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UK to intervene in foreign takeovers of critical infrastructure
June 21, 2017 / 11:10 AM / 6 months ago

UK to intervene in foreign takeovers of critical infrastructure

LONDON (Reuters) - Prime Minister Theresa May plans to give her government the powers to intervene in the takeover of any critical infrastructure by a foreign buyer to enable it to protect national security.

Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain, January 26, 2017. REUTERS/Eddie Keogh

The world’s fifth-largest economy has attracted more foreign investment than any other country in Europe but May has said her government should have the power to scrutinise significant foreign investment and intervene when it concerns critical assets such as nuclear power.

The proposal was included in the government’s two-year policy plan set out on Wednesday, one of the few planned changes to British business that was mentioned in the 82-page document known as the Queen’s Speech.

”This will ensure that foreign ownership of companies controlling important infrastructure does not undermine British security or essential services, it said.

“It is important that we protect national security, while remaining an open and liberal international trading partner and a global champion of free trade and investment.”

May, who became prime minister after Britain voted to leave the EU last June, faced one of her first major challenges when she gave the go-ahead for a $24 billion plan for a Chinese-backed nuclear power plant in southwest England.

The City of London is seen from Canary Wharf, Britain May 17, 2017. REUTERS/Stefan Wermuth

She ultimately approved the deal but said her government would take a more cautious approach over similar foreign investments in the future.

Before a botched gamble on a snap election cost her party its majority in parliament, May had set out a raft of proposals for corporate Britain, including curbing soaring levels of executive pay and giving workers a greater say on strategy.

A spokesman for the prime minister said the government remained committed to improving corporate governance, after the proposal was not listed in the policy document.

The government could try to introduce changes to corporate pay by seeking to get companies to support their plans without bringing in primary legislation, or by changing the rules within existing legal frameworks without the need to pass fresh laws though parliament.

The government is expected to publish its plans for corporate governance in a green paper in the coming months.

“We were expecting a stripped-back Queen’s Speech and that’s what we got, but business leaders will actually be pleased to see the tighter focus on the most immediate challenges,” said Stephen Martin, Director General of the Institute of Directors.

“The scale of the task ahead is significant and business confidence, in light of our present political limbo, is low.”

Reporting by Kate Holton; editing by Paul Sandle and Susan Thomas

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