Ministers will be more likely to intervene in foreign takeovers of British technology companies under changes to implementation of new national security powers.

The Government has revised the conditions under which it expects to review deals that may affect Britain’s security, widening the scope of the rules.

The proposed changes mean that artificial intelligence, computer equipment and quantum technologies will be considered on the same level as defence and emergency services suppliers, indicating a greater appetite to intervene in tech deals.

It comes amid a security row over Britain’s biggest microchip factory, which was recently sold to a Dutch chipmaker owned by a Chinese technology company.

Newport Wafer Fab’s sale to Nexperia is currently being reviewed by Sir Stephen Lovegrove, the national security adviser, after Boris Johnson said the Government should take a second look at the deal.

The National Security and Investment Act, which will come into force in January, strengthens the Government’s power to review and block deals if they are seen as presenting a security threat.

National Security and Investment Bill

It outlines 17 areas of the economy – from military suppliers and energy firms, to synthetic biology, computer hardware and robotics – which could be affected. A dedicated Investment Screening Unit will review transactions within 30 days and allow the Government to intervene in deals up to five years after they are agreed.

A policy statement attached to the law was updated last week to say that acquisitions in all 17 areas will be treated as more likely to be called in for review, and that each deal will be treated on a “case by case basis”.

Previously ministers had said they would assign different levels of risk to certain areas of the economy, with areas such as military contractors and Government suppliers more likely to be scrutinised than companies in the “wider economy”.​​

The Government has sought to balance promises to remain open to international businesses with growing concerns about raids on British technology and defence companies. Last year, 492 UK companies were bought by foreign investors for £19.2bn, according to official figures.

Ministers recently shut off taxpayer-backed payments to Newport Wafer Fab after it was sold to Nexperia, as it emerged that the Welsh chip factory is involved in publicly-funded defence projects. The deal could be reviewed under the new legislation, which covers deals announced from November 2020.

Dealmakers have raised concerns that the national security laws could discourage investment in the UK and hold up acquisitions.