Sir Julian Lewis: It is clear from the opening contributions of both Front Benchers that there is a considerable degree of common ground on this legislation, and I would like to congratulate both of them on the way they have made their presentations. The Intelligence and Security Committee strongly welcomes the National Security Bill. The Committee has long called for reform of the Official Secrets Acts regime and highlighted the grave dangers posed by hostile state actors to the UK’s national security. Most recently, as we have heard, the ISC's Russia report of 2020 made it clear that the Official Secrets Acts regime was outdated and not fit for purpose. It recommended that new legislation be urgently introduced to provide new tools to help our law enforcement and intelligence community, who work tirelessly to defend the UK’s national security.

The Bill modernises the Official Secrets Acts espionage regime and creates important new offences such as sabotage, foreign interference and assisting a foreign intelligence service. As recommended in the ISC’s Russia report, the Bill also creates the long-awaited foreign influence registration scheme. That must be a cause of particular satisfaction to the Minister for Security, my right hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), who strongly promoted that policy during his very successful term as Chair of the Foreign Affairs Committee.

Together, these changes will increase the transparency of those threats and help to make the UK a more difficult operating environment for foreign intelligence services to act. They will help to deter hostile foreign powers from undertaking harmful activities and disrupt them at a much earlier stage. There have been several justified concerns about the way in which the Bill was handled, but after considerable scrutiny, especially in Committee and in the upper House, it has been greatly improved.

Theresa Villiers: I very much agree with everything my right hon. Friend has said. Does he agree that we will need to look at further reform of the Official Secrets Act 1989 in order to complete the excellent reform process in this Bill?

Sir Julian Lewis: I am extremely grateful to my right hon. Friend, a fellow member of the Committee, because that is one of the points I am about to come to and it is good to have it reinforced by someone with her status and experience.

We were very engaged in the legislation and three members of the Committee formed part of the Commons Bill Committee. Since then, the Committee has considered classified information on behalf of Parliament from the Government and held constructive sessions with the intelligence community to explain the rationale behind important parts of the Bill, such as clause 31 as it now is – it was previously clause 28. We have focused on ensuring that the Bill is as effective as possible in providing the intelligence community and law enforcement with the required tools while incorporating the necessary safeguards.

Martin Docherty-Hughes: The right hon. Gentleman is highlighting what he sees as benefits, but does he agree that clauses 85 to 88 will mean any British Government could avoid paying damages in cases where the secret intelligence services have arbitrarily handed a UK citizen into the detention of a friendly state that goes on to torture them? Surely being liable for playing a part in the torture of a UK citizen is not a good way to do intelligence.

Sir Julian Lewis: My understanding of the legislation – someone from the Intelligence and Security Committee is due to speak after me [Sir Jeremy Wright] who has a better perspective of the detail of this than I have – is that there are safeguards against anything that could possibly be used to justify or facilitate torture. This was debated in considerable detail in Committee, and I am concerned that the hon. Gentleman, for whom I have a great deal of respect from our time together on the Select Committee on Defence, still feels that the safeguards may not be strong enough. Perhaps we will hear from him later.

We are pleased to see that the Government have incorporated various changes recommended by members of the Intelligence and Security Committee, including on strengthening the Bill’s independent oversight provisions and replacing the “exemption” under clause 21 with an improved “defence”, with stronger safeguards and accountability provisions.

As my right hon. Friend the Member for Chipping Barnet (Theresa Villiers) flagged a moment ago, there has been a missed opportunity, namely the failure to reform the 1989 Act. As the ISC has said since the Bill’s introduction, it does not go far enough, despite reforming the espionage regime under the OSA, because it fails to reform the 1989 Act, as both we and the Law Commission recommended. That is despite a previous Government commitment that reforming the 1989 Act would be a key part of the Bill. This means the problems with the 1989 Act, which the Government have already acknowledged, will persist. Among those problems is the requirement to prove that damage has been done by unauthorised disclosures, which acts as a barrier to prosecution because showing that disclosures have done damage risks increasing the damage.

The recommendations include increasing the two-year maximum sentence, which we feel is clearly insufficient to deter or to respond to the most serious unauthorised disclosures. Will the Minister commit to introducing legislation to reform the 1989 Act in this or the next parliamentary Session? I would like an answer either now or at the end.

Bob Stewart: The problem is that classified information sometimes has to be used to prove something like this, and it is just not acceptable to use classified information in an open court.

Sir Julian Lewis: My right hon. and gallant Friend underlines my point, which is that, in proving damage has been done, the mere fact of displaying why something has been damaging can increase the damage and adverse impact by many multiples.

Both Front Benchers focused on Lords amendment 22, on foreign interference in elections, and Lords amendment 122, on the duty to update the MOU of the ISC. Like Admiral Lord West, who spoke in favour of Lords amendment 22 on the ISC’s behalf, I firmly support the introduction of the proposed new clause, which would help to increase the transparency and accountability of our political system. The ISC’s Russia report of 2020 recognised that the UK has clearly welcomed Russian money, including in the political sphere. It found that several members of the Russian elite with close links to Putin have been identified as being involved with political organisations in the UK, including by making large donations to political parties. That clause would require a UK-registered political party to create a policy statement, and to provide the Electoral Commission with an annual statement of risk management, identifying how risks relating to donations from a foreign power are being managed to ensure such donations are properly identified. This should not be controversial, and it is still not clear, despite the Minister’s best efforts, why the Government would wish to oppose that clause. Indeed, the Government said in the other place that the current electoral finance legislation is sufficient.

Several Lords also noted that, unlike companies or charities, political parties do not have to examine the source of the funds they receive. As those Lords explained, that means it is perfectly possible for companies to make significant donations to political parties despite clearly not making operating profits – so with limited explanation of how they can afford such donations or where the money comes from. That means that, unlike companies and charities, there is no enhanced due diligence even when a donor is operating from a high-risk country listed in terrorism-financing or money-laundering legislation.

As was also suggested in the other place, incorporating this modest amendment would mean that political parties develop a culture of knowing their donor, just as companies, particularly financial and legal entities, are required to know their customer. It is entirely appropriate for political parties to do more to determine the source of donations. The additional measures proposed would not be over-onerous. Lords amendment 22 is eminently reasonable, and it should not be controversial for political parties to want to ensure the transparency of their foreign political donations. We must protect against covert, foreign state-backed financial donations if we are to defend our democratic institutions from harmful interference and influence.

Alison Thewliss: I absolutely agree that we should be guarding against this. Does the right hon. Gentleman agree there is also a problem with incorporated associations that donate money? It is very difficult to trace where the money has come from, despite the efforts of organisations such as openDemocracy.

Sir Julian Lewis: I agree that it will always be difficult to man the defences sufficiently against people who apply great ingenuity and unscrupulousness in finding their way around such defences. Perhaps we should bear in mind – I say this in the context of British politics, rather than anywhere else – that, so long as we have an adversarial political system, parties that accept what we might dub “dirty donations” will be found out if their opponents are doing their job properly; or if they are not absolutely proven to have accepted money from unacceptable sources, they will still suffer general reputational damage that will not do them any favours when people cast their vote. It is very much in the interest of political parties to make sure their funds come from clean and acceptable sources.

In turning to Lords amendment 122, on the duty to update the Intelligence and Security Committee’s memorandum of understanding, I can almost hear an under-the-radar groan in the Chamber because this subject keeps coming back in one Bill after another. It featured prominently during our consideration of the National Security and Investment Act 2021, and I fear this will continue until the matter is resolved. People might be forgiven for saying, “Isn’t this all a bit unimportant, a bit introspective and a bit self-regarding of the Intelligence and Security Committee?” In our defence in insisting that the matter needs to be sorted out, I quote none other than Lord Butler of Brockwell, who, as Robin Butler, was one of the most revered Cabinet Secretaries in recent political history. In the debate on the matter in the House of Lords, he said that “the consequence” of the way the Government have been behaving

“is that in recent times the Intelligence and Security Committee of Parliament has not been used for the purpose for which it was set up.

If the Government are not going to use the Intelligence and Security Committee properly, they should save money and abolish it. But, of course, they will not do that because Parliament set it up, Parliament thinks it is important that this House and the House of Commons should have some insight into intelligence operations, and it would be unacceptable for the Government to abolish it. But they must choose either to abolish it or to use it properly. If they are to use it properly, they must update the memorandum of understanding and, as the noble Lord, Lord West, said, use it for the purpose for which Parliament intended: to give oversight by people who are fully screened within the ring of secrecy to report to Parliament. I think this is a much more important amendment than the face of it suggests.” – [Official Report, House of Lords, 7 March 2023; Vol. 828, c. 745-46.]

When someone of Lord Butler’s stature makes those remarks, we can be justified in continuing to focus attention on this matter.

Sir Jeremy Wright: Does my right hon. Friend agree that one curiosity of this debate is that earlier this afternoon the Minister referred with approval, as did the shadow Minister, to the ISC’s work in attempting to seek a resolution of the problems we all found with clause 28? Does that not demonstrate that the ISC’s remit matters because, if nothing else, the Government sometimes find it a useful institution to help to resolve this kind of problem?

Sir Julian Lewis: Absolutely. My right hon. and learned Friend is far too modest to say that his input, as a former senior Law Officer of this country, to the changes that were made was of extreme importance and assistance to the Government.

Bob Stewart: In short, we have to revise the MOU because at the moment we on the ISC cannot do our job properly and it is a job that everybody in this Chamber wants us to do.

Sir Julian Lewis: I am grateful for that strong support. It should not have been necessary for people in the upper House to bring forward a legal requirement to update the MOU. For the benefit of people not buried in the intricacies of these arrangements, let me say that the MOU means that at any one time an exchange of letters between me, as the Chairman of the ISC, and the Prime Minister can modify the range of organisations that the ISC has the right to scrutinise. As we will be hearing in a few moments, that is because when that arrangement was initiated, it was recognised that from time to time changes in the structure of Departments mean that different parts involving classified intelligence-related activities would pop up here and there in different Ministries, so we would need an ability to adjust the MOU to approve our scrutinising the classified parts of those activities. That is precisely because ordinary – I know that my colleague on the Front Bench does not like my using that word – departmental Select Committees are not able effectively to scrutinise highly classified material in any systematic way. If they were, it would not have been necessary to set up the ISC in the first place.

Owen Thompson: As a relatively new member of the ISC, I am finding it extremely perplexing to try to understand why the Government have such a resistance to updating the MOU. Does our Chair agree that it would be particularly useful if the Minister gave his commitment to backing the Committee’s calls to update the MOU, using his good offices, and to trying to move that forward as quickly as possible? Like others, I can find little understanding of why the Government would be so resistant to doing that.

Sir Julian Lewis: I am very grateful for the hon. Gentleman’s support and I take this opportunity to pay tribute to both him and his predecessor for making an extremely valuable and valued contribution to the Committee. We draw such authority as we have from the fact that party politics does not enter into our work. I think I heard the Security Minister say that he accepted that the MOU needs to be updated—

Tom Tugendhat indicated assent.

Sir Julian Lewis: I see that he is nodding. Should he wish to elaborate on that a little more, that would be even more welcome.

I had better move on, because we are in a time-limited debate and I still have a little way to go. Let me set out the background by saying that the new clause proposed by Lords amendment 122 would update the ISC’s remit to ensure that it has the power effectively to scrutinise intelligence and security activity that takes place across Government under the new national security regime, not just in the seven organisations already listed in our MOU. The MOU sits under the Justice and Security Act 2013, and it outlines our remit and the organisations that we oversee. That encompasses the expenditure, administration, policy and operations of the agencies and four other organisations that currently form part of the UK’s intelligence community.

Given the national security focus of the Bill, the ISC already has the power to oversee much of the intelligence and security activity that will take place under the new regime through its oversight of those seven organisations. However, as we have made clear in our most recent annual reports, which were cited by the shadow Security Minister, intelligence and security activities are increasingly being undertaken by a wider collection of policy Departments, including those that generally do not carry out national security- related activity, such as the Department for Business, Energy and Industrial Strategy, the Department for Digital, Culture, Media and Sport, and the Department for Transport. Those teams are not currently listed in our MOU, simply because at the time it was drafted, in 2013, they were not responsible for any intelligence and security work. Had they been, Parliament would have included them in the ISC’s remit, as is clearly indicated by the commitments given to the House during the passage of the 2013 Act by the late and much-missed James Brokenshire, the then Security Minister.

All this means that the ISC’s MOU needs urgent updating. In the meantime, effective parliamentary oversight of intelligence and security matters is being eroded. Lords amendment 122 is therefore essential, as it will help to reverse the increasingly large gap that has emerged in Parliament’s ability effectively to oversee intelligence and security activity.

Effective oversight of intelligence and security matters can be undertaken only by the ISC. Select Committees do an excellent job scrutinising their Departments, and we have no wish to duplicate any of their work, but only we have the security infrastructure effectively to scrutinise those aspects where classified material, such as intelligence, underpins decisions on national security. The importance of this difference is obvious. For example, during the passage of this Bill, when the Government were unable to provide publicly the detailed rationale and case studies underpinning clause 31 to Parliament, due to its classified nature, the material was provided instead to those on the ISC, who were then able to scrutinise it on Parliament’s behalf. That enabled us to understand the problem and make recommendations for change, leading to a much improved “defence”, with the necessary safeguards, in place of the previous unsatisfactory “exemption.”

I have almost concluded, so I will just make the following few additional remarks. This could not have been achieved without the ISC, because Select Committees cannot provide effective oversight of classified matters. This is no reflection on the ability of Select Committees, which provide robust oversight on all other matters. The Government provided a clear undertaking to Parliament during the passage of the Justice and Security Act 2013, when the then Security Minister told Parliament that it was

“the intention of the Government that the ISC should have oversight of…all of central Government’s intelligence and security activities to be realised now”–

which was then –

“and in the future” – [Official Report, Justice and Security Public Bill Committee, 31 January 2013; c. 98.]

which is now.

It was clear that the MOU was designed to be a living document that could be updated to reflect any changes to the security and intelligence activities being undertaken by the Government. Yet the Government have repeatedly failed to meet this commitment, which indicates a worrying lack of appreciation of the importance of comprehensive oversight of intelligence and security matters. As the ISC set out in our annual report, the then National Security Adviser relayed the Government’s position that they did not feel bound by statements made by the then Security Minister in 2013 during the passage of the Justice and Security Act.

To conclude, if the Government will not ensure that the ISC’s memorandum of understanding is kept updated – and they have not been ensuring that – each piece of new legislation devolving intelligence and security matters away from the bodies already overseen by the ISC must come with a commensurate expansion to that MOU. I know that this is not the Minister’s fault. I speak to Minister after Minister – I am not saying anything about this particular one – but Ministers do not seem to understand why this keeps happening. I just wonder where exactly in the Government machine this necessary change that was always envisaged in the ISC system is being blocked.