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Overview Therefore, we cannot be confident that security is actually being taken into account or if, for  Ministers drawn to the siren call of investment, that is still regarded as a trade-off.

During the course of this Inquiry, the Government argued that such decisions could be scrutinised effectively by the Chair of the Business, Energy and Industrial Strategy (BEIS) Select Committee through a business lens, with the relevant supporting intelligence provided to the BEIS Select Committee Chair on an 'ad hoc basis'. We were told that the ISC should be satisfied by simply seeing the intelligence case that was fed into investment decisions. We considered this to be wholly unsatisfactory, as it means that no one oversight body will routinely have the full picture and be in a position to scrutinise the totality of the evidence before the Minister. Effective oversight is a key function of democracy and is particularly important in this case, given the length of time that Chinese investment in the UK has gone unchecked.

The fact that the Government does not want there to be any meaningful scrutiny of sensitive investment deals—and deliberately chose not to extend the ISC's oversight remit to cover this at the outset of the new legislation—is of serious concern. It is for this reason that we are still formally seeking to amend the Committee's Memorandum of Understanding (MoU) with the Prime Minister to include several relevant policy departments within the purview of the Committee's oversight remit. This is a small change which will have a significant impact on national security—and upon the trust placed by the public in Ministers who are charged with weighing up fundamental interests behind closed doors. On 7 February 2023, HMG announced a restructure of several government departments, including BEIS. This led to the creation of the Department for Energy Security and Net Zero, the Department for Business and Trade, and the Department for Science, Innovation and Technology, and the scaling back of the Department for Culture, Media and Sport (previously the Department for Digital, Culture, Media and Sport). Shortly afterwards, it was confirmed that the Investment Security Unit (ISU)—the body established to scrutinise investment decisions under the NSI Act—would be moved from BEIS to the Cabinet Office.

We presumed that this meant that the Government would confirm the ISC's responsibility for oversight of the ISU—in line with the Committee's MoU with the Government, which provides for ISC oversight over the National Security Secretariat in the Cabinet Office. However, on 21 March 2023, we received correspondence from the Minister of State for the Investment Security Unit advising that the ISU would still be overseen by the BEIS Select Committee—despite no longer sitting in the department which that Committee oversees. An MoU had been agreed between the BEIS Select Committee and the Chancellor of the Duchy of Lancaster (as the relevant Secretary of State now for the ISU) to this effect. The Deputy National Security Adviser wrote to this Committee on 23 March 2023 to clarify that HMG does not consider the ISC's remit under the current MoU to automatically extend to the activities of the Chancellor of the Duchy of Lancaster, as the Secretary of State now responsible for the ISU. This is a quite extraordinary decision. It is clear that the argument that the ISC's oversight does not extend to the activities of the Chancellor of the Duchy of Lancaster holds no weight (we note that the Chancellor of the Duchy of Lancaster is not overseen by the BEIS Select Committee either) and it is absurd that the ISC's oversight is being denied in this manner. The Committee will be pursuing this matter and reporting in due course.