Criticism by Theresa May of the lockdown excesses of Boris Johnson has been excoriating and arguably more piercing than that of Keir Starmer and the Opposition front benches.
Yet for all the former Prime Minister’s indignation, it was during her time at Downing Street that one of the most serious betrayals of British technology occurred.
A Tory government, committed to an industrial strategy (since torn up by Johnson) based around science, greater research and development spending and technology, presided over the sale of Arm Holdings, the British company most capable of becoming a European smart semiconductor champion.
Dealmakers: Former PM Theresa May and the late Cabinet Secretary Jeremy Heywood promoted the sale of Arm to Softbank
The disposal of Cambridge-based Arm to Japan’s Softbank for a stonking £23billion was portrayed by the Government as a master stroke. May and her Chancellor Philip Hammond were traumatised by Britain’s vote to leave the EU.
A big inward investment deal was seen as having political value, shoring up confidence in the UK’s ability to prosper post-Brexit. In response to the Japanese offer, Hammond gleefully tweeted: ‘The UK has lost none of its allure to global investors. Britain is still open for business.’
He added in a second tweet: ‘This would be the largest ever investment in the UK and would double the size of Arm’s workforce.’
What May, Hammond and the late Cabinet Secretary Jeremy Heywood, who promoted the deal, failed to recognise was that Softbank founder Masayoshi Son, for all his bravado about investing in Arm for the long-term, was a tech wheeler-dealer who regarded the innovative UK firm as a bargaining chip in his unrequited ambitions to be seen as Japan’s world leading tech entrepreneur.
Arm gave him access to the best of what Britain’s great research universities produce in terms of the cleverest chip design in the world, at the core of the ‘internet of things’, from Apple devices to Tesla cars and more.
The Cambridge company’s profitable subsidiary, Arm China, opened doors to Beijing.
Among Softbank’s first transactions after winning control of Arm was to sell a stake in the China offshoot to a company which it later emerged was connected to the Communist Party.
Arm was also a dazzling morsel to dangle before Saudi Arabian autocrat Mohammed bin Salman when Son was seeking investors for his $200billion Softbank Vision Fund in 2017.
Softbank’s access to the Government, which cleared the way for the deal, was facilitated by London deal maker Sir Simon Robey.
There was a close bond between Robey and Heywood, who was the then Cabinet Secretary, dating back to the civil servant’s four-year stint at Morgan Stanley.
Heywood had a conviction (almost certainly right) that investment banking and private sector skills could be deployed to good use in the public sector.
Ambitions: Softbank founder Masayoshi Son regarded Arm as a bargaining chip in his unrequited ambitions to be seen as Japan’s world leading tech entrepreneur
It was a narrative that he pressed upon me in a chat over tea in Morgan Stanley’s Mayfair townhouse during his stint at the bank.
Robey subsequently left Morgan Stanley and established his own boutique deal-making salon Robey Warshaw, which now includes among its associates former Chancellor George Osborne.
The firm represented the Softbank founder and tech wizard Son in its pursuit of Arm in the summer of 2016.
Heywood became convinced, after discussion with his former boss Robey, that a big Japanese investment in the UK would help show that Britain was ‘open for business’. The Japanese entrepreneur was speeded into a meeting in Downing Street with Hammond.
‘Simon Robey and Heywood were close,’ one official present at the Downing Street love fest told me this week. ‘But they were very careful about things.’
The deal was seen as particularly attractive to the UK as the investors were Japanese. They have long been regarded as inward investors to be encouraged in Whitehall because of their long-term thinking.
Unlike the Americans, the tendency in Japanese corporate culture is to try to put things right when they go wrong, rather than cut and run.
The icing on the cake for Downing Street, which convinced officials that the deal was worth doing, was a promise by Son to double the number of engineers working at Arm.
Son was triumphant, believing he had bought into one of the world’s great tech powerhouses – at a bargain.
The price paid seemed extraordinarily generous at the time and shareholders showed no public resistance.
The transaction encountered little of the political friction seen more recently with bids for aerospace pioneer Cobham, satellite maker Inmarsat and submarine defence specialists Ultra Electronics. Arm was waved through by politicians and regulators with no national interest or security test.
The contrast with what happened five years later when the bid by Nvidia was subjected to scrutiny in the UK, China, the US and Europe – and found wanting by most authorities – demonstrates how cavalier the approach of Heywood and the Government was to a brilliant British asset.
The lack of scrutiny is in marked contrast to the approach to the Nvidia deal this time around.
Both the Business Secretary Kwasi Kwarteng and the Department for Culture (under which scrutiny of semi-conductor deals sits) saw that the change of ownership could undermine the country’s national and economic security, and referred it to the Competition and Markets Authority for scrutiny.
The collapse of the £50billion Nvidia takeover presents the Government and the City with a real opportunity.
Robey, with Osborne at his side, still has the opportunity to redeem a mistake from the past and bring Arm back to the UK as a public company.
That would mean reversing the resolve of Softbank to go for a New York listing. The Government rolled out the red carpet to Son in 2016 and must do the same again.
Both the reports by former EU commissioner Lord Hill and fintech pioneer Ron Kalifa made the case for strengthening Britain’s place as a tech powerhouse by bringing initial public offerings to London.
If it needs a Heywood-style push then there could be no better combination than new Downing Street chief-of-staff Steve Barclay, a former Treasury minister, and the current Chancellor Rishi Sunak.
But they must act swiftly before the horse has bolted.
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