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Shocking revelations from Huawei-commissioned report: Huawei is good for the UK's economy so don't ban them

It might need a new angle since the government already has form for shafting the economy

Not a month seemingly goes by without the release of yet another "independent" report commissioned by hard pressed Huawei describing the business's importance to the UK economy.

The latest, penned by think tank Oxford Economics, claims Huawei contributed £3.3bn to UK GPD during 2019, both directly and indirectly, and supports 51,000 jobs via commercial operations. This is in addition to £1.1bn in tax receipts.

Huawei's direct impact in the UK economy is relatively small per the report, employing just 1,600 workers in 2019 (down from 1,700 in 2017). Direct GVA (gross value added) was £328.2m, including wages and salaries, employee and employer NI and pension contribution, business rates.

The bulk of the benefits derive from indirect economic activity (that is to say, activity stimulated from Huawei's supply chain procurement from UK suppliers); and induced activity – a fuzzy term that refers to wider economic boosts driven by things like employee spending, and spending from people working in the supply chain. If a Huawei staffer buys a coffee from Pret, that's "induced" activity.

Indirect GVA is almost five times greater than Huawei's direct contributions to UK GDP, at £1.66bn. Separately, induced employment, at 20,700 jobs, dwarfs the 1,600 directly employed by Huawei. Induced GVA was said in the report to be worth £1.353bn to UK GDP.

Oxford Economics broke down this impact further on a region-by-region basis. This largely correlates with population centres, but also where Huawei has major offices - 18 in the UK in total. Huawei has created three times as many jobs in London, and almost four times as much economic activity, compared to the North West of England, despite the former only having 22 per cent more people.

As for taxes, the report claimed Huawei paid £159.3m in direct tax, £476.3m in indirect tax and £477.6m in induced tax, equating to the £1.1bn figure Huawei is taking responsibility for. How very Amazonesque.

This is the third report commissioned by Huawei that El Reg covered in recent months. The first two, from analyst firm Assembly, focused on the rollout of 5G and the impact on UK economic competitiveness, arguing separately that the UK will lose its leadership status in 5G, and could potentially fail to capitalise on as much as £173bn in economic growth over the coming decade.

Huawei has, in effect, heeded the advice given by fictional spin doctor Malcolm Tucker on experts.

If this sounds desperate, it's because Huawei is. The Chinese telco, which has supplied UK fixed-line and wireless carriers for well over a decade, faces being excised from the Brit market entirely due to the US-China trade war.

By the end of this year, cellular networks will be prohibited from acquiring new 5G equipment from Huawei, and will be obligated to remove existing kit by 2027. Huawei has massively scaled back its enterprise business unit, discontinuing sales of entire product lines.

Its mobile business is also in comparatively poor shape, battered by Huawei's inability to license Google Mobile Services. Earlier this week, Huawei formally announced the sale of its Honor business unit, which represented the company in the low-to-mid end of the mobile market in the UK.

These Huawei-commissioned reports serve as a form of soft power influence, in the hope that those in power will recognise the impact of Huawei's presence in the UK market and reverse course. It's rather telling that the Oxford Economics report doesn't mention the US sanctions against the firm, nor the "rip and replace" mandate handed to carriers.

UK policy on Huawei is largely dictated by external factors, with Secretary of State for Digital, Culture, Media and Sport Oliver Dowden citing the company's precarious ability to source chips as a major justification in banning the company from the nation's 5G infrastructure. And until that is resolved, no amount of gentle poking or research will change things. ®

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