The government has been warned the UK risks becoming a “back door” to cyber and other national security threats as foreign companies snap up British firms.
They call for ministers to be notified of proposed investments which would affect media freedom, access to the sensitive data of individual, cybersecurity and critical supply chains.
MPs have attacked the proposed UAE-backed takeover of the Telegraph newspaper group, expressing concerns about foreign state ownership and warning that it is impossible to “separate sheikh and state”.
Liam Byrne, the chair of the Commons Business and Trade sub-committee, said it was “vital that we do not let our country become a “back door” through which our adversaries acquire capabilities that imperil the collective security of either us or our NATO Allies.”
The warning comes in the committee’s submission to the government ahead of reforms to the UK’s investment-screening regime.
Under the National Security and Investment (NSI) Act, this allows ministers to block purchases of or investment in firms in strategic industries on national security grounds.
The submission warns the UK is facing a “surge” of investment from countries classed as dictatorships as well as new threats from China and Russia.
With so many transactions ministers risk “losing sight of the wood for the trees" and missing key transactions with security implications, they say.
Both the US and the EU have recently announced tougher investment checks.
MPs also warned the lack of an explicit definition of “national security” was creating confusion.
MPs also condemn part of the Act as a “fundamental roadblock to scrutiny” because it prohibits telling Parliament how government decisions are made.
Mr Byrne said: “It is vital that Parliament is given proper oversight of the decisions made by ministers, so we can assure the House of Commons that the decisions made on investment screening are sound decisions.
“Right now, the truth is we cannot give that assurance, because ministers do not have the legal power to share the information we need to check decisions. That risks making a nonsense of parliamentary oversight of our economic security. That is something we simply cannot afford to go on.”