on. They abstained on EU-Japan. They abstained on EU-Singapore. They are against EU-Canada. They are against EU-South Africa. They are against EU-Korea. In fact, I have gone back 15 years, and I cannot find a single trade deal that the SNP has ever supported or voted for, so it is a bit rich for the hon. Gentleman to come along today and say that the deals have not been rolled over—none of which he supported in the first place. The SNP is anti-trade, it is hellbent on breaking up our Union and it is against Scotland’s best economic interests.
Listening to both the parties opposite, given how important free trade is for prosperity, I say thank goodness we are the ones in government. I commend my right hon. Friend and his colleagues for the work they have done in making as much progress as they have. I am confident that they will complete that progress in the time that remains As we head into 2021 and seek to negotiate another new round of free trade agreements, I ask my right hon. Friend to ensure that not only are we champions of free trade, but we set environmental sustainability at the heart of the negotiations. Those are global challenges that must be reflected in our commitment to free trade.
I thank my right hon. Friend for his interest in this area. The UK’s new independent trade policy is designed to be very environmentally friendly. That occurred in the Secretary of State’s speech to the World Trade Organisation in the spring. The UK global tariff that we have published reduces import tariffs, or eliminates them entirely, on 104 environmental goods entering the UK, including things such as steam turbines. We have gone significantly further than the common external tariff of the European Union. When it comes to our negotiations with future trade partners, the US, New Zealand and Australia, we have committed to promoting trade in low-carbon goods and services, as well as supporting R&D, innovation and science in sectors such as offshore wind, smart energy, low-carbon advisory services and energy from waste.
We are heading to Scotland with the Chair of the Select Committee.
The International Trade Committee first reported on the roll-over of trade deals in 2018. Hon. Members probably remember that we were told then that all the agreements would be signed about a minute after midnight on 29 March 2019. It is a huge concern that we still have not done 15 of those deals—indeed, with 44 days to go, the biggest trade deal with the EU is still uncertain. Is it not the truth that jobs, businesses and communities need to be better served by the Government in their work associated with Brexit and these incomplete trade deals? It is time for the Government to get their act together, and quick.
I thank the hon. Gentleman for that question. I remember appearing before his Select Committee during that inquiry in 2018, which I know he will remember well, too. The fact of the matter is that we have done roll-over deals with 52 countries. That is a very strong achievement and represents some 74% of the value of trade with non-EU countries that we set out to secure agreement with at the start of the trade continuity programme, which was when he did his inquiry. We are working flat out at the moment. He will know that just in recent weeks we have signed deals with Ukraine on 8 October, Côte d’Ivoire on 15 October and Japan on 23 October, and we signed an agreement in principle with Kenya on 3 November.
I am glad that the right hon. Member for Islington South and Finsbury (Emily Thornberry) raised Ghana, because that is what I am concerned about. The Ghanaian contention that the deal on offer is not compatible with the Economic Community of West African States simply does not stack up in my opinion. Will my right hon. Friend confirm that Ghana’s deal with the EU is compatible with ECOWAS and our deal replicates the EU deal exactly?
I thank my hon. Friend for his keen interest in Ghana, which is an interest I share. I went with the Westminster Foundation for Democracy in 2009 to help train up Ghanaian politicians. It is a country that I have kept a keen interest in for the past 11 years. There is a deal on the table. It replicates the EU agreement, gives full duty-free, quota-free access to our market and is consistent with the EU-Ghana stepping stone deal applied in 2016. There is no evidence that that existing EU deal has damaged Ghana’s relations with its ECOWAS neighbours.
I am surprised that the Minister keeps evading the whole thrust of the urgent question he was asked. Why is he so terrified of parliamentary scrutiny? He can talk about chaos on the Labour side, but chaos and confusion reign in No. 10. There is chaos and confusion in our relationship trying to get an agreement with the European Union as we leave. What is wrong with this Government? I am a member of the Committee on the Future Relationship with the European Union, which is being abolished just when we need it for parliamentary scrutiny. Why are this Government so terrified of being responsible and accountable to this House?
I just remind the hon. Gentleman, because he was definitely in the House in 2010, that the CRaG process, which was set up by the last Labour Government and which I strongly suspect he voted for, is exactly the system of parliamentary scrutiny that we are using as the basis for these continuity trade deals now. Not only that, but, as I have already outlined, we are building on the CRaG commitments with additional reports and additional involvement from the International Trade Committee and the House of Lords International Agreements Committee.
Does my right hon. Friend agree that our departure from the EU offers the UK a golden chance to lead the world in modern areas such as services, technology and advanced manufacturing, creating great opportunities for businesses and entrepreneurs in Stockton South?
My hon. Friend is absolutely right. Services represents about 79% of our GDP and 80% of our employment. The UK, as we know, is a world leader in tech and digital and far ahead of our closest European competitors, France and Germany. We are one of the world’s leading international financial services centres, with best in class industry, infrastructure, talent and expertise. The recently announced deal with Japan goes further than the EU deal when it comes to services, particularly financial services.
The Minister knows, but did not say, that the current CRaG process was put in place when many other layers of democratic scrutiny were applied to international treaties through the EU, but those layers are now gone. Now that his Department has failed to conclude the roll-over agreements, does he accept that democratic scrutiny needs to reflect not just the convenience of Government, but the proper oversight and challenge of Parliament? Or will he only change his view when he finds himself in opposition?
I think the hon. Gentleman is operating under the misconception that the Government do not want Parliament interested in trade and in trade deals. We are constantly at this Dispatch Box—I, the Secretary of State and the rest of the ministerial team—talking about trade and trade deals. We welcome all the additional parliamentary scrutiny. I remind him that the CRaG process he talks about was set up under the last Labour Government. We have gone further in terms of the reports that we publish and the involvement of Select Committees in both Houses of this Parliament.
The Prime Minister of Canada went on the record last week to say that the two nations had reached a point where, in effect, a deal with Canada was there for the taking. Does my right hon. Friend agree with that analysis, and can he update the House on the progress of the continuity Canada deal?
We are confident that we will be able to secure an agreement with our Canadian partners for entry into effect on 1 January. It is an incredibly important deal. I remind the right hon. Member for Islington South and Finsbury (Emily Thornberry) that her official position, under the hon. Member for Brent North (Barry Gardiner) at the time, was to oppose doing this deal in the first place. Canada is an important strategic partner for the UK and our 16th largest trading partner worldwide. The UK exports £11 billion-worth of goods and services each year, and we stand ready to secure and expand this trade.
These deals cut across many devolved powers, so surely there should be a significant consultation and scrutiny role for devolved Parliaments and Governments, learning from experience in Belgium and Canada, for example—or does the Minister share the Prime Minister’s rather extraordinary view that the devolution of powers was a mistake in the first place?
As we know, international trade is a reserved matter. However, it does have an influence on a large number of areas of devolved competence, so it is quite right that we involve the devolved Administrations in formulating our trade policy and our approach to different trade negotiations. In terms of the relations that I have with the Scottish Government, the ministerial forum for trade meets quarterly, involving not only the UK Trade Minister—myself—but the three devolved Administrations. Since May, in the time that I have had the remit for talking with the devolved Administrations, I have met with Scottish Minister Ivan McKee five times.
Listening to what has been said so far, I am very glad that the Conservative party is in government, because we really recognise the value of free trade, not just in terms of GDP figures but the very real impact it has on our constituents—on the great people of Bishop Auckland and beyond. On that note, does my right hon. Friend agree with the interesting stance of the shadow Secretary of State that we should only make future trade deals with countries with which we have a trade deficit?
The shadow Secretary of State has come out with some extraordinary comments in recent times. That particular one sounded like it was verging on Trumpian mercantilism. My hon. Friend is right that, at a time of growing protectionism, trade provides economic security at home and opportunities abroad. It is a key part of the Government’s levelling-up agenda. Trade is very much part of this country’s future, as are trade agreements.
I am afraid I cannot share the relief of the hon. Member for Bishop Auckland (Dehenna Davison) that we have a Conservative Government, because as we move closer to the end of the transition period, my constituents, and constituents and businesspeople all over this country, are increasingly worried about their inability to secure the deals and the clarity needed. As a Scot, I am not a nationalist, so my views cannot be dismissed as wanting to undermine the interests of Scotland in the United Kingdom, so can the Minister give us some indication of where these deals are going to come from, how they will be settled and what scrutiny they will have in this place?
I urge the hon. Member to judge us by our actions, not just our words. We have done continuity agreements with 52 countries, which account for £142 billion-worth of bilateral trade. On top of that, we have done a bespoke bilateral deal with Japan, which is the first stand-alone UK free trade agreement that this country has negotiated in 40 years. She should welcome the actions that we have taken to secure the future of these trade agreements and, in the case of Japan, improve on them.
May I congratulate my right hon. Friend on the progress made so far in agreeing to roll over more than 20 of our existing trade deals? Is he able to reassure the House that the Government have sufficient capacity to continue to get trade deals over the line?
That is a good question, and the answer is simply yes. The trade policy group, which I have been involved with in two different stints at the Department, is an incredibly dedicated, highly professional group of people. It has grown from around 45 at the time of the referendum in 2016 to more than 700. We have taken in private sector expertise—lawyers, experts in trade flows, experts in particular product lines and so on. I am confident that we have the capacity and the right people in place, and I pay tribute to them all for the hard work that they have been doing.
As my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) pointed out, the Canadian Prime Minister said last week that Canada was ready to reach a continuity agreement with the UK but that the British Government lacked the “bandwidth” to finalise the deal and, indeed, that his offer to provide support to the UK’s negotiators had not been taken up. Is not this just an embarrassing situation for the Government, who claim to be promoting global Britain?
I thank the hon. Lady for that question. As I have already said, we are in a good position with Canada. I am confident that we will be getting a deal. I saw those comments by the Canadian Prime Minister, whom I greatly respect. The only other person I have seen make those comments is Winston Peters, the leader of the New Zealand First party. I see it sometimes from the negotiating teams opposite; we need to take what they say in a live negotiation with a pinch of salt.
I congratulate my right hon. Friend on the progress that has been made on the continuity agreements that are so vital for our country’s prosperity, not least in sectors such as agriculture, which is so important to my constituency. With that in mind, does he agree that, while the Opposition parties seek to play political acrobatics with trade, it is this Government who are listening and involving farmers in our future and continuity trade deals by putting the Trade and Agriculture Commission on a statutory footing?
My hon. Friend is quite right. I think I am actually due to speak with farmers in his constituency in the coming 10 days or so, which I am looking forward to very much. He is quite right that putting the Trade and Agriculture Commission on a statutory footing means that all the National Farmers Unions from across the United Kingdom will play an active role in assessing trade agreements going forward.
Even the Scottish Tory leader’s senior adviser, the former Tory MP for Angus, has said that this Government need a “wake-up call” as we see decisions taken by the UK Government without regard to Scotland. A failure to roll over these FTAs would lead to a tariff and quota disaster for Scotland’s £15 billion food and drink sector. Indeed, with food and drink exports four times more important to the Scottish economy than the English economy, we can see why Scottish producers are horrified at this abject ministerial failure. Why will the Minister not acknowledge this £38 billion crisis? What will he do to fix it for food and drink producers in Scotland?
I think the hon. Member’s phrase was “abject ministerial failure”. We are working hard to roll over all these agreements. I just remind him that these are all agreements that were opposed by the SNP in the first place. It abstained on EU-Japan and EU-Singapore, and it was against EU-Canada, against EU-South Africa and against EU-Korea. He ought to be celebrating the fact that these agreements are not being rolled over, to be consistent with his previous position. We are working hard to make sure that they are rolled over.
Does my right hon. Friend agree that we should continue to follow the significant headway we have been making on a number of these trade agreements, and that we should help great British businesses, such as those in Stoke-on-Trent, to grow jobs by making the most of these agreements?
My hon. Friend is quite right. Both the Secretary of State and I have enjoyed meeting businesses in his constituency—particularly those in ceramics—and right the way across the city of Stoke. We have them on our minds in all our trade negotiations, to ensure that we get new opportunities for the ceramics industry in the Potteries and elsewhere.
The Minister seems keen to tell us how hard he and his team are working; meanwhile, crucial trade partners such as Canada seem to feel that the Government just have not got their act together and are not giving this the attention it deserves. Does he not realise that what is really important here is that British businesses, which need certainty about what their trading arrangements will be in January, are sat here in the middle of November still no clearer about whether we are going to be able to trade tariff-free with Canada?
I remind the hon. Member that the deals that we have rolled over represent around three quarters of the programme. We have updated businesses, as we have updated this House, after each of those deals to make sure that they are kept apprised. When it comes to Canada, of course, this is a live negotiation. We have contact happening every day with Canada. It is worth remembering that Canada actually walked away from the negotiation in 2019, and did not return to the table until July this year. As soon as Canada returned, we put in place a negotiating team and we got on with it.
Trade, and the jobs, investment and prosperity it brings, is an incredibly powerful way to level up our country and transform left-behind places such as Redcar and Cleveland. Does my right hon. Friend agree that promoting trade and helping our businesses to export is the best way to rebuild and reshape our economy?
I thank my hon. Friend and he is absolutely right. We have talked very much about the trade policy aspects of this Department. We are engaging very strongly with the US, for example, on steel tariffs. I know that is something his constituents will keep an ongoing interest in, making sure that those unnecessary and counterproductive tariffs are removed. But when it comes to the wider picture, the Department for International Trade more broadly works incredibly hard at promoting both the exports and inward investment that I know will be really important to his Redcar constituents.
While recognising that negotiating international trade deals is a reserved matter, the Minister will be aware that many of the policy areas included in trade negotiations are devolved to Wales. Considering this, I find it quite incredible that trade deals can be signed without the formal agreement and approval of the Welsh Parliament. Earlier, he alluded that there had been engagement with the devolved Governments, but can he inform the House whether he has received any critique from the Welsh Government about the approach of the British Government to these continuity deals?
I have an excellent relationship with the Welsh Government: first with Baroness Morgan and more recently with Jeremy Miles. The hon. Member is quite right that international trade is a reserved matter, but it does impact with devolved competence. I believe that the Welsh Parliament either has or will be recommending legislative consent to the Trade Bill, which I think is testimony to how well we are working together in the interests of all of the people of Wales.
I appreciate my right hon. Friend’s comments on this topic. I also welcome progress on continuity trade agreements so far as a first step to more comprehensive trade deals in the future. Does he agree that we cannot force countries back to the negotiating table and we must not do any deals at any price?
My hon. Friend is quite right: it takes two to tango, and that is as true for international trade agreements. If the partner does not want to negotiate, of course we will speak with them and use all the levers we have to try to get them to the table, but at the end of the day, if the partner does not want to negotiate, I am afraid that can happen.
If the Government were in control of this situation and favoured transparency, they would have come to the House to make a statement, not be forced to via an urgent question. British businesses need to know how existing arrangements will be preserved. The Government’s negligence is leaving them susceptible to disruption to as much as £80 billion of global trade. I have listened carefully to the Minister and, as expected, it was lacking in any detail. When will the Government be able to share any real detail on how we are going to avoid this imminent risk to jobs and livelihoods?
I would point the hon. Member to the agreements that we have signed in recent weeks with Ukraine, with Côte d’Ivoire and with Japan, with Kenya agreed in principle. We are looking forward to further agreements in the coming weeks that I hope she will welcome and support.
Could I congratulate my right hon. Friend again on the Japan free trade deal his Department has just concluded, which has created new opportunities, such as for Lucideon in my constituency of Stoke-on-Trent Central? Does he share my enthusiasm about the deal as an important pathway to the comprehensive and progressive agreement for trans-Pacific partnership?
My hon. Friend—it is good to have so many Stoke MPs here, from our Benches, asking questions—is quite right. The CPTPP represents a fantastic future for this country, and I hope that we are able to apply for formal accession in early 2021.
Our SPS—sanitary and phytosanitary—rules are based firmly on human health concerns, but they can have important animal welfare benefits by barring the import of food produced according to controversial intensive farming methods that would be unlawful here. With that in mind, will the Minister confirm that our trade deals will retain the ban in this country on ractopamine in pork and bovine somatotropin in dairy produce?
I can confirm that on 1 January under the European Union (Withdrawal) Act 2018 all of those existing rules will be transferred over to the UK statute book, and those bans will be maintained, which fulfils the manifesto pledge made by my right hon. Friend and I both individually and collectively last December.
I recognise that Northern Ireland is part of UK trade policy. However, under the protocol, while our goods can freely circulate across the European Union, we are not covered by the EU’s free trade agreements. There are major concerns that companies that are part of the supply chain for EU products will now be excluded from those processes due to rules of origin complications. This is a major problem for our agrifood industry in particular, especially the dairy sector. Will the Minister undertake to give urgent consideration to these complicated issues?
I greatly respect the work the hon. Gentleman has done in Northern Ireland over recent years, and he and I met in a separate capacity last year to discuss some of these problems. He is right: it is clear that under the withdrawal agreement and the protocol Northern Ireland is covered by UK free trade agreements, which is absolutely the right position to be in. Rules of origin complications with EU trade agreements are part of the active negotiation between London and Brussels at this very moment.
John Davies, who farms at Merthyr Cynog in my constituency, sits on the recently created Trade and Agriculture Commission in his role as president of NFU Cymru. He will be a loud voice for Welsh farmers, not holding back in his advice to Government. Does the Minister agree that having experts such as John scrutinising the detail of trade deals ensures they benefit Welsh farmers and proves this Government’s commitment to backing British farming?
My hon. Friend is absolutely right, and farming in Wales is so important that we have put its representatives on the Trade and Agriculture Commission not once, but twice; both NFU Cymru and the Farmers’ Union of Wales are on it. We have excellent interactions and hear their feedback at the Trade and Agriculture Commission, and we look forward to that continuing when it is put on a statutory footing.
Wales has an exporting economy, with exports which in 2019 were worth £338 million with Turkey and £234 million with Canada. What assurance of stability can the Minister give Welsh exporters to these countries that they can continue their businesses next year?
I thank the hon. Gentleman for that question, and he is right to highlight the importance of Welsh exports. They are very important to us at the UK Department for International Trade, and we are working very hard to get continuity of our trading arrangements with Canada—the CETA.
There is one section of the community for which trade deals are literally a matter of life and death for their business, not just some minor tweaking of tariffs and regulations. In the 1930s people could walk all the way from Lincoln to Grimsby across derelict farmland because of the import of cheap American wheat, so in the rush to conclude free trade deals will my right hon. Friend assure me that there will be a gold standard process in this House, equivalent to our old European Scrutiny Committees, so that Members of Parliament who represent rural seats can hold the Government to account and protect our superb farming industry?
My right hon. Friend represents his rural Lincolnshire constituency very effectively. There is no rush to complete future free trade agreements; he mentioned particularly the United States and there was no rush to do that. It is very important that we get the right agreement rather than a quick agreement, and I have already detailed how our commitments to parliamentary scrutiny go well beyond the previous Government’s CRaG procedures; we have added a lot to that.
I thank the Minister for all he has done so far to secure the trade agreements, but may I ask him a question about the agrifood sector? Does the Minister agree that it is essential that we have the detailed proposals not simply to scrutinise, but also to get some indications to businesses who do not yet know how to plan for January, and whose position in limbo must come to a very speedy end? When does the Minister believe that that information will be available for those businesses?
As soon as we conclude one of these continuity agreements and sign it, we will seek to publish it as soon as possible and start the CRaG process. The hon. Gentleman asks about the agrifood sector, which is incredibly important to Northern Ireland. I have met representatives of the sector on various occasions. I suggest that he looks, as I am sure he has done, at the UK-Japan deal and the potential protection for about 70 geographic indicators in that deal, as a sign of our commitment to the whole agrifood sector.
The potteries were founded in Burslem by Josiah Wedgwood. They are known worldwide for their world-leading ceramic tableware, which, sadly, those on the Labour Benches forgot about. As the proud Member for Stoke-on-Trent North, Kidsgrove and Talke and the chair of the all-party group for ceramics, can I ask my right hon. Friend whether he agrees that deepening our trading ties with countries that share our values, ideals and high standards is essential for growth in the UK ceramics industry?
My hon. Friend is quite right. We have gone through Stoke from south through to central and now to north. I reiterate our commitment to the ceramics industry, ensuring that we break down barriers, and reduce and remove tariffs to our ceramic exports in a way that is consistent with the UK values that I know both he and I share.
The Minister will know that when new trade agreements or changes to trade agreements can affect other areas of policy, there are, understandably, questions, so I thank him for meeting me on numerous occasions to discuss digital and trade policy. Specifically looking at the EU-Japan trade agreement, will the Minister say whether that agreement will change the enforcement powers for people’s data protection rights? Has his Department already consulted, or does it intend to do so, directly with the Information Commissioner on that?
I thank my hon. Friend for all his interaction. As the former Chairman of the Select Committee on Digital, Culture, Media and Sport, he has genuine expertise in this area and has continued his interest in it. He mentioned the EU-Japan trade agreement, but I think he is really asking about the UK-Japan trade agreement and the difference with the EU-Japan deal. If I commit to write to him in some detail on exactly where those differences are, he will be able to see them. I expect the report that is being submitted to Parliament will look at those differences in some detail.
Is it not true that the Government have just overstated the ease with which they would be able to do all this? We were going to have 40 trade deals on 29 March 2019, and we were going to have a trade area bigger than the EU, which was going to include China and the US. Prime Minister Trudeau said the talks hit the buffers because of the inability of the UK Government to negotiate trade deals—that is the truth of it. What are the Government going to do to ensure not only that we get these rollover trade deals dealt with, but that we have proper scrutiny of them?
I am glad the hon. Gentleman made his question as long as he did, because it gave me the chance to check the voting record on the Canada deal he just mentioned. He actually voted against it when the vote came to the House of Commons, so it is a bit rich of him now to complain it is not being rolled over.
Will my right hon. Friend join me in congratulating the officials and Ministers in his Department on achieving 74% of the continuity agreements we wanted with non-EU countries? Will he further update the House on the progress he intends to make with the other 26%?
Mr Speaker, I think I will use a cricketing analogy: we are 74 not out.
At a time when our economy is in peril and just 44 days before we leave the transition arrangements, we still have no agreement with the EU. Fifteen continuity agreements are yet to be agreed, breaching the Government’s own deadline which the Prime Minister clearly said was immoveable, yet the Trade Minister comes to the Dispatch Box and says that he will extend provision into January. Will he tell businesses what will happen to their trade with those 15 countries on 1 January, so they can now make their plans?
It is relatively straightforward. If the agreement is made with the remaining countries and there is not the time to put it through the CRaG process before 31 December, it has the potential to be provisionally applied. The terms of that agreement will remain on 1 January in accordance with the existing EU deal going into that time, so there should be no interruption for businesses. Parliament will still have the opportunity, under the CRaG process, to give that agreement full scrutiny.
I commend the great work of the Minister and the Department so far in securing trade deals across the world. West country produce is already the pride of a nation and it is proudly found on shelves from Stornoway to Sidmouth. Does he agree that by continuing the great work to break down the barriers to trade, we can export the best of the south-west and promote the finest standard of produce across the world?
I spent part of my childhood in the south-west, and I remember only too well the quality of its produce in the agrifood sector. We are negotiating better market access in markets such as Taiwan, China and the United States, where we have just had our first shipment of British beef this summer. We are also reducing tariffs in important areas such as the dairy sector, for example, on cheese, in some of these markets. This is part of a continuous engagement for UK agriculture.
We have a bad connection with Marion Fellows—we have tech problems—so we are going to go to Dr Neil Hudson.
I am pleased that the Government have strengthened the Trade and Agriculture Commission, announced more robust parliamentary scrutiny of trade deals and provided reassurance that products such as hormone-treated beef and chlorine-washed chicken will remain banned in the UK. Does my right hon. Friend agree that writing specific unacceptable products such as those, and others such as ractopamine-fed pork, the excessive use of microbials and the use of growth promoters, into specific chapters in trade deals would be a practical way of ensuring that high standards are encouraged globally? Does he agree that such an approach would make it clear to both parties in trade deals that those products are not going to be traded, allowing other, acceptable products to be encouraged and therefore driving up animal welfare standards globally?
I thank my hon. Friend for that question. I think he is asking me to ban things that are already banned and put it in writing. Let me make it clear that we remain absolutely committed to our high food safety, environmental and animal welfare standards, on which he and I fought the last general election. We have ensured that the law offers protections for the existing standards, so that they will remain in place. Under the European Union (Withdrawal) Act 2018, the products he mentioned will remain illegal after 1 January.
As chair of the all-party group on Africa, I wish to emphasise the importance of trade between the UK and Africa. By offering Ghana levels of market access that differ from those of its neighbours in the regional trading bloc ECOWAS—the Economic Community of West African States—the Government are forcing Ghana to choose between new trade barriers within ECOWAS or tariffs with the UK, which would plunge Ghana’s banana and cocoa producers, many of whom are already in poverty, into even more extreme poverty. So instead of bullying countries such as Ghana, will the Minister work with African countries to agree deals that promote trade and fair, sustainable economic development?
I know, from previous meetings that the hon. Lady and I have had, her passion and commitment to the UK’s trade with Africa. On Ghana, I look at the situation closely, as does the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire (Mr Jayawardena). We are clear that there is a deal on the table. It replicates the EU stepping stone agreement. There is no evidence to suggest that the EU stepping stone agreement in any way discriminates in respect of Ghana’s trade with the rest of its ECOWAS partners. We have also to be clear that the UK will follow World Trade Organisation rules on discrimination between economies of similar levels of development when it comes to trade agreements. That is very important, for example, for the generalised system of preferences. The best thing for us to do is for the UK and Ghana to sign that deal that is on the table.
It is clear from the meeting that I held with the Minister’s colleague, the Under-Secretary of State for International Trade, my hon. Friend the Member for North East Hampshire, last week that any accusation of foot dragging in dealing with these continuity agreements is clearly not correct. I am working with businesses in my constituency to take advantage of the widening trade opportunities. Does this Minister agree that Members from across the House should be working with businesses to ensure that we maximise the benefits of the trade policies being pursued?
My hon. Friend is right; we can have an esoteric discussion about trade policy, tariffs, quotas, automated tariff quotes and all this kind of stuff, but it must work for our consumers and our businesses. The whole point of doing trade policy is to make sure it boosts UK exports and inward investment in this country, and does good work for UK trade, consumers and businesses in constituencies such as his.
While the Department for International Trade attempts to strike trade deals, its counterparts in the Department for Business, Energy and Industrial Strategy are using the United Kingdom Internal Market Bill to expand the powers of the Competition and Markets Authority. There is a growing concern that the Office for the Internal Market could be used to challenge the devolved Administrations by, for instance, American investors with an interest in a trade deal. Can the Minister confirm whether he or the Secretary of State have had any discussions with their foreign counterparts over the role of the expanded CMA and the Office for the Internal Market?
Of course the whole Government take a common approach to the United Kingdom Internal Market Bill. It is important for our trade partners to know that the UK has a well-functioning and efficient internal market. The measures that have been taken are necessary to protect the integrity of the UK’s internal market, which is extremely important for Scottish businesses, particularly if an agreement with the EU cannot be reached. I commend the United Kingdom Internal Market Bill to the hon. Lady for her further consideration in both Houses of this Parliament.
Businesses in my constituency trade heavily with other nations, and obviously they want to get deals that will enable them to continue to do so as easily as possible, but they also know that deals have to be fair to both parties, whether that is two companies or two countries, so does my right hon. Friend agree that we should stand firm for British interests and not just accept any terms that are offered?
My hon. Friend is absolutely right. Even in the negotiation of continuity agreements, it is important to ensure that we get the best possible deal for British consumers and British businesses, including those in his Aylesbury constituency.
The Minister glossed over a question raised by my hon. Friend the Member for Brent North (Barry Gardiner) earlier. My hon. Friend made the point that the CRaG procedures were established when the European Union was our main negotiating host and the scrutiny came through that process. Does the Minister accept that public distrust of bad trade agreements and public confidence in trade agreements will be established by parliamentary scrutiny, and will he now re-examine whether these procedures are adequate for a modern trading country such as the United Kingdom?
As I pointed out earlier, we have we added quite a lot and gone beyond the CRaG process to ensure that Parliament is incredibly well informed. Over the course of this year, we have had many debates and published many documents, impact assessments, economic assessments and now reports on individual trade agreements. Parliament has been kept very well informed. When it comes to public distrust, the data shows that the UK public remain strongly in support of free trade.
As my right hon. Friend and neighbour knows, I am Scottish born and bred. Will he confirm that we will look to put in place deals that benefit all four nations of the United Kingdom and all regions?
I thank my hon. Friend and parliamentary neighbour for that question. We will always take the time necessary to negotiate the right deals that work for all nations of the United Kingdom and for all the regions of England, including our own region of London, as witnessed by the UK-Japan deal and the importance that that gives to UK financial services, which I know are very important to her constituents and mine.
I congratulate my right hon. Friend on the work that he and the team at the Department for International Trade have done in signing not only continuity trade agreements but trade agreements around the world that have the potential to benefit the whole economy and, importantly, local businesses in Burnley and Padiham. Can he reassure me that we will continue to work at pace to deliver even more agreements?
I can, and can I just say what a brilliant voice for Burnley my hon. Friend has been in this House over the last 11 months? I can confirm that we are working very hard indeed on the remaining continuity agreements, but let us also recognise how far we have come in the agreements that we have already got.
Scrambling at the last minute has been a feature throughout the Brexit process, and the UK Government’s approach to trade agreements is no exception. The Minister’s predecessor used to say that the EU trade deal would be the “easiest in human history”, yet that is now a race against time too. Will the Minister launch a full review of the timeline and negotiating strategy for future trade arrangements, so that they are not blighted by the serial incompetence that we have seen over the last four years?
I think the hon. Lady asked about scrambling at the last minute, but we have done deals with 52 countries that account for £142 billion of bilateral trade. That is a huge amount: 74% of the value of those non-EU countries’ trade before the start of this process. We look forward to further continuity agreements in the coming weeks.
I welcome today’s update on continuity trade agreements. Does my right hon. Friend agree that the future looks very promising for global Britain, and that we are much better off together as the Union?
I am delighted with the confidence that my hon. Friend has in the UK’s ability to carry out trade going forward. Under the Secretary of State’s leadership, and thanks to the whole team, all the people involved in the programme and an incredibly large amount of hard work, I am confident that we are in a good place today. I appreciate that that is also coming from my hon. Friend and his constituents.
On a point of order, Mr Speaker. I am grateful for the opportunity to make this point of order on the important matter of the country’s international development budget. It is unacceptable that we have heard in the media this morning that the Government are seriously giving consideration to reducing that budget from 0.7% to 0.5% of gross national income. The UK’s development spending has been the difference between life and death for countless vulnerable people across the world. I seek your guidance, because surely it is unacceptable that, yet again, we are hearing such things in the media as opposed to the Government coming to this House so that we can have a proper debate. If this is going to happen, what options are open to me and other Members to try to rectify the situation and quickly get clarity from the Government? Surely they would have to bring a Bill to the House to reverse this provision.
As I know the hon. Member will expect me to say, that is not a point of order, but of course it is important that she has raised the issue. I hope that the Secretary of State for Foreign, Commonwealth and Development Affairs and the Ministers who now have that responsibility, have been listening to what she said. If there is going to be a policy change, I would expect the House—not the media—to hear it first, as we keep emphasising. It is media speculation at this time. The hon. Member has some good avenues through which to pursue the matter; some named day questions would be a good start. However, I am sure that it is only media speculation. Surely a Government would not use this House as a secondary vehicle, when it should be the primary one.
On a point of order, Mr Speaker. Following on from your reference to named day questions, may I ask what can be done to ensure that we get timely responses to those questions? I have 12 outstanding named day questions to the Department of Health and Social Care, one of which is over six months late. Others are over a month late, including questions the answers to which I think might be of interest to the Prime Minister—for example, about policy relating to those who are immune through antibodies. I have also raised one matter not just as a named day question, but twice during debates on the Floor of the House, when I have asked the Department, and the Secretary of State in particular, for the evidence in support of the assertion made to the House on 1 October that “hundreds of thousands of deaths…would follow” if the Government “just let the virus rip”.—[Official Report, 1 October 2020; Vol. 681, c. 503.] Where is the answer to the very reasonable question that I submitted?
I know that the hon. Gentleman—as a person of long standing in this House, and great knowledge —knows that there are other avenues to pursue. Let me say once again that it is totally unacceptable for Members of Parliament not to get responses within the named time. The Procedure Committee will be listening to what we have already said, and I know that the Leader of the House is very concerned. The title is “named day questions”, and those questions should therefore be answered as such. It is completely unacceptable for questions not to be answered after six months. I am tempted to say that if there were an urgent question to be asked on the subject of named day questions, one could be tempted In order to allow the safe exit of hon. Members participating in this item of business and the safe arrival of those participating in the next, I am suspending the House for three minutes.
I beg to move, That leave be given to bring in a Bill to require the Secretary of State to report on the merits of a scheme for the United Kingdom to pay to train two doctors or nurses in developing countries for each doctor or nurse recruited to the National Health Service from those countries I am extremely grateful to you, Mr Deputy Speaker, for granting me this opportunity to make the case today for my Bill—my first ten-minute rule Bill since I was elected to the House 33 years ago. I am supported by a distinguished cross-section of Members from both sides of the House. I believe this Bill to be uncontroversial, but a genuine boost for the reputation of global Britain and the international values that this House supports, particularly ahead of the integrated review. It builds on the past reputation of our country as an international development superpower. We were the first of the major developed countries to honour our promise to the world’s poorest people to spend 0.7% of our gross national income as part of our mission to elevate the lives and social conditions of some of the most desperate people on the planet—people deprived not for any reason of their own, but because of where they were born One of the proudest moments of my political life was when the coalition Government, in spite of the austerity that our country faced back in 2010, declined to balance the books on the backs of the world’s poor and agreed to honour the 0.7% promise. I am still certain that that chimes with the values and instincts of the vast majority of our fellow citizens, even at such a dreadful time as this for so many Secondly, I want to emphasise how much we rely on those doctors and nurses and other healthcare workers who bring their talents and skills to this country to support our NHS from overseas. We respect them and we are hugely grateful to them. Indeed, if I may use a second world war analogy, much beloved by some of my hon. Friends, the heroes of this war against covid are not, as in the battle of Britain, the men and women of the Royal Air Force but, all too often, workers from overseas working in our hospitals, giving their all in our care homes, putting themselves in harm’s way, and often living on the minimum wage When we persuade a doctor from the developing world to come here, we do so in the knowledge that our gain will inevitably be their country’s loss. In this country, we have 215 doctors, nurses, health workers and midwives from Sierra Leone; from Nigeria, 4,099; from Pakistan, 3,394; from Ghana, 1,118; and from India, just short of 20,000. All these countries are developing nations with whom we have, or have had, a significant development partnership. What I am describing—the export to us of their doctors and clinicians—is reverse aid: not from Britain to help developing countries, but from those developing countries to help Britain; and it is clearly wrong. In Britain, we have one doctor for every 357 people—effectively, three doctors per 1,000 people—with some 15% of our nurses coming from overseas and about a quarter of our doctors. What should we do about this dependence on doctors from overseas, and especially from the developing world, where we are effectively poaching their key public assets? First, we should grow more doctors and nurses here in the UK. The Government have recognised this and increased the number of doctors trained here from 6,000 a year to 7,100 from 2018. It was particularly good to see that universities like Aston in Birmingham now run a foundation course bringing more students from disadvantaged backgrounds into medicine We recognise also that it would be wrong for us to end the opportunity for those doctors in the developing world who wish to exercise freedom of movement. The House will be as shocked as I was to hear that not long ago there were more doctors trained in Sierra Leone practising medicine in Manchester than were practising medicine back in Sierra Leone—the country that had trained them. We should not restrain their career opportunities by cutting off their ability to come here if they wish and if we want them to do so So let us work with the grain of human nature, do the right thing, accept our moral obligation to people much less fortunate than ourselves, but also meet the needs of our citizens and ensure that they have the best possible healthcare. Therefore why not do the following? For every doctor or nurse we poach from a developing nation, we should ensure that that developing country—on losing their trained professional to our advantage—receives from the existing British development budget sufficient resources to train up and replace them, two for one? When we are lucky enough to secure such professionals from the developing world, we should replace them twice over, and expand their public health services accordingly Remember these figures: in Britain, one doctor for 357 people; in Nigeria, one doctor for 2,753 people; and in Sierra Leone, 1.4 doctors and nurses for every 10,000 people. Ghana—a country with which Britain has a close historic relationship—has in the upper east region, one of its poorest, one doctor for every 26,000 people. All the time, these countries, too, are fighting covid. Nigeria has 64,000 cases, Ghana has 49,000 cases, and Sierra Leone has 2,385 cases. India has an estimated shortage of no fewer than 600,000 doctors and 2 million nurses. India, where Britain actively recruits doctors, has one doctor per 10,189 citizens and has 30% of all the world’s acute child malnutrition The case we make to Parliament and the Government today is as follows: it is immoral and selfish for Britain, with its wealth and infrastructure, to poach doctors from the developing world. However, by taking the action I have suggested, we can turn that into a win-win for us and for developing countries. It would not be right to fetter freedom of movement for those medical and health personnel who wish to come here and who we as a country wish to admit—and to whom we are truly grateful for bringing their skills to these shores. By replacing twice over the health service professionals who come here from developing countries with which Britain has a close development partnership, Britain can help to meet its own healthcare needs while providing additional healthcare capacity within those countries On 1 January, the UK takes over the chair of the G7 group of nations. At a time when the new US President-elect is determined to reinvigorate the international rules-based system, when this major pandemic has destroyed lives and livelihoods around the world, and when we know that covid will not be beaten here until it is beaten everywhere, especially in countries with weak public health infrastructure, Britain’s international development leadership and commitment to the 0.7% promise to the poor—Britain’s example—have never been more needed. My Bill will contribute to that leadership and to the international progress we so badly need Question put and agreed to. Ordered, That Mr Andrew Mitchell, Nicola Richards, Bob Stewart, Dame Margaret Hodge, Sir Edward Leigh, Jess Phillips, Caroline Nokes, Hilary Benn, Sir Robert Neill, Harriett Baldwin, Crispin Blunt and Ms Harriet Harman present the Bill Mr Andrew Mitchell accordingly presented the Bill Bill read the First time; to be read a Second time on Friday 8 January 2021, and to be printed (Bill 213).
I beg to move, That the Bill be now read a Second time Our country has always been a beacon for inward investment and a champion of free trade. We recognise and celebrate the positive impact of these twin policies in delivering prosperity and opportunities across the United Kingdom. Over the past 10 years, the UK has attracted around three quarters of a trillion dollars of foreign direct investment, which in turn has helped to create 600,000 new jobs in our country In 2019-20 alone, more than 39,000 jobs were created in England thanks to foreign direct investment projects, with more than 26,000 of those jobs created outside London. Almost 3,000 jobs were created in Scotland, and more than 2,500 in Wales and 2,000 in Northern Ireland respectively. That is why we will continue to work relentlessly to ensure that the UK remains a great place to do business and invest. That approach is more important than ever as we look to business to create jobs in our recovery from covid-19 The UK is very much open for business, but being open for business does not mean that we are open to exploitation. An open approach to international investment must also include appropriate safeguards to protect our national security. Those are not conflicting approaches; prosperity and security go hand in hand. Otherwise, we leave the United Kingdom open to the risk of being targeted and compromised by potential hostile actors who are looking to disrupt our economic and wider security.
From the moment that this Bill was started to now, we have learnt a lot more about security and infrastructure. Does my right hon. Friend share my concerns that the Chinese national intelligence law requires Chinese firms to assist with state intelligence work? This was brought to light for me when TikTok gave evidence to the Business, Energy and Industrial Strategy Committee. I am incredibly anxious about the data that it could potentially be harvesting and sharing back with its parent company, ByteDance.
I know that my hon. Friend cares very deeply about this issue and, indeed, she and I have had discussions about it. I would say to her that the Bill is agnostic as to the domicile of an acquirer. I think that that is right and proper, but it is also right and proper that we look at every single transaction on a case-by-case basis. Let me assure her that if there are security concerns with any transaction, of course we will act.
There is a lot in the Bill that I am sure we all support, but does my right hon. Friend accept that without a public interest test, a character test, an anti-slavery test and a human rights test, the definition of national security being offered here is extraordinarily narrow and problematic to the broader age that we live in? Does he accept that there will be debate around that point—about what constitutes national security in this age?
My hon. Friend raises a point that I know he has raised with my fellow Ministers, and other colleagues will raise a similar point. He talks about modern slavery. He knows that the Government passed the Modern Slavery Act 2015. The Home Office is looking to update and strengthen that. I note the points that he has raised, but the whole point of the Bill is for it to be narrow on national security grounds, and that is the way that it was constituted when it was first discussed in the Green Paper in 2017 and in the White Paper in 2018. However, I will try to address some of the points that he raised as I go on Those who seek to do us harm have found novel ways to bypass our current regime by either structuring a deal in such a manner that it is difficult to identify the ultimate owner of the investment, or by funnelling investment through a UK or ally investment fund, or indeed, by buying or licensing certain intellectual property rather than acquiring the company. Be in no doubt that the UK and our allies are facing a resurgence of threats. That is why we are updating our powers to screen investments into the UK. Our current powers date back to the Enterprise Act 2002. Technological, economic and geopolitical changes across the globe over the past 20 years mean that the reforms to the Government’s powers to scrutinise transactions on national security grounds are now required.
I welcome a lot of the proposals in the Bill, including on the issue of land and the removal of the thresholds in terms of ownership. One way that people have been able not only to get influence in this country but to launder money has been through the purchase of large amounts of property in the UK, which were highlighted in the Intelligence and Security Committee’s report on Russia. Does the Secretary of State see the Bill addressing that issue?
I will go on to the detail of that particular issue, but as the right hon. Gentleman identified, the Bill looks at assets and intellectual property. On the point that he raised about the size of transactions, as he knows, under the 2002 Act, apart from some limited exceptions, businesses being acquired must have a UK turnover of over £70 million or, indeed, the merger must meet a minimum 25% market threshold. This means that acquisitions of smaller but technologically sensitive companies are not covered The Government have been clear for a number of years about our intention to introduce new powers. Many of our international allies, including our Five Eyes partners, have also acted to update their legal frameworks to address national security risks. We, in turn, are seeking to update our legislation in a proportionate manner to ensure that we have more security for British businesses and people from hostile actors targeting our country; more certainty for businesses and quicker, slicker screening processes as we remain open to trade and recover from covid-19; and a regime that is in line with our allies, meaning that investors will be familiar with this approach Let me turn to some of the specifics of the Bill. Part 1, chapter 1 introduces a call-in power that the Government may use in relation to a trigger event across the economy that they reasonably suspect has given rise to or may give rise to a risk to national security. Trigger events include acquisitions of certain shares or voting rights in a qualifying entity, and the acquisition of material influence over such an entity. As the right hon. Gentleman pointed out, it will be possible for the first time to call in the acquisition of a right or interest in a qualifying asset, including intellectual property, where such an acquisition would enable the acquirer to use the asset or control or direct how it is used. That is similar to the US and other countries’ regimes The call-in approach is consistent with the 2002 Act, but importantly there are no minimum thresholds for the size of the business or asset to be acquired. That means that sensitive businesses and assets that may previously have slipped under the minimum size threshold will no longer do so. That will close the back door into the United Kingdom that hostile actors could exploit However, it is important to reassure the investment community that the Government expect to use these powers sparingly. We estimate that less than 1% of transactions in any given year will be subject to call-in. For transactions that fall outside the mandatory requirement of the regime, the Government will be able to call in a transaction within a period of five years of a trigger event having taken place where they have not been notified. When the Government become aware of a trigger event having taken place, they will have six months to issue the call-in notice. That five-year period is, again, consistent with regimes in Germany and France. The Bill requires that the Government publish a statement of policy intent explaining how they expect to use the power to issue a call-in notice Should the Bill become an Act, the Government’s call-in powers will apply from the date of introduction and will cover transactions that complete during its passage. That will ensure that hostile actors do not rush through the completion of transactions between the introduction of the Bill and Royal Assent as a means to avoid scrutiny under this legislation. My Department has already set up an investment security unit to field enquiries from businesses and investors about transactions under the new regime Under the National Security and Investment Bill, there will be no requirement to publish call-ins. That is of course in contrast to the public interest intervention notices under the 2002 Act.
I welcome what the Secretary of State just said about the call-in power. Will he confirm that, as a result of the measures in the Bill, most transactions can take place within 30 days, which means that the UK will remain a venue, and be an even better one, for foreign direct investment as we seek to rebuild our economy following coronavirus?
My hon. Friend makes a very important point. We are giving certainty, and we expect that most call-in decisions will be decided upon within 30 days. I said that we expect that less than 1% of all transactions in any given year will be called in, and only about 10% of those will then face detailed scrutiny.
Will the Secretary of the State provide clarity to the House about the jurisdiction of the Bill? For example, if a German technological company was listed in Germany but the IP and research and development was based in the UK, what powers would the Government have to act?
This Bill applies to any transaction that relates to an asset or entity in the United Kingdom. If that were the case, of course it would apply.
I am interested in that point. If a malign actor made an investment in another country with a lower-standard test, which then invested in the UK, putting intellectual property rights at risk, where do the UK Government go on that? Do they give themselves the scope, which I do not see in the Bill, to act on the basis of the original investment?
I thank my right hon. Friend for his question. He has taken a great deal of interest in this legislation, and we have spoken about such matters. As I said earlier, the whole point of the Bill is that we will be able to scrutinise the precise details of a transaction and of who the ultimate beneficial owner of a particular acquiring entity may be. I would therefore hope that the Bill will indeed cover the particular set of circumstances he outlines Going back to the point about providing assurances, businesses and investors can be reassured that the Government will treat potential national security risks with the discretion they deserve Turning to the mandatory notification elements of the Bill, investors in 17 prescribed sectors of the economy will be mandated by law to notify the Government of acquisitions of entities above a certain threshold of shareholding or voting. That mandatory notification process is similar to the approach taken in the United States, Germany and France. The Government have, alongside the introduction of the Bill, published an eight-week consultation to refine the definitions of those 17 sectors. The discussions that I and other Ministers in the Department have had with the investment community suggest that that has been extremely welcome Many sectors, of course, are well defined, and the purpose of the consultation is to refine them further so that the definitions are clear and narrowly focused on specific parts of sectors in which risks are most likely to arise and will allow parties to self-assess whether they need to notify. The House will appreciate that we could not have published the consultation before we introduced the Bill, with its call-in powers, or we would have risked hostile actors completing transactions in the particularly sensitive sectors.
My right hon. Friend is quite rightly focusing on precisely defining the sectors. Was he as concerned as I was to hear the Opposition spokesman say today that he would prefer a strategy that did not have that definition, relying instead on the whimsy of a particular Secretary of State at the time? That situation could, like it does in France, lead to a yoghurt company or water bottle business being defined as a national strategic asset.
My hon. Friend speaks with a great deal of interest and experience in investments. This Bill focuses on national security, and we have been clear that we will define the sectors where mandatory notification is required, which is right and proper. The whole point of the Bill is that we are taking a proportionate approach. We do not want some kind of chilling effect on investment coming into the UK. We have been a beacon for inward investment over many years with, as I said earlier, three quarters of a trillion dollars coming into our country over the past 10 years. We would not want that to change Transactions covered by mandatory notification that take place without clearance will be legally void. Again, that is in line with the French, German and Italian regimes. Parties to an acquisition may, of course, voluntarily inform the Secretary of State about their acquisitions to seek swift clearance to proceed. We have also streamlined the information required for notification from 36 pages, as required under the Enterprise Act 2002 for competition modifications, to a third of that The use of digital processes will make interaction with the Government much simpler, more transparent and slicker, and Government will aim to provide clearance for most transactions within 30 working days of notification, as my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) raised earlier. Having spoken to the investment community over the past week, I know that that timely approach to the clearing of transactions is welcomed Moving on to the assessment of called-in transactions, part 2 of the Bill provides powers to assess transactions should the Government call one in. Where the specific legal test is met, the Government may impose conditions or, in extremis, block or unwind transactions. I stress once again that the Government will use those powers sparingly and proportionately The Government will take the necessary powers in the Bill to gather information about any transaction. However, such information will be strictly safeguarded against inappropriate disclosure. That includes, of course, information from parties, regulators and others to make informed decisions on transactions. If no remedies are imposed, a final notification will be provided at the end of a national security assessment. Alternatively, the Government may choose to prescribe remedies Any notification decision under the Bill will be subject to legal challenge from the potential acquirer entity by way of judicial review or appeal, and the Government will be able to apply to the court for a closed material procedure to protect commercially sensitive and national security matters in such proceedings. The investment security unit will ensure that the entire process is streamlined and supported by robust digital structures and governance to ensure swift decision-making on assessments It is worth noting that the new regime will be underpinned by both civil and criminal sanctions, creating effective deterrents for non-compliance with statutory obligations. Again, that is in line with sanctions in the French and German regimes.
Is it not the case that a call-in itself could be commercially sensitive, particularly to a listed company? In that regard, a default of self-referral to the Government would probably be a better way for industry to ensure that share prices are not unfortunately affected by what might be a legitimate call-in.
My hon. Friend raises an incredibly important point. Of course, self-referral, as he refers to it, is possible. In fact, if any company has particular concerns as to transactions that they may be undertaking or part of, they will get a swift assessment from the Government. I make the point, though, that we will not be effectively publicising call-ins when they take place. Clearly, at the end of a transaction, if there was a particular remedy, that would be made public. It is also worth pointing out that the Government will publish an annual report, not on individual transactions, but on the scope of the transactions and sectors that have been looked at. I hope that that will give future investors an opportunity to consider the type of transactions in which the Government have a particular interest The final measure that I want to detail relates to the overseas disclosure of information relating to a merger investigation. Under section 243 of the 2002 Act, there is a restriction on the ability of UK public authorities to disclose merger information to overseas authorities unless the consent of the entity has been given. Clause 59 of the Bill removes that restriction. That will strengthen the Competition and Markets Authority’s ability to protect UK markets and consumers as it takes a more active role internationally, allowing the UK to set up comprehensive competition agreements with our international partners In conclusion, I hope that right hon. and hon. Members on both sides of the House see that the Bill updates our national security powers in a proportionate, pro-trade and pro-business manner.
Unless I missed it, there is no definition of national security in the Bill. Will the Secretary of State provide a definition or will he commit to putting one in the Bill to give us something to work with?
My hon. Friend raises an important point. As he will know, and I am sure appreciate, I am not going to be able to set out every single test that we will apply when it comes to a national security assessment. The application of the tests will, of course, be based on information that we garner from across Government. He can be certain that in using the powers, the Government will act in a quasi-judicial fashion, we will have regard to the statement of policy that has been published, and we will act, again, in accordance with public law principles of necessity and proportionality. I also made the point earlier that any decision can, of course, be challenged by an affected entity.
Before the Secretary of State moves on, will he give way?
I will move on, if that is all right with the hon. Gentleman These powers are narrowly defined and will be exclusively used on national security grounds. The Government will not be able to use these powers to intervene in business transactions for broader economic or public interest reasons, and we will not seek to interfere in deals on political grounds. They will not and cannot be used for wider economic tests. The Government already have proportionate powers in statute for intervention on the grounds of competition, financial stability, media plurality and combating a public health emergency. Going further than that would risk chilling and destabilising investment in the United Kingdom and reducing growth opportunities and jobs The UK has the lowest corporation tax rate in the G20. We are rated one of the most innovative countries in the world, ranking fourth in the 2020 global innovation index. We are one of the top 10 countries in the world for ease of doing business. We have a world-leading research and development environment, and the stability of our institutions, tax system and legal framework are respected globally. It is because of our pro-market approach that the United Kingdom has become one of the premier places to invest in the world, and I certainly would not want to do anything to change that. The powers we seek in the Bill support and enhance our pro-business environment, supporting economic growth, prosperity and jobs across the United Kingdom, while enhancing security for our country. I commend the Bill to the House.
I will start with the vital context to the Bill. At the heart of it is the first duty of any Government: to protect our national security, while meeting the shared desire across the House for our businesses to succeed and create wealth and jobs. The Bill must be seen against the changing geopolitical and economic landscape; the evolving nature of the threats to our national security in an age of rapid changes in technology; the lessons of covid about the critical nature of unexpected threats, including pandemics, which has thrown into sharp relief the critical need for advanced domestic capabilities in manufacturing and logistics and across supply chains; a shared sense across the House that we as a country have at times been too relaxed about some overseas interests investing in our country, with damaging national security implications; and an understanding that the existing legislation supported across parties two decades ago does not provide the basis for the kind of active industrial strategy that we need to build a safe and successful economic future. Those factors together demand legislation, and that is the context in which we view the Bill, so we support it and the fact that the Government are taking the necessary legislative steps to protect our vital national security interests. It is the right thing to do for our country Our main argument with the scope of the Bill is not so much about what it seeks to do on national security but what it omits on wider issues of industrial strategy. It is notable that the Bill brings us into line with other major economies on the security questions we face but fails to do so on broader issues of public interest and takeovers going beyond national security, despite the clear lessons that have been shown over the last decade. I will return to that point later in my speech, but first let me focus on the specific provisions in the Bill We should be candid that, in drafting the Bill, the Government face the very difficult challenge of keeping our economy open as much as possible to foreign direct investment, which is part of the lifeblood of business and jobs, and protecting our security. Navigating that challenge is hard, which is why getting the specific provisions of the Bill right is so important. This is obviously reinforced by the fact that the Bill goes significantly further in a number of respects than the 2018 White Paper envisaged—notably, the mandatory notification obligation that will apply in 17 sectors and the question of five-year retrospective application I want to raise a number of issues about the Bill in the interests of the constructive scrutiny that is the role of this House. These questions are about the scope of the Bill, the issue of retrospection, the capacity of the Government to make this regime work and the scrutiny of its effectiveness First, on the scope of the Bill, we do not take issue with the 17 key sectors identified by the Government. In quantum technologies, engineering, biology, space and a range of other emerging technologies, there are serious potential issues around national security. For example, the acquisition by a firm owned or funded by a foreign power of a company that designs graphic processes, networking routers or microchips could potentially risk national security, especially if the products are used by the UK Government. That is why the legislation is necessary However, as the Secretary of State acknowledged, the Bill goes well beyond those sectors. The call-in ability stretches to any entity or asset in the UK, irrespective of sector. While that was true in the old regime, this power will be viewed in the context of a much more activist, interventionist Government approach. We do not say that is wrong, or indeed out of line with some other countries, but there is a danger of a potential deterrent effect on investment To be fair to the Secretary of State, in his statement of policy intent accompanying the Bill he says that in those non-mandatory areas, “transactions are only expected to be called in on an exceptional basis.” The central question for businesses and investors in the non-mandatory sectors will be to decide whether or not to notify. The central challenge for the country is to make sure that investors are not put off from investing in the UK I would say to the Secretary of State that there is not yet clear, targeted guidance for market participants on how and when they should notify in those non-mandatory sectors; further detail on that will be crucial in due course. The Secretary of State will be aware of the example of the suspicious activity reports from financial institutions to the National Crime Agency where the system has, according to the Law Commission, been “swamped”. As with suspicious activity reports, there is a risk that the voluntary notification system sees businesses err on the side of over-reporting; the impact assessment already estimates that at least 1,000 notifications will be made each year. I hope that, during the passage of the Bill, Ministers can offer reassurance on that point Secondly, I want to raise is retrospection. The Government consulted on a six-month retrospective power to call in transactions for review, and certain respondents expressed the view that that was too long. The Government have chosen to go much further—for five-year retrospection. I appreciate that that is similar to France, Germany and Italy, and we have no inherent objection to it if the case can be made, but I have read carefully the Government’s response to the consultation, and I do say to the Secretary of State that Ministers need to do a better job of explaining the change in thinking to such a lengthy period In particular, I wonder whether Ministers would explain what the experience has been in those countries that have five-year retrospection—whether they have looked at its effects. As well as the possible deterrent effect on investors, there is obviously a massive challenge in unwinding a transaction that has taken place at five years’ remove. It would help if Ministers explained that, because there could be a subsequent series of transactions, so that unwinding from that would be very complex. There is also the issue that has been raised about the voiding, which is that a notifiable acquisition completed without the Secretary of State’s approval is void—not unwound by the Secretary of State, but automatically void without any decision required on his part. That is an unusual concept, and Ministers need to explain how it will work Thirdly—this is really important for practical purposes—I want to focus on how Government can guarantee an effective regime for the new powers. The Government have proposed a new investment security unit in BEIS. It is hard to overestimate the extent of the challenge for the new unit. It will have to respond to a large volume of mandatory, and potentially voluntary, notifications within a tight timeline set out in the Bill. The start of a new regime will always be turbulent The unit will have to track the development of fast-moving, highly complex technologies and monitor each of those markets, and the Secretary of State will have to take decisions on the advice of the unit, which can be challenged in court in the context of highly sensitive information and wide-ranging powers. And the unit will need to develop policy, practice and precedent to provide certainty to a wide swath of the economy. These are, as I am sure the Secretary of State knows, significant challenges, and it is no exaggeration to say that the success of the regime and the effective functioning of an important part of the economy rest on the new unit operating swiftly and effectively. If I may put it this way, the Secretary of State will be aware that his reputation and that of future Business Secretaries—not to be presumptuous —will depend on the resourcing and functioning of the unit I want to raise in particular the issue of small and medium-sized enterprises, which may well find the notification process most burdensome. Take the example of a small tech start-up founded by recent university graduates, who might incur much more debilitating costs in navigating the process than a large global corporation. It is essential that the Government find ways to mitigate this risk In any case, my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) and I are seeking from Ministers assurances that the unit will be adequately resourced, with access to the right technical capabilities; and crucially, there must be a clear flow of information and shared priorities between the unit, protecting our national security, and the Department of International Trade’s new office for investment, whose job is to get inward investment into the UK.
Does my right hon. Friend agree that what is also going to be needed is some very close relationships and working with the security services, because the information that it could rely on in these cases will mostly not be accessible straightaway by this new unit?
My right hon. Friend speaks with great knowledge on this issue, and he is completely correct. Indeed, I do not want to answer for the Secretary of State, but one of the issues that was raised was the definition of national security. These things are hard to define, for a whole range of reasons that we can understand, but for the reasons that my right hon. Friend set out, it is absolutely crucial that there is a close relationship with the security services.
Does the right hon. Member agree that the definition of national security provided in spheres such as the United States and Australia would actually help clarify for companies an idea of whether they are likely to fall within it? Without that, they are not quite sure what the judgment will be behind closed doors.
The right hon. Gentleman has taken a huge interest in these issues and, again, speaks with great expertise, and he may well be right that it is possible to do more on the definition. I am sure that is something the Secretary of State will consider. I can see there are definitely challenges, but I would agree with the right hon. Gentleman that the more guidance there can be for business about this, the better, because the more we will avoid a mountain of notifications that are not necessary and the more clarity there will be and the greater protection for our economy Fourthly, I want to talk about the role of this House in scrutinising the effects of this legislation. A large number of areas are left to delegated legislation in this Bill. Notably, the Bill enables Ministers to add new sectors to those subject to mandatory notification. I understand some of the reasons for this, but I do hope there can be proper scrutiny, if that is the case, in this House and, indeed, interaction with business. Given the sensitive nature of the issues involved in this Bill, I do think there needs to be a way—an annual report is envisaged, I believe, by the Secretary of State—for this House to monitor how this is working in practice I do not speak for it, but we have a special Committee of the House—the Intelligence and Security Committee—that can look at these issues. I would like to raise the question with the Secretary of State whether it could play a role in scrutinising the working of the regime and some of the decisions being made, because there are real restrictions on the kind of transparency there can be on these issues for the reasons raised by my right hon. Friend the Member for North Durham (Mr Jones). The ISC is in a sense purpose-built for some of these issues Again, this is one of a range of issues we will seek to raise during the passage of the Bill, because I think that it is really important. We see our role as a constructive Opposition to get this right. There is a shared understanding across this House that we need to update our legislation. There does need to be proper scrutiny, and I hope that there can be good scrutiny in Committee and an openness on the Government side to the points that are made across the House in relation to improving the legislation and a proper way to look at its operation, which is vital to our businesses.
Is the shadow Secretary of State aware that some people on this side of the House, as part of this process and as part of the scrutiny, have been calling for an annual statement on strategic trade dependency to give ourselves an overview and an understanding of the strategic direction of some of our industries, including specific examples?
It sounds like a good idea to me, and I would welcome that. Actually, that is a convenient segue to the wider points that I want to make on this Bill. Our view is that this is only one part of the change we need, because I believe that the existing legislation has been found wanting. That legislation was passed by a Labour Government—I checked—and I think it was more or less agreed across parties; certainly, the then Opposition did not vote against it. It has been found wanting not just on national security but on wider issues such as the public interest test for takeovers on economic grounds I just want to raise a very specific issue, because it illustrates the point. We are in the midst of a threatened takeover in the tech sector: the Nvidia-ARM deal. We know that ARM is the crown jewel of the British tech sector. We know that Nvidia competes with companies to which ARM supplies. There is a widespread view across the tech sector and across this House that this takeover could be a risk to the future prosperity and success of the sector in the UK, but looking at the Secretary of State’s statement of intent, I do not think that it falls in this list. The list of trigger risks are: disruptive or destructive actions; espionage; or inappropriate leverage. Those are not the issues with Nvidia. The issue is our wider economic interests, which speaks to the point that the hon. Member for Isle of Wight (Bob Seely) made In the two months since the takeover was announced, we have heard little from Ministers. It is true that there could be a referral on competition grounds—I am sure that the Secretary of State is a bit constrained in what he can say about this, but let us hear it if there is. But we are deeply worried about the future of ARM. We are worried about the strength of the legal assurances on its headquarters and other matters. It would be good if Ministers could tell us what they think about this issue. These are deeply serious issues about our industrial strategy and our economic base, and they go beyond national security and, on my understanding, the tests that are set out in the Bill.
The right hon. Gentleman speaks very lucidly about the deterrent effect, which he talked about earlier, as well as some of the challenges in establishing this new unit. Surely he must understand that the answer to this is to make sure that the scope of this Bill is absolutely as narrowly drawn as it can be. With respect, he has fallen into the trap of immediately hanging Christmas-tree-like baubles of employment policy and other areas of his industrial policy in what would otherwise be a very narrowly drawn and constructive Bill.
I really appreciate the hon. Gentleman’s point. These are not Christmas tree baubles that I have suddenly raised now. In 2010, there was the issue of the Kraft takeover of Cadbury. In 2014, there was the threatened takeover by Pfizer of AstraZeneca that had deep implications for our science base. I have felt for a decade that our legislation is not fit for purpose—and I acknowledge completely that this legislation was put in place by the Labour Government. These are deeply serious questions about the future of our industrial strategy and industrial base I do not pretend that these issues are easy to resolve. Of course there are dangers on both sides of the ledger, and we have to strike a balance between those two dangers, but we have enough experience with Kraft-Cadbury and with Pfizer and AstraZeneca— which did not happen, but not because of any powers of Government—to be anxious about Nvidia-ARM. If, as I believe, the whole basis of this legislation is to say that other countries are taking this action when it comes to national security and so should we, the logic applies here as well. It is not straightforward, it is not simple, and I completely acknowledge that to the hon. Gentleman, but I see the case for change.
The right hon. Gentleman used the phrase “I feel” and then talked about confectionary, then about how he felt about pharmaceuticals and about semiconductor chips that are used in mobile telephony. That is the problem, is it not, Mr Deputy Speaker? His feelings are not an appropriate way to interfere in the development assets of private capital. What could he provide to those businesses to protect their development from the vagaries of his feelings from time to time?
It is interesting; I believe the hon. Gentleman supports this Bill—I may be wrong—but on national security, the Government will apply some tests and we could apply some tests when it comes to our industrial base. Let me make this point to him: it is not just France, but Germany, Australia, Japan and the United States. It is all of the other major industrial economies that say, “Well, no, we do have a strategic interest in certain industries.” Of course, if we decided to go down that route, we would have a debate in this House about the specific areas in which we wanted to be able to intervene. We would have to look at exactly the criteria, and it is not just about whim, but the question is: is the status quo adequate I say to the hon. Gentleman that the status quo is not adequate, and we do not just have 10 years or more of experience to suggest that the status quo is not adequate; we also have a real situation now with Nvidia and ARM. If anyone in the House wants to get up and say, “We think it is fine. We think this should just go ahead. We are not concerned about what that means for our tech sector”, then fine, but everybody I speak to in the tech sector who knows about this issue, including my hon. Friend the Member for Newcastle upon Tyne Central, says that there is a real worry. Why have we not developed enough of these world-leading companies in this country? Why do we want to see ARM taken over?
The right hon. Gentleman is probably aware that on the journey to build the fabulous enterprise that is ARM, which is still employing thousands of British people and will continue to employ many more in the Cambridge artificial intelligence hub, that business made 22 acquisitions to equip itself to be where it is today. Had each and every one of those been subject to the jeopardy and the predations that he talks about, we may not have great British businesses like ARM in the future.
The hon. Gentleman is absolutely entitled to his view; we just have a difference of view on this. When it comes to our industrial base, I believe that the current legislation is inadequate, and there have been a series of events that illustrate that point. Indeed, I would make this point as well, which is that the Government say that the crisis of coronavirus makes parts of our corporate sector more vulnerable, and I think that only strengthens the case for action. The overall point I would make is this: I welcome the Bill and think it is the right thing to do, but there is a broader picture here about what a modern industrial strategy looks like, and I do not think we can ignore these vital issues around our economic and industrial base.
I have such an array of options. I think the hon. Member for Newcastle-under-Lyme (Aaron Bell) was first.
I thank the right hon. Gentleman for giving way. He is perhaps proposing an industrial strategy Bill, rather than a national security Bill, but on innovation and science and technology, does he not worry about the chilling effect of what he is proposing? Individuals who may be setting up a scientific or technology company might prefer now to do that in the United States, where they have every option of going to California and setting up the company in the first place, rather than setting up in the UK, because they might fear that he, as a potential future Secretary of State, as he indicated earlier, might prevent them from cashing in on what they have done?
The hon. Gentleman makes the point that the United States has exactly the regime that I am talking about and does indeed have those wide powers of intervention, so the notion that people are going to set up in the United States rather than Britain, when they have much stronger powers than us, does not hold water.
The right hon. Gentleman is of course right that there is a difference between the United States and the United Kingdom. One of the differences is that there are 350 million people in the United States. It is a continental power, a position that the UK sadly does not share. It does mean that our investment regime and our investment protocols have to recognise that we are having foreign direct investment of a very different nature I appreciate that this is a matter for debate, and I also appreciate that this is something where we will probably not agree. In fact, interestingly, the right hon. Gentleman seems to align much more closely with the former Prime Minister’s special adviser Mr Dominic Cummings than he does with me. Apart from that, it is actually a matter for a separate Bill. I may actually have some views where I sympathise more with him, but this Bill is quite clearly about national security. There are issues about how much further it should go, but what he says is not the scope of this Bill.
I can say to the hon. Gentleman that this is the first time I have been called a Cummings-ite. I have been called many things in my time, but a Cummings-ite after Cummings is really unusual The final point I will make before I conclude, because many hon. and right hon. Members want to speak in this debate, is that when I listen to Government Members, I feel that they accept the logic that we have to move away from the old view—the two decades ago view best embodied perhaps by the Enterprise Act 2002—when it comes to national security. They say, “We are worried about the investment effects, but national security matters.” Of course it does, and I agree with that. But then, when it comes to our industrial base, suddenly they have a completely different view, which is, “No, no, no. We can’t go back. We can’t change our view.” I think there is a degree, dare I say it, of inconsistency on that.
Is there not a direct national security issue around telecoms? When BT was privatised, the old General Post Office was advanced in both mobile technology and fibre optics. It was because the Thatcher Government decided to throw it open to the open market that the advantage we had in this country was lost. That is why we now find ourselves at mercy of Huawei and other companies.
My right hon. Friend makes a very important point. Indeed, my hon. Friend the Member for Newcastle upon Tyne Central and I were discussing this very issue last night—that these issues can interact I will just say this and then I will conclude, Mr Deputy Speaker, I promise. I think the public are in a different place from some of the Government Members who have spoken. I think the public really recognise this issue. We have many great companies, but some of them have been subject to takeover, and the public do not really understand why and they do not really understand why the Government have not played more of a role. I can see some hon. Members nodding Updating legislation to protect national security is long overdue, and we welcome it. We will support the Government as they seek to protect national security and defend our country. We will push them to go further on industrial strategy and the takeover regime. We think this is the moment to be bold and develop the industrial strategy that 21st century Britain needs, but we want to see this Bill pass through the House. We will engage on it constructively, and I know from the Secretary of State and the way he operates that he will do the same.
As Members will notice, the call list is quite extensive and it is top heavy on the Government side, so please be mindful, particularly on the Government side, of the length of your contributions.
It is always a pleasure to follow the right hon. Member for Doncaster North (Edward Miliband), not only because he followed me into leadership and discovered just exactly how pointless that really was. On that we can immediately agree, and he may well have stumbled into another point of agreement; he should know, now that he is a Cummings-ite, that I once employed him and then let him go, so maybe it is time for the right hon. Gentleman to do the same. Anyway, beyond that, I want to congratulate him, because there were things on which I did agree with him, as well as, obviously, things that would need further discussion I thank my right hon. Friend the Secretary of State for his deliberations on the Bill, which I will support tonight. It is long overdue. The debates around the Huawei stuff at the beginning of the year really exposed the fact that the UK had lost its way in this area in terms of threats and so on. We were behind the others—Australia, the United States; some of our big Five Eyes compatriots—but at least my right hon. Friend has grasped the nettle and brought this Bill forward, which is laudable. I also thank him for his courtesy in the course of this, in the sense that he spoke to me and, I know, to others. I particularly commend the courtesy of his Minister, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), who is a very good friend. He went out of his way to talk this through with colleagues on both sides of the House This debate is in that context. This is right. I particularly like clauses 32 to 39 and onwards, which deal with penalties, fines and incarcerations, the scope of which is up to five years. These are strong recommendations—slightly stronger than I expected, to be quite frank, but they are well worth it. There are many other good things about the Bill. I will not run through them all, because the Secretary of State did that, and I want to tease out a few points that I think are relevant and need inquiry The Bill gives the Secretary of State great powers for industrial strategy—powers to screen these investments that we have been discussing and to address the national security risk that they involve. It also gives him the power to call in investments. We have been through those already. However, I want to pick up on the things that I think are missing from the Bill and that I hope the Secretary of State will look at again in the course of its passage First, we have to accept that parked across this space are two very big threats: Russia and, of course, China. In fact, I think China is now the single biggest threat and problem posed to the United Kingdom and the free world. The way it is going—its problems, its difficulties, and the way it is focusing on internal suppression, external expansion and trashing both World Trade Organisation rules and laws—means that we will have to deal with that, and I suspect that this Bill will progressively be right in the middle of that. In dealing with that, I want to raise a couple of issues. In dealing with that, I want to raise a couple of issues Without this definition of national security, the Government are giving a stick to beat themselves with at the moment. Having such a definition is important for two reasons. First, it helps to improve clarity—a couple of my hon. Friends wanted clarity. I have looked at some of the definitions out there, including the American definition, which may not be perfect but it does cover some of the wider areas that I will talk about soon under transnational crimes and goes into things such as threats from drug trafficking. It is important for the Government to think carefully about this because it will help to define the Bill.
On what the shadow Secretary of State said, there is obviously a genuine and good debate to be had on the elements of the Bill. This is not necessarily about industrial policy—I say with great respect to those on the Benches opposite—which is part and parcel of another debate. It is about the modern definition of national security and whether we see it as narrow or broad, and there is a strong argument today for having a broader definition of national security.
I agree with my hon. Friend and I agree that this is not the Bill to discuss industrial strategy. The right hon. Member for Doncaster North made wider points which I think are worthy of discussion, but I am not sure that that discussion should take place in relation to this Bill and I want to keep this narrow. First, in China something very special is taking place: the idea of civil-military fusion, which is now infecting every single enterprise and company in China. The Chinese military, as we have already heard, uses this concept and strategy to acquire intellectual property, technologies and research for civilian use and for military use. An external investment screening body, therefore, should be set up under this legislation, to establish and investigate cases where this may now affect UK investments. This is very important, because the rules are very strictly applied in China: you co-operate with the intelligence services or you are out of business. You may be out of not just your livelihood but your freedoms.
Is it not even more dangerous in that, under the national security law in China, not only do people have to hand over data, but if asked by a foreign state they have to deny they are handing over data? If that is the case, should we not have a bigger debate about social media companies based in this country harvesting our data and our children’s data and where that data might end up down the line?
I of course completely agree with my hon. Friend and I was just going to come on to the data harvesting point, because it is caught in this. She is right that China’s national intelligence law requires all Chinese firms to assist with state intelligence work and to deny that if they are asked. Let us say the Secretary of State wants to investigate and says he has strong penalties for non-compliance. By law in China they are not allowed to comply with that process at all, so there is already a national conflict in this. TikTok is owned by ByteDance, which is a very dodgy company set up in China that has huge links with the Chinese Communist Government. So we need to be very careful about where we go with this because UK nationals might get caught up and get punished for what is essentially a refusal by the Chinese Government to allow others to do this I am also slightly concerned about some of the things that happened in the past not being caught by the Bill. The Henry Jackson Society has today announced that, having looked through the Bill, only 23 of the 117 Chinese acquisitions over the last decade would have actually been caught. The areas that are outside of this include pharmaceuticals. The Chinese takeover of Bio Products Laboratory, which has a very significant technology with regard to blood products, would not have been caught. In education, 10 universities have many thousands of obligations to Chinese investors, where they get a trade-off on technology, some linked to defence firms. That would not have been caught. Interestingly, Thames Water and Veolia Water have significant share ownership from Chinese firms, but that certainly would not have been called into question.
My right hon. Friend is referring a lot to China, and I am sure he will not be alone in that this afternoon. Is his perspective that we should be looking in the Bill to restrict all Chinese investments in the UK, or investment in particular sectors, and what is the differentiation if the origins of that is the Chinese state, in this fusion of the state with business?
My view is that the Bill should help us to identify exactly which of these are genuinely private and not located in China under Chinese law. That will be a big issue. I have to tell my hon. Friend that, on that question he is right, because I believe we are now facing a very significant threat from China. So we now need to use the Bill to figure out how we deal with that threat on a wider basis, not just on individual takeovers. The Government need to look at that. Huawei was a very good example of Government policy having to be reversed on that basis. It is a growing problem and he is right to raise it.
Does my right hon. Friend agree that it is incredibly important that we recognise that the Bill is not aimed at one particular country or any particular identified sovereign threat? It is a more general Bill about the importance and value of national security assets in this country. Does he also agree that referring to China as communist—although, of course, it is ruled by the Communist party—is a misnomer in the context of a successful model of authoritarian state capitalism with which we will have to deal and the world will have to deal? We will have to separate those companies that offer attractive investment opportunities from those that are genuine threats.
I thank my hon. Friend for that intervention. I know he has been a big champion of that relationship. We do not agree with each other on this matter because I think that China, with its dictatorial Government, poses a very significant threat. But I did speak about other countries—I did say that Russia also poses a threat—so I recognise his defence I want to move on to the national interest test. This year, the Australian Government invoked the national interest in looking at tests and they used it in similar legislation to block the acquisition of a minor stake—this might deal with the issue that my hon. Friend was talking about—in AVZ Minerals by a Chinese firm. They needed to intervene because the asset, given what has happened with covid and so on, had lowered in value unusually and unnecessarily, and that had opened it up to a takeover which they felt would have been very unhelpful. The other point I want to raise in passing is that we need to look at things like the Confucius Institute, which is here investing in universities with offers but is actually acting on behalf of the Chinese Government to follow lots of Chinese students around Other Members wish to speak, so I will finish my remarks. My main point is that without that national security test the Bill will lack clarity and definition, and fail to understand sometimes where it is actually looking. It could be open to pressures to turn this more into an industrial policy statement, rather than a national security issue The Bill also falls short of similar legislation by Five Eyes partners. My right hon. Friend the Secretary of State is absolutely right to say that they have looked across the scope of what others have done, but other Five Eyes partners have gone further on this. They are competitor countries to us, so it is not as though they have any kind of dictatorial regimes. The Committee on Foreign Investment in the United States and the Australian Foreign Investment Review Board are external bodies This is the point that I wanted to make to my right hon. Friend. I just wonder whether he might want to reflect on the nature of the pressure on somebody such as him, who, under the Bill, will have to sum up and make final decisions on the advice peculiarly to him. The other two organisations, in Australia and in the United States, have the ability to say that everybody on the panel makes a group decision on the evidence. I know he will argue that that process takes longer—yes, he may be right about that—but I feel that the pressure is on him I was in government for six years and I know what Downing Street does. It gives you a call and says, “I don’t think you have to go very far with this sort of stuff, do you? After all, this is worth a lot of money to us. Come on.” Others will say that and the Secretary of State will be sitting there thinking, “This is a balanced judgment. Where do I go on this?” I just wonder whether that pressure is fair on the Secretary of State. He would be questioned later on why certain decisions were made. If I was the Secretary of State, I would want to release myself from that situation. I would not want to be dragged to the courts to be accused of being biased in that decision and making a decision that was not agreeable. So I would look for more external bodies to be able to make that judgment I also say to the Government that human rights are vital nowadays. We cannot walk away from it; it is part of what makes us. The reality for us is that far too many companies have allowed themselves to quietly get sucked into the use of slave labour and other labour. We know about that, in Xinjiang province and in other areas too. My right hon. Friend does need to think about that very carefully. I do not want to make the Bill a Christmas tree, but elements of that are involved I congratulate the Government on bringing forward the Bill. It is the right legislation to bring forward. It is overdue, no question. However, the balance still needs to be widened somewhat. I hope that in the course of the Committee and Report stages the Secretary of State will accept that good amendments may come forward from brilliant people—not just me—who may well be able to help him in his adventures.
I start with my ISC hat on because it was the ISC that first investigated UK Government powers and processes for scrutinising foreign investment in sensitive areas of UK industry, found them lacking and called for more powers. In its 2013 report, “Foreign involvement in the critical national infrastructure”, the Committee looked into the issue of “foreign investment in the Critical National Infrastructure (CNI)” and concluded: “The difficulty of balancing economic competitiveness and national security seems to have resulted in stalemate.” That is not a criticism and it is not meant to be contentious. This issue has arisen over the past few years and most, if not all, advanced economies are now grappling with it. I therefore welcome the Bill, in principle, or certainly a measure like it While on the subject of the ISC, I offer the apologies of its Chair, the right hon. Member for New Forest East (Dr Lewis), who is self-isolating having been contacted by the English version of Trace and Protect, and is sadly missing this debate The Bill is designed to bring additional scrutiny of foreign investment that may have an impact on national security. I say from the outset that not only is there nothing wrong with having a national security eye on investments in critical areas—it is in fact absolutely vital Currently, as we have heard, the ability of the Government to scrutinise investments on national security grounds contained within part 3 of the Enterprise Act—that is, the mergers provisions—is rather limited. In practice, it means that the UK Government are unable to scrutinise on the grounds of national security without the investment first meeting competition concerns or, in very limited circumstances, a public interest test. We know this concern and similar concerns are shared globally. A number of other countries have been tightening up their investment security regimes in response to changing national security-related threats, enabling technology, the loss of intellectual property and the increasing crossover between sectors, which I may touch on later. The Committee on Foreign Investment in the United States is largely seen as setting the standard. We have also seen tightening in Japan, Canada, Sweden, Germany and France at least, with the Japanese regime extraordinarily strict, in some cases limiting ownership to barely 1% of active management or, more accurately, to barely 1% of a company in certain circumstances In the UK Government’s proposals, if both the trigger and the threshold are met, the individual investment can be called in by the Secretary of State for approval. The powers can be retrospective; it can be called in after it has occurred. However, the time to conduct the national security assessment—30 days, with potentially an extra 45—might be deemed to be a little short, given how shrewd, or clever, certain institutions, organisations and individuals are at hiding genuine beneficial ownership. One thinks how long it took to find where beneficial ownership existed for some entities in the UK. Were it not for the Panama papers, we would probably still never know. I therefore question whether that maximum of 75 days is actually sufficient The Bill adds a mandatory notification scheme whereby investment interests in certain sectors and asset types—which I do not demur with—must be pre-emptively or retrospectively declared, but it removes notification of call-ins from the competition authority to a direct serve from the involved parties. In the interests of transparency, I seek clarity from the Government on the reasons why notification via the CMA is being removed The Bill also introduces new powers to increase screening in respect of health and preventing hostile acquisition through strategic buying of health supplies, for example. I welcome that, but the scope of activities that might be caught is very wide. There may be a good reason for that, but it is worth exploring. The statement of policy intent describes the core areas as including things such as advanced technology, which is perfectly reasonable, but it also contains a much wider definition of national infrastructure. The impact assessment for the Bill estimates that the new regime would result in between 1,000 and 1,830 transactions being notified per year. That is very specific and it is also an eye-watering number, given that only 12 transactions were reviewed on national security grounds since the current regime was introduced 17 years ago. The necessary resources, as the right hon. Member for Doncaster North (Edward Miliband) said, and access to intelligence agency assessments, as the right hon. Member for North Durham (Mr Jones) said, must be available in the proper manner in order to carry out the work.
Does the hon. Gentleman share my concern that the Bill sets out a voluntary reporting and a notification system, but it is not clear how the security services enact any concerns they may come across into this system? I shall be making the point that I do not think this should sit within the Department for Business, Energy and Industrial Strategy. Does he have concerns on that issue?
I absolutely agree that these services should not sit within another Department. I am not sure whether it would be appropriate for them to be able to request call-ins directly, not least because where the information came from would then become abundantly clear, but there must be a mechanism whereby information that an agency comes across can be fed in to the proper people in order for this call-in to happen It is also self-evident that Members considering this legislation need to have far more information to understand the reasons for the Bill and the changing nature of the threat it is designed to counter. We also need carefully to assess the impact the Bill will have on sectors and infrastructure, not just in the UK as a whole, but in the devolved Administrations and in the English regions, in the light of the future economic opportunities they see and the plans they are already putting in place. It is far too soon to seek assurances, but I hope the Minister will wish to take a little time just to convince himself that there are no unintended consequences, either for the UK or for the Scottish Government’s inward investment plans, when Government agencies of all sorts are out actively seeking investment in some of the areas that may be deemed to be critical national infrastructure. As an example, let me cite the whole of Scotland’s tech sector, but that of Dundee in particular. It now has a digital ecosystem that spreads out across academia and through gaming, software design and development, and data centres. Many of the component parts of that have cross-sectoral application, some of which, depending on who owns them and who wishes to use them, could certainly raise a national security concern, depending on how bits of tech are deployed. How do we ensure collectively that the Bill does not impede growth or investment in such areas I also briefly wish to raise, at this early stage, some issues about implementation. The Bill is set to radically overhaul the UK’s approach to foreign investment, at a time of significant economic uncertainty. On leaving the EU, the UK Government cannot afford to get their global Britain approach wrong and suffer what has been described as the “chilling effect” on investment if this appears heavy-handed. So let me turn briefly to some of the possible implications and costs of these measures First, the impact assessment suggests a net cost to business of £43 million. Can the Government confirm whether that is the direct cost, or whether the figure includes the cost of lost investment? I suspect that it is the former because the latter is incalculable, but if the Government get this wrong, the true figure in lost investment, and the concomitant loss of output and productivity, could be substantial. Secondly, the impact assessment suggests that microbusinesses are in scope. As the Secretary of State will know, some of those businesses develop high-tech, cutting-edge intellectual property, and their business models include selling tranches of shares to raise cash throughout the development and life of the business. What assessment has been made of how these measures might stifle that investment and growth The third point is specifically on universities and academia. Throughout the whole UK, universities all have incubators, start-ups, spin-outs and commercialisable research. What assessment has been made of their ability to continue to thrive if the measures in the Bill inhibit investment by proposed sales being called in—because word will get out—or even investment being put off because of the potential additional risk of those sales being called in? We do not yet quite know what the impact on academia would be. There are some wider concerns about the possible impact on essential investment in energy, particularly renewable energy, and the possibility of retaliatory action against UK investors overseas, but I think they can be explored later in the Bill’s progress Let me return to one particular issue. I said earlier that the impact assessment suggested notifications of up to 1,800 transactions a year. In clause 7(4)(c), the Bill describes a qualifying asset as “ideas, information or techniques which have industrial, commercial or other economic value.” I know that this is not the Government’s intention, but wielding a hammer or welding a pipe are techniques that have economic value, and my concern is that companies erring on the side of caution will refer or notify themselves when they need not I have three brief questions that were sent to me by the Photonics Leadership Group. I intend to ask these questions now because they will be typical of what many industrial and new tech sectors are asking. First, there will be a huge number of research groups and businesses for which this Bill is relevant. Has the Department for Business, Energy and Industrial Strategy considered the number involved, and is it ready for the volume of submissions? Secondly, the information that has been sent out to relevant groups includes a flow chart, which suggests that businesses currently engaged in relevant business have from 12 November until this Bill is passed to register. This would suggest that the process is live already, but there appears not to be a template to allow businesses to contact BEIS and ask the question. Thirdly, since many in the sector cannot rely on foreign investment, how are the Government planning to replace this should there be the chill on investment that some fear I am pleased the Secretary of State said that the assessments would be based on information gathered from around and throughout Government, because I think we need to make our own geopolitical assessments. But the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) quoted the Henry Jackson Society. It would be unfortunate if we found that our assessments of which investments may or may not be aligned were being driven, pushed or prodded by someone else’s geopolitical assessment. I say gently to the Secretary of State that we need to guard against that to ensure that national security is protected, but that we do not have the chill on investment that is possible if we get it wrong.
It is a pleasure to follow the thoughtful speech of the hon. Member for Dundee East (Stewart Hosie). May I join my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) in paying tribute to the Front-Bench team for their courtesy in being open about the development of the Bill and for their communication with all parties in the House This is an important Bill at an important time. In recent years, we have seen a tendency on the part of some countries to move towards national measures that seek to protect their domestic economics from the open conditions of international trade, not only in goods and services but in ownership and intellectual property, and we of all nations should be a voice against that. Few nations have prospered through pursuing a policy of national self-sufficiency. Over time, they have become deprived of innovation, competition and investment, although the exposure and experience of international trade and investment can be disruptive and uncomfortable. In the end, workers become less productive than in other countries, consumers pay more and those countries use technology that is behind what other more open economies allow. In other words, they become less prosperous The importance of this Bill pivots on its title. Is it exclusively about national security, or is “and Investment” a doorway to a more restrictive view of overseas investment more generally? I am pleased that my right hon. Friend the Secretary of State made it absolutely clear that the Government have decided that it is the former, rather than the latter, although there are some dangers that I want to touch on Do we need a statutory framework to ensure our national security when it comes to commercial investments? Yes, of course we do. There are commercial activities conducted in this country that are essential to our national security—defence contractors are an obvious example. Public policy has always recognised that, whether through the use of export controls on their products or, in the case of ownership, through golden shares and the intervention powers of the Enterprise Act 2002 for national security, which have been referred to Does the framework need to be kept up to date? Yes, of course it does. As the Secretary of State made clear, technologies that are now pivotal to our national security had not been dreamed of 18 years ago when the Enterprise Act passed through this House. The nature of some of those technologies is such that their financial value may not be reflected in the ownership of the company concerned, so they may be pivotal but not trigger the turnover test. The turnover and the value of the transaction may not be a dependable guide to their importance to national security. The control of those technologies may not be confined any more to takeover bids for public companies; it may include ownership outside the stock market of intellectual property or other assets Most nations on earth have a framework for overseeing the national security consequences of investments. It is important that we have one and that ours is up to date. The Government are right not to expand the Bill beyond national security or to introduce, as the right hon. Member for Doncaster North (Edward Miliband) said, a wider public interest or industrial strategy test. I say that as the author of our current industrial strategy, of which an essential pillar is our business environment. That strategy says that we need to continue to be “an open, liberal free-trading economy in which new businesses can be created easily” and “existing businesses can attract investment” It is obvious that if a British company has succeeded and has made an international impact, we want it to continue to succeed and prosper in this country, and to do so with its headquarters and operations here. That goes without saying. The most important thing is that the company is founded and prospers in the UK in the first place, as my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) said. Especially in fields such as the tech sector, if we tell the founders of new businesses that, should they succeed, they will be excluded from the possibility that they can receive overseas investment, or at the very least that it will be heavily questioned if they should cede control of the business, and that the more their business succeeds, the more draconian the restrictions are likely to be—although Silicon Valley continues to be a major source of international capital investment—the consequence, no doubt unintended, may be that those firms will not be founded here in the first place but will go to places where there is no risk of there being stranded assets.
My right hon. Friend is making an important point, and there is clearly friction on this side over what we see as the crux, but does he accept that the United States and Australia—two free-market nations—will have significantly tighter restrictions after this Bill than we will, and does that concern him?
Of course we should look at the example of other countries; I am sure we will do so during the course of the Bill. However, I would say to my hon. Friend that those two countries are very different in their markets and the size of their economies. The pool of capital that is available to start-up companies in the US is vastly greater than it is in the UK at the moment, although I hope that will change, for reasons that I will go on to discuss. Australia, conversely, is a much smaller economy, which does not have the network of policy regulatory innovation that we have We have been a leader; that is our international reputation, and one reason that transactions are conducted in this country is the confidence in our rule of law. We should emphasise and champion that, rather than feeling compelled to follow what other countries are doing in their entirety. Our policy—our industrial strategy—must be to make Britain an even more attractive place for innovative companies to be founded and to stay—not because they are compelled to do so, but because the environment that we provide, in terms of scientific research, educated and trained people, the availability of capital at every stage in their development and the public policy environment make it an attractive place for them to want to be Neither must our regime establish, in my view, a list of countries that cannot invest at all in the UK. The test must genuinely be about national security. That is very appropriate. China has been mentioned already in these discussions, and of course it is right and proper that the national security concerns that the House has about China should be reflected through this regime, and these powers are important for that. However, when I was sitting in my right hon. Friend the Secretary of State’s place, I fought hard to save, for example, British Steel in Scunthorpe, Skinningrove and Teesside. The Chinese steelmaker that bought the company, Jingye Group, is essential to the employment of many tens of thousands of people across the north and the east of England, and more in the supply chain. From my recollection, there was no intellectual property vulnerability in terms of its operations. Indeed, the retention of that substantial steelmaking capacity has enhanced our economic resilience, whereas losing it would have seen us relying on imports. I might say the same for Geely, the owner of the London Electric Vehicle Company, which my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), being a west midlands MP, will be familiar with, and which gives valuable jobs to many people.
My right hon. Friend is making a very good case for why it is important to look at each investment in its own right. Geely, which bought the London Taxi Company, produced electric vehicles and now exports them to the Netherlands and France while continuing to manufacture in Coventry, is a good example of why that is so important. Does he agree that it is simply not good enough for this country to say, “China is Communist and we will not accept Communist investment, and therefore we will not accept Chinese investment.”? We must be a great deal more sophisticated and open than that.
I would say to my hon. Friend that the Bill’s focus on national security is absolutely right. We should have a beady eye on national security, with substantial powers, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, to enforce that. I think the Bill has it right in its focus on national security The Committee that examines the Bill will need to consider in detail some of the provisions of the Bill as it is presented on Second Reading. It is essential to provide investors and UK firms with a sense of predictability and confidence, but that can be undermined if the law has administrative consequences that are unintended and not provided for. For example, there are strong reasons to think that there may be a deluge of notifications, as the hon. Member for Dundee East said, when the new unit in the Department is set up, and it must be geared up to handle that right from the outset The prospect of five years’ imprisonment for directors and fines of 5% of turnover, as my right hon. Friend the Secretary of State commends, for failure to notify under a mandatory regime within sectors defined as broadly as communications and transport is, in my view, likely to lead to many small transactions being notified under the voluntary regime for peace of mind regarding those very strong sanctions against an inadvertent breach. It is an enormous challenge for the Department to set up a new unit, especially since the current regime—or the previous one, since the powers are live—has dealt with a very small number of transactions each year As Secretary of State, I reduced the turnover threshold for review from £70 million to £1 million only two years ago. This Bill contains no de minimis threshold, and I will be interested to see during the passage of the Bill evidence of why a zero de minimis threshold is necessary, especially when the definition of technology assets extends to “ideas, information or techniques”, which is very broad. This could result in a very large number of very small transactions being notified defensively Even if businesses are confident that they will not be covered by the mandatory notification requirement, the advantages of voluntary notification and clearance, with its exemption from the five-year look-back, may prove to be very attractive and very important in baking in the approval of a transaction against reversal more than five years in the future. It is clearly the ambition of the right hon. Member for Doncaster North to add further public interest tests. As we approach the general election, it may well be attractive, as a defence against the action of future Governments, for companies to notify even when they do not have to. It is very important that the Department is geared up for that Much of the Science and Technology Committee’s work in recent months has been concerned with the nation’s response to the coronavirus. If we can learn one lesson from that—for example, from problems with the test and trace system—it is that, to have public confidence, we need to properly anticipate demand and to set up to meet it from the outset. If that demand is not supplied, public confidence, which is crucial for investment, will be undermined.
Does not the coronavirus provide us with another lesson, which is that Government historically have not been terribly good at assessing risk and modelling the response to it? I say that as a former Minister, like my right hon. Friend. I was always surprised, in all the Departments I served in, at how little time is spent on modelling outcomes of the kind we are now enduring.
My right hon. Friend is right. To look ahead, we need to develop the capabilities to do that, and for a unit in the Department that previously did not have that responsibility—it was with the CMA, advised by others—that is a steep learning curve The foundational feature of the UK’s commercial reputation in the world is a place where people and businesses all around the world can be confident in investing. That derives in no small part from a public policy regime that is rational, stable and rigorously and efficiently administered. We should continue to aspire to take a global position of leadership in this area, so I welcome the focus of the Bill and its ambition to bring our arrangements up to date. I look forward to helping ensure that we can be proud of the Bill and see it as a contribution to our continued reputation for having the highest standards of corporate government and investment security in the world.
Before I begin my remarks, I should declare my interests as chair of the all-party parliamentary group on technology and national security and the parliamentary internet, communications and technology forum APPG, whose members will no doubt have interest in the Bill; as the chair of a global network of legislators interested in artificial intelligence regulation called the Institute of Artificial Intelligence; and lastly, in my capacity as Chair of the Business, Energy and Industrial Strategy Committee, I have had discussions with the management of ARM, its founder Hermann Hauser and the CEO of Nvidia about the proposed takeover I support the Bill and thank the Secretary of State for briefing me on its contents last week. The ability to scrutinise foreign investment and to intervene when there are national security interests is not only a critical function of the state but an increasingly important one, given the impact of technology and data on every part of our economy and our infrastructure, and the use of that avenue to cause harm to Britain’s interests. It is on that basis that we should have a robust scrutiny function, but it should also be finely balanced with the transparent, clear and pro-investment framework brought forward under this Bill. I agree with other colleagues around the House that, by international standards, Britain has been a bit of a laggard in recent years in bringing forward a robust foreign investment regime, and that is why we support the Bill, but I have a few questions today, which I hope the Minister might try to answer in summing up First, on the definition of sectors, the 17 sectors identified include some dual-use functions such as quantum computing, which at this point in its development seems obvious and indeed is in line with the recommendations of the Science and Technology Committee inquiry into quantum computing in the last Parliament, when I was a member of that Committee. However, as has been noted, other sectors are identified merely as “artificial intelligence” or “energy”. Artificial intelligence, for example, is a general purpose technology that will increasingly apply to every aspect of our economy, so how we ensure robust and clear definitions will clearly be important It has been noted that there is a risk under the Bill of over-reporting as an insurance policy. I wonder whether lessons could be learned from other regulators—for example, by introducing regulatory sandboxes within the units in the Department where interested individuals might be able to come to set forward in advance the transaction and get some initial advice on whether it falls within the definitions. If it does not, I think there will be a risk of over-reporting, but also of court cases that dispute the definitions, which, in their own right, can be fairly limited in statutory instruments and will probably not apply to every circumstance. I reaffirm the comment from the Opposition Front Bench on engaging with Parliament on the sector definitions under the statutory instruments—and not just with Parliament as a whole but with the relevant Select Committees, including my own. I also note the interest of my hon. and right hon. Friends from the Science and Technology Committee, the Foreign Affairs Committee and the Defence Committee in this matter Secondly, on the definition of national security, there has been some debate in advance of the publication of the Bill on whether the Government were intending to go beyond national security and to look at broader economic or jobs-related issues. As my right hon. Friend the Member for Doncaster North (Edward Miliband), the shadow Business Secretary, said from the Dispatch Box, we think that there is some legitimacy to Ministers having a right to intervene when, for example, a major employer or a sector that is strategically crucial to the British economy is under threat from a legitimate overseas acquisition that could have an impact on British jobs or British industrial capacity. I welcome the comment that this is a broader industrial strategy conversation and note the Department’s intention to rewrite that, as previously advised before Christmas, although it will presumably now take longer. I look forward to that broader debate, but I agree with colleagues on a cross-party basis that at least some legal structure around the definition of national security would be helpful, for reasons I will come on to later Thirdly, this is not just about mergers and acquisitions; as the Government’s Project Defend assessment has shown, there are very long supply chains relating to critical national infrastructure, through which components are sourced from companies in jurisdictions about which Ministers might legitimately have national security concerns. I would be interested to hear whether Ministers plan to expand the scope of the Bill or bring forward other legislation in future to deal with supply chain intervention, in addition to or alongside merger and acquisition issues I also note that while clause 7 of the Bill covers all the corporate vehicles such as limited liability partnerships, trusts and limited companies, it excludes individuals. This is probably very limited, because individuals would not want to take on the liabilities of buying big companies, but I am sure there are potential cases where individuals will buy intellectual property or assets in their own individual right, whether it is a licence to intellectual property or actual property, as my right hon. Friend the Member for North Durham (Mr Jones) mentioned, and they would fall out of the scope of this Bill. I would be interested in the Minister’s view on that Fourthly, the application of the Bill applies from the date of presentation, not from the date the Bill becomes law. It would be useful, given that this is now the regime in the UK, for the Department to set out what current takeovers will be subject to it. Colleagues have mentioned the ARM-Nvidia takeover, which of course is important to the British economy. I understand from press reports that the Department has not felt able to confirm whether that will be subject to this legislation, but I think it would be in Ministers’ interests to be quite clear about that Equally, I would stress again the comments from the Opposition Dispatch Box about the length of retrospectivity. Five years seems a very long time, and I would be interested to understand why a period of five years has been adopted by the Government. One of the attractive natures of the British economy is our policy stability and the way in which the rule of law functions, and I share the concern that five years is a long time. There could be a change of Government, a change of Ministers, a change in leadership in the unit in the Department or a change in the view on national security that could start to unwind a transaction many years after it had gone through. Ministers need to consider that carefully Fifthly, we are still waiting for confirmation of the Government’s intentions for our post-Brexit competition and state aid policy regime. Ministers have been quick to table statutory instruments to say that the European regime will not apply from 1 January but have not yet set out what will. The Bill is implicated in that process. It is the start of a post-Brexit state aid and competition policy. If the Minister feels able to give us a bit of a glimmer in his closing remarks about when the details of our post-Brexit competition and state aid policy might be published, I would be grateful. Lastly, I am not entirely clear what the assessment process is under the Bill. In previous examples, such as the hostile takeover of GKN by Melrose, in which I declare a constituency interest, the national security assessments were undertaken by the Secretary of State for Defence and, perhaps for fair reasons, were done without much oversight or transparency. Given that all those sectors will now be subject to national security assessments, will it be the Ministry of Defence, the Department for Business, Energy and Industrial Strategy, the intelligence services or another body that undertakes them? It would be useful to have some transparency about who is making the assessment and how the Secretary of State will ultimately balance very difficult decisions In sum, I will support the progress of the Bill. I share some concerns about the speed and why it has been brought forward so quickly, and I reiterate my point about the statutory instruments, therefore, being an important part of parliamentary scrutiny when they are introduced. I hope that Ministers will engage fully in the consultation process with stakeholders to ensure that the new framework is not only fit for purpose but gets the crucial balance right between national security concerns and maintaining Britain’s leadership as a pro-investment economy that fits with our broader regulatory position post Brexit.
I start, as many other hon. Members rightly have, by paying tribute to the ministerial team and the team of civil servants for their consultation on the Bill with not just Members of this House, but the wider business community. It is a hugely important Bill. When, no doubt, some of it becomes an Act, we will all be living with the consequences, which are difficult to imagine in a fast-changing world in which technology is evolving I welcome enormously not just the consultation that the Secretary of State has already contributed to, and which he has welcomed, but that which he has also invited, because that is a really important part of the next few weeks and months. It shows wisdom and extreme judgment to make sure that the Bill survives contact with the enemy I welcome the fact that the Bill has been crafted to recognise the competition that we are seeing increasingly between states. The Minister in his place, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), as a former member of the Foreign Affairs Committee, knows only too well what we are seeing around the world and has regularly spoken with me about the various natures of competition that he, too, envisions. I welcome that he sees the Bill as being about the UK’s response and ensuring the prosperity and happiness of the British people around the world Power is not just about state power; it is also about the economics of strategic challenge through business. As the sadly likely recession following the covid pandemic rises, the reality is that state capitalism will pose a greater problem. As the wells of private sector investment dry up, companies able to draw on national reserves may do better Other countries have already seen that and reacted early. In March, in response to similar pressures that the Secretary of State responded to earlier, the Australian foreign investment review board reduced the threshold to zero for calling in acquisitions. In August, France reduced the shareholding required to trigger an inquiry from 25% to 10% for similar reasons. The United States has not followed suit on that basis, but the CFIUS regime, as we all know, is one of the most mature in the world. The Committee on Foreign Investment in the United States has, in some ways, led the way, so the need to adapt to changing circumstances is not so immediate For our Government to introduce the Bill now is a welcome demonstration that the UK sees the changing circumstances and recognises that state-owned enterprises pose a different threat from five, 10 or 20 years ago. The Bill also recognises, in the 17 sectors that other hon. Members have spoken about, the rapid pace of technological change that we are seeing and the urgency of making sure that we realise what we are looking at. As assets are being developed that are essential to our continued prosperity and security, they now emerge much more quickly than we ever imagined Indeed, I would argue that two of the biggest strategic losses for the United Kingdom in recent years were the 2014 sale of DeepMind to Google and the 2016 sale of ARM to SoftBank, but they have been completed. What those two firms have both enabled, however, is quite phenomenal. Deep Mind, which one can pretty safely say is the world’s premier AI company, is an extraordinary asset. When it started in 2010, it was seen as a sideline, but today in 2020 it is seen very much as the main event The UK is not directly comparable with some of the other countries that we have spoken about. Some people have mentioned France, Germany or Australia, but the UK has about double the foreign direct investment of France or Germany, and our international co-operation—our links abroad—are quite different Here I declare that my entry in the Register of Members’ Financial Interests shows that I, too, invest in businesses across the UK, and the reason why is that I think, as a Conservative, that if someone believes in business, they should put their money where their mouth is. I am proud to support some young people who have come up with some ideas, some of which may succeed and one of which may even make me as rich as the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Stratford-on-Avon—[Laughter.] This Bill looks at the challenge that such businesses are starting up with, and here I pay tribute to my constituency neighbour and right hon. Friend the Member for Tunbridge Wells (Greg Clark) who spoke about the de minimis clause—the minimum amount that should be called in. Of course, it is absolutely right that companies can evolve. Technology can adapt very quickly, and ideas that one thought were insignificant can become very significant However, the reality is that that rarely happens overnight and, with the nature of British capitalism being as it is, the value of a company will be appreciated in the market a long time before the technology is appreciated by the Government. Therefore, although I understand why the minimum number is set at zero, there is an argument—I would welcome the Government’s thoughts on this—for setting it even as low as £1 million, which is actually a very small sum these days for many of the venture capital enterprises in our country. I welcome the fact that this Bill makes the important distinction between national interest and national security. I see the hon. Member for Aberavon (Stephen Kinnock) in his place, and I know well that if this Bill were about national interest, he would be making one of the strong speeches about the steel industry that I have heard him make over the past five years, but this Bill is not about that. This Bill is fundamentally about the threats to the UK people and to our national security, not just our immediate interests It is important to make that distinction in the long term because, of course, to change that would be to fundamentally open a different question. It may be one that Opposition Members or, indeed, some Government Members, would wish to engage with, but it would be a big change to the investment environment of the United Kingdom. It would change our employment structures considerably and challenge many of the services that are built on the UK economy, from law and accountancy to finance and investment. It is a rather larger question, and I am glad that it is not included in the scope of this Bill The Government recognise that more consideration is needed, and they could do a little more, if I may say so, just to advertise the consideration that they are looking for in the 17 sectors. Having spoken to many lawyers in recent days—a confusion of lawyers, in fact—and to several businesses, it is quite clear that, although the consultation is welcomed, not all are as aware of what is required as would be beneficial If I may, I am going to start claiming some credit for some of this, because the Minister will know that the Foreign Affairs Committee has long pressed for tougher measures to protect our vital national security interests against growing threats. In our May 2018 report entitled “Moscow’s Gold”, we highlighted the corrupt investments associated with the Kremlin, but not unique to that Mafia-style regime, that have direct implications for the UK’s national security. The sanctions regime we rejected is a welcome addition to the state’s arsenal against those who seek to damage our national security. In 2019, we went further: in our report, “A cautious embrace: defending democracy in an age of autocracies”, we recommended that the Government establish a power to block listings on the UK markets on national security grounds as a matter of urgency. The Government have now announced their intention to do so to stop companies with questionable ownership from taking advantage of UK listings The fact that the Bill builds on both those reports is enormously welcome. They also led us to ask some pretty important questions about how the Government could achieve their aim, because there are various elements in which those questions exposed gaps or failures in the British structure that would allow the Government to be properly informed of where to get the information. That is why I will ask a few initial questions, before the Foreign Affairs Committee spends a few weeks hearing evidence and listening to commentators on the Bill and investors, practitioners and lawyers about its application. Indeed, we may even suggest amendments To turn to my first question, the Government have been clear that state-owned entities and sovereign wealth funds are not inherently more likely to pose a national security risk, especially if they have operational independence in economic investment strategies. This is of course important for many countries around the world, including Norway and many others, who operate very large sovereign wealth or national pension programmes. However, regimes such as that of the Chinese Communist party use opaque ownership structures to hide state interference. Will the Minister tell us what structures will be created and legal powers given to ensure that we can draw on the expertise and knowledge of those Departments and agencies across Government, including the Foreign, Commonwealth and Development Office, to shape decisions accurately? It is clear to all of us that UK missions around the world will need to be actively involved to ensure that the information required to take decisions is provided in a timely manner My second question is about the fact that this Bill provides gateways for disclosure of information to my right hon. Friend the Secretary of State and disclosure by him to a public or overseas authority. What we really need to know as well is not just how much he is able to exchange, but how much he is able to draw on other intelligence agencies and other partners and particularly, perhaps, on those in democratic and law-abiding countries, including the European Union, as we will no longer be part of the investment screening regulation and we have never been part of the different agencies or regulators in the United States, Australia and many other countries. Who are the likely partners with whom he is intending to share and how will we support each other Thirdly, the best estimate of the impact assessment suggests that the new notification regime will cost about £49 million a year and about £425 million over 10 years. Those numbers are, of course, uncertain. The new regime is expected to result in up to 1,800 notifications a year, which is a vast increase compared with the approximately 60 notifications a year that the Competition and Markets Authority currently deals with. The Bill introduces an investment security unit that will be staffed by 100 officials. May I seek assurance that this unit will have the capacity and necessary competencies to effectively screen this high volume of transactions and to expand if notifications are more than expected? The Minister will have heard from many people that there is the possibility that voluntary notification will result in a much higher level of disclosure than anyone is currently expecting, and therefore, the 100 officials could rapidly become overwhelmed and the timelines that he has very sensibly set out, of 30 and 45 days, could become impossible.
Does the hon. Gentleman agree that this unit or some of the individuals in it will need a high classification of security clearance? Without that, they will not be able to make informed judgments on some of these applications.
I agree entirely with the right hon. Member that what we are looking at here is a multi-agency taskforce, not a BEIS departmental body. The reason, of course, why it has to be a multi-agency taskforce is that, as he says quite correctly, the need to have access to high-level intelligence is clear, but so is the need to be able to understand the changing nature of the technology and, indeed, the changing nature of some of the individuals and groups that may be affected. It is, after all, entirely possible that a company owned one day by one individual abroad is likely to be, or is in the direction of being, controlled by a rather less salubrious individual only a few days later, and the need for such multi-agency taskforce access is clear Insufficient resources would of course cost delays and have a serious impact on the UK economy. Indeed, it could lead to the various obstacles that I know the Minister has been incredibly careful about avoiding, which is why he has made the scope of the Bill so narrow. I am sure that he will be able to help me in assuring me that this group will have the resources it needs. Fourthly, given the sensitivity of the cases—my mistake: I was going to repeat exactly what the right hon. Member for North Durham (Mr Jones) said, so I shall skip it. I was going to ask for exactly the same As this Bill makes its way through the House, the Foreign Affairs Committee will be following it closely. As I have said, we will be conducting various hearings with various people along the way in the next few weeks, and we will, I hope, be making welcome suggestions that the Minister will be able to consider. Properly implemented and with due consultation and consideration, this new investment regime should provide certainty and transparency for UK businesses and investors in this country. It is an important and valuable change to our laws to ensure that our businesses are able to prosper in the safe knowledge that the information they develop and the innovations they provide allow the happiness and prosperity of these people, our friends and our allies.
It is a great privilege to follow my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat). I especially agree with him that the Minister and his team have been exceptionally good at communicating this over the past weeks, so long may that continue With the right clarifications, I stand to support the Second Reading of the Bill. It is incumbent on all of us here to think in terms of the contribution we can make to our collective livelihoods—a contribution of security, a contribution of transparency and a contribution of prosperity. On prosperity, the Minister and other colleagues have been working hard to assuage some of my concerns. I gravitate towards this side of the House because I believe in opportunity—the opportunity that overseas investors see in the UK to grow market share, reach new customers and develop cutting-edge technology, thanks to access to the brightest brains on the planet, and a confidence that a penny put into Britain today can become a pound tomorrow. We do not want the Bill to herald in uber-protectionism by stealth; otherwise I would have great difficulty in subscribing to it Foreign direct investment is a powerful contributor to the UK. Indeed, conservative estimates show that FDI has created over two Boltons-worth of jobs. That is 600,000-plus jobs, as the Minister actually told me last night, so I hope that is correct. Over 57,000 new jobs were created as a result of FDI in 2018-19 alone. The “World Investment Report 2019” showed that the total value of the UK’s inward investment stock was $1.89 trillion—the third highest in the world, and worth more than the figures for Germany and France combined. Indeed, the northern powerhouse has been one of the top winners from FDI. Manchester has been recognised as Europe’s fifth best large city for business, ranking ahead of places such as Rotterdam. Bolton is a significant recipient of FDI through, for example, the £250 million redevelopment of the Crompton Place shopping centre, and this is central to our town’s rebirth. We need to be on the ball, as the value of the UK’s inward FDI has been falling. In 2016, the value of inward FDI was equal to 10% of GDP, which fell to 2% in 2018. I welcome the new Office for Investment, as we must not lose out to friendly competitors on our own doorstep. FDI contributes so much to our economy and society Moving on to security and transparency, the Bill seeks to contribute by putting the UK on a similar footing to other major economies, such as the US, France and Germany. Indeed, the CFIUS regime in the US reviews certain foreign investments in businesses to determine whether such transactions threaten to impair US national security. That is a sound premise and one that every nation state should embody: protecting one’s core sovereign interest. Indeed, the Bill aims to offer more security for British businesses and people and protection from actors or, indeed, actresses harbouring malign intent I appeal to the Minister to ensure that the Government will only use their brand- spanking-new powers exclusively on national security grounds and not for broader economic or political measures. Mission creeping may lead to capital seeping. I encourage the Minister to articulate how to safeguard against spurious applications of the new powers. Some analogous screening systems are viewed as not transparent, such as those that do not give parties the opportunity to debate the conclusions. I understand the intention of our own UK version is to allow a quicker, slicker investment process for investors I also understand that a new digital portal will be made available to investors, and the Government have committed to a 30-working-day service timeline. Along with mandatory notification of investments in key sectors, that provides much-needed transparency for firms, while providing proportionate defence against those targeting sensitive UK assets Finally, my humble contribution to today’s debate will imminently fly towards the Minister, like a not quite national security-protected Airbus paper plane. Alas, I have penned a mnemonic. According to Hansard, the word “mnemonic” has only been used once in this House, and without actually producing one. This could be an epic fail, so the House should brace itself. I will give way to the Minister if he would like to intervene straight away or, indeed, anyone else in the Chamber who can rhyme off the 17 industries that may feature in this final legislation. If not, forever hold your peace. Silence—great. It goes like this, and it does not roll off the tongue. It is CQC—which we are all very familiar with—CASCADED MS TEAM. C is for communications. Q is for quantum technologies. C is for computing hardware. I could go on, but I will simply repeat again: CQC CASCADED MS TEAM. That, hon. Ladies and Gentlemen, along with the Bill’s contribution to security, transparency and prosperity, is how I would like to personally contribute to today’s debate.
I was going to say it is a pleasure to follow the hon. Member for Bolton North East (Mark Logan), but I am not sure that it is. I welcome any measure that aims to protect or increase our national security. We live in an interconnected world now—a global world—in which capital is no respecter of national boundaries. We also live in a world in which nation states are using strategic investment as a way to pursue their own national interests, and there was mention earlier of the Chinese belt and road initiative We also live in a world in which nations or individuals use investments to launder money or to buy influence or protection, as was highlighted in the Intelligence and Security Committee’s Russia report. So the measures in the Bill are to be welcomed but, as the hon. Member for Dundee East (Stewart Hosie) said, the issues that it addresses were raised seven years ago in the ISC report on Huawei. None the less, I wish to mention a few areas where the Bill is still deficient The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) mentioned the Secretary of State’s role. A call-in will be triggered on whether a transaction creates a risk to national security. Notification takes place in one of two ways—a transaction is notifiable either under four criteria or under a voluntary system. I believe the voluntary system is fraught with administrative difficulties and needs to change. However, I want to focus on how the assessment is then made and the role that the Secretary of State plays in deciding whether a case goes forward. I do so by reference to a recent case—that of the Cobham company The Bill would not have prevented the £4 billion sale of Cobham to a US company, even though the Ministry of Defence had huge issues around the sale, partly because it would allow unauthorised persons to understand either the details of the MOD capacity and activities, or give them a more strategic picture of the capabilities and activities that had been built up. The MOD said that the transaction posed a risk to the existing MOD programmes if the merger entity took decisions to exit from an investment or to move offshore the associated capabilities At the time, Lady Cobham’s concern was that Cobham would be split into various entities and sold off—and, lo and behold, that it is exactly what is happening. It has gone from four divisions to nine, and the risks to national security were clearly evident at the time. I see nothing in the Bill that would have stopped that, because it comes back to the decision of the Business Secretary I am not anti-business in any way, but I am not sure that BEIS takes a view in terms of security issues, which would be perhaps more evident in the Ministry of Defence and so on. So there is an issue about who takes the final decision on such bids’ going forward. I would prefer that to be a decision of the national security committee or a sub-committee of that, so that we may have in-depth intelligence reasoning—and I accept that such decisions should be taken on national security grounds only. If we look at the United States model, we see that some very dubious decisions are taken there on national security grounds, which, frankly, are more to do with protectionism rather than anything else.
Does the right hon. Gentleman agree that there is a real role for Committees of this House in such processes and that the ability to subpoena both witnesses and papers would add not only depth to the Government’s investigation but protection to the Business Secretary who was forced to take the decision?
I agree. There is an issue, in some of these cases, around national security. A point was raised earlier in the debate about whether the ISC should look at such decisions. Certainly there is an argument for an annual report, which I would welcome. I said earlier that I had a fundamental problem with one individual’s taking such decisions, and I am sorry, but I do not think that the new investment security unit is the vehicle. The hon. Gentleman has referred to it as a taskforce, but unless it has national security at its heart, the push for business to get things moved on will take over, rather than what we should be looking at—national security. So decisions should not be left with the Business Secretary The other issue I raise is with supply chains. We all know that supply chains are now very complicated, long and diverse, from small companies right down to SMEs. I asked who will map those supply chains. We might say that small companies will self-notify, but would we miss things? There is a key role here for our security services in terms of flagging up things about particular companies, and I do not see that in this process. A small company very low down the supply chain, which may have only a very small element of either a nuclear project or a defence project, might lead to a security risk. I do not think that the new investment security unit will be able to deal with this. That is a role for our security services, which should be at the heart of this, rather than just being a member of the taskforce The other area I wish to focus on is in relation to the core areas. Listing them in the way that they have been listed is not helpful. For example, the term “military dual use” brings in a whole host of issues. Is a vehicle that is used for military purposes “dual use” even if it has a civilian use? Trying to define things in a list is actually very unhelpful. I would sooner come at it from the point of view of security and intelligence-driven information, which would inform the decisions that are taken. I am also a bit reluctant for things to be added to that core list by secondary legislation Then we come to an area that has already been touched on, which is the role of universities. The Bill mentions “moveable property, ideas, information or techniques which have industrial, commercial or other economic value.” When does an idea become a commercial value? I personally think that we need to be looking carefully at this. There is some perfectly legitimate and important foreign investment in our universities, and I do not want to stifle it, but if we have, for example, a Chinese or Russian company investing in a university, particularly in a research programme, is that covered by this Bill? At the initial stage, the investment goes in, but there is no actual product as such. A separate look at that needs to be part of our overall assessment, and, again, that can only be done not from a broad brush stroke approach, but from letting our security services look at some of these areas The other point I want to make is to do with land, which is referred to in the Bill, but, again, what is strategic? Would it be allowable, for example, for a Chinese or Russian company, or any company, to start buying up real estate with Government offices on it? The other thing that the Bill does not really cover—the Minister might say that there are measures to cover this—is the issue relating to the well-trailed arguments about the way in which Russian and former eastern European countries have used the property market in the UK, not only to launder money but to build up huge assets in terms of power and influence. I have just two final points. One is referred to in the appeal system as closed hearings. Members may be aware of what closed hearings are. This is where intelligence, which is an informed decision, goes before a court within a closed hearing. These hearings are mainly used in terrorism-related activities or other national security cases. I would be interested to hear from the Minister in his summing up exactly how he envisages that working in relation to this Bill and how he will manage closed cases, because they are very controversial. At the moment, for example, there are a lot of legal challenges to cases when intelligence goes before the court and then it is ruled that it cannot be heard in open hearings. I just wondered what the Minister has to say on that My final concern is around the time limit, which I do not quite understand. It is six months from the date that it comes available to the Secretary of State. I am very opposed to anything that is retrospective, because, as has already been argued, to try to unpick these things will be very difficult. I just want to understand from the Minister the reason behind the five-year retrospection Yes, I welcome this Bill, but what it should have at the heart of it is security and intelligence. At the moment, there is too much emphasis on business. I am not arguing for one minute that we should get security and intelligence looking at every single investment decision. I am pro-investment, but the balance here is possibly wrong if we are trying to stop what we all want to stop, which is malign activity in our economy.
I have declared my business interests in the Register of Members’ Financial Interests I support the idea of Ministers having powers to prevent foreign acquisitions where security matters are of concern. I trust that Ministers will want to ensure that all the other transactions that do not pose those security issues will go through smoothly, easily and quickly for obvious economic reasons There is a wider concern. As Ministers have rightly said, this is not the debate to deal with all the other worries we might have about unsuitable foreign investors, but there is concern out there in the public that we do not want asset-strippers, we do not want large companies that come here in order to gradually close down the UK capacity to take out a competitor, and we do not want them to come in under cover of sustaining jobs in Britain only to take away the intellectual property and then later to discover that they are not so keen on the British business after all We do need those protections, but where Ministers are checking their defences on competition grounds as well as on security grounds, they need to ask themselves this fundamental question: why are so many of our assets sold to foreigners? There is, of course, one very simple reason: throughout this century, under all three types of Government we have had so far, we have run a massive balance of trade deficit with the EU on trade account, so we need to raise the foreign currency to pay the bills so we can afford to buy the tomatoes, the vegetables and the German cars and all the other things that we have been importing, not matched by an equal volume of exports to pay those foreign currency bills. We see that it is having a bigger impact now on our long-term balance of payments situation. Before we ran this long series of huge deficits, we had net assets abroad, which meant that there was a big positive line in our balance of payments, which said that as a country we earned a lot more in interest and dividends from our investments overseas than foreigners earned on the investments they had in the UK. That has now been reversed, and every year now we have a very big deficit on the interest and dividends, because there are so many more foreign claims on us than we have claims on foreign assets This is a matter of concern. Ministers need to work on a series of economic revival policies that put much more emphasis on British people investing in Britain, so that we recreate more of that wealth in our own national hands and do not have the vulnerability, that need for foreign currency, which has been brought about by the current twin deficits—the trade deficit and now the deficit on investment income account I was very pleased to hear Ministers saying, rightly, that there are many great investment opportunities in the United Kingdom, so we need to deal with this paradox: why is it that foreigners can see them and are piling in with all their money to buy our best ideas, our best companies and our best properties, and why are more British people and British companies not able to do just that? The Government need to work with the British investors, British companies and British entrepreneurs to make it an even better climate for them to do the investing, as well as taking advantage of the foreign investors coming in and giving employment opportunities We need that entrepreneurial Britain, which grasps this opportunity and understands that we have a huge opportunity here to take out imports—to grow more of our own food, and to produce more of our own cars and more of our own products generally—so that we chip away at the very big balance of trade deficit, and in turn then generate cash that can be reinvested in the United Kingdom This Second Reading debate presents an opportunity to make the wider plea to Ministers that, as we recover from covid and the damage, we remember that £100 billion deficit that we were running in 2019 before covid-19 disrupted world trade and say that that is unacceptable: that means too big an increase in claims by foreigners on our country year after year. That is why we need policies to get the investment in, chipping away at the £20 billion deficit in food with the EU and at the fishing deficit and the car deficit, so that we are generating those jobs on British capital, and starting to reverse that net liability position that now disfigures our accounts.
It is a pleasure to follow the right hon. Member for Wokingham (John Redwood), who is my dad’s Member of Parliament. Considering the number of Conservative MPs who are self-isolating, I am glad to see Minister in his place. May I take this opportunity to wish good health to the hon. Member for Warrington South (Andy Carter), who is also self-isolating I welcome this Bill and I am glad that the Government are at last addressing the important issue of protecting important assets when foreign acquisitions threaten national security. However, I fear that they have dragged their feet on this matter and that that has led to paralysis rather than strategic planning in several sectors, most notably civil nuclear power In 2016, the then Prime Minister, the right hon. Member for Maidenhead (Mrs May), delayed approval of Hinkley Point C because of fears of the potential for a controlling influence by the Chinese state firm China General Nuclear Power Group. While approval was subsequently granted, that illustrates the governmental hesitation that has beset this vital industry—an industry that depends on long-term certainties—for years now It has taken more than four years for the Government to bring forward the proposals in the Bill to allay those fears. In that time, the nuclear sector, which offers both reliable low-carbon energy and high-skilled, well-paid, unionised jobs, has suffered paralysis. Our fleet of nuclear power stations is ageing and needs renewing. The Government promised an energy White Paper in summer 2019, which has been delayed and delayed ever since. In that time, we have seen Hitachi withdraw from its planned investment in a nuclear plant at Wylfa because of the Government’s hesitation in agreeing a funding agreement. The whole sector, and thousands of people in quality jobs, including almost 4,500 civil nuclear workers in my constituency, are still waiting to hear a clear plan and direction from the Government. We must not lose those jobs, and the planet cannot afford stalling over this green energy sector We know that part of the reason for the delay has been fear of foreign influence in our strategic assets. Dozens of Conservative MPs have even formed an internal lobbying faction called the China Research Group to focus on the threats that they perceive from China. That led to the banning of Huawei from our 5G network back in July. That makes it all the more extraordinary that it has taken so long for the Bill to be brought forward. Labour has called consistently for tougher powers on takeovers since 2012. I hope that now this legislation is finally here, the Government will have no more excuses not to act to give the assurances and firm grounding that nuclear firms reasonably request Alongside the Bill, I look forward to early publication of an energy White Paper that lays out the groundwork for nuclear energy that is environmentally and economically secure, and where the UK’s national interest and national security are protected.
My hon. Friend is making an excellent speech. Does she agree that the fact that 57 items of our critical national infrastructure—including, of course, nuclear, but also other energy and airports—are reliant on Chinese supply chains demonstrates the abject failure of this Government to bring forward a proper industrial strategy?
I agree that, given the national security risks posed by actions being taken by the Chinese state, including what our military refers to as sub-threshold activity, we should, as a nation, make sure that we have a Bill that ensures that our national security is protected from the Chinese state and anyone else, anywhere in the world, who seeks to damage our national security Developing a robust takeover regime is essential if we want firms in our key sectors to grow and provide good jobs here in the UK, and this Bill is a key part of that. I worry, though, that it misses the opportunity to go much further in strengthening powers that prevent damage to the UK’s national economic interest, as well as our national security, as in the case I have outlined. I therefore hope that the Government will consider amendments in Committee to widen the scope of what constitutes national security.
This Bill is welcome, necessary, important and, it has to be said, overdue. In making a few remarks about it, I draw the Minister’s attention to the fact that the Chairman of the ISC, the right hon. Member for New Forest East (Dr Lewis), is not able to be with us and sends his apology. I will make a number of points from the Committee on his behalf and that of other Committee members The first is that this Bill is stimulated, at least in part, by the ISC report from 2013. That report, “Foreign involvement in the Critical National Infrastructure”, made the case that new legislation was required. The hon. Member for Dundee East (Stewart Hosie) has already made that point emphatically, but the Minister does need to explain what might have happened differently had this legislation been in place seven years earlier, because some of these powers are clearly retrospective but they do not stretch back into the mists of time The Bill is important, not least because the Government have acknowledged that the UK faces continued and broad-ranging hostile activity from foreign intelligence agencies, hostile state actors and others. Novel means of undermining UK national security include investments that can be structured to obscure the real actors behind them. This is not a straightforward matter of takeovers that are directly linked to defence or critical national infrastructure; it is subtler than that, as the Bill acknowledges and as the Government have said. I want to dig a little further into that during my extensive, but not tediously so, contribution The Bill’s importance is also reflected in the dynamism of the threat that we face, which is metamorphosing, as I implied a moment ago. Those who seek to undermine our national security are becoming increasingly clever at doing so and the Bill will need to exercise all the flexibility that its provisions permit. But it may be that, as well as that, we need to return to these matters time and again. In a recent debate, I emphasised that traditionally legislation coming before this House pertaining to security has been spasmodic—it has been periodic. Legislation has stood the test of time but, as the increasing dynamism of the threats we face obliges Government to think again about means of countering them, it may be that we see more legislation than we have hitherto in this area. I happily give way to my hon. Friend, a fellow member of the ISC
I thank my very good friend for giving way. It seems to me that, if we define national security closely, we will not keep up with the speed at which it changes. So I am against the idea of having a definition of what national security is. Does my right hon. Friend agree?
I do, but the challenge in a democratic polity is ensuring sufficient accountability while maintaining that degree of flexibility. It is all much easier in less democratic countries—I use that term as gingerly and modestly as I can—which are not obliged to legitimise or justify what their Governments do. We are—rightly—so the Government are properly scrutinised and held to account. It is right, as my hon. Friend says, that we maintain enough flexibility to respond to the dynamism that I described. But of course, we need mechanisms in place to ensure that that flexibility does not allow the Government too much scope. That is why—this point was made by my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) and I emphasise it on behalf of the ISC—Committees in this place missioned to do just that need to play an important role. I know that the Government recognise that, and that my right hon. Friend the Member for Wokingham (John Redwood) recognises it.
Indeed. This issue—where does security end—is very difficult. If we look at the great wars of the last century, which we do not want to repeat, food supply was absolutely critical and was a great strategic vulnerability of our country.
That is true. Vulnerability, of course, is also dynamic. That is why I emphasised, in intervening on my right hon. Friend the Member for Tunbridge Wells (Greg Clark), that the Government need to get better at assessing risk and modelling the response to it. This is what the Bill begins to do. It has been a long time in the making, but I emphasise that it is welcome because it begins to look at appropriate mechanisms for doing that. So it is certainly necessary.
Does the right hon. Gentleman agree that security and intelligence need to be at the heart of the Bill and that they should drive how we take decisions? That is why being located in BEIS might be a mistake.
The right hon. Gentleman made that point in his contribution earlier and it seems to me to be a profound one. In establishing the new processes and the new governance associated with this legislation, it is vital that the interaction with the intelligence services, and all the skills available to the Government to assess risk, is built in to their considerations but also to the process. I am not absolutely convinced that the Bill does that. It may be that there is sufficient flexibility, to take up a point raised in an earlier intervention, to allow the Government to do so, but I hope the Minister, when he sums up the debate, will provide reassurance that the connection between intelligence and risk assessment is as sure as it needs to be. I am grateful to the right hon. Member for North Durham (Mr Jones) for making that point.
When the decision maker is a Minister in the Government, they benefit from the advice of the security services, including the National Security Adviser. That was certainly my experience as Secretary of State. All these decisions draw extensively on the advice of the national security apparatus. I do not think—my hon. Friend the Minister will clarify it when he winds up—there is any intended change to that.
Yes, the Minister needs to explain how the Government’s arrangements for the new investment security remit interface and interact with the national security structures that already exist, such as the investment security group. There needs to be clarity about the process, as I described it a few moments ago.
Of course, it is not just about the formal structures, because of the fast-changing nature of the threat and the way in which technology emerges and develops. Perhaps we should have an annual debate in here, where we can think out loud about emerging technologies that may become a threat and, on the other side, those technologies that have become so redundant they are no longer a threat, to avoid them being pre-emptively given to the Government and clogging up the system.
That is an excellent suggestion from another member of the Intelligence and Security Committee. My goodness, we are here in force and working as a team, as you can see, Madam Deputy Speaker. It is important that the House considers these matters, as well as the Committees I mentioned which have a particular responsibility for dealing with these things and holding the Government to account The point was made earlier that the national interest and national security are not identical. But they are coincidental—they do overlap—as there is a point at which national resilience, or its absence, compromises national security. The Government acknowledge that in the scope of the Bill. They talk about critical national infrastructure, as well as technology sectors of various kinds. By the way, I first looked at this issue, Madam Deputy Speaker—this is not a widely known fact, but I am happy to share it in the privacy of this intimate gathering—as a Cabinet Office Minister, with the former Member for West Dorset, Sir Oliver Letwin. We looked particularly at the threats posed to core infrastructure, such as the energy sector. By the way, that threat is posed not only by hostile state actors, but other players who might choose to disrupt core activities, with extraordinarily damaging consequences for our citizens. The Government do look at those things, but historically I do not think they have done so systematically enough. I know my right hon. Friend the Member for Tunbridge Wells, who has a distinguished record in this area, will have had similar experiences to me when we, in turn, looked at energy as part of our ministerial responsibilities China has been mentioned. I do not want to speak about it at great length, but clearly the ISC is currently looking at China and will be considering these very subjects in relation to that inquiry. That will come as no surprise to the House or the Minister I said this Bill was necessary, but necessity requires a degree of precision and I have some specific questions that I hope the Minister will deal with, either in summing up or by writing to the ISC if he does not have time to address them today. In looking at a specific case, will the investment security unit be able to consider the cumulative effect of a particular business transaction? In other words, will it take into account whether past acquisitions in that sector, when combined with the case currently under consideration, will result in a cumulative threat to national security? Moreover, will the unit consider acquisitions that might result in an indirect threat, for example, through supply chains or managed service providers? This may well involve very small businesses; sometimes a single expert or a small group of experts will play a vital role, as component parts, in either a technology or an industry that is vital to our national security.
My right hon. Friend is making an excellent point in an excellent speech. He is highlighting the need to understand national security not only as individual events and individual companies, big or small, but as a series of cumulative processes. Those gradual processes, over time, are as important to understand.
Order. Just before the right hon. Gentleman replies, let me give a gentle reminder that we have a lot of speakers still to go and I know the Minister wants to give a full reply at the end.
I am terribly grateful, Madam Deputy Speaker. I do not know whether it was the persuasiveness of the case I was making or its imperfection that has encouraged 1,001 people to intervene on me. Perhaps it was the latter, but I will give way no more and move to the concluding part of my oration There are questions to be asked about the proposals before us. I touch on one more before I reach my exciting summary. The Bill provides for the Government to apply to use closed material proceedings. My hon. Friend the Member for Isle of Wight (Bob Seely) and the right hon. Member for North Durham made the point about connections to other expertise, both within Government and beyond it, so how will that be impacted, given the closed material proceedings? How will closed hearings be managed effectively? I think the House will want to know the answer to that I said that the Bill is welcome, and it is certainly is, because it provides the means by which, for the first time, Government will consider matters of profound concern very much in line with the recommendations of the 2013 report. That report identified: “The difficulty of balancing economic competitiveness and national security” and suggested that it had reached a “stalemate”. With this Bill, we have moved on from that stalemate. Given the scrutiny the Bill will enjoy, in the spirit that this kind of legislation normally does, as the whole House will want to get this right, and given the Government’s willingness to listen and to take on board some of the points that have been made today and that will be made in further scrutiny, I have every confidence that we may end up with a very good piece of legislation that is fit for purpose. Edmund Burke said: “Early and provident fear is the mother of safety.” Sometimes it is important to be a little fearful in order to be provoked to take necessary action. In taking that action, the Minister will know that the Government have no greater responsibility than to secure the safety of the country they serve and its people.
It is a pleasure to follow the right hon. Member for South Holland and The Deepings (Sir John Hayes). I can assure the House that I will not be speaking for quite as long, although I aim to speak as eloquently. I thank the Minister for the time that he spent with the Inter-Parliamentary Alliance on China yesterday, going through some of the issues in the Bill. We operate on a cross-party basis, and I will be mentioning some of the concerns raised in that call so that they are made public The Liberal Democrats absolutely support the premise of the Bill. It is the right thing to be doing. My objection, however, lies in the Bill’s scope, which I genuinely believe should be wider. I appreciate that it has been constructed narrowly, presumably so that it can be put through Parliament quickly, but this is a great opportunity that should not be missed. The point that I made to the Minister yesterday was that if we are not going to amend this Bill to include some very important changes that are needed in our legislation, when are the Bills that will be necessary to fill in the cracks going to be brought to the House? I am hearing that that is what Members across the House want to know. If not now, when I will focus on two specific matters. The first, which has been mentioned by other Members, is the definition of national security. I found the speech of the right hon. Member for South Holland and The Deepings very interesting, because there are arguments for defining and not defining. I believe that we should be defining, so that this House can properly scrutinise whether the definition encompasses everything that we would consider a national security concern and whether those concerns will be captured in the Bill.
Rather than being about not not defining national security, I wonder whether this is about broadening the definition so that it can include the many other issues with which we are all concerned.
Yes, indeed; I agree. We should be broadening it, in fact, to underline the values of our country that should be enshrined in the Bill. I hope that Members would agree that there is no way that anyone could describe human rights as baubles. Human rights are not baubles off of which we are hanging a Bill. Human rights are the trunk of the tree off of which we hang the legislation and everything that we do in this place. When I suggest that we widen the scope of the Bill to include more human rights amendments, it is in that spirit We should not be singling out China particularly—although I am about to—but it is right that this Bill is looking at the enterprise in itself; it is not China or any Chinese investment per se that concerns Members of the House. That distinction is very important. It is equally important, especially during the time of a pandemic, that we attract business, that this country is open for business and that businesses want to invest in it. That is all correct, but I have grave concerns, particularly about companies such as TikTok, which is an example of the kind of thing that we very much hope is captured in the Bill. It is a shame that we do not know—I certainly do not—whether TikTok will fall within the scope of the regime put forward by the Minister and the Secretary of State. That is a genuine question. If it will not, let me make the case for why it should As has been said, this is not just about national security and infrastructure as things that we can touch. As we well know, the way in which hostile states are now operating is more to do with data flows and what they do with them. We also know that China does not think within the scope of two, three or four years; it is thinking ahead to the 20, 30, 40 and 50 year marks. What is it doing with TikTok? It is harvesting data, and primarily the data of young people—not just here, but across the world. Some 41% of TikTok’s users are aged between 16 and 24. Our young people’s data is being harvested now. Why? Competitive advantage, perhaps, but also we know that the way that the modern Chinese state is operating is to slowly build dependency. It is incredibly important to recognise the point around dependency and national security now, because it is getting a slow underground hold on our country. If we are not careful and we just focus on the parts that we can see, like the mycelium of a fungus—is it edible or not?—we forget that the majority of what is happening is underground and longer-lasting than we might imagine. Will data flows be considered specifically? Will the movement of the global HQ of TikTok to this country come under the scope of the Bill? If not, I will seek support across the House for amendments at the next stage so that that can happen Now is the time to fully address human rights. That is why it is important to talk about China, because yes, on the one hand, there are data flows, but on the other, there is what it has done in Hong Kong. The issues with TikTok arise from 2017, but the more recent issues in June of this year, and what it has done in Hong Kong, suggest a direction of movement for the Chinese state that is deeply concerning. Linking that to what is happening in Xinjiang with the Uyghurs, we have, almost through not paying attention, tacitly said to that state, “We think what you are doing might be okay. We are not going to challenge it directly.” Magnitsky sanctions are mentioned as the current way that the Government are dealing with this. We welcome that and think they should go further. However, it is also time that we had amendments to a Bill that specifically deal with genocide, slave labour and supply chains. This is not just about sanctioning individuals. We know that the state has a hold on its enterprises, and that needs to be addressed too At this stage, I have no intention of throwing any Lib Dem strops and opposing Bills, or whatever. However, I hope that the Minister knows that at the next stage some movement needs to be made on these two very important issues.
I want to concentrate on what is essentially the core of this Bill—our national security. Today our country continues to face a broad-ranging hostile attack from foreign intelligence agencies. A few of our critical industries and technologies may already have been purchased, at least in part, by foreign investors, some of whom may not have a particularly benign approach to British national security This Bill comes not before time, considering that the Intelligence and Security Committee ruled on the matter and suggested changes in 2013. Unless the UK curbs the right of foreign firms and investors to obtain technologies through the means of mergers and acquisitions, and similar, our advanced technologies could easily find their way into the weapons systems of foreign and potentially hostile states. This would definitely harm the UK either directly or indirectly. The Bill gives the Secretary of State the power to screen investments that might just pose a national security risk, and that is what we are talking about today. Obviously the Bill very much reflects the views of the ISC, of which most Members, apart from the Chairman, are present. [Interruption.] I didn’t use the word “you”, did I, Madam Deputy Speaker? [Interruption.] Oh good—you were looking at me with horror.
I only pointed out that I was once a member of the ISC as well.
I am always a culprit on the word “you”. I have now lost my place, thanks to your intervention, Madam Deputy Speaker The report produced by the ISC in 2013 contained a requirement for legislation, and we are now getting that legislation seven years later, which is rather a long delay. I am delighted that the Bill protects British industry and puts safeguards on it, but it puts particular safeguards on our national security. In future, investors will have no choice but to notify the Government if the ownership of certain businesses is to change hands—thank goodness for that. However, I note that the Secretary of State will also have the power to call in other businesses if he or she has concerns about national security. That is why I am slightly against a narrow definition of national security; I would prefer it to be a bit more fluid The decision to call in an investment will be based on three factors: the nature of the target of acquisition; the type and level of control being acquired and how that could be used in practice; and the extent to which the acquirer raises national security concerns. The list of sectors to be covered is under consultation. I will not use a mnemonic, which until today I thought was some sort of drill, but that list includes advanced robotics, artificial intelligence, cryptographic authentication, whatever that is, quantum technologies—I do know what that is—and satellite and space technologies, in which we are world leaders. It is very important that those sectors are guarded against being infiltrated, because that is what it is—infiltration to take away intellectual property At the moment, the UK is almost unique among major western economies in not having stand-alone foreign investment legislation, and this Bill will sort that out. It will give Ministers the power to look at transactions overall and to review them. The Government’s impact assessment estimates that it will result in well over 1,000 transactions a year—possibly up to 1,800, as some Members have suggested. That is a lot, and it means a lot of work for a specific department of BEIS. There will only be 100 people to do that work, which is slightly worrying I will finish, because I was told to be short—and I have been, in six minutes—and because I had your naughty finger pointed at me, Madam Deputy Speaker.
Get on with it!
I am getting on with it! I am trying to finish. This is a good Bill. I hope the House will support it. I will not finish my last paragraph, because my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) has stolen my thunder. This is a good Bill, and we need it.
It is such a pleasure to follow the hon. Member for Beckenham (Bob Stewart), and I genuinely hope that your naughty finger will not be pointing towards me at any point in my remarks, Madam Deputy Speaker We on the Opposition Benches will not oppose the Bill, because it is a step in the right direction. It is good to see the Government finally recognising the need to put national security at the heart of how we deal with foreign investment. However, the Bill fails to address the broader issue of how takeovers and acquisitions should be regulated to promote our broader national and economic interests and, indeed, the interests of British workers and their families across the length and breadth of our country. In that sense, it draws a false distinction between national security and economic security, because it is absolutely clear that the two are intrinsically linked In order to properly reflect on the effectiveness of this legislation, we therefore need to go back to first principles and ask ourselves this single basic question: what is the economy actually for? It is only by reaching consensus on that fundamental point that we shall be in a position to assess the extent to which the Bill will make a positive contribution to the lives and livelihoods of our constituents The British economy is unbalanced, it is unstable and it is therefore profoundly lacking in resilience. It is too reliant on the financial services sector at the expense of manufacturing—our manufacturing sector has collapsed since the 1970s from 30% of GDP then to just 9% now. It is too London-centric, thus failing to harness the talents of so many people from other areas of our country; it is too inward-looking, with persistent trade deficits; it is too unequal, pushing the proceeds of growth to the wealthiest 1%, and it is too short-sighted, constantly aiming for the fast buck rather than long-term, sustainable prosperity driven by patient capital Every piece of legislation that is brought forward by the Department for Business, Energy and Industrial Strategy should be relentlessly focused on fixing those faulty foundations of our economy—those fundamental weaknesses—and every step that the Business Secretary takes should be a step towards an active industrial strategy that is designed to drive a modern manufacturing renaissance. He should be focused on home-grown industry, home-grown investment and home-grown technology. Those critical steps will help to build that sense of purpose and resilience into the UK economy that we are so desperately missing The culture of the UK’s corporations is also in urgent need of change. The prevailing business strategies are driven by short-termism, with the delivery of fast buck profits to shareholders taking precedence over all other considerations. Addressing that will require a new deal between shareholders, companies and their workforces, and between the public and private sectors. Far too many of the corporations listed in the FTSE 500 are characterised by a transactional, rootless form of ownership, which militates against the investment in R&D, innovation, skills development, new technology, plant and machinery that is desperately needed if we are to put our economy on to a more balanced and sustainable footing The Government’s laissez-faire approach makes a major contribution to this short-termist culture, because it opens the door to acquisitions by foreign companies, resulting in the UK’s having by far the highest number of successful hostile takeover bids of any advanced economy in the world. Time after time since 2010 we have seen our strategic national assets being flogged off to the highest bidder. Let us just look at the case of Arm, a jewel in the crown of the British tech industry, which is in the process of being sold to Nvidia, or Cadbury’s, an iconic British brand, sold to Kraft without any proper consideration of what that would mean for the long-term sustainability of the business Moreover, our sovereign capability is profoundly undermined by the fact that much of our critical infrastructure is not in our own hands. In fact, 57 of our critical national infrastructure supply chains depend on China, from our energy suppliers to our airports, our pharmaceuticals and our personal protective equipment. The repercussions of that overexposure have been felt during the pandemic. Our lack of capacity to produce PPE has cost the UK taxpayer an eye-watering amount of money; a breaking story today shows that a Spanish businessman has pocketed £21 million of British taxpayers’ money simply for acting as a broker between the Government and overseas suppliers—a potent symbol of systemic failure Let me be clear that many of these so-called private takeovers and infrastructure investments are carried out by companies and investment vehicles that are a front for authoritarian state actors who have wider political and national security agendas and whose values are at odds with our commitment to democracy, liberty and the rule of law The crucial point here is that our values should not be for sale The most obvious and pressing case, of course, is the Chinese Government, who are relentlessly expanding their influence economically, politically and militarily. We need only recall the case of Imagination Technologies, which was recently the target of a hostile takeover attempt by an investment vehicle with direct links to the Chinese state. Of course, there are also substantial Chinese stakes in Hinkley Point and other sizeable chunks of our critical national infrastructure Successive Conservative Governments since 2010 have been naive and complacent in their approach to China, exemplified by David Cameron and George Osborne’s disastrous “golden era” strategy. It is time for this Government, this House and, indeed, the entire country to wake up to the reality of these matters and to come to the realisation that, while we must always seek constructive engagement with China, we must take a clear-sighted, hard-headed approach to defending our national interest and our sovereign capability I also take this opportunity to raise another more specific way in which the Government’s lethargic tendencies have proved costly to British business and weakened the economy as a result. The Government have been naive about the deliberate attempts to weaken UK businesses through market distortion by the undermining of competition laws. The most obvious example of that is the deliberate over-production of steel way beyond global demand and the subsequent illegal dumping of that steel on European markets. The result of those illegal uncompetitive practices combined with Conservative inertia has been the weakening of UK steel companies and the opportunity for foreign investors, many of whom come from countries that are the origin of the dumping in the first place, to buy up our strategically and nationally important asset. Some 80% of China’s steel industry is state owned, and the key point is that the illegal dumping of products from those state-owned industries into European markets is an example of the practices that are undermining the international rules-based order That in turn has a damaging and direct impact on our industrial base and on our communities and their families—the workforces that are directly impacted. It is a perfect example of how the global is truly local. We need a level playing field, and this legislation should be about—this is everything that the BEIS Department should be about—developing that level playing field so that our workforce is not competing with one hand tied behind its back against a system that is rigged against it from the word go This Bill is a big missed opportunity to strengthen the UK’s wider industrial strategy and for the Government to show that they are committed to building an economy of purpose and resilience. Moreover, it fails to reflect the impact of coronavirus on UK businesses and the increased vulnerability in the face of vulture capitalists and state-backed actors that are waiting to pounce. This legislation only really seeks to protect the UK’s national security and appears to do little to support the UK’s wider national interest, such as the need to protect jobs and support communities in this time of national emergency Focusing on the all-too-narrow scope of the Bill, I also have genuine concerns about the process for arriving at a decision on whether to block a takeover. Currently, the plan is that the process sits firmly within BEIS. That is an issue, first, because such a decision would have huge cross-departmental impact, so it would surely be better to create a multi-agency taskforce to rule on key decisions. Such a taskforce would include the Treasury, the Home Office, the Foreign, Commonwealth and Development Office, the intelligence and security services, and the Ministry of Defence. It could follow a similar model to the Committee on Foreign Investment in the United States. All the signs were that BEIS was a cheerleader for the Huawei deal, when it was clearly against our national interest to go ahead with that deal. That does not augur well for its ability to police the effective implementation of the Bill Secondly, handing all the decision-making power to the Business Secretary could lead to problems further down the line, should a future incumbent—I am in no way implying that such a fate would befall the current Business Secretary—be influenced by political or commercial interests in this country or overseas.
I had not intended to intervene again in the debate, except that I want to emphasise, and perhaps amplify, the point that the hon. Gentleman has just made. The legislation brings us into line with other Five Eyes players—the intelligence community with which we work directly—but he is right to say that the mechanisms that they use are different, in some cases, from the ones employed in the Bill in exactly the way he describes. Will the Minister look at those mechanisms and see what more we can learn from them as the Bill is improved during its passage through the House?
The right hon. Member has pointed to the fact that it is such a broad, cross-departmental issue that it requires more than just one pair of eyes—if he will excuse the pun—to look at it Time and again, we have seen that the takeover regime is not fit for purpose. It is welcome that we are finally coming into line with other countries on national security, but we are still behind on takeovers that would harm the national interest more broadly. Protecting our national security is only one element of protecting, nurturing and developing the vital sectors of the future that we know are crucial for our economy Given the economic dislocation and potential corporate vulnerability caused by coronavirus, the case for action is stronger than ever. I will support the Bill, but we need to see improvements and further regulation to protect British business and the broader national interest.
It is always a pleasure to follow the hon. Member for Aberavon (Stephen Kinnock). Although I did not agree with everything in his speech, I have fond memories of being in his constituency playing rugby as scrum half, fishing, and go-karting on rickety self-made go-karts that often fell apart. I also went to my first rock concert at Aberavon leisure centre—The Who; I think they were at Madison Square Garden some years earlier, I hasten to add I welcome the Bill. As has already been stated, it is perhaps a little long overdue, given that my predecessors on the Intelligence and Security Committee suggested in 2013 that such a Bill was required urgently. I also put on record my thanks to my hon. Friend the Member for Isle of Wight (Bob Seely), who has been calling for such a Bill for many years. I am sure he is, at least in part, happy to see the Bill before the House. I also commend the Secretary of State, the Minister and, indeed, the whole ministerial team for bringing the Bill forward so early in this Parliament It is, of course, right that the Secretary of State has new powers to scrutinise strategic and sensitive investments in sectors that might pose a national security risk to the United Kingdom. The Bill should also act as a legislative assurance, or reassurance, for would-be investors and businesses. They can now avoid, hopefully, being targeted and potentially exploited by the hostile states and entities hidden behind the respectable veil of supposedly legitimate mergers and acquisitions that take place in the City every day—strategic partnerships, joint ventures and major investments The Bill also rightly responds to the huge advances in technology, as we have heard from other hon. Members today, which in itself further widens the potential scope of the Government’s national security concerns—and, indeed, remit—particularly around intellectual property, patents and copyright. Although this might prove problematic for the Government, particularly around dual technology, it is absolutely right that it should be addressed. We heard from the hon. Member for Dundee East (Stewart Hosie) earlier on the use of dual technologies. However, the Bill should not mean compromising growth or prosperity, and I was glad to hear the Minister underscore that. Got right, there is no need for it to compromise or conflict with national security and national prosperity. It is more than manageable, certainly with this excellent ministerial team, for the Government to balance national security and economic competitiveness, and to give the Government greater powers to assess and scrutinise investments that could reasonably be viewed as posing a potential risk to the UK’s national security. The Bill rightly empowers the Secretary of State, where necessary, proportionately to impose remedies up to and including blocking the transaction, using full through to lower-level measures. If the risk to national security is extreme, clearly those fuller measures should be deployed Of course, the Bill protects businesses that are small. We have heard from hon. Members on that as well, and I think the Government need to be careful that investors are not put off by the potential for many months of bureaucracy and hurdles to entry to market, particularly at the start-up stage or the second or third capital raising stage for entrepreneurial SMEs. The Bill will, of course, look at small businesses, and many of these small businesses have a global reach although their turnover might not be particularly large. They might—by definition, as small businesses—have fewer than 30 employees, but that does not necessarily mean that their technology and intellectual property are not of interest to some of the UK’s adversaries In welcoming the Bill, I would like to take the opportunity to thank my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) and his Committee for their work. He has raised this issue over many years, and I would like to put on record my thanks to him. My hon. Friend the Member for Beckenham (Bob Stewart) has rightly mentioned computing hardware, quantum technologies and satellite and space technologies. There is a list of 17, and I will not go into them now, but it is absolutely right that these very sensitive areas fall under the remit and the scrutiny of this new legislation. Madam Deputy Speaker, you will know as a previous distinguished member of the Intelligence and Security Committee, that the Committee is currently considering the threat of this whole area in its current inquiry into the national security threat that China may or may not pose. In my view, it poses a significant threat in a lot of areas. Will the Minister give an undertaking to the House that there will be a timely publication of those mandated reporting sectors If I may, I would like to ask a few questions, through you, Madam Deputy Speaker, of the Government. Can the Minister explain the Government’s arrangements for the new investment security unit? How will it interact with the national security apparatus and structures that already exist, including the investment security group? Will the investment security unit consider acquisitions that might result in an indirect threat—for example, through supply chains or managed service providers? What safeguards will there be in the Bill to prevent non-UK Governments from pressuring the UK Government to call in certain mergers and acquisitions that those Governments might find offensive or inappropriate even though the UK might take a different view? Also, on the issue of competitors, what safeguards will there be to prevent vexatious and spurious calls for the Government to intervene by competitors who feel they are going to lose out as a result This Bill is long overdue, but it is right to give credit where credit is due. I thank the Government for bringing it forward and I hope that they will work with the ISC and the whole House as it goes through to Report stage. I commend the Bill and thank the Minister for all he is doing.
It is a pleasure to follow my hon. Friend the Member for The Wrekin (Mark Pritchard), who was a very successful businessman before he entered the House. I am also looking forward to hearing from my hon. Friend the Minister when he sums up later Foreign investment in the UK is an unalloyed good thing, and we would all be much the poorer without it. Inward investment stimulates our economic growth across the entirety of the UK. In 2019 alone, as the Secretary of State told us, almost 40,000 jobs were created thanks to foreign direct investment, with most of those outside London, despite its global reach Foreign investors in the UK create more exports and spend more on research and development than our domestic businesses, giving the lie to some of the things that we have heard from Opposition Members this afternoon. Let us remember that every doctor, nurse and careworker who has looked after us during the pandemic is paid for directly from the product of the economic growth that results from being one of the most open economies in the world. That is one reason why I congratulate the Government on recently establishing the new Office for Investment, with my noble Friend Lord Grimstone and No. 10 working together to bring high-value opportunities to the UK, such as on net zero, as well as investment in infrastructure and advancing research and development I approach this Bill with a degree of trepidation, much as one may occasionally have to approach a golden goose and suggest moving it to a slightly different, newer nest next door. There are many positive aspects of the Bill that I welcome, such as the clear statement of intent about enthusiastically championing free trade—we heard that from the Secretary of State today. I think it is very important that the Minister restates that at each stage of the proceedings. In many respects, this will be a more modern and slicker framework, providing more certainty and clarity for those we seek to attract here to invest. Timelines for assessments will be set out in law, and, as somebody who was previously a practitioner of acquisitions, I know how capricious the current status quo is, so I welcome anything that can make that more predictable. I also agree that aspects such as the turnover test or share of supply are backward-looking in an era when a business can become successful or strategically important while barely out of the incubator I hope that the Minister will not mind if I mention some areas for those on the Government Benches to focus on, from the perspective of a colleague who wants the Bill to succeed in its stated objectives. It is really important that it remains narrowly drawn around the risk to national security, and it will be good to hear the Minister again restate that very clearly. To govern is to choose, and it is important to be as clear about what the Bill is not as we are about what it is.
Will my hon. Friend give way?
I will not, because I know that so many colleagues want to get in. The Bill is not about the impact of a particular locality or even the domicile of a particular acquirer, and it must not become another fit and proper test by the back door because we do not like the identity of an acquirer or their political views on that day of the week. Investment is all about taking risk and pricing that risk, but political risk is the very hardest to price. In a globally competitive world, where every word that we say in this House will be pored over for meaning, we all have a responsibility to ensure that we provide clarity to those who are poised to invest here Much is hung on the speed of this regime—I think, Minister, that 30 days must mean 30 days, and I can already see some ambiguity. The Bill talks about acceptance, not just receipt. A subjective view about what constitutes acceptance cannot be a back-door way of stopping the clock. That is a notorious practice in current European competition filings. There is also talk of the Secretary of State being able to have a further 45-day extension. I think there should be a clear presumption that if this is not done within 30 days, the transaction can proceed. In truth, if we apply that logic to a pavement licence during a pandemic, I do not see any reason why we should not apply it to keep our capital markets and our lifeblood of the economy functioning. Those timeframes should be symmetrical. The state should not load the dice in its own favour, because if we look at the Bill, we see that, when it comes to appealing the decision by the Secretary of State under judicial review, the claim must be brought within only 28 days I thought it was very helpful of the Secretary of State to provide the context that he expects less than 1% of all M and A asset transactions to result in notification, but with respect, I want the telephone number of his lawyer, because I do not know where we are going to find the risk-averse legal advisers in transactions that do not distort that by notifying just in case, particularly given the presence of criminal liability. I agree with other colleagues that I would like the Minister to commit, if possible, to publish annual statistics on the number of notifications and the outcomes Finally, as ever when we pass new legislation, it is wise to think of it as an opportunity to retire some elsewhere. Media plurality has ill served the media sector, much of which now lies in foreign hands. As we look to rebuild our industrial strategy in the future, post covid, and as we strike out post Brexit, a new lighter touch approach from the Competition and Markets Authority would give many of our British businesses the scale to compete internationally.
Naturally, Madam Deputy Speaker, I hope to speak for no more than six minutes. It is a pleasure—genuinely a pleasure—to follow my hon. Friend the Member for Arundel and South Downs (Andrew Griffith). In the spirit of constructive debate, I am going to disagree with some of his points, but it was undoubtedly the most eloquent argument in favour of a highly free-market approach, though I will ask some questions on it, if I may. I am going to talk a little about national security, and make some supportive suggestions for the Minister and some general points about the nature of national security in the modern world with China. There is much to support in this Bill, and we can all agree that most of it is very necessary and very good. I would also like to thank the Minister, who is obviously held in very high regard by those on the Government Benches, for his engagement; it is always good to talk to him. I have actually rather enjoyed listening to the debate, because clearly a lot of constructive suggestions are being made, and I thank my hon. Friend the Member for The Wrekin (Mark Pritchard) for his kind remarks I am going to suggest some amendments and then explain why I think they are necessary. For me, there is an issue about national security and our definition of it. That has not been offered so far in the debate, but it sounds like the Government’s definition is too narrow in this age. That does not mean that we are talking about industrial policy. I was very interested to listen to many of the speeches by Opposition Members, including the hon. Member for Aberavon (Stephen Kinnock), who made some very good points. This is not the space for industrial policy, but it is a question of how we interpret national security The amendments I think we should be tabling are on a character test and a public interest test, if not specifically a human rights test. Nobody has ever accused me of being a bleeding heart liberal, but I think that, in this day and age, to have no human rights test, even one wrapped up in a public interest test or a character test, is genuinely confusing, especially because countries that are in many ways more free marketeer than us do have them. Australia has such a character test and a public interest test based on national security, competition, tax revenue, the impact on the country and what it describes as a common sense test. Forgive me if I am wrong, but I thought that we had rather invented common sense, but we do not necessarily have a common sense test or a character test While my hon. Friend the Member for Arundel and South Downs said that he is—I hope I am not misquoting him—ambivalent about the identity of people moving in, I am not. There is an issue about Huawei and there is an issue about ZTE because they are fronts for an authoritarian state. As well as a moral question over what authoritarian states do in their own countries—and, yes, we do tend to wag our fingers at people too much—there is a justified question to be asked, because how foreign authoritarian states treat their own people is very often, given half a chance, how they would treat us, so there is an issue for me here The next amendment relates to CFIUS, the Committee on Foreign Investment in the United States. That is a more transparent process and, if I understand it correctly, more people have to sign up to agree, so it is not just sitting within their version of the Department for Business, Energy and Industrial Strategy. Defence, the Secretary of State and other players get to sign off on funding for companies. In many ways, CFIUS has a higher threshold than we will have in this country. I do not think anyone is accusing the United States of being less free marketeer than we are, but in this area, they are more conservative. I am not saying they are right or wrong, but I think that it is an important point to note My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and the hon. Member for Dundee East (Stewart Hosie) spoke about the cumulative threat. It is not about a single company or a single issue, but the way an industry changes over time. Indeed, the hon. Member for Aberavon made that point about the slow collapse of the British steel industry. Also, the point has been made that a lot of foreign direct investment is good, but there is clearly a balance Finally on the amendments, I would be keen to see something more stated, more obvious or more explicit on critical national infrastructure. Where would we be with Chinese investment in our nuclear industry, for example, if this Bill was already law? That is a matter for genuine debate I will move on to one or two other specific points. We are forever telling people how we prioritise human rights and how we lead the world, yet there is nothing about human rights in the Bill. As I have said, I think that lacks consistency, and we need a public interest test Next, we are talking about national security without a definition. I was saying to my hon. Friend the Member for Bolton North East (Mark Logan) that we need a definition. He is very much a Sino expert: he lived in China and speaks Chinese, which is rather more than I do. He said that it is a very Confucian thing to say that, to have a debate, we need to understand the definition and know what we are debating. It is a genuine Confucian point: where is our definition of national security to have a debate with? We need that. In this day and age, we need a wider definition of national security. It is not just nuts and bolts on tanks—I am not saying that the Minister is saying that—but much wider than that The former leader of our party, my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) talked about civil and military fusion in China. I am somebody who lived in the Soviet Union. I have travelled in China a bit, and I have worked in sort of authoritarian states. The purest free market position here is dated. I am not saying we need an industrial policy approach, but we need an understanding that sees strategic interests—national security and the national interest—in big data, artificial intelligence, facial and gait recognition and all these technologies that Moscow and Beijing want to use to control their own people. I am surprised that the technology being developed by universities potentially does not fall under the Bill, and I believe it needs to My hon. Friend the Member for Gloucester (Richard Graham) made the point, as he ever does, about the importance of Chinese foreign direct investment, and I agree. The point was also made by my right hon. Friend the Member for Tunbridge Wells (Greg Clark). Chinese FDI clearly has an important role. It enriches our country, but there is a cost as well Finally, we need an amendment on strategic trade dependency. I would like to see an annual statement from the Government on the nature of our strategic trade dependency. If I had stood up a year ago and said, “Personal protective equipment is a strategic issue for this country,” everyone would have laughed and Front Benchers would have been swapping amused WhatsApps at the foolishness of a Back Bencher. Who now denies that PPE is a strategic issue, given the amount of money it has cost us and the delays because we did not have our own industry? Over time, that industry had faded away, and now that has caught us out. There is a wider strategic debate There is also the nature of dynamic risk, as my hon. Friend the Member for South Holland and The Deepings said. Everything that we know about the last year, with the changing nature of authoritarian states, such as China and Russia, the fusion of the civil and military and the entirely different approach to power in those countries, makes me realise that the national security definition that needs to be offered in the Bill, but currently is not, should be, if not broad, then at least have a greater understanding of the modern world we live in than is currently the case in the Bill or this debate. I very much hope there will be movement on that from Ministers.
It is a pleasure to follow my hon. Friend the Member for Isle of Wight (Bob Seely), who has great experience in these matters. As he said, this has been a very thoughtful debate. I welcome the Bill, which, as many hon. Members have said, is long overdue. Much of our law on industrial security and business transactions is governed by the Enterprise Act 2002 and our very narrow and often inadequate competition and markets laws A lot has happened in the past 20 years. Major global corporations have exercised huge powers in mining data, monitoring and tracking populations and controlling technology in every aspect of our everyday lives. In most cases, they have done so without the need for a close physical presence. Of course, the huge issue of cyber-security and cyber-crime has become the weaponry of the 21st century. It is therefore right that we bring our laws into the 21st technological century, which would also bring us into line with some of our major allies This is also an investment Bill. As a global free-trading nation, we need to get the balance right and ensure that UK plc is open for business in the eyes of the international investment community and international markets. My constituency neighbour and hon. Friend the Member for Arundel and South Downs (Andrew Griffith), mentioned the great inflow of investment and jobs that that has created. The Bill needs to be targeted and proportionate so that we continue to attract safe investment, while deterring unsafe and questionable investment I am pleased to welcome the new systems and procedures in the Bill, including the transparent call-in notices based on trigger events, a clear and swift timetable to make decisions on call-ins, clear timelines, a single point of decision in BEIS, the interaction with the Competition and Markets Authority and the sanctions and legal challenge process. It is good to bring that in line with our Five Eyes allies. As the Minister said, it is estimated that the Bill will affect less than 1% of all mergers and acquisitions and asset transactions in this country My concern, like that of other right hon. and hon. Members, is whether the Bill goes far enough. Does it cover enough sectors and appropriate interests? How should the Government define national security, which is absent from the Bill? Should there not be a greater independent and external screening mechanism? Is not too much power still concentrated in a Secretary of State who, as was indicated by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), can still be swayed by political considerations that sometimes—just sometimes—might trump national interests? Where is the parliamentary scrutiny role in all this? Where is the appeal mechanism if no call-in is triggered? This is a point that not many other Members have mentioned, but does the Bill leave too many of our early-phase innovation companies exposed to being gobbled up by foreign super-giants that can take advantage of almost unlimited capital and currency swings in their favour? I remember the old days in the City when the Government had golden shares in companies such as Cable & Wireless, British Aerospace and Plessey. People had to make a foreign ownership declaration to own shares in Peninsular and Oriental, and they were only able to own deferred stock. The Government still have special shares in British Airways and Rolls-Royce, for example, but it is hard to think of the last time the UK Government blocked a takeover or major asset acquisition of a company in which they held a golden share. Are they actually that golden The Minister stated that he is nation agnostic and that there will be no white list of nations, but we all know—this debate has brought this out very clearly again—that China remains the biggest threat and the single most important reason why such legislation is required. I have been a lone voice on China’s human rights abuses in Tibet for many years, as chair of the all-party parliamentary group for Tibet, and it is good at last to be in company, partly sparked by the outrage that is going on against the Uyghurs, what has been going on in Hong Kong and the suppression of the indigenous Mongolian population. However, it is what we do not see that is so much more dangerous, and the row over Huawei and 5G earlier this year brought that to light The ownership of Huawei is quite clear: it is 99% owned by the Huawei Investment & Holding Company trade union committee. Under Chinese law, trade union committees are ultimately administered by and answerable to the All-China Federation of Trade Unions, which is according to its constitution under the control of the Chinese Communist party. It is a very clear ownership: Huawei is under state control Huawei is involved with at least 11 United Kingdom universities as well as six London colleges, and I have great concerns—I have raised them on many occasions in this House—about the influence of the Confucius institutes on our campuses around the country. The US has raised concerns as well. The US-China Economic and Security Review Commission last year said: “China is using broad research relations with universities and other entities to try to fill in any technological gaps they have as well as in certain areas to try to advance Chinese standards so that Huawei and other Chinese-produced equipment will be the equipment of choice as networks get built out.” That is a threat to national security, and we need to take account of it We have heard a warning just today about Scotland and Scottish universities: Scotland has the highest number of Confucius institutes per capita of any country in the world We all know that ultimately the CCP has a claim on any data held by Chinese companies, where it does not need to go to the inconvenience of hacking into a foreign company’s database, as happens all too often. That includes TikTok, as we have heard from many hon. Members—in particular, my hon. Friend the Member for Wealden (Ms Ghani), who has made a specialisation of this. The spread of social media is a hugely powerful tool in extending control over populations, particularly young populations. China’s national intelligence law requires all Chinese firms, not just Huawei, to assist in state intelligence work, and Huawei’s equipment is used in monitoring the population in Xinjiang province. And of course it has great form in stealing IP from countries around the world All the contributions in this debate so far have focused on technology and communications, but why is pharmaceuticals and biotechnology not on the list in the Bill? It has been included on the list of the equivalent legislation in France. We know from Wuhan the global reach that biotechnology can have when it goes wrong. What checks are there on Chinese laboratories operating on UK soil in dangerous materials that could compromise our security? China, as we have heard, has been taking over pharmaceutical firms, including human blood plasma firm Bio Products, originally part of the NHS and taken over in 2016 by the Creat Group. That company would not have been covered by the mandatory notification under the proposals in the Bill There are many other areas of Chinese ownership that cause concern, too. The China General Nuclear Power Group holds a third of Hinkley Point nuclear plant and 20% of Sizewell C, and Beijing-controlled companies control about 25% of nuclear and wind energy demand in the United Kingdom. As my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) mentioned, it is the cumulative effect of their influence and their ownership that we need to be aware of. The largest operator in the North sea is the China National Offshore Oil Corporation, accounting for 25% of UK oil production and 10% of the country’s energy needs—helped by billions of pounds-worth of tax breaks from this Government and previous Governments, it should be noted. The chairman of the CNOOC, Wang Yilin, declared in 2012: “Large-scale deep-water rigs are our mobile national territory and a strategic weapon.” The China Huaneng Group is building Europe’s largest battery storage project in Wiltshire, and the Hong Kong company MTR owns a 30% stake in South Western Railway and has the Crossrail franchise. I could go on and on, and the Henry Jackson Society has estimated that only 23 out of 117 Chinese acquisitions of UK corporations in the past decade would have been subject to the mandatory notification in this proposed legislation These are all strategic areas—energy, infrastructure, transport interests—which could have a massive impact on our security and prosperity if controlled by a malign party, and on top of that there is the monopoly China is building up in the supply of lithium and cobalt, essential components of batteries and the battery technology that we need to develop globally for environmental reasons as well What would the impact of the Bill be on all of those operations? What are the reciprocal rights for UK companies taking a stake—a controlling one or otherwise —in equivalent companies in China? I bet they are not equivalent. Surely there needs to be some sort of equivalence test in this legislation to ensure that we have access to assets overseas that is equal to that we are allowing overseas corporations and Governments to have in this country. I have not mentioned human rights, which has come up many times. I have not mentioned the malign influence of Russia and heavily disguised asset purchases from those close to the Putin regime. What does the Bill do for clearer declarations of ultimate beneficial ownership and the role of Companies House? We have done much in that area on tax avoidance, but what about for the purposes of the national interest? We need far greater transparency. Surely the Bill is a way of helping to achieve that. Surely there should be a wider national interest test We must also mention the role and influence of friendly foreign powers, particularly the concerns about US and Japanese multinational companies that have been gobbling up UK high-tech start-ups and defence companies in recent years. The hon. Member for Aberavon (Stephen Kinnock) mentioned ARM, which was taken over by the Japanese—SoftBank—in 2016 and then by the Americans this year. It makes silicon chips for virtually all our mobile phones. There are numerous examples of high-tech start-ups in silicon fen at Cambridge. Public money has gone into universities, resulting in commercial spin-offs, and then founding shareholders have been lured by pound or dollar signs to silicon valley, US high-tech giants and social media companies. That is why we have no equivalents of Facebook, Google or TikTok in this country. We have very few tech stocks; in the FTSE, the weighting of infotech is just 1.37% In conclusion, Madam Deputy Speaker—before some naughty extremity of your body casts itself in my direction —surely we should be using a national interest test to grow our own in the United Kingdom. Certainly there should be a reciprocity test if national interest protection laws overseas prevent UK companies from making equivalent acquisitions or taking strategic stakes. I support the Bill, but there are many questions still to be answered, and measures certainly need to be beefed up.
Thank you, Madam Deputy Speaker, for calling me in such an important debate. May I start by thanking the Secretary of State and the Minister for the time that they have given me, members of the Inter-Parliamentary Alliance on China and others to discuss the contents of the Bill and what it does As I understand it—I hope I get this explanation right—the Bill gives the Government the power to screen and call in acquisitions of assets deemed to pose a threat to national security. Those assets might include land, physical property or intellectual property. As a result, the Secretary of State will be given retrospective powers to consider investments made over the past five years I welcome the cross-party consensus on the Bill. It seems to me, as a new intake Member of Parliament, that this is one of those rare moments when there is consensus in the House to produce a truly remarkable piece of legislation. I hope that the Government will listen carefully to the comments that have been made already I welcome the sentiments of the Bill, and I hope that passing it into law will be our first step in attempting to match Australia’s Foreign Investment Reform (Protecting Australia’s National Security) Bill and America’s Foreign Investment Risk Review Modernisation Act of 2018. But—and there is a sizeable “but”—we have, as other Members have made clear, a long way to go before this legislation reflects the comprehensive laws that many of our Five Eyes nation colleagues have in place The UK seeks to be a competitive, free and fair economy. I believe that that is sacrosanct and that we must do everything we can to ensure that businesses and people around the world look at our country as an attractive destination for investment. A stable democracy, a highly skilled workforce, league table topping universities, the rule of law and world-class industries such as photonics and FinTech all make the UK an attractive place to invest that benefits investors and British citizens alike Our laws are balanced as a result, encouraging foreign investment and adherence to UK laws and national interests. That balance has become all the more challenging with rapid technological change, internationalist agendas and our own failure, if I may say so, to hold a strategic dependency review. In short, the threats to our national security are numerous, real and present, and they come in a multitude of forms The narrow scope of the Bill limits its impact. It fails to address the threats that the UK is currently facing, and it holds the potential to see us become complicit with businesses and organisations that violate human rights. The national security that the Secretary of State spoke of remains ill-defined, to the detriment of the objectives of the Bill. Added to that, under the screening mechanism outlined in the Bill, a number of sectors are not addressed, such as education—a core part of the UK’s economy and an attraction to thousands of foreign students across the globe, with institutions that undertake research and development programmes in myriad areas, including defence, development and foreign affairs. A recent study found that 10 UK university laboratories are now dependent on significant investment from Chinese defence firms, yet our universities have not been specified in the scope of the Government’s consultation on sectors to which mandatory notification applies. How can that not be considered a national security risk The pharmaceutical sector is a global success story, with many companies basing their operations here in the UK, but there is nothing in the Bill that would have stopped or reviewed the Chinese takeover of Bio Products Laboratory. At a time when we face greater and graver challenges around the health of mankind, the Government must rethink what needs to be included in the scope of their consultation I have touched on two sectors but said nothing about the UK’s nuclear sector or water industry. Both need to be given the cover to protect our national security. Our core infrastructure, which is intimately connected to our national security, is routinely being placed in the hands of foreign owners. That should be a cause of great concern to the whole House. My hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) mentioned the 23 out of 117 Chinese acquisitions of UK firms—if less than 20% of Chinese acquisitions are being scrutinised under this legislation, we need to rethink parts of the Bill and strengthen it where possible.
I think it would be helpful for us to decide whether we are talking about foreign ownership of assets or Chinese ownership of assets. Obviously there is a gradation between them, but I am hearing from some of the contributions that we just do not like foreigner ownership of assets, which I am sure is not what my hon. Friend means at all.
It is important to recognise that China has a poor track record in this case, which has not been addressed, but of course we are not against foreign ownership. We want to ensure that the structure is in place to scrutinise these acquisitions in the correct way that protects opportunity in this country. I thank my hon. Friend for his intervention A few months ago, I broke cover early on to vote against the Government over the proposals to see our 5G network built by Huawei—and I have not lived it down yet! I did so because our core infrastructure should never be compromised by foreign investment, and that was a severe threat to our national security. I welcome the fact that the Government have moved so significantly and plan to phase out Huawei by 2027 I also did so because of the reports of human rights violations by Huawei. The success of my right hon. Friend the Member for Maidenhead (Mrs May) in passing the Modern Slavery Act 2015 is a proud moment for the UK, but it is worthless unless we use this Bill to stop dealing with companies that are reported to be using slave labour and looking to invest in the United Kingdom. Nothing in the Bill prevents companies that are complicit in gross human rights violations from investing in the United Kingdom, and that is a huge oversight. It would be an injustice and morally wrong for the UK ever to look the other way as money created from slave labour was invested in this country We have been told that this is not the right Bill for such provisions, but with all due respect, that is the same excuse used by the Whips on every single occasion that I have raised concerns about a piece of legislation. If we are going to bring forward the correct pieces of legislation, let us bring them forward. If not, the Government should not be surprised if we try to tack on amendments to address the issues that so many Members across the House feel strongly about.
My hon. Friend is making such a brilliant speech that I do not want to interrupt him, but I will do so briefly. Does he agree that all these concerns could be wrapped up in a public interest amendment—including, for example, a human rights element—which would give Ministers some leeway and scope to address them?
My hon. Friend is absolutely correct. I hope that the Minister is listening, that we might expect such an amendment to arrive before us in due course, and that, with the consent of the House, we might see it implemented As I was saying, the line between state and civil actor has been blurred. The civil/military fusion requires legislation, and the Bill is in need of development to counter it. I therefore ask the Government very quickly to consider the following few proposals First, I would suggest the introduction of a committee on foreign investment. Our colleagues in America have introduced such a system. That would alleviate the pressure for any decisions to be made from political expediency. I believe, as my hon. Friend the Member for East Worthing and Shoreham was saying, that that would promote parliamentary scrutiny and transparency and ensure that there was an understanding of the entire system Secondly, I would suggest that the definition of national security be expanded to include human rights. We do more often than not, in this country and in this place, develop policy around moral obligations. This should be one of those cases Thirdly, I suggest that we increase the Bill’s scope and use it to tackle organised crime. That has not been mentioned. The UK very successfully closed the domestic trade in ivory. There was a trade across the globe—a domestic trade in ivory that was linked to al-Shabab. There is a way to track organised crime down to terrorist organisations. There is scope within the Bill to do so Fourthly, a recent study found that at least 929 UK shell companies used in 89 corruption and money laundering cases accounted for £137 billion. Those companies are registered through Companies House. The Bill should be used to alleviate the burdens and ensure that there are fewer implications for the UK We can attract investment and tackle malign activities. I hope the Government will engage, in the same constructive manner in which they have introduced the Bill, and I will be supporting them tonight. I am sorry for going on for so long.
It is a pleasure to be called to follow my hon. Friend the Member for Totnes (Anthony Mangnall) and make a contribution reflecting my time as an adviser in the Ministry of Defence, as well as in the Cabinet Office, where I was involved in national security issues and the investment regime In three years advising the Defence Secretary, there were issues with an increasing number of transactions that, typically, related to small firms involved in sensitive parts of the defence supply chain or in emerging technologies. The regime at that time, because of the threshold limit, did not allow the Government to impose formal remedies, let alone block transactions. Instead, we had to rely on a quiet word with those seeking to sell firms, to discourage them from such action. In more than one case, a suspicion was that a hostile actor, a state actor, was seeking to use a transaction to acquire key intellectual property to support their offensive military capabilities Persuasion did ensure that none of those transactions came to fruition, but the risk was clearly there. It is not acceptable to leave that gap in our powers. In the Cabinet Office I worked on measures to improve the Government’s ability to take a more strategic view of risks, and to understand the cumulative impact that my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and others have talked about, as well as bringing in the regulations to lower the threshold for military dual-use goods and advanced technologies. That dealt with some of the problems, but the case for comprehensive reform to strengthen the current legal framework is compelling In legislating, our role here today is to judge how best to protect national security while encouraging investment and maintaining the UK’s hard-fought reputation as one of the best places to do business. In my view, that is best done by having a regime that is targeted, predictable, transparent and efficient, so I welcome the Bill, which improves on the proposals set out in the White Paper. It gives more clarity on the sectors where the greatest risks to national security exist, and for which a mandatory approach will therefore rightly apply, subject to consultation However, investors must be assured that the regime is about national security; it is not a power to block transactions that Ministers do not like, or a back door to protectionism. There also needs to be an efficient screening system. It is crucial that the structures and resources are put in place to ensure that the timetables for review and assessment in the Bill are actually met. I know that the proposed investment security unit will sit within BEIS. Others have mentioned that issue. I should be grateful if the Minister would explain how the unit will work—for example, with the National Security Secretariat within the Cabinet Office—and whether there will be joint staffing, given the need for people with sufficient experience and vetting to provide the advice, because the success of the regime depends on being able to deal with the number of notifications coming forward. Will there also be additional resourcing for the agencies and other parts of Government that will provide those assessments The Bill represents a proportionate approach to provide the powers to screen transactions on national security grounds and ensures that the UK remains open for business—but not at any cost.
First, I note that I am the only woman on the Government Benches speaking in the debate today. That is not because many of my colleagues do not wish to. For example, my hon. Friends the Members for South Ribble (Katherine Fletcher) and for Rutland and Melton (Alicia Kearns) cannot speak today because they are self-isolating or shielding and our virtual Parliament does not allow them to take part in these debates. The sooner we allow Members who are having to self-isolate and shield to take part in debates, the better I welcome the Bill and the work it will do not only to protect British business and our national security, but to provide more safety and comfort to companies and individuals from abroad investing in the United Kingdom. There is a clear need for the Bill to secure new investment as we transition into a genuinely independent trading nation for the simple reason that legislation in this area was last written at the beginning of this century, and it has not kept up with business and advances in technology since then I regularly speak to financial and professional services based in my constituency of the Cities of London and Westminster, and the legislation technology lag is often a key concern. I am glad that the Government are taking action to prevent the lag from growing any greater. As we recover from covid-19, it is essential, for the economy to recover, that we remain a vibrant and attractive destination for global investment. The actions taken under the Bill to make interactions with the Government simpler, more transparent and swifter than the current regime have to be welcomed for the benefits to both domestic business seeking international capital and those investing from abroad alike. The Bill, as I understand it, will also create an investment screening regime in line with those that already exist in other nations around the world—many have been mentioned today—meaning that investors will be familiar with the processes that they will likely have to undertake. I am pleased that my right hon. Friend the Secretary of State is keenly aware that we must strike a balance between preserving national security and enshrining the UK’s world-leading position as an investment location. Of course, we are aware that it is only a small minority of rogue players who might pose a risk to our national security, so we must welcome legitimate investment as openly as possible. I hope the Government will continue to work with businesses as the Bill progresses to ensure that that balance is maintained Having said that, I understand that the Government predict, in their impact assessments, that less than 1% of all mergers and acquisitions and asset transactions will result in voluntary notification to Government. Some of the magic circle law firms based in my constituency believe that the Government may have underestimated those figures and, indeed, even if they are correct, it will none the less result in a much greater number of transactions being reviewed than is currently the case. They are concerned that the increased administrative burden of more reviews might deter investors. I would welcome a response from the Minister on that point I am pleased that the Bill’s focus is on national security concerns and that it will not enable the Government to intervene for wider economic reasons. This appears to remove the potential for any political interference when reviewing mergers and acquisitions. I would welcome assurances from my hon. Friend the Minister that it is the Government’s intention to take the politics out of that as much as possible. Furthermore, I am reassured that the new investment security unit will be within the Department for Business, Energy and Industrial Strategy, rather than across Government—although I take the point made by my hon. Friend the Member for North West Norfolk (James Wild)—meaning greater consistency and potential speed in decision making. It is about that speed. As has been said already today, 30 days should really mean 30 days if we are to ensure that we do not block investment Finally, the Bill is to be welcomed in the broader context of other legislation before the House. I spoke last week in the Second Reading debate on the Financial Services Bill, brought forward by Her Majesty’s Treasury. Taken together, I believe the Bills represent a clear indicator that across Government, this Administration understand the priority and impact the financial and professional services, many based in the City of London, have on UK plc and the wider global economy. They will lead the recapitalisation of the economy post covid-19 and they will finance the Government’s levelling up agenda. It is right that we do what we can to ensure that they can operate safely and securely as technology advances in the financial marketplace I hope that my right hon. Friend the Secretary of State and ministerial colleagues will continue to consult business as the Bill progresses through the House. Should I be able to act as a conduit to the business community in my constituency, I would be delighted to help. I commend the Bill to the House.
It is a pleasure to follow my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who represents a constituency where many businesses will have to wrestle with some of the implications of the Bill as it passes through and becomes law. I congratulate my right hon. Friend the Secretary of State and the Minister on their preparation of this Bill. A lot of good time has been put in over the past couple of years and good evidence has been presented to prepare the Bill for debate today, and it will be my pleasure to support it It is both easier and right to look at this as a national security measure and not so much as an investment measure; we have to deal with the investment implications, but it is important that we get the national security measures right. There has been lots of conversation today about the requirements of the Bill, but I have to say that the evidence of historical examples has not been quite as strong as some of the measures in it. In many cases, this is a precautionary Bill, rather than one driven by the evidence historically. I do not think we want to be too critical of what we have been doing over the past 10 or 15 years. As many Members have said, this Bill is bringing something up to date so that we can deal with the things we think might be coming in the next 10 or 20 years I can now see why the Minister has had to thread a needle to try to land this precisely. Many voices, on all sides, have been asking him to extend the Bill. Indeed, the Bill has the potential to be an expansive octopus, given the pressures that might be put on the Government to extend it. I have heard about having a wider national interest test and including more sectors than the 17 we already have. We have talked about a definition of the national interest, which has been portrayed to the Minister as something that might restrict, but, as he well knows, the more precise a definition, the broader it can be in terms of how it is interpreted for others There have been many cautionary comments from others about the extension of the Bill into a national industry strategy for the country—that is not the purpose of the Bill. The right hon. Member for Doncaster North (Edward Miliband), the Opposition spokesman, who is no longer in his place, misjudged the Bill in saying that that is something we need to adorn it with. That would be completely inappropriate and it would take away from some of the scrutiny I hope Members will give the Bill as it goes through Committee I ask the Minister to be aware of and listen to people on the potential for unintended consequences. We have heard a lot about the decision in respect of Huawei, but he will be aware of the potential for retaliatory measures by us. Please look at the unintended consequences in respect of innovation in some of the sectors that may be affected. In that regard, I just point Members to my entry in the Register of Members’ Financial Interests as an adviser to a technology company May we also feed something in from the Government Benches about a pattern we are seeing? As we are bringing forward more regulatory measures and as we take back regulatory powers from the EU, parliamentarians are constantly raising the question of what parliamentary oversight of those regulatory powers there is. It would be useful if Ministers would look at that. I congratulate the Minister on presenting the Bill and I am grateful for the opportunity to make some comments today.
It is a pleasure to follow my hon. Friend the Member for North East Bedfordshire (Richard Fuller), who always brings a lot of expertise to debates about business matters in this House. I welcome the Bill, and I say that as a supporter of open trade and investment, not as a supporter of protectionism, not least because I want to see companies and products from the UK in every country in the world The Government’s No. 1 job is our national security, as is any Government’s. The regime for assessing that through an investment lens was designed in 2002. We can all pick something from 2002 that indicates just how long ago that was, but I have opted for the fact that it was in 2002 that President George W. Bush declared Iran, Iraq and North Korea as being the “axis of evil”. Whether or not we think he was right to do that and that those were the right countries, it illustrates just how much geopolitics has changed in that time and shows that we were not thinking about the threats we now face, at least in the same way, in 2002. It is therefore right that the Government now update the regime that we use to assess these matters. It is also right to have a system of mandatory notifications in the 17 areas that have been defined. In 2002, we did not even understand how artificial intelligence or advanced robotics might improve our lives, never mind the ways in which they might be used by hostile states to endanger our national security It is right that the Secretary of State will have a five-year period in which to call in trigger events after they have happened. That will enable him or her to perceive a threat that may not have been immediately obvious at the time of the trigger event. The Government rightly say that this Bill is not about one country or one threat—we should not be looking through the lens of 2002 for the current regime; we should make legislation now based on which countries we think are the threats in 2020. But I was one of the people concerned about the position we had got into with Huawei, which is, in many ways, a good example of why we need that retrospective power. Difficult though it may be to unwind some decisions, there are times when we have to do so. It is also right that there is no turnover threshold. If it relates to national security, it relates to national security. Turnover simply should not be a factor Unusually, I found that a lot of criticisms of the Bill that I looked at before this debate were actually in its favour, although a number of Members have actually made great contributions today about the ways in which we might further strengthen the legislation. The fact that we might, by the Government’s estimate, see between 1,000 and 1,830 notifications made says to me not that the new regime is too strong, but that our old regime has not been strong enough. Maybe it will end up at that number and maybe it will not, but having only had 12 assessments done in the period since 2002 suggests to me that we are not dealing with a strong enough set of tools to assess these situations. The fact that 100 instances might have to go through a full national security assessment and that we might seek to impose remedies on 50—again, by the Government’s assessment—just underlines why this legislation is important and why we need a much stronger regime. It is right that national security is not defined in this legislation, as that will enable the Government—and, importantly, our security services—to interpret it as broadly as they can, and to perceive threats that they may not have perceived before. It is also right that the Secretary of State makes the decisions. I have seen some pooh-poohing of the role of politicians in this process, with the idea that they might use it for political gain or domestic considerations that are not really about national security, but we elect politicians to make judgments about national security. They are the ones who are truly accountable, rather than officials. It is right that that role should sit with the Secretary of State I welcome the way in which we have borrowed from international examples: mandatory notifications such as those in the US and Japan, and a retrospective period such as that in France and Germany. This suggests that we have looked at examples around the world, and borrowed from them all to try to get the best system for us. Of course, it also underlines the fact that we are behind a number of our partners—both the Five Eyes and our western European partners—and therefore the importance of passing this legislation quickly I will continue to welcome foreign investment and foreign trade, but I will never do so with any risk to national security. Given the actions that we see from hostile states through their investment decisions on a weekly basis, the passage of this Bill cannot come quickly enough.
It is a pleasure to follow my hon. Friend the Member for Wantage (David Johnston) and also to recall the axis of evil. He mentions that things have moved on, but I challenge that and say that those countries that were part of that axis of evil are still threats today. Some of us were warning about the likes of China and Russia back in 2000, so I believe that the world is becoming a far more dangerous place. We have an increased number of threats rather than fewer, which is why this Bill is so fundamentally important. We need to have national security as our watchword. I know that this Government understand that perfectly well, so, as well as encouraging new investment into Britain, we need to increase the security and safety of British interests from hostile actors The Bill will give the Government new powers to block mergers and acquisitions when they are national security risks. It will also introduce an extension of screening powers to include assets and intellectual property as well as companies Why is this Bill so necessary? There is no doubt that foreign direct investment is vital to the UK economy. In the past 10 years, over 600,000 new jobs have been created from more than 16,000 FDI projects and $750 billion have flowed into the UK as a result of FDI. Foreign direct investment is overwhelmingly a good thing. As a Conservative, I am greatly anticipating throwing open our doors to global inward investment as we exit the Brexit transition period. I support unrestricted international trade and, for me, attracting investment into Britain is one of the most exciting things about leaving the European Union. Let me make this clear: leaving the European Union allows us to increase investment in this country, and it will be better economically for all of us. However, we cannot be naive about the threat that certain regimes pose for the United Kingdom. They exert their influence by taking over companies in strategic areas and increasing our dependency on their products and services, limiting our independence and stifling our dissent in the process. We cannot overthrow the shackles of the European Union only for hostile powers to come over and take over the jewels in the British crown. That is not acceptable Members will know well that one of my political interests is the combating of the malign influence of the People’s Republic of China. The Government demonstrated strong leadership earlier this year by banning Huawei from Britain’s 5G infrastructure. I pay tribute to my hon. Friend the Member for Totnes (Anthony Mangnall), who is no longer in his place, who helped the Government to come to the realisation of these malign influences. However, despite Huawei’s weak protestations of independence from the Chinese Communist party, western politicians and companies know the price of conducting business in the PRC. A mainland Chinese telecom company, founded by a former People’s Liberation Army officer, has no chance of avoiding Beijing’s meddling, especially when the company in question is playing a central role in critical western infrastructure The same can be said of TikTok, a Chinese-owed app, which has enjoyed explosive growth in the west among teenagers. It is not all fun and games though, with the company being accused of having close links with the Chinese regime and of gathering data on our young people. Indeed, we heard from representatives of TikTok on the Business, Energy and Industrial Strategy Committee a couple of weeks ago, and we heard their protestations saying that they had no connection almost and that they were not passing over data. However, how can that be true when TikTok is owned by China—a state that is naturally hostile to human rights and many other aspects There are very real fears that the Chinese state is using its economic influence to weaken our Government, sow discord in our societies and extend its surveillance network in our lives. Let us be honest, it is not just in Britain that we see China act in such a way. We have seen it act across the middle east and into Africa as well. We are not the only country over which China is trying to extend its influence and it is great that this Bill will go some way to stop that influence and protect our national infrastructure. I am pleased that the Bill takes such a strong stance Huawei and TikTok should act as a cautionary tale to us for the future. The PRC’s unforgivable actions in Hong Kong, an autonomous territory, against the Uyghurs, a distinct and proud people, and against the Christians in China show us that Beijing cannot play by the rules and we cannot rely on them to look after our best interests However, the PRC is not the only regime about which we must worry. I do not need to remind Members of the threat posed by Russia and Iran and other despotic dictatorships. My priority is the protection of the British national interest and the safety of UK citizens. As the UK’s current powers to oversee foreign investment date from legislation in 2002, new primary legislation is needed to bring the UK Government’s powers up to date. As my hon. Friend the Member for Wantage said, much has changed over the past 20 years and therefore these new powers must take into account new threats and technological, economic and geopolitical changes. The Government must have powers to intervene effectively and efficiently to protect the UK. Furthermore, to be an effective and trustworthy ally to our friends and partners around the world, we must bring our powers into line with theirs. Australia, Japan and the United States have already taken action in this area, and we must not be left behind, because if we are, our businesses and our infrastructure will be ripe for the picking for these malign regimes This Bill means that we can continue to work on bringing investment to our shores, boosting GDP and creating jobs as we recover from the coronavirus while defending ourselves against those who threaten the safety of the British people and the UK’s sensitive assets. I expect Members in all parts of the House to support this crucial piece of legislation, which will ensure that we are prepared for the challenges and the threats of the future, because the world is not a safe place and there are many countries and regimes that want to do us down. We will always stand with the British people and with British business to protect our interests.
It is a pleasure to follow my hon. Friend the Member for Rother Valley (Alexander Stafford), and indeed colleagues around the House, as the last Back-Bench speaker in this debate This has been a very thoughtful debate with lots of interesting suggestions for the Minister from all sides. I thank the Secretary of State for his opening remarks and the Minister for his engagement with these issues. He met the Science and Technology Committee last week to talk through the Bill. It was obviously time well spent, because three of my colleagues from the Committee have already spoken, and now he has me as well—so well done to the Minister It is tempting, from a science and technology perspective, to seek to widen the scope of the Bill to attempt, for example, to protect start-ups in these fields, which are very innovative. Ultimately, however, I come down in the same place as the Chairman of the Committee, my right hon. Friend the Member for Tunbridge Wells (Greg Clark). Countries that try to legislate themselves into self-sufficiency instead end up self-satisfied, and that would then strangle the very innovation that we all seek and want to see in our businesses in the spheres of science and technology. I am therefore pleased that the Bill is drawn narrowly The Bill sits at the nexus of our domestic economy and our international relations. If we were to widen its scope beyond the fairly narrow way it has been drawn, that could have unintended consequences for both those things. We heard the excellent and witty speech from the former Leader of the Opposition, the right hon. Member for Doncaster North (Edward Miliband), who clearly has lots of ambitions in the area of industrial strategy. I look forward to him putting that into the next Labour manifesto, perhaps, and that is where we can discuss these things, but this Bill is not the place to try to detail all the elements, whether it is about confectionery companies, union control or any of those sorts of things. This needs to be a narrow Bill so that we do not move into too many unintended consequences. On international relations, as my hon. Friend the Member for Wantage (David Johnston) said, we need to move with the times and in response to events. The exact nature of the threats we face evolves and changes over time. I trust my right hon. Friends the Foreign Secretary and the Prime Minister, and we need to give them the leeway to make judgments about national security in the face of what the international situation is at the time. This Bill is not just for the next five years. It is not just for the threat that we clearly face from the expansionist tendencies of Russia and China. It needs to stand the test of time, and by drawing it narrowly, we give it a better chance of doing that I support the Bill as it is, although many colleagues around the Chamber have made thoughtful suggestions for amendments, and I know the Minister will speak to those when he winds up. First, it gives us more security. Others in this place are far more expert on national security than I am, but it is clear that the developments we have seen over the past decade have meant that we have had to re-evaluate our relations with potentially hostile actors, such as China. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) spoke very firmly about that. This Bill gives us a proportionate defence against hostile actors who are targeting sensitive UK assets, and in ever more novel and complex ways that we could not have imagined in 2002 when the Enterprise Act on which our current defences rest was passed. It is time to update those powers, and I hope we can do so in a way that will stand the test of time. It is also right that we update those powers with a turnover requirement, because, again to echo my hon. Friend the Member for Wantage, national security is no respecter of the size of a company or where it is in terms of growth. Sometimes very nascent companies could have a significant impact on our national security in future The Bill provides more certainty for businesses and a regime that prioritises swift resolution of referrals and call-ins. That is absolutely, fundamentally important. My hon. Friend the Member for Arundel and South Downs (Andrew Griffith) was very much to the point on this. Businesses deserve certainty. If the answer is no on national security grounds, that is fair enough, but we cannot leave things in limbo. One might think that the five-year period does leave businesses in limbo to some extent. I acknowledge my hon. Friend’s point that most lawyers will probably suggest that they notify the Minister, and so, as he said, publishing statistics on notifications would be welcome. We need to maintain the UK as a premier foreign direct investment destination, because it is so important to our future, to our recovery from covid, to meeting our net zero targets—I congratulate my hon. Friend the Member for Arundel and South Downs on his appointment on that—and to levelling up. It is particularly relevant to me, in Newcastle-under-Lyme in north Staffordshire, that we continue to attract foreign direct investment so that we can continue to regrow our national economy and our local economies in areas that have not had much investment in the past couple of decades To sum up, this Bill will give us a regime in line with some of our strongest allies in the world. It will protect our national security and ensure that Britain remains fully open for business, and for all those reasons, I will be supporting it on Second Reading.
As my right hon. Friend the Member for Doncaster North (Edward Miliband) set out very well in opening the debate, we support the Bill. Inward investment is crucial for businesses across the UK and our economy, but it is also crucial that the UK has the powers in place to scrutinise and intervene in business transactions that could have implications for our national security In fact, we would have welcomed this Bill a long time ago. It is clear that the Government have failed to keep pace with other countries, including the United States, France and Germany, that have already taken steps to update the legislation in line with evolving security threats. From serious questions about Huawei’s dominant role in the UK’s 5G network, as raised many times by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), to the takeover of Imagination Technologies by Canyon Bridge, it is inarguable that the Government have been slow off the mark on foreign acquisitions and the possible implications for national security Right hon. and hon. Members from all sides agreed on that, including, I think, the Chairs of the Business, Energy and Industrial Strategy Committee, the Science and Technology Committee and the Foreign Affairs Committee, and all five—I think it was five—members of the Intelligence and Security Committee who spoke. I thank colleagues from across the House for their contributions and apologise in advance if I cannot do justice to all of them This has been an excellent debate, one that I think showed the House at its best; we heard informed and considered speeches and, where there was disagreement, it was reasoned and open. There is strong agreement across the House that new legislation is necessary to combat changing security threats and to balance those considerations against the ambition to ensure that the UK remains an attractive country in which to invest Companies in fast-developing fields, from quantum computing to telecommunications to artificial intelligence to cryptography, are no longer just companies; they are strategic assets that are fundamental to our nation’s security. Until now, Ministers have failed to modernise the takeover regime to keep up with this changing landscape, the pace of technological development and what that means for security. Instead, they have continued to operate within a legal framework that, as we have heard, was created almost two decades ago, before Facebook or Twitter were even invented. My hon. Friend the Member for Warrington North (Charlotte Nichols) explained the impact of that uncertainty on the nuclear industry and investment in her constituency That is why we strongly welcome the Bill now and agree that it is necessary. It is essential that we get the specific provisions of the Bill right, in order not to deter foreign direct investment while also balancing the need to protect our national security. First, there is the definition of national security, which was raised by many, particularly the hon. Member for Isle of Wight (Bob Seely). The right hon. Member for South Holland and The Depths (Sir John Hayes)—[Interruption.] The Deepings, sorry.
As deep as you want!
The right hon. Gentleman is always very deep in his responses. He suggested it was deliberately left undefined in the Bill. The sectors that will be subject to mandatory notification are also not defined in the Bill and, we are told, will be set out in secondary legislation. I thank the hon. Member for Bolton North East (Mark Logan) for his provisional mnemonic and wish him well in updating it Definitions, and the lack of them, are important because the proposed powers are not limited by size of turnover or share of supply threshold. They could apply to almost every business transaction within the sectors, and the definition of national security therefore must be set out to help provide clarity for businesses and investors, but it is unclear—perhaps the Minister could provide some of that clarity—whether the takeover of the UK artificial intelligence company DeepMind by Google would have been called in on national security grounds under the scope of this Bill In Committee, Labour will seek further details on how the retrospective powers to render acquisitions void would be applied and whether an assessment has been made of the economic and legal consequences for businesses and their employees of acquisitions being rendered void after the fact. The hon. Member for Dundee East (Stewart Hosie) highlighted the Government’s capacity, or lack of it, to process the sheer volume of estimated notifications that the Bill will provoke. We need also to look at how businesses, small businesses in particular, will be supported to cope with the new regulations, which may prove difficult to navigate. We will ask also whether an assessment has been made by Government of the impact the changes could have on investment in small businesses—a chilling effect—including university start-ups, particularly those in the 17 key sectors, which was a point made by the hon. Member for The Wrekin (Mark Pritchard) Labour will also seek assurances about transparency and oversight and how the powers are applied—a worry of the hon. Member for Beckenham (Bob Stewart)—including calling on the Government to explore giving the Intelligence and Security Committee a role in scrutinising the use of powers under this legislation. My right hon. Friend the Member for North Durham (Mr Jones) was right to emphasise the importance of the involvement of and access for the intelligence services We hope to work with the Government to ensure that we establish a robust, transparent and fair regime that protects national security, while allowing the UK to continue to enjoy the opportunities that overseas investment affords businesses across our country and economy, but the Bill is also a missed opportunity. It is a missed opportunity to demonstrate what the Government mean by “industrial strategy” and to show that it is more than a slogan. It is a missed opportunity to help UK businesses in key sectors to flourish and grow here in the UK, sustaining and creating jobs—a point on which my hon. Friend the Member for Aberavon (Stephen Kinnock) was particularly eloquent Time and again, we see vibrant, growing UK companies sadly lost overseas. While we recognise that foreign acquisition can breathe new life into a company, supporting jobs and growth in the UK, far too often we see UK companies pawned off or stripped for parts. Far too often we see UK companies bought out and wound down to eliminate the competition, with the consequent loss of high-skilled jobs. Nowhere is that more evident than in the technology sector, which must be a key part of any 21st century industrial strategy We have lost far too many businesses to Silicon Valley, weakening our technological sovereignty. The takeover of leading UK technological company Arm by the US company Nvidia was announced recently, and while Ministers claim to have scrutinised the deal, they have not been forthcoming with the details. When Arm was previously taken over by SoftBank, legal assurances were extracted about the future of the company’s Cambridge headquarters and the UK workforce. Have Ministers extracted the same legal assurances at this time? Will the Minister come clean today The Business Secretary said himself that the UK should be open for business but not for exploitation. However, key companies have been cherry picked by companies in San Jose, with the UK consequently losing out. It is therefore not clear that the current takeover regime is fit for purpose The weaknesses in the current regime are about not just national security but industrial strategy. Under the current regime, the Secretary of State has the power to intervene in qualifying businesses on four public interest grounds: media plurality, national security, stability of the UK finance system, and the capability to combat and mitigate the effect on public health emergencies.
The coincidence, as I described it, between national interests and national security is profound and is proven. When a company is taken over and technology transfer takes place, it is possible for a nation that is hostile to our interests to gain a sufficient understanding to develop systems that endanger this country, including, in some cases, weapons systems.
The right hon. Member is talking to a chartered engineer who strongly believes that our capability in engineering and the kind of key technologies of which he talks is a basis for our national security, and that national security, without some degree of important technological sovereignty, is difficult to wholly achieve. I look forward to debating that in Committee It is worth pointing out that the Government’s powers have been used only sporadically in previous interventions, and they are seemingly not underpinned by any real strategy. The hon. Member for East Worthing and Shoreham (Tim Loughton) made a similar point Many Conservative Members are vehemently opposed to extending the remit of the Bill to cover industrial strategy, including, but not limited to, the hon. Members for Totnes (Anthony Mangnall), for North West Norfolk (James Wild), for Cities of London and Westminster (Nickie Aiken), for North East Bedfordshire (Richard Fuller), for Wantage (David Johnston), for Rother Valley (Alexander Stafford), for Newcastle-under-Lyme (Aaron Bell) and for South Dorset (Richard Drax). Labour believes, however, that the Government should be able to intervene in the takeover of a critical business on industrial strategy grounds. That power should be paired with defined criteria and transaction thresholds to give businesses and foreign investors clarity and confidence, and to truly make it clear that we are open for business and not exploitation—to coin a phrase. Why did the Government not bring forward legislation to ensure that technology firms remain in the UK and to end the current ad hoc approach to industrial strategy being pursued by Ministers? That has seen binding commitments often negotiated at the last minute, companies lost, and no clarity as to the rhyme or reason why the Government choose to intervene or not. I urge the Secretary of State and the Minister to continue to approach the Bill in the spirit of collaboration, to address the undefined areas and issues that we have raised, and to shed some light on their long-term industrial strategy, including their plans to keep high-growth technological companies flourishing in the UK.
It is a pleasure, as ever, to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). I thank all hon. Members who have spoken in this important debate. We have had upwards of 25 speeches, all of which were thoughtfully delivered. I also thank the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), for his constructive approach to this important piece of legislation. I will aim to respond to as many points made by hon. Members as possible, but I will, of course, write in response to individual questions as well I begin by responding to the points of the right hon. Member for Doncaster North and the hon. Member for Newcastle upon Tyne Central, who both raised the grounds for intervention when it comes to the legislation. The legal texts in the Bill are explicit in their reference to national security rather than public interest or wider economic considerations. The hon. Member for Newcastle upon Tyne Central mentioned the particular deal with DeepMind and Google. If it is deemed that the asset is so important to national security—it does not matter who the acquirer is—the Bill would allow us to intervene and block that acquisition I have to be clear to the House today that any action the Secretary of State takes under the proposed regime would be to protect national security and not for wider economic or industrial reasons. I am sure that the right hon. Member for Doncaster North will look forward to the industrial strategy refresh that the Secretary of State is committed to publishing in the first quarter of 2021 To address the point made by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), we already have a proportionate public interest power on the statute book, and most recently we have legislated to allow intervention for mitigating the effects of public health emergencies. The right hon. Member for Doncaster North and the hon. Member for Newcastle upon Tyne Central also asked about the engagement with Government. The investment security unit will ensure that clear guidance is available to support all businesses engaging with investment screening from the outset. We have made it clear to the investment community that we are committed to effective engagement with businesses on the regime itself, and to ensuring that they are able to access a dedicated, simple online portal to notify us of any potential transaction. Of course, we note the importance of a full Government approach to investment screening. While the unit will be based in BEIS—this point was made by the right hon. Member for North Durham (Mr Jones) when he talked about the ISC—it will work closely with the security agencies and other Departments with real sector expertise. The chief executive of Make UK, Stephen Phipson has recognised this point, saying: “Technology development moves at fast pace and this Bill will modernise the UK’s approach in a proportionate way, given the Government’s commitment to a quick and streamlined process of evaluation.” More widely, I am happy to meet any hon. and right hon. Member who has today expressed an interest in the workings of the investment security unit. The right hon. Member for Doncaster North also raised the role of the Intelligence and Security Committee, as many other colleagues have done today, and we will of course work constructively with its members and, indeed, with other Committees across the House. I wish the Chair of the Committee, the right hon. Member for New Forest East (Dr Lewis), well, and I would like to thank the other members of the Committee who spoke today. The contributions from the hon. Member for Dundee East (Stewart Hosie), the right hon. Member for North Durham, my hon. Friend the Member for The Wrekin (Mark Pritchard), my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and my hon. Friend the Member for Beckenham (Bob Stewart) were typically excellent and well-informed The right hon. Member for Doncaster, North, along with the hon. Member for Bristol North West (Darren Jones), also raised the issue of the five-year period for retrospection. We have come to that view because six months would simply be too short, and we have looked at what other countries have done. It would be relatively easy for hostile parties to keep a trigger event quiet for six months and time us out, but that will be substantially more difficult in a five-year period.
I am extremely are grateful to the Minister for his comments about the members of the ISC who have contributed to the debate. Given the range of questions posed to him by ISC members, will he commit to write to the Committee formally to pick up those points, so that the Committee has a clear set of answers to the series of questions posed? It would not be fair to expect him to deal with all of them now.
I can certainly give my right hon. Friend that commitment; I will do that My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), my hon. Friend the Member for Isle of Wight (Bob Seely) and the hon. Member for Oxford West and Abingdon (Layla Moran), who is not in her place, probed on the definition of national security. A number of hon. Members have argued that the definition of national security is too narrow. I would gently point out that the Bill does not seek to define it at all, as some other Members have quite rightly argued, including, very wisely, my hon. Friend the Member for Beckenham. I think that is a real strength of the Bill, not a weakness. It means that the Government have the flexibility to act as risks change over time. The statement of policy that was published last week refers to espionage, disruption and destruction and inappropriate leverage. Those are examples of national security, not the exhaustive content of it. We need to maintain a degree of flexibility in our approach, as my hon. Friends the Members for Wantage (David Johnston) and for Beckenham recognised. I appreciate that these are quite important powers, and of course they are fully justiciable under the Bill. Hon. Members can feel secure knowing that their use, including the application of national security, can be fully tested in closed courts if necessary The Chair of the Science and Technology Committee, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), and my hon. Friend the Member for The Wrekin expressed concerns that these reforms will somehow threaten investment in small tech firms. I again remind the House that we estimate that the vast majority of transactions across the economy will not be affected by this legislation, and we do not expect to take action in relation to most of the small number that are notifiable. We will make any interactions with the Government simpler, quicker and slicker by providing clearance to most transactions within 30 days, and often quicker. Notifiable investments will be submitted through a new digital portal. At the spring Budget, the Government committed to increase public spending on R&D to £22 billion, which I think is music to the ears of many innovators in our country My right hon. Friend the Member for Tunbridge Wells and my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) made the important point that the Bill does not set out a minimum size of business affected by the regime. As the Secretary of State set out, the threats we face today do not correlate to the size of the parties concerned, as they perhaps once did. This is unfortunately the world we live in. I am glad that we live in a country in which small and medium-sized businesses thrive so mightily and are often at the vanguard of cutting-edge technologies, but it is only right that the Government have flexible powers to intervene when the acquisition of such businesses may pose a risk to our national security My hon. Friend the Member for Isle of Wight, the hon. Member for Bristol North West (Darren Jones) and the right hon. Member for North Durham (Mr Jones) raised the issue of supply chains. The covid pandemic has demonstrated the importance of resilience in supply chains to ensure the continued flow of essential items to keep global trade moving. We have focused on ensuring supply chains for goods such as PPE. When we entered the pandemic, only 1% was manufactured in the UK; it is now about 70%. That is why we are looking at what other steps we can take to ensure that we have diverse supply chains in place. We will consider all our global supply chains to avoid shortages in the event of future crises My hon. Friend the Member for Tonbridge and Malling, my right hon. Friend the Member for South Holland and The Deepings and the hon. Member for Dundee East also probed the assessment process. We will make any interaction with the Government much simpler, quicker and slicker, and I am very happy to share how we are doing that The Chair of the BEIS Committee, the hon. Member for Bristol North West, probed our approach to sectors. It is important for the regime to reflect technological change and keep up with the investment landscape. We welcome views from across the business community on our sector consultation, and officials from across Government are already engaging with the sectors’ experts to ensure that those definitions are tight. In the time that I have left, I want to tackle the issue of human rights. My hon. Friends the Members for Isle of Wight and for Totnes (Anthony Mangnall), and the hon. Member for Oxford West and Abingdon raised the issue of human rights, particularly in relation to Xinjiang and the Uyghur people. We take our responsibility incredibly seriously and are concerned about gross violations of human rights being perpetrated against the Uyghur Muslims and other minorities in Xinjiang. We have played a leading international role in holding China to account on these abuses and we will continue to do so through the UN and other opportunities that we have. In respect of the risk of UK business complicity in human rights violations, including forced labour, we have urged all UK businesses to conduct due diligence on their supply chains and are taking steps to strengthen supply chain transparency In conclusion, we have had an excellent debate today and I again thank right hon. and hon. Members for their contributions. I look forward to further probing the Bill and getting it right together in Committee Question put and agreed to. Bill accordingly read a Second time. National Security and Investment Bill (Programme) Motion made, and Question put forthwith (Standing Order No. 83A(7)), That the following provisions shall apply to the National Security and Investment Bill: Committal (1) The Bill shall be committed to a Public Bill Committee Proceedings in Public Bill Committee (2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 15 December 2020 (3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets Proceedings on Consideration and up to and including Third Reading (4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced (5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day (6) Standing Order No.83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading Other proceedings (7) Any other proceedings on the Bill may be programmed.—(David Duguid.) Question agreed to. National Security and Investment Bill (Money) Queen’s recommendation signified. Motion made, and Question put forthwith (Standing Order No. 52(1)(a)), That, for the purposes of any Act arising from the National Security and Investment Bill, it is expedient to authorise: (1) the payment of sums out of money provided by Parliament of any expenditure incurred under or by virtue of the Act by the Secretary of State, and (2) the payment of sums into the Consolidated Fund.—(David Duguid.) Question agreed to.
I rise to present a petition on behalf of my constituents in Linlithgow and East Falkirk relating to the retirement age of prison officers, an issue I have raised on their behalf on a number of occasions before. I would like to place on the record my gratitude to the hon. Members from both sides of the House who signed my early-day motion 654 earlier in the year The petition, which I fully agree with, states: The petition of residents of Linlithgow and East Falkirk, Declares that prison officers carry out some of the hardest public service work in dangerous and often violent conditions and yet they are expected to continue to carry out this work until they are 68 years old; further that police officers can retire at 60 years old even though they do not experience the same unrelenting threatening conditions; further that people living longer does not mean their physical and mental abilities can withstand the daily demands placed on prison officers; and further that the retirement age of prison officers should be aligned with that of police officers The petitioners therefore request that the House of Commons urges the Government to bring down the retirement age of prison officers to 60 as 68 years of age is too old to cope with the physical and mental challenges of being a prison officer on a daily basis; and to afford prison officers more generally the same consideration as police officers, who have periodic contact with the same type of offenders And the petitioners remain, etc [P002625]
I rise to present a petition calling for the Government to rally international condemnation of police brutality in Nigeria. The petition was instigated by the Nigerian Association, Tyne and Wear The petition states: The petition of residents of the constituency of Newcastle Upon Tyne Central, Declares that the British Government and wider international community should condemn in the strongest possible terms the Nigerian military opening fire on protesters at Lagos Lekki Toll Gate on 20 October 2020 in which there are reports that 69 people were killed, of whom 51 are believed to be civilians, 11 police officers and seven were soldiers; further declares that these people were peacefully protesting against police brutality committed by, but not limited to, the Special Anti-Robbery Squad (SARS) The petitioners therefore request that the House of Commons urge the Government to take action to rally the international community and ensure the Nigerian Government investigates this brutal violation of human rights in full, to encourage the relevant authorities to charge officers and soldiers guilty of killing unarmed protestors, to explore sanctions on the Nigerian Government if guilty of corruption, and to provide a strong voice against corruption and violence in Nigeria And the petitioners remain, etc [P002628]
Good evening, Madam Deputy Speaker. I am very grateful to have been granted this debate on the future of Cleveland bridge, which is of high importance for my constituents in Bath. I look forward to the Minister’s full response Cleveland bridge is a grade II* listed structure. It forms part of the character of Bath’s UNESCO world heritage status. It is worth reminding fellow hon. and right hon. Members that Bath shares its unique status only with Venice. Not just parts of our city but the whole city and its setting are a world heritage site. The protection of the city as a whole is of national importance, and it should not just be the citizens of Bath and the council that are called on to safeguard this treasure for future generations There is another aspect to this debate. Bath is a city identified as suffering from illegally high levels of air pollution, and it has been ordered by the Government to bring pollution levels down to the required legal minimum. The council has worked hard to develop a strategy in response. The route with one of the highest levels of air pollution is London Road leading towards Cleveland bridge Cleveland bridge links the north and the south of the city over the River Avon just a short walk from the city centre and is surrounded in all directions by listed architecture. Unfortunately, it is part of the primary road network and therefore has to be open to all traffic. The bridge consists of 19th-century ironwork with a 1920s concrete deck, but the weight of modern heavy goods vehicles is shaking the bridge to bits. Heavy traffic on the A36 and the alternative A350 has been an ongoing source of tension for many residents for many years. Not only are there issues at Cleveland bridge, but just a few miles away at the village of Limpley Stoke, the A36 suffers from regular landslips. It is also true that the A350 has issues and needs better infrastructure In 2009, Wiltshire Council attempted to put in the Westbury bypass to improve the A350 corridor. That was supported by Bath and North East Somerset Council, but the implementation of the plan was stopped by a public inquiry in 2009. In 2012, Bath and North East Somerset Council attempted to put a weight limit on Cleveland bridge. Objections were received from Wiltshire and Highways England, leading to a judicial review. Bath and North East Somerset Council was told it could not impose a reduced weight limit of 18 tonnes It is of note that the 2012 ruling states that “we are conscious of Bath and North East Somerset’s important concerns about local air quality. The Department is not, in line with PRN guidance, commenting on the air quality aims of the proposed scheme.” Eight years on, and especially since the challenge to Government by ClientEarth, the goalposts on air quality have completely changed. It is time that the Department for Transport commented on air quality in Bath when it comes to the A4/A36 route over Cleveland bridge It is clear that from the south coast to the M4, there is a shortage of suitable routes to take north-south traffic. For example, routes travelling east to west move at approximately 60 mph, but north-south routes travel at 30 mph. The impact is not just about lorries going through villages, but the loss of economic activity and efficiency Over the past few years, Wiltshire Council, Dorset Council and Bath and North East Somerset Council have formed an alliance. They recognised that, however much investment they made as local authorities, it would not be enough to fund the improvement of any one route. Additionally, if any authority favoured a particular route, it would become politically very challenging. I thank all colleagues across those three local authorities for the work they have put in so far, working together on a complex set of circumstances The alliance threw the question back to the Government and asked for an economic study to take place, and the relatively simple question was: which is the best route, and how do we improve it? This is now called the strategic study and is being undertaken by Highways England as part of its road improvement strategy. Highways England and the Government now have ownership of the issue. The A350 has been selected to be looked at in-depth I am grateful to the Minister, Baroness Vere from the other place, for responding to me in her letter on 22 October. She wrote that the improvement strategy will review the case for adopting the A350 corridor as the main strategic route in place of the A36/A46 and will consider the case for trunking or detrunking these key roads. The study alone will take until approximately 2023 to complete and then, if adopted, the third phase of the road improvement strategy will provide the framework to implement and pay for the necessary upgrades. In the meantime, Cleveland bridge will be closed for much of next year as urgent repairs to the structure are carried out. I am grateful to the Department for Transport for making funds available As I said before, Cleveland bridge is a grade II* listed structure. In their 1992 report, the engineers who carried out the last set of repairs stated that they did so on the understanding that the then local authority would exclude the heaviest vehicles. That never happened. In fact, it got worse The challenge of a listed heritage asset is that you have to work with the structure as it is listed. You cannot replace the Victorian ironwork—because it is listed. You cannot replace the 1920s concrete deck—because it is listed. You can only repair and strengthen them, but they will never be stronger than when they were new, and when they were new, they were never expected to carry the very heavy vehicles that are being used today. The innovation of the bridge’s design, in both the early 19th and 20th centuries, is recognised in its listing, but those designs never envisaged that the bridge would be on a modern primary road network, with all that that entails.
Next year will see the very latest technology deployed to save the 1920s concrete structure. The danger is that bringing back the heaviest lorries will hasten the collapse of the deck, destroying the listed asset forever. With continuing heavy lorries, it is estimated that the current repairs may last for only 15 years. Therefore, without a permanent weight restriction, my concern is that while progress will be slow on an upgrade to the A350, Cleveland bridge will again be in need of urgent, serious repairs very soon. We cannot let that happen. It is absolutely essential that we set a weight limit that the bridge can sustain for the long term The Department for Transport has expressed its view that the A350, as the major north-south link, is a viable option, and in Bath neither I nor the council would disagree. However, the Department for Transport has not done enough so far to create a consensus among councils and MPs in the Wiltshire constituencies to take this option forward to its final completion. It would be interesting to hear from the Minister whether the Government are actually looking into any other viable options In the meantime, people in Bath have waited for years for a solution. So, while we are waiting, the first thing that I would like to happen is for the Department for Transport to allow Bath and North East Somerset Council to have the power of decision making over its own infrastructure and keep the current 18-tonne limit. The council does not have that power on its own We are looking for the Government to consent to a permanent 18-tonne weight limit on Cleveland bridge. That is my ask to the Minister. The co-operation of the Government would benefit not only the people of Bath but the whole nation, and safeguard our heritage for future generations. The impact of a weight restriction would help to reduce air pollution across the city, in line with the Government’s important aim to improve people’s health. Last but not least, it would work in tandem with the Government’s ambition to improve their strategic A350 network and the overall economic benefits to the region. I look forward to the Minister’s response.
I congratulate the hon. Member for Bath (Wera Hobhouse) on securing the debate. I know that Cleveland bridge, that iconic grade II* listed structure, which she has described in great detail and very eloquently, built in 1826, is of great significance to her constituents, and indeed the nation. As she highlighted, it is a UNESCO world heritage status site I know that many of the hon. Lady’s constituents have contacted her about this important local issue, and she has been extremely assiduous in discussing their thoughts and concerns in more detail. I of course agree with her that the protection of Bath is of national importance, and that is why it is good to have this debate tonight I want to put on the record a note of thanks to the hon, Lady’s local colleagues in Bath. She references the work on the clean air zones and the strategy. My Department has very close working with Bath, and we very much appreciate and thank those people for their work taking forward that important policy As I am sure the hon. Lady is aware, the Government are taking action to invest to improve England’s local highway infrastructure—the dense network of local roads of which Cleveland bridge is part. We know that, without that investment in local roads, delays and disruption occur for the travelling public and businesses. I am really glad that the hon. Lady referred to that. She noted and appreciated the funding that Bath and North East Somerset Council has received from the Department for repairs to that iconic great bridge. The Department’s grant for the project is £3.56 million of a total cost of £3.92 million, and the council is providing the remaining £360,000 The highways maintenance challenge fund enables local highway authorities to undertake major maintenance projects that are otherwise difficult to fund from the regular highways maintenance block funding allocations. Improving and maintaining our local transport infrastructure is essential for economic growth and connectivity, and Cleveland bridge is certainly no exception. As part of our wider commitments to road maintenance, the Government are committed to improving local journeys and ensuring that our local road network is safe and reliable. We are therefore investing more than £7.1 billion in highways maintenance between 2015 and 2020-21 to help councils to keep roads and vital local infrastructure, such as bridges, in good condition.
I thank the Minister for elaborating on the funds that are available. As I mentioned in my speech, the problem is that if the bridge continues to have heavy goods vehicles on it even after the repair, it will very quickly need repairs again. Is it not a false economy not to put a permanent weight restriction on the bridge?
I thank the hon. Member for her questions. I assure her that I will address those points—I hope, to her satisfaction. I have a copy of her letter to the Department with me We know that road condition, particularly the quality of road surfaces, is a concern for all road users, so we are making more money available for major repairs and trials of new technology to help local authorities future-proof our roads The local enterprise partnership, the West of England Combined Authority, considers the repair of Cleveland bridge and Saint Philip’s causeway viaduct as priorities. It sees Cleveland bridge and St Philips causeway as key structures in its regional network. As the hon. Member rightly said, issues on both structures have resulted in weight and speed restrictions, which the authority considers incur significant associated economic cost. Its view is that further restrictions will have an impact on safety, the economy and air quality, with higher carbon emissions. That is why the authority is very supportive of investment prioritisation for both these schemes Cleveland bridge has had funds allocated to it for its repairs, but I understand that the work has not started yet. Officers at the council propose that the work should begin in May or June next year, subject to the backing of council members, some of whom share the hon. Member’s concerns about the impact of HGVs on routes through Bath if the 18-tonne weight restriction is removed when the bridge is repaired. It would be a matter for the council to decide how to go forward, but I am sure that it is listening to the debate with great interest. I encourage her to continue working closely with the council to ensure that these important works can be undertaken I turn to the road investment strategy, which the hon. Member also touched on in her remarks. Bath’s Cleveland bridge provides a link between the A46 and A36 roads, which approach either side of Bath. It therefore forms part of an important through route between the Dorset coast and the M4. The majority of the route is part of the strategic road network—that is, roads managed by Highways England that link our most important population centres and international gateways, such as ports and airports Through the setting of periodic road investment strategies, the Government set out their strategic vision for the network and specify what Highways England must deliver in terms of road enhancements and day-to-day performance. To inform the content of the strategies, the Department and Highways England develop a substantial evidence base about the network, its current performance and likely future pressures. This is a product of several years of research, analysis, public engagement and consultation. These issues are of central importance in and around the city of Bath, and any long-term solution for reducing the impact of traffic at the Cleveland bridge will need to acknowledge and respond to this sensitive and deeply valued setting in relation to the natural, built and historic environment The hon. Member mentioned the strategic study. In situations where there is a recognised substantial problem or gap in current transport infrastructure, the Department commissions such a study to examine the issues and consider options that could address them. The unsatisfactory nature of the A36/A46 route passing Bath has long been acknowledged. The present dualled A4/A46 trunk road, the Batheaston bypass, was opened in 1996, but proposals to link the A4 to the A36 at Bathampton were rejected following a public inquiry. I am grateful to the hon. Lady for providing a lot more detail on the history associated with that to the House Subsequent proposals to revisit the options at that location, promoted by the local authority in connection with proposals for an eastern park and ride site, have not resolved the issue. There is a general recognition of the substantial factors that constrain choices for making meaningful improvements. In that light, the second road investment strategy committed Highways England to carrying out such a strategic study that will review north-south connections between the M4 and the Dorset coast. That will include a review of the case for adopting the A350 corridor as the main strategic route for the area in place of the A36/A46 via Bath and will consider the case for the trunking or de-trunking of key routes. So I hope I can reassure the hon. Lady that both Highways England and officials in the Department will engage with the Western Gateway as well as with a range of local stakeholders as the study develops. I should add that decisions about how Bath is best linked to the major destinations are for the relevant local highway authority to make.
I thank the Minister for the detailed description of what is taking place now, but, as I said in my remarks, this will take years, and in the meantime the people of Bath have an 18-tonne weight restriction on the bridge. Why can the Department not allow Bath and North East Somerset Council to retain that limit? It will be good for the bridge, the people of Bath and our national heritage.
I thank the hon. Lady for her questions and her persistence. I have no doubt that the relevant stakeholders, including the local highway authorities, will be listening with great interest when they come to make their deliberations on these really important issues for the people of Bath In closing, I have mentioned the engagement taking place, but if the hon. Lady wishes to continue more engagement here in this place and with my noble Friend Baroness Vere in the other place, who is responsible directly for this particular matter of policy, I am sure she will find a lot of reassurance that she can offer her constituents. I thank her once again for this debate Question put and agreed to.