The chancellor will this week unveil a review of Britain’s foreign direct investment (FDI) framework as the government scrambles to counter the impact of Joe Biden’s efforts to turbocharge clean energy industries.

Sky News has learnt that Jeremy Hunt has asked Lord Harrington, a business minister during Theresa May’s premiership, to oversee a far-reaching examination of the FDI regime.

One source said the review would be launched publicly on Thursday.

Mr Hunt’s decision to commission will be viewed as significant in the context of the US government’s Inflation Reduction Act (IRA), which was passed last year and passes hundreds of billions of dollars in tax subsidies to aid a reduction in greenhouse gas emissions.

The review to be led by Lord Harrington is expected to include an examination of the Office for Investment (OfI), which was established in 2020 under the then trade and investment minister, Lord Grimstone.

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Since its launch, the OfI has helped draw more than £10bn in inward investment to the UK, partly through wide-ranging deals with Gulf-based investors.

One insider said Lord Harrington would explore how the UK’s inward investment promotional activities compared to those of international competitors such as the US and Singapore.

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His work, which is expected to be supported by a panel of experts and last for several months, will form part of the government’s attempts to demonstrate how post-Brexit freedoms can unshackle FDI opportunities.

It is likely to examine areas such as the provision of grant incentives as well as the OfI’s mandate.

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Sources said it would focus on the chancellor’s priority sectors, including advanced manufacturing, green industries, digital technology and life sciences.

The Treasury has been contacted for comment.

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