UK security committee "shocked" over Huawei contract with BT A parliamentary committee has attacked the British government's failure to investigate the use of equipment from China's Huawei in the UK national telecommunications network, saying security issues "risked being overlooked." In a report that raises new questions about Huawei's links to the Chinese government and the People's Liberation Army, parliament's intelligence and security committee said it was "shocked" that Whitehall officials failed to inform ministers about BT's use of Huawei equipment in a £10bn upgrade of the telecommunications network eight years ago. The report provides no evidence that Huawei, the world's second-biggest supplier of telecoms equipment, is being used in the UK as a vehicle for cyber espionage or that it has given unauthorised access to any third party. However, the committee, which comprises leading politicians and civil servants, said there would always be risks involved in any telecoms system sourced from abroad - and the UK authorities were not doing enough to manage that risk. The committee said its investigation revealed "a disconnect between the UK's inward investment policy and its national security policy." In particular, it said a centre set up by the government to monitor the physical equipment and software used by Huawei, "is highly unlikely to provide, or to be seen to provide, the required levels of security assurance." Cyber security has increasingly become a worry for governments around the world given fears of state-sponsored hacking of commercial and military secrets. Huawei has been the focus of particular scrutiny given fears over the potential misuse of telecoms equipment supplied by the Chinese manufacturer. The company provides all aspects of the telecoms infrastructure chain, ranging from the technical boxes and masts that carry and filter voice and data communications to the software that runs the network and the handsets that receive calls. After publication of the intelligence committee's report, George Osborne, the UK chancellor, rushed to assure China that he did not want to see any change in the countries" bilateral trading relationship. "Inward investment is critical to generating UK jobs and growth," Mr Osborne said. It is a personal priority of mine to increase trade links between the UK and China and I cannot emphasise enough that the UK is open to Chinese investment. The Chinese company defended its role in the UK, saying: "Huawei is open to ways of working to improve cyber security: after all, we have done everything we have been asked to do by UK government to date and more with our customers. We are always open to new ideas and ways of working. In one of its more damning judgments, the committee said eight years after the Huawei contract was signed, the government had still not put in place proper procedures to evaluate any major investment by a foreign company in the UK's critical national infrastructure. "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," the report said. Given what is at stake, that is unacceptable.