My Lords, I rise to speak to Amendment 103, and I declare my interests as set out in the register.
Like the noble Baronesses, Lady Noakes and Lady Lister, I am new to the Bill and have been provoked by briefings. Like others who have spoken today, I emphasise that I am absolutely no fan of this foreign influence registration scheme, which is far too broad in its application, as we have heard. I think it will be highly damaging to UK research and development, inward investment and British interests around the world. The noble Baroness, Lady Hayter, listed those who might get caught up in the scheme, and clearly very few of those have any connection at all with national security. I am delighted to support many amendments in this group and, in particular, the clause stand part notices that the noble Lords, Lord Anderson of Ipswich and Lord Carlile of Berriew, and my noble friend Lord Wallace have spoken to so cogently.
This has given us the opportunity to debate the flawed nature of the whole scheme. I will make some remarks about the impact on business and investment, which my noble friend Lord Fox would have made were he able to be here. We have heard powerful testimony from the British Academy, referred to by the noble Baroness, Lady Lister, and from the
Russell group, referred to by the noble Viscount, Lord Stansgate, about the hugely detrimental potential impact of the Bill on the international research and development front. The British Academy rightly says that international collaboration is critical to the excellence of UK research and the Government’s aim to become a scientific and global science superpower. As it says, as currently drafted the FIRS will have a severely negative impact on the UK’s ability to engage with researchers internationally and on the ability of researchers in the humanities and social sciences to engage on critical public policy topics, and it will irrevocably harm the UK’s research and innovation standing. Strong words.
Under the scheme as currently proposed, at minimum, research universities will be smothered in red tape and, at worst, heavy criminal penalties in undertaking international research partnerships will be imposed. Bluntly, I must tell the Minister that his amendments add very little to the clarity of this scheme. The Minister’s letter about the intersection with the National Security and Investment Act, which we debated in 2021, was far from convincing. There is already a raft of other legislation relating to the academic technology approval scheme and export control, which impact on a university’s international activities. If this scheme, by mischance, does go through, it makes Amendment 104, in the name of my noble friend Lord Wallace, the absolute bare minimum needed. Both the Russell group and the British Academy make the case for clarity, non-duplication, proportionality and a high threshold for registration, none of which is currently present in the scheme.
A further cause for withdrawal of this scheme is the strong reaction from the business and investment community. That is why this stand part debate is so important. The ABI states very clearly that the current proposal for the FIRS
“risks placing significant reporting burden on insurers and long-term savings providers investing in the UK, with the potential to negatively impact the UK’s international competitiveness and attractiveness as a place to invest”.
TheCityUK says these proposals
“if passed unamended would have a chilling effect on inward investment into the UK”.
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The current registration scheme goes far wider than national security concerns, as we have heard from all around the Committee—it is a catch-all that is the very antithesis of a growth agenda. The noble Baroness, Lady Noakes, was spot on when speaking to her amendments. As the noble Lord, Lord Anderson, said in his remarks, this legislation goes far further than the Australian equivalent. The Home Office is demonstrating how far removed it is from any kind of commercial or competitive business reality by trying to impose such a scheme.
As TheCityUK, the ABI and the advocates of the clause stand part notices have made clear, the FIRS received little consultation and the whole of Part 3—the “slapdash” scheme, as described by the Financial Times, which it seems that BEIS itself is concerned about—should be reconsidered, or at minimum the primary tier removed and a more fit-for-purpose scheme devised. Memorably, Herbert Smith, the law firm, described the foreign
influence registration scheme as making the notorious Dangerous Dogs Act 1991 look like a masterclass in thoughtful legislation.
That said, given the width of the registration scheme, I have a major question: why, unlike virtually every other sector, are legal services not required to register under these provisions? My Amendment 103 is a probing amendment that would remove paragraph 5 from Schedule 14. This paragraph provides an exemption for legal services from registering activities, as defined in the Legal Services Act 2007, under the foreign influence registration scheme.
Why is the legal sector—of which I have been a member for nearly 50 years—treated differently under the Bill from every other professional activity involving a foreign entity to be registered under the new scheme? Requiring those providing legal services to register would have no undue or prejudicial influence on existing or future legal cases. Simply registering that a law firm works on behalf of a foreign state or entity would say nothing about the legal advice it is providing or any other particulars of the case.
Legal professional privilege ensures that authorities and the public do not have the right to examine the particulars of a certain case or individual circumstances, but they do have the right to know that British law firms are servicing clients in scope of the registration scheme. Communication between the lawyers and their clients will of course remain entirely protected; only the matter of the existence of a contract for legal services would be made public. The boundaries between legal PR and lobbying services are often blurred, and excluding legal services from a fit-for-purpose foreign influence registration scheme could serve as a loophole for unscrupulous actors.
This amendment is also relevant as we await the second economic crime Bill and a debate on tightening the rules on professional enablers. Some UK law firms have played an important role in creating the reputation of London as a laundromat. In the last few years, billions of dollars have moved to Russia via British courts and legal settlements reached with British solicitors. As Alexei Navalny’s Anti-Corruption Foundation has drawn to my attention, VTB, Gazprom and PJSC Sberbank have all been involved in litigation in London and represented by UK law firms. They were also all involved in multi-million-pound cases before the war in Ukraine.
So this amendment is modest. If we cannot establish the same basic standards for the legal sector as we have for every other sector, we are not being serious about tackling malign foreign states and the use of our valued legal system. At the end of the day, of course, what I would much prefer to see, as so many noble Lords have asked for today, is the withdrawal of this scheme, and its reconsideration.