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Banning Huawei Could Make U.K. Networks Less Secure, MPs Say

Kitty Donaldson

(Bloomberg) -- Barring Huawei Technologies Co. from operating in the U.K. could lower security standards and make networks less resilient to malicious attacks, according to Parliament’s intelligence and security committee, which urged the government to speed up its decision on the Chinese company.

The U.K. is investigating Huawei as part of a review of supply chain and security issues for so-called 5G telecommunications networks. But the final report has been delayed in the transition to a new prime minister and amid pressure from the U.S.

President Donald Trump’s administration banned U.S. firms from dealing with Huawei, dragging the company into a broader trade war by arguing that its connections to the Chinese government meant it could allow Beijing to use its network equipment to spy -- an allegation Huawei denies.

The parliamentary committee, which examines the work of Britain’s spy agencies, said security could be weakened by the removal of Huawei because it would leave the U.K. dependent on only two potential suppliers -- Nokia Oyj and Ericsson AB. The committee analyzed National Cyber Security Centre submissions to the government to come to its conclusion.

Banning Huawei on security grounds would “increase over-dependence and reduce competition, resulting in less resilience and lower security standards,” the committee said in a report issued Friday. “Including a third company -- even if you may have some security concerns about them and will have to set a higher bar for security measures within the system -- will, counter-intuitively, result in higher overall security.”

The committee also downplayed the risk that ruling out Huawei risked “irretrievably damage” ties with China, calling that analysis “simplistic.”

“As a pragmatic global power, China clearly recognizes the importance of reciprocity and mutual respect in international relations: the Chinese government would not allow a British company to play a similarly significant role in China’s critical national infrastructure -- and they will understand if the U.K. decides to follow their example,” the committee said.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Stuart Biggs, Thomas Penny

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