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National Security and Investment Bill - Sitting 3

26 November 2020

Proposing MP
Graham Brady Con
Altrincham and Sale West
Type
Public Bill Committee

At a Glance

Issue Summary

The discussion revolves around the clarity needed for market participants regarding factors considered under a national security assessment and the impact of the National Security and Investment Bill on the UK's investment climate, especially for small and medium-sized enterprises. Graham Brady discusses the scope of the National Security and Investment Bill and its potential impact on the investment climate in the UK. The discussion revolves around how the government assesses whether a small or start-up company poses a threat to national security under the National Security and Investment Bill. Graham Brady is concluding the session with witnesses and thanking them for their time and assistance to the Committee. Professor Ciaran Martin discusses the balance between national security and economic security concerns in relation to the National Security and Investment Bill, emphasizing the need for a clear distinction and strategic identification of key technologies. The statement discusses the National Security and Investment Bill and its implications for technology sectors like artificial intelligence and quantum computing. Professor Martin discusses the composition and expertise needed for the investment security unit within BEIS, addressing concerns about technology, geopolitical expertise, and commercial nous. The statement discusses the National Security and Investment Bill's provisions for transparency and parliamentary oversight, including judicial reviewability and closed material procedures. The MP is thanking Professor Martin for his testimony and proposing to adjourn the Committee session until the next scheduled witness arrives.

Action Requested

Witnesses from Slaughter and May suggest providing more detailed guidance to market participants about national security considerations and propose considering measures like de minimis thresholds to ease the burden on early-stage companies within mandatory notification sectors.

Key Facts

  • The statement of policy intent provides framing for factors considered under a national security assessment.
  • The Bill is expected to result in between 70 and 90 call-ins per year, compared to only a dozen interventions under the previous regime since 2002.
  • The impact assessment estimates approximately 1,830 notifications annually.
  • The Bill's scope is already considered broad.
  • Broadening it further may introduce uncertainty, potentially impacting the investment climate in the UK.
  • The existing intervention regime under the Enterprise Act will remain in force.
  • The Government understands the threats and intelligence, making them best suited to make judgments about national security risks.
  • Real-time engagement with the investment security unit is crucial for helping companies navigate the regime effectively.
  • There is a suggestion to align definitions of significant influence or control between the National Security and Investment Bill and the Companies Act 2006.
  • Graham Brady is concluding a session with witnesses.
  • He thanks Ms Wright and Mr Boney for their time and assistance.
  • The Bill aims to address up to 17 sectors or areas where notifications will be mandatory.
  • Sovereign cryptography has been covered by national sovereignty requirements for over a century.
  • The professor supports the need for sovereign and friendly capability in key technologies.
  • Professor Martin supports broad powers for the Secretary of State to gather information, but advocates for transparency and accountability.
  • Made in China 2025 strategy aims at global technological dominance.
  • China is developing new IP protocols to facilitate easier internet control.
  • Expertise required for the unit includes technological, geopolitical, and commercial nous.
  • The investment security unit's location within BEIS or another department is debated.
  • Professor Martin suggests a need for transparency in how the Government interprets the Bill's scope.
  • Closed material procedures are explicitly provided for cases involving sensitive matters.
  • National security organisations can discuss thematic issues rather than individual cases that contain extremely sensitive detail.
  • The tech landscape will look different by 2025, requiring official updates on the application of the Bill.
  • The current time is 12:10.
  • Professor Martin has completed his testimony.
  • The next scheduled session with a new witness is at 2 pm.
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