Boris Johnson is preparing tough new laws to crack down on foreign takeovers that pose a risk to Britain’s national security.
In a move that will garner support from critics of China, Mr Johnson is considering making it mandatory for countries to announce potential takeovers that could pose a security risk.
It comes just days after it was revealed the government planned to deepen relationships with its ‘Five-Eyes’ intelligence partners, in a bid to loosen China’s grip on investment into Britain’s technology and research sectors.
Under previous laws set out by former prime minister Theresa May, it is optional for firms to declare such takeovers – but new laws could see companies penalised for not telling the government, according to The Times.
Boris Johnson, pictured speaking at the Global Vaccine Summit on Thursday, is said to be drafting new laws to protect businesses from foreign takeovers
The new legislation, believed to have the full backing of the PM’s aide Dominic Cummings and Chancellor of the Exchequer Rishi Sunak, comes amid fears British businesses could be left vulnerable in the wake of the economic crisis brought about the coronavirus pandemic.
Chair of the Foreign Affairs Select Committee Tom Tugendhat told The Times: ‘Clearly a recession is going to have a disproportionate effect and leave companies like ours under a greater threat of takeover from state-backed entities than at any time before.
‘The UK has some of the weakest protections against foreign takeovers of any nation. There is a danger that if we do not keep pace then our companies will be naked when everyone else is wearing armour.’
According to The Times, businesses would have to declare when a foreign company tries to buy more than a 25 per cent stake in their shares, purchases assets, intellectual property or acquires ‘significant influence’.
Tom Tugendhat has warned some British businesses are under a greater threat of takeover following the coronavirus pandemic
The move comes after months of criticism over Huawei’s involvement in the rollout of Britain’s 5G network.
The state-owned company has bought a stake in a company responsible for commercialising research at Oxford University. It also has a £5million deal with Imperial College London that will see it provide 5G at its West London campus, while also funding research and facilities for the next five years.
Over the weekend it was reported that senior members of the Cabinet, including Mr Sunak, had warned against putting up ‘an economic wall’ with the world’s second largest economy.
But Mr Johnson is determined to ‘reset and reform’ relations, by working closely with Australia, New Zealand, the US and Canada – the ‘Five Eyes’ intelligence partners.
In light of Beijing’s handling of the Covid-19 pandemic, Downing Street figures have warned of a ‘reckoning’ with the Chinese government.
The Mail on Sunday has learnt the plans discussed at the NSC include urgently seeking a Western-only solution to the lack of expertise in superfast 5G technology.
Ministers are being urged to curb Chinese involvement in Britain’s nuclear power plants as relations with Beijing sour.
As Hinkley Point C is built in Somerset, state-owned China General Nuclear Power Group (CGN) is being lined up as a partner in similar schemes planned for Sizewell in Suffolk, and Bradwell in Essex.
The projects were part of a deal struck by former prime minister David Cameron and Chinese premier Xi Jinping in 2015, with the nations hailing a ‘golden era’ of relations.
But senior Tories want Boris Johnson to reconsider as concerns grow about Beijing’s ambitions and potential grip on important infrastructure.
The Prime Minister has restricted the involvement of Chinese telecoms firm Huawei in the 5G mobile network. Now China’s ambassador to the UK has fired a warning shot at the Government in return.
Liu Xiaoming has privately told ministers China could cut its backing for the nuclear plants and HS2 if Huawei is sidelined in 5G plans.
HSBC has also asked the Government to reconsider its position on Huawei.
Chairman Mark Tucker told Johnson he feared fresh reprisals against HSBC in China if Huawei was blocked, The Sunday Telegraph reported.
Johnson has faced pressure from US President Donald Trump and Tory backbenchers to ban the firm altogether.
Senior Tories want PM Boris Johnson to reconsider Chinese involvement as concerns grow about Beijing’s ambitions and potential grip on important infrastructure
Tougher scrutiny of China has grown as its relations with the UK cooled, with Beijing’s communist leadership criticised over its early handling of the pandemic as well as its crackdown on Hong Kong.
Bob Seely, a member of the Commons foreign affairs committee, said: ‘The world has changed. There’s a strong case for saying we need to be more mindful of our vulnerabilities.
‘I would be wary of letting China in. That’s the case with Huawei and nuclear power. It is better to be safe than sorry.’
French firm EDF submitted plans last week for Sizewell, which it will develop with CGN – the second of the three plants agreed by Cameron and Xi. Hinkley, the first, was reviewed by Theresa May’s government but allowed to go ahead.
Like that plant, Sizewell C will use French designs. CGN will help to fund it and have an option to take a 20 per cent stake.
But state-owned CGN will be the senior partner at Bradwell, owning a two-thirds stake and using its own designs. Former Tory leader Sir Iain Duncan Smith warns the plants are set to become ‘the next Huawei’.