The UK government is paving the way to make it harder for foreign takeovers of UK technology firms deemed to be in the public interest.
The upcoming National Security Investment Bill has been in the works for some time, based on a Green Paper published back in 2017, designed to give Government greater scrutiny of any overseas buyers of UK technology start-ups.
“We’re definitely supportive of the Government being able to protect the UK’s strategic interests in tech,” a source close to one cabinet minister told the Daily Telegraph.
Draft proposals for the bill from 2018 would introduced more rigorous checks on any state-backed group looking to buy more than a 25% stake in any British firm developing anything deemed key to national security.
The legislation has become more pressing in wake of the Government hardening its attitude towards China, and the security risks involved in using Huawei technology in the planned 5G network.
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During a recent Prime Minister’s Questions, Prime Minister Boris Johnson said that measures would be brought forward within the next few weeks to ensure the UK “protects our technological base”.
MPs were “right to be concerned about investment”, he said, and right to be “the buying up of UK technology now by countries that may have alternative motives”.
However, it is not just China which the Government is concerned about buying up world-beating technology.
Boris Johnson’s chief of staff last year bemoaned the sale of British AI developer DeepMind, writing that the UK “had a valuable asset and let Google buy it for trivial money without the powers-that-be in Whitehall understanding its significance”.
DeepMind, which sprang out of University College London – was bought by Google for $500m in 2014 – a price ex-Google CFO Patrick Pichette later admitted was “a steal”.
And US DNA sequencing giant Illumina bought Cambridge University start-up Solexa for £600m in 2006; today, the American company has a market cap of $45bn and employs 11,000 people in California.