Boris Johnson Looking to ‘Improve’ U.K. Rules on Foreign Investment

(Bloomberg) -- Boris Johnson’s U.K. government is looking at how it can protect critical industries from foreign takeovers, as his party urges him to establish a new, more cautious, relationship with China.

The impact of coronavirus has added to existing questions that Conservative members of Parliament were asking about Johnson’s decision to allow Huawei Technologies Co. to supply equipment for the U.K.’s 5G network.

Answering questions at the government’s daily virus press conference Tuesday, Business Secretary Alok Sharma said the forthcoming National Security and Investment Bill will address these concerns.

“It’s important that we protect our critical assets,” he said. “We will look to see through the forthcoming bill when it comes through how we might improve upon that.”

According to Sharma’s department, the bill “will strengthen the government’s powers to scrutinize and intervene in takeovers and mergers to protect national security.”

Tom Tugendhat, the Conservative chairman of Parliament’s Foreign Affairs Committee, said it was essential to act.

“State-owned enterprises are going to go into this recession with deeper pockets than free market companies,” he said in an interview. “That’s going to turn many firms into easy pickings. Australia and even the European Union are tightening up foreign investment rules. That’s leaving the U.K. one of the few places where businesses are naked while everyone else is wearing armor.”

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