Commons Sense

House of Commons · Ministerial Statement

Investment Security Unit: Scrutiny

23 March 2023 · 6 other contributors

Opened by Darren Jones Lab Bristol North West

EconomyBusiness & Trade

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Darren Jones raised concerns about investment security unit: scrutiny in the House of Commons. A government minister responded. Other MPs also contributed.

Key points

  • Minister rises to give a statement on behalf of the Business, Energy and Industrial Strategy Committee
  • Memorandum of understanding with the Government covers scrutinizing powers under the National Security and Investment Act 2021
  • Investment security unit within BEIS operationalizes the National Security and Investment Act for national security scrutiny of investments

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Government Statement

Darren Jones

I rise to give a statement on behalf of the Business, Energy and Industrial Strategy Committee regarding the memorandum of understanding with the Government for scrutinizing powers under the National Security and Investment Act 2021. This Act established new statutory measures for government scrutiny of investments for national security purposes, covering all transactions unlike in other countries. The investment security unit was set up within BEIS to operationalize this act. When the Bill passed through the House, it was confirmed that scrutiny would be done by my Committee and a memorandum of understanding (MOU) was agreed upon. This MOU ensures scrutiny is largely conducted in private and retrospectively following any legal challenge, aligning with U.S. practices. The Committee can request information via a private explanatory memorandum or special access as Chair, with the decision maker now being the Chancellor of the Duchy of Lancaster under recent machinery changes.

Other contributors (6)
  • Nusrat Ghani Con Sussex Weald

    Question

    I welcome the report, especially paragraph 11. The investment security unit has moved to Cabinet Office but we continue supporting businesses while protecting national security. Can the hon. Member reflect on the NSI Act being a leading regime and our good relationships with like-minded partners for best practice sharing? Could he also comment on when I will be in front of his Select Committee and thank all staff who worked on securing this MOU?

    Minister reply

    Thanking the Minister for her question, I look forward to working collaboratively. The officials and Clerks did a lot of work over nearly 13 months to get to this point. As for when the Minister will be summoned, it is unusual but we look forward to welcoming her in due course.

  • Kevan Jones

    Question

    Can I thank my hon. Friend for his statement but express disappointment from a Government perspective? The Intelligence and Security Committee can access the highest classification of information, while under this process, not all information might be accessible to us due to Osmotherly rules. Will the Secretary of State clarify where the unit resides in Cabinet Office if it is the National Security Secretariat?

    Minister reply

    As a member of Opposition, I acknowledge that we do not have statutory powers for summoning information but can escalate issues via usual channels or on the Floor of the House. The ISU resides in Cabinet Office and likely within the National Security Secretariat.

  • Jeremy Wright Con Kenilworth and Southam

    Question

    I thank the hon. Gentleman for his statement and recognise that a huge amount of work has gone into it, including with the Government. I thank him for the engagement he has had with my right hon. Friend the Member for New Forest East (Sir Julian Lewis), the Chairman of the ISC, of which I, too, am a member. Is there not an advantage in having staff and members of a committee who are used to dealing with classified material on a routine basis?

    Minister reply

    There is an interesting question to which none of us knows the answer: how routine will it be for us to have to look at either commercially sensitive or national security-sensitive information about individual transactions? Under this memorandum of understanding, we will request that information when we are permitted to do so—after the period of judicial review and appeal has closed—so that we may understand whether the Act is being used in the way it is supposed to be used.

  • John Hayes Con South Holland and The Deepings

    Question

    Just to endorse the comments of my right hon. and learned Friend, I know that the hon. Member for Bristol North West has behaved in an admirably collegiate manner throughout. Is it really appropriate that members of the Committee may have sight of highly sensitive information but will not be able to retain or analyse it?

    Minister reply

    We have to give the MOU a whirl and see how it works. It is for my Committee merely to have oversight and scrutiny of how Ministers have come to their decisions, not to make different decisions from them. I am not sure in practice how much information would need to be processed in that way for us to do an effective job.

  • Theresa Villiers

    Question

    I welcome the work that has been done to get the MOU agreed, but like my fellow members of the ISC, I think this is frankly an unsatisfactory situation. Will the Chair of the Select Committee be willing to report back to the House on how these processes are operating?

    Minister reply

    I hope the right hon. Member recognises that if I am blocked or prevented from doing the work I have been asked to do by the House, I will make it clear that is the case. I reassure her that if they do not work well enough, I will certainly be back here to make that case.

Shadow Comment

Nusrat Ghani

I welcome this report and the scrutiny it offers for our decisions. The NSI Act is leading globally, with good relationships between like-minded partners to share best practices. I inquire about the timing of my appearance before the Select Committee and express gratitude towards all staff involved in securing this MOU.

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