- In October 2020, the DNSA explained that "the reason we haven't sort of chucked it straight over the fence is that we are trying to give BEIS some time to build that capability".[1] The DNSA went on to say:
That doesn't mean it's easy to build that capability, but in key areas, and I think particularly DCMS [the Department for Digital, Culture, Media and Sport] and BEIS, we've really got to help them and support them develop the same level of maturity we see in other areas of government, particularly DfT [the Department for Transport].[2]
In other words, BEIS is responsible for countering the threat emanating from China's involvement in the Energy sector, but, in October 2020, it was readily acknowledged by the DNSA—at the heart of the UK Intelligence Community—that BEIS did not and does not have the expertise, capabilities or infrastructure to do so.[3]
- Returning to the issue of cumulative threat, in December 2020, we wrote to the BEIS Minister to ask whether the ISU would be able to consider the cumulative effect of investments and were assured that it would be able to do so.[4] We understand this to mean that a situation where there are concerns about linked investments would also be considered. If so, this is a positive change and an improvement on what appears to have happened in the case of Hinkley Point C/Bradwell B.
OOO. We reiterate that foreign investment cases cannot be looked at in isolation and on their own merits. It is absurd that the (then) Department for Business, Energy and Industrial Strategy (BEIS) considered that foreign investment in the Civil Nuclear sector did not need to be looked at in the round: we question how any department can consider that a foreign country single-handedly running our nuclear power stations shouldn't give pause for thought. This clearly demonstrates that BEIS does not have the expertise to be responsible for such sensitive security matters.[5]
PPP. Previous investments in the sector, or the potential for there to be 'legitimate expectation' that an investment in one area ought to facilitate a linked investment, must be taken into account. If the Investment Security Unit fails to do so, then it will be unable to counteract the 'whole-of-state' approach so effectively utilised by China (amongst others).
- ↑ Oral evidence—NSS, *** October 2020.
- ↑ Oral evidence—NSS, *** October 2020.
- ↑ We now understand that, as part of the restructure of several government departments in February 2023, the Investment Security Unit (ISU) has returned from BEIS to the Cabinet Office. The Committee has not been in a position during this Inquiry to scrutinise the effectiveness of this transfer, or the reasons behind it. Whilst, in principle, we would have welcomed the move to return the ISU to the Cabinet Office, where the relevant security expertise, capabilities and infrastructure are more likely to be in place, as we have previously noted, unfortunately, effective oversight has not been put in place.
- ↑ Letter from Minister for Business and Industry to the ISC Chairman, 7 December 2020. (This letter was placed in the Libraries of both Houses and is publicly available).
- ↑ As previously noted, as part of the restructure of several government departments in February 2023, the Investment Security Unit (ISU) has returned from BEIS to the Cabinet Office. The Committee has not been in a position during this Inquiry to scrutinise the effectiveness of this transfer, or the reasons behind it. In principle, we would have welcomed the move to return the ISU to the Cabinet Office, where the relevant security expertise, capabilities and infrastructure are more likely to be in place. However, as outlined earlier, unfortunately, effective oversight has not been put in place.
173
