Govt introduces new powers over UK businesses key to national security and resilience

The UK Government will from today be able to scrutinise certain foreign takeovers to ensure they do not threaten the UK’s ability to combat a public health emergency, such as coronavirus.

Changes to the Enterprise Act 2002, being laid before Parliament today, will give the Government the power to intervene if a business that is directly involved in a pandemic response, such as a vaccine research company or PPE manufacturer, finds itself the target of a takeover – either from outwardly hostile approaches, or financially distressed companies being sold to malicious parties.

The changes will also expand powers to scrutinise and intervene in mergers in three sectors of the economy central to national security, namely artificial intelligence, cryptographic authentication technology and advanced materials, by lowering the thresholds that must be met before such scrutiny can take place.

Secretary of state for business, Alok Sharma said these timely new powers will send an important signal to those seeking to take advantage of companies struggling as a result of the pandemic that the UK government will step in to protect its national security.

"To better protect the country’s resilience to COVID-19 we are taking steps now to mitigate against public health emergencies."

"These measures will strike the right balance between the UK’s national security and resilience while maintaining our world-leading position as an attractive place to invest - the UK is open for investment, but not for exploitation."

These interim changes to the Enterprise Act are put in place ahead of more comprehensive powers in the forthcoming National Security and Investment (NS&I) Bill.

The government has intervened on public interest grounds under the EA02 on 20 occasions: 12 on national security grounds, 7 on media plurality and once on financial stability. No transaction has ever been blocked in public interest grounds.

The public health emergency Statutory Instrument will be laid today, will come into force tomorrow.

COVID-19 cases and deaths (Source: UK Government)

As of 09 00 on 21st June, there had been 7,890,145 tests, with 175,018 tests conducted in the prior 24 hours.

304,331 people had tested positive, of which 1,221 in the prior 24 hours.

As of 17:00 on 20th June, of those who tested positive for coronavirus in the UK, across all settings, 42,632 had died, of which 43 in the prior 24 hours.

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