Source · Select Committees · Foreign Affairs Committee
Recommendation 1
1
Paragraph: 18
In the absence of any evidence to the contrary, we have no choice but to...
Conclusion
In the absence of any evidence to the contrary, we have no choice but to assume that the NSA review that the Prime Minister said he had initiated has not, in fact, been started. In its response to this report, we ask that the Government set out the circumstances in which the National Security Adviser is engaged in reviews under the National Security and Investment or Enterprise Acts; the reasons why the Prime Minister asked the NSA to undertake a review of Newport Wafer Fab; why the NSA did not undertake such a review; and for an update on the nature of the continued monitoring by the Investment Security Unit
Paragraph Reference:
18
Government Response
Acknowledged
HM Government
Acknowledged
Under the National Security & Investment Act 2021, and previously under the Enterprise Act2002, the Secretary of State for Business, Energy and Industrial Strategy must take decisions relating to national security in a quasi-judicial manner, ensuring that he makes his decisions on the facts and evidence of an individual case. The Investment Security Unit, based in the Department for Business, Energy and Industrial Strategy, provides advice to the Secretary of State on whether to intervene in an acquisition, within a clear and transparent statutory framework provided by the National Security and Investment Act. The Investment Security Unit brings together experts from across government and the intelligence community to scrutinise acquisitions and assess the need for intervention to protect the UK’s national security. Where appropriate, this can include advice from the National Security Adviser. The National Security Adviser is the Prime Minister’s lead official on matters of national security. The Prime Minister therefore asked the National Security Advisor to review the case. The Government continues to consider the acquisition of Newport Wafer Fab by Nexperia and no decisions have been made. As part of that consideration, the Prime Minister asked the National Security Adviser to review the case. As set out above, it is for the Secretary of State for Business, Energy and Industrial Strategy to take decisions under the National Security & Investment Act. This is a role that he performs in a quasi-judicial manner, based on the facts and evidence of each individual case. For reasons that the Committee will understand, the Government does not comment on the details of individual businesses’ commercial transactions or on national security assessments. More broadly, as set out above, the Investment Security Unit is responsible for identifying, addressing and mitigating national security risks to the UK arising when a person gains control of a qualifying asset or qualifying entity as set out in the National Security and Investment Act. Where appropriate, the ISU also works with other departments and teams to prepare advice on what mitigations might be appropriate to address national security risks presented by an acquisition. The National Security & Investment Act fully commenced on 4 January 2022, and from this date began to receive notifications from investors and acquirers. The Act also gives the Government powers to call in acquisitions that took place from the day after introduction of the National Security and Investment Bill into Parliament (12 November 2020) but before commencement. For acquisitions that took place in this window, and if the Government became aware of the acquisition before commencement, any call-in decision must be issued within six months of commencement. This means that, where the relevant statutory tests are met, the Secretary of State may call in a qualifying acquisition he is aware of up to 6 months after the commencement of the National Security and Investment Act.