Boris Johnson has survived his first backbench revolt since December's election after 38 Conservative MPs defied a three-line whip over the government's plans to allow Huawei to be part of the UK's 5G mobile network.
Former ministers Iain Duncan Smith, Liam Fox and Damian Green were among the rebels, who backed an amendment that would end the Chinese company's involvement in the project by the beginning of 2023.
The amendment won the support of all opposition parties apart from the DUP, five of whose MPs voted with the government, which won the vote by 24 votes.
The government agreed earlier this year to allow Huawei's technology to be used in Britain's 5G network but to exclude it from the most sensitive parts and to limit its market share to 35 per cent. The decision put the UK at odds with the United States and its other partners in the Five Eyes intelligence sharing network, Canada, Australia and New Zealand.
Mr Duncan Smith said Huawei had access to almost unlimited funds from the Chinese government to enable it to win market dominance by undercutting competitors on price.
"This company is not a private company. Ultimately, it is essentially almost completely owned by Chinese trade unions, and they, of course, are completely locked into the Chinese government. This an organisation wholly owned by China, " he said.
“When this all began, there were something like 12 companies in this marketplace. One by one, they have disappeared. Why have they disappeared? They simply cannot compete with Huawei’s pricing.”
Britain’s security services have an arrangement with Huawei that allows them to scrutinise all the company’s technology that is used in Britain. But Mr Duncan Smith suggested that Britain’s services were overconfident about their capacity to control Huawei, given that the Americans and others feel no such confidence.
“No matter how intelligent, brilliant and great our security and cybersecurity services are, how is it that they are right and everybody else is wrong? In fact, at a briefing the other day, I saw them trashing the Australian view of this. I simply say, fine, but the reality is that we are alone on this matter, and I think that that is a very bad place to be in relation to our closest allies when it comes to security,” he said.
Earlier, cabinet secretary Mark Sedwill, who heads the civil service, told a House of Commons committee he regretted Philip Rutnam's decision to resign as permanent secretary at the home office after a clash with home secretary Priti Patel.
Mr Sedwill said he could not comment on allegations that Ms Patel bullied staff but he said the question of whether a minister’s behaviour amounted to bullying depended on the power balance involved.
“The key issue here is the effect that it has on other people, and that effect can depend on the circumstances or context within which a particular line of conduct is happening. Does someone feel intimidated? Does someone feel they can do their job effectively?” he said.
The backbench rebellion over Huawei came a day before chancellor Rishi Sunak presents a budget that is expected to be dominated by the economic consequences of coronavirus.
But Mr Sunak said it will also pledge hundreds of billions of pounds of investment in roads, railways, bridges, housing and research as part of the government’s promise to bring more economic development to regions outside London.
“By investing historic amounts in British innovation and world-class infrastructure, we will rebalance opportunities and lay the foundations for a decade of growth for everybody,” he said.