City reacts to Conservative manifesto

City reacts to Conservative manifesto

Theresa May’s pledge to scrap the Serious Fraud Office (SFO) and incorporate it into the National Crime Agency (NCA) has dominated the City’s reaction to the release of the Conservative Party manifesto, which also makes clear the need for proper approval of bidders on M&A transactions.

The takeover policy outlines the need to update the rules on M&A in order to apply greater scrutiny on potential bidders. The manifesto states: ‘We will update the rules that govern mergers and takeovers. This will require careful deliberation but we can state now that we will require bidders to be clear about their intentions from the outset of the bid process; that all promises and undertakings made in the course of takeover bids can be legally enforced afterwards; and that the government can require a bid to be paused to allow greater scrutiny.’

One City corporate partner suggested this could make way for a Foreign Investment Board in a similar vein to Australia. ‘They’re just planting the idea to get people used to it. The Americans and the Australians have a foreign investment approval process and perhaps that’s the intention here.’

As regards the judiciary, the manifesto also states an intention to ‘modernise our courts, improving court buildings and facilities and making it easier for people to resolve disputes and fight justice.’ Among the other key policies for law and business include repealing section 40 of the Crime and Courts Act 2014, which, if enacted, would force media organisations to pay the legal costs of both sides in libel and privacy cases, even if they win.

There has been some debate among partners over the SFO cull, with Baker McKenzie dispute resolution partner Jonathan Peddie describing it as a ‘big leap forward.’ He adds: ‘The proposal reflects the move towards intelligence-driven, holistic law enforcement which has developed apace since the Crime and Courts Act 2013. Placing fraud, bribery (including the DPA jurisdiction), money laundering, serious organised crime and terrorist finance strategies all under one roof recognises the need for a single strategy for an interwoven set of threats.’

However Kingsley Napley veteran litigator Stephen Parkinson takes a different view, describing Peddie’s comments as ‘a triumph of hope over experience.’ Parkinson adds: ‘In my experience, when you get major organisational change, it always leads to paralysis. The NCA’s focus is not on economic crime, it has absolutely no track record. The way you investigate and prosecute serious and complex fraud is very different from the way you investigate organised crime. The NCA is an unknown entity in this respect.’

Michael Potts, managing partner of Byrne and Partners added: ‘It is no surprise that the drive to abolish the SFO has resurfaced in the Tory manifesto. Theresa May has repeatedly proposed folding its business into the NCA. In that respect, who remembers the Assets Recovery Agency that was abolished and folded into SOCA and then the NCA? The real risk of such an abolition is that it will cause the momentum of the proper prosecution of serious fraud and corruption/bribery to stall just when the SFO is getting some traction.’

Key Conservative party policies at a glance:


• Leave the European single market

• Pursue free trade with European markets and secure new trade agreements with other countries

• Secure the entitlements of EU nationals living in Britain and British nationals living in the EU

• Replicate all existing EU free trade agreements

Taxation and the economy

• Increase the personal tax allowance to £12,500 and the higher rate of tax to £50,000 by 2020

• A referendum for local residents to veto high increases in Council Tax

• No increase to VAT

• Guaranteed annual increases in the state pension through a new double lock to be introduced in 2020


• Double the Immigration Skills Charge levied on companies employing migrant workers to £2,000 a year

• Listed companies will have to publish rate of executive pay to broader UK workforce pay

• Maintaining Corporation Tax fall to 17% by 2020

• Reform the business rates system

This article first appeared on The Lex 100‘s sister publication, Legal Business.