Monday, 17 February 2020

Who Are We?

As B - Day (bidet?) arrived and departed the government started to clear the decks by making some decisions which had been left hanging before the election. On infrastructure it's two down (5G, HS2) with one to go (Heathrow 3rd runway). All were made in principle already but not buttoned down. The government has also thrown in an accelerated target for banning the sale of petrol and diesel vehicles without any substantial plan for delivering it. And then immediately started talking about an even quicker timescale. I've already written about this pie in the sky approach (Wishful thinking without WYDIs, 8 February) so what about the infrastructure decisions?

I feel both the go ahead for HS2 and the decision to use but limit the involvement of Huawei in our 5G network were the only credible decisions from where we are. I've been critical of the HS2 project and made clear that I think it could be delivered at much lower cost by descoping the speed as it's the capacity that matters (Take the H out of HS2 now, 16 Sept). Admittedly that compromise might risk further delay: the trains are due to be ordered in spring 2020 and the shortlist of 5 companies revealed outlines of their designs months ago. Taking the expensive Euston terminal off HS2 Ltd, possibly as a first stage of kicking it into the long grass, makes sense. After all, Euston is not the place most people want to be after arriving in London. So, if you have to get on another pantechnicon anyway, why not do it at Old Oak Common? The experts don't agree on that, with some saying it's "blindingly obvious" that the new Old Oak Common station and in particular its link to central London (as well as Heathrow) via the Elizabeth Line (aka Crossrail) would get swamped. The Old Oak Common station architect disagrees, saying the station could act as the HS2 London terminus but it's not clear to me whether he is allowing for passenger volumes on Crossrail, as two thirds of passengers heading to London are expected to carry on to Euston rather than get off at Old Oak Common and jump onto Crossrail. One can understand the government hedging its bets on this at the moment while someone learns how to use an abacus. Setting up yet another body to deliver the northern part of HS2 along with NPR (Northern Powerhouse Rail, keep up!) seems less sensible to me, creating unnecessary interfaces with the risks that entails. The interfaces shouldn't be difficult to manage but this is the rail industry and its got form.

While eye wateringly expensive we shouldn't be surprised by the higher than expected cost. Apparently the guy who built many of New York's urban rail lines and roads said that politicians shouldn't be given the full cost at the outset as the projects would never get sanctioned. He recomended quoting the smallest credible price as the thinest end of a thin wedge which then needed to be driven in until it was unthinkable to cancel the project. So not much changes. And, while eye watering, the cost of over £100 billion is modest in comparison with overall public sector spending over the time HS2 is taking to build: 20 years of public spend is more than £14,000 billion in today's money.

But it's also worth bearing in mind that HS2 is almost irrelevant in terms of the country's overall transport strategy. Rail provides 11% of passenger km travelled (and only 3% of journeys) and 9% of freight km-tonnes* moved. The extra capacity provided by HS2 will make very little difference to that overall picture. I didn't always make myself popular when working in the rail industry by pointing out that not many people would notice if the railway wasn't there, other than commuters into London and a few other cities and frequent travellers to London.

Not only is it of marginal relevance, the railway costs an awful lot. The total public sector spend on transport is £32.5 billion, with 55% of it going on rail. But guess what? All of this is covered by road taxes, with fuel and vehicle excise duty raising over £34 billion. So, despite the eye watering cost of rail tickets, they are heavily subsidised by road users. These costs include capital spend of £8 billion on roads and £12 billion on rail. Yes, all those roads and those comparatively few rail lines and the figure is that way round.

So rail costs a packet and only serves some people and some of them only some of the time. But it's perceived as a "good thing" so politically HS2 had to go ahead. I discount the argument that the money should have been spent on increasing capacity on existing lines. Sure some of those projects should go ahead anyway but we've found many times that increasing capacity on existing road and rail routes is expensive and causes huge disruption. The passengers on those routes who suggested it would soon have changed their mind when they realised how many years of delayed journeys they would experience.

In the 1990s I risked upsetting my company's CEO, a great supporter of rail and a former British Rail director of engineering, by making what I thought was an off the wall suggestion: that it would be better to tarmac over all the railway lines and run convoys of lorries and buses along them. The disarming answer was that this had been suggested on many occasions and made a lot of sense economically. This was before I went to work in the company's rail technology division where I continued to occasionally ask provocative, devil's advocate questions.... But I'm going to park my suggestion while we decide how to operate all those lorries and buses without fossil fuels. If we could do that economically and with driverless vehicles then convoy roads would make a lot of sense, albeit not moving at HS2 speeds of up to 250mph.

As for the use of Huawei in the UK's 5G development, from where we were the decision was also probably the only credible course of action as a several year delay and cost escalation in the introduction of 5G was unthinkable after Johnson giving it large on "gigabit broadband" so many times.

I can get by on most IT subjects but have never pretended to know much about telecomms. Railway signalling sometimes interfaces with telecomms and some projects I was involved in were blighted if there was a need for new equipment to interact with legacy kit involving phone modems. I think there were only 3 people with any great technical knowledge in Network Rail and I wasn't confident they understood it very well. But I did spend a fair bit of time chatting to a senior BT executive a few years ago. He told me a bit about Huawei and why BT's relationship with them, which started around 2005, was so important to BT.

We now know that senior civil servants didn't tell ministers at the time about the implications of BT getting into bed commercially with Huawei. But I doubt anything different would have been decided - even if it could, BT being a private company. It was a commercial decision by BT. And why not? It gave us faster progress and more of it for the available money than we otherwise would have had. I'm sure we are much further on with broadband than we would have been without Huawei.

However, the implications of becoming more reliant for our communications on a company that is undoubtedly an arm of the Chinese state - because all large Chinese companies are** - have grown and are troubling, particularly as China has moved strongly towards an Orwellian type of surveillance society using IT, face recognition, etc. There are strategic implications for us. And, as an advocate of private provision of services, I accept that there are times when the national interest has to be decided by politicians, not business people in large companies.

But just what is "strategic" in this context? In business I always felt that anything described as "strategic" always meant something that couldn't be justified on cost grounds alone. That would certainly have been the case for switching from Huawei right now: it would set us back years as our current 4G system is dependent on their equipment.

The main reason the decision is tricky is the opposition from the USA. But they don't have the same issues that we do. Why not? I'm not entirely sure but I suspect it's because a very high proportion of their homes and commercial buildings are connected to their cable network, which is copper cable but not copper cable like our "last mile" for broadband: it's copper in the form of coaxial cable which can download at tens of MB per second so Americans can get their Netflix fix. Cable covers many remote locations. But broadband prices have tended to be quite a lot higher in the US than in Europe.

Trump offered to help the UK with 5G development if we ditched Huawei but it was an empty promise as they don't have it themselves: Americans have been heard to mutter that they may as well by pass 5G and work on 6G. The only companies with any international standing in this game besides Huawei are Ericsson, Nokia and another Chinese company.

I have seen claims that the Americans were leaders in 4G but that isn't consistent with their world ranking for 4G speeds: 4 places below us in 30th position in the world and below Albania***. That still means their cellphones, as they call mobiles, will work satisfactorily as smartphones for most applications. In any event, the Americans have a very different broadband environment from us. And both countries, in the forefront of the technology in the early 1980s, have been left behind.

I think Johnson is right to try to persuade the Americans that the risk is manageable, even if Trump's Veep, Pompeo, is sounding off about it. They probably see us as a "swing" country on Huawei: what we decide could well influence others. Of course, the Americans have much more money to throw at these problems. We have to manage some risks differently simply because we don't have the same level of resources. It's entirely possible that we can manage the risk. But is there a contradiction at the heart of our policy? If Huawei is not secure enough to be deployed near nuclear installations and military bases then isn't all the rest of our data, in particular the data belonging to most of our major companies at risk? I guess if companies are daft enough to send highly sensitive data on open links without encryption they are leaving themselves open and not just to the Chinese. And anyway, I've heard it said that if the Chinese wanted to hack our data they wouldn't start from intercepting stuff on the 4G/5G network, they'd just hack straight in. The most puzzling thing about the hoo-ha to me is whether the 5G network is relevant to information sharing with the Americans, which I had always assumed was by a more secure form of transmission. The leaks tend to come from people.

So, before we get to the non- argument about chlorinated chicken, Johnson has shown that he's not chicken and we won't be bullied by taking a pragmatic decision which risks pleasing no-one (the industry don't like the limit and the Americans don't like any Huawei involvement) but probably makes sense from where we are. However, this game has some way to run yet, as we start to make our own way in the world and show who we are.

But that isn't why I gave this post its title. The post is dedicated to all those tv and radio journalists, especially on the BBC, who haven't yet learned how to say Huawei. My BT friend had met many people from the company many times and it was quite clear from the way he said the company's name that there's no prominent "H" at the front and certainly no "oo-aarr missus" sound anywhere in there. So it's definitely not Who-are-way. There is the merest hint of a soft h at the beginning in "wah-way", said as one brisk word with no pause between or emphasis on either of the two syllables.  If the BBC correspondents want me to believe they are tech savvy they could at least learn how to say the company's name.

* All the transport stats including costs and taxes are from Transport statistics Great Britain 2018 available on

** not just large ones. I was chairman of a Chinese company which was a joint venture between the British company I worked for at the time and part of the Chinese nuclear industry. The smoke detector you should have in your house is more likely than not to contain a small radioactive source made in the company's factory in Shenzen, as we had more than 60% of the global market for these sources, with a higher share in Europe. What do you mean you didn't know you had a radioactive source in your house? It's a very small americium source in a gold foil, which means should you decide to eat it it shouldn't be absorbed in your body (I still wouldn't recommend it though). The company imported americium from Russia - from multi-use plants which switched periodically between making weapons grade plutonium and by-products like americium - basically as brickettes which we wrapped in gold and rolled out into a wafer thin film. So of course we had a communist party minder on our board (not officially, but we all knew it). He was very partial to rice wine I remember. But conversations indicated that just about all companies of any size or sensitivity had a party minder keeping an eye on them. When we nearly ran out of americium on one occasion I wasn't at all sure I believed the story we were given and did wonder where the stock had actually gone. But that wasn't a time or place for asking provocative, devil's advocate questions as long as the issue got sorted. Which it did.


P.S. June 2020: to give some scale to the issue if BT were required to strip out Huawei kit, it's present in about 12,500 of their 19,500 mobile phone masts

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