Under Burnham, Investment Screening Remains Hard to Predict

29 Sep 2026 10:58 AM

There is uncertainty over what capabilities a sovereignty-minded government decides Britain must control.

Starmer Years: Conflicting Impulses

Since Labour took office in July 2024, UK investment screening has sat between two conflicting impulses: stronger appetite to protect the UK’s strategic and national security interests, and greater pressure to attract inward investment.

Policy like the National Security Strategy (NSS) and Defence Industrial Strategy established the strongest links yet between economic security and national security. The NSS and Strategic Defence Review identified China as a persistent geostrategic challenge. And since President Trump’s re-election, political concern over dependence on US technology and infrastructure has grown.

The Government also agreed to update the sectors of focus under the National Security and Investment Act (NS&I Act), subject to secondary legislation. The changes will bring the water sector into the mandatory notification regime, establish standalone schedules for critical minerals and semiconductors, and clarify areas including, data infrastructure and sensitive government data.

The period also saw steps from the Treasury and other ‘prosperity’ departments to encourage inward investment, particularly from China. This included efforts to reduce the risk thresholds applied to some sectors to support investment decisions, albeit maintaining a cautious approach in the most sensitive. We also saw the Government direct the Competition and Markets Authority to prioritise investment and growth in related competition law, manifesting in June 2026 revised draft guidance noting the positive effect of mergers for innovation and R&D which the European Commission has recognised as important for strategic sectors like defence.

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