22.The National Security and Investment Act 2021 (“the Act”) has provided the Government with new powers to scrutinise and intervene in certain acquisitions of UK companies by foreign businesses and investors to protect national security. The Act provides for a mandatory notification and pre-approval requirement for those sectors of the economy where it is considered that national security risks are most likely to arise. Any acquisitions subject to mandatory notification will not be allowed to proceed without Government approval, and any acquisition that is not notified to the Secretary of State and cleared will be void. These draft Regulations specify 17 sectors and activities within those sectors which will be in scope of the new mandatory notification regime.
23.The 17 areas are: Advanced Materials, Advanced Robotics, Artificial Intelligence, Civil Nuclear, Communications, Computing Hardware, Critical Suppliers to Government, Cryptographic Authentication, Data Infrastructure, Defence, Energy, Military and Dual-Use, Quantum Technologies, Satellite and Space Technologies, Suppliers to the Emergency Services, Synthetic Biology and Transport.
24.The Department for Business, Energy and Industrial Strategy (BEIS) says that following feedback received during consultation, the scope of these sectors has been narrowed to make them as targeted and proportionate as possible. We note, however, that the specified sectors will still cover a significant number of companies, including many small businesses, and that the Department will need to ensure that all businesses are informed of the new notification requirements, as many may otherwise not be aware of the new rules. BEIS also says that the Government will keep the list under review so that it reflects changes in national security risks and technology. We take the view that it is important that the Government also review the wider impact of the new oversight regime under the National Security and Investment Act 2021 on the relevant sectors and foreign investment into the UK.
25.Separate draft Regulations have been laid alongside this instrument to make provision, for example in relation to how turnover is to be assessed, to enable fines to be calculated that can be issued against businesses that commit offences under the Act.
26.This instrument extends until 31 December 2021 the temporary suspension of a prohibition on importing chilled meat preparations, such as raw sausages, hamburgers, meatballs and peppered steak, from the European Economic Area (EEA) into England, that would otherwise have expired on 30 September. The instrument also extends the temporary suspension of a requirement for such imports to be deep frozen. Without the extensions, it would be illegal for traders to import chilled meat preparations from the EEA from 1 October. The Department for Environment, Food and Rural Affairs (Defra) says that the extension will ensure relevant products remain available, and that it is a proportionate measure to ensure trade continuity, as there are no public health concerns and chilled meat products from the EEA present a low biosecurity risk. We note, however, the absence of a level playing field for businesses from Great Britain (GB): because the EU has not reciprocated these temporary measures, GB businesses have been banned from exporting chilled meat preparations, such as raw sausages, to the EU since 1 January 2021.
27.This is the second extension.Asked about permanent arrangements, the Department told us that:
“Defra commissioned the [Food Standards Agency] and [Animal and Plant Health Agency] to carry out risk assessments to determine whether there is a scientific basis to support the application of P&Rs [prohibitions and restrictions] for trade between the EU and UK. The risk assessments were finalised at the end of August and are now being analysed by Defra. Further risk assessment may have to be carried out to determine the risk from non-EU countries. Defra is aiming to develop a permanent policy as soon as all necessary risk assessments have been carried out. Relevant stakeholders including business will be consulted for the development of a permanent policy to ensure that they are prepared to deal with any changes.”
28.While not part of this instrument, we also asked Defra about the arrangements for the rest of the UK. The Department told us that Scotland and Wales have made equivalent legislation to allow for chilled meats to be imported from the EU until 31 December 2021. With regard to Northern Ireland (NI), Defra explained that:
“The UK Government was successful in agreeing a temporary derogation for movements from GB-NI until the 30 September 2021 with the EU, permitting movements to continue until that date. However, the Government further proposed to the EU on 23 July a ‘standstill’ arrangement to maintain the operation of the Protocol on the current basis, and to pause current legal actions, to provide space for discussions on those proposals. Following on from this, to provide space for potential further discussions, and to give certainty and stability to businesses while any such discussions proceed, the Government will continue to operate the Protocol on the current basis. This includes the grace periods and easements currently in force allowing the movement of chilled meat preparations from GB to NI.”
29.As a result of lessons learned during the pandemic the Government decided in August 2020 to restructure public health provision in England. This includes the dissolution of Public Health England (PHE) and the establishment of a new Department of Health and Social Care (DHSC) executive agency, the UK Health Security Agency (UKHSA). With effect from I October 2021:
30.These regulations are concerned with the transfer of staff to the receiving organisations and making appropriate consequential changes to legislation that currently refers to PHE.
16 The temporary measures were first introduced until 31 March 2021 by the Meat Preparations (Amendment and Transitory Modification) (England) (EU Exit) Regulations 2020 () and subsequently extended until 30 September 2021 by the Meat Preparations (Amendment and Transitory Modification) (England) (EU Exit) (Amendment) Regulations 2021 ().
17 This information was subsequently corrected by DHSC, the CQC is not taking on any functions from PHE - see correspondence published in our , Session 2021-22, HL 76.