UK chancellor defends Huawei after security report spooks MPs

The UK chancellor, George Osborne, said Huawei is considered a "long-term valued investor" in the UK after a security report by members of Parliament warned of a "shocking" lack of regulatory oversight during a deal signed between BT and the Chinese vendor in 2005.

Osborne

Despite earlier reports by the Financial Times that the report by the Intelligence and Security Committee (ISC) had been heavily redacted by the government, which is fearful of further upsetting Beijing, the 27-page document was described as "scathing" and its findings were greeted with horror by lawmakers. According to Reuters, UK MPs said the Chinese vendor should not have been allowed to become embedded in critical communications network infrastructure without the knowledge and scrutiny of ministers.

"Such a sensitive decision, with potentially damaging ramifications, should have been put in the hands of ministers," the committee said, according to Reuters. "The failure ..to consult ministers seems to indicate a complacency which was extraordinary given the seriousness of the issue," it added, describing the lapse as "unacceptable."

Along with security concerns, the report has also served to underline the conflicting pressures that the government is under as it seeks to maintain trade links with Chinese companies such as Huawei, which has invested heavily in the UK economy.

"It is a personal priority of mine to increase trade links between the UK and China, and I cannot emphasise enough that the UK is open to Chinese investment," Osborne said in a statement, according to Reuters.

The Guardian said Osborne also welcomed Huawei's new office in Reading, and highlighted that the company recently promised to invest more than £1 billion (€1.18 billion) in the UK.

Nevertheless, according to the Guardian, the ISC report revealed a "disconnect between the UK's inward investment policy and its national security policy." The report adds: "The government's duty to protect the safety and security of its citizens should not be compromised by fears of financial consequences."

The report by the UK committee chaired by the former Conservative foreign and defence secretary Sir Malcolm Rifkind adds to mounting concerns on both sides of the Atlantic over alleged links between Huawei and the Chinese state.

"China is suspected of being one of the main perpetrators of state-sponsored attacks...focused on espionage and the acquisition of information," the report said, according to Reuters. "In this context, the alleged links between Huawei and the Chinese state are concerning, as they generate suspicion as to whether Huawei's intentions are strictly commercial or are more political."

The Financial Times said the Intelligence and Security Committee has now called for a major overhaul of the way the UK government assesses such investment in future. There have also been calls for the UK unit set up to monitor Huawei's cybersecurity to be staffed by GCHQ, the government's signals intelligence agency, not by Huawei employees, as is currently the case.

For its part, Huawei said it will continue to talk to the UK government and plans to invest further in the British economy.

"We will continue to communicate on this issue with the UK government and related parties and we will thank them for the support they have given us for the past 12 years," Huawei CEO Guo Ping told Reuters.

For more:
- see this Reuters article
- see this separate Reuters article
- see this third Reuters article
- see this Guardian article
- see this separate Guardian article
- see this FT article (sub. req.)

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