Statement (Commons and Lords) on International Investment - Oct 17

International Investment

12.49 pm 

12.56 pm 

• Greg Clark 

  My colleagues and I meet regularly not only with Airbus but with the whole of the aerospace industry, which is one of our most successful industries, and we are well aware of how the sector and the companies within it work. This informs our negotiations to allow us to ensure that that way of working can continue.

• Alan Mak (Havant) (Con) 

  I welcome the Secretary of State’s statement and the investment in Bombardier. As the fourth industrial revolution accelerates and new technologies emerge, will he consider introducing a call-in mechanism to allow flexibility when the Government scrutinise transactions for national security concerns?

• Greg Clark 

  My hon. Friend is a great champion of the need to prepare for the fourth industrial revolution, if we are to benefit from it. Part of the reason for this Green Paper is consistent with the high standards that we have always had in this country for ensuring that our systems are up to date. We are suggesting that, in certain sectors that are relevant to national security, it would be possible, subject to the results of the consultation, to scrutinise transactions to assess whether they posed a problem.

• John Woodcock (Barrow and Furness) (Lab/Co-op) 

  It is surely right to add smaller companies to the national security process, but this is only a Green Paper and secondary legislation takes time. Given how fast these fields of technology are moving, what are the Government doing right now to mitigate the risk of what we want to legislate to deal with in the future?

• Greg Clark 

  The proposals can be introduced through secondary legislation, and I hope that they will find favour with the House so that we can proceed with that. There is an ability to act through other measures if there is a threat to national security, but the essence of these proposals is that this can be done in anticipation, rather than when a threat has crystallised. This is the right way to proceed, rather than waiting for a threat to be identified as imminent. This is about being prepared.

• Kevin Foster (Torbay) (Con) 

  I welcome the Secretary of State’s statement and particularly the news about Bombardier. Does he agree that the Brexit vote was about us going out into the world and being part of the international trading community, not about withdrawing behind a wall? Will he therefore reassure me that, despite what we are saying about considerations of national security, we will remain an open advocate of free trade in the world?

• Greg Clark 

  It is precisely because we are a leading advocate of free trade and open investment that it is necessary to have the right framework in place so that people can invest with confidence. In fact, in many cases, the steps that we are taking bring us into line with our competitor nations when it comes to trade, and I am absolutely confident that this regime will be respected and applied.

• Tom Brake (Carshalton and Wallington) (LD) 

  On the subject of companies developing dual-use technology, can the Secretary of State confirm that as well as introducing powers to stop those companies from falling into foreign hands, he will ensure that they will still be able to recruit workers from the EU? Those workers will often not be particularly well paid, as they might be graduates working in start-up companies. Also, will he clamp down on companies here that use subsidiaries in other countries to avoid UK export controls and sell dual-use technology that can be used to clamp down on dissent in middle east countries?

• Greg Clark 

  On the right hon. Gentleman’s second point, an export control regime deals with these matters. On his first point, while the scope of the Green Paper is extensive, it is not a consultation on immigration policy. There will be other opportunities to pursue that.

• Robert Jenrick (Newark) (Con) 

  I broadly welcome the proposals to change the takeover code and protect national security assets, especially smaller companies, but will the Secretary of State consider adopting a new principle that for every new policy that could be construed—however unfairly—as being protectionist or anti-business, at least two new policies should be brought forward that state as loudly as possible that Britain is open for business and a free trading country committed to free enterprise?

• Greg Clark 

  We are saying loudly and clearly that we depend on free trade, and that free trade depends on our having clarity in the rules so that investors in our companies know what scrutiny they will be subject to. That is something that business has wanted, so it is good that we are going to be clear about that.

• Alan Brown (Kilmarnock and Loudoun) (SNP) 

  These proposals are welcome as far as they go, but if, thinking about the bigger picture, we are looking at transparency in safeguards relating to foreign investment, we will need to stamp out the laundromat money-laundering schemes that channel billions of pounds through the UK. What steps are the Government taking to eliminate the vehicles for that practice, including the Scottish limited partnerships?

• Greg Clark 

  My hon. Friends in the Treasury are, as the House knows, active and vigorous in pursuing measures against money laundering, and that approach is an important part of this regime’s reputation for applying high standards.

• Wendy Morton (Aldridge-Brownhills) (Con) 

  I welcome the Secretary of State’s statement and his recognition of the importance of not only large strategic businesses, but the supply chain. Does he agree that it is vital that the rules for the scrutiny of foreign investment are clear, certain and proportionate?

• Greg Clark 

  That is exactly what is proposed in the Green Paper. The focus is on national security, which is an important responsibility for the Government. It is important that investors and businesses know the procedures so that they can have the greatest certainty when conducting business, including when contemplating takeovers.

• Tom Pursglove (Corby) (Con) 

  Will my right hon. Friend say a little more about the role of industrial strategy in helping to harness international investment?

• Greg Clark 

  One of the strengths of the UK’s economy is our reputation for innovation and discovery through the application of science. Our industrial strategy deepens our commitment to that. We have seen the biggest increase in public investment in research and development for more than 40 years. Part of our strategic approach means establishing companies that make use of that technology, and having a regime under which companies that do use that technology can be confident about taking in foreign investment is part and parcel of the positive, mature regime that we want to establish.

  ---

  • The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con) 

    My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy.

     

    “Mr Speaker, the United Kingdom has a deserved reputation as one of the most open economies in the world; one which welcomes international investment and the benefits it brings. Our position as the fifth-largest economy in the world has been built on international trade and investment. Today’s Green Paper affirms our commitment to that approach and sets out proposed reforms to our scrutiny of foreign investment to ensure that our national security is protected.

     

    An open approach to international investment must include appropriate safeguards. It is vital that the UK Government can deliver on our primary duty to safeguard national security and ensure that the interests of the British people are protected. It is important that the Government have both knowledge of potential national security risks to the UK and the ability to act where necessary.

     

    Our review has highlighted that it needs to be updated to take into account the changing structure and size of companies in sectors critical to our national security. Our reforms will bring the UK into line with many major developed economies. We want to develop clear, consistent and proportionate rules which enable us to scrutinise the ownership of our infrastructure but which are also well understood and give international investors the clarity and transparency they require.

     

    We propose a two-stage approach. First, I am now updating our current arrangements by consulting on amendments to the Enterprise Act 2002 to enable the Government, if necessary, to intervene in mergers which fall outside the current provisions. In most sectors, the thresholds in the Act allow the Government to intervene on public interest grounds only in mergers where the acquired company has a UK turnover of more than £70 million or the merger results in an increase in the UK share of supply to 25% or more. These thresholds are no longer appropriate for certain sectors, particularly those where smaller companies may hold technologies which are critical for national security. For these sectors, we propose to introduce amendments by secondary legislation which would lower the turnover threshold to £1 million and remove the requirement for the merger to increase the share of supply to 25% or more.

     

    Specifically, I am consulting on amendments to the thresholds for the dual-use and military sector and certain parts of the advanced technology sectors. The first of these relates to items that are currently subject to export controls. Hostile actors should not be able to acquire these items, or the knowledge about how to make them, by buying UK-based businesses. The second relates to companies involved in the design of computer chips and quantum technology. Advanced technologies can create threats which are difficult to detect and may mean that devices could be directed remotely, should a hostile actor gain access.

     

    The Green Paper also seeks public views about options for broader reforms to the way we scrutinise investment for national security purposes. In particular, we are seeking views on two proposals: broadening the range of transactions that the Government are able to review for national security purposes; and the introduction of mandatory notification of foreign investment into certain parts of the economy which are critical for national security, such as the civil nuclear and defence sectors.

     

    The Government intend that any reforms should be firmly targeted at national security. While the national security assessment by its nature must remain confidential, we will also seek to provide greater certainty and clarity to businesses on the process itself. These proposals will ensure that our arrangements for protecting national security are aligned with the practices in other major countries and are more robust to the evolving nature of national security threats and technological change.

     

    Let me say something about takeovers more generally, outside the area of national security. We have held discussions with stakeholders, including the Takeover Panel, about the current process for takeovers. These discussions have covered the need for more information and time to allow for assessment of takeover bids by interested parties, and how assurances given during the takeover process can be properly assessed and compliance scrutinised. We believe the recently proposed changes by the Takeover Panel would improve the UK’s takeover rules. We look forward to the conclusion of the consultation.

     

    Alongside this, the Government will act, where appropriate, to ensure that public funds are protected in merger situations. In particular, we will take steps to ensure that government-funded research and development grants can be clawed back following a takeover if the new company would have been ineligible to receive the grant or the purpose for which the grant was made has changed.

     

    I now turn to a particular international investment announcement made late last night. Last Tuesday, I briefed the House on the trade dispute brought by Boeing against Bombardier. Since the outset, I and my colleagues have been constantly engaged and this has included looking at alternatives.

     

    I am pleased to tell the House that yesterday the boards of Bombardier and Airbus announced plans for a joint venture involving the C Series aircraft. The deal is expected to be completed by the second half of next year. I have spoken directly to Pierre Beaudoin, the chairman of Bombardier, and Tom Enders, the chief executive of Airbus, specifically about this joint venture. I have also discussed this with Chrystia Freeland, Canada’s Minister of Foreign Affairs. My top priority has been to emphasise the importance of giving certainty to Bombardier’s high-quality UK workforce now and in the future.

     

    The Shorts factory in Belfast employs more than 4,200 skilled workers and supports a supply chain of hundreds of companies and many more jobs in the UK. Airbus also has a large presence in the UK, employing more than 15,000 people, and is firmly rooted in the UK’s advanced technology industrial base.

     

    It is in all our interest that the C Series is successful. Both Bombardier and Airbus have made a number of important commitments to me, including that C Series wing manufacturing will continue in Belfast and that the strategy will be one of building on existing strengths and commitments. This announcement offers the potential to protect the interests of Bombardier’s Belfast workers and UK supply chain. The UK is already Airbus’s wing factory for the world and this announcement reinforces that position.

     

    The trade dispute brought by Boeing against Bombardier’s C Series remains in place. We consider this action by Boeing to be totally unjustified, unwarranted and incompatible with the conduct we would expect of a company with a long-term business relationship with the United Kingdom. We refute entirely any suggestion that our support for Shorts contravenes international rules. We will continue to work to see it resolved while Bombardier and Airbus negotiations continue.

     

    I remain in close contact with Airbus, Bombardier and the Canadian and US Governments. I will be speaking to the chairman of Bombardier and the chief executive of Airbus again later this week for an update on progress. I will, of course, continue to meet the representatives and Members of this House who have been assiduous in standing up for their constituents’ interests. I will do everything I can to secure the best possible future for Bombardier’s Belfast workforce and its UK-based suppliers. I commend this Statement to the House”.

  3.18 pm 

  • Lord Mendelsohn (Lab) 

    My Lords, I thank the Minister for repeating the Statement in this House. I also thank him for his personal interest in these matters, not just in relation to Bombardier but for his deep involvement in shaping the Green Paper, which is shown through its pages.

     

    I turn to the last part of the Statement, which is the very welcome news that Bombardier and Airbus have determined to create a joint venture to look at developing the C Series aircraft. The pairing of these two cutting-edge product lines is a very exciting prospect for the future of aerospace manufacturing and the excellent industry that we have here. We are hugely encouraged by such a step and what it means for the UK. I would be grateful to the Minister for some further information on what assurances or indications the Government have gained from both companies as to the likely investment or potential for jobs growth in this country as a result of such an excellent step. I reaffirm the broad consensus of the House, as demonstrated during the course of the last Statement, that we strongly support the Government’s actions in defending Bombardier’s position against a completely unjustified and unwarranted attack by Boeing, and a process which we are not convinced is as straightforward and clear as it could be. We urge the Government to do whatever they can and we support their continued efforts to try to ensure a swift and speedy resolution of these matters.

     

    We warmly welcome the excellent and timely Green Paper National Security and Investment and Infrastructure Review. We are pleased that the Government have chosen to look at how we can update our structures to deal more effectively with changing times. As a general observation, this creates further changes to our merger regime, some of which the Minister has already mentioned, such as matters involving the Takeover Panel and the FCA and further reviews of corporate governance. Even some of the insolvency reforms have a bearing on how we look at this regime. I make a plea for a more holistic process in how we review these issues of industrial strategy. Especially as we face Brexit, it would be useful if the Government could come up with a more joined-up approach to how these different parts can achieve the outcomes that we want, rather than having conflicting and competing claims or unwelcome consequences.

     

    In relation to the principles from which we approach this review, it is important to state—as the review itself does—that we have to ensure that the UK remains open for investment and participation. We still want to be a major global player in all these areas. Sometimes the indication that we are involved in a review creates a chill. We should be clear that, while it is entirely legitimate to protect the country’s interests, we will not create a large investment review. This also applies to how we address issues such as the clawback of funds and how those funds might be used for early development or other things for companies which might not be eligible. That provision would itself raise a series of questions. One has to assess things delicately and put them in sensible terms. The intention is clearly right, but we would not want it to have unwelcome consequences.

     

    We are pleased with the short-term and long-term approach to ensuring that we have an adaptable and operational system. The review stresses our foreign direct investment position, which this House has discussed many times. We are mildly sceptical about the nature of some of this investment. The charts in the paper identify the level. If we subtract the gold transactions which take place in the UK as goods received—which effectively net each other out—I am not sure the position would be so flattering. Our FDI position is not as good as is suggested and we should be conscious that we have a long way to go in encouraging the right sort of job-creating investment. The review should be seen in that context, rather than giving the feeling that we are in a much stronger position than we are.

     

    Will the Minister provide some thoughts on the following issues? First, what are our national security requirements? Are these strategic or are they direct security concerns? What balance will be in place on issues such as security of supply versus strategic control, as well as our own capacity to ensure that we have certain technologies? We welcome the important short-term measure of lower thresholds, which does plug gaps. On long-term measures, the review is right to look at mechanisms such as call-ins and notifications. However, these raise questions themselves, the first of which is the nature of acquisitions and security concerns as companies develop in the modern world. This is not always about the takeover of a company. As we have seen from the way in which companies acquire access to technology and other things, this can frequently be done through partnerships, joint ventures and other things which do not involve a complete and direct transfer of equity. Sometimes control changes due to debt, so we need to consider all these measures. I would be very grateful for the Minister’s observations on those points.

     

    In relation to the nature of these companies, we have looked at lower tests on dual use in the military sector and those involved in the design of computer chips and quantum technology. Certainly, our security concerns can be identified in other high-tech sectors, including life sciences and even food technology, as well as other areas of science and research. I would be very grateful to be told how the Government decided which sectors to select.

     

    In the context of the voluntary and mandatory reforms, what was the thinking behind the notion that you can divide those sectors into voluntary and mandatory? Certainly, the guidance the Minister talked about would be enhanced by giving a much clearer view on that.

     

    Finally—I do not wish to sound too mischievous, but I will ask this question anyway—does our reviewing the matter at this stage suggest that we may well take a different view over the long term, as these companies already fell within the threshold, or that we might be open to taking a different view on what took place in relation to ARM or even Hinkley Point?

  • Lord Fox (LD) 

    My Lords, I draw your Lordships’ attention to the interests registered in my name. I, too, thank the Minister for repeating the Statement in this House. He is of course right to declare that the UK economy should be open. All of us on these Benches earnestly hope that that is the way the Government continue to play it and that we do not start to close down and become a little England.

     

    The Minister also rightly highlighted the need for changes in appropriate safeguards. The world is changing very quickly, national security needs are changing and the Government are right to keep those under review, so this is a timely process.

     

    The noble Lord, Lord Mendelsohn, asked for a holistic approach to the whole issue of mergers and acquisitions. En passant, I add pensions to that list, which he did not include, because increasingly pensions and the rights of pensioners are becoming a driver within the mergers and acquisitions section.

     

    On the Statement, there is a powerful case for strengthening the public interest in takeovers, as, indeed our leader Vince Cable has argued regularly, most recently, I think, on the AstraZeneca case. However, while lowering the threshold is a welcome step, the Government’s proposals are narrow and do not add a great deal to the overall public interest element, which should be covered in a more holistic approach. In recent months we have seen several of the UK’s high-tech companies snapped up by foreign competitors. This has been exacerbated by the fall in the value of the pound. That is a regrettable outcome. Therefore, today’s inclusion of computer chips in the list of new technologies singled out is somewhat interesting given that it follows the much publicised acquisition of ARM, arguably the world’s best chip designer. That, again, was driven by the weakness of the pound. Perhaps the Minister agrees that there is an element of closing the stable door here. We wish that some of the measures we are discussing were in place at that time.

     

    The addition of quantum technology raises the question: why only that? Again, the noble Lord, Lord Mendelsohn, opened up a list of other technologies. I had biosciences and some aspects of IT and encryption on my list. It seems to me a rather narrow list when you consider the potential threats to a range of technologies. In some technologies, the threats have not been thought of yet but they exist. In our view the scope should be widened to defend not just the science base from a security point of view but also the overall knowledge base of this country. Knowledge can leak out from this country through a variety of means, of which mergers and acquisitions is but one. Joint research projects are another. In many cases you often have competing aims where inward development exercises try to draw foreign investors into research projects where the IP driver in this country would be to exclude some of those investors. In many cases, therefore, we are creating a situation that is leaking out valuable information —whether it is for security interests or economically valuable—through actions that the Government or local government are driving. Perhaps this is something that the Minister could look at. At the heart of this is the narrow look at security needs. These Benches would widen that to cover more economic interests of this country, and we hope the Government will take that on board.

     

    Turning to Bombardier, I am sure the whole House welcomes the announcement of this deal, which should protect the future of the plane-maker. Clearly, only a few days ago, we were discussing a very bleak future for the 4,000-plus workers and all of those indirectly involved in the economic area that it has created in Belfast, so this is good news. I said at the time that even though this is not a case that would, in the end, be won by Boeing, time was the issue that would kill off and affect Bombardier. This is a very effective way of trying to bridge that time and of negating that problem. We should all congratulate everybody who has been involved in expediting this so swiftly and effectively. I am sure there are “i”s to be dotted and “t”s to be crossed, and I hope the Minister will give assistance to all those who require it to make sure that happens. In that regard, will the Minister tell us what anti-trust hoops he expects this deal to have to jump through?

     

    We would also welcome some clarity from the Minister on what assurances have been forthcoming, both on investment and on the public statement made by the CEO, Tom Enders, on the notion that operations will be more efficient. What will be the job implications in both Belfast and perhaps in Broughton? What assurances have been given, and how will he be able to uphold them? In many ways, the US Administration and Boeing might feel that they have got off the hook somewhat by this, but there are still huge tariffs outstanding on this aircraft. The actions of the US remain a salutary warning to this country that its relationship with the Trump Administration is, at best, strained and poses something of a black cloud.

     

    In conclusion, today’s announcement takeovers and mergers sets out steps in the right direction. We welcome greater breadth in scrutiny and the requirement for notification. I am sure that, as the consultation process goes through, the Government will look at the technologies, and at which elements of which technologies we should be concerned about. I hope they will also take on board the public interest aspect in mergers and acquisitions.

  • Lord Prior of Brampton 

    I thank both noble Lords for their broad welcome for the news on Bombardier and the Green Paper. Turning first to Bombardier, both noble Lords would like further information about jobs, growth and possible anti-trust implications, but it is too early to say at the moment. This joint venture has only just been announced. It is still subject to negotiations between the two parties. Rather than hazard a guess at where they will come out, perhaps we should report back to the House when further details become clear.

     

    Turning to the Green Paper, both noble Lords would like a more holistic approach. The noble Lord was referring particularly to the takeover context, and he is absolutely right. Pensions are absolutely essential in that context, as are environmental obligations and the like. The noble Lord, Lord Mendelsohn, referred more to a holistic approach in the context of industrial strategy more generally, rather than specifically on takeovers. He will have to wait until later in November, when we will announce our industrial strategy. I hope he will agree, when that strategy is before him, that it is a holistic, joined-up approach to industrial strategy.

     

    I will deal with some of the other issues that both noble Lords raised. Of course foreign direct investment is essential. There is a balance; we want to be open to foreign direct investment—the last thing we want to create is a chill, as the noble Lord put it, on investment coming into this country. Although it is absolutely true that a number of high-tech British companies have been sold over the last two or three years, particularly to American buyers, in the vast majority of cases those American companies have brought capital and support. I refer, for example, to Google’s acquisition of DeepMind; it has put huge resources behind that company which might not have been there had it remained a private British business. SoftBank’s acquisition of ARM falls into that category as well; it gave a number of important undertakings about research and keeping that research in the UK. Therefore, there is a balance to be struck in these areas and the last thing we want to do in this country is shut ourselves off from investment from the US and elsewhere. If one looks at how we support small tech companies, it raises a much broader issue about patient capital, spin-outs from universities and the like. I hope we will deal with those issues when we come to our industrial strategy in a few weeks’ time.

     

    Both noble Lords raised whether the definitions of quantum computing chips and dual-use defence were too narrow. They will, no doubt, want to comment on that issue in the consultation. We have gone for quantum computing and chips in particular because they are often embedded into infrastructure and safety-critical areas. Quantum computing is precisely the area where cybersecurity is so important; we can use it to break complex encryption codes and the like. We felt, having done a lot of consultation, that those areas of chips and quantum computing were the critical ones. I understand the noble Lord’s point about life sciences; there may be other areas that he would like us to consider as part of the consultation. In general, however, this is a question of balance and where we draw the line. We can always argue about the balance, but I am reassured that we have not got it too far wrong when both noble Lords broadly support what we are doing.

  3.37 pm 

  • Lord King of Bridgwater (Con) 

    In general, I welcome my noble friend’s announcement that the Government intend to act in this area. However, I have one concern. In consulting on possible amendments to the international investment arrangements, we notice what happened when the pound suddenly weakened and overseas investors took the opportunity to take over UK companies. I worry about what will happen in the interim, before any new changes are made. I have felt for some time that these changes need to happen, and if companies see that the rules may change for them quite soon, we may find that it pre-empts people into taking action now.

     

    I also note from his Statement that the Secretary of State has been busy, helpfully, talking on the telephone to Airbus and Bombardier. I suggest that he makes one more telephone call to the chairman of Boeing, to say that that great company, which we much admire and with which we in this country have had very good relationships hitherto, has not been helped at all by this unfortunate action it has taken. The best thing it could possibly do now, in recognition of the complications it has introduced, is to withdraw the action it has taken and enable the companies to go forward in this new arrangement, which I greatly welcome.

  • Lord Prior of Brampton 

    My noble friend makes two important points. On Boeing, I cannot swear to it, but I think the Prime Minister has spoken to Boeing directly about this issue. Certainly, my right honourable friend Greg Clark, in the other place, is also in touch with Boeing. Boeing has two big investments in this country, which relate to helicopters and to a new facility it has opened in Sheffield, so it is an important part of our economy. I assure my noble friend that we are having conversations of the kind that he describes with Boeing. I understand my noble friend’s point that this consultation might lead to some companies pre-empting this and coming forward to buy a British company now rather than later. We have considerable soft power in these areas, so we can use quite a lot of influence behind the scenes to prevent that happening. But we certainly need to bear that consideration in mind.

  • Lord Spicer (Con) 

    My Lords, if this is genuinely about defence, that is one thing, but if it is going to be part of some sort of more protectionist policy, that will not sit well with Brexit. I am not sure what the word “holistic” means in this context but I am suspicious of it. Actually, we should particularly encourage large-scale projects that people get worried about because, once you are into a large-scale project, you cannot get out of it.

  • Lord Prior of Brampton 

    My Lords, my noble friend is absolutely right that foreign direct investment into this country is essential. For example, Hinkley Point power station is funded largely by the French and the Chinese. We are absolutely open to investment from all over the world, so there is no intention at all of discouraging foreign direct investment coming into this country—on the contrary. I think that we are the third biggest end point for foreign direct investment after the Chinese and the Americans, and there is no intention of harming that. As far as the word “holistic” is concerned, I think that the noble Lord meant “joined-up government”; it was not in any way directed at some conspiracy to prevent investment coming into this country.

  • Lord Howell of Guildford (Con) 

    My Lords, I particularly welcome the better news about Bombardier. Having, ages ago, been the Minister responsible for inward investment into Northern Ireland, I can confirm that the engineering skills legacy of Belfast and indeed of Northern Ireland is colossal. From the days of Short Brothers and Harland and Wolff, when I was involved right down through the years, there has been a highly innovative and skilled operation, and I am very glad that it will be preserved and encouraged with further investment, as it should be.

     

    On inward investment generally, I agree with my noble friend and the noble Lord, Lord Mendelsohn. We have to be a bit careful. We rely on heavy capital and inward investment to balance the books in this country and compensate for our colossal trade deficit, and we need to avoid any implication that we are somehow turning against being an open house for most inward investment, although there obviously have to be some safeguards. Can my noble friend reassure us about one area that he mentioned—civil nuclear power? The nuclear scene is dominated by both foreign ownership and foreign inward investment and support, not least for Hinkley Point C, which will survive and prosper only with heavy Chinese help and involvement. Can he assure us that nothing that has come out today will get in the way or cause further disruption of our already rather difficultly placed nuclear programme? It is not going well now and will go even worse if we cut out foreign investment.

  • Lord Prior of Brampton 

    My noble friend makes a number of very good points. First, as he rightly says, the 4,200 people who work at Short Brothers have some outstanding, world-class engineering skills, and the fact that Bombardier and Airbus have come to this agreement is extremely good news for all of them. Secondly, as far as civil nuclear power is concerned, he is absolutely right. Hinkley depends on Chinese investment, as indeed do many economies throughout the world. I think that it would be very foolish of us to be at all concerned about the Chinese investing in our civil nuclear power industry. The Chinese will probably build 150 nuclear power stations in their own country over the next 10 years, and they will unquestionably be among the world’s best when it comes to building and operating nuclear power plants. We should take the fact that they are investing in the UK as a very good thing.

  • Lord Lea of Crondall (Lab) 

    My Lords, does the Minister agree that Boeing has for many years been a classic example of indirect support of the military-industrial complex—to use General Eisenhower’s phrase—in the United States through defence expenditure, R&D and so on, and that the same applies to high-tech industries generally? Therefore, is it not a fact that we have to scrutinise matters very carefully and take a robust view of our long-term strategic interest when it comes to the arguments that keep flying around across the Atlantic?

  • Lord Prior of Brampton 

    The noble Lord is absolutely right. Boeing has been hugely supported by the American defence industry since the Second World War at least. He is right that we should vigorously defend any claims that Boeing has against the British Government’s support of Bombardier in Northern Ireland.

  • Lord Lansley (Con) 

    My Lords, I want to ask my noble friend about the extent to which the proposals in the Green Paper, which I confess I have not yet had the chance to read, are aligning the public interest test for national security purposes with the export control regime. My recollection from serving on the quadrilateral committee in another place is that national security was not the only consideration for export controls; other considerations also applied, including our international and human rights obligations. However, my noble friend’s Statement said that this is targeted firmly at national security. Do we intend to reinforce the export control regime in toto or simply the aspect of it that relates to national security?

     

    Forgive me, but if I may, I will also ask: while the Government are pursuing amendments to the Enterprise Act on the public interest intervention, will they also make progress on updating the public interest test on media plurality, which was foreshadowed in the debate here on the Digital Economy Bill in the last Session? It needs to be substantially updated to reflect the changing media framework to which that media plurality is applied.

  • Lord Prior of Brampton 

    My noble friend has asked me two questions and I am not sure whether I can do them full justice. On his first question about the export control regime, it is true that the £70 million test will come down to £1 million for companies that are subject to the export control regime. I assume that those companies would, by definition, be concerned with national security issues. In so far as they are not, I will have to write to my noble friend on that point.

     

    I will also have to take further advice on his second question. At the moment, there is no intention to extend the Green Paper consultation to media plurality, but I will double check that and write to my noble friend.