There’s an intriguing detail in Rishi Sunak’s mini-reshuffle*
It wasn’t announced at the time and it wasn’t in any of the newspaper coverage but, although he was overlooked for the big ministerial roles, Oliver Dowden has a new job. If you’ve been paying attention to his government web page you’ll already have noticed there’s a slightly mysterious new item at the bottom of his list of responsibilities: National Security and Investment.
And it turns out that it’s not a minor addition. Sunak chopped up the Department of Business, Energy and Industrial Strategy, took ‘digital’ out of the culture ministry, set up a new energy security department and moved the Investment Screening Unit, the office that monitors big investments in the UK that might have national security implications, into the Cabinet Office, where it becomes Dowden’s responsibility. The ISU has been in existence for about a year, as an effect of the National Security and Investment Act 2021. The law was originally sponsored by Alok Sharma, then Secretary of State for Business, Energy and Industrial Strategy. It was the result of the enormous collective freak-out about (mainly) Chinese investments in Western businesses that marked Donald Trump’s term in office and the return of nationalism in international trade.
The UK law was one of those reflex reactions that often follow a shift in American policy. It’s modelled on the Committee on Foreign Investment in the United States, set up by Gerald Ford and beefed up by Donald Trump in 2018. Other countries in the US orbit also tightened rules on Chinese investment in this period (and there’s obviously a strong parallel with the financial and economic sanctions against Russia introduced by many Western nations after the invasion of Ukraine).
In Britain the unit has ‘called in’ over 100 investments and blocked a total of five. Four were Chinese acquisitions in the UK and one Russian. It’s considered to be effective – reports are produced quickly – but not at all transparent. When deals are not actually blocked conditions can be imposed – and they’re sometimes not strictly national security conditions. An American company was allowed to buy a UK satellite communications business on the condition it created jobs here, for instance. Fascinatingly, the Chinese are not necessarily taking these rulings lying down and are using international law to challenge some, including a huge 5G deal thrown out by the Swedish government.
So Oliver Dowden, as the most senior Cabinet Office minister, is now responsible for this unit. And it’s not a nominal role – he becomes the ‘decision maker’ in the unit’s adjudications and could easily find himself testifying before an international tribunal brought by a foreign government. Although most of us didn’t notice the change, the investment industry did. And they’re a bit nervous about it. Corporate law firm Morrison Foerster (known, it says here, as MoFo) says the change “…is likely to result in material disruption to delivery by the ISU in the short term…”
It’s not obvious why this important job should be tacked onto the end of the long list of things already done in the Cabinet Office but it means that, in addition to ministerial propriety and ethics (Zahawi, Williamson, Raab et al), the strikes taskforce (lol), running the war on woke, organising the coronation, supervising public appointments (e.g. Richard Sharp at the BBC) our MP is now also responsible for stopping the Chinese Communist Party from taking control of UK technology firms.
And that’s before he even gets to his constituency business. Blimey.
- A useful explainer of the National Security and Investment Act 2021 from another international law firm, Norton Rose Fulbright.
- And if you feel you might need to refer an investment to the Investment Screening Unit, there’s a web page for that.
- Just before the reshuffle, the Business, Energy and Industrial Strategy select committee (which will presumably now have to change its name to reflect reorganised ministries) launched an inquiry into ‘information sharing by the Investment Security Unit’. So that’s another committee for Dowden to attend.
*It may just be us that find this intriguing.