National Security and Investment Bill — House of Lords, 2021-04-15
Topic: Defense
Sheila Masters (Conservative, Centre-right): My Lords, I shall move the amendment and speak to Amendments 16 and 17 in my name. I thank my noble friend Lord Hodgson of Astley Abbotts and the noble Lord, Lord Fox, for adding their names. I have also added my name to Amendment 18 in the group, in the name of my noble friend Lord Hodgson of Astley Abbots My amendments are probing amendments, following the interesting stand part debate that we held in Committee on Clause 30, which gives the Government extraordinarily wide powers to give financial assistance. The Minister’s response in Committee raised as many questions as he answered and we have therefore tabled amendments to gain further enlightenment There is no constraint on the ability to provide financial assistance in the Bill, other than that it can be only "in consequence of the making of a final order" My noble friend the Minister sought to reassure us that this was "not a general compensation scheme" and would be used only in exceptional cases. The Minister said the power "will only be used in instances where the public interest, particularly national security interests, require it" Later, he said that "the nature of national security makes it very hard to predict where some of these issues might arise. However, where they do and where national security is an issue, it is important that the power is there".—[Official Report, 16/3/21; cols. 223-26.] I was puzzled by this. Is national security a necessary condition for the use of the power or not? Our horrible hybrid working practices mean it is not easy to pursue questions in Committee when the Minister gives answers, so I tabled Amendment 15 to explore this further Amendment 15 adds to Clause 30(1) the words "if he or she"—that is, the Secretary of State— "considers that there is a risk to national security", so that the financial assistance power could be used only if it were necessary on national security grounds. There could easily be other grounds for giving financial assistance—for example, if we had an industrial strategy, which I am definitely not advocating. I do not believe it would be appropriate to allow considerations broader than national security to underpin financial assistance under this Bill. If my noble friend the Minister thinks anything beyond national security could be involved, I suggest he needs to explain to the House what those circumstances could possibly be Amendment 16 takes out some words from Clause 30(2) so that financial assistance can be provided only by way of loans, guarantees or indemnities. The current wording allows practically anything under the sun and certainly allows grants and soft money. My noble friend the Minister will know that I am deeply sceptical about giving a Government powers to throw taxpayers’ money around. Powers such as these, drafted with good intent, can end up being used as cover for politically expedient expenditure. The best way to stop that happening is not to have the power in statute, as it is too much of a temptation and, even if I trust the current Government to act responsibly, which of course I do, I would not trust Governments of a different party—if we were unlucky enough to experience that again Lastly, Amendment 17 says that financial assistance has to be provided on arm’s-length terms. I should probably have drafted this in terms only of loans, guarantees or indemnities, as I do not think that subsidies or grants—which I am sure my noble friend the Minister will tell me he needs the power to provide—can ever be on arm’s-length terms. I was prompted to table this by what my noble friend the Minister said in Committee: "For example, if the Government provided a loan, it would normally have to be at market rates."—[Official Report, 16/3/21; col. 224.] I hate weasel words such as "normally" almost as much as I hate throwing taxpayers’ money around in non-commercial transactions. I therefore ask my noble friend the Minister to say a little more about the boundary between commercial and non-commercial terms for assistance given under Clause 30. What will drive the use of market rates and, I hope, market terms and conditions? What criteria would be used for abandoning arm’s-length terms I would have preferred not to have this broad and undefined power sitting on the statute book, because it implies an intent to provide financial assistance. The Government could have relied on the Appropriation Act for genuinely exceptional circumstances. However, if the Government are set upon having the power, Parliament is entitled to some better explanations than we got in Committee of its potential use. I beg to move.