Skip to main content

General Committees

Debated on Wednesday 8 July 2020

Delegated Legislation Committee

Draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020

The Committee consisted of the following Members:

Chair: Mrs Maria Miller

† Allan, Lucy (Telford) (Con)

† Davies, Dr James (Vale of Clwyd) (Con)

† Fletcher, Mark (Bolsover) (Con)

† Garnier, Mark (Wyre Forest) (Con)

† Harper, Mr Mark (Forest of Dean) (Con)

† Hunt, Jane (Loughborough) (Con)

† Jones, Mr Kevan (North Durham) (Lab)

† Lewell-Buck, Mrs Emma (South Shields) (Lab)

† Penrose, John (Weston-super-Mare) (Con)

† Powell, Lucy (Manchester Central) (Lab/Co-op)

† Scully, Paul (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

Sheerman, Mr Barry (Huddersfield) (Lab/Co-op)

† Simmonds, David (Ruislip, Northwood and Pinner) (Con)

Tarry, Sam (Ilford South) (Lab)

† Thompson, Owen (Midlothian) (SNP)

† Tomlinson, Michael (Lord Commissioner of Her Majesty's Treasury)

† Twist, Liz (Blaydon) (Lab)

Peter Stam, Committee Clerk

† attended the Committee

Third Delegated Legislation Committee

Wednesday 8 July 2020

[Mrs Maria Miller in the Chair]

Draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020

I beg to move,

That the Committee has considered the draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020.

It is a pleasure to open the debate under your chairmanship, Mrs Miller. The draft instrument was laid before the House on 8 June. I will try to clearly explain the rationale behind it, but first let me turn quickly to foreign direct investment more broadly.

The UK has a proud and hard-won reputation as one of the most open economies in the world. We remain the top destination in Europe, and the third in the world, for foreign direct investment, with 58,000 new jobs created in the UK in 2018-19 through that inward investment.

Although most FDI does not raise concerns, it is vital that any transactions that could operate against the public interest should be scrutinised. Under the Enterprise Act 2002, the Secretary of State has powers to intervene in mergers that present public interest concerns. The Government will shortly bring forward the National Security and Investment Bill to further strengthen the UK’s ability to scrutinise investment into the UK. There will be the usual opportunities to debate the Bill once it is introduced.

The European Union also recognises the security risks that can, on occasion, be posed by foreign direct investment, and has responded by bringing forward a regulation that establishes a framework for the screening of foreign direct investment into the European Union. The draft instrument will make effective that regulation, which will come into force on 11 October. As Committee members will know, under the withdrawal agreement the UK is obliged to implement EU law during the transition period. Most of the regulation’s provisions will automatically have direct effect in the UK. I will briefly set out its purpose.

The regulation will create a mechanism that will allow the UK, member states and the European Commission to share information about investments with each other. Specifically, the EU regulation does three things. First, it requires member states and—for the duration of the transition period—the UK to provide notification of any FDI that is undergoing scrutiny. That will have no impact on us, because in the UK notifications of screening under the Enterprise Act are already published on

Secondly, the regulation allows the UK, member states and the European Commission to issue opinions and comments on investments that are being screened elsewhere in the EU, and to request information where their own security or public order might be affected. To be clear, while any opinions expressed might be considered, they will not affect the UK Government’s right to intervene in or make decisions on merger cases that we consider may raise national security concerns: our sovereign capability is not affected.

Thirdly, the regulation requires member states and the UK to share basic information about FDI that has not already been screened where it may affect another member state’s security or public order. The UK could similarly request information or issue opinions on investments occurring in EU member states if we felt that our security or public order might be affected. Member states and the UK are not required to share information on specific security or public order concerns.

The EU regulation will automatically become part of UK law on 11 October 2020. However, some measures in the regulation require changes to UK law to ensure that it can operate effectively in the UK. The draft instrument makes those changes. It will allow the Competition and Markets Authority, the CMA, to use its existing powers, set out in the Enterprise Act, for the purposes of regulation.

However, two changes to the Enterprise Act are being made. The first extends the CMA’s existing information-gathering powers and associated penalty regime. The CMA already gathers information for businesses, when the Secretary of State intervenes in a merger, by issuing a public interest intervention notice, or PIIN. However, the EU regulation allows information to be requested about FDI that is not undergoing screening—when a PIIN has not been issued. It is these cases for which the additional information-gathering powers are needed.

The CMA will be able to gather this information only when a member state or the European Commission has requested it on the basis that FDI into the UK might affect their own security or public order. The types of information that can be requested include the ownership structure of the foreign investor, the value of the investment and the date when the investment is planned to be or has been completed. Businesses already hold that information, so it will not be burdensome to provide. If, however, a business fails to comply with a request, penalties could be issued. The instrument extends the scope of the existing civil and criminal penalty regime available to the CMA, as set out in the Enterprise Act.

The second change that the instrument makes will allow the Secretary of State and the CMA to disclose information to the European Commission or member states where the Secretary of State wishes to provide comments on FDI in a member state. The Enterprise Act already allows the Secretary of State or CMA to provide information to the Commission or member states where that is required because of a Community obligation, but that would not be the case when we actively choose to provide comments on FDI in a member state, which is why the second change is needed.

May I ask the Minister a question about that second point? I have been listening very carefully to what he said. The explanatory notes make it clear that these regulations will be revoked at the end of this year, when the transition period comes to an end. In the Bill that we will introduce, are we proposing to allow Ministers to continue sharing information with the European Union where they choose to do so in the cases that he set out, or will that come to an end when these regulations are revoked?

I thank my right hon. Friend for his intervention. The regulations will be repealed as part of the wider European Union (Withdrawal Agreement) Act 2020. They do not interact with the Bill that we are introducing, but add further powers that can be used.

The UK and the EU have both stated that we intend to support ambitious, close and lasting co-operation on external threats. That co-operation should respect both sides’ strategic and security interests and respective legal orders. We are open to participation in security-facing EU programmes and instruments on a case-by-case basis.

The right hon. Member for Forest of Dean makes an interesting point. Is there not going to be a gap between the lapsing of this legislation and the new Bill to which the Minister refers? This week, we announced sanctions against a number of individuals—independently of any other country, including the EU. Does that not leave us at a disadvantage if we are not able to get information, perhaps about people we think are a threat but the EU does not?

I thank the right hon. Gentleman for his intervention. Both the UK and the EU have expressed our intention to co-operate as best we can. How that is structured will be part of the negotiations. Although this measure does not directly interact with the new Bill, we intend to introduce the Bill very soon.

This is like a lot of things to do with the withdrawal agreement Act—it is wishful thinking, and there will be a gap that will put the UK at a disadvantage. Great fanfare was made this week about the fact that we can now sanction individuals who use investment as a way of hiding money. It was said that that is a great step forward for our freedoms from the EU. If we do not have a seamless connection, this measure will leave us at a huge disadvantage, because there will be no onus on the EU to share any information with us.

As I say, although we are obviously obliged to abide by EU law during the transition period, we do not believe it would be appropriate to remain part of the reciprocal information-sharing channel after the transition period has come to an end. As I say, when the National Security and Investment Bill is introduced, we will be able to debate that fully.

May I clarify something? I think the right hon. Member for North Durham is asking a slightly different question about reciprocal obligations. My question was more straightforward. These regulations give the CMA a power that it does not currently have to share information that we wish to share.

All I was asking was this: in the future, when we are no longer obligated to share information with the EU, will Ministers have the legal power to share that information if they chose to? They will under these regulations, but once those are revoked will Ministers have the power, under the Bill that the Minister has talked about, to share information with the EU if they choose to do so? That is all I was asking. I did not go quite as far as the right hon. Gentleman was suggesting.

I thank my right hon. Friend for that clarification. We already share a lot of this information on, and it is not particularly burdensome on businesses to release the information we are looking for. Much of this work is in effect tidying up, because we have gone that little bit further in the Enterprise Act.

I say in response to the right hon. Member for Forest of Dean that there will be no obligation on Ministers to share information. There might be good will, and it might be in our interest to share the information, but there will be no legal obligation as there is now.

As I said, we already go far enough with the Enterprise Act. The information is released and on This is very much a tidying-up exercise to ensure that the legislation works.

My apologies for pressing the point, but having been the Minister for Investment at the Department for International Trade, I know there are quite significant implications in the question from my right hon. Friend the Member for Forest of Dean and all of this.

Ministers from the Department for International Trade will be actively seeking foreign direct investment into UK businesses and, at the same time, the Competition and Markets Authority could start pushing back against those active Government interventions to bring people into the country, for various reasons. If Ministers could disclose some of the information at the start, that would pre-empt the problem otherwise of Departments working against each other, which would be to the benefit of the country. Should DIT officials try to start bringing in people who may be a bit dodgy, we could work out that they were dodgy before we started all the hard work. That is why that question is so important.

Order. Before I ask the Minister to respond, may I gently bring hon. Members back to the fact that we are considering the instrument before us, not any future instruments?

Thank you for that clarification, Mrs Miller, and I thank my hon. Friend for his intervention. We can debate this issue when the National Security and Investment Bill comes to Parliament.

The second change that the regulations make will allow the Secretary of State to disclose information to the European Commission or member states when the Secretary of State wishes to provide comments on FDI in a member state. As I said earlier, the Enterprise Act already allows the Secretary of State or the CMA to provide information to the Commission or member states where required because of the Community obligation.

The interventions were about further information that is not necessarily required, but I believe that in the upcoming National Security and Investment Bill we will have plenty of chances to debate the area and ensure that, with the Enterprise Act, it is solid. Although we do not believe that we should be part of a reciprocal information-sharing procedure at the end of the transition phase, we are already going that little bit further anyway. However, it will be revoked, along with the EU regulation.

I want to address a key issue for me: the need to have something in place to ensure certainty. That addresses the point made by the right hon. Member for North Durham. These measures envisage a seamless arrangement until such time as Parliament has implemented new measures. What I think I read in the explanatory memorandum is that the Enterprise Act ensures that the system of which we are currently a part with the European Union to manage the process is operational in UK law through the Competition and Markets Authority.

I thank my hon. Friend. The UK and the EU will have separate jurisdictions to scrutinise mergers. The EU might look at a merger if it is relevant, but that would not stop the CMA from conducting its own investigation.

The hon. Member for Ruislip, Northwood and Pinner tried to help the Minister out, but I do not think he did: the regulations, which I have no problem with, lapse when the transition period ends. Obviously, the new Bill will try to cover some of these areas. If we believe the Prime Minister, this is all going to be done and dusted by January next year, so that Bill will have to come in before January 2021 if we are to have the seamless transition the Minister has referred to.

That is a topic we will come to when we introduce the Bill. Hopefully, with the co-operation of Her Majesty’s Opposition, we can get that through swiftly and at the appropriate time to allow for that seamless approach.

To conclude, this instrument is not going to make fundamental changes to the UK’s investment screening regime. The UK is going to retain the levers in the Enterprise Act that allow the Secretary of State to intervene in a merger. The instrument will also not affect plans for the forthcoming National Security and Investment Bill, nor will it interact with the two instruments laid before the House on 22 June, which amend the Enterprise Act 2002. However, it is necessary to agree this instrument to ensure that the UK complies with EU law, as is our duty under the withdrawal agreement.

It is a pleasure to serve under your chairmanship, Mrs Miller. I note that some of us have made good use of our local enterprises over the past few days by getting our hair done—something the Minister was much concerned about the last time we spoke. I hope that all Members will make use of those local enterprises in the coming days.

The Opposition are happy to support today’s instrument. It is right for the Government to make sure that the UK meets its legal obligations under all EU regulations, including the foreign direct investment regulation, until the transition period comes to a formal end. We support the enhancements to the Competition and Markets Authority’s existing powers to gather the necessary information and share it with our European partners when required. If the UK leaves the transition period on 31 December 2020, as the Government intend, the foreign direct investment regulation and this instrument will have been in place for just 12 weeks. We therefore consider its impact to be minimal, and that is why we support it.

However, the instrument contains a number of desirable powers. I therefore urge the Government to bring forward the necessary legislation to which the Minister has alluded in good time, to ensure there is not the gap that my right hon. Friend the Member for North Durham has highlighted. I also ask the Minister to work with the CMA to ensure that its enhanced powers are deployed proportionately, respecting the additional burdens placed on many small businesses at the moment due to the covid-19 crisis.

It is, of course, important that the regulation is backed up by a meaningful sanctions regime, but we hope those sanctions will be used in a proportionate and considerate manner, given the short window covered by this instrument.

It is a pleasure to serve under your chairmanship, Mrs Miller. It is also a pleasure to see the Government squirming when it comes to how shambolic the exit from the EU is becoming. The regulation that we are considering will be in place until the end of the transition period. The Minister cannot say when the new National Security and Investment Bill will come forward, but given the snail’s pace at which the Government are bringing forward legislation at the moment, I doubt it will be in before Christmas, so there will be a gap.

It also concerns me that after the transition period we will be left with what I think the Minister referred to as the “good will of Ministers”. That is not a legislative term that I am aware of—that we are to let the Executive exercise their good will. Interestingly, the explanatory memorandum states that

“An Impact Assessment has not been prepared for this instrument”


“no, or no significant, impact”

on the private sector, “voluntary bodies” or “the public sector” is foreseen. I am sorry, but I do not accept that. If there is a gap during which we are relying on Ministers to take case-by-case decisions on whether they share information with the EU, that is quite a significant impact.

As I said to the Minister in my earlier intervention, the Government this week congratulated themselves on having new powers, free from the awful EU, to sanction individuals. Without co-operation with the EU or other nations on information sharing in this and other security sectors, however, we can have all the powers we like but, frankly, if we do not have the information to implement them or to co-operate with other nations, they are pretty meaningless. That gap will be there, which concerns me.

The other thing that concerns me is what the Minister just said. He said that, under the new Bill, we will not have a system of automatic transfer of information with the EU. That is absolutely silly from our point of view, because we do not live in a hermetically sealed bubble in this country where everything that goes on outside our borders can be forgotten and cannot affect us. We are interrelated, whether with the EU or other nations. Some Government Members want to portray the vision that Britain can somehow pull a duvet over its head and ignore the rest of the world but, I am sorry, it cannot. That is quite serious.

Increasingly, as shown this week by the sanctions, people want to hide money. States, individuals and criminals, for whatever purposes, use investment as a way to cleanse that money through the system. When we leave the transition period, it will be vital to share that information with the EU and other countries. If we do not, we will not have the ability to test whether the money is clean or linked to individuals who we do not want to be associated with, or whether for some other reason the money has come from sources that we do not approve of.

It is important for that information to be there. If it is not, and it is left to a Minister after the transition period, we will be at a huge disadvantage without the National Security and Investment Bill. When will that come forward? If the direction of travel in that Bill is that—I know it is like red meat to Tory Back Benchers—we will not share anything with the EU because that nasty old institution will dilute our great freedoms, I come back to the point that, without co-operation with other nations on that area and a whole host of others related to national security co-operation, we will be at a huge disadvantage.

Does the right hon. Gentleman agree that we should stick to our knitting? The regulations are a short-term device to get us from A to B. We do not have to consider all the legislation and the whole purpose of leaving the EU with regard to this short piece of legislation.

I say to the hon. Lady that the devil is in the detail. I have sat on a number of these SI Committees and I always like to contribute, because we need to scrutinise them, as their implications are important. They may well be small in terms of their overall impact, but cumulatively, they have an impact. I have sat on many such Committees because of the withdrawal from the EU, and the impact of this SI, without the cover legislation, will be that we are disadvantaged. My plea to the Government is to bring that Bill forward before Christmas—before we leave—because we are going to leave and it will leave us at a disadvantage.

I reiterate the main point, which is, whether the hon. Lady likes it or not, we need to co-operate with everyone in the world to make sure that it is to our advantage and that we are not at a disadvantage in cross-border trade and investment, which is a fact of life. She might not like co-operating with those nasty Europeans, but unfortunately, she will find that, come 31 December, we will have to.

I thank the right hon. Gentleman for giving way again. This is a device for getting from A to B, and nothing else. I do not agree with his comment about “nasty Europeans” either—most decidedly. I am one of those Back Benchers that he is talking about, but I do not agree with that phrase.

It gets from A to B; I do not disagree with the hon. Lady on that, but where is C? Where is the ultimate destination? That is the point, which the Minister has not answered. If we do not have that Bill before us before we end the transition period, we will be at a disadvantage.

This process of withdrawal will not be easy, because there will be huge complications in terms of numerous things that will come up in a number of years, which will hit us in the face. In terms of the security of our country, the idea that we can get investment from individuals—some parts of the Conservative party might welcome that, but my party will not—who we should not [Interruption.]. The hon. Member for Bolsover laughs, but, I am sorry, he should just look at some of the donations taken by his own party from individuals whom I would not want to be associated with, but that is another matter.

If the Minister can assure us that the Bill will be in before Christmas, that will be fine. It makes practical sense to agree this today, but it is important that we have that Bill before we end the transition period.

I have one question and one point. I am conscious of your injunction, Mrs Miller, to stick to the subject. This is directly related to points that are made in the explanatory statement.

I disagree with the hon. Gentleman about the future framework—

The right hon. Gentleman. I disagree with him on the compulsory nature of the information sharing. I am perfectly happy with a co-operative framework. The point I was driving at—I think this is the substance of the regulations—is that in order for the CMA to share information, it has to have the power to share the information. If it shared the information, even if it wants to, that would be unlawful; it does not have the power to do that sharing.

My point, which I think is different from that of the right hon. Gentleman, is that I am perfectly relaxed that we are not able to compel European Union member states, post the transition period, to share information with us, because I am content that they should not be able to compel us to share information with them. I do, however, want to see a structure where we co-operate with them, so that where we choose to share information with them, we are empowered to do so. The regulations specifically address allowing us to share information.

My question to the Minister is about what is intended to come afterwards. Do we intend to replicate the ability for us to share information where we choose to do so? That is a different point from that made by the right hon. Gentleman, which, I think, is about some element of compulsion.

My second point is that the explanatory notes explicitly say that the intention is to revoke not just the instrument we are debating today but the retained version of the foreign direct investment regulations in their entirety at the end of the transition period. Paragraph 7.1 of the explanatory memorandum states that the FDI regulations do not

“affect the UK’s ability to screen investments into the UK”

because we will retain our own responsibility for national security. Once we have removed those FDI regulations, do we currently have domestic powers to do that screening, or is that what the new Bill is for?

That is an important question, because if we currently have powers and the new piece of legislation the Minister refers to is about strengthening or extending them, I am fairly relaxed about whether there is a gap before the Bill comes into force, because if we already have substantial powers and we are talking about beefing them up, I can live with there being a gap. If we revoke the FDI regulations on 31 December, however—and with them, our current ability to do screening for our own national security—the right hon. Member for North Durham is right to say that we would need the new legislation to come into force immediately upon their revocation or there would be a gap, not just in the sharing of information, but in our own national security. That is a point on which I differ from the right hon. Gentleman, but also one very specific question that pertains to points in the explanatory note.

I thank the Committee for its consideration and for the points that have been raised during the debate, which I will try to address. The hon. Member for Manchester Central talked about the CMA and small businesses. Clearly, it is important that we give due consideration to the pressures on small businesses, especially at this particular time. The CMA understands that this is a challenging time for small businesses and encourages them to approach it as soon as possible if they foresee difficulties in meeting the deadline, so that the information request or stipulated response dates can be varied where appropriate. It is important that the CMA works with small businesses in that regard.

The right hon. Member for North Durham raised a few points. On the question of co-operation with the EU, as I have stated, the EU and the UK have said that they both want to co-operate where appropriate. On information sharing, we must not forget that the EU does not equal the rest of the world. It is an important partner for trade, for security and for any number of issues on which we must continue to co-operate, but as we do so, we need to retain our sovereignty at the end of the transition phase, having left the EU in January. The Opposition effectively did not want to bring Parliament back as a result of covid; we wanted to come back so that we could progress the legislation at pace, and we have done a lot since then. The right hon. Gentleman asked whether the legislation places us at a disadvantage. The Enterprise Act already has information-gathering powers when there has been a public interest intervention notice, so we will have the power to share information, as we do now, after the implementation phase.

As I have said, the UK and the EU have stated their intention to support ambitious, close and lasting co-operation. My right hon. Friend the Member for Forest of Dean asked whether Ministers will be able to share information about mergers after December. Yes; that is planned in the National Security and Investment Bill, so we will be able to share information about mergers after that point.

The right hon. Gentleman is talking about a future Bill. If he is happy to work with us, we can make sure that the Bill progresses at pace. We have been introducing a lot of new legislation at pace to respond to covid, and we can do the same with the Bill. We have all learned from the pandemic how to work more closely together when it is in the national interest, instead of playing politics with some of this stuff, and we have moved at pace. The right hon. Gentleman suggests that there will be a gap, but that is not necessarily within the scope of the debate or our intention.

That is a bit rich. I do not control the legislative programme of the House or the Government. The Minister has only to look at the programme for the last few weeks: Opposition days, general debates and the debates on estimates that we have had for the last two days. The idea that there is not enough time—and blaming the Opposition for it—is frankly a bit rich. It is down to the Government to bring the legislation forward.

To be fair, I was responding. The UK’s investment screening process will continue to operate as it does now, with a few additional steps to ensure that we comply with the regulations. Our sovereign capabilities to intervene in a merger will not be affected. I commend the regulations to the Committee.

Question put and agreed to.


That the Committee has considered the draft Enterprise Act 2002 (EU Foreign Direct Investment) (Modifications) Regulations 2020.

Committee rose.

Draft NHS Counter Fraud Authority (Establishment, Constitution, and Staff and Other Transfer Provisions) (Amendment) Order 2020

The Committee consisted of the following Members:

Chair: David Mundell

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

† Double, Steve (St Austell and Newquay) (Con)

† Gibson, Peter (Darlington) (Con)

† Howell, John (Henley) (Con)

† Jenkinson, Mark (Workington) (Con)

† Jones, Fay (Brecon and Radnorshire) (Con)

McCabe, Steve (Birmingham, Selly Oak) (Lab)

† Madders, Justin (Ellesmere Port and Neston) (Lab)

† Mann, Scott (North Cornwall) (Con)

Osborne, Kate (Jarrow) (Lab)

Rees, Christina (Neath) (Lab/Co-op)

Sharma, Mr Virendra (Ealing, Southall) (Lab)

† Throup, Maggie (Lord Commissioner of Her Majesty's Treasury)

† Western, Matt (Warwick and Leamington) (Lab)

† Whately, Helen (Minister for Care)

† Whittome, Nadia (Nottingham East) (Lab)

Bradley Allbrow, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee

Wednesday 8 July 2020

[Mr David Mundell in the Chair]

Draft NHS Counter Fraud Authority (Establishment, Constitution, and Staff and Other Transfer Provisions) (Amendment) Order 2020

I beg to move,

That the Committee has considered the draft NHS Counter Fraud Authority (Establishment, Constitution, and Staff and Other Transfer Provisions) (Amendment) Order 2020.

It is a pleasure to serve under your chairmanship, Mr Mundell. Like any organisation, the NHS is not immune to fraud. As hon. Members are aware, the Government have backed the NHS with the biggest cash boost in its history: an extra £34 billion by 2023-24. That money will make a difference to many people. Yet, fraudulent activity in the NHS means that the money intended for patient care sometimes ends up in the pockets of those who did not legitimately earn it, meaning fewer resources available to be spent on frontline health services such as patient care, health care facilities, doctors, nurses and other staff. It is taxpayers’ money, and we have a duty to spend it appropriately. An effective counter-fraud organisation that is able to operate independently is crucial—a body that can act without external interference or influence and perform functions that cannot be undertaken at a local level, such as serious and complex investigations that cross borders and cases of alleged bribery and corruption on a national level.

As a result, the NHS Counter Fraud Service was set up in 1998 as part of the Department of Health. Since then, the function has evolved, and in autumn 2017 the NHS Counter Fraud Authority was launched as an independent special health authority. The National Health Service Act 2006 means it is limited to a maximum lifespan of three years, and so is due to be abolished on 31 October 2020. To prevent that, a statutory instrument was laid on 11 June 2020 to extend the abolition date of the NHSCFA by three years, to 30 October 2023.

I want to take this opportunity to highlight the important work of the NHSCFA and set out why we need to extend its lifespan for a further three years. The NHSCFA is a national centre of excellence. It has built strong relationships with organisations across the health and law enforcement sectors so that we can take the fight to those who seek to deprive the NHS of resources for patient care. Fraud is a hidden crime; to fight it, we have to find it. The NHSCFA is continually developing its intelligence and investigation capabilities, and is breaking new ground in how it detects and prevents fraud. It has also set important national standards for the counter-fraud work of NHS providers and commissioners. It also applies to independent healthcare providers and NHS organisations. Its work is clearly bearing fruit.

The NHSCFA’s latest strategic intelligence assessment shows an overall estimated reduction in losses from fraud of £60 million between 2017-18 and 2018-19. It also showed a £27.6 million reduction specifically on dental contractor fraud, thanks to a relentless focus by the NHSCFA over recent years, along with an £85 million annual reduction in fraud losses from false entitlement claims for help with healthcare since 2017.

It is clear that that approach is working. To change direction now would be a mistake. The concerted approach by the NHSCFA to improve fraud awareness and drive up fraud reporting across the NHS is bearing fruit, so we need it now more than ever, especially when we are in the middle of the greatest threat to public health that we have seen in generations.

As part of the Government’s response to coronavirus, the Chancellor has repeatedly said that the NHS will get the funding it needs. An initial £5 billion coronavirus fund was established at the Budget in April 2020. That was then increased to a £14.5 billion emergency response fund, of which £6.6 billion was earmarked to support our health services. We are continuing to work with the NHS and Her Majesty’s Treasury to ensure the NHS gets the funding and resources it needs.

Although we have seen the nation coming together to celebrate the heroic work of NHS staff, coronavirus unfortunately presents a heightened risk of fraud, where criminals may seek to exploit the situation. Never before has a counter-fraud response to this investment been so important. “Protect the NHS” is not just about protecting staff. It is also about the money that taxpayers contribute to this invaluable national resource.

The NHSCFA has played a key role during this period and has produced and shared coronavirus threat assessments with partners, and coronavirus counter-fraud guidance specifically for the NHS. This includes guidance outlining the unique risks during the coronavirus response and specific guidance outlining types of mandate fraud, and how to identify, prevent and respond to them.

As technology evolves, the risks to the NHS will also evolve, especially the risks from fraud, so we will need organisations such as the NHSCFA to co-ordinate the response at a national level. If we made the decision to abolish the NHSCFA today, that would expose the NHS to significant financial risks. It would mean that there would be no ability to record and assess accurately the nature and scale of fraud, and inform the response to it, both within the NHS and across the wider health sector. That would result in serious and complex fraud investigations being transferred elsewhere—for example to other NHS bodies, the police or the Department of Health and Social Care.

I thank the Minister for giving way and for the examples that she has just set out. However, could she give us an overall picture of where the fraud is arising? Is it arising from within the NHS, from organisations with which the NHS has a relationship or from the man in the street?

I thank my hon. Friend for his intervention. The fraud we see comes from a range of the categories he has just mentioned, sometimes including members of the public and users of the NHS, but sometimes also organisations with which the NHS has contractual relationships.

Let me come back to the point I was making about the downsides there would be if we did not decide to continue the NHSCFA today. If we were to do that, it would undermine NHS funding—much-needed resources that are critical for patient care. I therefore urge hon. Members to keep this vital organisation in place and allow it to keep doing its important work, providing confidence and even certainty for many people. I commend the draft order to the Committee.

It is a pleasure to see you in the Chair, Mr Mundell.

As we have heard, this statutory instrument extends the abolition date of the NHS Counter Fraud Authority from 31 October 2020 to 30 October 2023. As the Minister set out, any order for a new special health authority established after 1 April 2013 must include provision for the abolition of that authority within three years of its establishment, pursuant to section 28A of the 2006 Act. The 2006 Act also provides that the abolition date can be varied or changed by order within that three-year period to a later date, beginning with the day on which the authority would have been abolished. Of course, that is why we are here today, because, as the Minister said, we clearly need an authority to deal with fraud in the NHS.

I think that this is the first time that we have had an opportunity to discuss the NHSCFA since the statutory instrument that brought it into force was laid in 2017. I think that came in under the negative procedure, which meant that it did not require approval by resolutions of both Houses, so there has been no discussion of the NHSCFA’s remit and performance.

As the Minister said, the Secretary of State’s function to protect the health service from fraud has been carried out by a number of organisations since 1998. Obviously, the NHSCFA was established on 1 November 2017 to identify, investigate and prevent fraud, bribery and corruption across the national health service in England. That responsibility was previously held by NHS Protect, which was a division within the NHS Business Services Authority. NHS Protect’s staff, property and liabilities were transferred to the new authority.

The estimate of fraud in the NHS from the most recent NHSCFA annual report—that is for 2018-19, and I hope that when the Minister speaks at the end of the debate she will tell us when the 2019-20 report will be available—will be of concern to most people. The sum that we are talking about—the estimated fraud in the NHS—is £1.27 billion each year. We often talk about the issue of NHS workforce shortages; we know that there are more than 40,000 vacancies for nurses. When I say that £1.27 billion would pay for those 40,000 nurses, 5,000 frontline ambulances or 116,000 hip operations, we can be in no doubt that it is extremely important that we counter fraud as much as we can, and that this authority is needed to prevent fraud, bribery, corruption and any illegal acts or any financial gain at the expense of the NHS and, of course, as the Minister said, the taxpayer.

It is important to remember that, although we are talking about significant sums, those who commit fraud are the minority. However, their actions take resources away from the NHS, staff and patients and have an impact on us all. As the Minister said, at this time in particular, the NHS is under additional pressure with coronavirus, so it is vital that every penny intended for the NHS stays within it. The scale of the challenge is clear. It is welcome that the most recent annual strategic intelligence assessment highlighted a reduction of £90 million in patient fraud, but it is fair to say that there is still an awful long way to go.

The explanatory memorandum that accompanied the instrument that created the NHS Counter Fraud Authority stated:

“The establishment of a special health authority focused entirely on counter fraud activities is intended to provide the independence and practical accountability that is required to deliver effective anti-fraud services across the health service.”

It also stated:

“The Secretary of State has statutory responsibility for health service security management functions under the 2006 Act”,

and that security management is most effective when tailored to local circumstances. It concluded that local NHS bodies were best placed to develop and apply security management policies and practices, in order for them to take account of local circumstances and deal with security matters. We need to establish whether that has, in fact, turned out to be correct. Concerns about those powers being transferred were raised by Members of both Houses at the time, in 2017.

The Government stopped collecting data on assaults against NHS staff in 2016, but following freedom of information requests from all NHS trusts in England in 2016-17, the Health Service Journal reported that physical assaults on NHS hospital staff had risen 9.7% since the previous year. Those figures suggest that, on average, there were just over 200 reported violent attacks on NHS workers every day. As alarmingly high as those figures are, Unison believes that many incidents go unreported, and estimates that there were 56,435 physical assaults on NHS staff in 2016-17.

In January this year, The Independent reported that the Health and Safety Executive found that 25 NHS trusts were in breach of rules designed to make sure that they manage risks to their staff from violent patients or members of the public, following 38 inspections by the regulator since April 2018. These inspections were prompted by increasing numbers of assaults on staff, including three killings by patients in the last five years. Figures show that between 2015 and 2018 the number of violent attacks on health and social care staff was three times as high as in other industries. We can see that the disbanding of NHS Protect has had some impact, but without national data it is difficult to determine the true scale of the problem. Can the Minister tell us whether the Government have any plans to resume the collection of national data? If she cannot advise us of that today, could she possibly write to me?

The protection of staff should of course be an absolute priority, and the Government did promise an anti-violence strategy in 2018. Will the Minister update us on where that is, and on the seven trusts that were issued notices of improvement in terms of how they manage the risks of violence and aggression? What action are they taking to reduce violence against NHS staff across all settings, and what training and support is available? We know from the annual staff survey that 14.5% of staff said they had experienced physical violence from patients, their relatives or the public. The figures for the most recent survey are not yet available. Will the Minister update us on whether we can expect to see those latest figures?

Can the Minister advise us whether she believes that the uncoupling of security and fraud aspects, per the statutory instrument creating the Counter Fraud Authority, has been a cause of this increase in violence, or whether there are other factors in play? It is important that we try to get to the bottom that.

To return to the Counter Fraud Authority, I mentioned that the most recent annual report identified a number of challenges and potential barriers that affect its ability to tackle fraud against the NHS. It highlights the fact that the

“level of understanding of the nature of fraud in the NHS continues to be uneven across the health system.”

There is under-reporting of fraud and suspicious activity, which is a continuing concern. There is also inconsistent recording of local counter-fraud work, which is another concern. The report highlights a

“fragmented approach in the NHS to sharing lessons learned and limited cross-NHS working, resulting in lost opportunities to identify and prevent fraud.”

Can the Minister advise us on what the NHSCFA intends to do to improve cross-NHS working?

The report also draws attention to a number of initiatives, including an e-learning programme to train counter-fraud champions and improving access to large datasets, which was due to be rolled out in the last financial year. We have not seen that yet, so can the Minister update us on its progress? I also note that last year’s annual report says the authority’s

“approach to counter fraud work is detailed in our 2017-2020 strategy document ‘Leading the fight against NHS fraud’”,

which is obviously due to expire this year. Can the Minister advise us on when we will see an updated strategy document?

We will not be opposing the order. It is clearly important that we continue to have the Counter Fraud Authority, but if it continues for three further years, we need assurances from the Minister that she is holding it to account for its performance. We need to have confidence that greater success in reducing fraud will be part of the story for the following three years.

I welcome the helpful and constructive comments from the shadow Minister, who shares the perspective of the Government on the important role of the NHSCFA and the importance of preventing and tackling fraud in the NHS. I want to reiterate that never before has a counter-fraud response to protect the Government’s investment in the NHS been so important, and that only a national organisation such as the NHSCFA can gather and process the information and intelligence arising from the huge range of threats to the NHS.

I should reiterate that the vast majority of people do not commit fraud in their interactions with the NHS; the problem is very much from a minority. The NHSCFA carries out the Secretary of State’s counter-fraud functions in respect of the health service in England, and it has the crucial ability to distil data and enable a focus on prevention in its counter-fraud response.

The shadow Minister asked about cross-NHS working. The NHSCFA is working hard to build and develop capability across the NHS and among NHS organisations, to extend consistent principles, national standards and best practice to all parts of the NHS, and to drive a national, co-ordinated and cross-organisational response. The focus is on prevention, because we know that preventing loss is more cost-effective than prosecuting suspects and recovering funds that have already been lost.

The shadow Minister asked about a revised strategy for the CFA, and I can assure him that it is being drafted and will be published soon.

On the updated strategy, we have talked a lot about personal protective equipment in the last few months, and it is fair to say there are some unusual entrants into that market. Will the updated strategy look at how PPE is procured moving forward?

The shadow Minister makes an important point about PPE. Clearly, the Government have had to move very rapidly to increase the procurement of PPE to meet the needs of the NHS and social care during the pandemic. PPE procurement for covid-19 is centrally managed, not managed by NHS trusts, and therefore falls outside the remit of the NHSCFA. It is being investigated by the DHSC anti-fraud unit, but that is being supported by the NHSCFA. No doubt lessons learned from the covid experience will be used by the NHSCFA in developing its processes and the strategy that we have been referring to.

Extending the current model will provide the opportunity for the NHSCFA to continue its work and consolidate its organisational design, which it has been working on over the last three years. The Department will continue to oversee the function of the NHSCFA, in its sponsorship role, to ensure that it remains fit for purpose. The draft order is an important and integral piece of secondary legislation to allow the NHSCFA’s independent and crucial remit to continue. I urge all hon. Members to approve it.

Question put and agreed to.

Committee rose.

The Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020

The Committee consisted of the following Members:

Chair: Ian Paisley

† Brine, Steve (Winchester) (Con)

† Doyle-Price, Jackie (Thurrock) (Con)

† Gideon, Jo (Stoke-on-Trent Central) (Con)

† Graham, Richard (Gloucester) (Con)

† Gullis, Jonathan (Stoke-on-Trent North) (Con)

† Hammond, Stephen (Wimbledon) (Con)

† Moore, Damien (Southport) (Con)

Osamor, Kate (Edmonton) (Lab/Co-op)

† Powell, Lucy (Manchester Central) (Lab/Co-op)

Smith, Nick (Blaenau Gwent) (Lab)

Tarry, Sam (Ilford South) (Lab)

Thompson, Owen (Midlothian) (SNP)

Timms, Stephen (East Ham) (Lab)

† Timpson, Edward (Eddisbury) (Con)

† Tomlinson, Michael (Lord Commissioner of Her Majesty's Treasury)

† Twist, Liz (Blaydon) (Lab)

† Zahawi, Nadhim (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)

Yohanna Sallberg, Committee Clerk

† attended the Committee

Fifth Delegated Legislation Committee

Wednesday 8 July 2020

[Ian Paisley in the Chair]

The Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020

Before we begin, I remind Members about the social distancing regulations. Members may wish to remove their jackets if they feel very warm or overcome. I also remind Members that if they make speeches, they should email them to Hansard, who would appreciate it. I call the Minister to move the motion.

I beg to move,

That the Committee has considered the Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020 (S.I., 2020, No. 627).

The order was made and laid before the House on 22 June 2020 under the affirmative process. As ever, it is a delight to serve under your chairmanship, Mr Paisley. I will explain clearly the rationale behind the order.

Today’s debate focuses on the addition of a public interest consideration to the Enterprise Act 2002—specifically, the need to maintain in the UK the capability to combat and mitigate the effects of public health emergencies. As Committee members know, the Government have done everything in their power to protect UK citizens, UK businesses and the UK economy during the pandemic, but the crisis has exposed a gap in those powers that the order seeks to fill. In short, it helps to ensure that critical public health and crisis mitigation capabilities can be preserved in the United Kingdom to safeguard the welfare of the British people.

I turn briefly to the Act as a whole, which enables the Government to intervene in qualifying mergers and acquisitions on specified public interest grounds. There were three grounds for such interventions in the Act: national security, media plurality and financial stability. The last was added in 2008, following the financial crisis.

The order added a fourth public interest consideration to the list: public health emergency capability. The addition does not change our belief in an open economy or the many benefits that result from investment in the United Kingdom. In 2018 alone, more than 57,000 jobs were created thanks to foreign investment, and such investment will continue to be vital as we power our economy and our recovery from the pandemic.

Our belief in an open economy is reflected in our history of interventions under the Act. To date, there have been 20 interventions: 12 on the grounds of national security, seven on media plurality and one on financial stability. Not one has resulted in a blocked merger. However, the covid-19 pandemic has caused us to step back and review the circumstances under which it is proper for the Government to intervene in takeovers, and that work has led to the order under consideration.

I turn briefly to the detail of the order. All Committee members will recognise the hard work, dedication and commitment of firms in their constituencies up and down the country that have been involved in our covid-19 response. Those companies have helped us to weather the pandemic storm and their capabilities, including their expertise and knowledge, will be just as crucial as we rebuild our economy. However, the very qualities that made those firms critical to our response put them at risk from opportunistic investors. Although the vast majority of investors are an immense boon to the country, a small and unscrupulous minority seek to use UK expertise to advance their own agenda at the expense of the British people.

In the past months, we have seen attempts across the world to buy priority access to vaccines, to control the flow of personal protective equipment or to limit the availability of certain drugs. The Government have been clear that they will not allow that to happen to UK firms as a result of qualifying takeovers. This order creates the legislative framework to allow us to do so.

Companies directly involved in combating public health emergencies, such as drugs companies, are most at risk. However, astute Members will have noted that the order also allows intervention to maintain UK capability in mitigating the effects of a public health emergency. That might be necessary if there were a risk to firms in our food supply chain, for example, or to companies that allow us to work safely during a pandemic, helping slow the spread of the virus while allowing us to mitigate the impact on our economy. Such companies might include internet providers, for example, whose fibre broadband allows people across the country to work from home, order food and essentials from their living room, and keep in touch with their loved ones.

In conclusion, this is a reasonable and proportionate measure, allowing the Government to intervene to maintain the UK’s capability to combat and mitigate the effects of public health emergencies. The need for such a measure has been illuminated by the covid-19 pandemic, but it does not alter our appetite or enthusiasm for genuine investment into this country, which will always be encouraged and welcomed. I hope all Members will support this measure to ensure the UK remains open for business, but not for exploitation, and I commend the order to the House.

It is a pleasure to serve under your chairmanship, Mr Paisley. We noted during this morning’s statutory instrument Committee that many Members had made use of their local enterprises over the past few days to get their hair done. I note that some have not yet done so, although I think the Minister was the first in the queue on Saturday—[Laughter.] He got his hair coiffed to its usual high standard.

The Opposition support these measures. It is important to protect critical public health and crisis mitigation infrastructure from aggressive takeovers. Many usually successful businesses of all sizes that are supporting our communities to tackle the effects of covid-19 are suffering from short-term impacts on their profitability and share prices, and might therefore be more vulnerable to takeovers than would otherwise be the case. We support the addition to section 58 of the Enterprise Act of a capability to combat and mitigate the effects of public health emergencies as a new public interest consideration, placing it alongside the existing provisions for interventions on the grounds of “national security”, “media plurality” and

“the stability of the UK financial system”.

As the Minister has said, the Labour Government used an order similar to the one we are considering today to add the stability of the UK financial system to that list back in 2008, following the financial crisis. There is no doubt that that provision will also play an important role in the months and years ahead.

I appreciate that swift action is required in these times, and the Government have moved quickly to act in this instance. However, the Labour Government did manage to conduct an impact assessment and lay it before the House alongside the 2008 order, so I ask the Minister to consider doing something similar in quite short order, or maybe conduct a formal review of the changes at some point so that we can understand their long-term impacts. That said, we are happy to support the order today.

I am grateful to the shadow Minister for the support of the Opposition. Of course, the National Security and Investment Bill will be coming forward, in which we can look in the round at what we have in place to protect the UK economy from predatory behaviour.

The Minister has laid out the case for why there needs to be a public interest addition to section 58 of the Enterprise Act 2002, and he mentioned the context: of the 20 interventions so far, none has been carried out.

None the less, the impact of this change is in the direction of growing protectionism. We are seeing that trend across the world, and it can only have a negative impact on inward, and indeed outward, investment. Will the Minister tell us the extent to which some of the partners with whom we are trying to do free trade agreements have similar provisions in place—in other words, specific considerations of public health emergencies added to their public interest constraints on buying companies? To what extent does he believe that that trend is going to grow?

In an earlier statement, the Minister said:

“It is difficult to imagine that the need to maintain critical UK public health and crisis mitigation capabilities will become less important over time.”

That implies that there will be more intervention, rather than less. It would be valuable if we were all clear about the direction of travel, given that this party of Government believes strongly in creating a global Britain that allows our businesses to go overseas and, if need be, to buy companies to help expand British interests overseas. As the Minister said, we benefit hugely from inward investment.

I am grateful to colleagues for listening so intently and for their presence. I hope they will see fit to support the order.

My hon. Friend the Member for Gloucester raises an important point about other countries and our experience of how they have dealt with the pandemic. Our European allies, Australia and Japan, have also moved to protect their economies and companies similarly. He also raised scope creep, which would not go down well. Let me be clear: this is not a wider public interest test brought in through the back door. My hon. Friend is rightly concerned about that, and he would want to hold the Government to account if that were true, but it is not. I hope I can allay his fears.

The Government continue to welcome genuine investment from around the world. I repeat this for the last time: our economy can thrive only when the health of the British people is protected.

Question put and agreed to.

Committee rose.

Draft Port Examination Codes of Practice and National Security Determinations Guidance Regulations 2020

The Committee consisted of the following Members:

Chair: Mark Pritchard

† Drummond, Mrs Flick (Meon Valley) (Con)

† Edwards, Ruth (Rushcliffe) (Con)

Grady, Patrick (Glasgow North) (SNP)

† Grundy, James (Leigh) (Con)

Johnson, Dame Diana (Kingston upon Hull North) (Lab)

Jones, Andrew (Harrogate and Knaresborough) (Con)

† Lewer, Andrew (Northampton South) (Con)

† McGinn, Conor (St Helens North) (Lab)

Morris, Grahame (Easington) (Lab)

† Morrissey, Joy (Beaconsfield) (Con)

Owatemi, Taiwo (Coventry North West) (Lab)

† Philp, Chris (Parliamentary Under-Secretary of State for the Home Department)

† Pursglove, Tom (Corby) (Con)

Ribeiro-Addy, Bell (Streatham) (Lab)

† Smith, Jeff (Manchester, Withington) (Lab)

† Watling, Giles (Clacton) (Con)

Williams, Craig (Montgomeryshire) (Con)

Dominic Stockbridge, Committee Clerk

† attended the Committee

Sixth Delegated Legislation Committee

Wednesday 8 July 2020

[Mark Pritchard in the Chair]

Draft Port Examination Codes of Practice and National Security Determinations Guidance Regulations 2020

I beg to move,

That the Committee has considered the draft Port Examination Codes of Practice and National Security Determinations Guidance Regulations 2020.

As always, it is a pleasure to serve under your chairmanship, Mr Pritchard. Approval of this statutory instrument is required before changes to the counter-terrorism port examination and biometric retention powers made by the Counter-Terrorism and Border Security Act 2019 can come into effect, as well as new counter-hostile state activity port examination powers under the same Act. These regulations will bring into force a revised code of practice regarding functions carried out under schedules 7 and 8 to the Terrorism Act 2000, a code of practice regarding those functions under schedule 3 to the 2019 Act and revised guidance issued under the Protection of Freedoms Act 2012 and concerning the retention of biometric data for national security purposes.

Counter-terrorism officers who currently use schedule 7 port examination powers must do so in accordance with the relevant code of practice. Although the code largely reflects the primary legislation, it also includes further procedural guidelines for those exercising the powers and additional safeguards for those who are subject to them.

Amendments to the powers through the 2019 Act necessitated consequential changes to the code, which we are now making. This reflects new provisions to pause the detention clock where a detained person requires medical treatment during the examination, to prohibit oral answers given by an examinee in response to questioning under compulsion being used as evidence in a criminal trial and to require an examinee in detention to choose a different solicitor where there are concerns with their chosen solicitor.

A similar code was produced for the schedule 3 powers, but with two key differences: first, to reflect that schedule 3 is targeted towards detecting those engaged in hostile activity—potentially hostile state activity—as opposed to terrorism; and, secondly, to provide additional detail relating to the new property seizure and retention powers exclusive to schedule 3 that require an examining officer to seek the authorisation of the Investigatory Powers Commissioner to retain and use a person’s property or copies of that property.

Both these new codes were subject to public consultation last year. In response to the feedback that we received, we have strengthened safeguards for confidential material, making it clear that such material should not be accessed by frontline officers without prior judicial authorisation. We have extended these safeguards to cover material that may disclose a source of journalistic information. We have also provided further clarity on the practical operation of new schedule 3 retention powers.

In addition, the regulations bring into force updated guidance, issued under the 2012 Act, on the making or renewing of national security determinations. NSDs allow the biometrics—fingerprints and DNA profiles—of unconvicted individuals of national security interest to be retained after initial statutory retention periods have expired. That is obviously to strengthen our ability to fight terrorism and other threats. The changes include increasing the maximum length of an NSD from two to five years, which operational experience shows is important. NSDs are an important national security capability. Biometric material retained using NSDs is known in the last year to have led to the identification of individuals thought to have travelled to take part in the conflict in Syria and Iraq, has provided evidence of potential terrorism offences and has been matched to potential visa and asylum applications, resulting in the subject individuals being refused entry to the United Kingdom.

In revising the biometrics guidance, we have undertaken significant consultation with key stakeholders, including the police, the devolved Administrations, the Lord Advocate and the independent Biometrics Commissioner. I urge the Committee to consider the draft codes and the revised guidance favourably, and I therefore commend these regulations to the Committee.

It is a pleasure to serve under your chairmanship, Mr Pritchard, and it is always good to see the Minister. I do not think familiarity breeds contempt in his case, because I have seen plenty of him and I am only growing fonder of him. I thank him and the Minister for Security, the right hon. Member for Old Bexley and Sidcup (James Brokenshire), who briefed me in advance on the SI, which was useful. It is in that spirit that I want to work constructively with the Government to ensure that we have robust national security policies firmly in place.

Although the regulations are, on the face of it, technical, they are an important aid in that task. As the Minister said, they bring into force revised codes of practice pertaining to port examination powers under schedule 7 to the Terrorism Act 2000—[Interruption.]and also pertaining to those exercised as outlined in schedule 3 to the Counter-Terrorism and Border Security Act 2019 in relation to hostile state activity; I hope that that is not the cause of the noise outside.

In addition, the regulations contain proposed revisions to guidance on biometric data, as set out in section 22 of the Protection of Freedoms Act 2012—notably pertaining to conditions on when biometric data can be retained, such as when national security determinations are authorised, as the Minister said.

Our first responsibility, of course, is to protect the public, and there is little question that intercepting terrorist and hostile state actors is vital to that. The attempted assassination of Sergei and Yulia Skripal in March 2018, which led to the poisoning of Detective Sergeant Nick Bailey and Charlie Rowley, and of Dawn Sturgess, who sadly died, made it clear to what depths those who want to harm our values, communities, country and citizens will stoop in order to achieve their ends. Those events and the evolving nature of risks and security threats highlight the need to improve our lines of defence and fill gaps in the legislation. The 2019 Act and the regulations are an attempt to do that.

Our skilled counter-terrorism and border officers at UK ports are often the first line of defence against malign actors, and we need those threats to be intercepted at quick pace. That means that appropriate powers and training must be provided to those dedicated men and women, and their operational partners, so that they can stop, question, search and detain individuals they believe to be dangerous.

That requires updated codes of practice on rights and duties, and we welcome the further clarity in the draft guidance on the scope of an accredited officer’s engagement, as well as clarity on the rights and obligations of the individual being examined, including safeguards on timeframes, communication of information and robust complaints procedures.

Clear guidance not only ensures proportionate and fair use of the powers, but makes their operation as efficient as possible. The Opposition want that, because it keeps our country safe and secure. We welcome the clarification in the guidance of what “hostile activity” comprises. As set out in annex C to the draft schedule 3 code, that is now to include various types of actions, among them espionage, sabotage, assassination and subversion.

Will the Minister confirm whether the list will continue to be reviewed regularly so that activities could prospectively be added if a national security interest deemed it necessary? Clarity in response to evolving threats will help officers on the frontline to do their job and help to keep people safe.

We support the regulations in principle, and we simply seek some clarification and assurances, which I know the Minister is always happy to provide. We acknowledge the safeguards provided in relation to journalists and sensitive information, and I am sure we can agree that in a democracy such as ours, confidential material should be subject to higher legal protections. Investigatory Powers Commissioner oversight is therefore welcome, as are safeguards on retaining confidential material in secure ways. On that first point, will the Minister outline the timeframes that we can expect for independent authorisation—particularly for urgent cases? Will he also outline the systems and processes in place for secure storage?

On biometric retention, we accept the operational case for making changes and the need for the guidance to reflect that. The changes are on issues that include, as the Minister said, extending the length of NSDs from two to five years, allowing a chief officer of a police force in England and Wales to make an NSD in relation to data held by any force in those two countries, and giving the police greater opportunities in specified circumstances to prepare and consider an application before the data is deleted.

Those are, rightly, resilient measures, but we must remind ourselves that they apply to individuals who have not yet been convicted of any crime. It is therefore vital—this is similar to our discussion of terrorism prevention and investigation measures in the Counter-Terrorism and Sentencing Bill Committee yesterday—to have strong protections.

I understand that the Biometrics Commissioner suggested, as stated in the guidance, that officers should make an NSD for less than the new maximum statutory period of five years if they think that that would be proportionate. Again, I trust officers implicitly to make that call based on the evidence in front of them. Can the Minister confirm that further oversight and support would be provided in such scenarios, so that resources are allocated accordingly if the full period is genuinely needed? I am sure he will agree that it would be undesirable for the length of the measures to influenced by local resource considerations rather than underlying security concerns. Conversely, if an individual’s risk profile changes and they no longer pose a threat, will the Minister clarify whether data retention could also be changed, based on that judgment? A sense of flexibility and review is important for such measures.

The Biometrics Commissioner recommended that data be deleted within a reasonable period in circumstances where an individual has been arrested but not convicted of a non-terrorism offence. The guidance states that a reasonable period is up to six months. Can the Minister tell us what evidence led to the designation of that timeframe? Was it suggested by the commissioner?

As I said at the outset, national security is of the utmost importance to the official Opposition, the Government and all members of the Committee. In that context and that spirit, we support the action that the Government are taking.

Let me briefly reply to some of the points that the shadow Minister made. I echo his comments about what a pleasure it is to appear opposite each other once again—this is becoming quite a double act, and one that I hope will continue for many months and years to come. I promise that I did not organise the honking of horns on the river that occurred, very rudely, during his speech a few moments ago.

On the ongoing review of how these provisions operate, the Minister for Security and the Investigatory Powers Commissioner will be taking a close, ongoing interest in how they operate, to ensure they are operating as intended. If the threat changes or an evaluation is made that further changes need to be made to the codes of practice that we are debating, I am sure that the Investigatory Powers Commissioner will suggest them or the Minister for Security will move them forward if he or she considers them to be necessary.

On the processes for storage, I do not want to go into the technical or operational details, but suffice it to say that there is a high level of assurance that the systems being used to retain this information are extremely secure. We are conscious that the material concerned is personal and confidential to the person to whom it relates, and that it is often of some national security importance.

In relation to the shadow Minister’s question about the time of retention, we will expect officers who exercise these powers to do so proportionately. If the threat is such that the full period of time is not required, we would expect them not to use it. If, as the shadow Minister said, the nature of the threat changes, we would expect that to be reflected in any ongoing retention decisions. Those are clearly day-to-day operational decisions, and we have to rely on the officers on the ground to make those decisions within the confines of the law and the confines of the codes of practice that we are debating. On that basis, I commend the regulations to the Committee.

Question put and agreed to.

Committee rose.