7The societal implications of quantum technologies
97.As with most new technologies, quantum technologies present a variety of potential benefits and risks to society. This Chapter explores what these are, and considers ways in which they can be managed.
Potential societal impacts
98.The applications described in paragraphs 9 to 15 of this Report illustrate the potential for quantum technologies to benefit society across fields as diverse as medicine, construction, transport or telecommunication. Indeed, Professor Sir Mark Walport, Chief Executive of UK Research and Innovation, told us that there is “hardly any sector that does not have the opportunity to benefit” from quantum technologies.279 This variety of potential uses, as well as the success of the first generation of quantum technologies, provides some of the optimism for the potential of the next generation. In 2016, the Government Office for Science estimated that altogether, quantum technologies could grow to be comparable to the consumer electronics manufacturing sector, then worth £240bn per year worldwide.280 Although the Quantum Technology Hub for Sensors and Metrology cautioned that the “diversity and the underpinning nature of [quantum] technology makes predictive quantification of market size challenging”,281 we heard widespread agreement that the market potential for quantum technologies was substantial, whatever precise value it might finally cover.282
99.Professor Hensinger added that, beyond widespread technological applications, an additional societal benefit from research into quantum technologies is its unique ability to inspire young people to take an interest in science, technology, engineering or mathematics subjects:
When I was young, there was a space programme. It was on the back of breakfast cereal packages, and, to be honest, the reason I am here is that I wanted to be the science officer on the Enterprise. With quantum computing, I now see a very similar thing.283
100.As with any new technology, there are, however, potential risks as well as opportunities. For example, the Royal Academy of Engineering told us that quantum technology could increase the speed and capacity of data analysis, and that “by accelerating the scope of artificial intelligence there will be positive and negative societal implications across the areas of health, security, privacy and equality”.284 The Networked Quantum Information Technologies Hub noted that quantum sensors, such as small, accurate navigational devices, could “open up opportunities for innovative personalised services, but at the same time create new risks related to monitoring, profiling and social control”.285 Several witnesses, including UKRI, told us that the societal implications of quantum technologies would develop similarly to other technological advances and could mostly be managed through existing regulatory frameworks.286 However, Professor Knight told us that quantum technology was “a revolutionary cross-sectoral technology, the deployment of which will have an impact on society as great as the digital revolution”.287 The Networked Quantum Information Technologies Hub made the point that “it is still very early to assess the most likely applications for quantum information technologies”.288 It noted, however, that if certain quantum technologies did provide dramatic improvements in capability but at high initial cost, then this could led to potentially problematic concentrations of power among the few organisations with access to such technologies.289
101.One particular issue was the anticipated ability of quantum computers to undermine conventional digital security methods.290 Currently, when sensitive digital information is communicated between two points, it is usually protected by being transmitted in an ‘encrypted’ form.291 A mathematical ‘encryption key’ is used to convert the information into a format that can only be meaningfully interpreted by being converted back to its original form using a corresponding ‘decryption key’. The calculations that are required to be able to break such encryption methods would take conventional computers millions of years to complete but could rapidly be performed by a quantum computer.292 The Government Office for Science has warned that the development of a quantum computer large enough to be able to easily crack cryptographic defences in this way would have “such serious consequences that it is sometimes called the crypto-apocalypse”.293 Professor Knight warned that this problem needed to be taken seriously:
We have to assume that the encryption we use to secure the Internet will fail within the decade […] All the things we do when we use [standard Internet security methods] for secure engagement—trading, commerce, entertainment and securing our own identity—have to be rolled up in a replacement within a decade.294
However, he indicated that the Government, industry and academia had started work on replacement systems that would be safe from quantum computers, which he was confident would avert the potential security risk “provided […] that we do not lose our nerve on the funding of the National Programme”.295 Professor Tim Spiller, Director of the Quantum Communications Hub, explained that there were two broad approaches to protecting encrypted information from attack by a quantum computer:
- sensitive information could be sent using quantum communication technologies that guaranteed detection of any interception of the message (see paragraphs 12 and 13 of this Report); or
- the conventional mathematical techniques used to encrypt information against attack from existing computers could be replaced with “evolved” techniques that sought to be immune from attack by conventional and quantum computers.296
Professor Morton agreed that, despite its high profile, the problem of digital security was unlikely to pose an insurmountable challenge.297 However, he qualified that:
Better awareness in industry that [standard Internet security methods] will be broken over the coming years is important, and I do not think that people are sufficiently aware of that. We should do more to support the adoption of post-quantum methods, and increasing awareness of those methods.298
102.Professor Spiller warned that future quantum computers already posed a threat to data that requires long-term security since “information that is sent encrypted at the moment can be stored and decrypted in the future”.299 Examples of such data included information relating to national security, medical data and other personal information. Professor Spiller told us that although neither of the two approaches to providing protection against quantum computers were yet ready for large-scale deployment, the security community would be “well positioned” to implement them once quantum communications technologies were more commercially viable and the development of mathematical methods for quantum-safe encryption were more advanced.300 On the latter point, he highlighted a competition administered by the US National Institute of Standards and Technology aiming to determine new, standardised methods for providing digital security that would be safe against conventional and quantum computers, which he said he expected to conclude in 2019.301
103.As with most new technologies, quantum technologies present a variety of potential benefits and risks to society. The future development of quantum computers could undermine the methods currently used to keep sensitive digital information secure. If the encryption methods used to secure communications over the Internet and other systems were to become vulnerable, this would have significant economic and societal impact. Ongoing work, involving quantum communications systems and ‘post-quantum’ cryptography methods, is expected to be able to provide technical solutions to this problem. However, there is a concern that low awareness of the problem could hinder timely implementation of such solutions. The Government should monitor the development of potential solutions to the threat of quantum computers undermining digital security techniques, including the agreement of new security standards. It must ensure that the relevant organisations and businesses are aware of the problem and its solutions, and act to ensure the timely implementation of solutions required to guarantee the continuity of widespread digital security systems. The Government should continue to encourage and participate in international dialogue with like-minded countries to address these issues.
104.Although quantum communication systems that are immune to interception would enhance security when used for legitimate purposes, the same systems could undermine security if used to evade legal interception by law enforcement or security agencies. Professor John Morton flagged that it needed to be considered “whether un-hackable and un-interceptable communications are acceptable from a security perspective”.302 Citing a case in 2016 in which the American Government struggled to access data on a phone belonging to a terrorist, Professor Michael Pepper, representing the Royal Academy of Engineering, explained that “it is a problem with the present technology, and it will become a bit more severe when quantum cryptography enters the domestic arena”.303 Professor Spiller suggested that one way to ensure law enforcement agencies could intercept messages protected by future quantum communication technologies would be to maintain a system of “trusted nodes” within the communications network, points at which messages would transfer from one quantum communication system to another and hence temporarily lose their quantum-derived protection.304 The organisation operating the network would control access to the trusted nodes and could provide access to law enforcement or security agencies to allow them to intercept the messages in their unprotected state at these trusted nodes. Professor Spiller argued that establishing geographical points in the communications network at which quantum communication systems would not be applied would be more secure than purposefully designing vulnerabilities in the quantum communications systems themselves:
The moment you build a vulnerability into the system that can be unlocked then other people can unlock it too. It is better to do it with physical trusted nodes at certain places where you know you can access data.305
105.Beyond quantum communications technologies, Airbus told us that “quantum sensors would deliver the ability to identify submarines on the sea bed from an aircraft without global positioning systems”, and said that “this will be an essential sovereign capability supporting the defence of UK”.306 However, Dr Mark Bentall, Head of Technology Development and Innovation at Airbus Defence and Space, clarified that the same technology would also “clearly” pose a threat to the UK nuclear deterrent if other nations acquired the same capability:
Obviously submarines operate under secrecy, and that is one of their key capabilities. All the time that secrecy is maintained, their capability is maintained, but as soon as there is capability to sense clearly underwater, it is a significant problem.307
106.In response, the Ministry of Defence told us that “given the challenges of wide-area sensing in open-ocean conditions, it is unlikely that such [anti-submarine] capabilities will provide a radical change in capability in the medium term”.308 A workshop hosted by the National Quantum Technologies Programme, examining the implications of quantum technologies for defence and national security, similarly concluded that:
Although plausible in the future, [submarine detection] would require levels of sensitivity that are currently beyond the state of the art, and there are also operational requirements which would need to be overcome […] so that realising this in practice would be a huge challenge.309
The Ministry of Defence assured us that it “continues to identify, develop and assess technologies which can be used to both find and hide submarines”, with particular alertness to quantum technologies afforded by the department’s close relationship with the National Quantum Technologies Programme.310
107.Quantum technologies have important implications for national security as well as for economic prosperity. The Government must ensure that the second phase of the National Quantum Technologies Programme gives equal priority to benefitting the UK’s national security and its prosperity. There should be good co-ordination between military and civil aspects of future quantum technologies in all components of the second phase of the National Programme.
Responsible research and innovation
108.In order to manage the societal impacts of new technologies, the National Quantum Technologies Programme has adopted a Responsible Research and Innovation (RRI) framework, which UKRI told us was a “well-developed stream of work”.311 The Networked Quantum Information Technologies Hub reported in 2016 that “in comparison with RRI in some other areas of science and technology, there has been less attention, to date, given to quantum technologies”.312 The Hub has subsequently led the National Programme’s RRI activity since 2017.313 It has said that RRI should entail “a varied range of multi-level activities undertaken by multiple actors across the research and innovation lifecycles”, including:
- dedicated interviews and focus groups with researchers, led by RRI specialists;
- workshops addressing key issues, involving researchers and other stakeholders;
- production of technology and risk assessments;
- public engagement activities; and
- engagement with industry, civil society and other key communities.314
The Networked Quantum Information Technologies Hub’s director, Professor Ian Walmsley, told us that:
[The Responsible Research and Innovation framework] is intended to engage with publics of various kinds to understand how quantum technologies, in particular quantum computing, are perceived, and to inform the public about what we are undertaking and how the field is evolving worldwide.315
In keeping with this aim, a ‘public dialogue’ exercise was commissioned in 2017 that involved 77 members of the public, each of whom attended two day-long workshops that explored the participants’ knowledge, hopes and concerns regarding quantum technologies—one workshop held before and one held after an engagement activity with one of the National Quantum Technology Hubs (such as a tour of a laboratory and a lecture on quantum technologies).316 A report summarising the findings from this exercise concluded that there was low initial public awareness of what quantum technologies were, but that overall support for the development of quantum technologies grew as people’s understanding increased, provided that research was subject to proportionate governance mechanisms.317 In addition to the public dialogue exercise, the Hubs have hosted or participated in a variety of other public outreach events to raise public awareness of quantum technologies.318
109.The output of RRI-focused work beyond public engagement, however, seems less extensive. The Networked Quantum Information Technologies Hub is the only Hub whose latest annual report mentions any RRI activity other than public outreach.319 The Networked Quantum Information Technologies Hub’s annual report does list a varied RRI work programme involving or directed at researchers working on quantum technologies, including training workshops, conference talks and the development of online resources.320 The Hub has also published a white paper examining the RRI implications of quantum technologies for defence and national security, which it intends to follow with a paper on the implications for artificial intelligence.321 However, it is not clear what proportion of the UK quantum technologies research community this work programme reaches, or what requirement there is for all researchers to demonstrate that they have properly considered the potential societal impacts of their research. Indeed, Professor Walmsley painted a mixed picture of the extent to which RRI had become embedded in research culture:
It is certainly becoming part of the culture, but the scale of the programme and the focus of going beyond research to technology development has meant that we have had to change awareness among researchers, as well as among external partners, about what it means and its implications. People have begun to embrace and understand that.322
Professor Delpy, Chair of the National Programme’s Strategic Advisory Board, assured us that:
We have made sure that, as part of their programme description, all the researchers in the Hubs identify the potential social implications of their research. We are open about that and try either to address it or to put in place any mitigations that are needed.323
However, he told us that this work had not yet uncovered “any adverse impacts that we have had to address”.324
110.The Networked Quantum Information Technologies Hub’s 2016 review of responsible research and innovation (RRI) emphasised that “RRI is a shared responsibility”:
Scientists have a responsibility which comes from being in the forefront of research […] and from their special expertise, but governments, funders, industrial partners, and early adopters of technology have at least as large a role to play.325
Those working at or interacting with Innovation Centres will be focused on the development of quantum technologies for real-world application, and will therefore be well-placed to assist researchers in considering the potential societal impacts of different quantum technologies.
111.Public engagement is an important aspect of managing the societal impacts of new technologies, and we commend the National Quantum Technologies Programme for its work on this front. However, potential societal impacts must also be rigorously considered by experts working on the technology. The Networked Quantum Information Technologies Hub is producing white papers on the RRI implications of quantum technologies for different application areas. However, RRI activities in the other Hubs appear to focus almost exclusively on public outreach. Given the significant anticipated applications of quantum technologies, we are concerned to hear that the National Quantum Technologies Programme has not yet identified any potential adverse societal impacts that have had to be addressed.
112.The National Quantum Technologies Programme’s Responsible Research and Innovation (RRI) work should continue into a second phase of the National Programme. All of the National Quantum Hubs should identify an RRI lead responsible for co-ordinating RRI work across the Hub and to act as the primary point of contact for internal and external stakeholders on RRI matters within six months of this Report’s publication. Each Hub should publish a review of the potential societal impacts of quantum technologies in their sector within a year of this Report being published, to be updated annually. These reviews should contain summaries for policymakers, describing potential implications and outlining possible measures to maximise the potential positive impacts and mitigate any negative impacts. The drafting process for these reports should involve researchers at all career stages, and be supported through training, conferences and workshops.
113.Innovation Centres should contribute to the National Quantum Technologies Programme’s responsible research and innovation (RRI) programme of work. Each Innovation Centre should appoint an RRI lead, similar to those to be appointed at the Hubs. The Innovation Centres should be actively engaged in all relevant Hubs’ annual reviews of the potential societal impacts of quantum technologies.
114.In October 2018, the Australian Strategic Policy Institute, a defence-oriented think tank, published a report examining the problem of international research collaboration that could potentially threaten national security.326 It focused on the Chinese People’s Liberation Army’s supposed policy of “picking flowers in foreign lands to make honey in China”—the practice of sending Chinese researchers, often with an obscured military affiliation, to collaborate with universities in countries in the ‘Five Eyes’ network or in the EU in order to gain expertise in research areas of relevance to defence or national security that can then be taken back to China.327 The Australian Strategic Policy Institute noted that around 2,500 scientists had been sponsored by the Chinese military to travel to these countries as students or visiting scholars since 2007, with the number of scientific papers co-authored by Chinese military-affiliated authors and foreign authors rising steadily from 95 in 2007 to 734 in 2017.328 Using co-authored publications as a proxy for the extent of collaboration, UK institutions had the most engagement with Chinese military-affiliated researchers between 2012 and 2017.329 Quantum physics and its applications, such as in cryptography and navigation technology, were highlighted as fields in which this had been most prominent. In particular, the report warned that “while foreign universities’ ties with the People’s Liberation Army have grown, it isn’t clear that universities have developed an understanding of the People’s Liberation Army and how their collaboration with it differs from familiar forms of scientific collaboration”.330 The Australian Strategic Policy Institute made a series of recommendations in light of its findings, including:
- to raise awareness among universities and businesses of the potential risks of collaboration with scientists affiliated with the People’s Liberation Army, and how such affiliations may be masked;
- to ensure information sharing between defence, intelligence, export control and immigration agencies as well as among international partners regarding scientific collaboration with the People’s Liberation Army, in particular where there are any cases of deception;
- for robust scrutiny of visa applications by foreign military personnel; and
- to regulate scientific training given to foreign military personnel and regulate funding awarded for scientific collaboration with non-allied militaries.331
115.Concerns have been raised about the potential threats to national security arising from collaboration between UK researchers and researchers affiliated with foreign militaries. Training in the potential threats arising from collaboration with researchers affiliated with foreign militaries, and the methods that can be used to obscure affiliation, should be included as part of the National Quantum Technology Programme’s responsible research and innovation framework. In its response to this Report, the Government should set out what analysis it has made of the potential threat, what action it is consequently taking, what it expects of universities, businesses and other organisations with regards to managing collaborations with researchers affiliated with foreign militaries, and what support or guidance it is offering to universities to help them counter any potential threat.
Foreign direct investment
116.The 2015 National Security Risk Assessment identified growing risks to the UK’s national security, including:
- the resurgence of state-based threats and intensifying wider state competition;
- the proliferation and growing importance of technology; and
- the erosion of the rules-based international order, making it harder to tackle global threats.332
In 2017, the Government additionally stated that national security challenges “now exist in an increasingly complex international economic and political landscape, with greater interconnectivity of nations and ever greater flows of capital” and acknowledged that “foreign control of [UK] businesses […] increasingly raises national security concerns”.333 It has outlined a variety of ways in which foreign control of UK business could threaten national security:
- increased access to businesses, physical assets, people, operations or data could facilitate espionage;
- control over businesses, physical assets or intellectual property (such as the computer code used to run an asset) that provide a critical service could enable foreign entities to undertake disruptive or destructive actions or increase the impact of such action; and
- investments could be exploited to adversely dictate or alter services or ownership could be used as inappropriate leverage in other negotiations.334
117.The Enterprise Act 2002 allows the Government to intervene in “relevant merger situations”, in which two enterprises are brought under common ownership or control.335 Such control could consist of the acquisition of majority voting rights in an enterprise, but also more subtle situations of material influence, such as minority shareholdings, representation at board-level or certain financial or other arrangements.336 However, in 2017, the Government stated that it “[lacked] comprehensive statutory powers in relation to business ownership and control”.337 Correspondingly, amendments to the Enterprise Act 2002 were made by secondary legislation in 2018 to reduce the thresholds required for the Government to be able to intervene in mergers between domestic and foreign enterprises active in specific areas of the economy. Given the potential military uses of quantum technologies (as described in paragraphs 101 to 107 of this Report), these areas of the economy explicitly included “the development and production of quantum technology”.338
118.Despite these amendments, the Government has since repeated that:
The UK’s current powers to prevent or mitigate [hostile exploitation of acquisition of control or influence over UK entities or assets] are no longer sufficient in light of the risks posed by national security, technological and economic changes.339
The Government has therefore proposed new primary legislation to reform the powers it has for preventing hostile actors from using ownership of, or influence over, businesses and assets to harm national security.340 The proposed legislation is based on a consultation that the Government held in 2017, which set out three potential options:
- an expanded set of business transactions that the Government could “call-in” for review, to examine on national security grounds;
- a mandatory notification regime for foreign investment into the provision of “essential functions” in the economy (for example in the civil nuclear and defence sectors, or in specific businesses, assets or projects); or
- a combination of the two.341
The Government reported that the consultation revealed “narrowly, more support for an expanded call-in power rather than a mandatory notification regime” with “very little support for the combined option”.342 There were two principal arguments against a mandatory notification regime.343 First, a mandatory approach would require clear definitions of which transactions would require notification, which it was felt would provide less flexibility in the context of a rapidly changing environment and would require frequent amendments to the regulations setting out the scope of the notification regime. Second, the notification and screening processes involved in a mandatory approach was felt by some to represent an unreasonable burden, for businesses as well as the Government, especially given the very small proportion of business transactions that are expected to have any impact upon national security.344 The combination of an expanded call-in regime with a mandatory notification requirement was felt to involve the burden to business and Government of a mandatory regime without reducing the uncertainty for business over which transactions could be called-in by the Government (given that the mandatory notification requirement was intended to apply only to a subset of the expanded transactions liable to be called-in).345
119.The Government therefore pursued a voluntary notification regime in its proposed legislation, which set out plans to:
- remove the thresholds on the turnover of the acquired company and the share of market supply of the merging enterprises required for the Government to be able to intervene;
- reduce the threshold on the percentage of voting rights that the acquiring enterprise has following the transaction, from 50% to 25% (although the current and proposed regimes both recognise other ways in which influence can be gained, beyond shares or voting rights);
- broaden the scope of the legislation to include the acquisition of influence over “entities” rather than just “enterprises”—entities will not be defined exhaustively but an indicative list will be published; and
- expand the scope of the legislation to include the acquisition of shares of, or influence over, “assets” (defined as real and personal property, intellectual property and contractual rights).346
120.Although the responses to the consultation favoured, narrowly, an expanded call-in regime with no mandatory notification requirement, the majority of the consultation respondents represented business interests rather than national security interests.347 Whereas some representatives of the business community have expressed concern at the level of Government interference permitted under the proposed legislation, the Royal United Services Institute, a defence think tank, has raised concern at the current framework and suggested that “it would make sense to require self-reporting by British companies in sensitive sectors, over a certain financial threshold, [to make] the job of monitoring easier”.348 The Government’s consultation document highlighted that “a reliance on voluntary notification or use of the call-in power […] carries the risk that the Government may be unaware of transactions that could raise national security concerns”,349 but the Government’s summary of responses made very little reference to this issue.350 The Government’s proposals for the new regime set out relatively little detail about how the Government intended to ensure that it becomes aware of all transactions that could threaten national security in time to review them, stating only that:
In order to ensure it becomes aware of trigger events (or potential trigger events) that may raise national security concerns, the Government will increase its resources dedicated to ‘market monitoring’ and invest in the tools and systems necessary. This additional resource will also ensure that parties, if unsure about the Government’s national security interest, can engage informally with officials at an early stage in their proposed trigger event.351
In an exchange of correspondence, Richard Harrington MP, Parliamentary Under-Secretary of State at the Department for Business, Energy and Industrial Strategy, told us that whereas “mergers relating to publicly listed companies are announced to the market”, for mergers involving private companies, the Government “may become aware [of the merger] either because it was notified by the Competition and Markets Authority, the company itself, or through other sources such as departmental relationships with the relevant sector or press reporting”.352 We note that of the countries reviewed by the UK Government in considering its options (the USA, Canada, Australia and France), all bar the USA operate a mandatory notification regime.353
121.We agree with the Government that, although foreign investment in the UK is almost always benign and welcome, there is the potential for certain transactions that increase foreign influence over British entities to pose significant threats to national security. We recognise the Government’s desire to avoid placing undue burden on businesses in its new regime for national security and investment. However, we are concerned that a voluntary notification regime leaves the Government unable to guarantee that it will be aware of all potential transactions that could threaten national security. The Government’s consultation on this matter reported only a narrow preference against a mandatory notification regime, and did not appear to incorporate the views of the national security community. The consultation also reported little support for a combined approach, which was felt to involve the costs of the mandatory regime without providing the certainty to businesses of a purely mandatory regime. However, the costs would be limited and greater certainty would be provided if the mandatory notification regime applied to a sufficiently well-defined area of the economy. Following amendments to the Enterprise Act 2002, enterprises that research, develop, produce or supply services involving quantum technologies are already subject to a stricter foreign investment regime than most other enterprises.
122.In addition to the voluntary regime for national security and investment recently proposed by the Government, we recommend that the Government establishes a mandatory notification regime for enterprises researching, developing, producing or supplying services involving quantum technologies, when they are first approached by foreign entities with offers of investment fulfilling the criteria under which the Government can currently intervene under the Enterprise Act 2002. The sanctions for not reporting a relevant merger should include criminal offences, civil financial penalties and ‘director disqualification’. The National Quantum Technologies Programme, through the Hubs, Innovation Centres, new national quantum computing centre and training programmes, should raise awareness of, and provide guidance on, the mandatory notification requirements. The Government should also ensure that there is capacity within the National Programme for the provision of advice to relevant enterprises when specific cases arise.
123.Acknowledging the fact that, under a voluntary notification regime there may be “instances where the Government only becomes aware of a trigger event that raises national security concerns after it has taken place or has completed”, the White Paper’s proposals provide for the Government to be able to retrospectively call in a trigger event for review within a set period after the transaction itself has occurred.354 The proposed period for this is six months, which the Government itself notes is considerably shorter than the equivalent period under comparable regimes internationally (including those in Germany, Australia and the USA).355 The White Paper states the Government’s opinion that “it is important that the prescribed period is not unnecessarily lengthy, in order to reduce uncertainty for parties to a trigger event”, but it does not provide any justification for this period to be significantly shorter in the UK than in other comparable jurisdictions. Responding to our enquiries, the Business and Industry Minister simply told us that “each [of the other international regimes] has been developed under a different legal framework, while some are based on voluntary notification and others on mandatory notification”.356
124.In situations that would be subject to a voluntary notification regime (for example where enterprises do not work with quantum technologies, or where transactions involving enterprises working with quantum technologies fall outside of the merger situations covered under the Enterprise Act 2002), it is possible that the Government will learn of a transaction that threatens national security after the transaction has completed. It is important that the Government is still able to act to protect national security in these cases. A time limit within which the Government could retrospectively intervene once it learns of a transaction would also incentivise enterprises who consider a transaction to be a potential threat to national security to notify the Government of it, without impacting upon enterprises involved in transactions that are clearly of no threat to national security. The Government’s proposed legislation includes such a period of six months—significantly shorter than the duration of equivalent periods in comparable regimes in other countries. The fact that equivalent periods are significantly longer across a diversity of comparable international regimes appears to be an argument for the UK to adopt a longer period, rather than, as the Business and Industry Minister suggested, a reason to not.
125.We recommend that, wherever the proposed voluntary notification regime applies, the Government increases the period in which it can retrospectively intervene in business transactions, as a result of national security concerns, to five years, in line with other countries such as Germany. This would allow the Government a greater window to intervene where it is not notified of relevant transactions. This time limit should be reviewed, and amended if necessary, after five years, to see if it has been used and to see if it has placed burden on business.
280 Government Office for Science, ‘The Quantum Age: technological opportunities’ (2016), p56
281 Quantum Technology Hub for Sensors and Metrology (QUT0013); Jonathan Flint, President-Elect of the Institute of Physics, agreed that “the products, competitors and industrial landscape are not yet defined, so no one can rightly say this will be worth £100 billion or whatever in X years”—Q77
285 Networked Quantum Information Technologies Hub, ‘Thinking Ahead to a World with Quantum Computers: The Landscape of Responsible Research and Innovation in Quantum Computing’ (2016), p47
286 For example, see: Quantum Communications Hub (QUT0009); Quantum Technology Hub for Sensors and Metrology (QUT0013); UK Research and Innovation (QUT0023), para 27; Ministry of Defence (QUT0026), para 29; Q128
289 Networked Quantum Information Technologies Hub, ‘Thinking Ahead to a World with Quantum Computers: The Landscape of Responsible Research and Innovation in Quantum Computing’ (2016), pp40 and 60–61
290 For example, see National Institute of Standards and Technology, ‘Report on Post-Quantum Cryptography’ (2016)
291 For more information, see: ‘Data Encryption’, POSTbrief 19, Parliamentary Office of Science and Technology, March 2016
292 Government Office for Science, ‘The Quantum Age: technological opportunities’ (2016), p16
293 Government Office for Science, ‘The Quantum Age: technological opportunities’ (2016), p50
301 Q178; see also ‘Post-Quantum Cryptography Standardization’, National Institute of Standards and Technology, accessed 9 October 2018
303 Q126; see also ‘Apple rejects order to unlock gunman’s phone’, BBC News, 17 February 2016
309 National Quantum Technologies Programme, ‘Responsible Innovation in Quantum Technologies applied to Defence and National Security’ (2018), p12
312 Networked Quantum Information Technologies Hub, ‘Thinking Ahead to a World with Quantum Computers: The Landscape of Responsible Research and Innovation in Quantum Computing’ (2016), p5
313 Networked Quantum Information Technologies Hub, ‘Annual Report 2017’ (2017), p40
314 Networked Quantum Information Technologies Hub, ‘Thinking Ahead to a World with Quantum Computers: The Landscape of Responsible Research and Innovation in Quantum Computing’ (2016), pp18 and 80–82
316 EPSRC, ‘Quantum Technologies Public Dialogue Report’ (2018), pp6–7
317 EPSRC, ‘Quantum Technologies Public Dialogue Report’ (2018), pp2–4
318 For example, see: Networked Quantum Information Technologies Hub, ‘Annual Report 2018’ (2018), pp42–45; Quantum Communication Hub, ‘Annual Report 2016–17’ (2017), pp30–31; Quantum Technology Hub for Sensors and Metrology, ‘Annual Report 2015–16’ (2017), p52; QuantIC, ‘Annual Report 2015–16’ (2016), p35
319 Quantum Communications Hub, ‘Annual Report 2016–17’ (2017); Quantum Technology Hub for Sensors and Metrology, ‘Annual Report 2015–16’ (2017); QuantIC, ‘Annual Report 2015–16’ (2016); these Hubs did not mention RRI activity beyond public outreach in their evidence to our inquiry either—QuantIC (QUT0002); Quantum Communications Hub (QUT0009); Quantum Technology Hub for Sensors and Metrology (QUT0013)
320 Networked Quantum Information Technologies Hub, ‘Annual Report 2018’ (2018), p41
321 Networked Quantum Information Technologies Hub, ‘Responsible Innovation in Quantum Technologies applied to Defence and National Security’ (2018); Networked Quantum Information Technologies Hub, ‘Annual Report 2018’ (2018), p41; Although all of the Quantum Technology Hubs are listed in this document, all three authors are affiliated with the Networked Quantum Information Technologies Hub—’Responsible Research and Innovation in Networked Quantum IT’, University of Oxford, accessed 15 November 2018
325 Networked Quantum Information Technologies Hub, ‘Thinking Ahead to a World with Quantum Computers’ (2016), p78
326 Australian Strategic Policy Institute, ‘Picking flowers, making honey: The Chinese military’s collaboration with foreign universities’ (2018)
327 The ‘Five Eyes’ network comprises the intelligence communities of the USA, the UK, Canada, Australia and New Zealand—’UKUSA Agreement Release: 1940–1956’, US National Security Agency, accessed 13 November 2018
328 Australian Strategic Policy Institute, ‘Picking flowers, making honey: The Chinese military’s collaboration with foreign universities’ (2018), p4
329 Australian Strategic Policy Institute, ‘Picking flowers, making honey: The Chinese military’s collaboration with foreign universities’ (2018), p8
330 Australian Strategic Policy Institute, ‘Picking flowers, making honey: The Chinese military’s collaboration with foreign universities’ (2018), p5
331 Australian Strategic Policy Institute, ‘Picking flowers, making honey: The Chinese military’s collaboration with foreign universities’ (2018), pp18–20
332 National Security Strategy and Strategic Defence and Security Review 2015, paras 3.1–3.4 and 3.23–3.35
333 Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: The Government’s review of the national security implications of foreign ownership or control’ (2017), paras 48 and 72
334 Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: The Government’s review of the national security implications of foreign ownership or control’ (2017), para 46; Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), paras 3.51–3.54
336 Enterprise Act 2002, sections 23 and 26—see also: Department for Business, Energy and Industrial Strategy, ‘Enterprise Act 2002: Changes to the Turnover and Share of Supply Tests for Mergers—Guidance 2018’ (2018); Competition and Markets Authority, ‘Mergers—the CMA’s jurisdiction and procedure’ (2014), pp15–36
337 Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: The Government’s review of the national security implications of foreign ownership or control’ (2017), para 43
338 Enterprise Act 2002 (Share of Supply Test) (Amendment) Order 2018 (SI 2018/578) and the Enterprise Act 2002 (Turnover Test) (Amendment) Order 2018 (SI 2018/593); Department for Business, Energy and Industrial Strategy, ‘Enterprise Act 2002: Changes to the Turnover and Share of Supply Tests for Mergers—Guidance 2018’ (2018), pp13–24
339 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), p20
340 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018)
341 Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: The Government’s review of the national security implications of foreign ownership or control’ (2017), paras 114–140
342 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), p26
343 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), paras 2.14–2.16
344 Richard Harrington MP, Parliamentary Under-Secretary of State for Business and Industry, has said that there have been eight interventions on national security grounds under the regime established by the Enterprise Act 2002, from “literally thousands of [merger and acquisition] transactions”—Oral evidence taken before the Business, Energy and Industrial Strategy Committee and the Defence Committee on 30 October 2018, HC (2017–19) 1640, Q5
345 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), para 2.13
346 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), paras 24–27, 3.11, 3.12, 3.19–3.23, 3.51–3.74; Competition and Markets Authority, ‘Mergers: Guidance on the CMA’s jurisdiction and procedure’ (2014), paras 4.1–4.30
347 Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: Summary of responses to the Government’s consultation on long-term reform proposals’ (2018), Annex A
348 ‘Britain Needs New Safeguards to Deal with Chinese Investment’, Royal United Services Institute, accessed 15 November 2018; see also: ‘Plan to tighten UK takeover rules are ‘disproportionate’’, Financial Times, 15 November 2018
349 Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: The Government’s review of the national security implications of foreign ownership or control’ (2017), para 110
350 The risk that transactions could complete without the Government being aware of them was discussed only in relation to the Government’s ability to intervene in a transaction after it had already taken place, with no firm conclusion on this given—Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: Summary of responses to the Government’s consultation on long-term reform proposals’ (2018), paras 50–51
351 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), para 7.14
353 Department of Business, Energy and Industrial Strategy, ‘National Security and Infrastructure Investment Review: The Government’s review of the national security implications of foreign ownership or control’ (2017), para 65
354 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), paras 6.26–6.35
355 Secretary of State for Business, Energy and Industrial Strategy, ‘National Security and Investment: A consultation on proposed legislative reforms’ (2018), paras 6.31–6.32
Published: 6 December 2018