Key Facts

• James Palmer is a senior partner at Herbert Smith Freehills.
• Palmer advised on SoftBank’s £24 billion takeover of Arm.
• The Bill could see notifications increase from 12 to potentially 90 or 100, with an estimated impact assessment predicting up to 1,870 notifications under the new regime.
• The number of reviews is projected to increase from 12 in nearly 20 years to nearly 2,000 a year.
• There are concerns about the impact on small technology businesses due to the lack of a de minimis threshold in certain sectors like communications and artificial intelligence.
• The MP emphasizes the need for clarity and predictability for investors to maintain the UK's attractiveness as an investment destination.
• Palmer is concerned about broad mandatory filing sectors such as communications.
• There are no de minimises in several sectors identified by Palmer.
• Palmer fears that the bill may catch low-value intellectual property sales, burdening small businesses.
• Graham Brady raises concerns about fewer buyers potentially affecting business valuations due to restrictions from the National Security and Investment Bill.
• The MP supports a proportional approach that balances national security with economic impact.
• He suggests regular reviews of the bill's economic effects to maintain accountability.
• Graham Brady introduces David Offenbach as a consultant solicitor with Simons Muirhead & Burton.
• David Offenbach has extensive experience in takeovers and company governance over many years.
• Offenbach welcomes the Bill but suggests it could be improved for the post-covid, post-Brexit UK.
• The Bill does not define 'national security'.
• Lord Heseltine stated that research and development should be a subject of importance.
• SoftBank’s purchase of Arm, Google's acquisition of DeepMind, Cobham's sale to private equity, and Immarsat's takeover are cited as examples where national assets have been sold off.
• There is twice as much foreign direct investment into Britain compared to France and Germany.
• The National Security and Investment Bill improves upon previous regulations by providing a proper statutory framework for dealing with non-compliance.
• David Offenbach suggests establishing a 'national security investment commission' as a separate statutory body to handle national security issues.
• He advocates for Britain having its own sovereign wealth fund similar to Norway's, which is valued at more than £26,000 per citizen.
• The Bill includes controls on the purchase and acquisition of land and other physical assets as well as companies.
• There are 17 different areas and categories in the Bill to ensure no asset with national security issues slips through the net.
• David Offenbach suggests blocking acquisitions if beneficial ownership cannot be established.
• Graham Brady chairs the Public Bill Committee session.
• The next witness is Creon Butler from Chatham House.
• Creon Butler advises on policy issues including climate change, national resource security, global health security, and economic security.
• The Bill updates legislation necessary due to changes in global economy and threats over 18 years.
• International co-operation should be strengthened beyond Five Eyes, including Japan and EU.
• State-owned enterprises are not inherently more likely to pose a national security risk.
• Creon Butler has experience in the National Security Secretariat (NSS).
• The new investment security unit within BEIS should have a strong operational focus.
• There is a trade-off between review timescales and the number of cases being assessed under the Bill.
• Graham Brady is managing the session of the Public Bill Committee.
• Will Jackson-Moore, a partner at PricewaterhouseCoopers, is testifying about the impact of the National Security and Investment Bill on international capital flows into the UK.
• There are approximately 6,000 venture capital investments and nearly 10,000 mergers and acquisitions transactions in the UK each year.
• The UK is currently the largest inbound country for venture capital, private equity, and infrastructure investment in Europe.
• Many other European territories have equivalent legislation but differ in application processes.
• The Bill could introduce additional uncertainty that may affect investment decisions.
• The session was finishing slightly ahead of time.
• Michael Tomlinson ordered further consideration be now adjourned at 4 pm.