The Government are today publishing a Green Paper: “National Security and Infrastructure Investment Review”. This sets out proposals for amending the current regime in relation to national security and investment.
First, the Government are introducing amendments to the Enterprise Act 2002. For most sectors, the Government are only able to intervene in mergers involving companies with a UK turnover of over £70 million, or where the parties’ combined share of supply increases to 25% or more. This means mergers or acquisitions of some smaller businesses whose ownership is critical to our national security cannot be scrutinised.
The Government propose to amend the thresholds in two areas: the dual use and military sector, and certain parts of advanced technology, namely the design of computer chips and quantum technology. For these two areas only, we will lower the threshold for Government intervention to businesses with a UK turnover of over £1 million, and remove the requirement for a merger to increase a business’s share of supply to or over 25%.
The Government are also consulting on longer-term proposals, including:
introducing a ‘call-in’ power modelled on the existing power within the Enterprise Act 2002, to allow the Government to scrutinise a broader range of transactions for national security concerns within a voluntary notification regime; and/or
introducing a mandatory notification regime for foreign investment in parts of the economy which are critical for our national security. Mandatory notification could also be required for foreign investment in key new projects or specific businesses or assets.
These proposals will ensure that our arrangements for protecting national security are more closely aligned with those of major, developed economies, and more robust to the changing nature of threats to our national security.
The Green Paper delivers on the commitment made in the Queen’s Speech to bring forward proposals to consolidate and strengthen the Government’s powers to protect national security.
I will be making an oral statement in the House later today and placing a copy of the Green Paper in the Libraries of both Houses.