Test to block foreign raids on UK firms

‘Proper industrial strategy’

FOREIGN companies could be blocked from seizing control of critical British businesses if the Conservatives win the election.

The party is set to introduce a national interest test which would allow ministers to intervene in controversial deals.

It follows years of criticism of successive governments’ lax approach to takeovers, as much-loved British brands from Cadbury to Jaguar fell under overseas control.

Under the plans, any foreign effort to buy more than 25 per cent of a company which is part of the ‘critical national infrastructure’ will face a review on security grounds.

The move follows a promise by Theresa May to stand up for British interests. however, sources claim the proposal is significantly less ambitious than originally intended.

The definition of critical infrastructure is expected to exclude all but the most sensitive firms. For example, AstraZeneca is unlikely to be protected. The drugs giant faced a £77 billion takeover bid from US giant Pfizer in 2014, triggering a wave of protests and fears of brutal job cuts.

David Cameron’s government refused to step in, and the deal only collapsed in the face of strong resist- ance from AstraZeneca’s board. In a speech shortly before she entered Downing Street, Mrs May said: ‘It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry, and AstraZeneca is one of the jewels in its crown. yet two years ago the Government almost allowed AstraZeneca to be sold to Pfizer, the US company with a track record of asset-stripping and whose self-confessed attraction to the deal was to avoid tax.

‘A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain.’

Treasury mandarins are said to be worried that the plans could put off investment, and Chancellor Philip hammond is also thought to have voiced concerns.

The proposals would allow foreign firms to build a larger stake in a company unchallenged than some had argued for. There were previously calls to launch a review if just 15 per cent of a firm was bought.

It is not yet clear if the pledge will be in the Tory manifesto when it is published later this month.

But senior Tories told the Sunday Times it would definitely be brought forward by the end of the year.