Technology Quantum computing crackdown watered down by ministers

Quantum computing crackdown watered down by ministers

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A crackdown on exports of British quantum computer technology has been watered down by ministers after warnings that it could lead to UK-based firms fleeing overseas.

The Department for Business and Trade has issued a general licence allowing quantum computer technology to be sold to dozens of countries including the US, Japan, Australia and European Union states.

The licence was issued last week – days before new laws were due to come into force requiring quantum companies to obtain permission before transferring or selling any technology overseas.

The crackdown, revealed by The Telegraph earlier this month, applies from Monday, and is designed to prevent quantum technology falling into the hands of hostile military powers.

However, its extent blindsided the nascent industry and led to concerns that companies may be forced to move overseas to escape the regulations.

One affected company said the rules would have stopped it from communicating with manufacturers based abroad or sending data to overseas subsidiaries.

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Quantum Motion, which has been backed by a taxpayer tech fund and last year raised the biggest ever investment round in a British quantum computing company, said overseas investors had suggested the company may have to move abroad.

“I don’t think they appreciated the impact,” James Palles-Dimmock, Quantum Motion’s chief executive, said. “The knee jerk reaction from all of my foreign investors was. ‘Should we be looking elsewhere, how do we make sure we’re in the best market for this?’”

He said the late granting of the licence “now gives a great degree of certainty” allowing the company to keep operating as before.

Jonathan Legh-Smith, the executive director of industry body UKQuantum, said: “Some of my members said there was a continuing concern about ‘what perception does this give people, particularly investors, about the UK’.

“Others said: ‘If our investors look at our location, they’ll ask where’s the easiest place to base the company?’

“Once people start thinking like that it can be an issue. It’s adding complexity to an already challenging field from an investment point of view.”

Quantum computers are in their infancy but are seen as potentially crucial to national security because of their potential for advanced chemistry and codebreaking.

The machines use the properties of quantum physics to allow them to make calculations fare quicker than conventional computers. The UK has a thriving industry owing to expertise at major universities.

Controls on exports have been agreed by a group of Western nations but Mr Legh-Smith said they were being applied inconsistently by different countries.

The general licence applies to exports to countries in the EU’s single market, Australia, Canada, New Zealand, Japan and the US, meaning countries such as China, Russia and Iran remain covered by the controls. It does not cover exports for military use.

A Government spokesman said: “The updated list includes new controls on specific emerging technologies which the UK, along with several other like-minded countries, has committed to implement to strengthen our national controls.”

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