Vince Cable: UK to remove takeover 'wiggle room'
- 13 July 2014
- From the section Business
Business Secretary Vince Cable has said he will tighten the rules to deal with foreign takeovers of UK firms.
He wants any new regime overseeing takeovers to also include possible fines for firms which renege on promises made during the deal.
He told the BBC that any commitments must have no "wiggle room".
He said legal changes would probably be needed to enforce such commitments, but that there was agreement across government for such measures.
After his comments, Labour's shadow business secretary Chuka Umunna said his offer to work with Mr Cable on the issues "remains open".
Tighter laws to strengthen the "national interest test" could also be in the pipeline, after concerns about the acquisition of major UK firms.
At present a formal public interest test only allows ministers to intervene when financial stability or media plurality are threatened.
Speaking to the BBC's Andrew Marr Show, Mr Cable said that as a "last resort" the government needed to be able to intervene in the public interest.
This follows controversy around the ultimately failed takeover bid by US drugs giant Pfizer for British-based peer AstraZeneca.
Critics had said Pfizer's assurances were vague and raised concerns of job cuts as well as the loss of vital research and development carried out at the UK company.
Mr Cable said that the government "had got some very good assurances from Pfizer" at the time, but the question was whether they were binding.
He said that to ensure in future that such assurances would be binding, "we may well get into the area of having financial penalties" as a means of ensuring that companies stood by their takeover promises.
But he also said it was a good sign that overseas firms wanted to invest in the UK.
Shadow business secretary Mr Umunna said: "Labour has led calls for a strengthened public interest test to apply to proposed takeovers and mergers in order to protect Britain's [research and development] and science base, which the business secretary - three months on - now appears to be coming round to.
"Vince Cable says he wants commitments given by the bidders of target British companies to have more teeth - a move which Labour would welcome.
"My offer to work with Vince Cable to achieve these aims, on a cross-party basis, remains open."