The Government and the Business, Energy and Industrial Strategy
(BEIS) Committee have agreed a memorandum of understanding (MOU).
It will give the Committee access to the information it needs to
scrutinise the work of the Investment Security Unit (ISU) and the
UK’s new system of screening investments for security risks.
The ISU is the body responsible for examining investments in or
takeovers of firms, and the acquisition of assets, that might
affect national security. It was created by the National Security
and Investment Act and began operations in January 2022. The
Secretary of State responsible for the ISU has the power to call
in such deals and decide whether to intervene.
Minister for the Investment Security Unit and BEIS Committee Chair
signed the deal on 14 March.
The Committee has also published a report that includes its
expectations of how the MOU will operate, and how scrutiny of the
ISU will be conducted. Mr Jones will make a statement in the
House of Commons chamber on the MOU today after any Urgent
Questions or Statements.
Frequently asked questions
Why does the MOU only allow for scrutiny of completed
cases, unless otherwise agreed between the Committee and the
Government?
This is consistent with the approach of international
counterparts that have had equivalent scrutiny regimes in force
for some time, such as the United States, and where it has
provided confidence that decisions have not been politicised.
Retrospective scrutiny of completed cases would begin only once
the window for legal challenge had closed.
What scrutiny has the Committee been conducting between
the National Security and Investment Act coming into force and
the signing of the MOU?
The BEIS Committee has conducted two public evidence sessions in
addition to private briefings and correspondence with Government
and experts. A National Security and Investment Sub-committee was
formed in June 2022 to conduct scrutiny of the work of the ISU.
Will the sub-committee review the outcome of cases and
seek to reverse or influence the Government’s decision?
To protect the investment screening process from actual or
perceived political influence the sub-committee will not review
decisions made by the Secretary of State on individual cases.
However, on some occasions it will look at how decisions were
reached to see if and how the review process can be improved.
How is this affected by machinery of government changes
and the creation of the Department for Business and
Trade?
Responsibility for scrutiny of the ISU will pass to any successor
Committee of the BEIS Committee, as set out in the MOU.
Is there scope for amending the way the MOU
operates?
The memorandum of understanding is subject to renewal at the
start of every Parliament. In its report, the Committee says it
expects to hold an evidence session before the end of this
Parliament with the Chancellor of the Duchy of Lancaster, as the
Secretary of State responsible for decision-making under the Act,
or the Minister with daily oversight of the ISU.
