National Security and Investment Bill

Debate between Aaron Bell and Lord Sharma

2nd reading & 2nd reading: House of Commons
Tuesday 17th November 2020 Commons Chamber

[Alok Sharma]

I will go on to the detail of that particular issue, but as the right hon. Gentleman identified, the Bill looks at assets and intellectual property. On the point that he raised about the size of transactions, as he knows, under the 2002 Act, apart from some limited exceptions, businesses being acquired must have a UK turnover of over £70 million or, indeed, the merger must meet a minimum 25% market threshold. This means that acquisitions of smaller but technologically sensitive companies are not covered.

The Government have been clear for a number of years about our intention to introduce new powers. Many of our international allies, including our Five Eyes partners, have also acted to update their legal frameworks to address national security risks. We, in turn, are seeking to update our legislation in a proportionate manner to ensure that we have more security for British businesses and people from hostile actors targeting our country; more certainty for businesses and quicker, slicker screening processes as we remain open to trade and recover from covid-19; and a regime that is in line with our allies, meaning that investors will be familiar with this approach.



Let me turn to some of the specifics of the Bill. Part 1, chapter 1 introduces a call-in power that the Government may use in relation to a trigger event across the economy that they reasonably suspect has given rise to or may give rise to a risk to national security. Trigger events include acquisitions of certain shares or voting rights in a qualifying entity, and the acquisition of material influence over such an entity. As the right hon. Gentleman pointed out, it will be possible for the first time to call in the acquisition of a right or interest in a qualifying asset, including intellectual property, where such an acquisition would enable the acquirer to use the asset or control or direct how it is used. That is similar to the US and other countries’ regimes.

The call-in approach is consistent with the 2002 Act, but importantly there are no minimum thresholds for the size of the business or asset to be acquired. That means that sensitive businesses and assets that may previously have slipped under the minimum size threshold will no longer do so. That will close the back door into the United Kingdom that hostile actors could exploit.

However, it is important to reassure the investment community that the Government expect to use these powers sparingly. We estimate that less than 1% of transactions in any given year will be subject to call-in. For transactions that fall outside the mandatory requirement of the regime, the Government will be able to call in a transaction within a period of five years of a trigger event having taken place where they have not been notified. When the Government become aware of a trigger event having taken place, they will have six months to issue the call-in notice. That five-year period is, again, consistent with regimes in Germany and France. The Bill requires that the Government publish a statement of policy intent explaining how they expect to use the power to issue a call-in notice.

Should the Bill become an Act, the Government’s call-in powers will apply from the date of introduction and will cover transactions that complete during its passage. That will ensure that hostile actors do not rush through the completion of transactions between the introduction of the Bill and Royal Assent as a means to avoid scrutiny under this legislation. My Department has already set up an investment security unit to field enquiries from businesses and investors about transactions under the new regime.

Under the National Security and Investment Bill, there will be no requirement to publish call-ins. That is of course in contrast to the public interest intervention notices under the 2002 Act.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I welcome what the Secretary of State just said about the call-in power. Will he confirm that, as a result of the measures in the Bill, most transactions can take place within 30 days, which means that the UK will remain a venue, and be an even better one, for foreign direct investment as we seek to rebuild our economy following coronavirus?

[Alok Sharma]

My hon. Friend makes a very important point. We are giving certainty, and we expect that most call-in decisions will be decided upon within 30 days. I said that we expect that less than 1% of all transactions in any given year will be called in, and only about 10% of those will then face detailed scrutiny.

Oral Answers to Questions

Debate between Aaron Bell and Lord Sharma

Tuesday 29th September 2020 Commons Chamber

[Alok Sharma]

We currently have a close to half a million green jobs in this country. We want to create another 2 million. The hon. Lady will also know that the Chancellor announced the green homes grant package, which will support more than 100,000 green jobs.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

Last week, I spoke with my constituent David Bevan, who runs Alive Network, the UK’s largest live entertainment booking agency. He and I acknowledge that he has already had an awful lot of support from the Government, through grants, furlough, bounce back loans, VAT deferral and so on. Times are tough at the moment, but he expects things to be busier than ever when we get to the other side. What more can my right hon. Friend’s Department do to help David’s business get to the other side?

[Alok Sharma]

I am pleased that my hon. Friend welcomes our jobs package. The Government continue to provide a full range of measures to protect jobs, businesses and livelihoods. Of course, I want this sector—indeed, every sector—to return to normal as soon as possible, but that will require scientific evidence to show that it is safe to do so.

Oral Answers to Questions

Debate between Aaron Bell and Lord Sharma

Tuesday 16th June 2020 Commons Chamber

[Aaron Bell (Newcastle-under-Lyme) (Con)]

What steps his Department is taking to support businesses facing insolvency.

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

Mr Speaker, may I join you in your words about our former colleague, Jo Cox?

We have introduced the Corporate Insolvency and Governance Bill to help companies maximise their chances of survival. The Bill introduces new corporate restructuring tools and temporarily suspends part of insolvency law to help businesses keep trading.

[Alok Sharma]

My hon. Friend is proving to be a real champion for businesses in his constituency, and he raises an incredibly important point. The impact assessment of the Bill’s measures suggests that the three permanent changes to the UK insolvency framework will result in net benefits to business of over £1.9 billion in today’s prices, which is a much needed boost for businesses at this uncertain time.

[Aaron Bell]

I welcome the Secretary of State back to the Dispatch Box after his recent illness. Businesses in Newcastle-under-Lyme and across the country face the risk of insolvency, especially those with business models that are dependent on socialising. In addition to what he has set out, which I welcome, can he tell us what Companies House proposes to do to support businesses at threat of insolvency?

[Alok Sharma]

My hon. Friend raises an important point, and this is part of the Bill. While Companies House has extended the period for filing accounts, we will give businesses the maximum period available under the powers in the Corporate Insolvency and Governance Bill for filing their accounts, confirmation statements and event-driven updates. At a time when many companies are focused on surviving, that will be very welcome respite.