Amendment 82

National Security Bill - Committee (4th Day) – in the House of Lords am 4:00 pm ar 16 Ionawr 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Lord Sharpe of Epsom:

Moved by Lord Sharpe of Epsom

82: Clause 62, page 43, line 23, after “an” insert “agreement or”Member's explanatory statementThis amendment clarifies that agreements can be “foreign activity arrangements”.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

My Lords, this group responds to the amendments tabled in relation to the political influence tier of the foreign influence registration scheme and separate amendments tabled regarding guidance on the scheme, impacts of the enhanced tier on the higher education sector and the exemption for legal activities. In addition, it introduces a number of minor government amendments to the scheme, which I will cover shortly.

Before I address the amendments and clauses specifically, let me say that we are not yet able to publish a policy statement relating to the power taken in Clause 77(1), which we committed to do in the Bill’s delegated powers memorandum. The Government are in the process of carefully considering feedback from industry and the important scrutiny in this House. As such, we believe that publishing a policy statement now would only muddy the waters when the Government’s focus is rightly on listening to Peers’ concerns.

It is the first duty of government to protect its people, the country they live in and the integrity of their democratic institutions. The political influence tier of the foreign influence registration scheme will play an important role in delivering on this agenda. Dialogue between policymakers and the rest of society is an essential feature of our democratic system. It provides parliamentarians and Ministers with important information and expert analysis, helping us to become more informed. It allows decision-makers and the public to be exposed to diverse opinions and voices, including from the international business sector. It can be a positive contribution to healthy and robust public debate, and will continue to be welcome in the UK.

However, when communications or disbursements are not transparent, it can lead to corruption or give certain groups an unfair advantage. It can be seen as a way for powerful interests to exert excessive influence on political and governmental processes, potentially at the expense of the British public. It is particularly important to be able to identify foreign influence. The UK Government and the British people are entitled to know when foreign interests seek to influence public policy and public opinion. We should be able to identify foreign influence and evaluate those contributions properly, including the aggregate impact over time. Some foreign lobbying presents risks to national security. Members of the Committee will have heard Ken McCallum, in his annual threat speech in November, discussing the challenge from state threats. He said:

The West is in a contest in which our security, values and democratic institutions are at stake.”

The Intelligence and Security Committee discussed political influence and state threats in its 2020 Russia report, calling for a scheme like the one delivered through the political influence tier of FIRS, which we are debating here today. The political influence tier of FIRS will play a role in strengthening openness and transparency in those processes, with the additional aim of deterring foreign powers that wish to pursue their aims covertly through agents and proxies. Noble Lords will be aware that some foreign states increasingly seek to influence how we think, vote and feel. Such states view themselves as being in a long-term contest with the West and take a much broader view of what they are interested in than simply national security matters. Covert political influence from state actors can damage our democratic processes, institutions and wider societal cohesion.

The foreign influence registration scheme will require those acting covertly with malign intent to make a conscious choice between registering their activity and publicly declaring their provenance, or not registering and risking prosecution. This raises the cost of conducting such activity and will be a significant deterrent to those who seek to harm our democracy.

Before we move on to the main debate, I will very briefly explain the government amendments in this group. Amendments 82, 89, 99, 100, 101 and 102 make minor technical changes to ensure consistency in the use of “arrangement” and “agreement” across the foreign influence registration scheme provisions. These amendments will assist with the clarity and understanding of the scheme.

Government Amendment 92 amends the existing provisions regarding public communications in the political influence tier of FIRS. This amendment provides that where a public communication is reasonably clear that it is being made by a foreign principal on its own behalf, it will not need to be registered. The Bill already provides an existing exclusion from registration requirements where it is reasonably clear that the public communication is made at the direction of a foreign principal. This is in keeping with our commitment to ensure that the scheme is proportionate and does not impose any unnecessary burdens.

During the last day in Committee, the noble Baroness, Lady Hayter of Kentish Town, raised a number of questions regarding the foreign power condition, which we dealt with at some length last week, and the foreign influence registration scheme. I thank her for her letter and will deal with the core of her questions now, to ensure that this is on the record. On the question of whether a member of this House will need to register when entering arrangements, the responsibility to register under the political influence tier of FIRS will lie with the foreign principal carrying out the activity in the United Kingdom, or with the person in an arrangement with the foreign principal to carry out activities in the United Kingdom. There will be no requirement on the person whom the foreign principal is seeking to influence to register activities. As such, Members of this House would be required to register only if they entered into arrangements with foreign principals to carry out political influence activities in the United Kingdom. This applies equally for arrangements with any foreign entity, including political parties in government or in opposition.

There was also a question in relation to the foreign power condition of why “a governing political party” has been included in the meaning of “a foreign power”. It addresses situations where there is a dominant political party or parties within a country to such an extent that it may be difficult to disentangle whether harmful activities have been carried out on the direction of the ruling party or the Government. The noble Baroness posed the question of what constitutes a governing political party. It is right that this will vary in different countries. Clearly we cannot legislate for every different administrative structure. Rather, in criminal proceedings where this was an issue, the prosecution would have to prove beyond reasonable doubt that a political party was the governing political party based on the facts of the case. Therefore, any political party with no members holding posts in the Government would not be in scope. The definition in Clause 30(2) means that a political party is a governing party only if individuals within that party hold posts in the Government or part of the Government. For example, the Democratic Party runs the US Administration and sets the direction of government policy. It is therefore the governing political party in the US.

To omit Clause 30(1)(e) as the noble Baroness suggested and to rely entirely on the other aspects of the definition of “a foreign power” risks creating a loophole whereby sophisticated state actors could claim to act on behalf of the ruling party but not the Government. To be clear, foreign powers, including governing political parties of a foreign Government or their members acting in their capacity as a member, do not have to register their own activities. However, those in arrangements with foreign entities—including governing political parties—to carry out political influence activities in the UK will need to register those arrangements.

I will be listening very carefully to the remarks made on this group and will respond to the amendments directly in my closing comments. I look forward to this important debate.

Photo of Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede Shadow Spokesperson (Justice), Shadow Spokesperson (Home Affairs)

My Lords, in his opening statement, the noble Lord said that the Government plan to publish a policy statement and that the reason they were not doing so now, in anticipation of Committee, was that they did not want to muddy the waters. Can I ask the noble Lord whether he plans to publish that policy statement and make it available before Report?

Photo of Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede Shadow Spokesperson (Justice), Shadow Spokesperson (Home Affairs)

I thank the noble Lord for making that clear. It will have an impact on the way we address this whole group, because it is a very extensive group and many different groups from different sections of society have contacted us all, I suspect, and raised their concerns. I have been contacted by groups from business, the legal profession, universities and political parties. Some 400 NGOs have written to me, as I am sure they have to other noble Lords.

My Amendment 88, also in the name of the noble Lord, Lord Wallace of Saltaire, would ensure that guidance is provided on the foreign influence registration scheme. Other noble Lords have gone into more specific concerns and explorations of what particular definitions might mean.

I thought it might be most helpful in opening this group, in a sense, to raise two particularly powerful concerns that have been raised with me. I want to cite two groups that have contacted me. The first is the company AstraZeneca, which sent around an email that I thought it worth citing to show this company’s concerns, which illustrate other, wider concerns. It said:

Clause 70, as drafted would, we believe, impose a requirement for persons in our overseas operations to register each and every dealing with not just Members of the UK Government … but also in Government Agencies such as the Medicines and Healthcare Products Regulatory Agency, The National Institute for Clinical Excellence, The Environment Agency and others where we have regular contact” on medical issues. AstraZeneca is asking a very profound question about how far these requirements will go and how much impact they will have on its day-to-day business. The email goes much further, but that is the gist of the concern raised.

The other group that emailed me is the Law Society. Of course, all these groups, including the Opposition, support the broad aims of the registration scheme but are concerned about the practical impact and whether it will have a cooling effect on their ability to conduct their existing business. The Law Society email says:

“The Law Society supports the Government’s ambition to protect national security and ensure public safety. However, we are concerned that the proposals in this Bill could have serious implications for access to justice … Law Society members have shared significant concerns with us about the potential impacts of FIRS more generally. These include concerns … that the scheme risks damaging the UK’s largest exporting industry (financial and professional services) and its reputation as one of the world’s most attractive jurisdictions for cross-border business and trade and destinations for foreign investment.”

I have given just two examples, but there are many others. This whole scheme has raised a lot of questions in other sectors; we have heard about political parties and universities. I look forward to this being a wide-ranging debate and the noble Lord giving as full an answer as he can in summing up, but I am grateful for his confirmation that the policy will be available before Report so that, if we choose to, we will have ample time to take matters further.

Photo of Lord Anderson of Ipswich Lord Anderson of Ipswich Crossbench

My Lords, while I very much welcome the fact that this policy is under review, I hope your Lordships will agree, in view of the great interest that has been expressed in this subject outside this place, that we take the opportunity to express, at least in summary, the very grave concerns that some of us have about this part of the Bill.

In that spirit, I shall speak briefly to the five stand part notices in my name, signed also by my noble friend Lord Carlile, the noble Lord, Lord Wallace, and the noble Baroness, Lady Hayter. They would leave intact the enhanced tier, which I believe to be of real value for our national security, but if carried they would remove Clauses 66 to 70, the so-called primary tier of FIRS.

These clauses bring to mind the saying of Jonathan Swift:

Laws are like cobwebs, which may catch small flies, but let wasps and hornets break through.”

Foreign Governments are exempted from having to register their foreign influence arrangements, even when their attempts at persuasion are covert. But the full range of other foreign organisations do have to register, even when they have no connection whatever with their Government and are entirely up front about what they are asking.

Nor is it only foreign principals who are caught. As the Minister just said, the obligation to register, on pain of imprisonment, falls on any person who is directed by a foreign principal to exert political influence or even to arrange for it to be carried out. That includes trying to influence an MP, Peer or political party on any subject whatever, and any communication to Ministers or senior officials attempting to influence a decision, for example of BEIS, HMRC or FCDO, even when the identity of the foreign principal is well known to all. I refer to my interest in the register as a trustee of a peacebuilding charity. Like many charities and international NGOs based in the UK, it is very concerned by this proposal.

With registration comes a continuing and open-ended obligation to disclose whatever may be required by an information notice. There are exceptions for legal professional privilege and confidential journalistic material but nothing to protect commercially confidential dealings that a would-be investor might have, for example, with BEIS or the CMA. Whatever global Britain might mean, this is surely the opposite.

The Schedule 14 exemptions are eclectic. There is a big one for foreign news publishers, whatever their country of origin. Political parties are exempt but only when they happen to be in government. There are no exemptions, as there are in Australia, for bodies active in the charitable, religious or artistic fields; industry representative bodies; or firms acting as tax agents, customs brokers, liquidators and receivers. The specificity of some of those exemptions surely demonstrates how, relatively speaking, careful the Australians were to look at the evidence. There is not even an exemption for commercial or regulatory contacts. Instead, we have that sure sign of a rushed job: a delegated power to provide for additional exemptions, to add to the very few in the Bill.

At Second Reading my noble friend Lord Carlile described this scheme as an architectural concept drawing, and so it is. Nothing like it was consulted on last summer. It first arrived when the Bill was in Committee in the Commons. Part 3 of the Bill was further substantially amended on 16 November, the last day of its passage through the Commons.

In view of the blizzard of opposition that has come in since then, to which the noble Lord, Lord Ponsonby, has referred, the Government are planning to react. The Security Minister—to whom I am grateful, as I am to the Minister today, for discussions with them and their officials—inherited this mess and seems, if I may put it this way, to have two broad options.

Option 1 is to revert to the Australian model by applying this scheme not to all foreign organisations but only to those controlled by foreign Governments, and by introducing a wider range of exemptions. It could also be focused, this time in distinction to Australia, on covert rather than overt influence. The amendments in the name of the noble Baroness, Lady Noakes, which I have supplemented with my own Amendment 92B, amount to a very preliminary sketch of what that option would look like.

That would certainly make the primary tier less harmful, but it would not make it into good law. Working up that preliminary sketch into a viable system would require detailed consultation, the identification of a clear goal and the testing of proposals against the desired outcome—processes which a proper legislative procedure cannot skip but for which there is really no time now. That testing process would have to take full account of experience with FITS, the Australian scheme, which has produced not a single prosecution in its four years of operation but which has been publicly attacked by one of those subject to it, Kevin Rudd, as imposing huge compliance costs for no obvious benefit. Noble Lords might have seen his open letter to that effect. It would also have to acknowledge that the Australian model, even if it worked well in Australia, cannot simply be imitated in a country that depends to a greater extent on its global connections, the majority of them entirely benign.

Option 2, the clause stand part propositions in my name, acknowledges that the repairs to these clauses are too extensive to be done in-flight and that they are an unnecessary part of a necessary Bill. Yes, our lobbying laws need tightening, but this is not the way to do it. These clauses risk diminishing our national standing without enhancing our national security. We can attempt a last-minute fudge, but I wonder whether that could really be a substitute for a clear and considered plan. We should keep the enhanced tier by all means—it is important—and put the primary tier out of its misery.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Chair, International Agreements Committee 4:15, 16 Ionawr 2023

My Lords, I declare my interests, as I did before, as a board member of the ABI and a member of the Labour Party.

I thank the Minister for his preliminary responses to my letters. Given that I sent them to him on a Sunday, I am immensely impressed that he has already given us some answers today, even though I found the answers staggering and more worrying. There is an expression about using a sprat to catch a mackerel; I rather think that the Government are using a whale to catch a minnow. They have this completely the wrong way around.

However, in the spirit of that very rapid response to my letter, I hope that on the specific issue of political parties the Minister will agree to meet, not just with the Labour Party but with representatives of the other parties, to discuss how this could work in practice, because some of the things he said about parties influencing other parties could have absolutely nothing to do with national security. The example I gave before was that, as a member of an international party organisation, we might indeed be thought to influence who would be chosen as, for example, president of the Party of European Socialists. That has absolutely no national security implications but, clearly, from what the Minister has said, it would be caught by this. So if, when he comes to respond, he could agree to meet with the political parties, that would be helpful.

Turning to what is in front of us, as the noble Lord, Lord Anderson, said, I have added my name to the proposition that Clauses 66 to 70 should not stand part of the Bill. I am very conscious of the fact—as I am sitting quite close to the noble Lord, Lord Wallace—that some of this sounds very much like familiar territory. Before the Minister was in the House, when I was on the Front Bench, I tried to amend the lobbying Bill to ensure that it included in-house lobbyists, not simply consultant lobbyists, which might have tackled some of issues that now concern the Government—that is, knowing who is lobbying Ministers. That surely is the important aspect of it, although the present Bill goes much further than that. The then Minister, the noble Lord, Lord Wallace of Saltaire, absolutely and I think very unwisely declined to take my amendments to give that Bill some real teeth. I think we got them past this House, but they were kicked back and he would not agree to them. I am therefore delighted that he is about to speak after me and I hope he will do a “mea culpa” at that point and admit that “we was right” and he was wrong.

However, today we are talking about far more than just lobbying—although it is interesting that that was how the Minister introduced this group. We are now seeing an attempt to set up an enormously enlarged register, compared with what was set up under the domestic Act. It would not only encompass dealings with a wide range of opinion formers or decision-makers, and in fact a large number of non-decision-makers, but require registration or reporting—the Minister’s answer to me earlier was about registration; I also asked about reporting—from a swathe of bodies and individuals from across the globe.

We have heard, as my noble friend has already mentioned, of concerns from business and academia, but there are also concerns from visiting party officials, international NGOs and many others. If I have read government Amendment 98 correctly, however—which we will come to in a later group—the list of UK persons with whom communication could be classed as a “political influence activity” covers our own employees, if you are lucky enough to have any. It also includes an officer, trustee or agent, and even some members of a political party, which could even include a constituency vice-chair, whom those of us in political parties know is quite a minnow within the political hierarchy. It could include an election candidate, even in a hopeless seat—not that Labour has any hopeless seats these days. Does that mean all election candidates? It is the most extraordinary catch-all that the Government are setting their sights on. We are going to come back to that list later, but it is relevant because it explains why we are concerned about the clauses that some of us would like taken out of the Bill.

As the noble Lord said, I referred last week to Clause 30 and political parties, even those coming from our close allies in NATO. They were defined as being “foreign powers”—although, as he said, there were some exemptions if you were in government. That means that Opposition parties seem to be in a worse position, even though they may have no power in that country, because they would have to register if they tried to influence any of us or our employees, local government and all sorts of other people. So we have more questions and, if the Minister agrees to a meeting, we could discuss what exactly they are trying to get at. Is it that all political parties are bad, or are we interested in the issues on which they are trying to lobby? It would be useful to know what exactly this is aimed to catch.

In relation to business, very serious concerns have been raised by member firms of the ABI, by banks, by the pharmaceutical industry, as we have heard, and by other major importers, exporters, service providers and investors. Needless to say, many of their overseas colleagues and partners will meet with influencers, opinion formers and decision-makers while they are here in the UK. That is not just visiting politicians but many of those who turn up, for example, at our party conferences or at seminars held by a wide range of organisations. While they are there, they tend to bump into people like you and me, because that is where we are also going. So, as soon as they come here and go to a meeting and find that one of us is there, they are liable to have to report that, even though that was not the purpose of their visit.

So the question really is: do the Government really, in the name of national security, want us to either ourselves record, or ask those people coming in to record, all those exchanges, on pain of criminal sanction if we fail to do so? I know this is an aside, but this is coming from a party that has perhaps not been too fussy about the amount of money it has taken from people with very close Russian contacts. It is a little bit odd.

The Minister did refer to Russia but why, if we are aiming at Russian influence, are we going for that enormous wide range? It was this Government who refused my attempts to stop expats being able to fund our political parties. Again, if we want to cut influence on our political parties, why not go at that and overseas money rather than try to catch all the exchanges that take place in everyday life?

Whether this is a whale rather than a minnow—or whichever way round—this feels to me not even like a sledgehammer to crack a nut, but like a great big sledgehammer aimed at a tiny seed. If the Government are worried about Russian, Chinese, ISIS or North Korean activities, why not go for them? Why are we looking at Swedish investors, Belgian NGOs, Dutch political parties, EU visitors, Spanish bankers or German academics, all of whom could be caught up in this?

The Minister spoke in his introduction of those with “malign intent”. That I understand, but the Bill is going far broader than that—at those with healthy intent that is good for society, people, this country and their own country; all are being caught. As the noble Lord, Lord Anderson, referred to, we hear of the Government wanting a global Britain that sees itself as a global player, growing our trade around the world and attracting good investment. If that is the aim, this is no way to seek to achieve it.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade), Liberal Democrat Lords Spokesperson (International Development), Liberal Democrat Lords Spokesperson (Foreign and Commonwealth Affairs) 4:30, 16 Ionawr 2023

Before the noble Baroness sits down, would she perhaps give permission for us all to receive the Minister’s response to her letter? He is saying from a sedentary position that he will circulate it; if that is acceptable to her, it would be very helpful. He said at the outset that if we, as Members of this House, carry out activities for a foreign organisation of which we might be a member which receives direct support from a foreign principal—we could be a trustee of an organisation funded by the Gates foundation, for example, and there are many other examples—for us to engage with each other, we will now have to register. That is why I think the response to her letter could be so significant, as that is what I took from his comments.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Chair, International Agreements Committee

The Minister will understand that I cannot possibly answer this question because then we would have to record the conversation. To be serious, in fact, my letter to the Minister, which included a lot of questions, did ask that he circulate it to the Committee and not just to myself.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

My Lords, my name is on several of these amendments. I should perhaps say that I welcome and support those in the name of the noble Baroness, Lady Noakes. Two amendments of mine are also concerned with ensuring that the interests of charitable bodies, commercial bodies, universities and policy researchers should be specifically catered for and excluded from some of the purposes of the Bill.

However, I want to talk more generally about Part 3 as a whole. I thank the noble Baroness for her back-handed compliment. There are, of course, parallels between the transparency of lobbying Bill in 2013 and this Bill. There were those who pushed me as the then Minister to exclude a substantial number of bodies and persons from that Bill; others were pushing for the inclusion of a lot more than we had. It was not easy to strike the appropriate balance between ensuring full transparency on what was going on and not pulling too many people into the net. The question of identifying who the lobbyists were was one of the more difficult elements with which we had to be concerned. On that occasion we agreed to pause the Bill.

I should also say that it was not simply the Labour Opposition; indeed, concern about that Bill was very much on the Cross Benches, led by Lord Ramsbotham, sadly no longer with us, and the noble and right reverend Lord, Lord Harries of Pentregarth. We paused the Bill for three months, consulted more widely and came back with amendments. The Bill was then carried in an improved form. It was not perfect; it is impossible for a Bill of that sort, or this sort, to satisfy all accounts because we are trying to strike a balance between a range of different objectives. It would be wise for the Minister to manage the policy statement and the pause for greater consultation; they should take up rather more time than is currently considered.

The Minister will have seen the Politico report last Thursday that suggested widespread concern in commercial and business circles about this Bill. The noble Lord, Lord Ponsonby, has already said how many comments and criticisms we have had from a range of different circles. I came to the Bill entirely from the point of view of think tanks, universities and the policy research sector. I had not expected to get such immediate responses from the City, law firms and others. We are now all aware of the widespread concern that the Bill will catch more than it was originally intended to. But there is more than that. I shall quote from one of the letters I have had: the Bill

“is essentially the proposed bureaucratisation of lawful and useful non-hidden international engagements. Influence is not covert just because it is not public: all policy makers and organisations rely on private interactions.”

I was thinking, as I looked at my newspaper this morning, what those Brits who will be attending the Davos Forum will do about what they report back, as one has private conversations with a range of people. Perhaps we should make sure that Keir Starmer and whoever else is going do indeed fill in all the forms as they come back.

Before I go further, I should comment on the Minister’s insistence, in our last sitting, that the Daniel Houghton case justifies the inclusion of the Netherlands alongside North Korea, China, Iran, Russia and others in the primary tier of foreign powers. I see that the case was in 2010. I have said at previous sittings that the issue of dual nationals and diasporas, both in Britain and elsewhere, is one of the complications of the Bill that I hope the Minister will address in our consultations. I mark, in passing, that Daniel Houghton was a Dutch-British dual national. He was a computer engineer employed by the SIS. He downloaded some SIS files and tried to sell them to the Dutch intelligence authorities. They immediately informed the British and he was arrested, convicted, given a 12-month sentence and served six months in prison. I am not sure that this one case justifies the imposition of the full regime on the Netherlands, in the same way that it is imposed on other countries.

I pick the Netherlands because traffic between it and the United Kingdom is probably closer than any other county apart from Ireland, even more than the United States, because it is so near. I recall being told by some senior Dutch politicians that a great many members of the Dutch elite have second homes in the south-east of England and send their children to British universities. I remember being told by a chief constable from North Wales Police that he needed to have more than one police officer who spoke Dutch because, when camper-vans break down in the summer, they need to have someone who can interpret. The extent to which British companies depend on the Netherlands has been increased by our leaving the European Union. I was told at a meeting of donors to my party the other week that several of them have opened offices or warehouses in the Netherlands to be inside the EU. It is not a country with which we have limited interaction.

To say that we need to have all the interactions which may involve political influence recorded is almost to suggest that, to find the needle in the haystack, you need to examine each strand of hay separately and then in time you will find the needle. You would of course destroy the haystack and damage the hay, and detract immensely from the normal business of the farm. To that extent, it is grossly disproportionate, and our concern with the Bill is that aspects of it are grossly disproportionate.

I read again through the supplementary Explanatory Memorandum over the weekend and I remain confused about many aspects of the Bill. I am worried about the imprecision of some of the language—the “informal” arrangements, the indirect control and those other phrases which, not being a lawyer, I do not entirely understand. I seek some reassurance from our legal colleagues that it is possible to make sense of some of these provisions. There is a reference at one point to the “scheme management unit”. I wonder if the Minister could tell us how large the Home Office thinks the scheme management unit will need to be when all these reports flow in. I suggest that it will need to be extremely large.

I am not entirely clear on how the specified persons come into the expanded bit. Can the Minister give us any rough idea of how many of the 190-plus UN member states it is envisaged would be specified by the Secretary of State in this? Would it be 10? Would it be 100, 150 or 190? That would clearly make a great deal of difference to the sort of regime which we are likely to have imposed. These are real concerns for those who are looking at the Bill from the outside.

The examples did not reassure me in understanding the Bill. Funding for UK think tanks is mentioned, as are NGOs from abroad attending all-party parliamentary groups and some of the activities of foreign academic institutions. All apparently come into the net. This requires much further consultation. We all recognise that there are serious foreign threats to this country, that some of these threats are new because technology and communications have enabled new methods of subversion, and that we need to deal with them. But we also recognise that the United Kingdom is an open society and an open economy, and we need to preserve the best aspects of our openness to the rest of the world. That is the balance that we have to strike.

One category left out appears to be multinational companies not controlled by foreign states, along with foreign foundations and the super-wealthy. I argue again that these are also, potentially, sources of severe foreign interference in UK politics which may well be hostile to UK interests. If one is talking about British interests in the broadest sense, as the Bill does, I recall that major tobacco companies have funded institutes in Britain to lobby against tighter control of tobacco selling and health regulation. Oil companies have funded think tanks and others to lobby against measures on, or even to deny, climate change. Foundations with political agendas have supported the establishment of new right-wing societies in British universities. Those are also threats which we should not necessarily ignore.

I suggest strongly to the Minister that, in view of the concerns which have been so widely expressed across the commercial and non-commercial worlds, we should take the time now to ensure that the Bill strikes the right balance, that we get it right and that we do not get it through necessarily as fast as the Government would have liked.

Photo of Baroness Noakes Baroness Noakes Ceidwadwyr 4:45, 16 Ionawr 2023

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.

Photo of Viscount Stansgate Viscount Stansgate Llafur

My Lords, it is a pleasure to follow the noble Baroness, not least because I want to make some remarks about the effect on other areas of life. I agree with her that her phrase “non-value adding bureaucracy” is an understatement, and I sometimes wonder whether the Government understand quite how much they have unleashed with the clauses we are considering in this group. I will, briefly, direct my remarks to Amendment 88, which sets out areas where it would be useful for the Government to provide guidance.

A number of Members have had a wide range of briefs of various kinds, and I draw the House’s attention to one from the Russell group of universities. In effect, I am referring to section (a) of the new clause that would be inserted by Amendment 88. In that briefing, the universities say that they fully

“understand that working with international partners is not without risk and take their responsibilities to protect national security seriously.”

They point out that they already work with the Government. However, they go on to say that the requirements of the foreign influence registration scheme

“could include a range of international activities from student exchange programmes to research partnerships, many of which are already covered in existing legislation. The potentially duplicative and complex nature of this arrangement could limit opportunities for genuine international collaboration and risk deterring global partners, which would in turn hinder national and local R&D led growth.”

Just as the noble Baroness was talking about the adverse effect on business and inward investment, similarly universities are telling the Government and the House that there would be adverse effects on international research collaboration. The briefing goes on to say:

“If university activity is to be included, the system must be clear and simple to use with accessible guidance that will ensure universities will not be penalised”— or criminalised—

“for misinterpretation or misunderstanding the system.”

As we are talking about provisions which have a criminal aspect to them, that matters a great deal.

The other point I bring to the House’s attention is about charities, which is reflected in section (b) of Amendment 88. The amendment was tabled by my noble friend Lord Ponsonby of Shulbrede and the noble Lord, Lord Wallace of Saltaire, who incidentally referred to the fact that even all-party parliamentary groups may be caught by this provision. In about half an hour, I am due to chair an all-party parliamentary group at the other end of this building, and I sometimes wonder whether, in future, we will have to register an enormous range of activity. The noble Baroness used the word “tsunami”, and that is something we would like to avoid.

I will look at charities from the point of view of the scientific community in Britain. Many key scientific societies in this country are charities, including the Royal Society and the leading sectoral scientific societies, such as the Royal Society of Biology, the Institute of Physics and the Royal Society of Chemistry. They also have extensive international networks. All are international in their nature, organising international conferences all over the world and with international links the like of which is hard to describe. Science is a very international business, and so it should be. We benefit from that, and I hope that, in future, we will not lose some of the benefits that we have hitherto had with Europe.

In drawing that to the Committee’s attention, I would like to know what the Government’s intention is in respect of the activities of scientific societies. I do not suppose for a moment that they were consulted on the Bill; I think that many do not even know that there is a possibility that they might be affected. The Russell group is an example of at least one organisation which has been on the ball. The activity of normal scientific life in this country stands to be affected by the Bill. I am very interested to hear the Minister’s reply on that point, because I wonder whether that was ever intended to be in the Government’s purview when bringing forward this legislation. I do not think that the activities of our scientific societies really run the risk to national security that might otherwise be implied, so for that reason that I bring the point to the Minister’s attention.

Photo of Lord Carlile of Berriew Lord Carlile of Berriew Crossbench

My Lords, I absolutely support the remarks that have been made by numerous noble Lords on the primary intention of this part of the Bill, which surely is to deal with those covert and hostile activities which may be committed by, or on the behalf of, foreign Governments—or foreign entities connected closely to foreign Governments—which might damage the national security of this country.

This is the National Security Bill and, plainly, those aspects have a place in the National Security Bill. I am totally unconvinced that the rest of these FIRS applications have any place in this Bill and I will come back to that in a moment. I agree with the noble Viscount who has just spoken that there is significant overreach in this Bill, as outlined by Amendment 88, but I suggest it goes much further than the list in Amendment 88. It reaches out into legitimate commercial and charitable activity which is carried on every day with absolutely no risk whatever to national security. If occasionally such a piece of activity trespasses into national security, I do not believe we need these provisions to deal with it; there are other ways of ascertaining and coping with that kind of incident.

I am particularly concerned—and I do not want to sound pompous about this, but I will say what I am thinking anyway—with the attitude of the Government to the role of this House in bringing clarity to legislation. We are here, if we are here for anything, to ensure that legislation that emerges from this Parliament has been properly considered and its drafting fine-tuned. It is perhaps the core business of this House that we do best. My noble friend Lord Anderson was kind enough to refer to a comment I made at Second Reading about this part of the Bill being a concept drawing which an architect might issue before ever drawing a plan. If I may build on that, I have thought about what has happened to that concept drawing. The best I can do at the moment is that the concept drawing was left on the table at which we eat at my house and my seven year-old grandson got at it with his box of crayons. It has some colour, but the colour is chaotic and disorganised and might even include—and I say this with deference to the ingenuity of the noble Lord, Lord Wallace of Saltaire—a drawing of a Dutch motor caravan user in a resort in north Wales who is trying to get a tyre repaired. This is not organised legislation, as it stands; it is the draft law of undrafted, unintended consequences.

Of course, we are all grateful to the Minister—who I know listens with great attention to what we say—for the indication that the Government are still thinking about this and that there may be further consideration. But I am concerned by his noble friend’s frequent use of the phrase “Further information will follow”. I think we are getting slightly bored by the use of that phrase by the noble Lord, Lord Murray. “Further information will follow” usually means “We have heard what you said, but we have not listened to it and we are not going to do anything about it.” I say to the Government that I do not understand for one moment why a set of proposals introduced by Government Back-Benchers in another place which has not been through the ordinary legislative process and which, as far as I can tell, has not had the close attention of expert parliamentary draftsmen is not being at least paused. In reality, it should be stopped and a new Bill be introduced with a proper, FIR scheme in it which we would all, I believe, contribute to in a constructive way. It would probably have quite a quick passage through the House, as long as it was not guilty of the sort of overreach we have here.

I want to give a real example. I have a friend, whom I met through a charity, who is a businessman. He runs a business that deals in something quite mundane, if complicated, which is large-scale plant hire. He has access to a large number of wagons. He came up with the idea of taking equipment that would be useful to people who have been displaced from their homes or who have difficulties as a result of Russian bombing in Ukraine. First, what he did was to collect a very large number of beds and mattresses, stick them in lorries, get his friends to help and carry thousands of beds to Ukraine where they were needed. One of his current enterprises—and I am happy to give details to any noble Lord who would like to contribute to what he is doing, as we have—is taking very large numbers of electricity power generation equipment which can be used in a house or a block of flats in Ukraine. He is doing it through and with the co-operation of a Ukrainian charitable body with a connection to the Government of Ukraine.

Under the Bill as it currently exists, I believe and he believes, he would have to register that arrangement. What is going to happen to examples like that? They will stop doing it because they do not want to get involved in an unnecessary bureaucratic nightmare. Or, if they do it, who is going to read the register with scrutiny? I predict with confidence that it will be Russian military commanders who will want to know exactly which kinds of lorry to bomb as they make their way across Ukraine and how to look for the generators that are going to save lives in public buildings, hospitals and homes in Ukraine. It is nonsense for this legislation to have that kind of overreach—I use the word again.

So I say to the Minister: why here, why now and why the hurry? This can be dealt with with the complete co-operation of your Lordships’ House, but not in the way it is being done. I urge the Government not to wait for Report but to take some executive decisions right now and say that what we should do is concentrate on what really matters, the true national security part of the Bill. Let us get that enacted with minimal amendment and with the co-operation of the whole of your Lordships’ House, wherever we come from politically or not, as the case may be. Let us go back to the drawing board and produce real architectural planning for a FIR scheme if it is to reach wider.

Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Llafur 5:00, 16 Ionawr 2023

My Lords, I apologise for popping up at this point, not having taken part in the debates so far, but I was requested to do so by the British Academy, the UK’s national academy of humanities and social sciences, of which I am proud to be a fellow. I am also an academic who has in the past collaborated with colleagues from outside the UK in the area of social policy, which of course is trying to influence government.

I am sure I do not need to spell out the importance of international research collaboration, which was touched on by my noble friend Lord Stansgate, especially in the wake of the Science Minister’s speech last week which emphasised the importance of the Government’s global science strategy. Any such strategy requires international collaboration. The British Academy accepts that mechanisms to prevent foreign interference are necessary, but such mechanisms must safeguard the benefits of international research and protect academic freedom. It is worth just noting here what the Joint Committee on Human Rights had to say. It was concerned that this was introduced at such a late stage of the Bill’s passage that it could not comment properly on it, but it said:

“Any foreign influence registration scheme must contain adequate protections to ensure that it does not interfere unduly with democratic rights, including freedom of association and free speech.”

I think everything we have heard so today, other than from the Minister, suggests that it could interfere in that way.

Indeed, the British Academy argues that such mechanisms exist already and that FIRS would duplicate them in a way that creates totally unnecessary bureaucracy, which surely this Government, of all Governments, want to avoid. It is not helped by the lack of clarity in the wording, which was referred to by the noble Lord, Lord Wallace of Saltaire, with details left for secondary legislation. The effect, the British Academy argues, would be a significant negative impact on the ability of UK researchers to engage internationally, creating irreversible harm to the UK’s research and innovation standing. The academy is not prone to hyperbole.

As currently drafted, as we have heard, FIRS would entangle wide swathes of international activities and is likely to have a chilling effect on international collaboration, not just deterring those with malign intent—as referred to by the Minister—but probably having a much greater impact on those with utterly benign intent. I cannot believe for a moment that this is what the Government want, especially given that it would undermine their own aspirations to forge a global science strategy.

It is in the Government’s own interest to accept the British Academy’s recommendation that they withdraw Part 3—I think I am echoing what the noble Lord, Lord Carlile, said—and consult with it and other relevant organisations to cocreate a framework that is proportionate and reasonable, taking into account existing reporting and oversight mechanisms. The academy argues that research and innovation should be largely excluded from FIRS. Is this something that the Government are willing to consider? If not, why not? Will the Minister agree to take this away, have discussions with the British Academy and others and, ideally, withdraw Part 3 altogether as has been suggested or, at the very least, come up with something less harmful before Report? I am echoing other noble Lords in calling for a longer pause than currently envisaged. The more I have listened to today’s debate, the more horrified I have become at what this part of the Bill might mean.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat Lords Spokesperson (Digital)

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”.

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.

Photo of Lord Hope of Craighead Lord Hope of Craighead Judge 5:15, 16 Ionawr 2023

My Lords, perhaps I could just add a footnote to what the noble Lord, Lord Clement-Jones, said—not along the lines that this paragraph of the schedule should be withdrawn but to draw attention to what I think is a defect in it, which illustrates the point that some of the details of this scheme have not been thoroughly thought through.

The point I want to make arises under paragraph (5)(4)(d), which exempts, as part of an example of “legal activity”,

“acting as an arbitrator or mediator.”

The exemption applies only if the person acting as an arbitrator or a mediator is a lawyer within the definition provided in paragraph (5)(3). Many people who act as arbitrators in technical cases are engineers or architects—people who are not qualified as lawyers but provide a valuable service in the whole scheme of arbitration on technical issues. It is quite common to find a panel of three arbitrators where one is them, perhaps, is a lawyer and the others are people with particular skills. I do not understand why, if there is going to be an exemption in relation to acting as an arbitrator or mediator, it should not cover anybody acting as an arbitrator or mediator, whatever his or her qualification might be.

Perhaps the Minister could explain at some point why it is only in the case of lawyers that arbitrators or mediators are to be exempted from the requirement to register. It would be interesting to know the reason because, otherwise, we will inhibit commercial activities and that would seem to be undesirable. I throw this out just as an example of what was referred to by some commentators as a rather slapdash approach to drafting. This issue needs to be looked at so that we can understand exactly what the purpose of this exemption is.

Photo of Baroness Hayter of Kentish Town Baroness Hayter of Kentish Town Chair, International Agreements Committee

My Lords, as we are in Committee, I think one can intervene a second time. I just want to ask the Minister about one of the questions I put about political parties; I think it also arises now, from what the noble Lord, Lord Carlile, said. It concerns the confidentiality of all these masses of reports. What privacy protections will be there if this measure goes ahead?

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade), Liberal Democrat Lords Spokesperson (International Development), Liberal Democrat Lords Spokesperson (Foreign and Commonwealth Affairs)

My Lords, the best estimate of cost is £47.8 million. The high estimate is £62.4 million. In addition:

FIRS could discourage business activities if the costs of compliance are considered too high. There is a risk of negative reputational impacts from inclusion on a public register. Other countries may introduce reciprocal measures to regulate the overseas activities of government and businesses. Persons could be prosecuted if engaged in unregistered activity, even if the activity itself is legitimate.”

“Benefits were not monetised … While there are many entities which would fall within the definition of a ‘foreign principal’ or ‘foreign power’, it is difficult to determine how many people are being directed to undertake registerable activities on their behalf, or how many people would qualify for an exemption under the scheme … There is also a lack of understanding around how likely the positive and negative impacts are … it is not known how likely it is that the benefits or impacts will occur, or how significant they are likely to be. It is also important to note that much of this feedback was provided before the scope and exemptions within the scheme were finalised.”

“It is acknowledged that the number of people who would be affected by the scheme in terms of registration and familiarisation is unknown … Due to the offences and penalties associated with non-compliance with the scheme, organisations that are ultimately out of scope will still need to be aware of the FIRS regulations to ensure they are out of scope, both currently and for future activities … members of the public will need support in fulfilling their registration requirements.”

“There is a risk that the scheme may have a disproportionate impact on small or micro-businesses (SMBs). There is a risk that SMBs, without established regulatory compliance procedures, won’t register with the scheme and could then be prosecuted. It is not known how many SMBs will be in scope of FIRS … With more time, a more extensive commission could have been sent to departments.”

The high estimate is that more than 371,000 individuals will need to be familiarised with the scheme, but:

Home Office anticipate that there will be a relatively small number of cases per year for FIRS (less than five).”

Those are all direct quotes from the Government’s impact assessment on this scheme from October 2022. That impact assessment is the least ringing endorsement of any piece of legislation that I have seen in this House for 10 years. More than 371,000 people will need to be familiarised with a scheme that will have five potential cases per year and, of course, the scheme was not consulted on. To be fair to the Home Office, I read the consultation document from 2021. The principle of a FIRS was in it, but this scheme was not. It is in many parts a direct lift from FARA in the United States, or the FIT scheme.

However, the Government have been very coy about the areas where they have not chosen to follow. The noble Baroness, Lady Noakes, indicated the commercial enterprises. The Government have not said why they chose not to follow the United States’ example of the exemption of bona fide commercial activity and other activity not serving predominantly a foreign interest. Therefore, the whole gamut of the points that she and others have made in this House will be covered by this scheme and not that scheme, but why is not indicated. In fact, the Government’s own impact assessment goes beyond that, saying that they do not know how many small businesses will be affected by it, yet the impact assessment of the overall Bill and of this scheme says that there will be 25 people in London operating the scheme at a cost of nearly £50 million. This spider’s web is a very expensive one, and not many hornets will be covered, as the noble Lord, Lord Anderson, said.

The other exemption that the Government have not indicated having referenced before concerns the US exemption on religious, scholastic, academic, fine arts or scientific pursuits. There has been no indication as to why the Government have chosen not to follow that route. There is not a bishop on the Bench, but any Anglican community in or established church from another country interacting with one of our bishops will have to register on this scheme, because there is no religious exemption for it. Any community in this country carrying out what they believe the Pope has asked them to do for campaigning, on what they believe are humanitarian grounds, will have to register under the scheme. Any of us, or any MP, who is encouraging others to support a Ukrainian NGO charity, as the noble Lord, Lord Carlile, indicated, asking us to support Ukrainians for the resettlement scheme will have to register on the scheme.

This is likely to be a scheme that helps oppressors around the world far more than it helps our Government to secure national security. It is no surprise to me that both Hungary and El Salvador cited with great enthusiasm the US scheme as a mechanism to find out what those in other countries are doing to encourage human rights and civil liberties at home.

The noble Viscount, Lord Stansgate, mentioned all-party parliamentary groups. It is not a question of whether or not they are covered; the Government’s Explanatory Notes state that they are. However, if an NGO takes the opportunity to attend an all-party parliamentary group meeting

“to advocate for changes to be made to new laws that have been announced by the UK Government … The NGO would be required to register attendance at the meeting before it takes place.”

If any MP or Peer who attends that meeting wishes to then communicate with other MPs or Peers to the benefit of that NGO, they would have to register. This is outrageous.

I have concern about the enhanced tier and think it likely that there is more debate to take place on that. These countries are likely to be those that most oppress human rights and civil liberties, and with whose people we most wish to engage. We want to engage with charities and NGOs that are struggling in these countries, but the Government are saying that, before they engage with us, they will have to register on a public register, which that country’s security and intelligence services will mine for information. There is no question about that.

I have not looked at the register of interests but I think that Members of this House who are trustees or involved in a charity, NGO or INGO are likely to be in the minority. If they are linked to an INGO or a charity that has received support, whether from the Danish or Swedish development agency, the Gates Foundation, academic research or other parts of the sector, and they engage with another parliamentarian, they will now have to register.

We will come to those who engage with us on another group but, under the proposed new schedule after Schedule 13, if they engage with the Mayor of London or any metro mayor, they will now have to register. The impact assessment was modest, since the Government have said that this now includes local government. Why a metro mayor in England is included but not the leader of city councils in Glasgow or Edinburgh is beyond me. This is the point made by the noble and learned Lord, Lord Hope. It might just be the drafting but you cannot put the amendments that the Minister is shortly going to move down to drafting errors. The impact assessment will have to be reviewed considerably, since local government is now included. Why is the Mayor of London included but not the Lord Mayor of London? Why is the London Assembly body included but not the Corporation of the City of London? It makes no sense whatever to me.

The Australian scheme includes former Prime Ministers—we heard the concerns about Kevin Rudd. Why did this Government choose to cut and paste from Australia but exclude former Prime Ministers?

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade), Liberal Democrat Lords Spokesperson (International Development), Liberal Democrat Lords Spokesperson (Foreign and Commonwealth Affairs)

There are a few, but 25 members of the Home Office are going to be monitoring this database, and a fair amount of their time might be taken up with David Cameron’s and Tony Blair’s international activities. What was the reason for differentiating from the Australian scheme?

We have heard concerns about the British Academy, universities, INGOs and NGOs, trade, and those seeking contact with FDI and the ABPI. It will render the work of our Prime Minister’s trade envoys that much harder when any interaction with an entity from a country with which we are seeking a better trading relationship now has to register in advance their contact with a trade envoy, not only for perfectly legitimate activities but for activities encouraged by the Government. We have also heard the concern from the ABPI that it will have to register the preparation and planning of meetings beforehand.

At the start of Committee, I indicated that our Benches did not see this part of the Bill as having been properly prepared. The details have not been consulted on and we believe that the Government should pause it. We said at the start of Committee that it may find a better home in the Economic Crime and Corporate Transparency Bill, if it is being reworked. It may be that we move for this to go to a Select Committee for further consideration or to be taken out of the Bill. We do not want to disrupt the Government’s moves to improve national security or to weaken the ability of our country to have national security. We also do not want to weaken our interaction with trade, investment and human rights, or—I say this as someone with no faith—our proper interaction with many faith groups, which will now have to register all of this activity within the Bill.

I hope that the Minister will say today that the Government are going to think again, pause and come back, not just by saying that more information will follow but with a commitment to consult on the specific schemes and work with us to bring back workable solutions.

Photo of Lord Cromwell Lord Cromwell Crossbench

My Lords, I apologise for not having participated in this debate earlier but, like other speakers, I have been provoked by listening to the contributions. The speeches tonight appear to be about either excluding certain categories or, in the case of the noble Lord, Lord Clement-Jones, trying to include a category in the scope of the Bill. The fact is that, if you start to specify organisations or types of organisations, you will include every organisation in the country, whether a business or arts organisation, a charity, a political party or any other group of people, because any organisation can host people who seek to bring influence of one form or another. It is the behaviour, not the organisation, that is the problem here. To suppose that registering organisations will defeat covert practitioners from seeking to exert influence is naive to the point of being dangerous. As many have suggested, the solution is to go away, redraft and come back with a shorter Bill that does not try to include every organisation, not only in this country but in every other country—any one of them could host a malign influence.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I thank noble Lords for their important amendments in this group and for the extensive and interesting debate. I would be very happy to meet the noble Baroness, Lady Hayter, and others from other political parties, as she wishes. As soon as the reply to her letter is written, I will circulate it.

I assure the Committee that I have heard the strength of feeling on this issue and the calls to remove the political influence tier completely. I will be taking this back to the department to agree the next steps required to address these concerns ahead of Report, while balancing the need for a mechanism that protects us all from malign foreign influence in the UK. At the risk of upsetting the noble Lord, Lord Carlile, further information will follow.

I should say this: there should be no doubt that those who comply with the registration requirements under FIRS, by being clear and open about whom they represent, are supporting the resilience of the UK and its institutions in the face of state threats. There is no suspicion around those who register with the scheme; they are doing the right thing. However, as I said earlier, this has been an extremely valuable debate and I am grateful for all the thought and expertise that went into these contributions. I reassure the noble Lord, Lord Wallace, that we are not singling out the Dutch; we are merely citing an example. This is about foreign influence.

I start by addressing the amendments tabled on the political influence tier of the foreign influence registration scheme. I have listened carefully, and several interesting points have been made. I have heard the concerns raised about the unintended consequences of the political tier, and the Government will consider these points carefully ahead of Report.

Today, we have heard calls to remove this part of the Bill and focus instead on amending existing lobbying laws. These laws have been designed to be suitable for the supervision of domestic lobbying where British citizens and residents have a right to participate in the political process, but they are inadequate for foreign influence, where the impact of undue influence presents a greater risk to our democracy, and therefore greater regulation is required.

This is reflected internationally, and it is not unusual for countries to have distinct lobbying and foreign influence provisions. For example, the US has a Lobbying Disclosure Act as well as foreign agent registration requirements. Similarly, the Australians have a lobbying register that is separate from their foreign influence transparency scheme. I hope that that goes some way to answering the queries on this from the noble Lord, Lord Purvis.

The United Kingdom is well behind these countries in understanding the impact of foreign influence, and both tiers of the scheme are required to rectify this. FIRS will allow the Government and the public to understand better the scale, nature and extent of foreign influence on our democratic institutions.

I refer noble Lords to the multiple calls in the other place at the point of the Bill’s introduction for a scheme to require transparency around political influence activities. Members of the other place have signalled their agreement that political transparency is essential. We also heard from the director of regulation at the Electoral Commission, who said in oral evidence:

“Any registration scheme that brings more transparency around who is seeking to influence those involved in our democracy can only be to the benefit of the confidence of voters.”—[Official Report, Commons, National Security Bill Committee, 7/7/22; col. 44.]

I know that noble Lords will agree that the British people need to be able to trust the institutions that serve them. It can only be right that the UK public and our democratic institutions are protected from covert foreign influence and better informed as to the scale and extent of foreign influence in our political affairs. I emphasise to noble Lords that the public, and Parliament, should know when these foreign political influence activities are taking place. Transparency is a source of strength. That is why we have included provisions in the scheme to make certain information public.

Those who register under the scheme will be playing an important role in supporting our efforts to strengthen the resilience of our democratic system and political institutions. While we are keen to work with business and other sectors to ensure a workable and easy-to-use scheme, the regulation of foreign communications or disbursements should not of itself be controversial for the reputable end of industry.

I reassure the Committee that the registration requirements will not be burdensome. Registering will require filling in a short online form. The scheme will not prohibit any activities carried out by foreign entities or on their behalf where these have been registered in line with the scheme’s requirements. We intend to consult widely and convene expert panels to produce targeted and practical guidance. That will be published ahead of the scheme going live to ensure that the public and business are clear on the requirements.

The noble Lord, Lord Anderson, asked about NGO workers abroad. The scheme will require the registration of political influence activities where they are to be carried out within the UK at the direction of any foreign power or foreign entity, or where they are to be carried out by a foreign entity itself. Where the activities do not take place within the UK, they will not be caught by the scheme. I think this also answers the question from the noble Lord, Lord Carlile, about the Ukrainian situation.

Photo of Lord Carlile of Berriew Lord Carlile of Berriew Crossbench

I am grateful to the Minister for giving way. He may be missing a point but will correct me if I am wrong. The collection of funds for that scheme, along with a lot of the organising activity, is done within the United Kingdom. As the Bill stands, that surely means there has to be registration.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

Well, as I have just said, I do not believe that it does. If I may, I will confirm that and come back to the noble Lord.

I will now turn to the amendments from my noble friend Lady Noakes. I commend her for the spirit in which they were made. The first of these, Amendment 89A, looks to constrain our definition of “foreign principal” in the political influence tier of the scheme. She is quite right to point out that the current definition includes all foreign powers and foreign entities, but I will explain why the scheme has this breadth and the ways we have constrained the scheme to compensate for it.

The amendment seeks to include only those foreign entities that are controlled by a foreign power, rather than all foreign entities, in our definition of “foreign principal”. In the development of the scheme, we considered this as an option. However, we have worked closely with our Australian partners and reviewed their submission to the parliamentary review of the foreign influence transparency scheme.

The Australians originally took a very broad definition of “foreign principal” to their Parliament. This was, through its passage, constrained to something akin to my noble friend’s amendment. However, this has caused the Australians significant challenges regarding compliance and enforcement. For FIRS to function as it should, it shall need to be crystal clear to people whether or not they are working for a foreign principal. With certain foreign entities, it can be very difficult to determine ownership and governance structures, and nearly impossible for a small business or individuals to know whether they are working for an entity owned or controlled by a foreign power. In their submission to their parliamentary review, the Australians have recommended that the “foreign principal” definition is broadened, in keeping with our proposals. To provide balance with the broad definition of “foreign principal”, we have drafted a narrower definition of “political influence activity” compared with the US and Australian precedents.

Another of my noble friend’s amendments, Amendment 89C, seeks to probe why communications to the persons listed in Clause 68(2)(a) are treated differently from public communications within Clause 68(2)(b), where the communication is clear as to the involvement of a foreign principal. Clause 68(2)(a) includes private communication activities and Clause 68(2)(b) addresses public communications, which might, for example, constitute advertisements for a campaign seeking to promote a change in the law.

A key reason for this difference is enforceability. It is quite straightforward to determine whether someone has been clear as to the direction from the foreign principal in a public communication because it will say it somewhere on the communication or be implicit. However, it would be far more difficult to evidence whether an individual had been reasonably clear about their arrangement with a foreign principal during a series of private phone calls with a Secretary of State.

Another reason is to ensure transparency. This objective is met where it is clear in public communications who they are directed by. However, for private emails and meetings, it will still not transparent to the public that they are taking place at the behest of a foreign principal unless they are registered.

My noble friend Lady Noakes has also tabled two amendments, Amendments 89B and 92A, seeking to exempt those carrying out commercial and business activities from registration requirements under the political influence tier of FIRS. The noble Lord, Lord Anderson, has tabled further amendments to this, adding further exemptions for regulatory, administrative and charitable purposes.

I emphasise to noble Lords that the UK prides itself on being a hub for international business. The Government recognise that international businesses, and UK businesses with international links, engage with UK decision-makers for the purposes of influencing their decisions, maximising their prosperity and in turn maximising UK prosperity. The scheme will not prohibit engagement with global companies where relevant arrangements or activities have been registered. Rather, it will ensure that it is transparent.

We have heard the concerns raised about the burdens for business that FIRS may create. The UK is and, we believe, will remain one of the best places in the world to do business. It is important to be clear that this scheme is not about obstructing or stifling the legitimate influence activities of businesses. It is there to encourage openness and transparency where activities are undertaken to influence the UK political system. We have deliberately designed the scheme to minimise the compliance burden for those falling within the scope of the requirements.

Photo of Lord Anderson of Ipswich Lord Anderson of Ipswich Crossbench 5:45, 16 Ionawr 2023

I am very grateful to the Minister. He has just mentioned for the second time the compliance burden. Earlier on, he said very reassuringly that all that would be required to register was the completion of a form. But does the Minister understand that one reason why so many people are so anxious about these provisions is that it is not simply a question of filling in a form? In addition, once you have done that, there is the ongoing and, apparently, permanent obligation to comply with any information notices, which can be given at any time, requiring information of any sort to be provided to the Government. This is against the background of an absence of statutory guarantees regarding confidential information, except for lawyers and journalists, and not even—I think I am right in saying—any indication in the Bill as to whether this register will be public. The Minister has spoken a great deal about transparency.

How is that consistent with a United Kingdom that welcomes foreign engagement? Can the Minister understand how reluctant responsible directors and trustees will be to advise engagement with United Kingdom Government authorities against the background of those potentially very onerous provisions, which are liable to cause administrative problems and render it impossible for them to keep private what is always intended to be private?

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I reassure the noble Lord that the Minister absolutely understands exactly where he is coming from. I will come on to the confidentiality aspects of the question he just asked in a second.

The process will require information about those party to an arrangement, as well as a description of the arrangements and activities to be undertaken. We would not expect a detailed account of every activity to be undertaken either as part of an arrangement or by a foreign principal, but the full process will be set out in regulations, which will be laid before Parliament.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

Are those regulations to be laid before Parliament before the completion of the Bill, or will we have to wait until after it becomes an Act?

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I will come back to the noble Lord on that shortly.

I will go on to the commercial sensitivity aspects—in effect commercial confidentiality, mentioned just now by the noble Lord, Lord Anderson. We believe that ensuring that information can be publicised where it relates to the carrying out of political influence activities will help to strengthen the resilience of the political system, but Clause 77(2) allows the Secretary of State to specify or describe information or material that is not to be published. We intend this to include where publishing the information would, for example, threaten the interests of national security, put an individual’s safety at risk, or result in the disclosure of commercially sensitive information. The registration system will allow a person to flag where they think they meet such an exemption, which will not be considered by the scheme management unit.

In accordance with our data protection obligations, we intend for the information to be published to be limited to what is necessary to achieve the transparency aims of the scheme, particularly where that information is personal. I have heard all the concerns and, as I said, the Government will give further consideration to these points ahead of Report.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade), Liberal Democrat Lords Spokesperson (International Development), Liberal Democrat Lords Spokesperson (Foreign and Commonwealth Affairs)

That commitment is welcome. The Minister referred to the lack of a regulatory burden; I am following the point that the noble Lord, Lord Anderson, raised. However, the Government’s impact assessment says, in effect, that everybody needs to be familiarised with it because they will not know whether they are in scope. It says at paragraph 37, which I quoted earlier:

“Due to the offences and penalties associated with non-compliance with the scheme, organisations that are ultimately out of scope will still need to be aware of the FIRS”.

When it comes to domestic charities and NGOs, the impact assessment’s higher estimate of how many people will have to familiarise themselves with FIRS is 105,000 people. It will be an enormous regulatory burden on the domestic charity sector as to whether it knows to comply with it. Simply stating that it is a small online form is insufficient. On that point, I wonder why the Government have no estimate at all of how many small and medium-sized businesses will be captured by this.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

The noble Lord has pre-empted the remainder of my speech to some extent, which I am afraid goes on for rather a long time; I apologise in advance for that. I will come on to the charities aspect in a moment. On the regulatory burden, I think I have been reasonably clear as to the simplicity we intend when it comes to complying.

The amendment from the noble Lord, Lord Anderson, would extend my noble friend Lady Noakes’s amendment to charitable activities, as was just described again by the noble Lord, Lord Purvis. I once more thank the noble Lord, Lord Anderson, for his scrutiny of the scheme. In essence, the question is: why is there not a charity exemption in the scheme and will this not make it harder for charities to carry out legitimate activity here in the United Kingdom? We believe that the ability of charities to campaign on issues relevant to their charitable mission is very important and crucial to our democracy. The scheme will not prevent this. It will ensure that the public are informed about the role played by overseas entities in this work, however.

We have also taken steps to minimise the potential burden on charities conducting legitimate activity as a result of FIRS. For example, making a public communication, campaign information or requests for support by a charity will be registerable only if it is not reasonably clear from the communication that it is made at the direction of a foreign power or entity. If such a communication is published for or on behalf of a foreign charity in its own name, it would not need to be registered. If it is published by a UK charity or PR firm at the direction of a foreign charity, it would not need to be registered if it is reasonably clear from the communication that it has been made at the direction of the foreign charity. I hope that is reasonably clear and has given some reassurance to the charitable sector.

Photo of Viscount Stansgate Viscount Stansgate Llafur

For the avoidance of doubt, have scientific societies in this country that are charities been consulted by the Government in respect of the legislation in any shape or form?

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I assure the noble Viscount that I shall come to the substance of his comments and those of the noble Baroness, Lady Lister, shortly.

I turn to the probing amendment from the noble Lord, Lord Wallace of Saltaire, that provides for a public health emergencies exemption to the political influence tier. I agree that where an event such as a coronavirus pandemic arises, it is imperative that the sharing of key information does not face unnecessary regulatory red tape.

The scheme does not intend to impede the sharing of information relating to public health emergencies. Governments speaking to other Governments, and experts speaking with other experts, will not be caught by the scheme. Only where communication is carried out to influence a political matter will it be registerable. Where it is done to influence a political matter but the information is shared as part of an arrangement with the UK Government, the UK arrangements exemption will apply and no registration will be required. We would be happy to consider further the point that the noble Lord raised. As an aside to one of his other points, I say that the enhanced tier will be used only for those countries or entities responsible for the greatest state threats. I do not know how many that will be.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Liberal Democrat Lords Spokesperson (Cabinet Office)

Does the Minister accept that issues of public health can often be highly political? One of my colleagues at the London School of Economics who was looking after a number of exchange students in what was then the Soviet Union was expelled from the Soviet Union for having collected some dust in a part of Ukraine where it was rumoured that there had been a nuclear accident. We all know that the provision of public information about Covid-19 in China has become highly political and highly sensitive. We cannot quite put things into neat categories in the way he suggests.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I do not think that I am putting it into a particularly neat category; I think I am leaving a large amount of room for this to be taken on a case-by-case basis. I repeat: only where communication is carried out to influence a political matter will it be registerable. Where it is done to influence a political matter but the information is shared as part of an arrangement with the UK Government, the UK arrangements exemption will apply. I think that covers it completely.

I turn to Amendment 88 tabled by the noble Lords, Lord Ponsonby and Lord Wallace, and Amendment 97 tabled by the noble Lord, Lord Wallace, as they both raise the important issue of guidance for higher education and other sectors. We recognise that clear, targeted guidance will be essential in support of the public’s understanding of the scheme’s requirements. I hope that the Committee will be reassured by what I said of our plans to convene expert panels to help develop the guidance. That will ensure that the requirements are clear for universities and higher education institutes. Throughout the development of this scheme, we have listened to the views of organisations from the university sector. We will continue to do so as we design bespoke guidance.

Therefore, I do not think that the proposed amendments are necessary. Although it is essential that the guidance is published ahead of the scheme going live, putting time limits on publication following the Bill’s passage may hamper the engagement we wish to carry out in producing the most helpful and targeted guidance.

Amendment 104, which is another amendment from the noble Lord, Lord Wallace of Saltaire, seeks to ensure that the higher education sector is not unnecessarily burdened by the enhanced tier of FIRS. I assure him that this has been considered in relation to FIRS. There is a clear difference between it and the National Security and Investment Act, the academic technology approval scheme, and the export control regime. The Government are clear that FIRS fills an gap in our current toolkit.

The focus of the enhanced tier is to provide scrutiny to the UK activities directed by foreign powers, and foreign power-controlled entities, where the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the UK. In the limited circumstances where there is a risk of duplication, we will work closely across government departments and potential registrants to keep the burden of registration to a minimum and inform our approach to using this tier of the scheme.

In essence the noble Viscount, Lord Stansgate, and the noble Baroness, Lady Lister, were asking whether this scheme would interfere in the work of academia and broadened it out to further bodies, such as the British Academy, as referenced by the noble Baroness, and the scientific bodies referenced by the noble Viscount. There is no intention for this scheme to interfere with the work of academia, or with relevant international collaborations. We have considered the feedback of the academic and higher education community on this point. Under the specified persons tier, a UK university would need to be acting at the direction of a specified foreign power or a specified foreign power-controlled entity before registration requirements could apply. It would not be enough for a foreign power or entity to simply provide funding in support of an activity at a university, for example through subsidy or donation. Nor could responding to a generic request from a foreign power or entity be considered as “acting at the direction of”.

Under the political influence tier, where political influence activities are to be carried out within the UK at the direction of a foreign power or foreign entity, or where the activity is to be carried out by a foreign entity, it will need to be registered. This will help strengthen the resilience of the UK political system, as discussed on previous subjects. I can reassure the noble Baroness that the British Academy will be consulted as part of our ongoing discussions and potential thoughts around things that may or may not change.

Photo of Viscount Stansgate Viscount Stansgate Llafur 6:00, 16 Ionawr 2023

I will reflect on what the Minister says when I read Hansard. I am glad that bodies such as the British Academy will be consulted, and I hope that the named organisations I mentioned earlier will be consulted. If we take the case of an international conference, held in one of many states around the world, is it the Government’s view that that international conference, which may or may not be sponsored officially by a Government but nevertheless takes place in what may be considered an unfriendly country, brings about the type of involvement in this scheme on the part of individual people attending, or does it not?

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

My Lords, I thought I was very clear on the precise specified persons tier here. A UK university would need to be acting at the direction of a specified foreign power or a specified foreign power-controlled entity before registration requirements could apply. I think that covers the set of circumstances just outlined by the noble Viscount.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat Lords Spokesperson (Digital)

The Minister spoke about universities. Did he mean the academics—any academic within the universities?

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

Yes.

Amendment 103 was tabled by the noble Lord, Lord Clement-Jones, to remove the exemption from the registration requirement in FIRS for lawyers providing legal activities. While I welcome the challenge, removing this exemption would risk undermining long-standing protections the UK has afforded to the provision of confidential legal advice and the equitable administration of justice. The exemption is available only to lawyers carrying out legal activity and so would not apply to other individuals carrying out legal activity.

I also reiterate what was said in Committee in the other place: that this exemption does not completely exempt legal professionals from engaging with the scheme. It does not cover all the activities that could be undertaken by a legal professional as part of an arrangement with a foreign principal. Activities that are not strictly legal activities, such as lobbying, for example, may still need to be registered. So, for example, if a lawyer were to enter into an arrangement with a foreign power to lobby a UK government Minister or parliamentarian on the UK’s foreign policy towards that foreign power, that would be registrable. The fact that the individual is a lawyer is not sufficient in and of itself to exempt them from registration.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat Lords Spokesperson (Digital)

I heard what the Minister said about lobbying and the additional aspect of lobbying by law firms, but why is any exemption needed beyond what is contained in Clause 74, which covers legal professional privilege effectively—legal proceedings and so on—so that no confidential information needs to be divulged? Why is it not necessary that a law firm is acting for a foreign power or an entity controlled by a foreign power? Why should that be exempt?

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I think I explained this in reasonable detail. It goes back to the sort of work the lawyers carry out. As I say, it is the long-standing protections that the UK has afforded—

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat Lords Spokesperson (Digital)

All the Minister is saying, in a highly circular way, is that it is in here because it has always been in here in some other forms of legislation. I do not think that is much of an answer.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

In that case, I am very sorry to disappoint the noble Lord. I apologise for having spoken at such length.

Photo of Lord Hope of Craighead Lord Hope of Craighead Judge

I am not sure whether the Minister has picked up my point about arbitration. I am very sorry that I did not put down an amendment to direct attention to this, but it is quite an important point because London is a preferred seat for arbitration and many cases involving foreign powers and foreign-controlled activities. I have done a handful of arbitrations, but each one of them is within that category.

One of the features of an arbitration is the confidentiality of the process and the fact that the process exists at all. There are some cases where parties do not want it to be publicised that they are engaging in this process, because it would raise all sorts of questions, particularly at the home state of the foreign activity, the foreign-controlled entity or the foreign power itself. It is rather important to be sure that the ground is properly covered.

As an arbitrator myself, and a lawyer-arbitrator, I favour the exemption provided by paragraph 5, but I do not think it goes wide enough. That is my point: it would seem very strange if I, as a lawyer for a team of three arbitrators, did not have to register, but if the noble Lord, Lord Patel, was with me as an expert in his field, he would have to do so, and an engineer or an architect would have to do so as well. That really destroys the exemption. It is a serious point to look at, though I quite agree that it is a point of detail. I apologise for not having drawn attention to it specifically before.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

I was about to attempt to address the question from the noble and learned Lord, Lord Hope, but unfortunately he is not going to like the answer, which is that I do not know. I will have to look into this and come back to him.

I appreciate the concerns that have been expressed by all noble Lords, and I thank all those who participated in what was clearly a very healthy and important debate. We will reflect carefully on the comments raised prior to Report. For the moment, and to that end, I ask noble Lords not to press their amendments.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade), Liberal Democrat Lords Spokesperson (International Development), Liberal Democrat Lords Spokesperson (Foreign and Commonwealth Affairs)

Since the Minister said he would go away and reflect on this debate, which may bring about substantial changes to what the Government are doing, what would be the point of his moving his amendments for the remainder of this part? It would save the Committee quite a bit of time if he did not move these amendments to the rest of the part that he said he is now going to consider.

Photo of Lord Sharpe of Epsom Lord Sharpe of Epsom The Parliamentary Under-Secretary of State for the Home Department

My Lords, I am not sure it would save a huge amount of time, would it?

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat Lords Spokesperson (International Trade), Liberal Democrat Lords Spokesperson (International Development), Liberal Democrat Lords Spokesperson (Foreign and Commonwealth Affairs)

It depends how long the Minister takes to move his own amendments. When he sums up his own amendments that he will be moving, he will be saying, “I am now going away to reflect on these and come back before Report”, so there is very little point in doing that.

Amendment 82 agreed.

Clause 62, as amended, agreed.

Clause 63 agreed.