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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.

• Read the full report (HTML)
• Read the report (PDF)
• Find all publications related to this inquiry, including oral and written evidence

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 Nusrat Ghani and BEIS Committee Chair Darren Jones 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.