National Security and Investment Bill — House of Lords, 2021-02-04
Topic: Defense
Iain McNicol (Labour, Centre-left): It gives me great pleasure to follow my noble friend Lord Woodley’s maiden speech and welcome him. While growing up, I am sure very few, if any, of our friends would have ever believed that we would end up here in your Lordships’ House. I have known Tony for many years, through my time at the GMB and his at the Transport and General Workers’ Union. We all know, and we have heard, how proud Tony is of his time as a shop steward, a union officer and general secretary of TGWU, and now Unite However, there are a couple of interesting, even surprising, activities that he does not often shout about. He is rightly very proud of his role at Vauxhall Motors Football Club where, as chairman, he has led a committed team in developing the facilities. The club has a new all-weather pitch—a number of pitches—and a new club house. Thousands of children and young people have got involved and played on those football pitches at Ellesmere Port. Forty-seven teams compete in the league from the age of five upwards—it is a real community Tony has been involved in the Cuban Five or Miami Five campaign for many years. Not many of us can say that we have been involved in a prisoner swap, never mind one that involved the Pope, our Prime Minister and the US President. In late 2014, the prisoners’ release and exchanges, including Jewish American prisoner Alan Gross, were all secured during the end of a 16-year campaign, and we saw for a short time a step change in the Cuban-US relationships. Tony, welcome to the House Turning to today’s debate, I would like to focus on two issues: first, the importance of clarifying national security and, secondly, accountability and oversight. Before I do, allow me to make a few introductory remarks. Safeguarding our national security has always been critical to our nation’s future, but never more so than now. I support the Bill, which strengthens the powers of the Government to intervene when corporate transactions threaten national security. However, I believe that the Bill would be strengthened by a number of amendments, which I am sure will be forthcoming from all sides of the House as it passes through. The scale and sophistication of national security threats have materially increased since the current limited screening regime was introduced by the Enterprise Act back in 2002. Importantly, the Bill follows—if not offers a little UK catch-up—similar moves by many other countries, as outlined by the Minister in his introduction Turning to how the Bill should clarify national security, it gives sweeping powers to the Secretary of State but does not give any statutory guidance on the meaning of national security. Surely it would be sensible to include guidance on factors that would be captured by national security, outlining references to critical national infrastructure and economic security specifically. Such guidance would also provide much needed clarity for business Although the Bill is aimed at all investments—not just foreign investments—foreign companies, sovereign wealth funds and other international finance vehicles seeking to invest in companies and projects could pose a particular threat, whether that is relevant to critical infrastructure, personal data or cutting-edge technologies. The decline in democratically accountable Governments is highlighted by the Democracy Index, which recently stated: "The global score of 5.44 out of ten is the lowest recorded since the index began in 2006." This is a real cause for concern. Any investment, not just critical national infrastructure, should automatically raise a red flag As we heard earlier, Part 3 of the Bill gives the Secretary of State quasi-judicial powers by allowing them to act as the key decision-maker for all decisions under the new regime. As we have heard, BEIS has previously been a cheerleader for Huawei and others, overly open to investment and pro-market to an extent that requires meaningful checks and balances. I do not believe that the Bill as drafted offers these. One option would be for a cross-departmental body to oversee the call-in powers. I listened to the Minister talk about the investment security unit in his introduction but I am not sure that that was clear, as my noble friend Lady Hayter outlined in her introductory remarks. Some further clarity on that would be much appreciated Finally, I worry that the Bill does not go far enough on takeovers, mergers and acquisitions outwith the realm of national security. For years the Government have refused to do more to protect growing UK companies so that they are less likely to be taken over, asset stripped or gutted by overseas businesses—which are often anti-trade union. 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. It is notable that we are coming into line with other countries on national security but not on takeovers; given the economic impact of coronavirus and potential corporate vulnerability, the case is now stronger, not weaker. The Bill is a missed opportunity to bring forward a comprehensive industrial strategy to help businesses to recover, grow and create jobs.