MPs on a parliamentary committee are to investigate whether government policy should intervene in mergers and acquisitions to block foreign takeovers of UK companies.

Members of the business select committee launched their probe this week with chairman Ian Wright saying the committee would look closely at the prime minister’s stated need for an industrial policy.

Iain Wright MP said: “I am pleased that the new prime minister agrees that a modern, innovative and competitive economy needs an industrial strategy.

“But we on the committee want to explore what this means in practice. Will this be a return to ‘picking winners’ by the government? Is it just a rebadging of existing policies? Or is the government going to make a genuinely new offer to support key industries right across the country?”

Wright added: “We will want to explore the rationale for the support and the means of providing it, particularly in a coordinated way across government departments. We will also want to test how a new government industrial strategy fits in with its own devolution agenda, so that local, regional and national policies and strategies can be aligned as much as possible.”

A key subject for parliamentary inquiry is: “How interventionist in the free market should government be in implementing an industrial strategy, for example in preventing foreign takeovers of UK companies?”

The committee will also consider what lessons can be learnt from other countries and their attempts to implement similar policies.

City AM reports that the committee will ask foreign corporates how best the UK can defend UK companies against foreign acquisitions.