U.K. Tightens Control Over Foreign Investment After Hinkley Deal
(Bloomberg) -- The U.K. will increase government control over foreign investment in critical infrastructure projects after approving plans for French and Chinese involvement in the controversial Hinkley Point nuclear plant.
Britain will take a special share in future nuclear projects following the 18 billion-pound ($24 billion) Electricite de France SA development in southwest England to ensure significant stakes cannot be sold without its knowledge or consent, the government said on Thursday. The French state-backed company will also need prior notification and agreement from U.K. ministers before selling its controlling stake in Hinkley.
Prime Minister Theresa May ordered a review of the project to address national security concerns after succeeding David Cameron in the wake of the U.K.’s vote to leave the European Union. May was home secretary before becoming premier, overseeing the police and the security service MI5, and the reforms will inject greater government control over future infrastructure projects.
Nick Timothy, now May’s chief of staff, worked for her at the Home Office and criticized the Hinkley deal in an article for the Conservative Home website in October 2015. He was working for an education charity at the time but returned to May’s side when she became prime minister.
“The Government seems intent on ignoring the evidence and presumably the advice of the security and intelligence agencies,” Timothy wrote. “No amount of trade and investment should justify allowing a hostile state easy access to the country’s critical national infrastructure.”
Business Secretary Greg Clark made clear on Thursday that the new controls are intended to address such concerns.
“We will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the government’s agreement,” Clark said in a statement. Britain will consider national security implications of all significant investments in critical infrastructure, including nuclear energy, in the future, the statement said.
The plans for greater control over the ownership and control of critical infrastructure mirrors arrangements in other major economies, including the Committee on Foreign Investment in the United States, which reviews foreign control of businesses that might affect national security.