Newport Wafer Fab Sale

Lindsay Hoyle Excerpts
Thursday 15th July 2021

(2 years, 8 months ago)

Commons Chamber
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Geoffrey Clifton-Brown Portrait Sir Geoffrey Clifton-Brown (The Cotswolds) (Con) [V]
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(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on the sale of the Newport Wafer Fab semiconductors plant in Duffryn, Newport, to the Chinese-owned firm Nexperia.

Thank you very much for granting this urgent question, Mr Speaker. I thank the Minister also for being present to answer it. I understand that the Government cannot comment on security matters, but the purpose of the urgent question is to give Parliament an opportunity to make its views known about the strategic importance of the Chinese takeover of Wafer Fab, a semiconductor manufacturer based in Newport.

The Chinese firm Wingtech Technology has a controlling stake in the acquiring company Nexperia, which supplies Chinese companies that create smartphones, including Huawei. The Prime Minister stated at the Liaison Committee last week on 7 July:

“This Government is spending a huge quantity of taxpayers’ money to make sure that we get Huawei out of our telecommunications networks.”

Would it not therefore be completely inconsistent if Government policy allowed the takeover of a firm creating microchips of such importance to our national security? The Prime Minister also stated that we need to be more self-reliant, and that he was told that it costs £9 billion to build a semiconductor factory. Why would we allow such sophisticated national infrastructure to be sold?

Finally, while I agree with the Prime Minister that we do not want an

“anti-China spirit to lead to our trying to pitchfork away every investment from China into this country”,

in this particular case the security issues should be paramount. China considers this matter vital for its national security, as do other countries, including our ally the United States. Why are our Government not taking the same view?

Lindsay Hoyle Portrait Mr Speaker
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We have gone slightly out of order. The hon. Member was meant to just ask the urgent question, and then come back. If the Minister can roll the two together, I will then go to the shadow Minister.

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

--- Later in debate ---
Amanda Solloway Portrait Amanda Solloway
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As I have said, the Government have looked closely at the transaction and do not consider it appropriate to intervene at the current time. The Prime Minister made it clear at the Liaison Committee that he would ask the National Security Adviser to do a review. I am afraid that I will have to get back to my hon. Friend on an impact assessment as I do not know that.

Lindsay Hoyle Portrait Mr Speaker
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I think that was a hint that the Government should provide them when they are promised.

Iain Duncan Smith Portrait Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
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I congratulate my hon. Friend the Member for The Cotswolds (Sir Geoffrey Clifton-Brown) on his question.

May I say to the Minister that I think the Government are in an unholy mess over this? It is no good their telling us that there is a very clear definition of what is strategic and what is not strategic. In the course of this failure to make a decision, did they look at what China thinks of semiconductors? China is the biggest exporter in the world and is busy buying up semiconductor technology everywhere it can find it. It has identified semiconductor technology as one of the key areas that it needs to dominate globally, and it is busy stealing technology, getting other people’s intellectual property rights and buying up companies. The idea that a semiconductor is not strategic! The technology will be used in almost everything we do—in everything we produce that is electronic.

My simple question is: are we now in a kind of Project Kowtow, where we just have to do business with the Chinese no matter what? That is outrageous. The Minister must take back to her Cabinet colleagues that it is not going to pass. We should have used the Act and blocked the deal.

--- Later in debate ---
Amanda Solloway Portrait Amanda Solloway
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As I mentioned, the Government are completely committed to human rights and are mindful of everything we need to do on that. We have looked very closely at this transaction. I can give the hon. Gentleman my reassurance that the National Security and Investment Act will allow the Government to scrutinise and intervene on any acquisitions that may pose a national security risk. I reiterate that the Government want a mature, positive relationship with China based on mutual respect and trust. There is considerable scope for constructive engagement, but as we strive for a positive relationship, we must not sacrifice either our values or our security.

Lindsay Hoyle Portrait Mr Speaker
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I now suspend the House for a few minutes to enable the necessary arrangements to be made for the next business.