DEBATE: Will the National Security and Investment Bill make it harder for the UK to remain a business hub?
Will new laws to block foreign takeovers make it harder to ensure that the UK remains a business hub post-Brexit?
Max von Thun, senior associate at political advisory firm Global Counsel, says YES.
Under the screening regime proposed by the new National Security and Investment Bill, a much higher number of deals will be subject to potential government intervention on national security grounds for up to five years after they have taken place.
In addition to traditional corporate takeovers, acquisitions of land and intellectual property will now be in scope, while thresholds on turnover and market share that previously spared smaller companies will be abolished.
The government has attempted to sell the proposals to business by portraying the new regime as more transparent and efficient than the existing Enterprise Act system. But internationally mobile businesses, entrepreneurs and investors — who typically consider a range of jurisdictions for their activities — will almost certainly be re-evaluating the attractiveness of the UK as a result of these proposals.
Combined with the economic disruption set to be caused by the rapidly approaching end of the Brexit transition period — and with a UK-EU trade deal still proving elusive — this is the wrong moment for the UK to be pulling up the drawbridge.
Roger Barron, partner at global law firm Paul Hastings, says NO.
For most of modern history, the UK has been an attractive hub for foreign investors. Britain is a great place to grow a business and boasts a number of key structures to help businesses thrive here, including a mature and respected financial and legal system and of course our central time zone. These will not just disappear as a result of Brexit, nor due to new rules about foreign takeovers.
This new legislation should not make it substantively harder for well-advised and prepared foreign investors to enter the UK. Instead, it is there to help protect services that are critical to the UK’s national security, such as communications, defence, energy, transport and artificial intelligence.
Protecting national security has been the direction of travel for a number of years now. Far from singling us out, these new rules will see the UK follow in the footsteps of many other developed countries, including France, Germany and the US. They are about security, not protectionism.
It would be naive to think that this legislation would be the reason behind the UK failing to prosper post-Brexit.
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