New Clause 18 - General exemptions

National Security Bill – in a Public Bill Committee am 2:45 pm ar 18 Hydref 2022.

Danfonwch hysbysiad imi am ddadleuon fel hyn

‘(1) The registration requirements do not apply—

(a) in relation to an arrangement that is a UK arrangement;

(b) to the extent that an arrangement relates to the provision of legal services.

(2) The prohibitions do not apply—

(a) to activities carried out in accordance with a UK arrangement or a UK agreement;

(b) to the provision of legal services.

(3) A “UK arrangement” or “UK agreement” is an arrangement or agreement to which—

(a) the United Kingdom is a party, or

(b) any person acting for or on behalf of, or holding office under, the Crown is (in that capacity) a party.

(4) The registration requirement in section (Requirement to register foreign activity arrangements)(1) does not apply to the extent that the arrangement relates to the provision of goods or services which are reasonably necessary to support the efficient functioning of—

(a) a diplomatic mission,

(b) a consular post, or

(c) the permanent mission to a UK-based international organisation of a country which is a member of the organisation,

(for example, the provision of catering or maintenance services).

(5) The registration requirements do not apply to persons who—

(a) are members of the family of a principal person forming part of the principal person’s household, and

(b) make a foreign activity arrangement or a foreign influence arrangement pursuant to an activity carried out by the principal person in that capacity.

(6) The prohibition in section (Requirement to register political influence activities of foreign principals) does not apply to persons who—

(a) are members of the family of a principal person forming part of the principal person’s household, and

(b) carry out an activity pursuant to an activity carried out by the principal person in that capacity.

(7) For the purposes of subsections (5) and (6)—

(a) “principal person” means a person who is a member of staff of—

(i) a diplomatic mission,

(ii) a consular post, or

(iii) the permanent mission to a UK-based international organisation of a country which is a member of the organisation;

(b) the members of the family of a principal person forming part of the principal person’s household include a person who is living with the principal person as their partner in an enduring family relationship.

(8) “Member of staff”—

(a) in the case of a diplomatic mission, means a member of the mission within the meaning given by Article 1 of the Vienna Convention on Diplomatic Relations (set out in Schedule 1 to the Diplomatic Privileges Act 1964);

(b) in the case of a consular post, means a member of the consular post within the meaning given by Article 1 of the Vienna Convention on Consular Relations (set out in Schedule 1 to the Consular Relations Act 1968).

(9) The Secretary of State may by regulations make provision for further cases to which the registration requirements or the prohibitions do not apply.

(10) In this section—

“consular post” has the meaning given by Article 1 of the Vienna Convention on Consular Relations (set out in Schedule 1 to the Consular Relations Act 1968);

“diplomatic mission” is to be read in accordance with the Vienna Convention on Diplomatic Relations done at Vienna on 18 April 1961;

“legal services” has the meaning given by section 8(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012;

“the prohibitions” means the prohibitions in sections (Requirement to register activities of specified persons) and (Requirement to register political influence activities of foreign principals);

“the registration requirements” means the requirements in sections (Requirement to register foreign activity arrangements)(1) and (Requirement to register foreign influence arrangements)(1);

“UK-based international organisation” means an international organisation which has its headquarters in the United Kingdom and on which privileges and immunities have been conferred under section 1 of the International Organisations Act 1968.’—

This new clause creates exemptions to the registration requirements in NC11 and NC14 and the prohibitions in NC13 and NC16.

Brought up, and read the First time.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

I beg to move, That the clause be read a Second time.

Photo of James Gray James Gray Ceidwadwyr, North Wiltshire

With this it will be convenient to discuss the following:

Government new clause 19—Registration information.

Government new clause 20—Information notices.

Government new clause 21—Confidential material.

Government new clause 25—Publication and copying of information.

Government new clause 28—Interpretation.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

This group relates to scheme exemptions; the power for the Secretary of State to set what information needs to be registered with the scheme; the power for the Secretary of State to issue notices requesting information from registrants and those believed to be in scope of the requirements; provisions protecting confidential material from disclosure; the power for the Secretary of State to make regulations about the publication or copying of information provided through registration; and definitions for terms used in relation to FIRS. The majority of the new clauses in this group are substantive, so, as with the previous two groups, I will take each new clause in turn.

I will now address new clause 18, which contains the proposed exemptions from the requirements to register under FIRS. These are in addition to the carve-outs we have already discussed for foreign powers and recognised news publishers. There are three areas of exemptions that I will walk through. First, I have already described the importance of ensuring that the scheme is compliant with the UK’s obligations under international law regarding the diplomatic and consular relations between countries as well as international organisations. That is why a foreign power is not required to register with the scheme, and nor is an international organisation considered a foreign principal under the primary registration requirement.

These international obligations require the UK to accord full facilities for the performance of the functions of a mission or consular post. That is why, under the enhanced registration requirement, we propose exempting the registration of arrangements with a specified foreign person that concern the provision of reasonably necessary goods and services to an embassy, consulate or permanent representation to an international organisation headquartered in the UK. This is set out at subsection (4) and could include catering or building facilities. It is not necessary for the exemption to apply to the primary registration requirement, as that requirement is concerned only with the registration of political influence activities.

We also consider that our obligations are to avoid interference with the functioning of a diplomatic or consular post where partners, both married and unmarried, provide key support to the diplomat they accompany. A spouse—a married partner—will derive privileges and immunities from the accreditation of the principal person. However, in subsections (5) and (6), we have included a specific exemption to recognise the equal contribution to the functioning of the mission that can be provided by unmarried partners in an enduring relationship. That would apply to both the primary and enhanced registration requirements.

Secondly, we propose to exempt the provision of legal services such as advice and representation in legal proceedings, as set out in subsections (1) and (2). The right to a fair trial and the equitable administration of justice may depend on the confidentiality of the provision of legal services, which is generally protected by legal professional privilege, as discussed previously. However, the exemption does not cover all activities that could be undertaken by a legal professional as part of an arrangement with a foreign principal, and activities that are not strictly legal services, such as lobbying, may still need to be registered.

Finally, the Government also propose an exemption under subsection (1) for arrangements that the UK, or anyone acting on behalf of the Crown in their official capacity, is party to. The exemption is also for activities that are in accordance with a UK agreement, as set out in subsection (2). Let me provide an example of each. First, if the UK Government or a person acting under the Crown were to invite a group of stakeholders, some of which were foreign companies, to participate in a policy-making discussion with individuals such as senior civil servants or a Government Minister—for example, discussing draft legislation or a policy proposal—the exemption would apply such that the foreign companies would not be required to register their activities carried out in the course of their participation. In agreeing to participate at the specific request of the United Kingdom Government, they would be party to an arrangement with the UK and taking direction from UK officials. Requiring the arrangements to be registered would disrupt significant amounts of routine UK Government activity of which the Government are already aware.

Secondly, the exemption also covers arrangements that flow from an agreement made with the UK. For example, the UK Government could enter into an agreement with a foreign country to provide overseas aid. The foreign country could enter into a subsequent arrangement with an NGO to discuss with the UK Government where the overseas aid should be provided to support prioritisation of the funding. As that activity would be carried out in accordance with the original agreement between the UK and the foreign country, the arrangement between the foreign country and the NGO would not be registerable. That will avoid registrations of activities and arrangements that the UK Government would already reasonably expect to take place as a result of arrangements that they have made. The Secretary of State will have the power, as provided by subsection (9), to add further exemptions by regulation as necessary in the future. This will ensure that where further exemptions are needed, they can be added in a timely manner while still enabling parliamentary scrutiny.

Hon. Members will note that there are several exemptions in similar international schemes—notably those in the United States and Australia—that are not included in FIRS. No exemption for registered charities or commercial activity is being proposed in FIRS, for example.

Those exemptions were included in those schemes as an attempt to narrow their scope. It is important, however, to take a cautious approach to exemptions, as they are capable of undermining the aims of the scheme and creating loopholes to be exploited. I refer again to the submission of the Australian Attorney General’s Department to the ongoing review of the Australian scheme. One of the points of learning expressed in that submission is:

“Certain exemptions do not have a clear justification, have unclear scope, or lead to inconsistent outcomes for similar relationships.”

As I explained in discussion on the previous two groups of new clauses, the Government’s view is that it is the responsibility of all sectors to demonstrate transparency and accountability. The exemptions and exceptions under FIRS have been included to ensure that we do not undermine existing obligations or protections. On scope, we have taken alternative steps to ensure the proportionality of the scheme while ensuring that it meets its objective of deterring those who seek to engage in covert arrangements and activities. We have done so by not requiring communications activities to be registered where it is reasonably clear who they are being directed by, as well as by ensuring that entities, rather than their employees, are responsible for registration.

New clause 19 would give the Secretary of State the ability to make regulations to outline the information required from a person as they comply with their registration obligations under the scheme. It will be important to strike the balance between ensuring that sufficient information is provided by a registrant to deliver the scheme’s objectives, while not creating a substantial administrative burden for those who will need to comply with the scheme’s objectives. We have consulted on that point with sectors, and we have reviewed the approach taken by our international partners in the US and Australia.

We intend to keep the administrative burden of registration to a minimum. The process will require personal information that would allow the scheme management unit to differentiate between those who are registered—for example, the names and contact details of those who are party to the arrangement. Information will also need to be provided on the arrangements and areas of activity to be undertaken, either pursuant to the arrangement in question or by an entity that has been specified or is a foreign principal. The level of detail provided will depend on the specific context and nature of the arrangement, but we do not expect registrants to provide a detailed account of every activity that they undertake as part of the arrangement.

Finally, it is critical for the aims of the scheme that the information provided does not become misleading, false or deceptive. That is why, if there is a material change to the information provided, subsection (3) requires registrants to inform the Secretary of State within 14 days from the day on which the change takes effect. The Secretary of State would be able to issue guidance on what constitutes a material change. Although it will often be context-specific, the focus will be on whether the registered arrangement or type of activity has changed in a material way. To ensure that we are able to enforce that, we propose including an offence that would be committed if, as a result of a failure to notify the Secretary of State of a material change, the information provided is misleading, false or deceptive in a material way.

We consider it appropriate for that level of detail to be outlined in regulations, because it is largely administrative in nature. Any information provided to the scheme will be held in compliance with the Data Protection Act 2018 and UK general data protection regulation.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Cabinet Office), Shadow SNP Spokesperson (Constitution)

The Minister has just described subsection (6) of new clause 19, which states:

“A person who fails to comply with subsection (3) commits an offence if, as a result of the failure, the information provided…is misleading, false or deceptive in a material way.”

That is absolutely correct. New clause 22, however, contains a range of offences that are committed if someone provides information that is “false, inaccurate or misleading”. Is there a reason why we have “deception” in new clause 19 but “inaccurate” elsewhere? Is there a different burden of proof for deception and inaccuracy?

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

If the right hon. Gentleman will forgive me, I will come to that in a moment.

New clause 20 provides the Secretary of State with the ability to give a notice to a person who has registered with FIRS, or who should have registered with FIRS but has not. On receipt of an information notice, the person will be required to provide the information requested within the specified timeframe. Failure do so without a reasonable excuse will be an offence. Receiving an information notice does not mean that an individual is guilty of a FIRS offence or that they are engaged in wrongdoing. It is, fundamentally, a tool to provide reassurance that individuals are meeting their registration requirements.

Photo of Stuart McDonald Stuart McDonald Shadow SNP Spokesperson (Home Affairs)

I have a question about the new clause, and it may save the Minister from having to make a speech. With power, unlike with other notice powers, there seems to be virtually no limit on the nature of information that can be requested. There is no judicial oversight or right to challenge. It seems to be an incredibly broadly drafted power, and I do not understand why.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

The hon. Member for Halifax has raised the question of oversight on various occasions and I have already committed to discussing it with her, so I will come back to that point. As for the nature of the information required, that will depend on the nature of the business. It is broad, as the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East correctly identified.

Where a person is suspected of committing a FIRS offence, the information gathered as a result of these notices can be used to support the investigation and prosecution of a FIRS offence. New clause 21 makes provisions clarifying that a person does not have to disclose any information that is protected by legal professional privilege or confidential journalistic material, or that would require them to identify or confirm a source of journalistic information.

Legal professional privilege, commonly referred to as LPP, or as confidentiality of communications in Scotland, is a fundamental tenet of UK law and protects those seeking legal advice and representation in the UK. It ensures that material such as communications between clients and their lawyers—and, in some circumstances, third parties—is protected from disclosure. LPP does not arise where a lawyer’s assistance has been sought to further a crime or fraud. Any disclosure requirement in FIRS that could have the effect of breaching LPP would fundamentally infringe the rights of individuals to receive confidential legal advice, where that advice is not for the purposes of enabling a crime, and their rights to a fair hearing.

There is also legal precedent for protecting against the disclosure of confidential journalistic material or sources of journalistic information, unless the power to require disclosure has been subject to prior or immediate after-the-event judicial or other independent or impartial scrutiny. The Government consider that protections for such material should also be included in FIRS to ensure adequate protections for journalists and their sources. The protections will apply even if a journalist or a recognised news publisher has to register under the enhanced tier of the scheme. The Government propose this new clause to ensure that FIRS upholds the rule of law and fair access to justice. It will ensure that there is adequate protection for confidential journalistic material and information related to journalistic sources.

New clause 25 allows the Secretary of State to make regulations about the publication or copying of information provided through registration. The ability to publicise certain information registered with the scheme is vital to delivering the aims of FIRS, by ensuring that the influence of foreign powers and entities is open and transparent. We intend to publish information registered under the primary or enhanced requirements that relates to the carrying out of political influence activities. The regulation-making powers also provide the flexibility to publish information registered about a wider range of activity under the enhanced requirements.

As I said earlier, however, that is to be determined alongside the decision to specify a foreign power or entity subject to a foreign power or control. Ensuring information can be publicised where it relates to the carrying out of political influence activities will help to strengthen the resilience of the UK political system against covert foreign influence. After all, sunlight is the best disinfectant. Not only will this ensure that the UK public are better informed of the scale and extent of foreign influence in our political affairs, but it will put a person actively seeking to avoid being transparent in a difficult position. Either they comply with the scheme’s requirements and expose their arrangements or activities, or they face potential enforcement action.

The information published will be limited to what is necessary to achieve the transparency aims of the scheme: for example, the name of the registrant, which could be an individual or an entity; the foreign power or principal for which political influence activities are to be carried out; or the nature and duration of such activity. Subsection (2) would allow the Secretary of State to specify or describe information or material that is not to be published. That is likely to include a situation where publishing the information would threaten the interests of national security, put an individual’s safety at risk or risk disclosure of commercially sensitive information.

Subsection (1)(b) would allow the Secretary of State to make provision for the copying of information provided through registration. It an important provision that will ensure data can be managed by the scheme management unit and shared with other enforcement agencies when necessary. As already mentioned, data will be managed in accordance with the Data Protection Act 2018 and GDPR. As with other parts of the registration scheme, we consider it appropriate for this level of detail to be outlined through regulations, which will also provide the Government with the flexibility to adapt should there be a need to make changes to what information is to be provided in order to meet the objectives of the scheme.

New clause 28 provides the definitions relevant to the registration scheme requirements. As we have discussed these terms in detail in relation to the requirements to which they apply, I do not consider that further examination is needed.

In my opening remarks, I explained that any arrangement with the Republic of Ireland or with a body incorporated or association under the laws of Ireland will be exempt from registration, as are activities to be carried out by such entities. This, again, ensures that the letter and spirit of the Belfast/Good Friday accord are protected, by avoiding interference with the right of citizens in Northern Ireland to identify as Irish. To achieve that in the drafting, subsection (2) clarifies that the Republic of Ireland is not to be considered a foreign power for the purposes of FIRS.

Finally, subsection (3) makes provisions to ensure that where a person, company or entity is exempt from FIRS, that exemption extends to the employees or office holders of that entity acting in their official capacity. We consider that requiring these individuals to register with the scheme would be disproportionate if their employer was themselves exempt. I ask the Committee to support the six amendments that I have outlined.

Photo of Holly Lynch Holly Lynch Shadow Minister (Home Office) 3:15, 18 Hydref 2022

There is an awful lot in this group that is still to be determined in regulations, which is always a shame because it does not allow for the same scrutiny as when we consider everything as a package.

Government new clause 18 creates exemptions to the registration requirements laid out in the previous clauses. There is merit to each of those exemptions, but my concern is that we are creating a grey area, particularly when a person engages in both exempt activity and registrable activity. For example, I note that in subsection (4), we do not require those who support the functioning of a diplomatic mission or consular post to register. However, we know that we have potential weaknesses here following the case of one of our own British embassy security staff, who was arrested and charged in Germany with spying for Russia under the Official Secrets Act 1911; it is good to know that that legislation is not totally out of date. That raises the question: do we go as far as we need to on the networks surrounding the vital work of embassies, and can we ensure that an exemption by role does not automatically exempt activity that we would certainly want to know about?

I have had the opportunity to discuss with officials my mixed views about the complete exemption of family members of a principal person under subsections (5) and (6) of new clause 18. While it is right to create a distinction between those we are interested in and their family members, I worry that if we are explicit about this in legislation, we are presenting them as perfect potential spies to the regimes that their principal family member is associated with, bearing in mind that we are dealing with some fairly unscrupulous hostile states.

In new clause 19, again, we are waiting for a great deal more information to be set out in regulation. Under subsection (3), where there is a material change to any information already registered, the Secretary of State has to be notified within 14 days of the material change’s coming into effect. Why 14 days after? Why not in advance of the material change, as is the case in other clauses—for example, within 10 days of the agreement being made when first registering?

Subsection (6) states that a person commits an offence if

“the information provided to the Secretary of State in relation to the registered arrangement or registered activity is misleading, false or deceptive in a material way.”

To come back to my earlier point, who will be undertaking those investigations? We are presumably creating a whole range of new responsibilities here, so who will lead that work, and will they have the corresponding resources?

Government new clause 20 permits the Secretary of State to give a notice to a person to provide information in connection with arrangements or activities registrable under the registration scheme. Subsection (3) states that the Secretary of State may permit an information notice

“requiring the person to whom it is given to supply the information specified in the notice.”

I have no doubt that information notices will be a powerful tool, but there is still a lot to be specified in the new clause.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East made a good point about oversight. I want to push the Minister on what means the public will have to query or raise concerns about an arrangement. If someone is aware of an arrangement that has either not been registered or not registered in full, what mechanism is there for them to raise that with the Home Office?

One of the examples that we discussed yesterday with officials was if a journalist writes an article that appears to be a blatant sales pitch for a hostile state. It would probably take an information notice to get to the bottom of whether it was commissioned by a hostile state, but how would a member of the public raise such a query? How would an employee of a company who is growing increasingly concerned about the nature of a joint project that they are working on raise those concerns with the Home Office? Currently, the mechanism is lacking from the provisions. I would be grateful to hear how the Minister intends to address that concern.

Government new clause 25 allows the Secretary of State to make regulations in relation to the publication and copying of information provided to the Secretary of State under the registration provisions. What really worries me about the registration scheme is that submissions will be made to the Home Office and they will go into some sort of electronic black hole and never see the light of day. We will not properly assess the arrangements or activities to see whether we are worried about them, and we will not publish them for months because we do not have the right back office resources to do so.

Any MP who has casework with the Home Office on almost any front—from visas to asylum and the national referral mechanism—will have experienced a similar service, despite, I have no doubt, the best efforts of civil servants. Can the Minister confirm that the register will be kept up to date in relative real time, and that it will be published online, which I think is what he said in his opening remarks? Can he also suggest a target turnaround time between registration and publication, which I am sure would be welcome and would set an early standard for what people can expect from the scheme?

Photo of Stuart McDonald Stuart McDonald Shadow SNP Spokesperson (Home Affairs)

I will briefly emphasise how incredibly broadly and dangerously drafted new clause 20 is. All sorts of organisations will fall within the scope of the provisions; it could be a local business or a UK non-governmental organisation. Unless I am missing something, under the clause they can be asked by the Secretary of State in an information notice for virtually any information that she fancies helping herself to, with virtually no restriction whatsoever.

The new clause does not even require a link to some sort of ongoing investigation. There is no court oversight of the nature of the request, and there is absolutely no mechanism to challenge or appeal against any sort of information notice. If someone has been handed an absurd information notice and they refuse to comply with it, they can end up being prosecuted. As it stands, new clause 20 seems to be incredibly difficult and should be revisited.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

I will come to the point made by the right hon. Member for Dundee East. He is absolutely right. Forgive me—that is a drafting error, which we will look at and tidy up.

On diplomatic staff, the hon. Member for Halifax makes a fair point. This is, however, diplomatic staff and their spouses acting in an official capacity—when they are conducting duties on behalf of their nation, and on behalf of the mission that they are sent to support. It is not supposed to be a blanket exemption; it is merely when they are acting in their role.

Who will manage the unit? A scheme management unit is expected to sit within the Home Office—that is, at least, the current plan—which will administer the scheme. It is unlikely that every registration will need to be scrutinised. More likely, the register will be a resource for public scrutiny. That is where the right hon. Member for North Durham, who is not currently present, was absolutely right: sunlight is the best disinfectant, and indeed disinfectant is the best sunlight.

Photo of Jess Phillips Jess Phillips Shadow Minister (Home Office), Shadow Minister (Domestic Violence and Safeguarding)

I am sure that the Minister has heard, just as I have, about cuts to Government Department budgets. This being a new additional spend, I wonder whether there has been any assessment of the cost of it, and whether he thinks the cost of it will survive.

Photo of Thomas Tugendhat Thomas Tugendhat Minister of State (Home Office) (Security)

As with the whole Bill, the way to think about it is as a public register, and because it is a public register the scrutiny will be provided, no doubt, by our friends in His Majesty’s press corps, who will look through every detail, as they look through every detail of the Register of Members’ Financial Interests and ensure that they keep us on our toes. They will no doubt do the same for businesses.

I will have a look at the question of the 14 days as opposed to 10. I am not quite sure why there is that difference, so I will come back to the hon. Member for Halifax on that, and with further details on the management of the scheme.

Question put and agreed to.

New clause 18 accordingly read a Second time, and added to the Bill.