When people think about world-leading tech firms, they probably imagine start-ups in Silicon Valley or data centres in China.
Too often, I fear people overlook the success stories on their doorstep. London Tech Week, which concludes today, is an important opportunity to celebrate the United Kingdom’s thriving digital economy.
I am proud to have taken part in this year’s conference, attending a roundtable with businesses from across the tech sector, to discuss the government’s new investment screening powers.
Investment can carry national security risks, particularly in sectors of strategic importance, such as tech
During 2022, UK tech firms raised a record £24bn – more than France and Germany combined, according to the Digital Economy Council. This inward investment is not only critical to the continued success of our tech sector, but also to the growth of our economy – one of the Prime Minister’s five priorities.
Yet investment can carry national security risks, particularly in sectors of strategic importance, such as tech. To manage these risks, the government introduced the National Security and Investment Act 2021, which grants the Deputy Prime Minister the power to review certain investments and make interventions to protect national security.
Before we introduced the regime, I know some were nervous there could be tensions between security, investment, and prosperity. However, our national security is one of the factors that underpins our prosperity. International investors are attracted by the UK’s stable economy, equitable rule of law, and efficient regulatory processes.
As a minister, I am responsible for the Investment Security Unit, which administers the government’s investment screening powers. While the vast majority of businesses will never need to engage with the Investment Security Unit, the government is committed to managing risks in a fair and proportionate manner for those that do. The data suggests the government is already fulfilling this commitment.
In 2022, the Investment Security Unit reviewed around 800 acquisitions and issued just 14 final orders that either imposed restrictions or blocked an acquisition. Furthermore, the vast majority of these cases were cleared to proceed within 30 working days, with no further action required, allowing businesses to continue with their investment plans and help deliver economic growth.
As the system enters its second year of operation the government is taking a number of steps to build on the Investment Security Unit’s strong track record.
Firstly, the Deputy Prime Minister and I are meeting regularly with businesses who engage with the Investment Security Unit. These meetings are privileged opportunities for us to speak with the people making real world decisions about our economy. We get to hear directly about the challenges business leaders face and what the government can do to help.
Secondly, the government continues to gather feedback from businesses. During the passage of the National Security and Investment Act, the government committed to periodically publish market guidance to provide practical support for businesses engaging with the Investment Security Unit. The first edition of this guidance was published in 2022 and since then the government has continued to gather insights which informed the second edition of market guidance, published in April.
Thirdly, the Investment Security Unit will publish its annual report later this summer, providing new insights into its work. The annual report is one of the main ways the Investment Security Unit ensures transparency and accountability against its remit.
More than two years since the National Security and Investment Act received Royal Assent, the government remains committed to making the investment screening process more open and transparent. Through cooperation, I am determined that the government and businesses can build the frameworks necessary to protect national security while encouraging investment and innovation across the UK.
Nusrat Ghani, Conservative MP for Wealden and Cabinet Office minister
The original article is available here.
