Lord Frost demands Brexit Britain seize sovereignty on national security firms

Frost admits Britain needs 'benefits of Brexit to start paying off’

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The former Brexit minister endorsed Tom Tugendhat, MP for Tonbridge and Malling and chair of the Foreign Affairs Select Committee, as he urged the Government to work on a “bolder long-term strategy” to protect and foster the United Kingdom’s ability to ensure national security while continuing to serve as a base for science and tech companies with that exact mission.

Mr Tugendhat made the call in the context of the Arm Holdings affair.

The British company, which has more than 500 clients using its chip designs, including Apple, Samsung and Google, was acquired by Japan’s Softbank for $32bn in 2016.

Four years later, in September 2020, American rival Nvidia announced it wanted to take over Cambridge-based Arm from SoftBank.

The proposed sale would have been the largest in the semiconductor industry.

But in February, the plans sunk.

READ MORE: Who are ARM Holdings? Cutting-edge British tech firm sold for £24bn

In a joint statement, Softbank and Nvidia said they had decided to terminate the takeover due to “significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties”.

According to Mr Tugendhat, Arm has become to play a “key role” in the country’s “national security and global competitiveness at a time of intensified geopolitical tension”.

The deal’s collapse, he argued in an op-ed in the Financial Times, should be taken as an opportunity to “look again at holding on to a company that is so crucial to Britain’s future”.

And Lord Frost, who quit the cabinet late last year, said of the Tory’s observations: “I strongly agree with Tom Tugendhat in his FT article here about Arm Holdings.”

Writing on Twitter, he added: “We need to be much more serious about supporting in this country important national capabilities relevant to national security.”

Arm employed 6,500 staff, including 3,000 in the UK, as of February.

In March, it announced it is planning to cut up to 15 percent of its workforce. Most of the sackings, it said, would be in the UK and the US.

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The company said: “Like any business, Arm is continually reviewing its business plan to ensure the company has the right balance between opportunities and cost discipline.

“Unfortunately, this process includes proposed redundancies across Arm’s global workforce.”

Now, SoftBank is to take Arm public – though not at home, but on the US Nasdaq.

This happened “despite a vigorous lobbying campaign by the government, the London Stock Exchange and the investment community to persuade SoftBank to choose London for its primary listing”, the Conservative MP said.

Writing on Twitter, he added: “We need to be much more serious about supporting in this country important national capabilities relevant to national security.”

Arm employed 6,500 staff, including 3,000 in the UK, as of February.

In March, it announced it is planning to cut up to 15 percent of its workforce. Most of the sackings, it said, would be in the UK and the US.

The company said: “Like any business, Arm is continually reviewing its business plan to ensure the company has the right balance between opportunities and cost discipline.

“Unfortunately, this process includes proposed redundancies across Arm’s global workforce.”

Yet, not all is lost in the UK’s bid to “secure Arm’s future and end years of debilitating ‘pass the parcel’ treatment”, he argued.

Stressing it is “far too late for timid half-measures”, Mr Tugendhat proposed the Government buys “a golden share” or makes the promise to purchase a 25.1 percent stake in the firm at the market price “to facilitate, support and, if necessary, compel a London-based IPO”.

Saying it is not about controlling Arm’s “day to day activities” but about safeguarding the country’s “scientific innovation capability in this crucial global industry”, he emphasised: “We all have skin in this game.”

He added: “Providing the security and stability Arm needs to invest for the long term, and protecting its ideas, are matters of vital national interest.”

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