Theresa May’s government faces a highly contentious decision about Britain’s future — except this time it’s about a Chinese firm.
In the midst of the Brexit crisis, the prime minister faces growing pressure to clarify the U.K.’s stance toward Huawei, the Shenzhen-based telecoms giant that Washington says will pose a security risk if it’s allowed to build Britain’s next-generation 5G network.
At the next meeting of the National Security Council, which will be presided over by May, top officials will evaluate months of evidence about alleged security risks linked to Huawei’s hardware and decide what, if any, restrictive measures to take about its access to U.K. telecoms markets.
But as with the Brexit debate — an endlessly divisive problem for the ruling Conservative Party — there are fears May’s top team will be split over how to deal with Huawei and the broader question of how to weigh Britain’s commercial interests in China against its defense ties with the United States, officials told POLITICO.
On one side of the divide there are security “hawks” like Defense Secretary Gavin Williamson and cybersecurity chief Ian Levy, who underscore intelligence assessments that highlight security risks with Huawei and argue in favor of tougher restrictions, including bans on access to core communications networks.
“The security in Huawei is like nothing else — it’s engineering like it’s back in the year 2000 — it’s very, very shoddy,” Levy, the head of the U.K.’s Government Communications Headquarters (GCHQ) security service, told the BBC’s “Panorama” in April, adding that the problems could lead to a partial ban on the company’s equipment.
On the other side there is George Young, who speaks for the Cabinet Office in the House of Lords, who says it would not be in the national interest to ban Huawei totally.
The U.K. government has “deep insight into what Huawei is up to” and could “take mitigating action in certain circumstances,” Young told a House of Lords debate in January.
The all-consuming nature of Brexit — Britain has just won a six-month extension on its exit from the EU — has overshadowed Huawei in the public eye and made it hard to predict where the government’s line will be drawn.
But officials informed about preparations told POLITICO that the government has taken on board criticism of the Chinese telecoms giant’s security measures. And one minister familiar with dynamics inside May’s security Cabinet said on condition of anonymity that they anticipate a “row” over the way forward.
End of a ‘golden era’?
One explanation for the U.K.’s internal dispute over Huawei is that the country is heavily invested in the prospect of future trade with China. Trade has boomed over the past decade, and some ministers are looking to Beijing for trade opportunities to offset any dropoff in trade with the European Union as a result of the U.K. leaving the bloc.
Last year, before the prime minister headed to China for an official visit, a minister back home described London-Beijing ties as having entered a “golden era,” likely spurred on by Chinese President Xi Jinping’s promises in a landmark 2017 speechof vast investment and bolstered trade with EU powers.
According to Joyce Anelay, a senior minister at the Foreign Office until 2017, London has become increasingly aware of China’s “Belt and Road” Initiative — a broad plan designed to bolster East-West trade along historical routes.
The initiative has illustrated to U.K. officials “how [Chinese officials] were determined to drive ahead in a way others hadn’t quite forecast,” said Anelay. “Their technology has been supported by this vast investment by China which means they are outstripping everyone else’s commercial capacity to provide an alternative.”
Jim O’Neill, former chief economist of Goldman Sachs, and who was a Treasury minister until 2016 under Chancellor George Osborne, said unless there is clear evidence Huawei has done something systematically to adapt the technology to spy, the government needs to think about China with a more Treasury-style perspective “and bit less [Foreign and Commonwealth Office] and Home Office” or it would never really “explore the benefits economically for post-Brexit Britain.”
Any serious questioning of Huawei’s position in the U.K. without firm evidence, including a ban on their access to procurement markets, could put a damper on that mood, supporters of a friendly China policy argue.
However, over the past year security concerns have come to overshadow the gung-ho commercial stance, amid a coordinated campaign by U.S. President Donald Trump’s administration to pull allies away from Huawei and impose restrictions.
Defense Secretary Gavin Williamson, who earlier this year announced plans to send a new British aircraft carrier to China’s backyard, said in December that he has “grave, very deep concerns” about Huawei’s equipment being used on Britain’s 5G network.
“We’ve got to look at what partners such as Australia and the U.S. are doing in order to ensure that they have the maximum security of that 5G network and we’ve got to recognize the fact, as has been recently exposed, that the Chinese state does sometimes act in a malign way,” he told journalists.
Visitors look at their phones at the Mobile World Congress (MWC) in Barcelona | Gabriel Bouys/AFP via Getty Images
Under pressure from Washington, most of the “Five Eyes” security partnership — the United States, Canada, United Kingdom, Australia and New Zealand — have taken steps to limit Huawei’s market access. Feeling the heat, the U.K.’s intelligence community has hardened its rhetoric toward the company since the start of the year.
Last month, the country’s cybersecurity authority released an annual “oversight report” that slammed the company for failing to fix glitches in its software, and asserted that Huawei poses “new risks” to U.K. telecoms networks.
That report is set to feature prominently when May sits down with the National Security Council, and the government carries out its review of supply chain security — a review that was launched after months of controversy over the position of Huawei in the West.
Criticism taken on board
Ahead of the meeting, officials in the Department for Digital, Culture, Media and Sport in London have drafted proposals that have been shared across government, and are on the agenda for the next National Security Council, according to figures familiar with discussions.
One official familiar with the contents of an early draft of the supply chain review, who was not authorized to speak on the record, said that last month’s cybersecurity review of Huawei equipment would be taken into account. The critical review has “informed some initial proposals that have gone to ministers,” the person said.
“There are obviously more sensitive parts of the network,” the official said, adding the proposals could recommend imposing stricter requirements and restrictions on telecoms operators running “critical infrastructure” networks and other sensitive parts of the network about whom they buy equipment from.
A journalist takes a photo at an auction for the construction of a 5G network in Germany | Arme Dedert/AFP via Getty Images
At the same time, the official said the review would aim to ensure “a proportionate approach,” “a competitive market” and “diversity in the supply chain” — adding it is “about more than Huawei.”
“We don’t want a single network to grow so large it becomes dominant in the market [and] that it becomes a risk,” the official added.
At the same time, defenders of the U.K.’s trading relationship with China are stepping up. O’Neill warned that ministers are neglecting the U.K.’s ties with China.
“The idea that we will ever be able to develop a really powerful post-Brexit trade deal [with China] if we don’t think with more subtlety and seriousness about things, it is for the birds,” said O’Neill, who is now chairman of the London-based think tank Chatham House.
Anelay, the senior minister at the Foreign Office until 2017, warned against seeing China as an adversary.
“With China, for me [the approach should be] engage but be aware. They have a different way of looking at the world and we need to respect that and work with it, but not be sucked into it.”