The Prince Andrew spy scandal shows that the government doesn’t know what to do about China

One great irony of the current Chinese spying scandal is that, whatever intelligence the apparently gregarious Yang Tengbo allegedly managed to pick up about Prince Andrew and the British establishment, Beijing’s agent would never have been able to report back definitively on Britain’s policy towards China.

That is because, over the past two decades or so, insofar as such a settled attitude has ever existed, it has never lasted for long. It has been characterised by wishful thinking, confusion and the unbearable dilemma of being confronted with a choice of morality and money.

The British, in other words, really don’t know what to do about China – and that extends even to publicly acknowledging the name of this now high-profile alleged spy, so often photographed with prime ministers and cultivating his friendship with the Duke of York.

The relationship has gyrated for some decades now. During the New Labour era, the atmosphere was cordial in the warm glow of the (at first) successful handover of Hong Kong to the People’s Republic. David Cameron’s government, driven by economic necessity, talked up the “Golden Era” in Sino-British relations; the prime minister even took President Xi for a pint at the local pub near Chequers.

Under Theresa May, things grew frostier, when China’s role in telecoms (Huawei) and the British nuclear power programme was scrutinised. Boris Johnson characteristically flip-flopped, while Liz Truss was unremittingly hostile. Rishi Sunak settled on calling China a “systemic threat” rather than, say, an existential one.

Post-Brexit economic realities have inevitably meant that Britain has had to compromise in diplomacy in a way it would not with a lesser power. Sir Keir Starmer wishes to “engage” with China, “cooperating” on climate change, “challenging” on human rights, and “competing” on trade.

Whether that trifecta bet on future policy survives these relations we shall see; there are more immediate matters to settle.

With the alleged spy now unmasked, will the authorities tell all about his activities, including the extent and nature of his relationship with the King’s brother, and any financial dimension?

How did this unlikely figure form what the High Court judge in the hearing on naming him called “an unusual degree of friendship” with the late Queen’s favourite son? Will ministers and the palace now be open and transparent about what has been going on? Or will the British people continue to be kept in the dark?

Britain’s allies in the Five Eyes intelligence network – the United States, Canada, Australia and New Zealand – must be as disturbed about these developments as anyone.

For his part, Mr Yang says he wanted to make his identity public and denies he was a spy. He complains that as an “independent entrepreneur”, he would never do anything to harm the UK. Perhaps – but the security services wouldn’t have had him banned from Britain for no good reason, and the evidence against him is strong.

After all, every member of the Chinese Communist Party (CCP), Mr Yang included, has an obligation to serve the system in the acquisition of information about foreign powers. In fact, Mr Yang worked for the “United Front Work Department”, an accurately named front organisation of the CCP and its Politburo. He was no stray businessman selflessly attracted by the prince’s “Pitch@Palace” project.

Sir Iain Duncan Smith, himself a victim and sanctioned by China, is right to draw attention to characters circulating “in plain sight” and this latest story could well be what Sir Iain calls “the tip of the iceberg” of such intelligence gathering and influence-peddling.

We know for sure, for example, that Barry Gardiner, the Labour MP and former frontbencher, has had to defend his decision to accept more than £500,000 in donations from prominent London-based solicitor Christine Lee before he was warned she was a Chinese agent. Mr Gardiner received the donations from Lee mainly to cover staffing costs in his office, over a period of six years, and employed her son as his diary manager. There is no reason to suppose these are entirely untypical cases.

It is not clear whether Mr Yang transmitted any secrets back to Beijing and it seems unlikely, not least because Prince Andrew won’t have been in possession of any. Most of Mr Yang’s encounters with the establishment appear to have been of a fleeting nature – a handshake and a photo. Lady May, for instance, cannot recall anything about him.

He was more an agent of influence, in London to promote Chinese interests wherever he could and, perhaps, provide photographs to show his comrades back home he was doing his job – hence the prime ministerial and royal selfies.

Mr Yang may have generally overstated his influence but possibly not in the case of Prince Andrew. In a letter found on one of his devices, Mr Yang was told by Dominic Hampshire, an adviser to Prince Andrew, that: “Outside of [the prince’s] closest internal confidants, you sit at the very top of a tree that many, many people would like to be on … Under your guidance, we found a way to get the relevant people unnoticed in and out of the house in Windsor.”

That is oblique indeed, but it is undoubtedly upsetting to see one of the UK’s greatest instruments of soft power, the monarchy, subverted in this fashion. The public deserves to know much, much more about this bizarre episode.