Newport Wafer Fab Sale

Chi Onwurah Excerpts

Thursday 15th July 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)]

Of course, Mr Speaker. The Government recognise Newport Wafer Fab’s value as a company, and its contribution to consortia based at the south Wales compound semiconductor cluster. The Government are committed to the semiconductor cluster and the vital role that it plays in the UK’s economy. The Welsh Government have previously provided financial support to the company, as economic development is devolved and the responsibility of the Welsh Government.

Under the Enterprise Act 2002, the Government have powers to intervene in mergers and takeovers that raise national security concerns. We have recently strengthened those powers in the National Security and Investment Act 2021, which is expected to come into force at the end of this year, but it is right that commercial transactions are primarily a matter for the parties involved. The Government have been in close contact with Newport Wafer Fab, but do not consider it appropriate to intervene in this case at the current time.

We will continue to monitor the situation closely, and, as part of that, the Prime Minister has asked the national security adviser to review this case. Separately, work is under way to review the wider semiconductor landscape in the United Kingdom. As I am sure the House will appreciate, I am unable to comment on the detail of commercial transactions, or of any national security assessment of a particular case.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I congratulate the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown) on securing the urgent question.

Newport Wafer Fab is a symbol of British innovation and world-class employment—not just its 450 employees but the wider regional semiconductor cluster. It is also a testament to the long-term role of public investment in strategic economic planning by the Welsh Government, so the priority must be to secure a viable long-term future for what is the UK’s largest semiconductor manufacturer. With European automotives protesting over chips shortages and promising to ramp up domestic production, it is clear that Newport Wafer Fab is a strategic economic asset.

Labour welcomes investment in the business, as we welcome almost all inward investment in thriving British industries, but, given the importance of semiconductors to our country’s critical infrastructure, there is a clear case for examining this on national security grounds, and it is a pity that the Minister did not make it. Global competition to secure microchip development is accelerating. Our national security interests require a strong position in this contested market, so how will the Minister now ensure that this vital national economic and technology asset is protected? Will she use the powers in the National Security and Investment Act 2021 to urgently scrutinise this takeover? If the sale is blocked on national security grounds, will the Government work creatively and urgently to secure the financing that the business needs? All options must be kept on the table, including a role for potential public equity investment.

As Labour argued during the passage of the NSI Act, the Government have consistently outsourced British national security and economic interests, because Ministers have prioritised market zeal over British security, as in 2012 when they let the Centre for Integrated Photonics, a prize British research and development centre, be taken over by Huawei. That is why Labour is calling for the national security and public interest test regime to be strengthened. This is a critical test of whether the Government are willing to use these new powers or not, which goes to the heart of what kind of industrial strategy we have and what kind of country we want to be.

[Amanda Solloway]

As laid out in the integrated review, China is a systemic competitor. The scale and reach of China’s economy, the size of its population, its technological advancement and increasing ambition to project its influence on the global stage, for example through the belt and road initiative, will have profound implications worldwide. Open, trading economies such as the UK will need to engage with China and remain open to Chinese trade and investment, but they must protect themselves against practices that have an adverse effect on prosperity and security. Co-operation with China is vital in tackling transnational-type challenges, particularly climate change and biodiversity loss.

The UK wants a mature, positive relationship with China, based on mutual respect and trust. There is considerable scope for constructive engagement and co-operation, but as we strive for that positive relationship, we will not sacrifice either our values or our security. It has always been the case that where we have concerns, we will raise them, and where we need to intervene, we will. The Government have a range of legislative and regulatory powers to protect infrastructure and critical services, including the new National Security and Investment Act 2021. The NSI Act is nation-agnostic: acquisitions should be considered on a case-by-case basis, which will help to ensure that the Act is not discriminatory and that we uphold our World Trade Organisation obligations.