Westminster
Image Source: Herry Lawford

"No back door into the UK": Government introduces intervention powers in foreign investments

A new bill has today been implemented which will allow the government to intervene in “potentially hostile” direct investment.

The National Security and Investment Bill will update the government’s current powers to impose conditions on or block a deal in sectors where there is an “unacceptable risk to national security”.

The bill will see investors and businesses required to notify the government about transactions in defence, energy and transport sectors.

This will apply to investors from any country, but will be “targeted and proportionate”, meaning that most deals will not be intervened with.

The bill will also be applicable to a five-year retrospective, which will not apply to deals made before the bill’s introduction to parliament.

Alok Sharma, the UK’s business secretary, commented: “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 - a professional services firm - 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.”

Our Partners