Boris Johnson has suffered his first Commons revolt since the election over Chinese telecoms firm Huawei's involvement in Britain's 5G network.
Thirty-six Tory backbenchers voted for an amendment, tabled by former party leader Sir Iain Duncan Smith, to ban "high-risk vendors" like Huawei from the network after 2022.
But they and their allies were not enough to overturn the Prime Minister's stonking 80-seat majority.
Ministers refused to back down as the vote approached in the House of Commons. And despite the rebellion, MPs voted 306-282 against Sir Iain's amendment tonight, a majority of 24.
Tory rebel Bob Seely warned it could just be the start. "It was a strong first showing," he said.
A defeat would have scuppered the Prime Minister's bid to let "high-risk vendor" Huawei run up to 35% of the UK's super-fast 5G network, which the Tories vowed to build as a key election pledge.
After months of debate ministers gave Huawei – which denies being a tool of the Chinese state – a limited role in building the UK's phone infrastructure back in January.
The firm can provide parts for up to 35% of the total network and will not be allowed to control the technology's roll out entirely in any city. The company is also to be excluded from safety-critical networks in critical infrastructure and from the network in sensitive locations.
But Tory MPs warned the decision would be "nesting a dragon" and it infuriated the US – with Donald Trump allegedly flying into an "apoplectic rage" in a phone call with Boris Johnson .
Sir Iain said before the vote: "We are genuinely concerned that this country has got itself far too bound into a process in which we are reliant on untrusted vendors and in this particular case, Huawei.
"But let's not be in any doubt at all, the one thing I do want to say is that we heard recently that it is the view, and a government minister said this, that Huawei was a private company. Let us be very clear absolutely from the outset, this company is not a private company.
"It ends up being essentially almost completely owned by Chinese trade unions and they of course are exactly locked into the Chinese government. This is a Chinese wholly-owned organisation."
He continued: "When it comes to security versus cost, my view is security wins every single time because I worry when we start compromising security.
"We have no friends out there anymore on this issue, whether it's the Canadians, the Americans, the Australians, the New Zealanders, they all disagree with us."
In an attempt to head off the rebellion, Culture Secretary Oliver Dowden wrote to Tory MPs setting out the measures the Government was taking to restrict Huawei's involvement and restated the commitment to see it replaced by competitors over time.
In his letter to colleagues, Mr Dowden said: "I wish to stress again that the Government is clear-eyed about the challenges posed by Huawei."
He insisted that the Government's aim remained to reduce reliance on high-risk vendors as competitors to Huawei emerged – although he did not set out the kind of timetable sought by the Tory rebels.
"We want to get to a position where we do not have to use a high-risk vendor in our telecoms networks at all," he said.
But he angered Tory MPs in the Commons when he could not set a deadline for when that would happen.
Critics of the Government's approach include former Cabinet ministers Damian Green and David Davis, Commons Foreign Affairs Committee chairman Tom Tugendhat and Tory backbench 1922 Committee chairman Sir Graham Brady.
Foreign Affairs Select Committee chair, Tom Tugendhat, said: "The position (Sir Duncan Smith) argued for I think is one that is not only shared by many on these benches but one that is quite obviously shared by many in this country, that we should be supporting a domestic industry, that we should be looking to partner with countries and companies that share not just the technology, but actually also the values that underpin that technology.
"Would he not agree with me that the Government is absolutely right to be looking at investing in infrastructure and in fact, we all welcome the Government's investment in broadband and shouldn't some of that investment perhaps be in the UK infrastructure?"
Sir Iain Duncan Smith responded: "Well I agree with (Mr Tugendhat) and this is the other sad part of what's been going on now for over a decade. We have watched, doesn't matter which government's been in power, quietly as all of that ability has been stripped out of the UK.
"So our last provider was some years ago and they've gone. So we now rely, not just beyond the Huaweis of this world, but you also rely for all the microprocessors and the chips are not produced here and in many cases, they're mostly produced in the Far East."
He added: "If these were strategic and important to us, surely we should have all got together and decided therefore we need to have these facilities here so that we can control the future development."
Their move reflects widespread misgivings across the party over the decision, with fears that it could give China a "backdoor" to spy on the UK's telecoms network.
The Prime Minister's official spokesman told a Westminster briefing: "Market failure has left us in this position and we want to get to a position where we do not have to use a high-risk vendor in our telecoms network.
"We will keep the 35% market cap under review.
"Our intention is for this share to reduce as market diversification takes place.
"We will work with the US and our partners to diversify the telecoms market and develop alternative suppliers."
Responding to the vote, Victor Zhang, VP, Huawei said: “We were reassured by the UK government’s decision in January that we could continue working with our customers to keep the 5G roll-out on track.
"It was an evidence-based decision that will result in a more advanced, more secure and more cost-effective telecoms infrastructure.
"We are proud to have supplied cutting-edge technology to telecoms operators in the UK for more than 15 years and we will build on this strong track record, supporting those customers as they invest in their 5G networks, boosting economic growth and helping the UK continue to compete globally.
“The government has examined the evidence and concluded that Huawei should not be banned on cyber security grounds and two parliamentary committees have done the same and agreed. An evidence-based approach is needed, so we were disappointed to hear some groundless accusations asserted. The industry and experts agree that banning Huawei equipment would leave Britain less secure, less productive and less innovative.”
Full list of Tory rebels:
36 Conservative MPs (although three were paired with the Labour leadership candidates).
Bob Blackman (Harrow East)
Graham Brady (Altrincham and Sale West)
Andrew Bridgen (North West Leicestershire)
Fiona Bruce (Congleton)
Christopher Chope (Christchurch)
Damian Collins (Folkestone and Hythe)
James Davies (Vale of Clwyd)
David Davis (Haltemprice and Howden)
Richard Drax (South Dorset)
Iain Duncan Smith (Chingford and Woodford Green)
Liam Fox (North Somerset)
Mark Francois (Rayleigh and Wickford)
James Gray (North Wiltshire)
Damian Green (Ashford)
Philip Hollobone (Kettering)
David Jones (Clwyd West)
Jack Lopresti (Filton and Bradley Stoke)
Tim Loughton (East Worthing and Shoreham)
Anthony Mangnall (Totnes)
Stephen McPartland (Stevenage)
Esther McVey (Tatton)
Anne Marie Morris (Newton Abbot)
David Morris (Morecambe and Lunesdale)
Sheryll Murray (South East Cornwall)
Robert Neill (Bromley and Chislehurst)
Matthew Offord (Hendon)
Owen Paterson (North Shropshire)
Andrew Percy (Brigg and Goole)
John Redwood (Wokingham)
Andrew Rosindell (Romford)
Henry Smith (Crawley)
Robert Syms (Poole)
Tom Tugendhat (Tonbridge and Malling)
David Warburton (Somerton and Frome)
Bill Wiggin (North Herefordshire)
William Wragg (Hazel Grove)
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