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‘More powers are needed to intervene in foreign acquisitions that could damage UK economy’ says Portsmouth MP

  • Labour calls on Ministers to strengthen powers to intervene in foreign acquisitions that would damage the UK’s economy, such as the takeover of ARM
  • Ministers are supposedly ripping up and publishing a new industrial strategy this autumn but transparency data reveals Ministers have only spoken about the industrial strategy at three in 1,375 meetings – and never with tech companies
  • Shadow Business Secretary warns foreign takeovers are hollowing out the UK’s tech sector as it’s revealed Ministers have not met with ARM, Softbank or Nvidia in 2019 or 2020

Portsmouth South MP Stephen Morgan is today calling on Ministers to keep high-growth and strategically important companies in the UK, as it reveals the Government has not spoken to key companies about a tech-focused industrial strategy.

Labour is supporting the National Security and Investment Bill, which strengthens powers for the Government to intervene when foreign acquisitions threaten national security. But the Official Opposition is calling for the Government to strengthen its powers to intervene when acquisitions could see vital companies stripped for parts or moved overseas, damaging the UK economy.

The Shadow Business Secretary has argued Ministers should have intervened in the takeover of the UK tech company ARM by the US company Nvidia on public interest grounds. 

During the debate on the Bill, Labour called on Ministers to come clean about whether they have obtained legal assurances about the company’s future in the UK.

Stephen Morgan MP said:

“The Government’s proposal brings the UK in line with other countries on national security but leaves us with significantly weaker powers on takeovers.

France has powers to block takeovers of companies deemed strategic, and the US Committee on Foreign Investment in the United States is able to block acquisitions that might have major implications for national interests. Britain should have the same.

Every month that goes by when ministers don’t legislate on these issues leaves us more vulnerable to losing vital economic interests. That just isn’t good enough for constituents in Portsmouth”.

The call comes as it is revealed that, despite Ministers’ plans to rip up the existing industrial strategy white paper and publish a new one this autumn, they have only held three meetings out of 1,375 to discuss industrial strategy with stakeholders in 2020 so far, including only once before the Covid-19 crisis took hold.

Crucially, none of these meetings were with tech companies, despite a BEIS spokesperson saying the new industrial strategy aims to put the UK “at the forefront of global technological opportunities”.

Shadow Business Secretary Ed Miliband MP added:  

“It’s right that the Government is bringing the UK into line with other countries to give itself powers to protect national security, but this Bill is a missed opportunity to do so on wider industrial strategy.  

Time and again in recent years, the existing powers have proved inadequate to protect vital economic interests – from Pfizer’s attempted takeover of Astrazeneca to the recent takeover of ARM.  

If the Government is serious about industrial strategy, we need an ability to intervene in takeovers to protect our vital interests, particularly in our tech sector.”