Economics and ‘national security’ often pull in different directions. This is especially true when we look at relations with China.
Consider the strange case of the Scottish wind turbine project. At the end of March, the UK government blocked a planned Chinese investment in the Scottish Highlands to manufacture wind turbines on ‘national security’ grounds. The issue got lost in the fog around the Scottish parliamentary elections. But it hasn’t gone away. The Chinese have indicated that they will switch the plant from Scotland to Spain. The British partners who spent years negotiating the project, in good faith, are furious and are questioning the capricious nature of UK government decision making around ‘security.’
The planned Chinese investment, at Ardersier, to manufacture wind turbines was potentially the largest turbine factory in the world, employing 1,500 people with more in the supply chain. For British partners and the Scottish government, utilising China’s impressive ‘green’ technology was thought to be a safe and sensible form of collaboration. The project involved making the most technically sophisticated bit of the turbine – the nacelle – in Scotland.
I don’t normally warm to the Scottish National Party but I have some sympathy with the then Scottish Deputy Chief Minister and Economics Minister, Kate Forbes, who said the decision was: ‘simply, sabotage of Scotland’s industrial future’.
The £1.5 billion project involving the Chinese company Ming Yang was to be on a site on the Moray Firth once used to employ 4,500 people for oil and gas platform assembly. Ming Yang is recognised as one of, if not the, leading company in the world for wind technology where China is the dominant producer with 70% of global wind capacity. Ming Yang is already a trusted partner of Octopus Energy, a reputable and popular British energy supplier.
Political dinosaurs in Britain and the USA may regard wind power as a ‘woke’ response to the ‘climate hoax’. But the Chinese long understood and planned for its development as a source of cheap, secure and clean energy. They are now being vindicated, not least by the disruption to oil and gas supplies from the Gulf. So, why is it a problem to utilise Chinese investment and technology to develop our own wind-power sector?
‘National security’ was given as the reason for vetoing the investment. What exactly was involved is unclear but the Scottish Conservative leader attempted to explain: ‘the Chinese will spy on British seas, defence submarines and the layout of energy infrastructure’. But the undoubtedly sensitive submarine naval base at Faslane is on the other side of Scotland. Satellites and container ships can see far more than static towers in the North Sea. And there are far more obvious ways of engaging with Britain’s energy system including the (minority) Chinese stake in our new nuclear power stations. If there were worries about ‘killer switches’, the project could have been approved subject to security inspection or subject to the most sensitive components being reserved for Western suppliers.
There are ominous similarities with the story of Huawei which was excluded from the UK for equally murky reasons, also rationalised as ‘national security’. Huawei was a key supplier of telecoms technology and hardware to the UK. When Secretary of State, I queried the use of Huawei in sensitive installations but was reassured that any hypothetical Chinese attempt to create ‘back doors’ into secure systems could be monitored and managed. The benefits of Huawei’s (apparently) superior products outweighed the risks.
Theresa May was given the same advice which led to the sensible compromise on 5G: that Huawei be excluded from the most sensitive work but used for peripheral hardware. After American intervention, however, this decision was overturned, and Huawei products were ripped out of the system at considerable cost to British consumers and companies.
Alleged Chinese security ‘threats’ are now appearing frequently, with alarming headlines about of Chinese ‘spies’ lurking in universities, parliament, science labs and Chinese-owned business. Some politicians and, perhaps also, individuals in our security services appear to be obsessed by this Chinese ‘threat’ beyond any plausible risk assessment. Since security advice is not, for obvious reasons, in the public domain it is difficult however to judge how much is prudent caution and how much is simply paranoia.
Of course, there are risks and security issues. It is right to be careful. There is plenty of evidence that Chinese entities have been involved in cyber-attacks. When travelling to China on official business dealing with sensitive issues it is sensible for ministers and others to surrender their mobiles (as I did when in office). Common sense also suggests that any Chinese investment in politically sensitive sectors should involve British inspection and surveillance of any potentially suspect hardware and software.
There are threats, but also opportunities. Many of these opportunities lie in the fields of renewable energy and associated manufacture. As a result of foresight not matched in the West, China now dominates production and technology in the sector: wind and solar power and their manufacturing supply chains; high-voltage transmission; electric vehicles; batteries.
Whilst Britain has made good progress in wind power development at competitive cost – helped by lifting the absurd fatwa outlawing cheaper onshore wind – the manufacturing supply chain is less developed. In the Coalition years, one big success of the Industrial Strategy was attracting Siemens to make turbines in Hull. There are now 27 (foreign owned) factories in the UK. But only the Chinese are willing to make the high-tech and high-value nacelles (the ‘brain’ and ‘engine’ of the turbine) in the UK. Or were, until banned.
The same issue will arise with EVs if we adopt the template of the UK government in the early 1980’s, to competition from Japanese car imports: that was to embrace UK production by Japanese companies. We should demand that BYD and other Chinese companies make their cars and batteries here. China has grown through demands for technology transfer (including theft). We should learn from them. We should welcome Chinese manufacturers as we welcomed Nissan, Toyota, and Honda. I was pleased to see that Nissan has agreed terms with the Chinese company Chery to make EVs in Sunderland.
I am reminded of advice I heard thirty years when working in a British multinational on prospective investments in China: ‘only the naïve ignore the threats; only fools ignore the opportunities’. Let this be the last time folly prevails.
* Sir Vince Cable is the former MP for Twickenham and was leader of the Liberal Democrats from 2017 until 2019. He also served in the Cabinet as Secretary of State for Business, Innovation and Skills from 2010 to 2015.
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14 Comments
Might it be that our current U. K. government is simply complying with the wishes/obsessions of the government of the U. S. A.?
Could this be why we lost the Shetland Constituency? When will the UK HAVE ITS OWN WELL MANAGED, MODERN INDUSTRIES to face the future without outside interference?
Steve Trevethan: Might we hope that our next PM is rather more willing to tell the Donald when to take a running jump?
In the writing on the threats vs opportunities equation that politicians have to weigh up it’s odd this article didn’t mention that in March Vestas announced it will build a EURO250m nacelle and hub factory in Scotland as a result of AR7. Yes smaller than what Ming Yang proposed at Ardersier, but still it should have been mentioned.
Very sensible recommendations. We may not like China, but this is one of the key sectors they already dominate, so we have to work with them to some extent.
I too suspect the US exerted diplomatic pressure and we caved.
I don’t know who wrote the headline, but I’d just make the point that there aren’t many windmills in the UK. There are still a few that mill flour from grain though.
We do have are lots of wind turbines which mainly harness the power of the wind to generate electricity.
“Whilst Britain has made good progress in wind power development ……..the manufacturing supply chain is less developed.”
The largest owner of wind turbines in the UK is Ørsted: majority owned and controlled by the Danish state. It owns major offshore projects like Hornsea and Walney. The next biggest one is the German RWE. They are probably no better or worse than the Chinese as partners but it does raise the question of why there is so little UK involvement in the sector.
It probably also does answer the question of why manufacturing in the UK lags. This will be well down the priority list, if it’s on there at all, of the financial interests involved in generating electricity. The turbines obviously have to be located in the UK but they don’t need to be made here. The interest lies of the owners lies in making money – not turbines.
As Pof Prem Sikka explains:
“The finance industry now controls significant parts of the UK economy. It extracts wealth, destroys jobs and weakens economic resilience. Governments go to extraordinary lengths to promote and protect the finance industry, whilst neglecting other productive areas, such as manufacturing.”
https://leftfootforward.org/2026/06/the-finance-curse-is-devouring-the-uk/
@Peter Martin. I suspect that Vince was making a reference to Don Quijote tilting at windmills, a similarly mad pursuit.
Thank you Peter Martin for the link to LFF. Prof Sikka’s article should be a wake up call to our policy team, although I note he doesn’t offer any policy solutions, just a catalogue of disastrous consequences of our accountant-led economy.
Re the OP, it seems to me ridiculous that partnership with the Chinese is eschewed when these days we can learn more from them than vice versa.
Vincent spot on as usual.
@Peter Martin – ” but it does raise the question of why there is so little UK involvement in the sector.”
“There are 34 wind turbine manufacturers in United Kingdom. Of these, 28 manufacturers are still active. “
I seem to remember a while back there was a potential major UK turbine manufacturer, but to gain economies of scale, needed finance and certainty, which the Conservatives with their euro scepticism, New Labour with their similar internal schisms and UKIP made the UK a poor place to locate such a business requiring good non-UK domestic market access… Britain’s economic problems go back to Thatcher and in some sectors back to poor ill-informed decisions made in the 1960’s.
By committing to build drones at scale for Ukraine, Starmer is attempting to build some UK (defence) manufacturing capacity whilst UK government does what it is very good at and prevaricate, which in the past has resulted in welfare/overseas aid payments(*) going to US HQ’d businesses.
(*) Its all taxpayers money, that depending on the whim of the government can be allocated to a column with a different heading.
@ Roland,
You could be right about the 28 turbine manufacturers. But my comment: ” but it does raise the question of why there is so little UK involvement in the sector.” relates to the ownership of wind farms in the UK.
If nationalised industries are such a bad thing if the UK government is the owner, why are they such a good thing if it’s the Danish govt or the govt of some other country?
A UK govt can be expected to allow for the expected tax revenue and the beneficial effect of UK job creation when contracts are awarded to UK suppliers. We can’t expect the same from the Danish govt.
This point extends to our manufacturing sector generally. Other counties have looked after theirs. We haven’t. That’s why the North generally voted for Brexit.
When our manufacturing industry is faltering badly any denial of inward investment especially in an important industry such as renewable energy requires robust evidence and transparency to be justified.
@Peter – I agree with your point which seems to apply to many sectors, especially those sectors that previously had been state controlled/owned eg. Energy, water, … and point to the seemingly institutionalised mindset the UK (or probably more correctly England) suffers from, which I suggest the Tories since Thatcher (and possibly previously) have carefully nurtured, so many people actually believe it to be so and so contribute to the problem..
If we look at just the aerospace sector, the UK was producing planes the US industry was only capable of producing decades later. Another: computing was given a bit boost by Bletchley Park, but due to UK government wanting to keep everything hush-hush for decades, people had to go abroad – mainly to the US; it is sobering to discover all the US universities “pioneering” computing benefited from the Bletchley Park brain drain.