The Huawei rebels are still up for a fight
Many Tory MPs think the U-turn on Huawei does not go far enough
Who is upset most by the Government’s announcement that telecom providers in Britain cannot buy Huawei 5G equipment after the end of this year and must strip out all the Chinese company’s 5G kit by 2027? The three aggrieved contenders are: Huawei; the UK’s telecom providers; and Sino-sceptic Tory backbench MPs.
Losing up to 35 percent of its permitted stake in Britain’s non-core 5G network is a rebuff for Huawei. It is a reverse that challenges the ambitions of its founder, Ren Zhengfei, who in 2018 channelled his inner Dick Fuld to urge employees at the company’s Hangzhou research and development centre to “surge forward, killing as you go, to blaze us a trail of blood”.
There is certainly blood on the carpet after today’s Commons announcement by the Digital, Culture, Media and Sport Secretary, Oliver Dowden. But it is from a knee-capping, not a beheading. Huawei is not being banned from the UK market, as it might have been. Its share in 2G, 3G and 4G remains unchecked. Huawei will continue to have a major stake in Britain’s telecom provision for years to come.
For the same reason, UK’s telcos have avoided the torments of their worst nightmares. Less than two months ago, it was being authoritatively reported that “the Prime Minister has instructed officials to draw up plans that would reduce China’s involvement in the UK’s infrastructure to zero by 2023.” Instead of three years, today’s announcement grants them seven years to re-source 5G equipment. Are we really to believe the UK’s telecom companies have not been given sufficient lead-time to manage the transition? Huawei was in the happy place of having few serious competitors, with its Scandinavian rivals, Nokia and Ericsson, years behind the market leader. Years behind, … but seven years behind?
Seven years ago, seasoned observers of the interests and factions of Conservative MPs would have struggled to identify fear of China as one of the most adhesive of bonding agents. Even seven months ago, when Huawei’s participation in 5G was confirmed – the Tory Sino-sceptics were still in marshalling mode. Cynics may see their ‘Huawei Interest Group’ as a pals’ battalion of Eurosceptics who, having seen the UK leave the EU, are at a loose end and seeking a new imperial dragon to slay.
Could Britain’s intelligence agencies not foresee that America was about to deprive Huawei of the chips upon which it relied?
Many, including most prominently Iain Duncan Smith and David Davis, are indeed the veterans of multiple former wars with Brussels. Perhaps years of contradicting the CBI and multinational corporate interests on that front has contributed to a broader scepticism towards corporate interests now protesting that Britain needs to offer unfettered access to another large imperium. But the analogy should not be over-strained. Some Huawei-sceptics, like Tobias Ellwood, were Remainers. Another (although pro-Brexit) who like Ellwood comes with a strong defence background is Bob Seely, MP for the Isle of Wight since 2017. In May, Seely co-authored an influential report for the Henry Jackson Society which disputed the idea that the security threat from Huawei was containable and called for it to be blocked from the UK’s 5G rollout.
Seely and Duncan Smith have been the most articulate critics within the Huawei Interest Group. The group claims 59+ MPs, more than enough to defeat the Government in a vote. This was reason enough for the Government to conclude that the game was up and that it needed to extract itself from the promises made to Huawei.
The imposition in May by the United States’ Department of Commerce of sanctions against the international supply of all chips dependent upon American technology to Huawei has offered the British government the excuse it needed to U-turn so abruptly. The blow that the sanctions delivers to Huawei is supposedly so great that the Chinese company can no longer be regarded as the irreplaceable driver of Britain’s 5G roll-out.
As an excuse, it will do. But what are we to make of it? That Britain’s intelligence agencies, and in particular the National Security Cyber Centre, could in January offer reliable advice on the manageability of Huawei’s threat to British data security, but had so little knowledge about what was afoot in Washington DC that they could not foresee that America was about to deprive Huawei of the chips upon which it relied? In his famously angry phone call with Boris Johnson at the time, did Donald Trump not mention that such sanctions were in the offing? It seems fantastical that Whitehall had no hint that this game-changer was a serious prospect. And it seems incredible that if the British Government did have such an inkling back in January it blithely waved the green flag to Huawei regardless.
Even without the excuse of Washington’s sanctions, it is because the Conservative Sino-sceptics are now too numerous for the Huawei deal to proceed that Oliver Dowden announced today’s climbdown. The alternative was defeat on the floor of the House.
But has Dowden done enough? Will Conservative MPs accept that Huawei will continue to be deeply embedded in the non-5G network and that seven years is an appropriate period for the company’s kit to be extracted from 5G?
In the Commons today, both Seely and Duncan Smith asked Dowden to reconsider the seven years grace period, with Duncan Smith advising, “bring it forward to five.” Nor is this the only point of contention. Duncan Smith raised a human rights issue, laying down the challenge that “we know that Huawei has lied in their declaration under the Modern Day Slavery Act that they have had no involvement in slavery. We know that now from Xinjiang province. If we can prove that, and we are able to demonstrate it to this Government, will this Government ban Huawei altogether?”
The Secretary of State replied, but did not answer the question. But soon he may have to.
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