Tories fail to put their chips on the table with another delay in the UK semiconductor strategy- what can Labour do to take semiconductors seriously?
The UK Semiconductor Strategy was supposed to be released today but once again, it has been delayed. This time, according to a Whitehall official, it's due to the “optics” of the announcement. The delay and continued lack of certainty around UK semiconductor strategy stands in stark contrast to our allies' progress on this important sector. The US and EU have recently taken robust action to increase their semiconductor supply chain security and boost domestic production - with the US passing the CHIPS and Science Act, and the EU reaching a deal on Tuesday on its own European Chips Act.
Whilst our allies forge ahead with semiconductor chip strategy, the U.K. industry stands in turmoil with UK semiconductor bosses pleading with the government to introduce subsidies amid fears that some chip firms will be forced to move overseas. Darren Jones, Labour MP and Chair of the Business and Industrial strategy, recently pointed out that delays in publicising equate to an act of “national self harm” and it's increasingly clear that a Labour government is the only government that can be trusted to protect and support such a vital industry.
Labour must make securing semiconductor supply chains a priority upon assuming government and Labour for the Long Term has recommended that Labour develop a full set of semiconductor supply chain proposals, to implement immediately upon entering Government in our recent National Policy Forum Submission.
Our National Policy Forum Submission also set out a series of policies which the next Labour government should implement at a minimum, to protect the UK’s access to semiconductor supplies and ensure national security. Our recommendations draw upon proposals made by CSET, the BEIS Commons Select Committee and the Centre for Policy Studies and focus on growing the semiconductor industry, safeguarding against supply chain disruption, and securing the UK against the risks associated with semiconductor technologies:
Growing the semiconductor industry
- Establish government-supported enterprise bodies to coordinate between industry, academia and government in each of the UK’s five existing semiconductor clusters.
- Provide sponsorship for advanced engineering degrees in partnership with universities in each of the UK’s five semiconductor clusters.
- Explore the construction of an open access fab in the South Wales semiconductor cluster.
- Simplify and liberalise the system of R&D tax credits, to allow for greater investment in semiconductor plant and machinery.
- Explore the creation of a multi-year fund for the semiconductor sector within UKRI.
Safeguarding against supply chain disruption
- Explore the creation of a new multilateral organisation for cooperation between allied countries on semiconductor supply chains.
- Request that the UK be invited to take part in relevant parts of the EU-US Trade and Technology Council.
Securing the UK against the risks associated with semiconductor technologies
- Add semiconductors to the list of thirteen sectors currently included within the Government’s definition of ‘critical national infrastructure’.
- Review the effectiveness of the National Security and Investment Act 2022 in safeguarding the future of the UK semiconductor industry - with specific regard to the process around the Newport Wafer Fab intervention.
Semiconductors are the Twenty-First Century’s crucial technology, and access to a secure, reliable supply will be essential to Britain’s continued economic success. There is no excuse for the Government’s continued delay in publishing the Semiconductor Strategy, and Labour should commit to making semiconductor access a key priority upon taking office.