Foreign firms which lie about protecting British jobs in takeovers will face fines 

  • Vince Cable says he wants 'no wriggleroom' when promises are made
  • Law will be tightened to impose financial penalties on foreign companies 
  • Business Secretary reveals Lib Dems back a tougher public interest test

By Matt Chorley, Mailonline Political Editor

Foreign companies will be hit with huge fines if they break promises to protect British jobs.

Vince Cable said assurances made during takeover talks must be honoured, or companies would face the consequences.

The Business Secretary said he wanted to tighten the law so there is ‘no wiggle-room’ to hold businesses to account.

Business Secretary Vince Cable said he wanted to tighten the law so there is ¿no wiggle-room¿ to hold businesses to account

Business Secretary Vince Cable said he wanted to tighten the law so there is ‘no wiggle-room’ to hold businesses to account

The move follows controversy over the ultimately failed takeover bid by US pharmaceuticals giant Pfizer for British-based AstraZeneca.

While the takeover looked like it might still happen, the government insisted it was working to protect jobs and investment in research in the UK.

But critics said that once a company takes control of a British firm, there is little that can be done to ensure they stick to their promises.

Now tougher laws are being looked at to bolster the 'national interest test' following concerns about the acquisition of major UK firms.

Pledges made during negotiations should be legally binding with penalties for breaking them running into millions of pounds, Mr Cable said.

He told BBC One’s Andrew Marr show: ‘'We’re probably going to get other big takeovers coming down the track.

‘I think where we now have to strengthen that is to make sure that any commitments made, there’s no wiggle-room.

Where we now have to strengthen [the law] is to make sure that any commitments made, there’s no wiggle-room.
Business Secretary Vince Cable 

‘And we’re talking to the Takeover Panel about how to do that and we may well get into the area of having financial penalties in order to make sure that those commitments are binding.’

He said new laws were in the pipeline, and suggested the Lib Dems could go further and demanded a tougher public interest test introduced on foreign takeovers.

Mr Cable added: ‘Supposing the company don’t want to negotiate, or they’re not willing to give the assurances you need, what do you do then?

‘And I think you then need some fallback powers, you need the last resort where the Government can intervene, can invoke the public interest under the existing legislation. ‘What I would argue – and the Liberal Democrats’ view within the Coalition – is we need to do this, as it were, with a laser missile rather than a cluster bomb...

'We are going to need a last resort power such that if there is something that is very clearly against the national interest – and the loss of our R&D in pharmaceuticals is a very good example – the Government can in those circumstances intervene. I made it very clear when the original takeover was taking place that we were reserving all our options.'

The move follows controversy over the ultimately failed takeover bid by US pharmaceuticals giant Pfizer for British-based AstraZeneca (pictured)

The move follows controversy over the ultimately failed takeover bid by US pharmaceuticals giant Pfizer for British-based AstraZeneca (pictured)

At the time of AstraZeneca deal, Labour called for the Government to strengthen the public interest test for takeovers so any potential buyout would be subject to an assessment of how it impacted on Britain's strategic research and science base.

Today shadow business secretary Chuka 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 R&D 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.'

TUC general secretary Frances O'Grady welcomed the move, which she said was evidence of the Government tackling living standards rather than 'union-bashing'.

She told BBC One's Andrew Marr Show: 'I think it's definitely a step in the right direction.

'This is the kind of thing that the Government should be concentrating on - how do we make sure that we get real investment for the future and we start tackling living standards instead of having a bit of old-fashioned union bashing.' 

The comments below have not been moderated.

The words"Vince Cable" and "Public Interest" really shouldn't appear in the same sentence.The man is an incompetent fool.

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Oh, wow, and the £50 k fine will compensate for the £20 million saved in layoffs?? Is Cable in the line of fire in the reshuffle? Hope so..........................

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what about punishing ministers who sell of businesses cheap so friends in the city can make a killing vince

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Fines are no use, put the CEO in jail for a year

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WHY DOES VINCE(completely and utterly useless buffoon) CABLE STILL HAVE A JOB?????????

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Little Clegg is too frit to pension off this incompetent wobbly headed lefty old codger.

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CAN IT BE BACKDATED? CLEGGY'S WIFE MADE A LOT OF MONEY HELPING TO BROKER THE DEAL WITH CADBURY'S IN BRISTOL AND LOOK WHAT HAPPENED THERE - AT THE SAME TIME HE WAS POSTURING THAT JOBS WOULD BE SAVED!

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Too little and, far too late.

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Start with manifesto's, MPs lie through their teeth to get elected.

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Impossible to enforce , EU employment laws mean that jobs are open to all EU member ststes and their people, more spin from the waste of space LibDems

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