Monday 30 November 2020 / 10:30 PM Business / Chi Onwurah / Security / Stephen Kinnock

Labour pushes Ministers to strengthen national security and protect UK businesses

Labour will today (Tuesday 1 December) seek to strengthen the UK’s national security and back British businesses, by proposing clear scenarios where powers to block foreign acquisitions and protect UK companies from hostile actors should be used.

Labour is supporting the National Security and Investment Bill, which gives the Government stronger powers to intervene in instances where foreign acquisitions threaten national security. But, unlike the Tories, Labour is pushing for ‘national security’ to be legally defined to reflect modern threats and better protect British businesses.

The definition put forward by Labour would mean acquisitions of British businesses would be blocked if they risk, for example, the transferral of sensitive data; enabling hostile actors to gain control of a crucial supply chain; impacting UK defence capabilities; impacting the UK’s international obligations including with respect to climate risk and protecting human rights; and facilitating activities like terrorism, espionage, and organised crime.

Transparently setting out the range of scenarios in which powers to block foreign acquisitions could be used would give investors clarity and confidence, helping ensure the Bill does not deter foreign investment.

Crucially, it would also mean these scenarios would be enshrined in law – rather than being decided at the discretion of the Business Secretary of the day.

Labour will also argue that Conservative governments have successively been complacent on national security, failing to protect the UK’s critical national infrastructure and supply chains from enterprises backed by foreign states.

Chi Onwurah MP, Shadow Business Minister, said: 

“Ministers have a poor track record on national security, from waving through Huawei’s role in the UK’s 5G network to standing by while acquisitions have seen British businesses stripped for parts.

“Their history of making dodgy deals with mates also means it would be wrong to leave deciding what is and is not a threat to national security to the whim of Ministers.

“Labour is calling for clear rules that would set out when foreign acquisitions should be blocked, to back British businesses and protect our country’s best interests.”

Stephen Kinnock MP, Shadow Minister for Asia and the Pacific, said: 

“For 10 years successive Conservative governments have been profoundly naïve and complacent about our national security and our strategic national assets, leaving our home-grown businesses at the mercy of hostile takeovers. The effects of the pandemic have compounded these problems.

“While this Bill is a step in the right direction, it fails to recognise that national security is intrinsically linked to economic security. This failure leaves the UK’s critical national infrastructure and supply chains open to threats, particularly from enterprises and investment vehicles that are backed by foreign authoritarian states who often seek to undermine the UK’s defences.

“Labour’s amendments seek to fix these flaws, by defending our country’s sovereign capability and delivering a more resilient and secure Britain.”

 

The full proposed amendment is as follows:

 

To move the following Clause – 

When assessing a risk to national security, the Secretary of State may have regard to factors including, but not restricted to:

  1. Whether the trigger event risks enabling a hostile actor to gain control of a crucial supply chain, obtain access to sensitive sites, corrupt processes or systems, conduct espionage, exert inappropriate leverage or engage in any other action which may undermine national security;
  2. Whether the trigger event adversely impacts the UK’s capability and capacity to maintain economic security;
  3. The potential impact of the trigger event on the UK’s defence capabilities and interests;
  4. The potential impact of the trigger event on the transfer of sensitive data, technology or know-how outside of the UK;
  5. The characteristics of the acquirer, including its jurisdiction of incorporation and proximity to any state;
  6. The potential impact of the trigger event on the security of the UK’s critical national infrastructure;
  7. Whether the acquirer in respect of a trigger event has a history of compliance with UK and other applicable law;
  8. The potential impact of the trigger event on the UK’s international interests and obligations, including with respect to the protection of human rights and climate risk; and
  9. The potential of the trigger event to involve or facilitate illicit activities, including terrorism, organised crime and money laundering.