A new Bill to modernise the government’s powers to investigate and intervene in potentially hostile foreign direct investment that threatens UK national security will be introduced by ministers today.
Under the National Security and Investment Bill, the government will be taking a targeted, proportionate approach to ensure it can scrutinise, impose conditions on or, as a last resort, block a deal in any sector where there is an unacceptable risk to national security.
The new regime will update the UK’s current powers – which are almost 20 years old and do not reflect the threats faced today.
Under the Bill, investors and businesses will have to notify a dedicated government unit through a single digital portal about certain types of transactions in designated sensitive sectors, such as the defence, energy and transport sectors, to ensure it can investigate and take action to address any national security risks.
The Bill will also extend screening powers to interrogate the acquisition of sensitive assets and intellectual property, as well as the acquisition of companies. Investments will be screened much more quickly than the current regime, assessing transactions within 30 working days with timelines set out in law rather than by the government on a case-by-case basis as is currently the case.
Business Secretary Alok Sharma said: “The UK remains one of the most attractive investment destinations in the world and we want to keep it that way. But hostile actors should be in no doubt – there is no back door into the UK. This Bill will mean that we can continue to welcome job-creating investment to our shores, while shutting out those who could threaten the safety of the British people.”
Kevin Ellis, Chairman of PricewaterhouseCoopers said: “It’s vital that the UK continues to be an attractive destination for foreign investment and these measures will help to give much needed certainty and transparency to investors and businesses. While we shouldn’t underestimate the UK’s attractiveness for investment, competition for FDI is getting much fiercer. 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. Now more than ever we need to make it easier for that investment to materialise. FDI is crucial to fund build back better and for the economy, innovation, and most importantly, jobs.”