My Lords, I have not previously taken part in this Bill because I claim absolutely no expertise in national security. However, like many noble Lords, I have received a number of representations and briefings on the foreign influence clauses from those who have major concerns about their impact on business life, which is an area where I have some experience. I have tabled Amendments 89A, 89B, 89C and 92A in this group to raise those issues.
I have considerable sympathy with those opposing the Question that the clauses dealt with in this group stand part of the Bill. I would have added my name had there been space. A number of those making representations were very clearly of the view that the best thing to happen would be for the clauses to be put to one side and for there to be a proper consultation on them to expose all the practical issues across the many kinds of organisations that other noble Lords have referred to in this group.
My amendments are more modest and targeted, because I recognise that legislative opportunities do not come very often for the Government to put a scheme such as this in place. If there is any opportunity to improve the Bill before it leaves this place, we ought to encourage the Government to do so. To that extent, I was much heartened by the words of my noble friend the Minister at the beginning of this group. I completely accept that, as the noble Lord, Lord Anderson of Ipswich, said, this is not the whole answer; if we are trying to completely remedy these clauses, they will need more than my amendments. However, my amendments are directed particularly at the commercial aspect. I will speak relatively briefly to them.
Amendment 89A seeks to restrict the scope of the political influence clauses to organisations which are under the control of a foreign power. In that sense, it is like Australia. Clause 66 currently applies to any foreign organisation whether it has any connection to a foreign power; hence it applies to absolutely all foreign-operated corporations, as has been said, such as commercial companies and many other non-profit organisations, NGOs and the like.
Take the example of a company formed in one of our international friends—for example, a member country of the EU. Let us suppose that that company is thinking of investing in the UK in something we really want them to invest in, such as a nuclear power station or renewables. This provision is going to put a lot of hurdles in that company’s way. That company will inevitably have to have conversations about regulatory issues, licensing issues, planning and visas for specialist staff, which will involve meetings with officials and
government Ministers. At some stage, government decisions may be needed in order to encourage that company to complete its investment. These are ordinary commercial activities but, under the Bill as drafted, that company will have to register as soon as it starts to make arrangements—for example, when it engages UK-based advisers. Of course, UK-based advisers will also have to register if there could be any chance whatever that that EU company wants to do anything that could be deemed to be a political influence activity.
As other noble Lords pointed out, that sends a pretty terrible message to potential overseas commercial partners. The UK’s position as a desirable location for inward investment cannot be taken for granted, and it could be dealt a very severe blow if all foreign companies are treated like potentially malevolent actors. It is hard to see the public policy justification for drawing the boundary of the new requirements to include such companies.
My Amendment 89A would extend the ambit of Clause 66 to UK-incorporated organisations. At the moment, if the EU company in my hypothetical example had a wholly owned UK subsidiary, that company would not be caught if it carried out the activities on its own behalf, rather than on behalf of its parent. That does not seem logical because the substance is unaltered by the corporate structure. However, if a UK-incorporated company is controlled by a foreign power, I would have thought that the Government would want to be able to track its influence activities for the countries about which they have concerns. But, at the moment, Clause 66 does not seem to require it, and I hope that my noble friend the Minister can explain its subtleties when he winds up.
Both Australia and New Zealand have significant commercial carve-outs, designed to allow ordinary commercial activities to carry on. That is why I put down Amendments 89B and 92A, which are aimed more directly at excluding commercial activities. Amendment 89B quite simply exempts commercial activities from the definition of “political influence activity” in Clause 68, trying to bring it closer to the Australian or American systems.
My Amendment 92A also includes a power for the Secretary of State to exempt other activities that do not involve a risk to national security—other noble Lords gave examples of those other kinds of activities outside the commercial sphere. The noble Lord, Lord Anderson of Ipswich, tabled Amendment 92B to my Amendment 92A, and I agree with his amendment because it would lessen the need for a backstop power for the Secretary of State, although I still think that such a power would be desirable because we cannot decide in advance all those circumstances where it is clear that no national security interest arises.
My last amendment in this group, Amendment 89C, also concerns the definition of “political influence activity” in Clause 68(2). Under Clause 68(2)(b), general communications are not caught if they make it “reasonably clear” that the communication
“is made at the direction of the foreign principal”.
But this does not apply to communications to Ministers, MPs and the like—the specified people who are now in the new schedule. My amendment basically asks: why not? What is the harm in communications that are
clearly signposted at the behest of a foreign principal? In my example, if a company from the EU were trying to approach individuals or officials, as opposed to putting out a general communication, but it was quite clear for whom it was acting, what evil are we trying to deal with by making that a political influence activity in the Bill?
My remarks have focused just on commercial activities, and I have really focused on only one aspect of them: inward investment. If we drag the whole of commercial life into this regime, it will, at best, end up with a lot of non-value adding bureaucracy. At worst, it will swamp the Home Office with a tsunami of precautionary registrations and could do real harm to our economic prospects. I feel that, at the moment, the effect of the Bill is a bit like putting up a big sign saying, “No foreign businesses here” at the gates to the UK. I look forward to my noble friend the Minister’s response, and, as I said, I was heartened by his initial remarks.