ARM: Foreign Acquisition

Motion made, and Question proposed, That this House do now adjourn.—(David T. C. Davies.)

Earlier this evening, BBC Look East reported that this was a debate worth waiting up for, so we surely must not disappoint. I am very grateful for the opportunity to raise an issue vital to my constituency, but also important for the future of the wider UK economy. I declare at the outset that I am a member of Unite the Union, and I am very grateful to it for giving me the opportunity to hear directly from members employed at the company.

This urgently needed debate is to secure answers on the future of one of the UK’s most successful tech companies, ARM, which is based in my constituency. It was confirmed last Monday that it was being sold to the American tech firm Nvidia. Since it was founded in 1990 in Cambridge, ARM has become one of the UK’s best home-grown technology success stories, with huge global reach. It now designs and licenses the basic blueprints of chips used in around 90% of the world’s smartphones, as well as countless sensors, smart devices and cloud devices. Hundreds of global companies license its designs, including Apple, Samsung, Huawei and Qualcomm, putting the UK firmly at the centre of global technological development. ARM employs around 2,700 people in the UK, many in highly skilled, high-tech jobs. They work in its headquarters in Cambridge and across the country in Belfast, Manchester and Warwick.

First, I congratulate the hon. Gentleman on securing this Adjournment debate. I share his concern, as I have a number of high-tech and modern manufacturing companies in my constituency. Does he agree that the proposed sale will be against the national interest and the UK’s ambitions to be a European technological powerhouse? It is important for us in the UK to look after our own.

The hon. Gentleman anticipates my arguments, because there can be little doubt that this home-grown tech star is a great national asset for the country. Back in 2016, alongside many in Cambridge and across the UK tech sector, I was hugely disappointed to see ARM sold to the Japanese conglomerate SoftBank. I warned then that we were losing control of this important national asset, and I fear we are now seeing that warning borne out.

ARM’s sell-off in 2016 was backed by this Government with conditions that its headquarters would stay in Cambridge and its staff would be maintained, and so far that guarantee has been honoured, but we are now faced with a new situation with the news of the sale last Monday. Back in 2016, the then Chancellor, Philip Hammond, considered it so significant that he announced the deal personally and legally binding guarantees enforceable by the Takeover Panel were secured. This time there has been silence from Government—a silence that I hope will be broken this evening. Although I recognise the sensitivities around commercial confidentiality, the same applied back in 2016. We need to know what the Government’s view is on the transfer of a key UK- based technology giant, particularly in such uncertain times.

I thank my hon. Friend for securing this important debate. Does he agree with me that in assessing the risks of the takeover bid, we need to understand the possible repercussions for British jobs and industry if trade sanctions are put in place by President Trump, for example, as the Nvidia parent company is based in the United States?

I thank my hon. Friend the Chair of the Business, Energy and Industrial Strategy Committee. He makes an important point that I will come on to, but I return to the Government’s position, because I find their silence slightly ominous. It has been breached only by briefings to selected journalists and, frankly, that does not seem good enough to me.

It would be astonishing if this Government, with all their talk of world-beating test systems and taking back control, considered allowing us to lose further control of one of the only areas of technology in which we are genuinely world-beating and world-leading. It is particularly astonishing that the Government might be prepared to throw away British influence when it represents such a key bargaining chip in trade talks in a post-Brexit era. I do not think any other country in the world would allow such a jewel in the tech crown to be handed over in this way, so I urge the Government to scrutinise the deal carefully and to step in and use powers available to them to impose strict, legally binding conditions.

The sale raises a range of questions and issues of local, national and international significance. I have been raising them for many weeks now, as have trade unions and the co-founders of ARM. We have received little substantial response from Government, although I was pleased to have a direct discussion with Nvidia today. I invite the Minister to provide some answers from the Government’s perspective.

Since the announcement, Nvidia has made promises to keep ARM based in Cambridge, to hire more staff and to retain ARM’s brand, but without any legal guarantees, I fear that those remain just promises—doubtless genuinely made—not guarantees. Will the Minister confirm whether the Government are seeking legal assurances in this deal to ensure that ARM’s headquarters remain in Cambridge and it retains the some 2,700 jobs it supports in my constituency and across the country? I am sure she will say that it is hardly likely that Nvidia would ditch highly sought-after engineers, but members of Unite have told me that many jobs, particularly in IT, are much more vulnerable. Similarly, I am told that some 300 people in Cambridge work on graphics processors, an area in which Nvidia works. It could be a perfect match, or it could mean rationalisation and job cuts.

Order. It is a half-hour debate. I have not been told that you wish to speak and I am not sure whether the person who is holding the debate has either. You can intervene, but I have not been given notice of anybody else. Have you been told, Daniel Zeichner?

Only of one other Member.

Has the Minister been told? Three people are meant to know in an Adjournment debate: the Minister, the Chair, and the person whose debate it is.

I am happy.

I am happy, but the courtesies have not been carried out, as I understand it.

Thank you, Mr Speaker. I thank the Minister and I congratulate the hon. Member for Cambridge (Daniel Zeichner) on securing this debate on a subject that is important to his constituents and to all of us. I also congratulate everybody associated with ARM, which is a great British success story of the type that we need more of in this country.

I am an optimist and I believe that ARM will prosper under its new ownership. Nvidia is an exciting company that works on some of the cutting-edge technologies that ARM has excelled in. I hope it will open the world to more opportunities. I welcome, as the hon. Gentleman has, the commitments that have been given to maintaining a presence in Cambridge and to building an artificial intelligence centre there.

I also hope that the new owners will enjoy the benefits of operating in the United Kingdom with our adherence to the rule of law and to the English language and the pro-enterprise environment. ARM will also greatly benefit from the Government’s commitment to double investment in science, which is a point of alignment on both sides of the House.

I beg to differ with the hon. Gentleman on the two things that I think businesses such as ARM need to prosper and thrive. The first is certainty, which is rarely aided when the Government get involved. As the hon. Gentleman will know, ARM made 24 acquisitions to get the business to the place it is in today. If the Government had intervened on those acquisitions, perhaps it would not have been so successful.

Secondly, businesses need access to capital, which used to be one of the great strengths of the United Kingdom. We had a vibrant new listings market that the Hermann Hausers of tomorrow would be looking to. Another unforeseen effect of the Government’s making an intervention would be that our capital markets would become less attractive, less competitive and less able to foster the ARMs of the future, which is what the Government should seek to do to create the jobs, opportunity and prosperity that the country will need.

Let me start by thanking the hon. Member for Cambridge (Daniel Zeichner) for securing this debate on an important matter, to which he is right to bring the attention of the House. His constituency is a vital part of our nation’s tech environment, and I fully understand that many of his constituents’ jobs are in the sector.

The Government are incredibly passionate about protecting a vibrant, successful and growing tech sector in the UK, and about remaining at the cutting edge of innovation. A key part of that is the design of microprocessors, which are crucial for building reliable and predictable chips for worldwide customers. ARM is at the heart of that semiconductor ecosystem. As it is one of the largest tech companies in Europe, it is hard to overstate its significance to the wider sector, as the hon. Gentleman articulated beautifully. It has massive potential to give our country an advantage in a wide range of sectors and technologies.

The Government closely monitor all acquisitions and mergers. When a takeover may have a significant impact on the UK, we will not hesitate to investigate further and take appropriate action. In this case, we are working hard to understand the full impact of the move and the potential impact it may have on the future. From there, we are able to consider what steps we may wish to take.

Will the Minister give way?