‘Why Labour must expand takeover powers to protect UK jobs and industry’

Our Labour Government is embarked on an important industrial strategy to promote growth, encourage new investment and stimulate the creation of new enterprises and new jobs. Part of its work is to partner with the private sector through successful Labour innovations such as Great British Energy Limited and the National Wealth Fund.

Part of the task is also to look at existing laws to see whether and how reforms can enhance the government’s objectives. One area where reform is vitally needed is in relation to takeovers of stock exchange-quoted companies.

Protection of existing jobs and businesses is especially important at a time of increased global uncertainty, when national self-reliance and resilience are paramount.

There has been an increasing number of sales of UK-listed businesses to foreign companies in the recent past. The valuations of UK-targeted companies seem cheap to foreign buyers, both for public companies and private equity. One key statistic in 2025 was that 56% of business sale activity was from public to private buyers, mainly in the industrial and technology sectors.

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For example, on 1 April 2026 it was announced that one of our largest public companies, Unilever, proposed to undertake the second-largest food transaction in history — the slicing off of its food arm to the US-based spice company McCormick in a huge $44.8 billion deal.

On 8 April 2026 it was announced that the listed company Senior PLC will be bought by US private equity for £1.3 billion. Senior is a profitable, Hertfordshire-based specialist supplier of aircraft parts employing some 5,000 people.

Whilst foreign direct investment is welcome, it should be value-enhancing and not predatory value extraction. There is good news here. Britain is very entrepreneurial. We are third in the world for the number of start-ups, and third in the world for hosting unicorns — fast-growing companies valued at more than $1bn. And on 13 April 2026, OpenAI, the developer of ChatGPT, announced that it had signed a new office lease in the King’s Cross area. Phoenix Court, a US venture capital firm, said that King’s Cross is the world’s third-largest productive tech cluster after the San Francisco Bay Area and Beijing. OpenAI announced that it wants to make this its largest research base outside the USA.

The problem is that the law regulating takeovers is quite narrow. Other than in respect of national security, the regulator — the Competition and Markets Authority (CMA) — can only block or regulate a takeover on the grounds of a lessening of competition.

Only in the following areas is Government itself permitted to intervene by serving a public interest notice: media plurality, financial stability or public health. Here, a Labour government would be able to intervene (as Lisa Nandy did recently as Culture Secretary in respect of the sale of the Daily Telegraph).

In respect of national security, the Government can intervene to stop or regulate a takeover. It is, however, very light-touch regulation. In 2025 there were 1,143 notifications to government, of which 4.5% — some 56 cases — were assessed; 16 were allowed to proceed with conditions and only one proposal was blocked. The Cabinet Office operates the regime, but the decision to block is taken by the Business Secretary.

There are no public interest protections in sectors such as telecoms, post, rail, airports or air traffic control.

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I propose that the public interest test should be widened, as it was before 1984, so that takeovers can be blocked, or allowed to proceed with conditions wider than just competition issues.

As part of an active industrial strategy, the government should be able to intervene to protect vital industries and matters of public concern. Government should be able to consider, when examining a proposed takeover, such matters as the effect on employment, the environment, the location, the financing and the corporate governance of the buyer, as well as their national and regional policy.

I propose that Government should be able to block or regulate a takeover:
A. In the interests of protecting UK research, development and innovation.
B. Where the business activity is strategic for the UK economy (as they do in France).
C. Where it is in the public interest generally.

It is important to have a general power to intervene because of the ever-changing economic and business environment and the emergence of new areas of national interest and concern.

This reform can be introduced by a Statutory Instrument, as was done in 2008, 2020 and 2023, so our Government could do this immediately.

Had these reforms been in place, it may be that, for example, the following deals would not have proceeded, or would have proceeded on a different basis: Google’s purchase of DeepMind in 2014; SoftBank’s purchase of ARM in 2016; Melrose’s purchase of GKN Industries in 2018; US private equity’s purchase of Inmarsat Satellite in 2019; US private equity’s purchase of Cobham Group (defence and aerospace technology companies) in 2019; and US private equity’s purchase of Morrisons in 2022.

Now is the time for a bold, active Labour Government to introduce this new regulatory power to protect research, save thousands of jobs and help grow the economy.

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