House of Lords
Tuesday 16 March 2021
The House met in a hybrid proceeding.
Prayers—read by the Lord Bishop of Winchester.
Arrangement of Business
My Lords, the Hybrid Sitting of the House will now begin. Some Members are here in the Chamber, others are participating remotely, but all Members will be treated equally.
Oral Questions will now begin. Please can those asking supplementary questions keep them brief and confined to two points? I ask that Ministers’ answers are also brief.
Climate Change Committee: Carbon Budget Report
To ask Her Majesty’s Government, further to the report by the Climate Change Committee Sixth Carbon Budget report, published on 9 December 2020, what plans they have (1) to engage the public on, and (2) to ensure the behaviour changes included in, the recommendations of that report.
My Lords, we are engaging the public on the challenge of net zero through regular dialogues, consultations and online advice services. In 2020, we launched the brand Together for Our Planet, with a dedicated website, stakeholder engagement and a push across government digital channels. We are also developing policies to support people to make greener lifestyle choices, such as buying an electric vehicle or insulating their home, which will form part of the upcoming sectoral decarbonisation plans.
My Lords, I thank the Minister for his Answer, but I am sure he will agree that we need more than a website. Four months ago, the Minister assured the House that a dedicated engagement team was up and running and working on how COP 26 could be utilised to best affect behaviour change. So far, the only civic society engagement is an art competition for under-16s and a hashtag. Assuming that that is not the extent of the campaign, can the Minister say when the behaviour change part will be launched, what areas it will cover and who is leading on it? Speed is of the essence.
Throughout 2020, we held deliberative dialogues with the public on transport and heat decarbonisation, the environment, the future of food, carbon capture, usage and storage, and our transition to net zero. I can assure the noble Baroness that, in the run-up to COP 26, we will be working closely with businesses, civil society groups, schools and others.
My Lords, at local and national levels, in communities across the country, the Church of England is committed to reducing net carbon emissions to zero by 2030. Can the Minister say a bit more about the plans Her Majesty’s Government have to offer practical support for local communities already committed to transformation, using new, low-carbon technologies to achieve net-zero emissions?
The right reverend Prelate makes some good points. A BEIS-supported parish council carbon calculator has just been launched to support local communities to develop their own plans for tackling emissions locally. Once they have developed a plan, the Rural Community Energy Fund is available to support the development of net-zero energy projects.
My Lords, does my noble friend agree that the advice he mentioned in his reply to the original Question needs to pass the “three Cs” test and be clear, concise and consistent? Does he agree that the handling of the Cumbrian coal mine is an example of where the three Cs test was failed on all accounts?
My Lords, in November, I asked a supplementary question, and the Minister said that
“all campaign spend will be released in line with the usual Cabinet Office spend data publications.”—[Official Report, 18/11/20; col. 1415.]
This was in relation to what we are spending on engagement for COP. I have had a look, and I cannot see anything related to COP 26 engagement since then. Can the Minister please be clear about whether or not the Government actually plan to spend money on public engagement to drive behaviour change? If so, what is the budget? As the noble Baroness, Lady Blackstone, said, this is a crucial and urgent issue. If the Minister does not have the figures to hand, could he please write to me and place a copy in the Library?
My Lords, the message from the Sixth Carbon Budget report is important but complicated. We need to take people with us if we are going to succeed. The message needs to be clearer and simpler. Will the Government use the resources at their disposal to re-present the case, so that it can be understood by the ordinary person and not only the expert?
I agree with the noble Lord that we need to engage not only experts or early movers in this technology but the public as a whole. He makes some good points, and we will engage the full resources of Government to make sure that this message gets across.
My Lords, I chair Pendle council’s climate emergency working group. An additional 100 pages, as part of this huge document, are about local authorities:
“For local authorities, this does not entail focused emissions cuts”—
this is government policy—
“in separate sectors, but means transforming whole places towards Net Zero, working with residents, communities and businesses to deliver the right changes and investments for the area.”
That seems fairly obvious to some of us, but the report says that
“there is no overall plan for how local authorities fit into delivering Net Zero.”
Will the Government devote more attention to the need to bring local authorities together in this vital work?
The noble Lord makes some good points. Local government is indeed a key partner in delivering net zero, and this Government are supporting it with a range of funding streams covering key decarbonisation areas such as transport and building. Local government bodies are, of course, key to leading transition in their areas, leading by example on their own estates, and supporting and enabling others to follow their campaigns.
My Lords, does my noble friend the Minister agree that, since we are asking for long-term, fundamental and voluntary changes in behaviour, we should do that on the basis of trust and openness? Will the Government investigate the potential for setting up a repository of the best available data and research, so that individuals can easily establish, for instance, how much they are helping by adopting a vegan diet and how on earth it is possible for the local council to say that it is recycling when it is mashing up broken glass with our newspapers?
I certainly agree with the first part of my noble friend’s question about the need for trust and openness. The Government are currently examining how best to support the public in making green choices and adopting sustainable behaviours. This includes identifying information that people need and how it can best be communicated, and providing it in an accessible format.
My Lords, one year into the pandemic, what lessons have the Government learned to encourage behavioural change in relation to net zero, given that the Public Accounts Committee reports this month that the
“Government has not yet properly engaged with the public on the substantial behaviour changes that achieving net zero will require”,
via co-ordinated, cross-department, consistent messaging?
It is important that we get cross-departmental working going correctly. Obviously, the pandemic has resulted in some challenges in this area, but we are devoting considerable attention across government committees, and different departments are engaging with each other to try to get that message across. I agree with the noble Lord that there needs to be consistent messaging, and we need to get all of government focused on this effort.
My Lords, to get to net zero we need to encourage people to switch from cars to walking and cycling for local journeys. In this context, how does the average investment in local infrastructure in the UK to support this transition compare with places such as Copenhagen, where this has been done successfully, with about 50% of journeys on foot or bike? Secondly, my local authority, Oxfordshire County Council, is proposing changes that will increase car traffic in residential urban side streets and therefore discourage walking and cycling. How will the Government respond to this?
I am not aware of the specific changes proposed in Oxfordshire—I will certainly have a look at that—but there is a walking and cycling strategy. The Government have devoted considerable resources through the Department for Transport to encouraging both those modes of transport.
My Lords, the Sixth Carbon Budget report includes options for reducing emissions in the aviation sector. Can my noble friend the Minister tell us what the Government are doing to encourage sustainable aviation fuels, the development and take-up of which would not only reduce emissions but would support and create new green-collar jobs across the country?
My noble friend makes some very good points. As we were both aviation Ministers, I am delighted to tell her that today we launch the Green Fuels, Green Skies competition, which will provide up to £15 million in funding for the early-stage development of first-of-a-kind, large-scale sustainable aviation fuel projects in the UK.
I refer noble Lords to my interests in relation to sustainable development and low-carbon heat. Does the Minister agree that the switch from coal to gas was successful primarily because it was made easy and simple for households to make the switch by connecting to the infrastructure that was put into the great majority of streets in the UK? Is there more that the Government could do to support low-carbon networked heat solutions to make it similarly easy for people to connect and go low-carbon?
The noble Lord makes some very good points. Networked heat will be one of a number of different contributions that we will need to make to encourage transition to low or no-carbon heating. A number of different options are available, supported through a range of government incentive schemes.
Independent Office for Police Conduct
My Lords, following the publication of the IOPC’s investigation report, in October 2019 the Home Secretary asked the director-general to set out his plan for improving public confidence in the IOPC. The Home Secretary has been clear that she believes that there are outstanding questions and will discuss these with Sir Richard Henriques. We also welcome the Home Affairs Committee’s current inquiry into the police complaint system. We understand that the committee is taking evidence in relation to Operation Midland.
My Lords, would we not all agree across the House with the following words:
“I find it quite extraordinary that anyone who is referred for misconduct is not interviewed”?
Would we not all share courageous Lady Brittan’s astonishment that a deputy assistant commissioner of the Metropolitan Police—a man who was in charge of the disastrous Operation Midland and who allowed false evidence to be used to obtain search warrants—was not asked a single question in person before being cleared by the IOPC of allegations of misconduct? Why has the distinguished former High Court judge Sir Richard Henriques, to whom my noble friend referred, not yet received a reply to his request last month for an investigation into the
“apparent condoning of police criminality by its notional watchdog”
and other serious issues? Why is Sir Richard still waiting for an answer, and when will the investigation be started?
My Lords, as I understand it, Lady Brittan has received an apology from the Commissioner of the Metropolitan Police; again, I extend my sympathy to her for the events to which she and indeed her late husband were subjected. The IOPC is an independent body, which takes its decisions independently from the Government and from the police. I cannot and will not comment on the way in which the IOPC conducts its own investigations. My understanding is that Sir Richard will receive a letter from the Home Secretary. However, it is worth bearing in mind in relation to his more recent comments that in his report itself Sir Richard said that
“the officers had conducted this investigation in a conscientious manner and with propriety and honesty.”
Like my noble friend Lord Lexden, I hope that Ministers will initiate a comprehensive inquiry into the manifest shortcomings of Operation Midland and the IOPC. I also wonder whether the Minister shares the widely held view that the considerable injustice done to all those who have been defamed can never been remedied without expanding the remit of any such inquiry to include Midland’s associated and no less egregious scandal, Operation Conifer.
My Lords, as regards injustice, as I have previously said, the commissioner has apologised both to Lady Brittan and to Lord Brammall. On the shortcomings of the IOPC, we agree that there is room for further progress. The Home Secretary has raised concerns about the IOPC’s performance, and in October 2019 she formally requested a report on the IOPC’s plans to increase efficiency and effectiveness—that is on the Home Office website. The Government are not minded to initiate a public inquiry into either Operation Midland or Operation Conifer, because both operations have already been subject to considerable scrutiny.
My Lords, we all want to avoid terrible cases like this. Some people are concerned that if there is anonymity up until charging, which of course would stop cases like this one and that of Cliff Richard, people may not come forward with important information. However, does the Minister agree that if people come forward after charging, that is still possible and in fact more possible, because the CPS will by then have looked at the allegations and found out whether there was anything worth pursuing?
My Lords, there is indeed a difference between pre and post charge. The Government believe that, in principle and in general, there should be a right to anonymity pre charge in respect of all offences. But—it is an important but—there will be exceptional circumstances where there are legitimate policing reasons for naming a suspect, such as an imminent threat to life. The guidance in this regard is governed by the College of Policing’s authorised professional practice on media relations, which states:
“Police will not name those arrested, or suspected of a crime, save in exceptional circumstances … such as a threat to life, the prevention or detection of crime, or where police have made a public warning”.
After charge, as the noble Lord indicates, the position is different.
My Lords, should we not congratulate the Mail and in particular journalist Stephen Wright for his forensic work in unravelling the Beech affair and their exposure of deficiencies in the Rodhouse-led investigations? Why does not Mr Rodhouse, who prior to the abuse scandals had a reputation for competence and thorough investigations, interview and explain the background to his actions? We all make mistakes in life and sometimes admitting them can be both therapeutic and clear the air. At least the public would then understand what has happened.
My Lords, so far as the Mail’s investigations are concerned, I would make three points. First, the message must go out that if you deliberately lie about sexual abuse, you will go to prison for a long time—in this case, 18 years. Secondly, as the noble Lord said, people make mistakes. The MPS made mistakes, it has learned, it needed to learn, and it is continuing to learn. Thirdly, however, the message must go out: if you are a victim of child sex abuse, even if it is historic, come forward. We have successfully prosecuted and obtained over 5,000 convictions, and in every case we will seek to ensure that justice is done, whether that be a conviction or an acquittal.
My Lords, one of the major recommendations of Sir Richard’s review was that the Met’s media communications policy should be amended to avoid any details of age or geography being released to the public in relation to the arrest, search, interview or bail of any suspect. Is the Minister satisfied that this recommendation is being followed and monitored to ensure that deviation from it will constitute a disciplinary offence?
My Lords, in her letter to the Home Secretary dated 15 February 2021, the commissioner set out that the MPS will follow the College of Policing media approved professional practice, which I set out to the House a few moments ago. Whether a breach of that is a disciplinary matter must be a matter for the police and for the IOPC.
This Question is about victims of false allegations and the role of the IOPC in investigating what happened and why. We also need to do better for all those victims who bring forward legitimate allegations yet are failed. Some 99% of rapes reported to the police in England and Wales result in no legal proceedings whatever. What more can the police and the IOPC do to play their part in helping to ensure that the rate of prosecutions for rape increases?
The noble Lord raises a critical point. Both my department and the CPS are focused on ensuring that we improve the number of rape allegations which come to court, where there is sufficient evidence to do so, and that the conviction rate improves as well. That is a huge amount of work and outside the ambit of a particular answer, but he will know that the Government are particularly focused on that area.
My Lords, in my activist world I hear a lot of complaints against the IOPC and its previous incarnation. I am curious about the fact that a lot of former police officers work there as investigators. It has been suggested that the IOPC does not investigate as thoroughly as it might because it has too many former police officers. Has the Home Office paid any attention to that?
My Lords, one must have a balance. If you are going to investigate the police, you need some people in your organisation who have the skill set to know how the police operate. The figures are these. Overall, 23% of IOPC staff are former police officers—that is 28% in operations. However, first, they do not investigate their former force; and secondly, most senior decision-makers are not former police officers. By law, the director-general cannot be a former police officer, and the current director-general has put in place a practice that the two deputies are also not former police officers.
Zimbabwe: Human Rights Abuses
My Lords, we remain concerned by the human rights situation in Zimbabwe, particularly the continued targeted arrests of, violence against and abductions of journalists, civil society activists and opposition politicians. We engage regularly with the African Union and South Africa on Zimbabwe, including on human rights issues. The Foreign Secretary discussed Zimbabwe with the South African Foreign Minister in November 2020, and the Minister for Africa discussed our approach with the former African Union Peace and Security Commissioner, Smaïl Chergui, in July 2020.
I thank the Minister for that Answer. The human rights abuses and the breakdown of the rule of law in Zimbabwe over the past few years have been devastating for the people of Zimbabwe, but also for the neighbouring countries. It has very negative economic and social consequences for them. With the very welcome focus of Her Majesty’s Government on getting value for money from overseas development aid, what is the FCDO doing to ensure that development aid, along with diplomatic engagement, encourages all members of the Southern African Development Community—SADC—to take action themselves, which would bring respect for human rights and the possibility of free and fair elections in the wonderful country of Zimbabwe?
I pay tribute to the noble Baroness’s work on supporting democracy for the Zimbabwean people, and I recognise that she has not only been present in Zimbabwe during previous elections but has a deep love for that country. We remain extremely concerned about the human rights situation in Zimbabwe. We provide significant ODA support, but not directly via the Zimbabwean Government. Our efforts are geared towards empowering people through education and via conservation, which provides significant opportunities for tourism and jobs. As we look towards elections in 2023, much needs to be done to ensure a fair playing field. That is what we will continue to push for; it is what the Zimbabwean people deserve.
My Lords, as an official Commonwealth observer at the last election in Zimbabwe, I was warned particularly about the threats posed by the new Government to women’s rights. Reports of abuses have greatly accelerated recently. Just last week, I was contacted by women’s organisers, asking for help to press for the release of three prominent women being held for political activity. What representations are being made about these types of cases and about women’s rights in general?
Of course, we are very concerned by the failure to address the allegations of abduction and abuse of three MDC Alliance members: Joana Mamombe, Cecilia Chimbiri and Netsai Marova. We continue to call for investigations into those allegations. The Minister for Africa reiterated this message when he spoke to Zimbabwe’s late Foreign Minister, Sibusiso Moyo, on 8 June 2020. We have raised our concerns about the arrests and rearrests of Joana Mamombe and Cecilia Chimbiri, who were recently denied bail, and we will continue to follow their cases closely.
Does the Minister recognise that if we are to have any influence on the appalling human rights abuses in Zimbabwe, we must also engage consistently with countries in the region to advance regional prosperity, underpinned by respect for human rights, the rule of law and democratic norms? When will the Government develop an overall strategy for the region that has some chance of successfully moving these issues forward?
My Lords, we engage with the African Union on all reports of human rights abuses in instances where the African Union has leverage and political will. We are not convinced that that is the case in Zimbabwe. However, when the African Union has taken proactive steps to address concerns about the political and economic situation in Zimbabwe, the UK has been supportive. We support the special envoys appointed by Cyril Ramaphosa, but they have also struggled due to the lack of engagement from the Government of Zimbabwe. We will work with all partners where it makes most sense for the UK.
My Lords, Zimbabwe and, indeed, the world should have been a better place now that the evil Mugabe is thankfully out of it, but does my noble friend agree that Mnangagwa seems to be no better? The murders, rapes and torture continue, with any government critics beaten to death or simply disappeared. South Africa, regrettably, seems to be heading the same way, first under Zuma and now under Ramaphosa. Knowing the Government’s limited powers, what can and will they actually do to save the starving and beaten people of Zimbabwe?
My Lords, we have repeatedly made clear our disappointment at the lack of political and economic progress of the Zimbabwean Government. On 1 February, we announced sanctions to hold to account those individuals responsible for human rights violations. We support the Zimbabwean people through numerous aid programmes, focusing on poverty reduction, humanitarian assistance, standing up for human rights and supporting Zimbabwe’s recovery from the Covid pandemic. On South Africa, we strongly support President Ramaphosa’s efforts to tackle corruption and promote accountability, as well as efforts to address those crimes perpetrated under President Zuma.
My Lords, is the Minister aware that neither the African Union nor the South African Government have publicly commented on the recent forced and unconstitutional displacement by the Government of Zimbabwe of more than 13,000 villagers in Chilonga, where a recent De Beers report has shown a large deposit of diamonds?
My Lords, I was not aware that neither South Africa nor the African Union has commented on the large-scale displacement that the noble Lord has described. The UK has a long-standing partnership with South Africa; we speak often and candidly on a broad range of issues, including, of course, Zimbabwe. I am sure my colleague, my noble friend Lord Ahmad, and the Minister for Africa will raise this issue in their next conversation.
My Lords, there is evidence that President Mnangagwa is using Covid-19 restrictions as a cover for a crackdown on opposition and criticism. It is also clear that stakeholders, including trade unions and businesses, are being sidelined in discussions relating to recovery plans. What are the UK Government doing to engage with Zimbabwean civil society, including trade unions, to address their human rights concerns, including with the ITUC?
My Lords, this year, we are providing £81 million in bilateral development assistance to Zimbabwe. When our support through multilateral systems is included, that increases to £139 million. As I said earlier, we do not give aid directly to the Government of Zimbabwe; those funds are designed specifically to empower civil society, partly through education, partly via multilateral organisations, notably UN agencies, international NGOs and, of course, the private sector.
My Lords, apparently a high-level ANC delegation from South Africa met officials from Zimbabwe’s ruling ZANU-PF party to address the escalating economic and political crisis last September. Its priorities should have been the deteriorating human rights situation. Unidentified assailants have abducted and tortured more than 70 government critics. Arbitrary arrests, violent assaults, abductions and police crackdowns on anti-corruption protests abound unchecked. What specific actions is the UK taking to persuade South Africa that the key message to ZANU-PF should be that Zimbabwe’s economic and political crisis cannot be resolved by repressing the people of Zimbabwe?
My Lords, I am afraid I did not catch the whole question; the reception was poor. However, the UK engages often and regularly with South Africa on Zimbabwe, including on human rights. For example, the Foreign Secretary spoke to Foreign Minister Pandor in November about Zimbabwe, including its impact on its neighbours. The UK recognises the important roles of the African Union and South Africa in relation to Zimbabwe, and we will continue to engage with both, given that we share a desire to see a prosperous Zimbabwe that respects human lives.
My Lords, with elections due in two years’ time, the people of Zimbabwe need real hope of lasting change. May I join other noble Lords in asking the Minister what more the Government can do, alongside our partners, to bring real pressure to bear on neighbours in the region to put effective pressure on the Government of Zimbabwe to end the current appalling state of human rights in that country?
The UK stands ready in friendship to support a Zimbabwe that fully embraces the rule of law, human rights and reform. The ball is in the court of the Zimbabwean Government. The UK is on the side of the Zimbabwean people; we always have been and we will continue to work alongside the international community to support good governance, respect for human rights and genuine political and economic reform in Zimbabwe, to help secure a brighter and better future for all Zimbabweans.
Independent Chief Inspector of Borders and Immigration: Site Visits
My Lords, during the pandemic, the number of accommodated asylum seekers has increased and we have sought alternative accommodation options, including two MoD sites. We expect the highest standards from providers and have instructed them to make improvements following the interim report from the independent chief inspector. We await his full report on contingency accommodation and will lay that in Parliament with the department’s response, as usual, after the inspection is completed.
I have been assured many times that the Penally camp and Napier barracks sites are adequate, safe, secure, habitable and fit for purpose as accommodation for refugees. Then the inspector’s report comes out. It is totally contradictory and supports the views expressed by Public Health England, the Red Cross and others that these sites are not suitable. Some of the words describing them, such as “filthy” and “decrepit” are totally unacceptable. Then we find that in Napier, 197 of the refugees are infected with the virus. What is the difference between what the Home Office sees as adequate accommodation and the damning report of the inspectorate?
My Lords, as I said, this is an interim report from the independent chief inspector, which made important findings that we are of course acting on. We look forward to seeing his report in full, once it is complete. It is important to remember the context in which we are operating—the additional pressures that the Covid-19 pandemic has put on the asylum accommodation estate. Establishing extra sites to react to that has been challenging. We recognise that there is room for improvement and we look forward to seeing the full report so that we can continue to improve.
My Lords, this latest, albeit interim, report reveals that the health of all the residents at Napier barracks is at risk. A third are reported to be suicidal. Although the report is interim, it joins the reports of the Crown Premises Fire Safety Inspectorate and Public Health England in presenting a damning picture of the place. At Christmas, I attended church with residents of Napier barracks. It shames us all. We know that it is not easy to be a Home Office Minister but what more does the Minister require before the Home Office stops placing people in the barracks and decants those who are there, before we see loss of life and still further damage to the United Kingdom’s international reputation for human rights?
My Lords, the Home Office has been working with Public Health England and Public Health Wales, as well as the Crown fire inspectorate, in respect of Penally to make sure that the temporary accommodation that we have had to set up in light of the pandemic is safe and in line with their recommendations. As of last Friday, 12 March, there are 48 people at Napier and 55 at Penally. This is temporary accommodation and we are working to make sure that it is indeed that.
My Lords, my noble friend has a difficult task today because he will be aware that this issue was raised by noble Lords on 11 February, when we were told that the accommodation was
“safe, warm, fit for purpose”.—[Official Report, 11/2/21; col. 489]
It is clear from the latest findings of the ICIBI that this is not the case. What is the Government’s response now in relation to the findings about what is actually going on in these barracks? Serious safeguarding concerns have been raised, specifically in relation to people who have self-harmed and those at high risk of doing so who have been relocated to accommodation that is unfit for human habitation.
My noble friend is right to point to the fact that many people who come to the UK seeking asylum have been through traumatic experiences and have important safeguarding needs. Given that, safeguarding has been at the heart of the activity of the Home Office in the setting up and running of Napier and Penally. An on-site nurse and migrant help are available at both sites to ensure that people who are at risk of harm get the help that they need. We are continually improving our safeguarding measures, including in the light of the interim report from the chief inspector, and we have commissioned further work from our providers to make sure that all staff are fully trained in this important area.
My Lords, in answer to a previous Question, a Minister in the other place said that the barracks
“were good enough for the armed services and they are certainly more than good enough for people who have arrived in this country seeking asylum.”—[Official Report, Commons, 8/2/21; col. 10]
However, on 3 February the National Audit Office said that the barracks had suffered from “decades of under-investment” and that troops were living in substandard accommodation. Is the Home Office saying that substandard accommodation is more than good enough for those seeking sanctuary in this country?
My Lords, we do not think that this is substandard accommodation. The noble Lord is right to point out that this is accommodation in which we ask those who serve our country and put their lives at risk to stay. We have undertaken work to improve the sites at Penally and Napier to make them safe and habitable for those who are coming here seeking asylum.
My Lords, some years ago I stayed in Napier barracks and more recently, about four years ago, I showered and had lunch there at the start and end of a charitable bicycle ride around France. The barracks are comfortable. While they are pretty basic, they are warm and dry, the food is good and the showers work. Can my noble friend explain how it can be that these barracks have been used for many years by soldiers, who defend us and our country without complaint in the House of Lords, and yet now for people who understandably have fled poverty and violence in their own countries and have almost certainly come through a safe country—namely, France—they are deemed not to be acceptable?
My Lords, my noble friend speaks from personal experience which I think might be unique in your Lordships’ House. He is right to point to the fact that we have tried to make the accommodation suitable for those who need to be there. We want them to stay there for as short a time as possible, but because of the constrictions of the pandemic, in some cases they have had to stay for longer than we would have liked.
My Lords, I declare an interest in having a home that is half a mile away from the Napier barracks, and I must say that the site has looked near derelict for several years. However, in November a letter was sent to the Home Secretary and the Department of Health signed by Doctors of the World, the Faculty of Public Health and the Royal College of Psychiatrists saying that these premises were not suitable, that in a time of pandemic they were positively dangerous, and urging the Home Secretary to close them down immediately. Can the Minister tell us why, despite that letter and other evidence to the contrary, the Home Secretary has continued to insist that these premises are safe, although nearly half the inmates have contracted Covid?
As I have said, we are working with Public Health England and Public Health Wales to make sure that the accommodation is in line with recommendations. We have taken additional measures to mitigate the risks of Covid transmission, such as increased distance between beds, staggered mealtimes, one-way systems and advice for the people staying there. I am pleased to say that there have been no positive tests for Covid at Penally and no people currently in Napier testing positive for Covid either.
My Lords, the findings of the chief inspector are shocking and scathing about the failures in the preparation of a Covid-safe site, poor leadership, “inadequate oversight” by the Home Office and “serious safeguarding concerns” at these unsuitable locations. Does the noble Lord agree that the report is shocking and scathing, and can he tell me who is taking responsibility for these failures?
My Lords, this is an interim report, but there are some troubling findings and we are acting on them. We look forward to seeing the full report so that we can do that. The Home Office takes this issue very seriously. While the full report has not yet been given to the Home Secretary, when it has been, she will take it very seriously.
My Lords, we have been working with the Crown Premises Fire Safety Inspectorate throughout and have had further advice from the Kent Fire and Rescue Service. We are grateful to them for their proactive work and we continue to work with them both to make sure that the accommodation is safe.
VSO: Volunteering for Development Programme
Private Notice Question
My Lords, the impact of the global pandemic on the UK economy has forced us to take the tough decision to temporarily reduce our aid budget. We are now working through the implications of these changes for individual programmes, including the Volunteering for Development grant. No decisions have yet been made. We understand the need to communicate with VSO in a timely manner regarding this grant.
VSO is the UK’s flagship development agency but, in just two weeks’ time, will be forced to close down its Covid-19 response work in 18 countries if its grant is not renewed. Allowing this vital work to fold would be totally at odds with the UK’s commitment to support Covid recovery globally, not just domestically, and completely out of sync with any definition of global Britain. Will the Minister act urgently to reassure VSO that its grant will be renewed?
My Lords, VSO is a highly valued programme that the FCDO—and DfID, formerly—has been proud to support for many years. I reiterate the earlier point that no decision on the programme has yet been taken. Officials have been working closely with VSO to understand its position and will continue to do so.
My Lords, does the Minister realise that, because the Government could not take a decision before the end of last month, the UK has lost its outstanding youth volunteering programme run through VSO, International Citizen Service? Does he further recognise that, as the noble Baroness, Lady Coussins, said, the only other major volunteering programme that gets to the heart of local communities now in helping them to tackle Covid will go if VSO does not get reassurance within the next two weeks? The knowledge, skills, experience, networks and influence that it brings will be thrown away if the Government cannot come to a decision in just two weeks.
My Lords, the current phase of the V4D programme was originally due to end on 31 March last year, but we extended it for a year principally so that VSO could support vulnerable communities across the globe through the challenges of the pandemic. As I have said, no decision on the next step has been made yet, but it will be made shortly.
My Lords, following the last speaker, can the Minister say why the Government halted the International Citizen Service, which has provided many community, business and political leaders of the future? How can the Government be so negative in funding programmes that support girls’ education, health systems and much else in parts of the world where development and soft power are key to government priorities?
My Lords, despite the changes that were recently announced, our aid budget will continue to serve the primary aim of reducing poverty in developing countries through a number of different means. The new strategic approach to ODA will ensure that every penny we spend goes as far as possible and makes a world-leading difference. The Foreign Secretary has set out how we will deliver better results for the world’s poorest, as well as for the UK, through focusing on the seven global challenges where the UK can make the most difference.
My Lords, I welcome the approach set out in today’s integrated review, but our aid spending and what we can do globally are crucial to soft power. It seems that the large sum of money that has been taken out of the ODA budget has, in one year, potentially impacted, for example, aid programmes in Yemen, research and development programmes on global public health and the funding of LGBT groups. All of this will impact our soft power, just as it does volunteering. Will my noble friend report back the strong views of many of us on this side of the House, as well as others, that the 0.7% target should be restored as soon as possible?
My noble friend is right to value our ODA in the context of the tremendous soft power that it brings the United Kingdom. I will convey his message to the Government. The creation of the FCDO and the strategic oversight of ODA spend by the whole of government means that we will do aid better across government, even if the budget is temporarily smaller. We will ensure that the UK’s aid secures a greater impact across the globe. We will combine our aid with diplomacy to maximise its impact, focusing our efforts on where the UK can make a world-leading difference and ensuring that the UK is a force for good across the globe.
My Lords, unfortunately, there is increased violence and atrocities against women and girls in many developing countries around the world. We are also aware that education and skills training is fundamental to support them to become self-reliant and empowered. Can the Minister tell us what budget the Government have allocated for education and skills training to support such suffering women and girls, and which countries will benefit from it?
The noble Lord is right: no development intervention is more transformational than 12 years of quality education for girls. That is why it is a major priority for the Government. Between 2015 and 2020, the UK supported 15.6 million children to gain a decent education, of which 8.1 million were girls. We will use our G7 presidency this year to rally the international community to step up and support girls’ education and co-host, with Kenya, the replenishment of the Global Partnership for Education in July 2021.
My Lords, is the Minister aware that, if the cuts to the overseas aid budget lead to cuts to the Voluntary Service Overseas programme, they will negatively impact the international distribution of Covid-19 vaccines, given the involvement of VSO in Covid-19 response programmes in different parts of the world, such as Covid safety training for healthcare workers and rural populations in Tanzania, Sierra Leone, Ethiopia, et cetera?
My Lords, the FCDO and VSO were able to work together to pivot over 80% of programming to pandemic response in just 10 days, including supporting educating girls and children living with disabilities, strengthening healthcare systems, protecting basic livelihoods, and so on. We have shifted much of the focus of our ODA over recent months towards enabling countries to cope with Covid. It is fair to say that the UK is a world leader in doing so, and we will remain so.
My Lords, today’s integrated review claims that the Government want to
“shape the world of the future.”
The failure to renew the volunteering for development grant in a timely manner, combined with the closure of the International Citizen Service, shows that there is a yawning chasm between the Government’s words and their actions. I hope that the Minister will today personally commit to expedite matters so that the FCDO renews the grant in a timely manner, and so that when international travel resumes, the International Citizen Service will restart.
My Lords, it is in all our interests that this decision is taken quickly, and I will convey the noble Lord’s message to the FCDO. If I may make a broader point, despite the changes that have been brought in temporarily—it is our intention to return to 0.7% as soon as the fiscal situation allows—we remain a world-leading donor. We will spend over £10 billion in ODA this year; I believe that makes us the second biggest donor of the G7.
My Lords, the decision to leave VSO hanging on a cliff is beyond belief; this is no way to make decisions. Slashing humanitarian aid, development assistance and now VSO sends a signal of disappointment and delusion. Are the Government trading the reality of soft power for some of the delusions of hard power? Will the Government now immediately—today—commit the funding needed for VSO?
My Lords, it seems that unless it gets a decision in the next few weeks, VSO may be an early casualty of the aid cuts. The current law allows the Government to miss the 0.7% by accident or in an emergency; it does not allow the Government to plan and do this with intent for an indefinite number of years. It has now been nearly four months since the announcement, and we are seeing the real-world, distressing impacts of this policy. Can my noble friend the Minister tell me when we will see the legislation to make this policy lawful, and confirm that a vote will be held in both Houses?
As my noble friend said, the legislation allows for the 0.7% target to not be met in a particular year in light of economic and fiscal circumstances. The Foreign Secretary is currently looking carefully at what is required by law. The legislation envisages that the 0.7% target may not be met in a particular year as a consequence of circumstances with which we are all too familiar.
My Lords, I speak as a former VSO volunteer; I believe that VSO has created a large cohort of outward-facing, global citizens connected by a belief in what UK aid can achieve overseas. The Government like to talk about “global Britain”, but is the Minister aware that unless a positive decision to renew the grant for VSO is made by the end of the month, the organisation will have to notify 180 national and other partners that the UK Government have withdrawn funding? Will the Minister confirm that funding will be in place for VSO? When will the Government inform it of the decision?
My Lords, I am not able to provide that announcement—that declaration—unilaterally. However, the noble Baroness is absolutely right that ICS volunteers like her have made a lasting impact in some of the world’s poorest communities, while building up their own skills, confidence and job prospects. It is a cherished part of the programme and the funding that we have provided over the years—a source of pride for this country. As I say, the decision will be delivered as soon as possible.
My Lords, the Government have form on this: they announced the cuts to the ODA budget this year on the day after the last Summer Recess. The Chancellor avoided referencing the ODA cuts in his Budget speech last week, and I suspect that this announcement might be coming at the end of next week, to avoid parliamentary scrutiny during the Easter Recess—just as the cuts start to bite. Can the Government guarantee that there will be an announcement before the Easter Recess? In making that announcement, will they understand that the VSO, as much as any other organisation, has changed its strategic purpose to build partnerships on the ground and develop volunteering that makes a real difference inside partner countries, rather than simply supporting children and older people from this country going to volunteer on a temporary basis? It is a strategic approach by VSO that is making a real difference.
My Lords, I will not take issue with anything that the noble Lord said in the second part of his question, although I question the cynicism that he has shown on the timing of government decisions. I will convey his powerfully delivered message to the FCDO, and, as I have said before, I and other colleagues will do what we can to ensure that we have the quickest possible resolution.
My Lords, the Minister talks about VSO without relating it to its political position in the world. He talks about officials considering its future, but it is a decision for politicians; it is they who must decide whether or not we continue it. Will he bear in mind that, unlike much of our aid, VSO is very difficult to corrupt or divert, so it should survive in spite of a cut, and that it is for politicians—the Minister himself—to make the decision?
My Lords, volunteers make a uniquely valuable contribution to sustainable development, including empowering women and girls across the globe. During the Covid response, our volunteering for development programme demonstrated the ability of local community and national volunteers, who can mobilise as first responders even when national and international travel is restricted. I strongly agree with my noble friend on the importance of the volunteering process—both UK nationals volunteering elsewhere and volunteers in situ. As I have said to previous speakers, I will convey his message, but I do not doubt that this is a decision that will be taken by Ministers, not officials, and I do not think anyone has pretended otherwise.
My Lords, the time allowed for the Private Notice Question has now elapsed. Apologies to the noble Baroness, Lady Watkins of Tavistock.
Policing and Prevention of Violence against Women
The following Statement was made in the House of Commons on Monday 15 March.
“With permission, Mr Speaker, I should like to make a Statement on the tragic death of Sarah Everard and the events of Saturday evening. I would like to begin by saying that my thoughts and prayers are with Sarah’s family and friends at this unbearable time. I know that every Member of this House will join me in offering her loved ones our deepest sympathies. While this is a horrific case, which has rightly prompted debate and questions about wider issues, we must remember that a young woman has lost her life and that a family is grieving.
Let me turn to this weekend’s events. I have already said that some of the footage circulating online of Clapham Common is upsetting. While the police are rightly operationally independent, I asked the Metropolitan Police for a report into what had happened. This Government back our police in fighting crime and keeping the public safe, but in the interests of providing greater assurance and ensuring public confidence, I have asked Her Majesty’s Inspectorate of Constabulary to conduct a full, independent lessons-learned review. The Metropolitan Police Commissioner has welcomed this and I will await the report and, of course, update the House in due course.
I would like to take a moment to acknowledge why Sarah’s death has upset so many. My heartache and that of others can be summed up in just five words, “She was just walking home.” While the specific circumstances of Sarah’s disappearance are thankfully uncommon, what has happened has reminded women everywhere of the steps that we take each day without a second thought to keep ourselves safe. It has rightly ignited anger at the danger posed to women by predatory men, an anger I feel as strongly as anyone. Accounts shared online in the wake of Sarah’s disappearance are so powerful because every single one of us can relate to them. Too many of us have walked home from school or work alone only to hear footsteps uncomfortably close behind us. Too many of us have pretended to be on the phone to a friend to scare someone off. Too many of us have clutched our keys in our fist in case we need to defend ourselves. And that is not okay.
Women and girls must feel safe while walking our streets. That is why we have continued to take action. Our landmark Domestic Abuse Bill is on track to receive Royal Assent by the end of April, and this will transform our collective response to that abhorrent crime. It builds on other measures that we have introduced, including the controlling or coercive behaviour offence and the domestic violence disclosure scheme, known as Clare’s law, which enables individuals to ask the police whether their partner has a violent or abusive past. We have also introduced new preventive tools and powers to tackle crimes including stalking, female genital mutilation and so-called upskirting, but we can never be complacent. That is why throughout the passage of the Domestic Abuse Bill, we have accepted amendments from honourable Members from political parties across the House. The Bill now includes a new offence of non-fatal strangulation, outlaws threats to disclose intimate images and extends the controlling or coercive behaviour offence to cover post-separation abuse. This is in addition to the Bill’s existing measures, which include a new statutory definition of domestic abuse that recognises the many forms that abuse can take—psychological, physical, emotional, economic and sexual—and, of course, the impact of abuse on children, as well as new rules to prevent victims from having to go through the pain of being cross-examined by their abusers in family and civil courts.
We all know that action is needed to improve the outcomes for rape cases, and we are currently developing robust actions as part of our end-to-end review of rape to reverse the decline in outcomes in recent years. At the end of last year, in December, I launched the first ever public survey of women and girls to hear their views on how we can better tackle these gendered crimes. On Friday, in the wake of the outpouring of grief, I reopened that survey. I can tell the House that as of 11 am today, the Home Office had received 78,000 responses since 6 pm on Friday. That is completely unprecedented, and considerably more than the 18,000 responses received over the entire 10-week period when the survey was previously open. I am listening to women and girls up and down the country, and their views will help to shape a new strategy on tackling violence against women and girls, which I will bring forward to the House later this year.
The Police, Crime, Sentencing and Courts Bill, which we will shortly be debating, will end the halfway release of those convicted for sexual offences such as rape. Instead, under our law, vile criminals responsible for these terrible crimes will spend at least two-thirds of their time behind bars. Our new law will extend the scope of the Sexual Offences Act 2003 with regard to the abuse of positions of trust—something that predominantly affects young girls—and it will introduce Kay’s law, which will encourage the police to impose pre-charge bail with appropriate conditions where it is necessary and proportionate to do so. We hope that that will provide reassurance and additional protection for alleged victims in high harm cases such as domestic abuse. I note that the Opposition will be voting against these crucial measures to support victims of violent crimes, including young women and girls.
The Government are providing an extra £40 million to help victims during the pandemic and beyond. Last month we launched a new Government advertising campaign, #ItStillMatters, to raise awareness of sexual violence services and ensure that victims know where to get help.
Over the past year, during the coronavirus pandemic, the police have been faced with an unenviable and immensely difficult task—one that, for the most part, they have approached with skill and professionalism— of helping to enforce regulations, as determined by Parliament, with one crucial objective in mind: to save lives. On 6 January, this House approved those changes by 524 votes to 16. Sadly, as of Sunday 14 March, more than 125,500 lives have been lost to this horrible virus. It is for that reason that I continue to urge everyone, for as long as these regulations are in place, not to participate in large gatherings or attend protests. The right to protest is the cornerstone of our democracy, but the Government’s duty remains to prevent more lives being lost during the pandemic.
There will undoubtedly be more discussions of these vital issues in the days and weeks to come, but we cannot and must not forget that a family is grieving. I know that the thoughts and prayers of the whole House are with Sarah’s loved ones at this truly terrible time.”
I would first like to express our heartfelt condolences and sympathy to the family and friends of Sarah Everard. Her tragic and appalling death has shocked and shaken us all, as the reaction to it has shown. We know that, much as we might want to think we can fully understand the turmoil and unbridled grief her family and friends are going through, in reality there is no way we can.
The pictures and media reports of what happened on Saturday during the policing of the vigil at Clapham Common have rightly led to many expressions of concern. The Inspectorate of Constabulary is undertaking a lessons-learned investigation and we await its findings. I would appreciate the Minister indicating first when those findings are expected and, secondly, that they will be made public. It also seems that the Home Secretary had discussions with the Metropolitan Police about the vigil and that she subsequently asked for a report on what happened from the commissioner. Will that report be made public?
Can the Government say what the purpose was of the discussions that the Home Secretary had with the Metropolitan Police prior to and about the vigil? The Home Secretary has said that operational issues are a matter for the police, so can we have an assurance that the Home Secretary did not seek to influence the commissioner on what the operational decisions on the policing of the vigil should be? Is there a record of those discussions, and will it be made public?
The tragic death of Sarah Everard and the apparent circumstances surrounding it have highlighted the fears felt extensively by women and girls over their personal safety, and the extent of the harassment, abuse and violence, including fatal violence, that they face on an all too regular basis from men. To say that a solution is for women to stay indoors and be more careful is completely unacceptable. The solution lies in men changing cultures and attitudes towards women and leading that change. It is not women who should change their behaviour. It is men and wider society that must change.
It is clear that the Government have failed in their role of creating an environment in which women and girls do not walk around in fear outside and live in fear inside. The Statement by the Home Secretary goes to some lengths to set out what the Government believe that they have done, and what they propose to do, to ensure that women and girls can feel safe. It is a very defensive part of the Statement. That the Government felt it necessary to put it in the Statement at such length says it all.
Interestingly, the Statement makes no reference to the reduction in the number of front-line police officers over the last decade, which the Government are now trying to reverse, no reference to the failed and damaging reorganisation of the probation service, which has had to be reversed, and no reference to the impact of the cuts made in our criminal justice system as far as our courts are concerned.
The Statement does make reference to the Domestic Abuse Bill. It is a good Bill, but the Government know that there is more that they could and should be doing to ensure that all women can safely leave abuse and access refuge services, that women feel safe to report abuse to the police, that disabled women have protection when intimate caring relationships turn abusive, and plenty more that this House has asked for. In particular, yesterday this House voted to ensure the registering, monitoring and supervision of serial abusers and stalkers—in essence, dangerous and predatory men—and to require a strategy on perpetrators. What will the Government now do about delivering that? They have come forward with plans to increase CCTV and street lighting, and to put more police in bars. That will make hardly a dent in the real problems. The real issue —as we are told by women who are shouted at while they are out running, who are followed on public transport, who are unsafe as they walk home—is not the lighting on the street but the perpetrators and harassers on the street.
We have put forward a 10-point plan on what now must happen. We must particularly address the low level of rape charges and convictions, and the need for new laws to stop harassment. Will the Government use the Police, Crime, Sentencing and Courts Bill to tackle these issues? At the moment, the Bill seems more concerned with statues than with women. Are the Government now prepared to work with us and others in a collaborative way, to put forward and promote measures that will fully address the concerns that so many women and girls feel about their personal safety in this country today?
My Lords, my heart goes out to the friends and family of Sarah Everard. I cannot imagine the pain and grief that they feel at this time. It also goes out to all women and girls whose fear of being attacked has, understandably, increased as a result of these terrible events. I also say to each and every decent and honest police officer—some of whom have contacted me, shocked and concerned about how recent events have made their job of protecting and reassuring the public more difficult, not just because of the allegations made against someone in their own ranks but because of the serious mishandling of the vigil on Clapham Common by their own senior officers—that I understand how they feel.
I was an advanced public-order-trained police officer—a senior officer trained to the highest level to deal with situations such as that faced by the police on Saturday—and I have been in charge of policing numerous high-profile events. What went wrong? I say first to the Metropolitan Police Commissioner that I make no criticism of the officers on the ground carrying out the orders of their senior officers. I am not an armchair critic of operational police officers making difficult decisions in real time on the ground. However, I am a critic of the senior police officers who set and devised such a disastrous strategy and then implemented it from the calm of the control room.
One of the first lessons that you are taught as a senior public order officer is not to ban gatherings. Organisers can work with you to implement restrictions; they can provide stewards to marshal those attending, and they can make public appeals that this should be a peaceful, socially distanced, candlelit vigil. Instead, the organisers were forced to withdraw, local authority Covid marshals could not be deployed, and the police were set against the public. Those seeking confrontation with the police, and who have nothing to do with women’s safety, potentially saw an opportunity, and the chances of being able to safely and peacefully police this vigil faded into the distance.
The appalling scenes that we saw on Clapham Common on Saturday were the inevitable result of decisions made by the police long before they forcibly broke up those who had gathered, albeit irresponsibly close together in large numbers. The decisions that the police made were even more unbelievable when you consider the circumstances that gave rise to the vigil in the first place.
The Home Secretary has said that she discussed the policing of the vigil with the commissioner on Friday. What advice did she give to the police about the way that it should be handled? I can understand someone with no training and no experience suggesting a zero-tolerance approach to the vigil, but not highly trained and experienced senior police officers. I appreciate that the Minister cannot account for the actions of the Mayor of London, but he should be asked the same question. That is why the leader of the Liberal Democrats, Ed Davey, has written to them both asking exactly this question.
What about the response? No, Home Secretary, the scenes at Clapham Common were not “upsetting”; they were totally unacceptable. A so-called independent review has been commissioned from Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services, which has just published a report that concludes that the police must find the correct balance between the rights of protestors and the rights of others, and that:
“The balance may tip too readily in favour of protestors”.
Does the Minister seriously think that HMICFRS is the right body to conduct this review, in the light of its report, published only five days ago? I know that the Minister agrees with me that knee-jerk reactions are not the best way to find lasting solutions to serious problems.
We have seen too many media reports showing perfectly lit CCTV footage of women being attacked to believe that more lighting and CCTV are the answer. Because of government cuts to local authority budgets, many councils have had to switch off their cameras or have given up live monitoring because they can no longer afford to maintain an effective CCTV system. Putting plain-clothed police officers in the pubs and clubs to identify vulnerable women and potential perpetrators would not have saved Sarah Everard. Asking a group of people who are themselves the focus of criticism what immediate action should be taken is unlikely to come up with the right answer.
What should we do? We need not just to record offences motivated by sex or gender but to make misogyny a real hate crime, where victims are given enhanced support and courts treat misogyny as an aggravating factor. We must teach young people how to treat each other with dignity and respect. We need a culture change that rejects the authoritarian populism that leads to misogyny, xenophobia and intolerance of diversity. And we need an investigation into whether a Metropolitan Police officer being accused of the kidnap and murder of a woman, another Metropolitan Police officer being accused of sharing sick graphics and jokes at the scene of her murder, and other Metropolitan Police officers being accused of taking selfies with the body of a murdered woman, are signs of serious problems with the culture in the Metropolitan Police. One serving Metropolitan Police officer I know and trust told me in a message on Friday that he is “counting down the years until I can retire and get out of this poisonous organisation.”
My Lords, I join the noble Lords, Lord Paddick and Lord Rosser, in expressing our thoughts, condolences and prayers to the family of Sarah Everard. Like the noble Lords, when I saw the pictures on Sunday morning and subsequently in the media, it was not just upsetting but really shocking. That is why the Home Secretary has not only asked for a report from the Metropolitan Police but has asked Her Majesty’s Chief Inspector of Constabulary to conduct a review. I can confirm that she had conversations with the commissioner and communicated with her all weekend. In terms of influence, noble Lords will know that the Government do not seek to influence the police. The police are operationally independent of government, and rightly so. I am sure that when the review takes place it will be made public, as the noble Lord, Lord Rosser, asked.
The noble Lord also made a point about men and wider society, and I could not agree more. Our young boys and growing young men are subjected to more and more malign influences, usually online. My noble friend had a discussion last night—and I thank him for that—about online pornography, which we will be dealing with in the online harms Bill. There is also the issue of what a good, healthy sexual relationship looks like, which schools deal with. I reject the point made by the noble Lord, Lord Rosser, that the Government have created this environment. Right from 2010—some 11 years ago—successive Conservative Governments have done so much to end violence against women and girls. We are now considering Report stage of the Domestic Abuse Bill, and I say to the noble Lord, Lord Rosser, that I feel there has been an incredibly collaborative approach across the House, with the Government listening very hard and making many concessions throughout the Bill, acknowledging that we are listening and we can make the legislation better.
The noble Lord talked about a register of stalkers; we had a discussion about that as well. As I said yesterday, where we are seeking to get to is no different; it is how we get there. I explained yesterday that I thought that adding a category to the register without dealing with some of the underlying problems in the processes would not solve the problem, but I do not think we disagree that we need to make sure that all people who are at risk of stalking and sexual offending need to be captured under MAPPA and through ViSOR if necessary.
The noble Lord also asked about the perpetrator strategy. We will be issuing the domestic abuse strategy later this year. Of course, it will contain measures to deal with perpetrators because fundamentally, they are the problem underlying domestic abuse. We will not be having a separate strategy, as noble Lords asked, because it is so linked with domestic abuse that it would be wrong to separate it.
The noble Lord, Lord Paddick, talked about not banning gatherings. We have lived through unprecedented times. One of the reasons why I am not speaking in the House is that I have had to self-isolate. So many people have had to give up their freedoms in pursuit of keeping the number of Covid infections low and preventing deaths, and this is only one of those measures.
The noble Lord asked whether HMICFRS is the right organisation to deal with this. I think it is; it is very experienced in this sort of activity. He also made the point, which I wholeheartedly agree with, about knee-jerk responses being the worst type of responses. It is right that we reflect on what has happened and that the review be undertaken. On timescales, I know that the terms of reference and the scope of the review will be dealt with very quickly.
The noble Lord also talked about making misogyny a hate crime. The Law Commission is looking into what types of crimes should be added to the hate crimes list, and it will be deliberating later on this year.
The last point he made is that we need a fundamental culture change. I totally agree. Women should not feel that they cannot walk home alone. It appears that Sarah Everard was not walking home particularly late. Women should not feel that they have to, as my right honourable friend the Home Secretary said, clutch their keys as they walk along the street. Men should respect women. We need to engender a culture of respect.
We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call as many speakers as possible. I call the noble Baroness, Lady Jenkin of Kennington.
My Lords, on 7 March I received an email from a young friend saying “Please help. One of my closest friends from university is missing”, but it turned out that we were all absolutely helpless. I send her and all Sarah Everard’s friends and relations the greatest possible sympathy.
I welcome the review of the policing of the vigil, as we have to get back to the public trusting the police. I also welcome the extension of the consultation into violence against women and girls, and I am glad that so many additional people have engaged in that exercise. My question, to which the Minister has already responded in part, is: how are we to help and prioritise, so that boys can grow up with a healthy attitude towards girls and with respect for them, given how the internet has changed everything beyond recognition in such a short space of time? We have not kept up with this. Only 15 years ago, boys would have had to reach up to the top shelf; now, they have free access to hard-core porn in their pocket, broadcasting violent and rough sex and the subjugation of women, so that it now seems normal to them.
My noble friend and I agree wholeheartedly on this point. The values that you give your children as they are growing up and some of the influences that they see around them shape them as adults. Tragically, there are young boys who grow up now thinking that non-fatal strangulation and violent acts upon women are part of what makes a sexual experience. We all know that sex is bound in love, and you do not show your love towards someone by practically beating them to a pulp or suffocating them. My noble friend is right to raise this question. I am very much looking forward to the online harms Bill, which places on communication services providers a duty of care for their users. That is one part. The other part is some of what children are taught in school and some of what they see at home. We are in the middle of considering the Domestic Abuse Bill. Sadly, some children think that what they see at home is the norm. We need responsibility from not only parents but online providers and society in general.
My Lords, we have only 20 minutes for questions and there are 15 more speakers. I know it is difficult, but if we can keep questions and answers brief there are a lot of noble Lords who wish to get in on this important issue.
Surely what is needed, as the Minister suggested, is a fundamental rethinking by men of their attitude to women. I feel every sympathy with those women who justifiably feel vulnerable and angry at the moment. What practical steps are the Government taking to ensure that more is done about this in schools? The law has only a limited effect; there must be a fundamental change of attitudes, and that begins right in the earliest days at school. Is it worth looking, for instance, at what is being taught under the heading of moral and social education? Is some kind of review of that needed?
The answer to the noble and right reverend Lord is that we have now made relationship and sex education obligatory in secondary schools, and relationship education is now in primary schools, which is absolutely right. There is more that we could do. This is not just about schools, but perhaps some of the ways that children behave at school reflect what their home lives teach them that relationships and behaviour look like. The education environment is incredibly important for children, but so too is the home environment.
My Lords, I too want to assure Sarah Everard’s family and friends of my thoughts and prayers. A couple of times in this House I have mentioned the work being done in Australia, the first country in the world to develop a national framework to prevent violence against women and girls. “Change the Story” identifies gendered drivers of violence and engages people where they live, work, learn and play. Will the Government take a serious look at Australia’s work and see what we can learn? Regarding the Police, Crime, Sentencing and Courts Bill, we will not be doing the right service to violence against women and girls unless we also ensure that we address the issue of that large group of women in prison for minor but repeated offences. Many are there because of the violence towards them and they need appropriate trauma-informed, community-based provision. Can the Minister assure the House that the issues about crime and sentencing will be looked at in a rounded and not a disconnected way?
My Lords, alas we all know the figures for violent crimes against women. No woman should feel unsafe or in fear in her home, on our streets or in our parks, so in the strategy to protect women and girls how will the Government address the need for major behaviour and culture change among men and boys, including through education and teacher training? Violence against women is a men’s problem. It will be long said of Sarah Everard, to whose family I too offer profound condolences, that she was just walking home. Women on Clapham Common on Saturday night were remembering Sarah Everard and it was not for police to manhandle them. The Metropolitan Police got it badly wrong. As advised by the noble Lord, Lord Paddick: do not ban gatherings.
On the rights and wrongs of the Metropolitan Police, I have laid out clearly that the Home Secretary has asked it for a report and asked the Chief Inspector of Constabulary to undertake a review. I agree with the noble Baroness: it might be towards men, but a lot of this stems from men. The respect agenda, which lies at the heart of it, is fundamental to what she is talking about.
My Lords, I too send my heartfelt thoughts and prayers to Sarah Everard’s family and friends on their unimaginable and tragic loss. The scenes of last weekend were extremely shocking. The police force needs to understand the scale of feelings and the loss of confidence by so many. This past week, a survey for UN Women found that 97% of 18 to 24 year-olds have been sexually harassed. Very few report this but almost every woman has experienced it. We need real change and a longer-term strategy to tackle what has been described as the toxic masculinity that is endemic across our society. Misogyny is a hate crime and I was concerned to hear the Minister say that this is to be looked at by the Law Commission. It needs a simple change in legislation. Kerb-crawling needs to become an offence. Will the Government look into this? Rape prosecutions have dropped every year for the past five years and are now at a record low. What has happened to the Government’s rape review, established two years ago? Women want to feel safe and be believed when they report an assault or rape. They want to feel secure and supported within our society.
The rape review is ongoing and it has not gone away. My right honourable friend the Home Secretary mentioned it yesterday. The noble Baroness made a point about kerb-crawling; I think it could be termed street harassment. Of course, there are stalking, harassment and public order offences which cover that. To go back to the point about knee-jerk reactions, it is right that the Law Commission should opine on misogyny before we start bringing in laws.
My Lords, watching Sarah Everard’s case unfold has been horrific. It brought back many memories for me as my late husband Garry Newlove’s murder was national news in horrific circumstances. My thoughts go out to Sarah’s family and friends. It is deeply distressing and traumatic for the family at this stage. We all know that 90% of murderers are men and 90% of sexual offences are committed by men. We know all the figures, so I reiterate to my noble friend that women have had enough of being blamed and their safety needs to be prioritised. We do not need more guidance; guidance alone will change nothing. We need cultural change and a multiagency perpetrator strategy that makes violent and abusive men visible. Can we have serial perpetrators identified, assessed and managed, just like police do with prolific robbers, burglars, car thieves and organised criminals? These men are domestic terrorists and women have had enough of them being allowed to run amok, and harm and kill so many.
My Lords, the statement of firmer legal action and the announcement of better lighting and more CCTV cameras do little to address the causes of violent and unacceptable behaviour towards women. To me, a placard at last night’s vigil for Sarah Everard says it all: “Educate your son”. Does the Minister agree that, in our homes and schools, we are failing to teach the boundaries of unacceptable behaviour towards women and girls? Will she further agree that a Sikh injunction at a time of conflict—to treat women and girls as mother, sister or daughter—is a worthy ideal for all of us at all times?
The noble Lord talks such sense on these matters, and I agree with that “educate your son” placard. If we, as parents, do not teach our children the boundaries and they do not learn them at school, how will they know what is and is not acceptable, and how will they know what respect is? As the noble Lord says, failing to protect our women in turn fails to protect our children as well.
My Lords, I first endorse strongly the sentiments expressed earlier by my noble friends Lord Rosser and Lady Blower. My concern is that the title of the Statement, “Policing and Prevention of Violence against Women”, fails to acknowledge the true nature of the problem. We should not just refer to “violence against women”; we must always make it clear that it is really violence by men against women that is the problem. Every opportunity should be taken to emphasise that it is us men who are the problem. As such, I am glad that the Minister has mentioned the importance of culture. Therefore, the question is: what steps are the Government taking to play their part in the required cultural shift by men?
The noble Lord makes a very important point: we should not just say “violence against women”—we should say, “violence by men”. However, it is not always violence by men; it mostly is but not always. The Government are clearly in the middle of the Domestic Abuse Bill and all the provisions therein. I thank my noble friend Lady Newlove for bringing forward the issue of non-fatal strangulation, which seems to be much more at large in some sexual behaviour and, of course, often leads to death—it is often at the heart of domestic violence. We have done much on forced marriage and female genital mutilation, which are all particularly female-focused, of course. We have done much in the 11 years that we have been in power, and I pay tribute to my right honourable friend Theresa May, who was at the original inception of this.
My Lords, I agree with all those who have called for a change of culture, attitudes and behaviour and better education for young men and boys—and indeed girls. However, will the planned new strategy on violence against women and girls have a comprehensive plan for how to get those changes? Secondly, in her foreword to the consultation on violence against women, the Home Secretary said:
“1 in 5 women will experience sexual assault during her lifetime”.
As my noble friend Lady Hussein-Ece said, a recent survey found that almost every single young woman in this country—97%—had experienced sexual harassment. Is it not time to adopt towards sexual violence a version of the so-called “broken windows” policing, whereby early intervention aims to deter and prevent more serious crime?
The noble Baroness will see some of the things that we have done in relation to perpetrator strategies and approaches, DAPOs, DAPNs and stalking protection orders. These are all measures to nip problems in the bud and prevent them from escalating into what could end up as full-on violence.
My Lords, does my noble friend the Minister agree that one of the key things to make a difference to policing and the prevention of violence against women will be the Domestic Abuse Bill? It has been greatly improved by Members across this House, giving police clear new tools and challenging current norms of behaviour. Is it not now imperative that we get it on the statute book?
My noble friend is absolutely right, and it has been a pleasure to work with her, given all her experience—of course, she was part of the team that was at the heart of that Bill’s inception. It is crucial that we get it on the statute book; she is absolutely right that we have all worked together to achieve it. It has been much improved and, as so many noble Lords have said, it is a landmark Bill.
My Lords, I could not agree more with what we have just heard; it has been a privilege to listen to proceedings on that Bill and the noble Baroness in particular. I will make two points. First, as a nocturnal dog-walker of some decades, I have frequently noticed how walking behind a lone woman or girl is unsettling. The minute I cross the street, I see the shoulders relax; I suggest to my male colleagues that we ought to be more aware of that fact. Secondly, many in your Lordships’ House, and I include myself, have been pushing the police to come down more trenchantly on people who break the lockdown rules—Cheltenham was only a year ago. While the sensitivity displayed the other day was clearly wrong, we have to be honest and say that the police are damned if they do and damned if they do not. I feel that we have been pushing them to be more proactive in this field.
My Lords, my heart goes out to the family and friends of Sarah Everard—this is a nightmare that every parent has. I support the other speakers today and will ask the Minister about the Tom Winsor inquiry, which she mentioned. First, what are its terms, who else will be involved and what are its timings? It is important that it starts quickly, has short and sharp terms and reports within the next few months. It must not be an inquiry that goes on for years—the public and we would not take it seriously. Secondly, like many Members of this House, I have been on a number of demonstrations over my lifetime, and I have never seen the police behave in the way that they did on Saturday night. What is in the police training, towards men and women, that involves throwing a woman to the ground and jumping on her?
My Lords, the inquiry will establish just what did happen and the events that led up to Saturday night. As I said to a previous questioner, the scope and terms of the review will be announced and laid very quickly. I agree with the noble Baroness that it should take place at pace.
My Lords, the time allocated has elapsed. This is a very important issue and there were a number of noble Lords and noble Baronesses who wanted to get in and ask important questions, so I remind people of the importance of brevity for future questions and answers so that we can hear from everyone.
Arrangement of Business
My Lords, the Hybrid Sitting of the House will now resume. I ask all Members to respect social distancing.
I will call Members to speak in the order listed. During the debate on each group of amendments, I will invite Members, including Members in the Chamber, to email the clerk if they wish to speak after the Minister. I will call Members to speak in the order of request. The groupings are binding. A participant who might wish to press an amendment other than the lead amendment in a group to a Division must give notice in debate or by emailing the clerk. Leave should be given to withdraw amendments. When putting the question, I will collect voices in the Chamber only. If a Member taking part remotely wants their voice accounted for if the question is put, they must make this clear when speaking on the group.
National Security and Investment Bill
Committee (3rd Day)
Clause 11: Exceptions relating to control of assets
Amendment 38 not moved.
39: Clause 11, page 7, line 36, at end insert—
“(aa) prescribe circumstances which are not to be regarded as gaining control of a qualifying asset which is the subject of an export control order under the Export Control Act 2002 and related provisions, and”Member’s explanatory statement
This amendment would enable the Secretary of State in regulations to set out where the control of assets under the Export Control Act should not to regarded as gaining control under this Act.
My Lords, this first group consists of two amendments, both in my name and both relating to the interaction of the export control regime with the investment screening regime. Amendment 39 would insert into Clause 11, which relates to the exceptions to the general definition of the control of assets, a power for the Secretary of State by regulation to prescribe where the control of a qualifying asset is not to be regarded as controlled under this regime. It would give the Secretary of State freedom to define circumstances where assets that are to be exported and are controlled by the export control regime would not be regarded as controlled for these purposes.
Amendment 87 is a bit more straightforward in that it would introduce a new clause requiring the Secretary of State when making final orders under the Act to take account of the effects of the Export Control Act and related provisions on that qualifying asset. Your Lordships will note in the Bill an interaction with the Competition and Markets Authority regime, but no similar provision is made for the interaction of the export control regime with this regime.
The Bill offers no substantive recognition of the interaction between the export control regime and assets under this regime. That is surprising, because paragraphs 3.85 and 3.86 of 2018 White Paper state—please forgive me, it is a fairly long quote:
“After the introduction of the reforms described in this White Paper, the export control regime will remain the key means of restricting trade in strategic goods where this might raise national security risks … The Government wishes to ensure that the new reforms are as proportionate as possible, and are not used instead of other, more targeted or proportionate policy levers. As such, where national security concerns relate solely or primarily to the export of goods, the Government expects that the export control regime would remain the primary means of protecting national security.”
The purpose of these amendments is to ask whether that is still the Government’s policy. If it is, why is it not reflected in the structure of the powers? Should it not be included in the Bill to make that clear?
The Minister may say that since the export control regime is under the control of Ministers, they have all the administrative means at their disposal to bring the two regimes together, whereas there is a separate statutory and independent agency in the Competition and Markets Authority. But that would not be transparent to those affected. I know from talking to people who would be affected that there is a long-standing relationship with the export control unit of the department and an understanding of how its powers are used. To the extent that that transparency and predictability are maintained explicitly, I think it would greatly assist those who are to be affected by these powers.
It is surely the case that Ministers, when making a final order, will take account of where qualifying assets are the subject of an export control order. That being so, I am looking not only for an assurance from the Minister that it is the Government’s intention to use the export control regime as the principal means by which the export of qualifying assets is controlled but for a recognition of this in some form in the legislation, to enable all those affected to be aware of the relationship between these two regimes and for it to be transparent. I therefore urge my noble friend to consider the merits of Amendment 87, which would introduce a new clause that simply did that without placing any constraint on Ministers. I beg to move.
My Lords, I am grateful to the noble Lord for bringing forward these questions in such a characteristically forensic manner. The Committee will be aware that I have not participated in it so far, and I therefore intend to be brief and shall raise only a small number of questions seeking clarification from the Minister on the interaction with the Export Control Act 2002 and on an associated issue.
It has been fascinating listening to the contributions in Committee up to this point about some of the opacity in the interaction with the other legislation and, indeed, how the investment security unit will operate within the department that will cover export control licence applications, which will also make considerations on national security grounds and how they interact. It was interesting to note that in the House of Commons, on the Prime Minister’s Statement on the integrated review, Julian Lewis, the chair of the Intelligence and Security Committee, criticised the Prime Minister for not allowing there to be full scrutiny of how the investment security unit will operate. I know that my noble friend Lord Fox will raise this later and will lead on it.
How will that interaction be on the export licence regime? One area where there have been calls for the Government to have annual reports on the operation of this legislation was interesting, given the fact that under the Export Control Act 2002 there are annual reports, and there is clarity as to how many applications and the various different criteria for refusal or putting on hold applications. An interesting aspect of the Export Control Act 2002—and I reread the Explanatory Notes to the legislation after seeing the amendment from the noble Lord, Lord Lansley—is that, on one reading of the Act, which does not go into the same level of detail for defining companies as this legislation, it refers to people being part of the licence, for them and their knowledge and for their providing technical assistance. There certainly can be companies that operate almost exclusively on providing technical assistance, in the technical services industry in particular; they are covered by the Export Control Act for their work that they will then carry out, and the Government take a view as to whether that is something that should be considered as an export.
Secondly, there are companies that operate within hybrid technologies, as the Export Control Act indicated, for technologies and technical assistance, and controls can be imposed for the transfer of technology from the UK and by UK persons, anywhere and by any means. It is interesting that Section 4 of the 2002 Act says that,
“‘trade controls’ …means the prohibition or regulation of … their acquisition or disposal … their movement”,
and associated activities of any goods. The Minister may say that that means specific items, goods or technologies of a company but not the company itself—therefore, this legislation covers the company. It would be helpful if the Minister could indicate something about the interaction.
It struck me that, if any Government indicated that a certain technology or good required prohibition from being exported or their trade in that to be regulated, that would be considered under criterion 5 for national security grounds. What if the interaction of that company is then the subject of a review under this legislation, or indeed that parent company is taken over, or there are shares that meet the trigger requirement? What is the status of the export licences that that company has—because the Government have already indicated that they have sought and maybe made a decision on national security grounds? It is worth pointing out that we know from the annual report that last year there were 80 refusals on national security grounds under criterion 5 in the UK—it indicates for the national security grounds of the UK, the EU and other friendly countries. In the last set of discussions, it was interesting to hear about the interactions with decisions that other friendly countries make. The Export Control Act makes determinations for that.
The second set of questions that I wanted to ask regarded what would be considered a qualifying asset. I read the Explanatory Notes for this legislation on what qualifying entities and assets were, and wondered whether this was something that could be considered. Is an asset something that, for national security grounds, is a good or service that has already been reviewed for the export licences legislation under criterion 5 on national security grounds? It seems to me slightly odd that, under this legislation, if a company trading in a certain good that has had a review on national security grounds and has this asset is taken over by another company, that is not a triggering event, as far as I understand it. One would have thought that it should automatically be a triggering event, if a company is exporting goods which would be considered open to national security reviews.
That points to one aspect that my noble friend and others have raised, which also struck me—the concept of proportionality and balance. Paragraph 6 of the Explanatory Notes for the Export Control Act says that there is a principle of proportionality in that Act, which many noble Lords have called for in this legislation. The Act contains provisions that prevent the Secretary of State from prohibiting or regulating certain activities
“unless the interference by the order in the freedom to carry on the activity in question is necessary (and no more than is necessary).”
I wondered where the principle of proportionality that was in our current review of national security grounds has somehow been lost on the way, with regard to how this legislation operates.
Thirdly and finally, when we debated export licences under the Export Control (Amendment) (EU Exit) Regulations 2020 in December, the Government brought forward these provisions. The UK now operates two sets of legal duties, from the UK and the EU. Any company trading in or through Northern Ireland continues to be covered by EU regulations, and the UK now has to operate under the export control regulations for the European Union as well as the United Kingdom. What interaction will there be with the investment security unit in operating under European law with regard to any trade that goes through Northern Ireland? Under this legislation, I could not see that interaction with Northern Ireland, and there could be one very large loophole if any operation wished to trade through Northern Ireland when operating in the EU. Can the Minister clarify those points?
Amendments 39 and 87, tabled by the noble Lord, Lord Lansley, probe the Minister around the question of the interaction of the NSI regime with the export control regime. The Committee must be assured that this new regime is not buried within the Business Department but works effectively across government, not least in relation to export controls. The Government’s response to the sector consultation in the report already mentioned states
“how the NSI regime sits alongside export controls to provide a comprehensive regime protecting our national security capability”.
It is not merely a question of sitting alongside, however that may be interpreted, but of interacting and co-ordinating with the Department for International Trade. The Government seem to recognise this in the comment:
“We must ensure that the export control criteria cannot be circumvented by allowing the acquisition of companies that produce such goods, rather than buying the goods themselves, without effective screening.”
More clarity and information in the procedures to this eminently sensible statement would be very welcome from the Minister.
The Government responded to the consultation that they intend to capture all materials that are considered likely to give rise to national security concerns and which are contained in the relevant legislation set out in the UK’s strategic export control list. I would be grateful if the Minister could provide better information on their intentions, and how and when this will become clear and transparent. Will he provide a guarantee that this will happen—the assurances that the noble Lord, Lord Lansley, has required during the passage of the Bill?
First, I thank my noble friend Lord Lansley for these two amendments, which seek to ensure seamless integration between the new regime provided for by the Bill and the existing export control regime. I shall take his amendments sequentially.
Amendment 39 seeks to ensure that the Secretary of State can, through regulations, exempt from the regime certain acquisitions of control over qualifying assets that are subject to export control orders. Clause 11 provides for exceptions relating to control of assets. Subsection (1) sets out that acquisitions made by individuals for purposes wholly or mainly outside the individual’s trade, business or craft are not to be regarded as gaining control of a qualifying asset and are therefore excluded from the scope of the call-in power. This does not apply in relation to an asset that is either land or subject to certain export controls set out in subsection (2)(b).
Subsection (3) also provides a power for the Secretary of State to amend the list of assets that are outside the scope of this exemption or to prescribe other circumstances in which a person is not to be regarded as gaining control over a qualifying asset. That includes being able to prescribe circumstances in which the acquisition of an asset subject to export control legislation is not to be regarded as gaining control over a qualifying asset. Any use of this power in subsection (3) would, of course, be guided by the operation of the regime in practice and any patterns of activity that are observed. As such, I can therefore assure my noble friend that the Bill already provides for what his amendment intends to achieve.
Amendment 87 would require the Secretary of State to ensure that any interim orders or final orders made in relation to acquisitions of control over assets take into account controls imposed under the Export Control Act 2002 and related provisions. I thank my noble friend for his proposal and commend the intent behind it. It is, of course, very important that the Secretary of State’s use of the powers provided for by the Bill is in keeping with the Government’s measures under other legislation. The Secretary of State must take into account all relevant factors when making decisions about the use of interim orders and final orders.
The legal tests in the Bill require the Secretary of State, before making an order, to reasonably consider that the provisions of the order are necessary and proportionate for the purpose. In the case of final orders, that purpose is to address a risk to national security, and in the case of interim orders, it is to prevent or reverse an action that might undermine the national security assessment process. Whether controls have been imposed under export control legislation will be relevant to whether the envisaged provisions of an order are necessary and proportionate. For example, where export controls in relation to an asset are already in place, it may not be necessary or proportionate to make an order under this Bill prohibiting the transfer of the asset overseas, but this will depend on the facts of each case.
Addressing the questions of the noble Lord, Lord Purvis of Tweed, about why we need the Bill when we already have the export control regime, I say that the export control regime is a licencing regime for certain controlled goods. It is an important part of the safe- guarding of our national security and it sits well alongside the proposed national security and investment regime. The two regimes are distinct though, and do not perform the same role. For example, the export control regime does not provide the Government with the ability to scrutinise acquisitions of UK companies or direct the use of sensitive assets used in the UK, whereas of course the NSI regime would.
On the noble Lord’s points about standard individual export licences if they have been granted for an export, I tell him that a standard individual export licence is granted to one person to export specified items to a named recipient. If the parties involved precisely follow the terms of a standard individual export licence that has already been granted following an assessment of national security risks, it is unlikely that the Secretary of State would reasonably suspect that the export might give rise to national security risks. In this situation, it is unlikely that he would be able to call that export in under the NSI regime. However, it is important to say that any decisions would need to be made on a case-by-case basis. It is important that the Secretary of State retains the ability to call in and scrutinise trigger events involving the export of assets in the event that national security risks are present.
The noble Lord asked about Northern Ireland. Qualifying entities as assets in Northern Ireland sit within the scope of the Bill, and that ensures that there are no loopholes. A trigger event under the Bill is not based on the application of EU law. For completeness, I should also say that the Secretary of State will, in any event, be subject to public law duties requiring him to consider all relevant factors when deciding whether to make an order under the Bill. Therefore, where export controls are relevant, the Secretary of State will need to take them into account when making that order.
I hope that that has explained, for the benefit of the House, the interaction between the two pieces of legislation. With the explanations that I have provided, I hope that my noble friend will feel sufficiently reassured that his concerns have been taken into account, and that he will not press his amendments.
My Lords, I am grateful for each of the contributions to the short debate. They were helpful and, indeed, added to the questions. The noble Lord, Lord Purvis of Tweed, referred appropriately to the Export Control Act provisions. I remember that I was on quadrilateral committee in the other place, about 15 or 16 years ago, so I remember how these issues were considered at that time. Indeed, there was a level of parliamentary oversight of the export control regime, which may be something we refer to at a later stage. He raised some good points: I thought the point about the EU export control regime was a very good one. The noble Lord, Lord Grantchester, made an interesting point about the interaction with the Department for International Trade in this context.
If I understand my noble friend correctly, he is more or less saying that the power under Clause 11(3)(b) would enable the Secretary of State to prescribe, by regulation, such circumstances as necessary, so in that sense my Amendment 39 is not necessary. I agree; it is not necessary but certainly the explanation of the interaction between the two regimes is desirable. However, Amendment 87, proposing a new clause, perhaps drafted differently to make it clearer about the interaction between the two regimes—both at the point where a call-in notice has to be considered, as well as the point at which interim and final orders are made—would be very useful. What I have heard from my noble friend suggests that, by administrative means, using the powers in the Bill and under public law requirements, the Secretary of State will have regard to the export control regime when using his powers under this regime. That is undeniably true. I think we all knew that, but there is much more that we put into legislation, particularly with a new system, that helps people who are to be affected by it to look at it and understand how it works.
What I found deeply surprising was that such an important part of the Government’s policy intentions—that the export of goods should still be primarily controlled by an export control regime—was not even referred to in the Bill or in the Government’s response to the consultation. It is as if it did not exist, but it does exist and it is important, as the Minister’s reply suggested. I shall reflect on what he said, but it may well be that there continues to be a “desirable interaction” clause in the Bill that makes it very clear to all those affected that the export control regime plays a significant part in the control of qualifying assets where they are to be exported. However, based on what my noble friend said, I beg leave to withdraw the amendment at this stage.
Amendment 39 withdrawn.
Clause 11, as amended, agreed.
Clause 12: Trigger events: supplementary
Amendment 40 not moved.
Clause 12 agreed.
Clause 13: Approval of notifiable acquisition
Amendments 41 and 42 not moved.
We now come to the group beginning with Amendment 43. Anyone wishing to press this or anything else in the group to a Division must make that clear in the debate.
43: Clause 13, page 8, line 20, at end insert—
“( ) If an acquisition has been notified under section 14 and the Secretary of State has not issued a call-in notice under section 14(8)(b)(i) within the review period specified in respect of that acquisition, the Secretary of State shall be deemed to have approved the acquisition.( ) If an acquisition has been notified under section 18 and the Secretary of State has not issued a call-in notice under section 18(8)(b)(i) within the review period specified in respect of that acquisition, the Secretary of State shall be deemed to have approved the acquisition.”Member’s explanatory statement
This amendment is to give certainty that if the Secretary of State has not issued a call-in notice in respect of acquisitions notified under the mandatory or voluntary procedures, they can proceed and cannot be voided under Clause 13.
My Lords, I thank the noble Baroness, Lady Bowles of Berkhamsted, for adding her name to Amendment 43. I think it was the noble Lord, Lord Clement-Jones, who commented earlier in one of our Committee sessions that the word that would recur in our deliberations is “certainty”, and that is what lies behind my Amendment 43.
If a transaction is a notifiable acquisition, it will be void under Clause 13 unless the Secretary of State has approved it in the ways set out in Clause 13(2). An acquisition subject to the mandatory notification procedure under Clause 14 will give the Secretary of State 30 working days from the time that he accepts the notice either to give a call-in notice or to notify that no further action will be taken. In the latter case, that is treated as an approval for the purposes of Clause 13.
My Amendment 43 attempts to deal with the situation in which a mandatory notification has been made but the Secretary of State has neither called it in nor made a notification that no further action will be taken. Without this amendment or something like it, a transaction could be stranded in no man’s land, having been neither called in nor told that no further action will be taken. I am sure that there would be the possibility of some form of legal action to force the Secretary of State to do something, but those involved in transactions should not be put to that sort of expense in terms of time and effort. Clause 13 is so draconian in voiding transactions that the parties involved deserve the clarity of a definitive outcome so that they can proceed with certainty.
My amendment also deals with the similar situation that could arise under Clause 18, where a voluntary notification has been made and, at the end of the review period of 30 days, the Secretary of State has neither issued a call-in notice nor made a notification that no further action will be taken. My amendment seeks the same clarity and certainty for voluntary notifications.
Amendment 67 in this group, in the name of my noble friend Lord Hodgson of Astley Abbotts, would achieve a similar effect in respect of voluntary notifications. I have no particular attachment to my form of drafting, but a solution should be found in this Bill to the problem of both mandatory and voluntary notifications. I beg to move.
My Lords, as my noble friend Lady Noakes said, Amendment 67 deals with Clause 18 on the voluntary notification procedure. I entirely support what she has said and her amendment. Like her amendment, Amendment 67 is to deal with no man’s land, but it adds a further wrinkle to no man’s land beyond that which she covered in her remarks. I am grateful for the support from the noble Lords, Lord Clement-Jones and Lord Bilimoria, and I have been reliant on the expertise of the Law Society for the detailed drafting.
As I say, this amendment is concerned with voluntary notification procedures. The objective behind the establishment of voluntary notification procedures seems entirely praiseworthy in that it can speed up the investment or divestment process for those involved by seeking in advance a decision by the Government on whether the proposed action will be subject to a call-in notice. If the Secretary of State decides to issue a call-in notice, the clock starts running on the 30-day period for initial assessment.
So far so good, but the Bill as drafted is not clear —as my noble friend made clear—on the time the Secretary of State has in which to decide, following a voluntary notice, whether he or she should issue a call- in notice. The only guide we have is under Clause 18(5):
“As soon as reasonably practicable after receiving the voluntary notice, the Secretary of State must decide”
and so on. This does not give any clear idea of how elongated this process may be. In particular, the use of the word “practicable” is rather strange—practicable for whom and in what circumstances? The solution to this is to redraft the clause so that unless the Secretary of State responds to the voluntary notification, it is deemed to have been accepted. That triggers the 30 working day period, so gives an end date by which the company or the investor will achieve clarity.
Amendment 67 also aims to correct a procedural anomaly in the current drafting, which touches on a point that was the subject of a discussion between myself and my noble friend Lord Lansley on the first day in Committee. I think this point goes beyond where my noble friend’s amendment went. It is as follows: the Secretary of State has this 30 working day review period to decide whether to issue a call-in notice or notify the parties that no further action will be taken, but the drafting of Clause 18(9) appears to muddy that clarity when it says that the review period
“does not affect the operation of the time limits in subsections (2) and (4)”
of Clause 2. This was the point raised by my noble friend on our first day. This would appear to mean that the Secretary of State could fail to make a decision within the 30 working days but would still have up to six months from becoming aware of the trigger or five years from the date of the trigger to serve a call-in notice. The same difficulty applies to Clause 18(8)(b), which allows the Secretary of State to inform the parties after considering a voluntary notification that no further action will be taken. Again, it seems overridden by the provisions of Clause 2(2), with the six months or five-year period allowing for further reflection by the Secretary of State.
Amendment 67 aims to cut through this Gordian knot by requiring the Secretary of State to make a decision on the voluntary notification by the end of the 30-working day period, and the absence of such a decision would be taken as approval. Objectively, that is to give clarity and certainty to investors, as we are trying to do throughout the Bill. Without an amendment such as this, the whole purpose and the advantages of the voluntary notification procedure could be undermined.
My Lords, I have added my name to the amendment in the name of the noble Baroness, Lady Noakes, and I support everything that she said. I also support what I might call the companion Amendment 67 from the noble Lord, Lord Hodgson, which has been signed by my noble friend Lord Clement-Jones. I also agree with what was said there.
I favour mechanisms to give certainty, and the way the Bill operates at the moment means that, absent a call-in or other response, a business is left in no man’s land—as the noble Baroness, Lady Noakes, called it. Indeed, the noble Lord, Lord Hodgson, pointed out that even if you escape from no man’s land, there is a piece of elastic that pings you back in again for up to five years.
I realise that with a new system the Government may not know how well it will operate, but many noble Lords have repeatedly expressed concern, and I am coming from the standpoint that it is totally unreasonable to push all the uncertainty on to industry.
We have operated without these measures for a long time—maybe for too long—but to switch to draconian uncertainty overnight does not seem fair. There needs to be a point at which no response is an all clear, even though that itself is unsatisfactory compared with the positive receipt of an all clear notice in your hand.
I have nothing else to add, but I support the amendments. The Government need to take notice and to make this whole process more workable for industry.
My Lords, I am delighted to support Amendment 67 and, by the same token, everything that my noble friend Lady Noakes said in connection with her amendment. The two dovetail nicely together. It will be for the Government to determine which drafting is the best. I welcome my noble friend Lady Bloomfield to her position. I am delighted to be in the Chamber rather than in the virtual Chamber; it is an altogether more pleasant experience.
The consequences of the current drafting of Clause 18, as so ably set out by my noble friend Lord Hodgson of Astley Abbotts, together with Clause 2(2), leave everyone in a very precarious position, as the parties involved would have literally no clarity as to any certainty or finality. My understanding is that the parties would have to proceed to complete the transaction before any time limit started to run. Perhaps my noble friend the Minister could clarify that.
I welcome Amendment 67 in particular as giving clarity. I thank the Law Society for bringing it to our attention and my noble friend Lord Hodgson for bringing it forward, with the able support of the noble Lords, Lord Clement-Jones and Lord Bilimoria. I hope that my noble friend the Minister will look favourably on these amendments. If she is not minded to, will she undertake to bring forward amendments of her own? It would be very unfortunate to leave the parties in what my noble friend Lord Hodgson described as a no man’s land, without any degree of clarity or finality.
My Lords, I very much welcome the amendments from my noble friends Lady Noakes and Lord Hodgson. Any of us who has worked in financial services, either before we came into Parliament or while we were in Parliament at certain stages, knows that it is difficult enough to put together a financial situation, but that the worst thing in the world is to not know the date by which something must be concluded.
Indeed, I reflect that London is, and I hope always will be, a leading financial centre in the world. In that context, we need certainty. Noble Lords will know that I have worked in south Asia. There was continually a degree of uncertainty there on some aspects of financial matters. In fact, major companies always had somebody to explain things to them, or to manoeuvre, in the nicest possible way, a situation. We do not want any of that. We really do want certainty and not this no man’s land that has been referred to.
I wonder about just one point, though. There might at some point be a situation where circumstances are such that, if these amendments are made or made in a slightly revised form, there must be some reserved power for national security. We have possibly experienced it in the pandemic that we are currently in. Some countries smaller than ours have suffered major power failure, and one could see the whole of the City of London being taken off the grid and everything else due to some unexpected event.
I am very much behind what my noble friends said in their amendments. I hope that the Government will respond to them, because they are needed, but I will understand if there is some national security dimension to the Bill that is not immediately obvious.
The noble Baroness, Lady Noakes, and the noble Lord, Lord Hodgson, have demonstrated exactly why Committee is so important. The way they have teased out the real meaning of these time limits under Clauses 14 and 18 has been revelatory, if we can call it such.
I very much like the no man’s land metaphor used by the noble Lord, Lord Hodgson, but, under Clause 18(9), my noble friend Lady Bowles also talked about the piece of elastic that brings you back. It is almost as if this Bill was designed to be deliberately obscure. The reference back to Clause 2(2) and (4) has almost been sneaked in, so that the Secretary of State has the ultimate discretion.
As the noble Baroness, Lady Noakes, said on the one watchword we have throughout the Bill, we are trying to create an investment regime where there is a high degree of certainty, so that people know what the boundaries are. The time limit boundaries seem to be limitless if they apply to the Secretary of State. An ordinary investor will no doubt be absolutely under the cosh if they fail to meet any time limits that apply to them, but the Secretary of State seems to have absolute discretion.
I do not think I need to add anything further, except to say that we on these Benches strongly support Amendments 43 and 67. I have signed Amendment 67, but both the mandatory and voluntary notification procedures need curing in this respect. I very much hope that the Government will see their way to amending these clauses as we move to the next stage.
My Lords, this sounds like a “me too” moment, because we also have tremendous sympathy with the amendments, especially after hearing the concerns of stakeholders in the research sector about the uncertainty around the time for notices to be decided by the Government. As we have heard, their concerns reflect others from business and investors.
Could the Minister explain why a default approval should not be included in the Bill if organisations have not heard back within a particular timeframe? She will probably know about the important process for clinical trials involving medical products prescribed in the Medicines for Human Use (Clinical Trials) Regulations. In that case, where no notice is given or where further information is requested within 60 days, the clinical trial is treated as authorised. I am not suggesting that these are two exact types of decision, but that default authorisation in legislation seems to be one we might look at. I am interested to know whether the Government have looked at a similar default approval to add here. Perhaps the Minister could say what sort of advice the Government have had on whether that would work here.
On Amendment 67, could the Minister indicate whether 30 days is right for such a process? It would be useful to know the Government’s thinking on the expected average turnaround time for a call-in notice.
I am grateful to my noble friends Lady Noakes and Lord Hodgson of Astley Abbotts for their amendments, which, I believe with good intention, seek to bring further clarity to the status of acquisitions that have been notified to the Secretary of State after the end of the 30 working- day review period. In particular, they seek to provide that acquisitions notified to the Secretary of State are deemed to be cleared following the review period if the Secretary of State does not issue a call-in notice within that period. Both worry, as other noble Lords have, that such a transaction might be stranded in a so-called no man’s land. Amendment 43, from my noble friend Lady Noakes, would apply to both mandatory and voluntary notifications, whereas Amendment 67 from my noble friend Lord Hodgson of Astley Abbotts would apply just to voluntary notifications.
I think we are all agreed it is essential that businesses and investors have the clarity and certainty they need from this regime. That is exactly why we have included statutory timescales for cases—those covered by mandatory notification as well as voluntary notification —to be screened by the investment security unit. That is also why the Secretary of State is already required to give a call-in notice or issue a notification of no further action before the end of the review period in response to both voluntary and mandatory notification. He has no other option, and I hope that noble Lords are reassured by this. The Government consider that this is the right approach as it imposes a legal requirement on the Secretary of State to take a positive action to provide certainty one way or another. I do not believe that the default approval system suggested by the noble Baroness, Lady Hayter, would add to that certainty.
The Government do not think it would be in anyone’s interest to leave the situation ambiguous as to whether an acquisition has been cleared or requires further scrutiny, so I am pleased to be able to reassure my noble friends of the Bill’s functioning on these matters. Many of the businesses the Government have spoken to about the new regime have emphasised they would not wish to proceed with completing an acquisition without unequivocal confidence that they are cleared to do so. As such, it is not clear to me that my noble friends’ amendments would provide greater confidence in the business and investment communities.
For these reasons, I cannot accept the amendment, and I hope that my noble friend Lady Noakes will withdraw it.
My Lords, I thank all noble Lords who have spoken on this group of amendments, especially my noble friend Lord Hodgson of Astley Abbots, who explained the interaction with Clause 2(2) and (4), and his Amendment 67, which I had not appreciated.
Apart from my Front Bench, we are agreed that there is a problem here. My noble friend the Minister explained why a time limit is put in the Bill. We understand that, but the Bill still does not give the certainty required: it does not deal with the position if the Secretary of State does not actually do something. We think the investment community is entitled to that certainty. One possibility is the default approval mechanism that the noble Baroness, Lady Hayter, referred to. We cannot just take it that because the investment community would like the certainty of a positive approval, we should let this Bill off from the ambiguity over what happens if the Secretary of State does nothing.
I shall read carefully what my noble friend has said in Hansard, but she should be aware that we will need to return to this on Report, because she has not satisfactorily dealt with the problem we have put to her. With that, I beg leave to withdraw the amendment.
Amendment 44 not moved.
45: Clause 13, page 8, line 21, leave out from “made,” to end of line 22 and insert “or in relation to which undertakings under section 26(1)(aa) have been accepted, that is completed otherwise than in accordance with the final order or the undertakings (as applicable), is void.”
Member’s explanatory statement
This amendment is linked to amendments in Lord Lansley’s name to Clause 26 which provide for undertakings to be accepted instead of a final order.
My Lords, this group consists of four amendments, all in my name. The few who are watching our proceedings may be slightly confused that all the amendments they have heard have been moved by those on the Conservative Benches. I think three-quarters of the amendments on our Marshalled List today are tabled by Conservative Members. It is because we all support the Bill, and we want to make it work well. I note that our noble friends are commending our intent; I promise them that our intent is positive in all these amendments. Many of them, like those in this group, are about trying to understand the structure of the policy and probing some of the considerations that we thought might go into it.
Amendments 45, 68 and 69 relate essentially to the policy question of whether the Secretary of State should accept undertakings as an alternative either to issuing a final notification, meaning nothing is going to happen, or to making a final order, meaning specific things must be done. Why should the Secretary of State have an intermediate option? The lawyer’s answer is that he does not need it. Since the power in Clause 26 is that a final order
“may include … provision requiring a person, or description of person”
to do or not to do particular things, there is no limit to the power conferred under the Act. Therefore, almost by definition, the legal answer to the question of whether the Secretary of State needs this additional power is no.
However, as so often, we come back to the question of what, in practice, works best. In that respect, the Competition and Markets Authority, which works on both merger cases and public interest cases, can seek commitments and accept undertakings in view of making the equivalent of an order. It does that, first, because it can be quicker: a proposal can be accepted much more rapidly than using the process of examination necessary to arrive at a final order. Secondly, it can be structured in a way that is more flexible. It can be purposive—it can set out what the entity or the person controlling the asset would need to do to satisfy the Secretary of State to mitigate or prevent the risks.
Those undertakings could, therefore, be purposive and long lasting, whereas an order must be prescriptive, a bit like legislation. It will have to tell people precisely what they are going to do, or else—I fear that this may too often be the resort of Ministers—put someone in a position to make decisions about an entity or an asset in place of the people who actually control that company or asset. I will come on to that a little later in this group, on Amendment 71.
The potential for a purposive, flexible and speedy reference to undertakings, which has long been established in relation to the merger control and public interest regimes under the Enterprise Act, would be a good way of proceeding. This is not without precedence in other jurisdictions. For example, we have referred in our discussions to the Committee on Foreign Investment in the United States. The number of times the United States resorts to presidential decisions is very modest. The number of times it enters into what is known as a mitigation agreement is much greater. What I am looking for is something a bit like a mitigation agreement.
Amendments 68 and 69 to Clause 26 would insert the ability to accept undertakings. Under Amendment 45, if undertakings were entered into and not adhered to, the notifiable acquisition would become void. Therefore, Amendment 45 is consequential on Amendments 68 and 69. I am looking to find out why Ministers have rejected the option of undertakings, and whether this is something that should be in their armoury, even if they use it rarely.
Amendment 71 relates to the question on Clause 26, which states that the Secretary of State can provide for
“the appointment of a person to conduct or supervise the conduct of activities … with such powers as may be specified or described in the order.”
Who is this person? This is purely a probing amendment to find out. Is this person simply a civil servant operating on behalf of the Secretary of State in all circumstances, and would the Government have such persons available with the qualifications and experience necessary to undertake these functions? If they are not civil servants, who are they? Under what circumstances would they be brought in, and with what qualifications would they be equipped? At the moment, as far as I can tell from the policy material issued with the White Paper and the response to consultation, these questions have not been addressed.
My Lords, it is nice to be in the Chamber rather than the glass cubes in which we have been confined. I assure your Lordships, and agree with the noble Lord, Lord Lansley, that noble Lords not only on those Benches but on this side of the House want this Bill to succeed; I think that I can speak for Her Majesty’s loyal Opposition as well. However, the measure of that success will be its efficiency, its certainty and the way it manages this important element of investment.
I listened to the answer that the Minister gave to the last set of amendments; I do not expect the noble Lord, Lord Grimstone, as Minister for this set, to comment on that. However, although it is probably irregular, I ask both Ministers to listen back to the answer that was given there and answer the same questions with their departments: how would they manage a company for five years that is still sitting in that kind of limbo? How would they make investment decisions for that business while it is still not approved but not denied? I ask them to think about the management decisions that they would make. When they have come to a conclusion, I think the Ministers will agree with the proposers of those amendments that some degree of certainty needs to be delivered quickly and efficiently—and that brings us to this set of amendments. The noble Lord, Lord Lansley, has eloquently set out an alternative to the—we might say—digital approach that the Bill has taken, with the option of remedies. Businesses are familiar with remedies, I would say, having worked with the CMA and others. The merits as set out by the noble Lord of speed, flexibility and durability are all things to be aspired to.
I know this sounds patronising, but I remind the Government that the title of the Bill includes the words “security and investment”—the investment part should have equal weight to that of security. It is straight- forward to stop things happening and tick a security box; it is harder to make sure that we have a regime that continues to encourage investment. Everything that takes time or injects uncertainty pushes investment away. The Ministers should listen to the wise words of the noble Lord, Lord Lansley, and think about this middle way, which can move things quickly, keep investment in the game and make sure that, at the same time as getting investment, we are also getting the security that the title of the Bill demands.
My Lords, there is something going around my mind now about letting foxes out of their glass cubes—I am not sure how dangerous that is.
These amendments would allow for undertakings to be accepted instead of a final order—a case well made by the noble Lord, Lord Lansley. During Committee in the other place, Dr Lenihan from the LSE said:
“There are many cases in which a threat to national security can be mitigated by agreements and undertakings without needing to block a deal.”
Perhaps the Minister could inform the House what thought was given to that proposal.
As we have heard, Amendment 71 is in a way a probing amendment to learn more about the type of person the Secretary of State could appoint to supervise a final order. We will be particularly interested to hear the Minister’s reply on this. What sort of specialism would be involved? Would the person need to have any relevant training, background or experience? It would be interesting to know how they would be selected and whether the job description would be included in the report that would in any case be made, so that one could see the basis on which the selection happened.
Clause 26(4) states:
“Before making a final order the Secretary of State must consider any representations made”.
We are interested in what exactly is meant by the word “consider”. Would that be part of a dialogue, perhaps as part of the negotiations, or simply a requirement that representations are in the dossier submitted to the Secretary of State for ratification? Assuming that the representations had not been successful—if there were a final order, that would presumably be against the wishes of the parties—it would be interesting to know whether the reasoning for rejecting them would be noted and reported on elsewhere, possibly to the ISC. It would be important for someone to be able to reflect on the decision-making that had taken place.
My Lords, I start by extending my thanks to my noble friend Lord Lansley for these amendments. I also thank other noble Lords who have spoken; all I think welcome the broad thrust of the Bill even if they wish, quite rightly, to probe certain aspects of how it will work.
I begin by addressing Amendments 45, 68 and 69. Amendments 68 and 69 would allow the Secretary of State to accept “undertakings” from the acquirer
“as the Secretary of State deems appropriate to remedy, mitigate or prevent any risk to national security”,
rather than issuing a final order or a final notification. Amendment 45 would then, as I read it, make a consequential change to Clause 13 in respect of notifiable acquisitions so that those which are completed otherwise than in accordance with the final order or the agreed undertakings are void.
The Bill as drafted allows the Secretary of State two options once he has exercised his call-in power: first, to issue a “final order”, which contains remedies. I would add here that remedies are not necessarily just black and white—they could have a whole set of actions incorporated into them; some noble Lords may not fully have comprehended that. Secondly, the Secretary of State can issue a “final notification”, which states that no further action is to be taken under the Bill.
Undertakings proposed by my noble friend in these amendments would come into force when the undertakings were accepted. They could be varied or superseded through the Secretary of State accepting another undertaking, replaced by a final order made by the Secretary of State at any time, or the Secretary of State would be able to release the acquirer from their undertaking.
I am grateful that my noble friend is seeking to expand the options available to the Secretary of State but, as I hope to explain convincingly in just a moment, the Secretary of State does not need these additional options. Undertakings would not be appropriate because the Bill already provides the dual benefit of certainty for parties while giving the Secretary of State the “teeth” needed to enforce a regime built around our national security.
The Bill includes the ability for the Secretary of State to establish the terms of any remedy through the power to make final orders. I emphasise that point again. The terms of a remedy may require someone to dispose of part of something or to do something in relation to one bit of an undertaking but not another. It is a comprehensive term which allows all sorts of matters to be included within it. Indeed, the Bill states in Clause 26(5)(a) that a final order may require a person
“to do, or not to do, particular things”.
I am advised that that is a strong statutory footing which the Government consider is both required and sufficient for remedies under this regime.
My noble friend Lord Lansley was right on the button when he said that this gives the Secretary of State all that he requires. The Secretary of State does not need any additional powers because this power gives him all that he might conceivably want to do. Of course, before the Secretary of State determines his final order, he is likely to engage with parties to an acquisition—acquirers and others—to explore potential remedies.
However, it is right for the purposes of national security that these remedies—once they have been considered, and once they might have been discussed and looked at—should then be able to be imposed through a final order rather than assented to by the Secretary of State. We believe that this imposition is necessary because the matters that we are dealing with here are matters of national security. The Bill as drafted provides the Secretary of State with the power to impose remedies through a final order or to take no further action under the Bill, which is all that is required.
With Amendment 71, my noble friend addresses an important part of the Bill; namely, the carrying out of activities pursuant to final orders. The execution of final orders is of course vital to ensure that any remedies imposed by the Secretary of State have their desired effect. There would not be much point in just imposing orders if they were not carried through afterwards. This amendment seeks to make explicit a requirement that anyone who will conduct, or supervise the conduct of, activities mandated by final orders must be “suitably-qualified”. While I appreciate the good intention of my noble friend, I do not believe that this amendment would add anything substantial to the Bill.
First, the Secretary of State is unlikely to appoint someone who could not conduct or supervise the conduct of activities mandated under the final order. It would be daft of him to put someone in to do the job who was not qualified to do it. Why would he or she wish to do that? To do so may undermine the Secretary of State’s remedy; the remedy may not be carried out in full or in part if the person is not qualified, which would be against the decision that the Secretary of State has made. It is therefore very much in the Secretary of State’s own interests that the person appointed has to be “suitably-qualified,” even if the Bill does not say that specifically. I take it for granted that that is what the Secretary of State would want to do.
Secondly, the Secretary of State will be subject to public law duties when providing for a person to be appointed. Those public law duties will require him to act reasonably and take into account all relevant considerations. This would include whether the person is suitably qualified to undertake the task. He would be failing in his public law duties if he appointed someone who was not so qualified.
Thirdly, should it be helpful to noble Lords, I am happy to state categorically on the Floor of the Committee that the investment security unit will comprise eminently qualified people of the right skills and experience. For example, if a particular case requires someone qualified in chartered accountancy or in audit, the Secretary of State will appoint somebody who has those qualifications to carry out what is required.
For these reasons, I believe that although noble Lords are trying to be helpful in putting forward the amendments in this group, they are unnecessary. What they seek to do is already covered by the powers that exist in the Bill, and I hope that my noble friend will feel able to withdraw Amendment 45.
I have received one request to speak after the Minister from the noble Lord, Lord Fox.
My Lords, I thank the Minister for his answer. I want to follow up on his last point. There is a certain ambiguity in his answer around where this person would be drawn from. In one sentence the Minister referred to the ISU and in the next sentence he referred to drawing on a particular power. It is not clear: is this a standing group of people who will be set in or will people be seconded from other companies or pulled in from other departments? A little more sense of what the source of these people is would give us more security around this.
My Lords, I thank the noble Lord for that question. It will be horses for courses. It will be either qualified people from inside or, if a person from inside does not have the qualifications, someone will be drawn in from outside and appointed to do it. The test will be to make sure that the person you ask to do the role has the capabilities and the qualifications to do it. I say yet again: why would the Secretary of State wish to do other than to appoint somebody who is qualified to do this task?
I am grateful to my noble friend the Minister for his responses to this short debate, and indeed to those who participated in it. It was helpful to elaborate some of the issues, although I am not sure that we solved many of the questions that were posed.
My noble friend correctly deduced that I did not see Amendment 71 as needed. It was designed to find out who these people are. Although my noble friend did not say so, the implication is that they are the staff of the department, working in the investment security unit. In a sense, that tells us already that, when we come on to think about some of the implementation of this and the annual reports and so on, we are dealing not only with a flow of cases through the investment security unit but with a continuing role for the unit in the scrutiny and the conduct of the activities that are the subject of final orders. I hope that we will be dealing with only some dozens of final orders a year, but it will build up over time since many of these final orders in relation to entities will have a continuing relationship.
I did not expect the “suitably-qualified” question to arrive at any other answer than that they are civil servants recruited into or drawn from the department, but if they were other than that, it would be very useful for us to be told. I am assuming that they are not.
On the question of undertakings, as I surmised at the outset, the Secretary of State has all the powers the Secretary of State requires. The point, however, is that when making final orders, it may be flexible from the Secretary of State’s point of view, since the Secretary of State can include anything the Secretary of State wishes to include in it. However, it is not necessarily flexible from the point of view of the people affected, since once the order is made, the flexibility has completely disappeared. What is flexible about undertakings is the ability of the acquirers to make commitments at the time they are contemplating an acquisition in order to bring those two things together to enable the acquisition to continue—the noble Lord, Lord Fox, made that point, perfectly reasonably. If we want to promote investment and to assist those who are acquiring entities and assets in the United Kingdom, other foreign direct investment jurisdictions such as the US allow for mitigation agreements. The American one does not impose orders, or rarely does so. There may still be merit in having the flexibility to enter into agreements with acquirers rather than imposing orders on them. I am surprised that the Government have simply dismissed that possibility. Having it on the statute book does not mean that Ministers have to use it, but if it is not on the statute book, they cannot do it. That is why we are thinking about it at this stage.
However, in the light of what my noble friend says by way of the powers in the Bill, I suppose that at this stage it is probably best to beg leave to withdraw the amendment.
Amendment 45 withdrawn.
Amendment 46 not moved.
Clause 13 agreed.
Clause 14: Mandatory notification procedure
Amendments 47 and 48 not moved.
48A: Clause 14, page 8, line 37, at end insert “which may include a streamlined form to be used by a person who has previously submitted a notification under subsection (1) or section 18 (2)”.
Member’s explanatory statement
This amendment seeks to reduce the regulatory burden for persons who have submitted notifications on previous occasions.
My Lords, in moving Amendment 48A, I shall speak to Amendments 67B and 67C, and propose that Clause 30 should not stand part of the Bill.
On the first three amendments, I have been assisted by the Global Infrastructure Investor Association and its legal advisers, Ashurst. The association, as its name suggests, represents major investors who participate in multiple infrastructure projects around the world. The purpose behind these amendments, as with so much of our debate today and on the previous two days in Committee, is to provide clarity, certainty and speed. My noble friend Lady Noakes, the noble Lords, Lord Fox and Lord Clement-Jones, and the noble Baroness, Lady Bowles, all talked about the extraordinary impact of uncertainty and time on companies. Let me give a brief example.
A few years ago, I was a non-executive director of a public company that was the subject of what is known as a dawn raid. My chairman was rung at 8.30 am by the chairman of a major competitor to say that, overnight, it had purchased 28% of our share capital from our investors. It was immediately referred to the Competition and Markets Authority, because these were two quite large companies in the sector, and we had a collective, organisational nervous breakdown. This went on for three or four months. The predator spent the whole time trying to persuade the CMA that there was no reason why the purchase should not go ahead; meanwhile, we in the victim company were trying to preserve morale, keep business going and assure people that their jobs were safe. But there was a degree of uncertainty, because it was not our decision in the end. The Ministers on the Front Bench deal with this in a sort of “it’ll be all right on the night” way, but it is very difficult in the real world out there. I give that example having been through this extraordinarily difficult period myself, and seeing how it could arise if we do not get the wording, clarity and speed of the Bill right.
Amendment 48A is the first. It would insert a provision for a more streamlined procedure for those who may be making frequent applications under the provisions of the mandatory notification procedure in Clause 14. Subsection (4) of that clause gives the Secretary of State powers, by regulation, to decide the “form and content” of any mandatory notification. The background to Amendment 48A is that there are many low-risk investors in the UK who currently and regularly invest in sectors that could trigger a notification once the Act comes into force. It would reduce the bureaucratic load if, once an investor had made a notification, or maybe one or two notifications, such an investor could make streamlined notifications, allowing them to avoid submitting the same information repeatedly —always, of course, with a statement that there had been no change in their circumstances in the meantime.
In the debate a few days ago on the group beginning with Amendment 15, the noble Lord, Lord Callanan, talked about the proposal in Clause 6(5), which does not entirely break new ground. It provides for the Secretary of State to make exceptions
“by reference to the characteristics”
of the acquirer. All that Amendment 48A seeks to happen is to move that sensible clarification and proposal into this subsection for this group of investors.
Amendments 67B and 67C are linked and seek to clarify the position of the Secretary of State under the stop-the-clock provisions of the assessment period and to ensure that any such powers are not abused. This is an add-on to the point made by my noble friend Lady Noakes earlier about no man’s land; the stop-the-clock provisions can be used to extend the period.
The two amendments relate to Clause 19, which concerns the power to require information, and Clause 24, which concerns the effect of the information notice and attendance notice. It is understandable that the Government may well need, and should be able to seek, further and better particulars for any transaction, but the extent of the power needs to be considered against two factors: first, the context of a regime where the basic assessment period is already quite long—75 working days or 15 working weeks for a national security assessment, or 30 working days or six working weeks for the initial screening process; and, secondly, that this statutory period can be extended by the Secretary of State using the stop-the-clock power. Under this power, the Secretary of State can require further information and must set a time limit by which it must be provided. Without being too cynical, it is perfectly possible for a Secretary of State with a tricky, controversial decision to make frequent requests for more information, stopping the clock on each occasion by imposing an unreasonably short time for the supply of the information. The process by which he or she pushes the pea around the plate could, eventually and ultimately, frustrate the transaction, without the Secretary of State ever having to take a decision at all.
Amendments 67B and 67C attempt to deal with this by a twin-track approach. Amendment 67B proposes that any information notice served under Clause 19 must allow a reasonable period of time for response, which must, in any case, be not less than three days. Without this safeguard, as I have said, the Secretary of State could repeatedly ask for more information, each time stopping the clock almost immediately. In parallel, Amendment 67C amends Clause 24, so that the stop-the-clock powers are discretionary and not automatic. Therefore, if complex questions take longer to answer, the Secretary of State does not have to stop the clock. Such an approach would mirror that followed by Section 34ZB of the Enterprise Act, in granting extensions to the statutory time limits to which the Competition and Markets Authority is subject for merger control purposes.
The final proposal in this group is that Clause 30 should not stand part of the Bill. I had thought about degrouping this, but decided that we have enough groups and should crack on. Clause 30 is entitled “Financial assistance”. Its wording can best be described as wide, and the Explanatory Notes are not much more helpful. In principle, there is nothing wrong with the Secretary of State having the power to compensate for the consequences of him or her making a final order under Clause 26. This is a probing amendment to ask my noble friend to provide what I might describe as a stream-of-consciousness description of how these powers are likely to be used.
For example, how is any compensation process to be initiated? Will it be at the request of the party which is the subject of a Clause 26 order or an offer by the Secretary of State? Is there an official or a body that will consider and assess such requests or will the decision flow from the Secretary of State’s desk? It may be that the expert person referred to by my noble friend Lord Lansley has a role to play here. What factors will be taken into account? Who decides the quantum of any compensation? Lastly but most important, how long is any process expected to take to complete?
If the subject of a Clause 26 order is a small, fast-growing company in urgent need of additional finance in the form of working capital to fund its expansion and the investment is suddenly blocked, any long delay may well prove terminal for the company as a whole. What about smaller companies where a single individual has spent a lifetime building up the business? Now he or she wishes to retire to enjoy the benefits of years of toil. Such a sale is then blocked on grounds of national security. What compensation or redress is available? It would be helpful if my noble friend could explain how this will work. In the meantime, I beg to move.
My Lords, I support the amendments in this group, which, as usual, the noble Lord, Lord Hodgson, has done a very good job of introducing. I was particularly drawn to the notion of streamlining, as suggested in Amendment 48A. I admit that my interests are probably wider than in this particular instance, but what we are dealing with here is a situation where there may already have been a previous notification and much of the same information might be needed again. If this is thought too wide, in that it goes on for ever so that it is hard to believe that updating might not be required, perhaps the streamlining could be for a certain period and, as the noble Lord, Lord Hodgson, also suggested, on the condition that nothing else has changed or, perhaps as an alternative, that one has to notify only what changes have been made.
This also raises the question of how much record-keeping the Government are going to undertake. I raised a somewhat similar query last week when I was thinking about licences and an investment agreement that covered options for licensing and whether they could be covered at once or, as perhaps this amendment envisages, there could be some kind of streamlining. However, the response from the Minister was that each instance had to be dealt with on its own. That would be a great shame from the industry side of things. That is no way to build up, if you like, intelligence, and for that to work both for the department and industry in helping to make it simpler to get through these notifications and to understand what is going on.
Looking at how a lot of notifications are made on a precautionary basis—much of the interest in the Bill is about making sure that an acquisition is safe—if an acquisition has already been cleared as being not of interest in response to a voluntary notification, for example, is it then sold on again? Is it safe to assume that, if there has been no significant change in activity but it was felt previously to have fallen within the definitions, it is safe to go ahead again with a voluntary activity? That is because again there will otherwise be a temptation to think that safety requires another notification. I would have thought that it was in everyone’s interests to cut down on the number of voluntary notifications.
Amendment 67B is self-evident, given that the “reasonable in all circumstances” provision must cover not only any urgency perceived by government but also the facilities at the disposal of the person. One interesting point that I would like to make here, although it goes a little beyond what the amendment is all about, is that Clauses 19 and 20 bear some resemblance to clauses in the Internal Market Act 2020, which were in turn lifted from the CMA information requirements. If the noble Lord, Lord Callanan, was answering this —although it is not—I am sure there would be a recollection that I recalled bitterly that those conditions were inappropriate. It is interesting to see that, in what might be called rather stronger situations, a slightly lighter touch is nevertheless being adopted here; that is, when individuals are involved in something that is necessarily of a security interest. Perhaps that reflects some recognition by the Government that people who have done no wrong should not be subjected to overly coercive requirements as though they were wrongdoers. That is a comment on an aspect of this part of the Bill, rather than in direct relation to the amendments.
I support these amendments. I was not sure what the noble Lord was going to say on the financial clause. Some very good points have been made, but I tend to be of the view that if the Government’s requirements have caused disaster to befall a company through delay, there should be a mechanism for compensation. However, how that is to operate needs to be made clear.
My Lords, it is a pleasure to follow the noble Baroness, Lady Bowles. I shall speak briefly to this group because my focus is solely on the final provision, which is that Clause 30 should not stand part of the Bill. I thank the noble Lord, Lord Hodgson of Astley Abbotts, for drawing our attention to this issue.
The whole subject of government spending, in particular where it relates to contracts but also to government aid, is now a matter of great public interest and concern. It is therefore important that this whole area should be given a great deal more attention and focus. We have seen, through our concern about international trade deals, the way in which companies carrying out their business and taking risks, which is supposed to be our economic model, have sought to attain compensation for, for example, government decisions about environmental matters or public health. We need to be concerned about the links in this, in particular as regards the ISDS arrangements, which I have debated with other Members of your Lordships’ House.
I would also ask the Minister if, either today or perhaps in the future, he would spell out how the Government see this working, especially what the mechanisms would be, and put a specific question to him about democracy and transparency. Clause 3 states that this legislation is to cover spending of £100 million or more. How has that figure been arrived at? Given that we are talking about government money, should it not perhaps be lower?
My Lords, it is a pleasure to follow the noble Baroness, Lady Bennett. I support the amendments in this group and I am delighted to have the opportunity to speak to the proposal that Clause 30 should not stand part.
The impact assessment sets out graphically what the financial implications of the measures in this Bill will be. It states that the costs are to be found in two main areas where the new regime could incur additional costs, notably additional administrative costs and the potential impact of a new regulatory regime on investment decisions. Of course, what we do not know are the known unknowns of possible investments, particularly in infrastructure, that may be cancelled. I am delighted to see that my noble friend Lord Grimstone is the Minister to reply, given his background with the Trade Bill. However, do the Government have any idea what the implications might be?
I understand that the Government have put a figure in the cost-benefit analysis of the costs to business and the Government together being, on average, between £26.2 million and £73.1 million per year. My understanding was that, when we were in the European Union, we attracted more foreign direct investment than any other EU country, and that, as of 2019, we currently have the seventh highest inward foreign direct investment flow, as the impact assessment tells us. I have some involvement in the OECD and water policy and note that,, in paragraph 168 of the impact assessment, we are told that:
“ The National Infrastructure Pipeline details long-term plans to invest over £400 billion (including £190 billion to be invested—”
“across 700 projects in water, energy and transport infrastructure. A large proportion of this would have been in conjunction with overseas investors.”
Water is attracting a high proportion of foreign investment, which the Treasury and the Government have consistently and rightly encouraged.
My noble friend Lord Hodgson, in his remarks on the question on whether Clause 30 stand part of the Bill asked a lot of the right questions regarding who will decide and so on. I should add a few other questions. Are these loan guarantees or indemnities recoverable and, if so, what would be the timeframe within which they would be recovered? I should also be interested to know from which budget the grants, loans and indemnities would come. The clause recognises the financial hit that many of the parties and investors might attract, which is welcome, but, as my noble friend Lord Hodgson identified, we do not find a great deal of information in the clause. There is no supporting schedule that one might normally expect in those circumstances and the Explanatory Notes say little. That is why I welcome the opportunity to ask those questions and I look forward to my noble friend’s responses when he sums up.
My Lords, I support my noble friend Lord Hodgson of Astley Abbotts in all his amendments. This House has an obligation to ensure that the Bill does everything possible to ameliorate the practical impact that it will have on business transactions. While most of the transactions will not, by the Government’s reckoning, engage national security issues, the fact is that they might do so and will inevitably result in a lot of precautionary notifications. We have to minimise the impact of the processes on ordinary investment decisions.
I particularly wanted to speak in respect of the question on whether Clause 30 stand part of the Bill and support what my noble friend Lord Hodgson said. It is extraordinary that a Bill about stopping certain transactions could have morphed into one whereby the Government will stuff public money into the pockets of one or more of the parties involved, with almost no explanation. As my noble friend Lady McIntosh of Pickering has said, one will find nothing in the Explanatory Notes or any of the other documents around the Bill. There is no comparable power in relation to the activities of the Competition and Markets Authority. That is extraordinary because the Government have taken the decision-making power to themselves in respect of transactions. They can then use public money in almost any way they choose. At the very least, we are entitled to have some clarity on how the Government expect to use the power.
I expect that the other place will claim financial privilege if we try to do anything to the clause, but we should not be deterred because of that.
My Lords, I am grateful to my noble friend Lord Hodgson for tabling the amendment because what is behind it is absolutely right, as a number of my noble friends have said in the debate. That is fine, particularly in a situation whereby we are hoping to set the environment in which new companies can be created. After the pandemic, we are highly likely to see a number of movements in that area that would not normally happen.
One area on which I have a slight query is the preference to be given to someone who has done it before, particularly if they are not a company but someone who is handling the matter. That gives an advantage over someone who has not done it before. Therefore, regarding the point made by the noble Baroness, Lady Bowles, about a time limit or distance limit in terms of time, there needs to be some stop on that. Otherwise, an unfair advantage is given to one party over another.
Another element that I worry about a little, which covers security matters as much as anything, is that some people out there are enormously creative in terms of manoeuvring and so on. Two things may seem similar but can be yards apart—miles sometimes. Not all that is written on the outside packet of a product or company represents what is happening underneath.
While I support the broad thrust of my noble friend Lord Hodgson, I have those reservations and shall listen carefully to my noble friend on the Front Bench.
My Lords, the noble Baroness, Lady Noakes, has coined another phrase that will run through this Bill—notably, “practical impact”. It is interesting that among those of us who have taken part in the debates on the Bill many have a practical understanding of what its impact could be. We have been in walks of life that have brought us into the investment community—not least the Minister himself—and we see the potential for major issues arising under the legislation because of the way in which it is drafted. This group of slightly disconnected amendments illustrates that. The noble Baroness, Lady Hodgson, and my noble friend Lady Bowles forensically took us through the amendment and Amendments 67B and 67C. I shall come to the question on whether Clause 30 should stand part of the Bill in a moment.
However, the amendment is definitely the kind of red tape-busting amendment that we need. My noble friend Lady Bowles said that we needed provisions that actually met the needs of the investment community and were tailored to it. The amendment is a classic example of what could be done in terms of making sure that we do not have a situation in which companies have to make notification after notification. The inter- twining of the mandatory and the voluntary notification aspects provided for in the amendment is extremely important.
Then we come to Clauses 19 and 24, and Amendments 67B and 67C. The noble Lord, Lord Hodgson, also has a way of coining a phrase, such as “stop the clock” provisions, which again give the Government all the cards and the poor old investor could be stuck for some period of time. As the noble Lord pointed out, the extent of the powers in terms of the periods are already quite long—75 working days or 15 working weeks for a national security assessment, or 30 working days or six working weeks for the initial screening period. We are not talking about modest periods but, rather like the referee in a rugby match, the Government can stop the clock and there is no control over that, as far as I can see. Therefore, we on these Benches firmly support those amendments.
On Clause 30 stand part, I liked the phrase of the noble Baroness, Lady Noakes: “stuff these companies with public money”. If that was the case, it would be pretty egregious. Now that noble Lords have drawn our attention to it, we can see that the Explanatory Notes on Clause 30 are vanishingly small. There is virtually nothing in there: there is no control over what the Secretary of State does. He may have to give a report if it is over a mere £100 million—and what is £100 million but small change in the circumstances? The Secretary of State can make more or less any decision and then say, “We have made the decision, but we have plenty of cash that we can stuff into your pocket.” It is the opacity, the lack of reporting and any real control in Clause 30 to which the noble Lord, Lord Hodgson, has rightly drawn attention. This is another area where I hope the Minister has something to say that not only gives quite a lot of further assurance but undertakes to create greater control over the powers in that clause.
After a bit, one gets a feeling for a Bill, and this one seems overly weighted in favour of the Secretary of State. The Secretary of State is more or less footloose and fancy free, and it is the poor old investor who will have to bear all the consequences.
The lead amendment, Amendment 48A, would introduce a streamlined form for mandatory notification, and Amendment 67B would make any time limit for an information notice not less than three working days. That seemed a sensible—I think the word used was “pragmatic”—proposal.
Turning to the interesting Clause 30, the Minister in the other place said,
“final orders, in exceptional cases … when we are administering taxpayers’ money—may bring about financial difficulty for the affected parties”,—[Official Report, Commons, National Security and Investment Bill, 8/2/20; col. 288.]
which is why Clause 30 allows the Secretary of State to give financial assistance to an entity through a loan guarantee or indemnity as a consequence of making a final order.
It would be interesting to know a little more about the whole of this, as we have heard, and when a potential recipient might know that they were even in line for such help. How early in the process would it be indicated—not the actual decision but that that was a possibility? Or is it like Father Christmas appearing at the end?
As we have heard, the figure of £100 million is interesting, and it is interesting that there is no regulation-making or guidance-providing requirement such that guidance on the use of the power might have to be, if not agreed by Parliament, at least provided and open for debate and scrutiny. Will such guidance exist and how many cases a year are envisaged involving £100 million? Who would make the decision and how, as has been asked, and will it be reported in a timely manner—or, indeed, at all?
If this is the Government’s desired outcome, it seems that Clause 30 does not provide for any financial assistance in the case of an interim order. Perhaps the Minister could outline the thinking behind that, given that an interim order could also impose major costs on a British start-up or prevent an acquirer investing in one if it was thought that that investment might increase the acquirer’s level of influence unduly and trigger the next stage. There could also be the loss of a business-critical investment. It would be useful to know the thinking behind making money available to cover one sort of loss but not another. I look forward to hearing more of the thinking behind how this would work in the Minister’s response.
My Lords, first, I thank my noble friend Lord Hodgson of Astley Abbotts for tabling Amendments 48A, 67B and 67C. I hope that the transaction he referred to had a happy ending.
Amendment 48A seeks to make it explicit that a streamlined mandatory notification form may be provided for in regulations if a person has previously submitted a mandatory or voluntary notification to the Secretary of State. The Bill requires a mandatory notice to be submitted to, and receive clearance from, the Secretary of State prior to the completion of a notifiable acquisition. Clause 14(4) provides for the Secretary of State to prescribe the form and content of a mandatory notice in regulations.
The amendment would amend the regulation-making power to make it explicit that such regulations could provide for those who have previously submitted either a voluntary or a mandatory notification form to submit a streamlined form. I am pleased to say that we are completely aligned with noble Lords who want the process under the Bill to be as streamlined as possible. As the Minister for Investment, looking to the interests of investors, I completely endorse that. I reassure noble Lords that the regulation power as drafted already provides for that.
In addition, the Government are designing both the voluntary and mandatory notification forms with business in mind, while ensuring that the Secretary of State receives the information that he needs to decide whether to issue a call-in notice in relation to a proposed notifiable acquisition.
I stress that the Government are keen to ensure that all the forms are clear and simple to complete. A draft notification form was published for comment during the Commons passage of the Bill, and the Government continue to engage interested parties to test the ease of completing the forms and the clarity and relevance of the questions.
Amendment 67B seeks to create a floor for the minimum time which the Secretary of State must provide to a party for responding to an information note. The minimum floor proposed is three working days. As noble Lords will be aware, Clause 19 provides for an information note which the Secretary of State may issue to require any person to provide information which is proportionate in assisting the Secretary of State in carrying out his functions.
An information notice may include a time limit for providing the information and the manner in which the information must be provided. An information notice must specify the information sought and the purpose for which it is sought, as well as the possible consequences of not complying with the notice.
It will be in the Secretary of State’s interest that any party from whom information is required is provided appropriate time for collecting and providing such information, or else confirming that they do not possess it. Providing insufficient time for doing this will only lead either to incomplete information being provided or to information being provided in a form which is more difficult to analyse. It might also lead to unwelcome outcomes, such as a party undertaking due diligence as to whether they possess the relevant information, but there then being insufficient time for them to establish that with certainty.
It is with these issues in mind that I assume that my noble friend tabled his amendments. I reassure him that the Secretary of State will already have the appropriate incentives to allow appropriate time for a response, and that, more widely, public law duties will require him to take a reasonable approach in setting a time limit for responding to an information notice under the Bill.
I shall deal directly with the point made by my noble friend that the Secretary of State might want to waste time. I reassure the Committee that the Secretary of State has absolutely no desire to push his peas around the plate, as my noble friend so graphically illustrated. It is absolutely not the Government’s intention. This provision is about helping to make sure that non-compliance with the process does not help hostile actors to get trigger events cleared. That would be truly perverse. The powers to require information or witnesses may be used only in relation to the Secretary of State’s functions under the Bill. This means that they have to be relevant to assessing the acquisition and making a decision on it. The Secretary of State will be subject to the usual public law duties when issuing information notices or attendance notices and judicial review will remain the safeguard on how those powers are used.
Amendment 67C would narrow the circumstances in which time would not count towards the assessment period after an information notice or attendance notice has been given. It would give the Secretary of State discretion to disallow days falling between the expiry of any time limit specified in the notice and the day that the Secretary of State informs the parties that he is satisfied that the requirements of the notice have been complied with. This would mean that days could not be disallowed if the notice is never complied with. There would also be no requirement to notify relevant parties that time had been disallowed, and any time that was disallowed could be disallowed only retro- spectively; that is, the Secretary of State would have to make the decision while the clock was running.
This would have two unfortunate effects. First, a party could time out the Secretary of State from making an informed decision before the end of the assessment period by not complying with the notice. Secondly, time could be disallowed only retrospectively, once there had been compliance with the notice, which would mean that the assessment period clock would still have been running throughout this time. Therefore, the Secretary of State could already have been timed out by the point that any decision is made to disallow time. The Bill as drafted prevents this by automatically stopping the clock for the days following the notice being issued until compliance with the notice or, if earlier, the expiry of any time limit for compliance. I reassure the Committee that the Secretary of State has absolutely no motive or desire to make this process anything other than as efficient and streamlined as possible.
Information notices and attendance notices cannot be issued for the purpose of lengthening the assessment period, as I have said before. The Bill explicitly requires—I stress this again—notices to be issued for the purposes of assisting the Secretary of State in carrying out his functions under the Bill. It is clearly not a function of the Secretary of State under the Bill to lengthen the assessment period. In any event, as I said earlier, issuing a notice for such a purpose would be inconsistent with the Secretary of State’s public law duties.
I will now set out why Clause 30, which makes provision for financial assistance, must stand part of the Bill. The Government recognise that final orders, in exceptional cases, may bring about financial difficulty for the affected parties. I shall give some specific examples in a moment. This clause therefore gives the Secretary of State the legal authority to provide financial assistance to, or in relation to, entities in consequence of the making of a final order; for example, in order to mitigate the impacts of a final order. I stress that this is not a general compensation scheme. It relates only to final orders. As well as being used to mitigate the impact of a final order, it might be used where the consequence of a final order in itself might otherwise affect the country’s national security interests. I will give an example of that in a moment as well. The cost will be borne by BEIS, but will be, as always, under the beady eye of the Treasury, which will have to give its consent to any monies issued under this clause. Noble Lords will know that such clauses are required to provide parliamentary authority for spending by the Government in pursuit of policy objectives where no existing statutory authority for such expenditure exists. I stress that I am confident that such assistance would be given only in exceptional circumstances when no alternative was available.
I am happy to give my noble friend Lady Noakes the examples she requested, to provide the noble Lord, Lord Clement-Jones, the transparency that he is seeking, and to help the noble Baroness, Lady Hayter, with some examples. For example, the Secretary of State could impose a final order blocking an acquisition of an entity which is an irreplaceable supplier to government, and the imposition of that order subsequently puts the financial viability of that entity in doubt. In such a situation, the Secretary of State, if he or she were so minded, could provide financial assistance to the entity to ensure that it could continue operating while an alternative buyer was found. Such a power naturally requires appropriate safeguards to ensure that public money is appropriately spent. Such spending would, of course, be subject to the existing duty of managing public money and be compliant with any other legal obligations concerning the use of government funds. As the Bill makes clear, in addition, if during any financial year the assistance given under this clause totals £100 million or more, subsection (3) requires the Secretary of State to lay a report of the amount before the other place. Where during any financial year in which such a report has been laid the Secretary of State provides any further financial assistance under this clause, subsection (4) requires that he lays a further report of the amount. Additionally, the annual report under Clause 61 must include the expenditure incurred by giving, or in connection with giving, financial assistance under Clause 30.
I shall give the noble Baroness, Lady Hayter, some more information about why we do not provide support in relation to interim orders. Restricting the power to final orders ensures that the Secretary of State may use it to assist entities only once a national security assessment has been completed and final remedies have been imposed. The purpose is to mitigate the impact of any final order on a company. It would not be an appropriate use of the power to provide aid to an entity that is only temporarily affected by an interim order which will last only for the period of the review, which is unlikely to be more than 30 working days.
I hope that noble Lords will see this clause as necessary and appropriate and have confidence that the Government and future Governments have limited but sufficient freedom to provide financial support under the regime as a result of it. I ask my noble friend to withdraw his amendment.
I have received two requests so far to speak after the Minister—from the noble Lords, Lord Fox and Lord Clement-Jones.
My Lords, I thank the Minister for his thorough answers. In his answer on Clause 30, the Minister referred to “affected parties” and did not rule out the aggressor, as well as the target, from potential compensation—or mitigation, as I think the Minister described it. Am I right in assuming that the aggressor might also feel that they are eligible for mitigation?
Secondly, the nature of that mitigation seems to rule out the Government taking a share in a potential company, rather than simply bailing it out. Given that this Government have already spent $500 million taking a 20% share in OneWeb, which was not even strategic, why would they not leave themselves open to taking a share in a company so important that they felt they needed to prop it up?
I thank the noble Lord for that question. I will give him an additional example of where this power or type of power might be used. As I stressed earlier, it is not a general compensation power and will only be used in instances where the public interest, particularly national security interests, require it. As I also said earlier, any financial assistance would be subject to Treasury consent and would have to be shown to provide value for money. For example, if the Government provided a loan, it would normally have to be at market rates. The clause does allow the Secretary of State to bail out any business, either directly or surreptitiously, through soft loans.
Equally, the aim is not for this Bill to cause businesses financial distress, nor do we anticipate it doing so. The Secretary of State—this is the key point—may make a final order only if he “reasonably considers” that it is “necessary and proportionate” to address an identified national security risk.
Let me give an example. A case might arise whereby an asset has to be secured to prevent the national security risk of someone else getting hold of it. The Secretary of State might have imposed a final order that blocked a trigger event of a UK company that was working on unique or world-leading technology. If the company could not immediately find an alternative buyer, and if the collapse of the company could itself pose a national security risk, the Secretary of State could consider using this power. In such a situation, the Secretary of State may decide that he or she wishes to provide financial assistance to ensure that the company could continue operating until an alternative acceptable buyer was found. As such, this power will be used only in very tightly drawn circumstances where doing so is clearly in the national interest.
My Lords, I know that the Minister is trying to be as helpful as possible by tying down the way Clause 30 will work. However, “tightly drawn” is not how I would describe its wording, so I assume he is really saying that it is the risk of judicial review hanging over the Secretary of State that keeps him honest in the circumstances. That is not a very good place to be when you are dealing with a Bill of this kind.
The other aspect is transparency. The noble Lord did not really explain the reason for the threshold of £100 million. He said it was for transactions—or compensation, if you like—and financial assistance under £100 million in aggregate would have to be reported for the annual review. However, if it was £99 million, say, that would not apply and it would not be subject to a separate report; it would just be aggregated along with all the financial assistance given over the course of the year. Why?
These powers are very wide; we need to know how they are being used and what direction the financial assistance is going in. Therefore, simply drawing a line at £100 million does not seem to be very satisfactory in the circumstances.
I thank the noble Lord, Lord Clement-Jones, for his question, and I understand the concerns that he raised.
I will first deal with the £100 million figure. Of course, that is a lot of money for the Government to have to spend without having to report to Parliament. However, I assure noble Lords that, in order to offer this level of financial assistance, the situation would have to be truly extraordinary. The only circumstances I can envisage where the Secretary of State would need to use this power would be for some of the most significant nationally important firms. The significant nature of these firms means that they may be large, so the Government have put in this reasonable cap of £100 million. Personally, I would be very surprised if anything like that were spent. However, of course, any spending under this power will be subject to Treasury consent, as I have said—and the Treasury does not rush forward with money for departments in situations like this.
I have to say—and, in a sense, apologise—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, provided that it is only ever used responsibly and respectively.
As there are no further speakers, I call the noble Lord, Lord Hodgson of Astley Abbotts.
My Lords, I thank all those who have spoken in the debate, as we struggle—that is the only word—to find the balance between national security and investor rights, and do so against a background of what is practical and realistic in the marketplace. I thank my noble friend the Minister for his extensive reply and tell him that I did not have a happy ending: we got taken over after four months, but never mind.
He has made a valiant effort. The noble Lord, Lord Clement-Jones, used the rugby match “stop the clock” analogy; I will use a cricketing analogy. I think the Minister’s officials have written him a speech that is a series of forward defensive prods, and it is rather like watching Geoffrey Boycott nought not out at lunch—but he has made a hugely valiant effort along the way.
On Amendment 48A, he says that we are completely aligned because the regulations provide for a streamlined procedure. Of course they do, but it will never happen because, unless something is written there, people will say, “Why go there, Minister? Why not just have the same old procedure we have always had?”
On Amendments 67B and 67C, I am not quite sure what appropriate incentives the Secretary of State had in mind to work the system appropriately. To be candid, it is unrealistic to say that judicial review is a possibility when you are working to the timetable these sorts of things will have to work to: it is not in touch with the reality of the marketplace.
On Clause 31, other noble Lords have made the relevant points. My noble friend the Minister made a determined effort to explain, but the loopholes and opportunities for difficulties with this are great. His example was that, if a firm’s takeover were to be blocked, help might have to be given until another buyer could be found. He knows better than any of us that, once a firm is known to be in trouble, any other offers will be very low indeed; the differential between someone selling on the uptick and when they know that the firm is a wounded bird will be very great indeed.
There is a big question to be answered about that, which he is much more familiar with than I am, of trying to meld together the realities of the marketplace with the needs of national security. We have not yet got the balance right. We have been advised by a number of leading law firms, and a number of Members of the Committee have practical experience. I cannot believe that we are wrong in everything that we are saying and that all the law firms are wrong. I cannot believe that some of the things that have been put forward are not worthy of much closer and further assessment. We are now in the territory of, “Are they fit for purpose?” “Oh yes, they are”, “Oh no they’re not”. I want the opportunity to go away, talk to the people who advised us, see what the Minister and his officials say, and then decide whether we should come back to these and other amendments at the next stage of the Bill.
In the meantime, I thank the Minister for the long speech that he made, and all other noble Lords who have spoken, and I beg leave to withdraw the amendment.
Amendment 48A withdrawn.