Ministers seek powers to block foreign takeovers retrospectively

New bill to stop hostile actors investing in the UK to be passed through Parliament

A finger about to press a Huawei logo in a dark room

A new bill that could potentially give the government powers to retrospectively block foreign takeovers of UK companies is being passed through the House of Commons on Wednesday. 

The new legislation will update the government's current powers, which are almost 20 years old.

With the National Security and Investment Bill, ministers will be able to fully scrutinise interest from overseas, impose conditions or, as a last resort, block any deal in any sector where it deems there is an unacceptable risk to national security. This also includes powers to reverse any deal made within five years. 

There is a suggestion the Bill will be used to prevent investment from countries like China, with companies being used by its government to access UK networks. Some conservative backbenchers are reportedly for amendments thar make it easier to prevent takeovers by foreign companies accused of being involved in human rights abuses.

"The UK remains one of the most attractive investment destinations in the world and we want to keep it that way," said business secretary Alok Sharma. "But hostile actors should be in no doubt - there is no back door into the UK."

The proposals come at a time of heightened political concerns over both Chinese ownership of key segments of the economy and also the UK's dependencies on foreign suppliers, which has been further revealed during the pandemic.

A number of Conservative ministers want the government to make it harder for Chinese companies to buy strategic British firms, particularly after they successfully forced the government to u-turn and ditch Huawei's 5G technology for the UK's networks.

The chairman of PwC, Kevin Ellis, suggested the bill would provide "much-needed certainty and transparency to investors and businesses" but he also stressed that it was "vital" that the UK continued to be an attractive destination for foreign investment.

"While we shouldn't underestimate the UK's attractiveness for investment, competition for foreign direct investment is getting much fiercer," he said. "Across all industries and markets the bar is being raised and we can't rely on existing skills, historical relationships or legacy perceptions to drive future success."

Featured Resources

B2B under quarantine

Key B2C e-commerce features B2B need to adopt to survive

Download now

The top three IT pains of the new reality and how to solve them

Driving more resiliency with unified operations and service management

Download now

The five essentials from your endpoint security partner

Empower your MSP business to operate efficiently

Download now

How fashion retailers are redesigning their digital future

Fashion retail guide

Download now

Recommended

Tech firms condemn anti-DACA ruling
Policy & legislation

Tech firms condemn anti-DACA ruling

19 Jul 2021
China tightens the reins on cyber security
cyber security

China tightens the reins on cyber security

13 Jul 2021
Department of Health and Human Services must improve cyber security info sharing
Security

Department of Health and Human Services must improve cyber security info sharing

30 Jun 2021
JEDI contract's future becomes murky after AWS court win
Policy & legislation

JEDI contract's future becomes murky after AWS court win

11 May 2021

Most Popular

The benefits of workload optimisation
Sponsored

The benefits of workload optimisation

16 Jul 2021
Samsung Galaxy S21 5G review: A rose-tinted experience
Mobile Phones

Samsung Galaxy S21 5G review: A rose-tinted experience

14 Jul 2021
RMIT to be first Australian university to implement AWS supercomputing facility
high-performance computing (HPC)

RMIT to be first Australian university to implement AWS supercomputing facility

28 Jul 2021