Yahoo Finance Business backs plan to review national security takeover law
City business groups have welcomed plans to review UK legislation designed to intervene in critical takeovers, saying it is clear the law needs refining.
Deputy Prime Minister Oliver Dowden, outlined his plans on Monday to launch a review of the National Security and Investment Act, which enables the UK government to scrutinise and potentially veto business takeovers.
Speaking to the Financial Times, Dowden said: “We can’t have yesterday’s regulation for tomorrow’s world,” adding that the government would look at “narrowing and refining” the act, which came into effect two years ago.
Stephen Phipson, chief executive of trade body Make UK, said: “It is clear that we need to refine the government systems used to examine potential takeover deals identified under the act to ensure they are handled as efficiently as possible.”
“We have seen too many perfectly acceptable takeover deals from allied countries hampered by excessive bureaucracy and, lengthy timescales, which can result in important inward investment deals not closing,” Phipson said.
Nicola Watkinson, a managing director at TheCityUK, said: “The industry recognises the importance of national security, but the wide-ranging scope of the current arrangements has led to a heavy burden on businesses, which can impact on the attractiveness of the UK as a place to invest and grow.”
Watkinson suggested that there is an opportunity for this review to bring “greater transparency to the UK’s investment screening regime”.
“Ultimately, this should be a positive step forward in helping to boost inward investment, create high-skilled jobs and drive economic growth across the UK,” she added.
Watkins added, however, the review “must not become another excuse for red tape”, as she believes it’ll be “especially damaging during this cost of living crisis”.
John Schmidt, partner at law firm Arnold & Porter, suggested that the UK government “is clearly and sensibly trying to focus on areas that are of concern and reduce the amount of no issue filings”.
“When you have 866 cases out of which only 65, or 7.5 per cent, needed a detailed review and only 14 cases, or 1.6 per cent, of notifications required remedies, it is clear that the net was cast too widely,” he said.
