Call for evidence outcome

Call for Evidence - National Security and Investment Act

From:: Cabinet Office
Published: 13 November 2023
Last updated: 18 April 2024 — See all updates

Read the full outcome

National Security and Investment Act 2021: Call for Evidence Response

HTML

Detail of outcome

The Call for Evidence response sets out the feedback received and the areas of work that the Government will be taking forward.

Government response to the Business and Trade Committee’s submission to the National Security and Investment Act Call for Evidence 2023

This is the Government’s response to the Business and Trade Committee’s submission to the NSI Call for Evidence.

Government response to the Business and Trade Committee’s submission to the National Security and Investment Act Call for Evidence 2023

Original call for evidence

Call for evidence description

The Government will use this Call for Evidence to consider changes to the NSI regime. We are looking for views from cross economy stakeholders both in the UK and overseas. In particular, this evidence will help the Government:

Hone the scope of the system’s mandatory notification requirements;
Improve NSI notification and assessment processes; and
Develop the Government’s public guidance and communications on how the NSI Act works and where the Government tends to see risk arising.

How to respond

The call for evidence period began on 13 November 2023 and will run until 15 January 2024.

You can respond to this call for evidence using the survey link

If you are not able to submit responses through this online form, please contact nsipolicy@cabinetoffice.gov.uk for alternative ways to contribute.

Do not feel obliged to respond to all the questions.

Foreword

The first duty of government is to protect its people. Bolstering economic security is an increasingly important part of that endeavour; indeed, there can be no security without economic security. The National Security and Investment (NSI) Act 2021 is an important economic security tool, enabling the government to scrutinise and intervene in acquisitions that could harm the UK’s national security.

The NSI system must be proportionate and well-targeted, minimising the burdens it places on companies and investors, while providing the certainty they need to do business. As decision maker under the Act, I want this system to be as pro-business and pro-investment as possible.

Security and prosperity go hand in hand. In fact, I believe that the UK’s position as a leading destination for inward investment is precisely because we have strong institutions and a robust rule of law, alongside a culture of open markets and free trade. So I want us to follow a “small garden, high fence” approach: safeguarding the UK against the small number of deals that could be harmful to our security whilst leaving the vast majority of transactions unaffected.

Since coming into force, the NSI Act has functioned well. The number of notifications received under the Act has been as expected. The large majority of notifications (93% in the most recent Annual Report) have been cleared without needing a detailed assessment, meaning we have been able to give these a clear and binding clearance within a rapid 30 working days. Where necessary and proportionate, I have however not hesitated to act to protect our national security. That has included 17 final orders.

In order to be truly effective, the NSI Act must also be flexible, adapting to the changing nature of our economy and evolving to consider all of those acquisitions that might be considered sensitive. At the same time, it must remain as frictionless as possible for those vast majority of deals that don’t pose any concern.

I have therefore been monitoring the performance of the Act, including through the latest Annual Report, and listening to feedback from a wide range of perspectives. I know we can continue to improve.

This Call for evidence is an opportunity to share your views on how the system can be even more business friendly while maintaining and refining the essential protections we need to protect our national security. In particular, I am interested in:

The impact of the system on businesses and investors, and their experience interacting with the process;
Whether the scope and requirements of the system are proportionate and effective; and
How well stakeholders understand the NSI system, how it is likely to be used, and what national security risks may be posed by investments.

I would therefore like to use this Call for Evidence to:

Inform the review of the National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021 (the ‘Notifiable Acquisition Regulations’, which set out the 17 sensitive areas of the economy subject to mandatory notification requirements) and the NSIA post-implementation review;
Hone the scope, in particular of the mandatory notification requirements, to continue to ensure the Government does not need to be notified of the large majority of deals that pose no national security risk while making sure we are notified of those deals that do warrant consideration under the Act;
Improve NSI notification and assessment processes to minimise business burdens as far as possible, without compromising Government’s ability to conduct proper scrutiny; and
Develop the Government’s public guidance and communications on how the NSI Act works and where the Government tends to see risk arising.

Depending on the responses, I will consider whether more detailed consultation on specific measures or legislative changes are necessary. I am not currently considering changes that would require primary legislation.

Approach to engagement

Through this call for evidence, I would like to hear from as many different stakeholders and interested groups as possible – both in and outside the UK – who interact with the NSI Act or take the NSI Act into consideration.

Sections 1-4 of this Call for Evidence help us understand who is responding. Sections 5 and 6 then cover the substance of this Call for Evidence. Section 5 considers the scope of the NSI system, including certain types of acquisitions in scope of mandatory notification and the 17 mandatory areas. Section 6 covers the operation of the Act, including the NSI notification service and the notification forms. In sections 5 and 6, I particularly welcome feedback from stakeholders who have interacted with the NSI system in these circumstances or operate in these business areas.

I thank you for joining me in undertaking this important review and helping to shape the future of Britain’s economic resilience. Ultimately, this regime should make the UK a more attractive place to invest. Because the best place in the world to do business must also be the most secure place to do business.

The Rt Hon Oliver Dowden CBE MP, Deputy Prime Minister and Chancellor of the Duchy of Lancaster.

Data protection

The department will process your personal data in accordance with the Data Protection Act 2018 (DPA) and this will mean that your personal data will not be disclosed to third parties.

In this call for evidence, we are asking for:

your name, email and organisation in case we need to contact you about your responses (you do not have to give us personal information, but if you do provide it, we will use it only for the purpose of asking follow-up questions if we need to)

This call for evidence and the processing of personal data that it entails is necessary for the exercise of our functions as a government department. If your answers contain any information that allows you to be identified, the Cabinet Officer will, under data protection law, be the controller for this information.

When responding to this call for evidence online, your personal data will be processed on behalf of Cabinet Office by Smart Survey Ltd, which runs the survey collection software. Smart Survey Ltd. hosts the survey collection only, and your personal data will not be shared with any other third parties. If you want to understand how your data is used by Smart Survey Ltd, you may wish to read their privacy statement.

Your response and the processing of personal data that it entails is necessary for the exercise of our functions as a government department. The legal basis for processing your personal data is to perform a task carried out in the public interest, or in the exercise of official authority vested in the controller.

Documents