- My LS
New security law risks collateral damage to the economy, lawyers warn
A well-intentioned bid to tackle foreign investments that present a security risk to the UK could hit legitimate international business at a time when our economy can least afford it, solicitors’ leaders warned as peers prepare to vote on amendments to the National Security and Investment Bill at the Lords report stage on Thursday 15 April.
Law Society president I. Stephanie Boyce said: “Overall, the Law Society supports the National Security and Investment Bill, its clear intention to control foreign investments that may have national security implications, and the need for safeguards.
“However, as drafted, the bill casts its net too wide across ill-defined territory and could easily make international business both more difficult and more uncertain in Britain.
“We need legislation that is proportionate and stands the test of time. The National Security and Investment Bill is a sledgehammer to crack a nut and will hinder global Britain’s growth.
“It is critical for investor confidence that the bill defines national security and distinguishes it from national interest. It should make explicit those factors that should not be taken into account in assessing whether a trigger event would give rise to a national security risk – such as domestic political interests.
“The scope of the bill is so wide, the number of deals that might have to be scrutinised each year could rise to thousands, up from just 20–30 currently. The bill commits government to a decision for businesses within 30 days, but with so many deals to audit in such a short timeframe, complex deals could easily get held up and so be jeopardised.
“This increase in the scope of the national security regime moreover means that even small businesses receiving minor international investment could find themselves caught in the bureaucratic web of the regime.
“Investors will also take no comfort from the fact that the bill would allow the government to void a transaction up to five years after the event. This is completely out of step with the pace at which international business and investment moves. We believe a two-year limit is essential to give foreign businesses confidence that the UK is a safe place to invest.”
Notes to editors
Contact Harriet Beaumont for the Law Society’s parliamentary briefing and proposed amendments to the National Security and Investment Bill.
About the Law Society
The Law Society is the independent professional body that works globally to support and represent solicitors, promoting the highest professional standards, the public interest and the rule of law.
Press office contact: Harriet Beaumont | 0208 049 3854