MPs raise security fears over Chinese telecoms

In a highly critical report, the parliamentary Intelligence and Security Committee (ISC) warned that attempts by Ministers to balance the need to encourage Chinese investment in the UK with security equipment had resulted in an “unacceptable” stalemate.

It highlighted the case of the Chinese telecoms giant Huawei, which signed a major contract in 2005 to supply equipment to BT and has since signed deals with other companies including O2, TalkTalk and EverythingEverywhere.

But despite concerns that China exploits vulnerabilities in the Huawei equipment to spy on the UK through the telecoms system, the ISC said Ministers were not informed about the BT deal until a year after it was signed.

The committee said staff from the GCHQ signals intelligence agency should take over the running of Huawei’s cyber security evaluation centre – known as the Cell – which it has built in Oxfordshire.

“The Government’s duty to protect the safety and security of its citizens should not be compromised by fears of financial consequences, or lack of appropriate protocols,” the report said.

“However, a lack of clarity around procedures, responsibility and powers means that national security issues have risked, and continue to risk, being overlooked.”

The report said members were “shocked” that officials chose not to inform – let alone consult – Ministers about Huawei’s deal with BT, adding: “We are not convinced that there has been any improvement since then in terms of an effective procedure for considering foreign investment in the CNI (critical national infrastructure). The difficulty of balancing economic competitiveness and national security seems to have resulted in stalemate. Given what is at stake, that is unacceptable.”

“A self-policing arrangement is highly unlikely either to provide, or seen to be providing, the required levels of security assistance,” the report said.