UK Intelligence and Security Committee blasts BT for Huawei government project involvement

The UK Intelligence and Security Committee has criticised fixed line incumbent BT in a report for allowing Chinese vendor Huawei’s equipment to be embedded in the heart of the UK’s critical national infrastructure (CNI) and failing to consult ministers beforehand.

BT is responsible for large parts of the UK’s telecommunications infrastructure. In 2003, it embarked on a £10bn rationalisation and upgrade project, called 21st Century Network. Huawei was among those companies selected to supply the equipment required.

In October last year, the US House Intelligence Committee warned US operators not to trust ZTE and Huawei, saying that the US “should view with suspicion the continued penetration of the US telecommunications market by Chinese telecommunications companies”.

According to the UK Intelligence and Security Committee, BT signed a contract with Huawei to supply transmission and access equipment in 2005, to be deployed across the network from January 2007. BT first notified Government officials in 2003 of Huawei’s interest in the 21st Century Network contract. However, the Committee has been told by the Cabinet Office that officials chose not to refer the matter to ministers, or even inform them, until 2006, a year after the contract had been signed.

In its report, the committee stated: “Whether the suspicions about Huawei are legitimate or unfounded, we consider it necessary to ascertain how the company came to be embedded in the heart of the UK’s CNI. What this Committee’s investigation has revealed is a disconnect between the UK’s inward investment policy and its national security policy.”

The committee added that it sought to understand the reasons behind the failure of BT to notify ministers and was initially told it was because officials concluded there were no means available by which Huawei’s involvement could be blocked and, therefore, that there was no decision to be taken by ministers. However, this now appears not to have been the case, the report stated.

“The Cabinet Office has since acknowledged that such powers do exist and that officials were aware of this at the time but assessed that the potential trade, financial and diplomatic consequences of using them would be too significant,” the report stated.

“We have subsequently been informed by the then Secretary of State for Trade and Industry, the Rt. Hon. Patricia Hewitt, that she did discuss the contract with BT. However, this was in relation to the competition aspects of the decision (and the implications for UK business) rather than any security concerns. Officials did not take the opportunity of her involvement to raise the security issues with her.”

The report concluded that there was no justification for failing to consult Ministers about the situation when BT first notified officials of Huawei’s interest and that such a sensitive decision should have been put in the hands of ministers.