Labour calls for more powers for Government to intervene in foreign acquisitions that could damage UK economy
- 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
Labour 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 Party 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. Labour 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 will call on Ministers to come clean about whether they have obtained legal assurances about the company’s future in the UK.
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.
Labour’s 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 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”.
Labour can reveal today that in January-June 2020:
- Despite media reports that they are ripping up and rewriting the industrial strategy, Ministers only held three out of 1,375 meetings to discuss it.
- Despite the aim of this new industrial strategy being to put the UK at the forefront of global technological opportunities, Ministers only met with six FTSE TechMark 100 companies – including just three before Covid took hold.
- Ministers only met with two of the 50 fastest growing tech companies.
- Throughout 2019 and 2020 so far, Ministers did not meet with ARM Holdings, Softbank or Nvidia despite reports that a takeover was being planned and despite the significance of ARM for the UK. Ministers have claimed to be “scrutinising the deal carefully”.
Shadow Business Secretary Ed Miliband said:
“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.
“Every month that goes by when ministers don’t legislate on these issues leaves us more vulnerable to losing vital economic interests.
“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.”