Kevan Jones debates involving the Department for Digital, Culture, Media & Sport during the 2019 Parliament

Tue 12th Jul 2022
Online Safety Bill
Commons Chamber

Report stage & Report stage (day 1) & Report stage
Mon 17th Jan 2022
Mon 8th Nov 2021
Telecommunications (Security) Bill
Commons Chamber

Consideration of Lords amendments & Consideration of Lords amendments
Tue 26th Jan 2021
Telecommunications (Security) Bill (Eighth sitting)
Public Bill Committees

Committee Debate: 8th sitting: House of Commons
Tue 26th Jan 2021
Telecommunications (Security) Bill (Seventh sitting)
Public Bill Committees

Committee stage: 7th sitting & Committee Debate: 7th sitting: House of Commons
Tue 26th Jan 2021
Thu 21st Jan 2021
Telecommunications (Security) Bill (Fifth sitting)
Public Bill Committees

Committee stage: 5th sitting & Committee Debate: 5th sitting: House of Commons
Thu 21st Jan 2021
Telecommunications (Security) Bill (Sixth sitting)
Public Bill Committees

Committee stage: 6th sitting & Committee Debate: 6th sitting: House of Commons
Tue 19th Jan 2021
Telecommunications (Security) Bill (Fourth sitting)
Public Bill Committees

Committee Debate: 4th sitting: House of Commons

Online Safety Bill

Kevan Jones Excerpts
Julian Knight Portrait Julian Knight
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We live in the strangest of times, and the evidence of that is that my hon. Friend the Member for Folkestone and Hythe (Damian Collins), who has knowledge second to none in this area, has ended up in charge of it. I have rarely seen such an occurrence. I hope he is able to have a long and happy tenure and that the blob does not discover that he knows what he is doing.

I backed the Bill on Second Reading and I will continue to back it. I support most of the content within it and, before I move on to speak to the amendments I have tabled, I want to thank the Government for listening to the recommendations of the Digital, Culture, Media and Sport Committee, which I chair. The Government have accepted eight of the Committee’s key recommendations, demonstrating that the Committee is best placed to provide Parliamentary scrutiny of DCMS Bills as they pass through this House and after they are enacted.

I also pay tribute to the work of the Joint Committee on the draft Bill, which my hon. Friend the Member for Folkestone and Hythe chaired, and the Public Bill Committee, which has improved this piece of legislation during its consideration. The Government have rightfully listened to the Select Committee’s established view that it would be inappropriate to establish a permanent joint committee on digital regulation. I also welcome the news that the Government are set to bring forward amendments in the House of Lords to legislate for a new criminal offence for epilepsy trolling, which was recommended by both the Joint Committee and the Select Committee.

That said, the Digital, Culture, Media and Sport Committee continues to have concerns around some aspects of the Bill, particularly the lack of provision for funding digital literacy, a key area where we are falling behind in and need to make some progress. However, my primary concern and that of my colleagues on the Committee relates to the powers within this Bill that would, in effect, give the Secretary of State the opportunity to interfere with Ofcom’s role in the issuing of codes of practice to service providers.

It is for that reason that I speak to amendments 44 to 46 standing in my name on the amendment paper. Clause 40, in my view, gives the Secretary of State unprecedented powers and would bring into question the future integrity of Ofcom itself. Removing the ability to exercise those powers in clause 39 would mean we could lose clauses 40 and 41, which outline the powers granted and how they would be sent to the House for consideration.

Presently, Ofcom sets out codes of practice under which,

“companies can compete fairly, and businesses and customers benefit from the choice of a broad range of services”.

Under this Bill Ofcom, which, I remind the House, is an independent media regulator, will be required to issue codes of practice to service providers, for example codes outlining measures that would enable services to comply with duties to mitigate the presence of harmful content.

Currently, codes of practice from Ofcom are presented to the House for consideration “as soon as practicable”, something I support. My concern is the powers given in this Bill that allow the Secretary of State to reject the draft codes of practice and to send them back to Ofcom before this House knows the recommendations exist, let alone having a chance to consider or debate them.

I listened with interest to my hon. Friend the Member for Croydon South (Chris Philp), who is not in his place but who was a very fine Minister during his time in the Department. To answer his query on the written ministerial statement and the letter written to my Committee on this matter, I say to him and to those on the Front Bench that if the Government disagree with what Ofcom is saying, they can bring the matter to the House and explain that disagreement. That would allow things to be entirely transparent and open, allow greater scrutiny rather than less, and allow for less delay than would be the case if there is forever that ping-pong between the Secretary of State and Ofcom until it gets its work right.

I want to make it clear that the DCMS Committee and I believe that this is nothing more than a power grab by the Executive. I am proud that in western Europe we have a free press without any interference from Government, and I believe that the Bill, if constituted in this particular form, has the potential to damage that relationship—I say potential, because I do not believe that is the intention of what is being proposed here, but there is the potential for the Bill to jeopardise that relationship in the long term. That is why I hope that Members will consider supporting my amendments, and I will outline why they should do so.

As William Perrin, a trustee of the Carnegie Trust UK, made clear in evidence to my Committee,

“the underpinning convention of regulation of media in Western Europe is that there is an independent regulator and the Executive does not interfere in their day to day decision-making for very good reason.” Likewise, Dr Edina Harbinja, a senior lecturer at Aston University, raised concerns that the Bill made her

“fear that Ofcom’s independence may be compromised”

and that

“similar powers are creeping into other law reform pieces and proposals, such as…data protection”.

My amendments seek to cut red tape, bureaucracy and endless recurring loops that in some cases may result in significant delays in Ofcom managing to get some codes of practice approved. The amendments will allow the codes to come directly to this House for consideration by Members without another level of direct interference from the Secretary of State. Let me make it very clear that this is not a comment on any Secretary of State, at any time in the past, but in some of these cases I expect that Ofcom will require a speedy turnaround to get these codes of practices approved—for instance, measures that it wishes to bring forward to better safeguard children online. In addition, the Secretary of State has continually made it clear in our Select Committee hearings that she is a great supporter of more parliamentary scrutiny. I therefore hope that the Government will support my amendment so that we do not end up in a position where future Secretaries of State could potentially prevent draft codes coming before the House due to endless delays and recurring loops.

I also want to make it abundantly clear that my amendment does not seek to prevent the Secretary of State from having any involvement in the formulation of new codes of practice from Ofcom. Indeed, as Ofcom has rightly pointed out, the Secretary of State is already a statutory consultee when Ofcom wishes to draft new codes of practice or amend those that already exist. She can also, every three years, set out guidelines that Ofcom would have to follow when creating such codes of practice. The Government therefore already play a crucial role in influencing the genesis and the direction of travel in this area.

On Friday the Secretary of State wrote to my office outlining some of the concerns shared by Members of this House and providing steps on how her Department would address those concerns. In her letter, she recognises that the unprecedented powers awarded to the Secretary of State are of great concern to Members and goes on to state that

“regulatory independence is vital to the success of the framework”.

I have been informed that in order to appease some of these concerned Members, the Government intend to bring forward amendments around the definitions of “exceptional circumstances” and “public policy”, as referenced earlier. These definitions, including “economic policy” and “business interests”, are so broad that I cannot think of anything that would not be covered by these exceptional circumstances.

If the Secretary of State accepts our legitimate concerns, surely Ministers should accept my amendments becoming part of the Bill today, leaving a cleaner process rather than an increasingly complex system of unscrutinised ministerial interference with the regulator. The DCMS Committee and I are very clear that clause 40 represents a power grab by the Government that potentially threatens the independence of Ofcom, which is a fundamental principle of ensuring freedom of speech and what should be a key component of this legislation. The Government must maintain their approach to ensuring independent, effective, and trustworthy regulation.

I will not press my amendments to a vote, but I hope my concerns will spark not just thoughts and further engagement from Ministers but legislative action in another place as the Bill progresses, because I really do think that this could hole the Bill under the waterline and has the potential for real harm to our democratic way of life going forward as we tackle this whole new area.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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I rise to speak to my new clause 8, which would place a duty on all internet site providers regulated by this Bill to prevent individuals from encountering adverts for cosmetic procedures that do not contain disclaimers as to health risks of the procedure or include certified service quality indicators.

I have been campaigning for a number of years for better regulation of the non-surgical and cosmetic surgery industry, which is frankly a wild west in terms of lack of regulation, only made worse by the internet. I pay tribute to my constituent Dawn Knight, who has been a fierce campaigner in this area. We are slowly making progress. I thank the former Health Minister, the hon. Member for Charnwood (Edward Argar), for his work in bringing amendments on licensing to the Bill that became the Health and Care Act 2022. That is now out for consultation. It is a first, welcome step in legislation to tame the wild west that is the cosmetic surgery sector. My amendment would enhance and run parallel to that piece of legislation.

Back in 2013, Sir Bruce Keogh first raised the issue of advertising in his recommendations on regulation of the cosmetic surgery industry, saying that cosmetic and aesthetic procedures adverts should be provided with a disclaimer or kitemark in a manner similar to that around alcohol or gambling regulation. Years ago, adverts were in newspapers and magazines. Now, increasingly, the sector’s main source of advertising revenue is the internet.

People will say, “Why does this matter?” Well, it links to some of the other things that have been raised in this debate. The first is safety. We do not have any data, for which I have been calling for a while, on how many surgical and non-surgical aesthetic procedures in the UK go wrong, but I know who picks up the tab for it—it is us as taxpayers as the NHS has to put a lot of those procedures right. The horrendous cases that I have seen over the years provide just cause for why people need to be in full control of the facts before they undertake these procedures.

This is a boom industry. It is one where decisions on whether to go ahead with a procedure are not usually made with full information on the potential risks. It is sold, certainly online, as something similar to buying any other service. As we all know, any medical procedure has health risks connected to it, and people should be made aware of them in the adverts that are now online. I have tried writing to Facebook and others to warn them about some of the more spurious claims that some of the providers are making, but have never got a reply from Facebook. This is about patient safety. My amendment would ensure that these adverts at least raise in people’s minds the fact that there is a health risk to these procedures.

Again, people will say, “Why does this matter?” Well, the target for this sector is young people. As I said, a few years ago these adverts were in newspapers and magazines; now they are on Facebook, Twitter, Instagram and so on, and we know what they are selling: they are bombarding young people with the perfect body image.

We only have to look at the Mental Health Foundation’s report on this subject to see the effect the industry is having on young people, with 37% feeling upset and 31% feeling ashamed of their own body image. That is causing anxiety and mental health problems, but it is also forcing some people to go down the route of cosmetic surgery—both surgical and non-surgical—when there is nothing wrong with their body. It is the images, often photoshopped and sadly promoted by certain celebrities, that force them down that route.

Someone has asked me before, “Do you want to close down the cosmetic surgery industry?” I am clear that I do not; what I want is for anyone going forward for these procedures to be in full control of the facts. Personally, if I had a blank sheet of paper, I would say that people should have mental health assessments before they undertake these procedures. If we had a kitemark on adverts, as Sir Bruce Keogh recommended, or something that actually said, “This is not like buying any other service. This is a medical procedure that could go wrong”, people would be in full awareness of the facts before they went forward.

--- Later in debate ---
Damian Collins Portrait Damian Collins
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The right hon. Gentleman makes a very important point and, as he knows, there is a wider ongoing Government review related to advertising online, which is a very serious issue. I assure him that we will follow up with colleagues in the Department of Health and Social Care to discuss the points he has raised.

Kevan Jones Portrait Mr Jones
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I am grateful to the Minister and I will be keeping a beady eye to see how far things go. The proposal would make a difference. It is a simple but effective way of protecting people, especially young people.

Eleanor Laing Portrait Madam Deputy Speaker (Dame Eleanor Laing)
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Very good, that was wonderfully brief.

BBC Funding

Kevan Jones Excerpts
Monday 17th January 2022

(2 years, 2 months ago)

Commons Chamber
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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The Secretary of State has come to the House today to say that the freeze in the licence fee is to help hard-working, struggling families. May I ask her to answer the question put to her by the Father of the House: when was this decided? Did it go through a Cabinet Sub-Committee? Did Cabinet sign this off, or is it that just over the last weekend the Government thought they would come up with something that would take the attention away from the Prime Minister?

Nadine Dorries Portrait Ms Dorries
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Cabinet has signed it off. These negotiations have been going on; they did with my predecessor as well as with me. Legally, I had to make my statement in as much time as possible before April, which is why I am making it today.

Telecommunications (Security) Bill

Kevan Jones Excerpts
Julia Lopez Portrait Julia Lopez
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I am pleased that the Bill has returned to the House from the other place and for the chance to speak to it. I thank my hon. Friend the Member for Boston and Skegness (Matt Warman) for his tremendous work in bringing it through the House earlier in this Session and in the last.

The Bill will create one of the toughest telecoms security regimes in the world. It will protect networks, even as technologies grow and evolve, shielding our telecoms critical national infrastructure both now and for the future. As the House will be aware, the Bill introduces a stronger telecoms security framework, which places new security duties on public telecoms providers and introduces new national security powers to address the risks posed by high-risk vendors.

I will briefly summarise the changes that have been made to the Bill. Lords amendments 1 to 3 were tabled by my colleague in the other place, Lord Parkinson. Lords amendment 4 relates to reporting on supply chain diversification and Lords amendment 5 relates to reviewing actions taken by Five Eyes nations regarding high-risk vendors. I will speak first to Lords amendments 1 to 3.

The important role of parliamentary scrutiny has been raised in debate throughout the passage of the Bill. In the other place, particular attention has been paid to scrutiny of our strengthened telecoms security framework. In its report on the Bill, the Delegated Powers and Regulatory Reform Committee noted that the new codes of practice were central to this framework, as they will contain specific technical information for telecoms providers. The Committee recommended that the negative procedure should be applied to the issuing of codes of practice. We carefully considered the Committee’s recommendation over the summer, and tabled amendments 1 to 3 in the other place to accept them.

The amendments will require the Government to lay a draft of any code of practice before Parliament for 40 days. Both this House and the other place will then have a period of time to scrutinise the code of practice before it is issued. These amendments demonstrate that we have listened and that we are committed to every aspect of the framework receiving appropriate parliamentary scrutiny. I commend these amendments to the House.

I will now speak to Lords amendment 4, regarding diversification. This amendment would place an annual requirement on the Government to report on the impacts of their 5G telecoms diversification strategy on the security of public telecommunications networks and services. It would also require a debate in the House on that report. The Government cannot support the amendment for two reasons. The first objection relates to the flexibility necessary for diversification. A reporting requirement of this nature is restrictive and premature. This is an evolving market that is rapidly changing, and we need the flexibility to focus our attention where it will have the greatest impact. While our focus is currently on diversifying radio access networks, once that part of the mobile network has been diversified we will move on to focus on other areas. Committing to reporting on specific criteria would limit us to reporting against the risks as we find them today and would not afford us the flexibility that diversification requires.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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I am very interested in what the Minister says, because one of the major themes, and one of the big failures of the 5G debacle over Huawei, is the fact that we do not have diversification in the network. How will the Government be able to do a stocktake every year so that we as parliamentarians, and others, will be able to judge that what is being said about a commitment to diversification, which is in a lot of policy papers, is actually happening in practice?

Julia Lopez Portrait Julia Lopez
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I thank the right hon. Gentleman for his comment. Hon. Members will be able to raise in the normal way, through parliamentary questions, scrutiny at oral questions and Committee work, what we are doing in this area. We are reporting regularly on some of our diversification efforts and some of the money that we are spending from the spending review.

Kevan Jones Portrait Mr Jones
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I accept that, although the current Government’s response to parliamentary questions these days is sometimes lacking. What benchmark, then, will the Government use for ensuring diversification? I accept that the Minister is the Minister today, but there will possibly be a future Minister—she will not be there for ever—so how are we to judge that we are actually going to get that diversification? Without that, we will end up as we have done now, with a network that is market-led and diversification is not in the market.

Julia Lopez Portrait Julia Lopez
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I appreciate the right hon. Gentleman’s concerns. We are committed to reporting to the House on a regular basis, but we do not want to limit ourselves on specifically what we will be reporting on in technological terms, because this is a rapidly evolving marketplace and we need to make sure that we have the flexibility to deal with particular infrastructure challenges as and when they come along.

My sense is that this amendment is intended to hold the Government’s feet to the fire on delivering their diversification strategy. If that is the case, a reporting requirement of this nature is unnecessary. This House and the other place already have mechanisms to hold the Government to account through parliamentary questions, as I said, and through the various Select Committees that can ably scrutinise this work. That is the appropriate way for scrutiny to take place.

Our second objection relates to focus. This is, first and foremost, a national security Bill. It is intended to strengthen the security and resilience of all our public telecoms networks, be they fixed line or mobile—2G, 3G, 4G, 5G and beyond. While the Government’s 5G telecoms diversification strategy has been developed to support that objective, it is not the sole objective of the strategy. This is market-making work. It is not a panacea to raise the security of our public networks. Moreover, the current scope of the strategy is not to address the entire telecoms market but to diversify a specific subset of it. The amendment extends the Bill beyond its intended national security focus and creates an inflexible reporting requirement on a strategy that will need to continue to evolve. We have been insistent on this position, and that is why I ask that this House disagrees with Lords amendment 4.

Lords amendment 5 would require the Secretary of State to review decisions taken by Five Eyes partners to ban telecommunications vendors on security grounds. In particular, it would require the Secretary of State to review the UK’s security arrangements with the vendor and consider whether to issue a designated vendor direction, or take a similar action, in the UK. I welcome the intention behind the amendment, which demonstrates that those in all parts of this House and the other place take the security of this country and its people incredibly seriously.

However, while we support the spirit of the amendment, we cannot accept it for four reasons. First, the House will recall that the Bill will provide the Secretary of State with the power to designate specific vendors in the interests of national security for the purpose of issuing a designated vendor direction. In clause 16 there is a non-exhaustive list of factors that the Secretary of State may take into consideration when issuing these designation notices. That list illustrates the kinds of factors we proactively consider on an ongoing basis as part of our national security work. A decision by a Five Eyes partner, or any other international partner, to ban a vendor on security grounds could be considered as part of that process, so this amendment would require us to do something that has been part of the Bill from the outset.

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Chi Onwurah Portrait Chi Onwurah
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Not to break the rules, but to work with other nations whose values we share, and in the long term to develop and support companies in this area.

Kevan Jones Portrait Mr Kevan Jones
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Does my hon. Friend also agree that this did not come as a great shock to the Government? It was all laid out in the 2013 Intelligence and Security Committee report on critical national infrastructure, but nothing has been done since then.

Chi Onwurah Portrait Chi Onwurah
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My right hon. Friend, as always, makes a really good point. That is where an industrial strategy would have come in. It was predicted and we had time to build up alternatives. To go from having Huawei as one vendor among others that had small parts of our network, to our network being so dependent on it, took time. We could have used that time better to secure our networks and our own capability. The Government are bodging this. They are leaving it to the market when national security is not a market function. Labour has consistently welcomed the Bill, but it is only a small step towards achieving a truly secure and robust telecommunications network. In 2010 the Tories inherited a secure, competitive and world-leading network. It is now insecure, uncompetitive and bumping along the bottom. The Government have wasted 11 years, with huge delays in the second and third-generation fixed broadband roll-out, pushing us down the bottom of the OECD tables. Telecommunications are essential to our national security and economy, and we hope the Government will take this opportunity to recognise that.

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Kevan Jones Portrait Mr Kevan Jones
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I begin by thanking the hon. Member for Boston and Skegness (Matt Warman), who took the Bill through Committee very ably. Sadly, he was a victim of the cull of competence in the last reshuffle, but his approach to the Bill was refreshing.

The Bill is important and, as a member of the ISC, I fully support it, but aspects of it need improving. Lords amendment 4 on the diversification strategy is vital. I was not reassured by the Minister telling us that this would be kept on track. When people try to give the impression that the issue of telecoms security suddenly hit us like a bolt out of the blue because of Huawei, I suggest that they read the 2013 ISC report on critical national infrastructure. What was going to happen was all laid out there, and nothing did. I think that without this annual stocktake, as the right hon. Member for New Forest East (Dr Lewis) said, there will be a tendency for future Governments to take their eye off the ball in terms of pushing forward the agenda that ensures that we are never again in a situation where we are beholden to, in this case, Huawei or any other vendor.

I have no problems with Lords amendments 1 to 3, but I think the Minister rather oversold this in saying that it is a demonstration of the Government’s commitment to parliamentary scrutiny. I accept that to a limited degree as it pertains to the codes of practice, but as the right hon. Member for New Forest East outlined, there is an issue that should concern Members on both sides of the House with this Bill and the National Security and Investment Act, in that there are elements of security now in two Departments that will not be able to be scrutinised by any Committee other than the ISC. As he outlined, although we have tabled probing amendments here and in the other place, we have given the benefit of the doubt to the Government, because of reassurances that scrutiny will be forthcoming. However, I say to the Minister that I would like a commitment tonight that she will feed that point back, because without this, no other Committee will be able to deal with the secret aspects involved. I have spoken to members of the Business, Energy and Industrial Strategy Committee, who are still trying to wheedle out of the Government their memorandum of understanding about what they can and cannot see, and that does not bode well. This is one thing that we will come back to, if it is not done now.

The ISC has so far been constructive and responsible in the way in which it has approached this issue. It is now in the hands of the Prime Minister to ensure that the memorandum of understanding is amended and is, as the Chair of the ISC said, in line with the Justice and Security Act 2013, which envisaged that we would have oversight if security went into other areas. Without that, these matters will lack the scrutiny that they rightly need.

Bob Stewart Portrait Bob Stewart
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I, too, speak as a member of the Intelligence and Security Committee. My comments will be short, because my time is limited, but many of the views that I will express have already been stated by other hon. Members.

As the House has heard, the ISC broadly supports the Bill, although it remains concerned about the Bill’s lack of a role for it in providing parliamentary oversight of parts of the legislation that Select Committees are unable to supervise. The ISC has made that point to the Government, but they do not accept it.

As a Committee, we want this legislation and will not push the issue, but we retain reservations about the matter not being part of the Bill. However, as the Chairman of the ISC—my right hon. Friend the Member for New Forest East (Dr Lewis)—and other hon. Members have said, we have written to the National Security Adviser to suggest that the matter be addressed in a revised edition of the Committee’s MOU, which comes from the Prime Minister. Otherwise, we consider that there will be gaps in the supervision available to Parliament—that is our main point.

The Committee fully supports the changes to clause 3 in Lords amendments 1 to 3 about codes of practice and the new wording after clause 23 in Lords amendment 4. With regard to Lords amendment 5 on Five Eyes review, we believe that the intelligence community will naturally consider the views of Five Eyes partners as part of its reporting, so the new clause, although worthy, is not really necessary.

Telecommunications (Security) Bill (Eighth sitting)

Kevan Jones Excerpts
Christian Matheson Portrait Christian Matheson
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I do not want to detain the Committee all that long. The basis of the new clause is to ensure that Ofcom has the staffing and financial resources, as well as the capacity and technical capability, to undertake its new responsibilities under the Bill.

I remind the Committee that we heard in the evidence sessions that this is only one of several new areas of responsibility that Ofcom has received in recent years. For example, it now has responsibilities for regulating aspects of the work of the BBC. Parliament will be presenting Ofcom with responsibilities in relation to online harms, all of which is to be welcomed, but we have to recognise that there will be an overstretch for Ofcom.

In the area that the Committee is considering, there are technical complications that require specific sets of talents and capabilities which, we have heard previously, are not always in ready supply in the sector. We heard evidence that Ofcom, in common with other public sector bodies, does not pay as highly as some high-end consultancies, suppliers, developers or software houses, and therefore there will be churn. I do not want to stand in the way of anyone’s career development, but understandably there will be churn, in terms of Ofcom’s ability to maintain its responsibilities in what we know will be a continually evolving sector that throws up new technical challenges.

New clause 3 provides a duty on Ofcom to report on its resources, including the

“the adequacy of Ofcom’s budget and funding…the adequacy of staffing levels….and any skills shortages faced”.

In doing so, it will concentrate the minds of senior management at Ofcom, although I have no doubt that those minds will be focused on these matters already. Perhaps they will give this priority, particularly in terms of forward planning, and they will think, “We’re okay at the moment, but are we going to require extra and additional capability in area x, y or z in the next couple of years.” It will also focus and concentrate the minds of Ministers and Parliament, ensuring that Ofcom has the resources and capability to achieve the tasks that we have given it.

We heard many lines of evidence from the expert witnesses. My hon. Friend the Member for Newcastle upon Tyne Central may refer to some of them in her contribution, and I do not want to undermine that. Professor Webb said:

“I doubt Ofcom has that capability at the moment. In principle, it could acquire it and hire people who have that expertise, but the need for secrecy in many of these areas is always going to mean that we are better off with one centre of excellence”.

Emily Taylor of Oxford Information Labs said:

“Ofcom is going to need to upskill. In reality, as Professor Webb has said, they are going to be reliant on expert advice from NCSC, at least in the medium term,”––[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 79, Q95.]

The new clause is about assisting Ofcom to make an audit of what is available and ensuring that it is up to standard in terms of technological changes. It will also ensure that it is looking forward, in the midst of all the other responsibilities that Parliament is asking it to undertake, in order to maintain a level of skills and expertise that will enable it to undertake the snapshot reviews of current networks, as well as reviews of future provision and threats to the network. I hope that the new clause is self-explanatory and I am pleased to present it to the Committee.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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I would like to speak to new clause 7, which stands in my name. It is related to new clause 3, in the name of my hon. Friend the Member for City of Chester. As he has just said, Ofcom has had an expansion of its duties in the last few years and become a little bit like a Christmas tree with added responsibilities, but none of them will be as important for the nation’s future as this. That is not to decry any of the expertise or other duties that Ofcom has, but national security and the security of our national telecoms infrastructure, is a vital new task. I have said before that my concern about Ofcom centres on national security. That is why I have tabled amendments to the Bill. My fear is that Ofcom will not have the necessary expertise, although I am not suggesting that it cannot develop into a good regulatory body looking at security and our national telecoms infrastructure.

I tabled parliamentary questions on Ofcom’s budgets and headcounts, and I am glad to see that its budget and personnel have increased as its tasks have grown. That was not the case in 2010, when its budgets were subject to some quite savage cuts. My concern—I will call this my Robin Day approach—is that we have to future-proof Ofcom to ensure that the organisation not only has the budget but also has the personnel it needs. I do not want to suggest that the Minister would want to cut Ofcom’s budget at present, as it does important work. However, it is a regulator and perhaps does not have the clout of a Government Department, so any future Chancellor or Treasury looking for cuts disguised as efficiencies could see it as easy, low-hanging fruit.

Ensuring that the Secretary of State undertakes duties highlighting Ofcom’s efficiency puts a spotlight on the basis of considerations by future Administrations of any political persuasion. That will be important, not just in the early stages but as we continue. It may take a while for Ofcom to get up to speed, but I want to ensure that that continues. The obligation for the Secretary of State to report on Ofcom would at least give me comfort that first, it is being looked at and, secondly, that civil servants cannot in future just assume that an easy cut can be made but which might then impact on our national security.

I raised another subject with the head of Ofcom when she appeared before the Committee. I do not really want to rehearse the discussions again, but as the Bill progresses the Minister will have to give assurances on security, and try to demonstrate the close working relationship between Ofcom and the security services. That will be important, as it will give credibility to the expectation that Ofcom can actually do the job that we have set out. If the Minister does that, it will reassure people who may not be convinced that Ofcom has the necessary expertise, and ensure that that close working relationship continues, not just now but in future, so that national security is at the centre of this.

There will always be a balance—as I said, we saw it in the National Security and Investment Bill—between wanting, quite rightly, to promote telecoms as a sector, and national security. I fall very much on the side of national security being the important consideration, and we need to ensure that that is always the case. It is important that national security and intelligence agencies are able to influence these decisions, not just in respect of Ofcom but also in respect of Ministers in future.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I support and second the comments and contributions of my hon. Friend the Member for the City of Chester (Christian Matheson) and of my right hon. Friend the Member for North Durham (Mr Kevan Jones), who tabled new clauses 3 and 7. I would also like to congratulate the Committee on having made it through, as it were, the thickets of the Bill as it stands to the sunlit uplands of our new clauses, which are designed to improve it in a constructive and supportive way.

New clauses 3 and 7 both address the challenge of Ofcom’s resources. As Members of the Committee know, I joined Ofcom in 2004. I know that we are not allowed to use props in debates in the Chamber, but the Communications Act 2003, which I am holding in my hand, is the Act with which the Bill is concerned. The changes that the Bill makes are mainly adding to that Act.

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“In relation to Ofcom’s costs, Ofcom is funded in two ways: first, by a levy on the sectors and companies that it regulates and, secondly, through the collection of fees, primarily from our spectrum duties. Our overall funding is obviously agreed by our board but also subject to a cap agreed with Government…We are currently in discussion with the Treasury about the exact technicalities and which of those routes will be used to fund this, but it will be in line with Ofcom’s normal funding arrangements.”––[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 97, Q131.]

Kevan Jones Portrait Mr Jones
- Hansard - -

This is about resources for Ofcom as a whole, but there will also be debate within Ofcom about how its resources are spent. Without any ring-fenced moneys for security, is my hon. Friend concerned, like me, that not only the external control of the budget but that debate internally might compromise security?

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

My right hon. Friend makes an excellent point. This debate is important for the Bill and important for our new clauses. It is also important that the Minister clarifies what the duties and priorities of Ofcom should be. Having worked for Ofcom at a different point in its history, I can tell hon. Members that when there is, say, a complaint about the behaviour of somebody in the “Big Brother” household that is hitting all the headlines in all the newspapers, that attracts the sudden concentration of resource—unnecessarily, one might argue. There needs to be a counterweight, if you like, to those headline-driven resourcing bottlenecks, which would be either ring-fencing or reporting on how resource is being used to support national security.

All Opposition Members are clear that national security must be the first priority of Government, and therefore the first priority of Ofcom. This is all the more relevant as I pick up the Communications Act 2003, in all its weightiness, where we find the general duties of Ofcom in section 3:

“It shall be the principal duty of OFCOM, in carrying out their functions—(a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition.”

Security is not mentioned—national security or telecommunications security. During the evidence sessions, the argument was made, although I forget by whom, that security was a necessary part of furthering the interests of citizens in relation to communication matters. That is possibly true, but I still think this important issue would be improved by clarity.

As we know, there is a significant pressure on Ofcom’s resources, which changes week by week and month by month depending on what the issues are in the many and increasing domains in which it operates. If these principal duties of Ofcom do not reflect our national security, the concern is that having no direct reporting mechanism to Parliament could mean these resources being used opaquely, with no direct requirement to prioritise national security. I hope the Minister will agree that new clauses 3 and 7 solve a problem the Bill will have in practice. I hope that if he will not agree to the clauses as they stand, he will agree to consider how Ofcom’s prioritisation of national security interests can be made clearer.

Kevan Jones Portrait Mr Jones
- Hansard - -

As I have said before, I am not a great fan of arm’s length regulators, because it is a way of Government Departments and Ministers off-loading their responsibilities. Given how my hon. Friend has described the Bill, the way this is going means that Ofcom will be larger than DCMS in the future. Does she share my concern about accountability if things go wrong? It is a good get-out for the Government to be able to hide behind Ofcom, rather than Ministers taking direct responsibility.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

As always, my right hon. Friend raises a good point. Having worked for a quango, I had clear insight into the line between independence and dependence, and into the importance of the political will of the Government, regardless of supposed independence. Equally, I saw how any regulator or supposedly independent organisation can be used as a shield for Ministers who do not want to take responsibility.

My right hon. Friend also raises a good point about the hollowing out of capacity in Government Departments. A consequence of 10 years of austerity and cuts is that DCMS and other Departments do not have the capability, capacity or resources that they previously might have enjoyed. I will point out to the Minister the example of the Government’s misinformation unit. It has no full-time employees and is supposed to exist using resources already in the Department—for something as critical now, with the vaccine roll-out, as disinformation.

My right hon. Friend is right to emphasise that given the relationship between the Government and Ofcom, which is an independent regulator, and given the increase in responsibilities that the Bill represents at a time when other responsibilities are also being added to Ofcom, the Minister cannot have it both ways. He cannot have no visibility when it comes to Ofcom’s resources and capacity while giving it yet more responsibility. In fact, this seems to be responsibility without accountability. I hope the Minister will take on board the suggestions in new clauses 3 and 7.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Ultimately, a mechanism already exists by which Parliament is able to scrutinise Ofcom’s resourcing. Ofcom is required under the Office of Communications Act 2002 to publish an annual report on its financial position and other relevant matters. That report, which is published every March—I am sure the hon. Gentleman is waiting with bated breath for the next one—includes detail on Ofcom’s strategic priorities as well as its finances, and details about issues such as its hiring policies.

Kevan Jones Portrait Mr Jones
- Hansard - -

I am intrigued. The Minister says Ofcom already has over 900 people, and it is obviously going to have to grow. How big is DCMS? We basically have a mini-Department here.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The right hon. Gentleman asks me a question that I may be able to answer in a moment, depending on a number of factors. As for the thrust of his question, Ofcom is ultimately a serious regulator that has the resourcing to do a serious job. The right hon. Gentleman would be criticising us if it had fewer people, so he cannot have his cake and eat it by criticising the fact it has enough to do the job—but I think he is going to have a go.

Kevan Jones Portrait Mr Jones
- Hansard - -

Quite the opposite. This just reinforces my point about quangos. If we reach a situation where quangos are bigger than the sponsoring Department it is perhaps best to keep things in-house rather than having arm’s length quangos and the nonsense behind which we hide in this country about so-called independence.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The reality is that the relationship between Government Departments and regulators is very often incredibly close, but independence is an important part of regulation. Although the right hon. Gentleman makes a reasonable point about the optimal size for in-house expertise versus external expertise, it is getting the balance right between Ofcom, the National Cyber Security Centre and DCMS that this Government and the reporting measures we already have are fundamentally committed to providing.

The right hon. Gentleman talked about Ofcom’s resourcing. Ofcom will not be making decisions on national security matters, as we have said repeatedly, but it will to be responsible for the regulation around these issues. As the right hon. Gentleman said, the Intelligence and Security Committee has shown great interest in how Ofcom is preparing for its new role.

As for the point about disclosure and resources, I would be happy to write to the ISC to provide further details in the appropriate forum about Ofcom resourcing and security arrangements. This could include information that cannot be provided publicly, including information about staffing, IT arrangements and security clearances of the sort that we have discussed. I hope that Opposition Members understand that that is the appropriate forum to provide reassurance and to satisfy the legitimate requirements of public scrutiny on this issue.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I thank the hon. Gentleman for that intervention. I hope that now that I have given those various reassurances, hon. Members are appropriately comforted.

Everyone is waiting for the headcount of DCMS; I am assured that it is 1,304 people, some 300 more than that of Ofcom. I do not know whether that makes the right hon. Member for North Durham happier or more sad.

Kevan Jones Portrait Mr Jones
- Hansard - -

According to the website that I have looked at, the figure is 1,170, so it has obviously increased slightly. Still, it makes Ofcom with its new responsibilities nearly as big as, if not bigger than, the sponsoring Department.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

We can discuss the optimal sizes of quangos and Departments outside this room. However, the right hon. Gentleman is obviously right that Government Departments and regulators need the resources they require to do their job properly. I hope that by describing the various mechanisms I have provided hon. Members with the reassurances they need to withdraw the new clause.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I think an organisation of 937 people can cope with 13 priorities. On one level, however the hon. Lady makes a reasonable point, and it is not one that we disagree with. Security has to be absolutely central to the work that Ofcom will do.

I will not restate the points I have made about how seriously we take the Intelligence and Security Committee and how seriously we will continue to take it. We will continue to write to the Committee on topics of interest as they arise and we are happy to continue to co-operate in the way that I have done; however, as I said in the debate on amendment 9, the primary focus of the ISC is to oversee the work of the security and intelligence agencies, and its remit is defined in the Justice and Security Act 2013. Amending the Bill to require regular reporting to the ISC, as proposed by the new clause, would risk the statutory basis of the ISC being set out across a range of different pieces of legislation.

Kevan Jones Portrait Mr Jones
- Hansard - -

Will the Minister give way?

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Earlier, the right hon. Gentleman was suggesting that it was the memorandum of understanding that he would like to see amended. Now he seems to be suggesting that we should insert the new clause, which will not change the memorandum of understanding.

Kevan Jones Portrait Mr Jones
- Hansard - -

No, I said in an earlier contribution that if it were done by the memorandum of understanding, I would be quite happy. I know the Minister is limited in the number of civil servants he has beneath him compared with Ofcom, but will he go away and read the Justice and Security Act 2013? It talks about Departments, but it also talks about intelligence more broadly, which is covered by the memorandum of understanding. I do not know why he is pushing back on this issue; it may be because of the Cabinet Office, which has more civil servants than he has. I suggest that we will win this one eventually.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

That may well be the case, but the right hon. Gentleman is not going to win it here—that is the important point to make. It is right not to try to address this issue in the new clause, but the Government will continue to take very seriously the work of the ISC, as he would expect.

Additionally, the new clause is designed to require Ofcom to provide annual reports to the ISC, which would, as the right hon. Gentleman knows, be particularly unusual in the context of the work of the Committee, as Ofcom will not be making judgments about the interests of national security under the Bill, or as part of its wider function. Ofcom’s role as regulator seems not to be something that comes under the purview of the ISC, even if I understand the broader point. As I said earlier, however, the NCSC is very much under the purview of the ISC, and there are plenty of opportunities for the Committee to interrogate the work of that excellent agency. I am sure the Committee will continue to take up such opportunities with vigour, but as I have said before, it would not be right to seek to reframe the remit of the ISC through the new clause. I ask the Opposition to withdraw it.

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None Portrait The Chair
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Mr Jones, new clause 7 has already been debated. Do you want to put it to a Division?

Kevan Jones Portrait Mr Jones
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No, Mr McCabe, it was a probing amendment. We debated some important issues around the accountability of Ofcom. Clearly, we are getting to a point where Ofcom has more staff than DCMS—perhaps, at some future date, Ofcom could take over the role of DCMS.

None Portrait The Chair
- Hansard -

I realise that this will come as a devastating blow to all of you, but the final question I must put is that—

Telecommunications (Security) Bill (Seventh sitting)

Kevan Jones Excerpts
Tuesday 26th January 2021

(3 years, 2 months ago)

Public Bill Committees
Read Full debate Read Hansard Text Read Debate Ministerial Extracts
None Portrait The Chair
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With suitable musical introduction, I call Kevan Jones to move amendment 16.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
- Hansard - -

I beg to move amendment 16, in clause 15, page 22, line 12, at end insert—

“(2A) When considering whether a designated vendor direction is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

This amendment would require the Secretary of State to give due priority to advice provided by the Intelligence Services (including the National Cyber Security Centre as part of GCHQ) when considering when to issue a designated vendor direction.

None Portrait The Chair
- Hansard -

With this it will be convenient to discuss the following:

Amendment 17, in clause 16, page 27, line 8, at end insert—

“(3A) When considering whether a designation notice is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

This amendment would require the Secretary of State to give due priority to advice provided by the Intelligence Services (including the National Cyber Security Centre as part of GCHQ) when considering whether to issue a designation notice.

Amendment 18, in clause 16, page 28, line 3, at end insert—

“(m) the person’s control of data flows.”

This amendment requires the Secretary of State to consider a person’s potential control of data flows when issuing a designation notice.

Clause 16 stand part.

Amendment 19, in clause 17, page 29, line 19, at end insert

“, together with an assessment of the impact the designation notice will have on supply chain diversity;”.

This amendment requires the Secretary of State to lay before Parliament a report on the impact a designation notice will have on telecoms market supply chain diversity, enabling parliamentary scrutiny.

Kevan Jones Portrait Mr Jones
- Hansard - -

I thought I would bring some light relief to the Committee’s proceedings. Amendments 16 and 17 are both probing amendments. I might sound like a broken record, but they are really just to ensure that we get a situation where the necessary advice is taken. Amendment 16 states:

“When considering whether a designated vendor direction is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

I accept that the entire purpose of the Bill is to have national security at its heart, but I still have a nagging doubt about whether Ofcom will be able to put national security at the heart of its considerations.

Amendment 17 states:

“When considering whether a designation notice is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

This is an attempt to future-proof the Bill. As I mentioned the other day, when we pass legislation in this place it is important that it outlives present Ministers, and us all. Unfortunately, there is form on this—look at the Intelligence and Security Committee’s 2013 report on critical national infrastructure. I accept it was then the Cabinet Office, not Ofcom, that dealt with this, but when BT negotiated its contract with Huawei, the Cabinet Office was told about it but did not feel it necessary to tell Ministers for another three years, until 2006. I am concerned that national security will not be at the forefront when people look at such matters. The amendment is really just to ensure that that takes place, and codifies it into law.

I do not wish to criticise civil servants in any way, but having been a Minister myself, I know they sometimes have a tendency not to put forward things that might have a political dimension that they do not recognise. That is why it is important for national security that the Secretary of State has first-hand knowledge and information directly from the security services. We have very effective security services in this country—I pay tribute to them—but we also have the Cabinet Office. I know the Minister might think I am a bit obsessive, but I am sure he has come up against the buffer of the Cabinet Office, which seems to want to intervene in everything and anything that does not really concern it.

The Secretary of State should have access directly to the security information and should not have to go through the filter of the Cabinet Office or Ofcom. I accept the assurances that the Minister gave about Ofcom’s ability to give advice and work closely with the security services, and these are probing amendments. I am interested in what he says about how we can ensure that when the Secretary of State takes a decision, national security is at its heart, and that he or she got it straight from the horse’s mouth—in other words, from the security services—rather than its being filtered through the membrane that sometimes exists in Whitehall.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I thank the right hon. Gentleman for his contribution to the debate. He has talked so much about my impermanence that I felt lucky to come back today, never mind any time in the future. He makes a reasonable point, with which I broadly sympathise. As this is a broad grouping that covers clauses 15 and 16 and the amendments to clauses 15, 16 and 17, I will discuss the policy intention behind the clauses in sequence, and address the amendments.

As the right hon. Gentleman said, it is obviously an opportune moment to pay tribute to the heroic work of our national security services. The Bill emphasises the importance of their advice, and it empowers the Government to manage the presence of high-risk vendors in our networks. The report to which he refers is important, but it is also important to say that it was published, as he said, in 2013. It related almost entirely to events that took place under Labour, and it predates the existence of the National Cyber Security Centre, so we are dealing to some extent with a different world. I will go into a bit of detail on that.

As the right hon. Gentleman knows, the Government announced in January last year that new restrictions should be placed on the use of high-risk vendors in the UK’s 5G and full-fibre networks. In July 2010, the Government worked with the NCSC to update the guidance following action taken by the US Government in relation to Huawei. Clauses 15 to 17 provide the principal powers that the Government need to manage the risks posed by high-risk vendors. Without such powers, the guidance issued to industry will remain unenforceable and therefore present a risk to national security.

Kevan Jones Portrait Mr Jones
- Hansard - -

I accept what the Minister says about the report, but its key point was that civil servants basically decided not to tell Ministers. On his explanation and the way forward, or what has changed since, how can we avoid a situation whereby Cabinet Office civil servants take the decision not to tell Ministers? How can we ensure that that will not happen again?

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

In short, the right hon. Gentleman is challenging the fundamental effectiveness of Government and the judgments that were made by officials at the time. I simply say that it is the duty of Government to ensure that such errors are not made in future. That cannot be done solely by legislative means; it must be done by custom and practice. The right hon. Gentleman understands, through his work on the ISC, that the role of those close working relationships is in some ways far more important in the day-to-day security issues that we are dealing with. Perhaps we can return to that point later.

The Bill will allow the Secretary of State to issue designated vendor directions, imposing controls on the use of goods, services or facilities that are supplied, provided or made available by designated vendors. The Secretary of State may issue such directions only where it is necessary to do so in the interests of national security and proportionate to the aims sought to be achieved.

Amendment 16, which would amend clause 15, seeks to place a statutory requirement on the Secretary of State to take into account advice from our intelligence services when considering whether to issue a designated vendor direction. Amendment 17, which would amend clause 16, seeks to place a similar requirement when considering a designation notice.

I should reassure hon. Members that the Secretary of State, as the right hon. Member for North Durham knows, has every intention of seeking the advice of our security and intelligence services, as would any Secretary of State, in particular the NCSC, when considering whether to issue a designated vendor direction or designation notice.

It is also worth saying, from a scrutiny point of view, that the Department for Digital, Culture, Media and Sport maintains an excellent relationship with the NCSC. We are scrutinised by the Select Committee on Digital, Culture, Media and Sport and I have appeared before the Intelligence and Security Committee, as the right hon. Gentleman knows. There are many examples in the Bill where the NCSC’s expert advice has been taken into account.

The UK telecoms supply chain review, on which the Bill is based, was the product of the close working relationship between the Department for Digital, Culture, Media and Sport and the NCSC. In a sense, that close working relationship demonstrates that matters have moved on substantively since 2013.

I draw hon. Members’ attention to the illustrative notices that we published in November last year. The NCSC was closely involved in the drafting of those illustrative notices. It will also be involved in the drafting of direction and designation notices once the Bill has been enacted . Given the demonstrable success of our collaboration with the NCSC thus far, I hope that the right hon. Gentleman will be satisfied with that explanation, although I appreciate that he introduced a probing amendment.

Clause 15 would create the new power for the Secretary of State to issue designated vendor directions to public communications providers, in the interests of national security. Although clauses 15 and 16 are distinct, they are complementary. Directions cannot be issued without identification of a designated vendor and designations have no effect unless directions are given to public communications providers. Clause 15 inserts new sections 105Z1 to 105Z7 into the Communications Act 2003 and amends section 151 for that purpose.

The clause will enable the Government’s announcements in 2020 on the use of high-risk vendors to be given legal effect. Those announcements include advice that require a public telecoms provider to exclude Huawei from their 5G networks by 2027, and stop installing new Huawei goods, services or facilities in 5G networks from September 2021. It will also enable the Government to address risks that might be posed by future high-risk vendors, helping to ensure our telecoms networks are safe and secure.

Proposed new section 105Z1 sets out the direction power. It would allow the Secretary of State to give a designated vendor direction to a provider, imposing requirements on their use of goods, services or facilities supplied by a specified designated vendor. Proposed new section 105Z2 provides further details on the types of requirements that may be imposed in a designated vendor direction. Proposed new section 105Z3 sets out the consultation requirements and expectations for public communications providers. Proposed new section 105Z4 sets out a requirement for the Secretary of State to provide a copy of a direction to the designated vendor or vendors, specified in a direction and, hence, affected by it. Proposed new sections 105Z5 and 105Z6 set out when and how the Secretary of State may vary or revoke a direction. Lastly, 105Z7 enables the Secretary of State to require a public communications provider to provide a plan setting out the steps that it intends to take to comply with any requirements set out in a direction and the timings of those steps.

Although the Government have made specific announcements on Huawei, the high-risk vendor policy has not been designed around one company, country or threat. The designated vendor direction power, as set out in these provisions, is intended to be an enduring and flexible power, enabling the Government to manage the risks posed to telecoms networks both now and in the future.

Clause 16 includes a non-exhaustive list of matters to which the Secretary of State may have regard when considering whether to issue a designation notice. Amendment 18 seeks to amend that clause by adding a person’s control of data flows to the list of matters to which the Secretary of State may have regard. However, nothing in the clause prevents the Secretary of State from considering control of data flows before issuing a designation notice already, if the matter were deemed relevant to the assessment of national security. It is already covered and so is not required as a stand-alone measure.

The clause creates a power for the Secretary of State to issue a designation notice, which designates a vendor for the purposes of issuing a designated vendor direction. Proposed new section 105Z8 is the principal measure of the clause, and sets out the power for the Secretary of State to designate specific vendors where necessary in the interests of national security. A designation notice must specify the reasons for designation unless the Secretary of State considers that doing so would be contrary to the interests of national security. The proposed new section also lists the primary factors that may be taken into account by the Secretary of State when considering whether to designate a vendor on national security grounds.

Finally in this group, amendment 19 would require the Secretary of State, when laying a designation noticed before Parliament, also to lay before Parliament a report detailing the impact that the designation notice might have on the diversity of the UK’s telecoms supply chain. The effect of the amendment would be to require the Secretary of State to lay a report purely on the impact of the designation notice, but a designation notice simply notifies vendors that the Government consider them a risk to national security.

Only when the designation notice is issued alongside a designated vendor direction are controls placed on the use of a designated vendor’s goods, services and facilities by public communication providers, so it is those controls that might have an impact on the diversity of the supply chain. I can reassure the Committee that the Government will consider the diversity of the supply chain before issuing designation notices and designated vendor directions. A lack of diversity is in itself a risk to the security of a network. I hope that answers the question that the hon. Member for Newcastle upon Tyne Central asked in regard to an earlier amendment. It is right that the Government consider that risk before deciding whether to issue designation notices and designated vendor directions.

To conclude, clauses 15 and 16 provide us with the ability to improve the security of our telecommunications networks and to manage the risks relating to high-risk vendors, both now and in the future.

Kevan Jones Portrait Mr Jones
- Hansard - -

I thank the Minister for his reply. I do not question his commitment to ensuring that we have security at the heart of the Bill, and I do not intend to press my amendments to a vote.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I will speak to amendments 18 and 19, standing in my name and those of my hon. Friends, and to clauses 15 to 17. As the Minister set out, the clauses are about key powers in the Bill that seek to secure our networks and to regularise requirements already in place, albeit informally or not legally, to remove Huawei as a specific high-risk vendor from our networks. The clauses give Government the powers to do what they have said they will do.

On the clauses, I will not repeat what the Minister said, and I congratulate him on clearly setting out their powers, which the Opposition believe are necessary. I also join the Minister and my right hon. Friend the Member for North Durham in paying tribute to our security services, which do such great work to keep us secure across a wide range of threats and challenges—both present and evolving—and on whose continued work and effectiveness the Bill is highly dependent. As my right hon. Friend set out, we want to ensure that national security is absolutely at the heart of the Bill.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The hon. Lady is not wrong, obviously, in the sense that there is a potential conversation to be had about when a cloud provider is a telecoms provider and vice versa, if I can put it like that, although it is not the most elegant way of doing so. However, the point is that the reason we have comprehensive coverage of the landscape is because we have both the National Security and Investment Bill, which she debated recently, and this Bill. The broad powers that she described are intended to provide precisely that sort of coverage.

Similarly, the hon. Lady referred to the length of the list in clause 16 of matters that can be taken into consideration. That relates to the point I made previously, namely that the sorts of issues that she is talking about, such as data flows, are already covered in the long list. The list is as long as it is because it is intended to look to the future. Therefore, being prescriptive in the way that she describes is fundamentally unnecessary. We are not excluding what she wants to be on the list. A matter is already very much there if it is pertinent to national security. For that reason, I do not think there is a compelling case to add that single topic to the list, both because it is already there and because if we start going down that route, we could make the case for adding a host of other things that are already covered but that people might want to be mentioned specifically.

As I said earlier on the convergence of the two sectors, the point is that we have comprehensive coverage through both Bills. It will be for the NCSC, Ofcom and the Government to make a judgment as to whether any consolidation in a sector poses a national security risk.

Kevan Jones Portrait Mr Jones
- Hansard - -

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16 ordered to stand part of the Bill.

Clause 17

Laying before Parliament

None Portrait The Chair
- Hansard -

We now come to amendment 20 to clause 17. This is Christian Matheson’s big moment. I call him to move the amendment.

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Christian Matheson Portrait Christian Matheson
- Hansard - - - Excerpts

I am sure the Committee has been waiting with bated breath for my big moment all morning, Mr Hollobone. May I say what a great pleasure it is to serve under your chairmanship?

I had prepared some notes to help me present the amendments, but I need not have bothered; I could simply have taken the Hansard report from last week and quoted my right hon. Friend the Member for North Durham. He talked about being a stuck record, but he is not; he is being consistent. I like to think that Labour has been consistent throughout the detailed consideration of the Bill. My hon. Friend the Member for Newcastle upon Tyne Central talked about the three areas that we consistently think would improve the Bill, and the amendment falls into one of those areas: scrutiny and the role of the Intelligence and Security Committee.

I refer to my right hon. Friend’s speech last week on amendment 9, when he talked about the desire to help the Bill. He also laid down a challenge. He commented on the fact that I thought that some parts of his speech were inspirational. They were, because they made me think quite a lot. There was one lightbulb moment when he used his experience of, I believe, 20 years in the House this year—on which I congratulate him—and said that the chances are that a similar amendment will be proposed in their lordships’ House and the Government may well agree to it.

My right hon. Friend also said that it is not necessarily a good thing for the Minister—not in this case, mind you—to be a tough guy who wants to get through the Bill without any amendments, when there is a genuine desire among the Opposition to get the Bill through. I remind the Minister and Government Members that we support the Bill. There have been occasions when an Opposition have tried to scupper, delay or make mischief with a Bill. I assure Government Members—I hope it is obvious to them—that there is no such skulduggery on this side of the House, not with this Bill and not ever, and certainly not when my hon. Friend the Member for Newcastle upon Tyne Central, my right hon. Friend the Member for North Durham and I on the Bill Committee. We are genuinely keen to improve the Bill during its passage.

The amendment again falls into one of the three areas my hon. Friend the Member for Newcastle upon Tyne Central has identified as necessary. As the Minister may have guessed, the chances are that we will not put it to the vote, but we do ask that he gives it careful consideration. I refer the Committee to the speech by my right hon. Friend the Member for North Durham last week about the role of the Intelligence and Security Committee. Amendments 20 to 25 relate to different clauses, but have the common aim of ensuring that there is correct parliamentary oversight of the process outlined in the Bill, specifically by referring all orders made under proposed new section 105Z11 of the Communications Act 2003 to the Intelligence and Security Committee.

It would normally be the Digital, Culture, Media and Sport Committee that would take on telecommunications matters. Additionally, the Secretary of State may lay orders before Parliament for general consideration and scrutiny. However, the Bill has our national security at its heart, and as a proud former member of the Culture, Media and Sport Committee, I am the first to admit that it would not be at all an appropriate forum for the consideration of such reporting to take place, nor would it be the normal procedure for laying orders before this House or the other place, either in general or on the specifics of the order.

As we touched on last week, the temptation is therefore the default position that no reporting at all would take place, which is clearly not desirable. I hope the Minister will confirm that that is not the Government’s intention. To be fair, I think he touched on that point last week, but it would be helpful if he could touch on it again.

The use of the ISC is therefore an elegant and obvious solution. The Committee, of which my right hon. Friend the Member for North Durham is such a distinguished member, has worked well and has the confidence of the House. It provides a secure and trusted forum for decisions of the Secretary of State that may have far-reaching commercial and technical implications, as well as security implications, to be scrutinised and considered by hon. Members who are able to receive the full facts and make a judgement based on them, while giving nothing away to those who wish us ill and would exploit our open democracy in doing so. I see no reason why our determination to protect our communications infrastructure should be used against us by our adversaries, but nor should that determination be traded off with a reduction in parliamentary scrutiny of the Executive and agencies that act on behalf of us all.

The ISC is there for a reason: it is precisely to cover situations such as this. If the Minister can propose an alternative solution that balances security with scrutiny, we would be pleased to hear it. I suspect this solution would also make commercial UK businesses more open to scrutiny themselves by offering a level of confidentiality, although I accept that that is not the primary role of the ISC.

It should also not be option for the Secretary of State to report. Such a chaotic patchwork would undermine the integrity of the Bill and the processes that we are setting up. Failing any alternative being proposed, we believe that these amendments, which involve the ISC acting on behalf of the whole House—indeed, the whole of Parliament—would fill a glaring hole and enhance the Bill. I commend them to the Committee.

Kevan Jones Portrait Mr Jones
- Hansard - -

My hon. Friend the Member for City of Chester said that we were going over old ground, and to a certain extent we are because some of the amendments reflect those that I moved last week.

May I say at the outset, Mr Hollobone, that the Minister has been an exemplar in engaging with and briefing the ISC? He has set something of a precedent; usually we have only Cabinet Ministers or Prime Ministers before us to give evidence. He is one of the few junior Ministers to have appeared before us, so I congratulate him. He did it because he wanted to engage with the issues. He must therefore be commended on his commitment to ensure that there is scrutiny. However—this is not to wish his demise, but to argue for his promotion—he will not be there forever. I think he does not quite understand why the Government are not at least moving on this.

The ISC’s remit is defined in the Justice and Security Act 2013. It sets out which Departments we cover, and the Department for Digital, Culture, Media and Sport is not one of them. However, as I said last week, security is increasingly being covered by other Departments, and this Bill is a good example. The National Security and Investment Bill is another one, where security decisions will be taken by the Secretary of State for Business, Energy and Industrial Strategy. Parliament must be able to scrutinise that.

If a high-risk vendor is designated as banned from the network by the Secretary of State for Digital, Culture, Media and Sport, there are perfectly good reasons why the intelligence behind that cannot be put into the public domain. The methods by which such information is acquired are of a highly sensitive nature, so it would not only expose our security services’ techniques, but in some cases would make vulnerable the individuals who have been the source of that information. I think most people would accept that that is a very good reason.

This sort of thing is happening increasingly. We have the two Bills that I have referred to, but we also have the Covert Human Intelligence Sources (Criminal Conduct) Bill, which will come back to the House tomorrow. Covert human intelligence and the ability to collect intelligence on behalf of our security services is very important. Most of that is covered by the Home Office, and covert human intelligence sources are covered by the ISC’s remit and can be scrutinised. However, there is a long list of other organisations that will be covered by tomorrow’s Bill, including—we never quite got to the bottom of this—the Food Standards Agency, for example. Again, how do we ensure that there is scrutiny of the decisions?

We also have—this has come out of the pandemic—the new biosecurity unit in the Department of Health. Again, there is no parliamentary scrutiny, because the Health and Social Care Committee will not be able to look at the intelligence that supports so much of that. An easy way out of this is in the Justice and Security Act 2013: the memorandum of understanding, which just means that, were our remit extended to look at this and other matters, the ISC could oversee and ask for the intelligence.

Having spoken to the Business Secretary and the Minister, who sympathises with us, I am not sure where the logjam is in Government. The point is that an amendment will be tabled in the Lords. Whether the provision is in the Bill or just in the memorandum of understanding between the Prime Minister and the ISC, it is easily done and would give confidence that the process at least had parliamentary oversight.

On many of these decisions, frankly, the oversight would not be onerous; we are asking only that we are informed of them. On some occasions, we might not even want to look at the intelligence. It might be so straightforward that, frankly, it is not necessary, so I do not think that it is an administrative burden. I cannot understand what the problem is. To reiterate what I said last week in Committee, it is not about the ISC wanting to have a veto or block over such things. It is, rightly, for the Government and the Secretary of State to make and defend those decisions.

It is also not about the ISC embarrassing the Government, because we cannot talk in public about a lot of the information that we receive. It is not as though we would publish a publicly available report, because of the highly classified nature of the information. However, the ISC can scrutinise decisions and, if it has concerns, write to the Prime Minister or produce a report for the Prime Minister raising them. That gives parliamentary scrutiny of the Executive’s decisions.

As I say, the report might not be made public. People might ask, “Would that be a new thing?” No—it happens all the time. For example, on the well-publicised Russia report this year, there was a public report with redactions in it and quite an extensive annex, which raised some issues that we were concerned about. That annex was seen only by individuals in Government, including the Prime Minister.

There is already a mechanism, so I fail to understand why the Government want to oppose this. From talking to Ministers privately, I think that there is a lot of sympathy with the position and I think that we will get there eventually. How we get there and in what format, I am not sure—whether the method is to put it in the Bill or to do it through the mechanism in the 2013 Act. That might be a way forward.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I rise to support the excellent comments made by my hon. Friend the Member for City of Chester and my right hon. Friend the Member for North Durham. I did well to delay my remarks till after my right hon. Friend had spoken, because he has set out very effectively, based on his considerable experience as a long-standing member of the Intelligence and Security Committee, both why it is important that that Committee should be consulted and receive the reports, and why it is hard to understand the Minister’s reluctance both in this Bill and in the National Security and Investment Bill to involve a source of such credible security expertise and, importantly, security clearance in key issues of national security.

I want to add two points to those made by my right hon. and hon. Friends. The first is to reiterate a point made previously: our security threats are changing, evolving and, unfortunately, diversifying. We see that in changes to our defence spending, in changes in the national review of our defence capabilities, and in changes in the evolution of the geopolitical landscape—the potential source of threats. However, the Minister does not seem able to support reflecting that by ensuring that, rather than keeping to our existing modes of parliamentary scrutiny, we enable parliamentary scrutiny of issues of national security by those who are best placed to carry out such scrutiny—undoubtedly members of the Intelligence and Security Committee.

I want to point briefly to a discussion in the evidence sessions. Ofcom made it clear that it does not consider itself in a position to make national security decisions, which is understandable, and that some of the decisions and considerations about national security with regards to telecommunications networks would require people who have STRAP clearance. Ofcom’s group director for networks and communications pointed to the fact that she had had STRAP clearance previously, and she said that if the NCSC

“feels that that is needed for the type of information that we may need to handle, we would make sure that happened.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 90, Q115.]

To my knowledge, Digital, Culture, Media and Sport Committee members do not have STRAP clearance. I would like the Minister to comment specifically on the level of security clearance required for members of the Committee that he has identified as being the location for scrutiny of important issues of national security. What level of security clearance do its members have? Would that enable the scrutiny that we all agree is in the best interests of the Bill?

I would like the Minister to respond to a specific example. Amendments 20, 22, 23, 24 and 25 are designed to require that the Intelligence and Security Committee has access to the appropriate information. There is a requirement for the Secretary of State to lay before Parliament a copy of a designated vendor direction, as set out in clause 15, which inserts new section 105Z11 into the Communications Act 2003. The new section states:

“The Secretary of State must lay before Parliament a copy of—

(a) a designated vendor direction;

(b) a designation notice;

(c) a notice of a variation or revocation of a designated vendor direction; and

(d) a notice of a variation or revocation of a designation notice.”

So far, so good—we have that scrutiny. However, the new section also says:

“The requirement in subsection (1) does not apply if the Secretary of State considers that laying a copy of the direction or notice (as the case may be) before Parliament would be contrary to the interests of national security.”

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I welcome the second salvo in the campaign to address this matter by the right hon. Member for North Durham. He said it would be an ongoing campaign.

This group of amendments would require the Secretary of State to provide information relating to a designated vendor direction or designation notice to the ISC. The amendments would require the Secretary of State to do this only where directions and designation notices had not been laid before Parliament, whether in full or in part, as a result of the national security exemptions in clause 17. It will not surprise the right hon. Member for North Durham or other Opposition Members that some of these short remarks will overlap with the conversation that we had earlier on a similar matter.

Amendment 20 would require designated vendor directions or designation notices to be provided to the ISC. Amendments 22 to 25 would require the Secretary of State also to provide the ISC with copies of any notifications of contraventions, confirmation decisions and so on. Although I recognise some Members’ desire for the ISC to play a greater role in the oversight of national security decision making across government, including in relation to this Bill, the amendments would, as the right hon. Member for North Durham knows, extend the ISC’s role in an unprecedented way. None the less, I thank his welcome for my unprecedented appearance.

As I said in the debate on amendment 9, the ISC’s primary focus is to oversee the work of the security and intelligence agencies. Its remit is clearly defined in the Justice and Security Act 2013, and the accompanying statutory memorandum of understanding, to which the right hon. Gentleman referred. I do not think he thinks it is my place to take a view on that role, and I do not think this Bill is the place to have that debate.

Kevan Jones Portrait Mr Jones
- Hansard - -

Yes, but I would ask the Minister’s civil servants to read the Act before they write this stuff for him. The Act refers to “intelligence”. Our remit is not fixed by a Department. I know the Minister sympathises with this and that we will get there eventually, but I say to his civil servants, please read the Act.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I will come on to that. Accepting any of these unilateral amendments to this Bill is not the appropriate place to achieve an overall enhanced role for the ISC—

Kevan Jones Portrait Mr Jones
- Hansard - -

I am sorry to say to the Minister that it is not looking for an enhanced role at all. It is actually doing what it says in the Justice and Security Act 2013. It is about scrutinising intelligence. A lot of the information, which will be used by him and others in these orders, will be derived from the same decisions that we oversee .

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Absolutely. Members of the Committee should note that in exercising the powers created by this Bill, the Secretary of State will be advised by the NCSC on relevant technical and national security matters. The NCSC’s work already falls within the Intelligence and Security Committee’s remit, so the right hon. Gentleman has found his own salvation.

In that context, the amendment seems to duplicate that existing power, while also seeking to do something that is better done in reform of a different Act, if that is what the right hon. Gentleman seeks. I am sorry to disappoint him again. I think he knew already that I would do that, but I look forward to his third, fourth and fifth salvos in his ongoing campaign.

Telecommunications (Security) Bill (Seventh sitting)

Kevan Jones Excerpts
Committee stage & Committee Debate: 7th sitting: House of Commons
Tuesday 26th January 2021

(3 years, 2 months ago)

Public Bill Committees
Read Full debate Telecommunications (Security) Act 2021 View all Telecommunications (Security) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 26 January 2021 - (26 Jan 2021)
None Portrait The Chair
- Hansard -

With suitable musical introduction, I call Kevan Jones to move amendment 16.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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I beg to move amendment 16, in clause 15, page 22, line 12, at end insert—

“(2A) When considering whether a designated vendor direction is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

This amendment would require the Secretary of State to give due priority to advice provided by the Intelligence Services (including the National Cyber Security Centre as part of GCHQ) when considering when to issue a designated vendor direction.

None Portrait The Chair
- Hansard -

With this it will be convenient to discuss the following:

Amendment 17, in clause 16, page 27, line 8, at end insert—

“(3A) When considering whether a designation notice is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

This amendment would require the Secretary of State to give due priority to advice provided by the Intelligence Services (including the National Cyber Security Centre as part of GCHQ) when considering whether to issue a designation notice.

Amendment 18, in clause 16, page 28, line 3, at end insert—

“(m) the person’s control of data flows.”

This amendment requires the Secretary of State to consider a person’s potential control of data flows when issuing a designation notice.

Clause 16 stand part.

Amendment 19, in clause 17, page 29, line 19, at end insert

“, together with an assessment of the impact the designation notice will have on supply chain diversity;”.

This amendment requires the Secretary of State to lay before Parliament a report on the impact a designation notice will have on telecoms market supply chain diversity, enabling parliamentary scrutiny.

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Kevan Jones Portrait Mr Jones
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I thought I would bring some light relief to the Committee’s proceedings. Amendments 16 and 17 are both probing amendments. I might sound like a broken record, but they are really just to ensure that we get a situation where the necessary advice is taken. Amendment 16 states:

“When considering whether a designated vendor direction is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

I accept that the entire purpose of the Bill is to have national security at its heart, but I still have a nagging doubt about whether Ofcom will be able to put national security at the heart of its considerations.

Amendment 17 states:

“When considering whether a designation notice is necessary in the interests of national security, the Secretary of State must take account of the advice provided by the intelligence services.”

This is an attempt to future-proof the Bill. As I mentioned the other day, when we pass legislation in this place it is important that it outlives present Ministers, and us all. Unfortunately, there is form on this—look at the Intelligence and Security Committee’s 2013 report on critical national infrastructure. I accept it was then the Cabinet Office, not Ofcom, that dealt with this, but when BT negotiated its contract with Huawei, the Cabinet Office was told about it but did not feel it necessary to tell Ministers for another three years, until 2006. I am concerned that national security will not be at the forefront when people look at such matters. The amendment is really just to ensure that that takes place, and codifies it into law.

I do not wish to criticise civil servants in any way, but having been a Minister myself, I know they sometimes have a tendency not to put forward things that might have a political dimension that they do not recognise. That is why it is important for national security that the Secretary of State has first-hand knowledge and information directly from the security services. We have very effective security services in this country—I pay tribute to them—but we also have the Cabinet Office. I know the Minister might think I am a bit obsessive, but I am sure he has come up against the buffer of the Cabinet Office, which seems to want to intervene in everything and anything that does not really concern it.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I thank the right hon. Gentleman for his contribution to the debate. He has talked so much about my impermanence that I felt lucky to come back today, never mind any time in the future. He makes a reasonable point, with which I broadly sympathise. As this is a broad grouping that covers clauses 15 and 16 and the amendments to clauses 15, 16 and 17, I will discuss the policy intention behind the clauses in sequence, and address the amendments.

As the right hon. Gentleman said, it is obviously an opportune moment to pay tribute to the heroic work of our national security services. The Bill emphasises the importance of their advice, and it empowers the Government to manage the presence of high-risk vendors in our networks. The report to which he refers is important, but it is also important to say that it was published, as he said, in 2013. It related almost entirely to events that took place under Labour, and it predates the existence of the National Cyber Security Centre, so we are dealing to some extent with a different world. I will go into a bit of detail on that.

As the right hon. Gentleman knows, the Government announced in January last year that new restrictions should be placed on the use of high-risk vendors in the UK’s 5G and full-fibre networks. In July 2020, the Government worked with the NCSC to update the guidance following action taken by the US Government in relation to Huawei. Clauses 15 to 17 provide the principal powers that the Government need to manage the risks posed by high-risk vendors. Without such powers, the guidance issued to industry will remain unenforceable and therefore present a risk to national security.

Kevan Jones Portrait Mr Jones
- Hansard - -

I accept what the Minister says about the report, but its key point was that civil servants basically decided not to tell Ministers. On his explanation and the way forward, or what has changed since, how can we avoid a situation whereby Cabinet Office civil servants take the decision not to tell Ministers? How can we ensure that that will not happen again?

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

In short, the right hon. Gentleman is challenging the fundamental effectiveness of Government and the judgments that were made by officials at the time. I simply say that it is the duty of Government to ensure that such errors are not made in future. That cannot be done solely by legislative means; it must be done by custom and practice. The right hon. Gentleman understands, through his work on the ISC, that the role of those close working relationships is in some ways far more important in the day-to-day security issues that we are dealing with. Perhaps we can return to that point later.

The Bill will allow the Secretary of State to issue designated vendor directions, imposing controls on the use of goods, services or facilities that are supplied, provided or made available by designated vendors. The Secretary of State may issue such directions only where it is necessary to do so in the interests of national security and proportionate to the aims sought to be achieved.

Amendment 16, which would amend clause 15, seeks to place a statutory requirement on the Secretary of State to take into account advice from our intelligence services when considering whether to issue a designated vendor direction. Amendment 17, which would amend clause 16, seeks to place a similar requirement when considering a designation notice.

I should reassure hon. Members that the Secretary of State, as the right hon. Member for North Durham knows, has every intention of seeking the advice of our security and intelligence services, as would any Secretary of State, in particular the NCSC, when considering whether to issue a designated vendor direction or designation notice.

It is also worth saying, from a scrutiny point of view, that the Department for Digital, Culture, Media and Sport maintains an excellent relationship with the NCSC. We are scrutinised by the Select Committee on Digital, Culture, Media and Sport and I have appeared before the Intelligence and Security Committee, as the right hon. Gentleman knows. There are many examples in the Bill where the NCSC’s expert advice has been taken into account.

The UK telecoms supply chain review, on which the Bill is based, was the product of the close working relationship between the Department for Digital, Culture, Media and Sport and the NCSC. In a sense, that close working relationship demonstrates that matters have moved on substantively since 2013.

I draw hon. Members’ attention to the illustrative notices that we published in November last year. The NCSC was closely involved in the drafting of those illustrative notices. It will also be involved in the drafting of direction and designation notices once the Bill has been enacted . Given the demonstrable success of our collaboration with the NCSC thus far, I hope that the right hon. Gentleman will be satisfied with that explanation, although I appreciate that he introduced a probing amendment.

Clause 15 would create the new power for the Secretary of State to issue designated vendor directions to public communications providers, in the interests of national security. Although clauses 15 and 16 are distinct, they are complementary. Directions cannot be issued without identification of a designated vendor and designations have no effect unless directions are given to public communications providers. Clause 15 inserts new sections 105Z1 to 105Z7 into the Communications Act 2003 and amends section 151 for that purpose.

The clause will enable the Government’s announcements in 2020 on the use of high-risk vendors to be given legal effect. Those announcements include advice that require a public telecoms provider to exclude Huawei from their 5G networks by 2027, and stop installing new Huawei goods, services or facilities in 5G networks from September 2021. It will also enable the Government to address risks that might be posed by future high-risk vendors, helping to ensure our telecoms networks are safe and secure.

Proposed new section 105Z1 sets out the direction power. It would allow the Secretary of State to give a designated vendor direction to a provider, imposing requirements on their use of goods, services or facilities supplied by a specified designated vendor. Proposed new section 105Z2 provides further details on the types of requirements that may be imposed in a designated vendor direction. Proposed new section 105Z3 sets out the consultation requirements and expectations for public communications providers. Proposed new section 105Z4 sets out a requirement for the Secretary of State to provide a copy of a direction to the designated vendor or vendors, specified in a direction and, hence, affected by it. Proposed new sections 105Z5 and 105Z6 set out when and how the Secretary of State may vary or revoke a direction. Lastly, 105Z7 enables the Secretary of State to require a public communications provider to provide a plan setting out the steps that it intends to take to comply with any requirements set out in a direction and the timings of those steps.

Although the Government have made specific announcements on Huawei, the high-risk vendor policy has not been designed around one company, country or threat. The designated vendor direction power, as set out in these provisions, is intended to be an enduring and flexible power, enabling the Government to manage the risks posed to telecoms networks both now and in the future.

Clause 16 includes a non-exhaustive list of matters to which the Secretary of State may have regard when considering whether to issue a designation notice. Amendment 18 seeks to amend that clause by adding a person’s control of data flows to the list of matters to which the Secretary of State may have regard. However, nothing in the clause prevents the Secretary of State from considering control of data flows before issuing a designation notice already, if the matter were deemed relevant to the assessment of national security. It is already covered and so is not required as a stand-alone measure.

The clause creates a power for the Secretary of State to issue a designation notice, which designates a vendor for the purposes of issuing a designated vendor direction. Proposed new section 105Z8 is the principal measure of the clause, and sets out the power for the Secretary of State to designate specific vendors where necessary in the interests of national security. A designation notice must specify the reasons for designation unless the Secretary of State considers that doing so would be contrary to the interests of national security. The proposed new section also lists the primary factors that may be taken into account by the Secretary of State when considering whether to designate a vendor on national security grounds.

Finally in this group, amendment 19 would require the Secretary of State, when laying a designation noticed before Parliament, also to lay before Parliament a report detailing the impact that the designation notice might have on the diversity of the UK’s telecoms supply chain. The effect of the amendment would be to require the Secretary of State to lay a report purely on the impact of the designation notice, but a designation notice simply notifies vendors that the Government consider them a risk to national security.

Only when the designation notice is issued alongside a designated vendor direction are controls placed on the use of a designated vendor’s goods, services and facilities by public communication providers, so it is those controls that might have an impact on the diversity of the supply chain. I can reassure the Committee that the Government will consider the diversity of the supply chain before issuing designation notices and designated vendor directions. A lack of diversity is in itself a risk to the security of a network. I hope that answers the question that the hon. Member for Newcastle upon Tyne Central asked in regard to an earlier amendment. It is right that the Government consider that risk before deciding whether to issue designation notices and designated vendor directions.

To conclude, clauses 15 and 16 provide us with the ability to improve the security of our telecommunications networks and to manage the risks relating to high-risk vendors, both now and in the future.

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Kevan Jones Portrait Mr Jones
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I thank the Minister for his reply. I do not question his commitment to ensuring that we have security at the heart of the Bill, and I do not intend to press my amendments to a vote.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I will speak to amendments 18 and 19, standing in my name and those of my hon. Friends, and to clauses 15 to 17. As the Minister set out, the clauses are about key powers in the Bill that seek to secure our networks and to regularise requirements already in place, albeit informally or not legally, to remove Huawei as a specific high-risk vendor from our networks. The clauses give Government the powers to do what they have said they will do.

On the clauses, I will not repeat what the Minister said, and I congratulate him on clearly setting out their powers, which the Opposition believe are necessary. I also join the Minister and my right hon. Friend the Member for North Durham in paying tribute to our security services, which do such great work to keep us secure across a wide range of threats and challenges—both present and evolving—and on whose continued work and effectiveness the Bill is highly dependent. As my right hon. Friend set out, we want to ensure that national security is absolutely at the heart of the Bill.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The hon. Lady is not wrong, obviously, in the sense that there is a potential conversation to be had about when a cloud provider is a telecoms provider and vice versa, if I can put it like that, although it is not the most elegant way of doing so. However, the point is that the reason we have comprehensive coverage of the landscape is because we have both the National Security and Investment Bill, which she debated recently, and this Bill. The broad powers that she described are intended to provide precisely that sort of coverage.

Similarly, the hon. Lady referred to the length of the list in clause 16 of matters that can be taken into consideration. That relates to the point I made previously, namely that the sorts of issues that she is talking about, such as data flows, are already covered in the long list. The list is as long as it is because it is intended to look to the future. Therefore, being prescriptive in the way that she describes is fundamentally unnecessary. We are not excluding what she wants to be on the list. A matter is already very much there if it is pertinent to national security. For that reason, I do not think there is a compelling case to add that single topic to the list, both because it is already there and because if we start going down that route, we could make the case for adding a host of other things that are already covered but that people might want to be mentioned specifically.

As I said earlier on the convergence of the two sectors, the point is that we have comprehensive coverage through both Bills. It will be for the NCSC, Ofcom and the Government to make a judgment as to whether any consolidation in a sector poses a national security risk.

Kevan Jones Portrait Mr Jones
- Hansard - -

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16 ordered to stand part of the Bill.

Clause 17

Laying before Parliament

None Portrait The Chair
- Hansard -

We now come to amendment 20 to clause 17. This is Christian Matheson’s big moment. I call him to move the amendment.

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Kevan Jones Portrait Mr Jones
- Hansard - -

My hon. Friend the Member for City of Chester said that we were going over old ground, and to a certain extent we are because some of the amendments reflect those that I moved last week.

May I say at the outset, Mr Hollobone, that the Minister has been an exemplar in engaging with and briefing the ISC? He has set something of a precedent; usually we have only Cabinet Ministers or Prime Ministers before us to give evidence. He is one of the few junior Ministers to have appeared before us, so I congratulate him. He did it because he wanted to engage with the issues. He must therefore be commended on his commitment to ensure that there is scrutiny. However—this is not to wish his demise, but to argue for his promotion—he will not be there forever. I think he does not quite understand why the Government are not at least moving on this.

The ISC’s remit is defined in the Justice and Security Act 2013. It sets out which Departments we cover, and the Department for Digital, Culture, Media and Sport is not one of them. However, as I said last week, security is increasingly being covered by other Departments, and this Bill is a good example. The National Security and Investment Bill is another one, where security decisions will be taken by the Secretary of State for Business, Energy and Industrial Strategy. Parliament must be able to scrutinise that.

If a high-risk vendor is designated as banned from the network by the Secretary of State for Digital, Culture, Media and Sport, there are perfectly good reasons why the intelligence behind that cannot be put into the public domain. The methods by which such information is acquired are of a highly sensitive nature, so it would not only expose our security services’ techniques, but in some cases would make vulnerable the individuals who have been the source of that information. I think most people would accept that that is a very good reason.

This sort of thing is happening increasingly. We have the two Bills that I have referred to, but we also have the Covert Human Intelligence Sources (Criminal Conduct) Bill, which will come back to the House tomorrow. Covert human intelligence and the ability to collect intelligence on behalf of our security services is very important. Most of that is covered by the Home Office, and covert human intelligence sources are covered by the ISC’s remit and can be scrutinised. However, there is a long list of other organisations that will be covered by tomorrow’s Bill, including—we never quite got to the bottom of this—the Food Standards Agency, for example. Again, how do we ensure that there is scrutiny of the decisions?

We also have—this has come out of the pandemic—the new biosecurity unit in the Department of Health. Again, there is no parliamentary scrutiny, because the Health and Social Care Committee will not be able to look at the intelligence that supports so much of that. An easy way out of this is in the Justice and Security Act 2013: the memorandum of understanding, which just means that, were our remit extended to look at this and other matters, the ISC could oversee and ask for the intelligence.

Having spoken to the Business Secretary and the Minister, who sympathises with us, I am not sure where the logjam is in Government. The point is that an amendment will be tabled in the Lords. Whether the provision is in the Bill or just in the memorandum of understanding between the Prime Minister and the ISC, it is easily done and would give confidence that the process at least had parliamentary oversight.

On many of these decisions, frankly, the oversight would not be onerous; we are asking only that we are informed of them. On some occasions, we might not even want to look at the intelligence. It might be so straightforward that, frankly, it is not necessary, so I do not think that it is an administrative burden. I cannot understand what the problem is. To reiterate what I said last week in Committee, it is not about the ISC wanting to have a veto or block over such things. It is, rightly, for the Government and the Secretary of State to make and defend those decisions.

It is also not about the ISC embarrassing the Government, because we cannot talk in public about a lot of the information that we receive. It is not as though we would publish a publicly available report, because of the highly classified nature of the information. However, the ISC can scrutinise decisions and, if it has concerns, write to the Prime Minister or produce a report for the Prime Minister raising them. That gives parliamentary scrutiny of the Executive’s decisions.

As I say, the report might not be made public. People might ask, “Would that be a new thing?” No—it happens all the time. For example, on the well-publicised Russia report this year, there was a public report with redactions in it and quite an extensive annex, which raised some issues that we were concerned about. That annex was seen only by individuals in Government, including the Prime Minister.

There is already a mechanism, so I fail to understand why the Government want to oppose this. From talking to Ministers privately, I think that there is a lot of sympathy with the position and I think that we will get there eventually. How we get there and in what format, I am not sure—whether the method is to put it in the Bill or to do it through the mechanism in the 2013 Act. That might be a way forward.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I rise to support the excellent comments made by my hon. Friend the Member for City of Chester and my right hon. Friend the Member for North Durham. I did well to delay my remarks till after my right hon. Friend had spoken, because he has set out very effectively, based on his considerable experience as a long-standing member of the Intelligence and Security Committee, both why it is important that that Committee should be consulted and receive the reports, and why it is hard to understand the Minister’s reluctance both in this Bill and in the National Security and Investment Bill to involve a source of such credible security expertise and, importantly, security clearance in key issues of national security.

I want to add two points to those made by my right hon. and hon. Friends. The first is to reiterate a point made previously: our security threats are changing, evolving and, unfortunately, diversifying. We see that in changes to our defence spending, in changes in the national review of our defence capabilities, and in changes in the evolution of the geopolitical landscape—the potential source of threats. However, the Minister does not seem able to support reflecting that by ensuring that, rather than keeping to our existing modes of parliamentary scrutiny, we enable parliamentary scrutiny of issues of national security by those who are best placed to carry out such scrutiny—undoubtedly members of the Intelligence and Security Committee.

I want to point briefly to a discussion in the evidence sessions. Ofcom made it clear that it does not consider itself in a position to make national security decisions, which is understandable, and that some of the decisions and considerations about national security with regards to telecommunications networks would require people who have STRAP clearance. Ofcom’s group director for networks and communications pointed to the fact that she had had STRAP clearance previously, and she said that if the NCSC

“feels that that is needed for the type of information that we may need to handle, we would make sure that happened.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 90, Q115.]

To my knowledge, Digital, Culture, Media and Sport Committee members do not have STRAP clearance. I would like the Minister to comment specifically on the level of security clearance required for members of the Committee that he has identified as being the location for scrutiny of important issues of national security. What level of security clearance do its members have? Would that enable the scrutiny that we all agree is in the best interests of the Bill?

I would like the Minister to respond to a specific example. Amendments 20, 22, 23, 24 and 25 are designed to require that the Intelligence and Security Committee has access to the appropriate information. There is a requirement for the Secretary of State to lay before Parliament a copy of a designated vendor direction, as set out in clause 15, which inserts new section 105Z11 into the Communications Act 2003. The new section states:

“The Secretary of State must lay before Parliament a copy of—

(a) a designated vendor direction;

(b) a designation notice;

(c) a notice of a variation or revocation of a designated vendor direction; and

(d) a notice of a variation or revocation of a designation notice.”

So far, so good—we have that scrutiny. However, the new section also says:

“The requirement in subsection (1) does not apply if the Secretary of State considers that laying a copy of the direction or notice (as the case may be) before Parliament would be contrary to the interests of national security.”

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I welcome the second salvo in the campaign to address this matter by the right hon. Member for North Durham. He said it would be an ongoing campaign.

This group of amendments would require the Secretary of State to provide information relating to a designated vendor direction or designation notice to the ISC. The amendments would require the Secretary of State to do this only where directions and designation notices had not been laid before Parliament, whether in full or in part, as a result of the national security exemptions in clause 17. It will not surprise the right hon. Member for North Durham or other Opposition Members that some of these short remarks will overlap with the conversation that we had earlier on a similar matter.

Amendment 20 would require designated vendor directions or designation notices to be provided to the ISC. Amendments 22 to 25 would require the Secretary of State also to provide the ISC with copies of any notifications of contraventions, confirmation decisions and so on. Although I recognise some Members’ desire for the ISC to play a greater role in the oversight of national security decision making across government, including in relation to this Bill, the amendments would, as the right hon. Member for North Durham knows, extend the ISC’s role in an unprecedented way. None the less, I thank his welcome for my unprecedented appearance.

As I said in the debate on amendment 9, the ISC’s primary focus is to oversee the work of the security and intelligence agencies. Its remit is clearly defined in the Justice and Security Act 2013, and the accompanying statutory memorandum of understanding, to which the right hon. Gentleman referred. I do not think he thinks it is my place to take a view on that role, and I do not think this Bill is the place to have that debate.

Kevan Jones Portrait Mr Jones
- Hansard - -

Yes, but I would ask the Minister’s civil servants to read the Act before they write this stuff for him. The Act refers to “intelligence”. Our remit is not fixed by a Department. I know the Minister sympathises with this and that we will get there eventually, but I say to his civil servants, please read the Act.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I will come on to that. Accepting any of these unilateral amendments to this Bill is not the appropriate place to achieve an overall enhanced role for the ISC—

Kevan Jones Portrait Mr Jones
- Hansard - -

I am sorry to say to the Minister that it is not looking for an enhanced role at all. It is actually doing what it says in the Justice and Security Act 2013. It is about scrutinising intelligence. A lot of the information, which will be used by him and others in these orders, will be derived from the same decisions that we oversee .

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Absolutely. Members of the Committee should note that in exercising the powers created by this Bill, the Secretary of State will be advised by the NCSC on relevant technical and national security matters. The NCSC’s work already falls within the Intelligence and Security Committee’s remit, so the right hon. Gentleman has found his own salvation.

In that context, the amendment seems to duplicate that existing power, while also seeking to do something that is better done in reform of a different Act, if that is what the right hon. Gentleman seeks. I am sorry to disappoint him again. I think he knew already that I would do that, but I look forward to his third, fourth and fifth salvos in his ongoing campaign.

Telecommunications (Security) Bill (Eighth sitting)

Kevan Jones Excerpts
Christian Matheson Portrait Christian Matheson
- Hansard - - - Excerpts

I do not want to detain the Committee all that long. The basis of the new clause is to ensure that Ofcom has the staffing and financial resources, as well as the capacity and technical capability, to undertake its new responsibilities under the Bill.

I remind the Committee that we heard in the evidence sessions that this is only one of several new areas of responsibility that Ofcom has received in recent years. For example, it now has responsibilities for regulating aspects of the work of the BBC. Parliament will be presenting Ofcom with responsibilities in relation to online harms, all of which is to be welcomed, but we have to recognise that there will be an overstretch for Ofcom.

In the area that the Committee is considering, there are technical complications that require specific sets of talents and capabilities which, we have heard previously, are not always in ready supply in the sector. We heard evidence that Ofcom, in common with other public sector bodies, does not pay as highly as some high-end consultancies, suppliers, developers or software houses, and therefore there will be churn. I do not want to stand in the way of anyone’s career development, but understandably there will be churn, in terms of Ofcom’s ability to maintain its responsibilities in what we know will be a continually evolving sector that throws up new technical challenges.

New clause 3 provides a duty on Ofcom to report on its resources, including the

“the adequacy of Ofcom’s budget and funding…the adequacy of staffing levels….and any skills shortages faced”.

In doing so, it will concentrate the minds of senior management at Ofcom, although I have no doubt that those minds will be focused on these matters already. Perhaps they will give this priority, particularly in terms of forward planning, and they will think, “We’re okay at the moment, but are we going to require extra and additional capability in area x, y or z in the next couple of years.” It will also focus and concentrate the minds of Ministers and Parliament, ensuring that Ofcom has the resources and capability to achieve the tasks that we have given it.

We heard many lines of evidence from the expert witnesses. My hon. Friend the Member for Newcastle upon Tyne Central may refer to some of them in her contribution, and I do not want to undermine that. Professor Webb said:

“I doubt Ofcom has that capability at the moment. In principle, it could acquire it and hire people who have that expertise, but the need for secrecy in many of these areas is always going to mean that we are better off with one centre of excellence”.

Emily Taylor of Oxford Information Labs said:

“Ofcom is going to need to upskill. In reality, as Professor Webb has said, they are going to be reliant on expert advice from NCSC, at least in the medium term,”––[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 79, Q95.]

The new clause is about assisting Ofcom to make an audit of what is available and ensuring that it is up to standard in terms of technological changes. It will also ensure that it is looking forward, in the midst of all the other responsibilities that Parliament is asking it to undertake, in order to maintain a level of skills and expertise that will enable it to undertake the snapshot reviews of current networks, as well as reviews of future provision and threats to the network. I hope that the new clause is self-explanatory and I am pleased to present it to the Committee.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
- Hansard - -

I would like to speak to new clause 7, which stands in my name. It is related to new clause 3, in the name of my hon. Friend the Member for City of Chester. As he has just said, Ofcom has had an expansion of its duties in the last few years and become a little bit like a Christmas tree with added responsibilities, but none of them will be as important for the nation’s future as this. That is not to decry any of the expertise or other duties that Ofcom has, but national security and the security of our national telecoms infrastructure, is a vital new task. I have said before that my concern about Ofcom centres on national security. That is why I have tabled amendments to the Bill. My fear is that Ofcom will not have the necessary expertise, although I am not suggesting that it cannot develop into a good regulatory body looking at security and our national telecoms infrastructure.

I tabled parliamentary questions on Ofcom’s budgets and headcounts, and I am glad to see that its budget and personnel have increased as its tasks have grown. That was not the case in 2010, when its budgets were subject to some quite savage cuts. My concern—I will call this my Robin Day approach—is that we have to future-proof Ofcom to ensure that the organisation not only has the budget but also has the personnel it needs. I do not want to suggest that the Minister would want to cut Ofcom’s budget at present, as it does important work. However, it is a regulator and perhaps does not have the clout of a Government Department, so any future Chancellor or Treasury looking for cuts disguised as efficiencies could see it as easy, low-hanging fruit.

Ensuring that the Secretary of State undertakes duties highlighting Ofcom’s efficiency puts a spotlight on the basis of considerations by future Administrations of any political persuasion. That will be important, not just in the early stages but as we continue. It may take a while for Ofcom to get up to speed, but I want to ensure that that continues. The obligation for the Secretary of State to report on Ofcom would at least give me comfort that first, it is being looked at and, secondly, that civil servants cannot in future just assume that an easy cut can be made but which might then impact on our national security.

I raised another subject with the head of Ofcom when she appeared before the Committee. I do not really want to rehearse the discussions again, but as the Bill progresses the Minister will have to give assurances on security, and try to demonstrate the close working relationship between Ofcom and the security services. That will be important, as it will give credibility to the expectation that Ofcom can actually do the job that we have set out. If the Minister does that, it will reassure people who may not be convinced that Ofcom has the necessary expertise, and ensure that that close working relationship continues, not just now but in future, so that national security is at the centre of this.

There will always be a balance—as I said, we saw it in the National Security and Investment Bill—between wanting, quite rightly, to promote telecoms as a sector, and national security. I fall very much on the side of national security being the important consideration, and we need to ensure that that is always the case. It is important that national security and intelligence agencies are able to influence these decisions, not just in respect of Ofcom but also in respect of Ministers in future.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I support and second the comments and contributions of my hon. Friend the Member for the City of Chester (Christian Matheson) and of my right hon. Friend the Member for North Durham (Mr Kevan Jones), who tabled new clauses 3 and 7. I would also like to congratulate the Committee on having made it through, as it were, the thickets of the Bill as it stands to the sunlit uplands of our new clauses, which are designed to improve it in a constructive and supportive way.

New clauses 3 and 7 both address the challenge of Ofcom’s resources. As Members of the Committee know, I joined Ofcom in 2004. I know that we are not allowed to use props in debates in the Chamber, but the Communications Act 2003, which I am holding in my hand, is the Act with which the Bill is concerned. The changes that the Bill makes are mainly adding to that Act.

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“In relation to Ofcom’s costs, Ofcom is funded in two ways: first, by a levy on the sectors and companies that it regulates and, secondly, through the collection of fees, primarily from our spectrum duties. Our overall funding is obviously agreed by our board but also subject to a cap agreed with Government…We are currently in discussion with the Treasury about the exact technicalities and which of those routes will be used to fund this, but it will be in line with Ofcom’s normal funding arrangements.”––[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 97, Q131.]
Kevan Jones Portrait Mr Jones
- Hansard - -

This is about resources for Ofcom as a whole, but there will also be debate within Ofcom about how its resources are spent. Without any ring-fenced moneys for security, is my hon. Friend concerned, like me, that not only the external control of the budget but that debate internally might compromise security?

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

My right hon. Friend makes an excellent point. This debate is important for the Bill and important for our new clauses. It is also important that the Minister clarifies what the duties and priorities of Ofcom should be. Having worked for Ofcom at a different point in its history, I can tell hon. Members that when there is, say, a complaint about the behaviour of somebody in the “Big Brother” household that is hitting all the headlines in all the newspapers, that attracts the sudden concentration of resource—unnecessarily, one might argue. There needs to be a counterweight, if you like, to those headline-driven resourcing bottlenecks, which would be either ring-fencing or reporting on how resource is being used to support national security.

All Opposition Members are clear that national security must be the first priority of Government, and therefore the first priority of Ofcom. This is all the more relevant as I pick up the Communications Act 2003, in all its weightiness, where we find the general duties of Ofcom in section 3:

“It shall be the principal duty of OFCOM, in carrying out their functions—(a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition.”

Security is not mentioned—national security or telecommunications security. During the evidence sessions, the argument was made, although I forget by whom, that security was a necessary part of furthering the interests of citizens in relation to communication matters. That is possibly true, but I still think this important issue would be improved by clarity.

As we know, there is a significant pressure on Ofcom’s resources, which changes week by week and month by month depending on what the issues are in the many and increasing domains in which it operates. If these principal duties of Ofcom do not reflect our national security, the concern is that having no direct reporting mechanism to Parliament could mean these resources being used opaquely, with no direct requirement to prioritise national security. I hope the Minister will agree that new clauses 3 and 7 solve a problem the Bill will have in practice. I hope that if he will not agree to the clauses as they stand, he will agree to consider how Ofcom’s prioritisation of national security interests can be made clearer.

Kevan Jones Portrait Mr Jones
- Hansard - -

As I have said before, I am not a great fan of arm’s length regulators, because it is a way of Government Departments and Ministers off-loading their responsibilities. Given how my hon. Friend has described the Bill, the way this is going means that Ofcom will be larger than DCMS in the future. Does she share my concern about accountability if things go wrong? It is a good get-out for the Government to be able to hide behind Ofcom, rather than Ministers taking direct responsibility.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

As always, my right hon. Friend raises a good point. Having worked for a quango, I had clear insight into the line between independence and dependence, and into the importance of the political will of the Government, regardless of supposed independence. Equally, I saw how any regulator or supposedly independent organisation can be used as a shield for Ministers who do not want to take responsibility.

My right hon. Friend also raises a good point about the hollowing out of capacity in Government Departments. A consequence of 10 years of austerity and cuts is that DCMS and other Departments do not have the capability, capacity or resources that they previously might have enjoyed. I will point out to the Minister the example of the Government’s misinformation unit. It has no full-time employees and is supposed to exist using resources already in the Department—for something as critical now, with the vaccine roll-out, as disinformation.

My right hon. Friend is right to emphasise that given the relationship between the Government and Ofcom, which is an independent regulator, and given the increase in responsibilities that the Bill represents at a time when other responsibilities are also being added to Ofcom, the Minister cannot have it both ways. He cannot have no visibility when it comes to Ofcom’s resources and capacity while giving it yet more responsibility. In fact, this seems to be responsibility without accountability. I hope the Minister will take on board the suggestions in new clauses 3 and 7.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Ultimately, a mechanism already exists by which Parliament is able to scrutinise Ofcom’s resourcing. Ofcom is required under the Office of Communications Act 2002 to publish an annual report on its financial position and other relevant matters. That report, which is published every March—I am sure the hon. Gentleman is waiting with bated breath for the next one—includes detail on Ofcom’s strategic priorities as well as its finances, and details about issues such as its hiring policies.

Kevan Jones Portrait Mr Jones
- Hansard - -

I am intrigued. The Minister says Ofcom already has over 900 people, and it is obviously going to have to grow. How big is DCMS? We basically have a mini-Department here.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The right hon. Gentleman asks me a question that I may be able to answer in a moment, depending on a number of factors. As for the thrust of his question, Ofcom is ultimately a serious regulator that has the resourcing to do a serious job. The right hon. Gentleman would be criticising us if it had fewer people, so he cannot have his cake and eat it by criticising the fact it has enough to do the job—but I think he is going to have a go.

Kevan Jones Portrait Mr Jones
- Hansard - -

Quite the opposite. This just reinforces my point about quangos. If we reach a situation where quangos are bigger than the sponsoring Department it is perhaps best to keep things in-house rather than having arm’s length quangos and the nonsense behind which we hide in this country about so-called independence.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The reality is that the relationship between Government Departments and regulators is very often incredibly close, but independence is an important part of regulation. Although the right hon. Gentleman makes a reasonable point about the optimal size for in-house expertise versus external expertise, it is getting the balance right between Ofcom, the National Cyber Security Centre and DCMS that this Government and the reporting measures we already have are fundamentally committed to providing.

The right hon. Gentleman talked about Ofcom’s resourcing. Ofcom will not be making decisions on national security matters, as we have said repeatedly, but it will to be responsible for the regulation around these issues. As the right hon. Gentleman said, the Intelligence and Security Committee has shown great interest in how Ofcom is preparing for its new role.

As for the point about disclosure and resources, I would be happy to write to the ISC to provide further details in the appropriate forum about Ofcom resourcing and security arrangements. This could include information that cannot be provided publicly, including information about staffing, IT arrangements and security clearances of the sort that we have discussed. I hope that Opposition Members understand that that is the appropriate forum to provide reassurance and to satisfy the legitimate requirements of public scrutiny on this issue.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I thank the hon. Gentleman for that intervention. I hope that now that I have given those various reassurances, hon. Members are appropriately comforted.

Everyone is waiting for the headcount of DCMS; I am assured that it is 1,304 people, some 300 more than that of Ofcom. I do not know whether that makes the right hon. Member for North Durham happier or more sad.

Kevan Jones Portrait Mr Jones
- Hansard - -

According to the website that I have looked at, the figure is 1,170, so it has obviously increased slightly. Still, it makes Ofcom with its new responsibilities nearly as big as, if not bigger than, the sponsoring Department.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

We can discuss the optimal sizes of quangos and Departments outside this room. However, the right hon. Gentleman is obviously right that Government Departments and regulators need the resources they require to do their job properly. I hope that by describing the various mechanisms I have provided hon. Members with the reassurances they need to withdraw the new clause.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I think an organisation of 937 people can cope with 13 priorities. On one level, however the hon. Lady makes a reasonable point, and it is not one that we disagree with. Security has to be absolutely central to the work that Ofcom will do.

I will not restate the points I have made about how seriously we take the Intelligence and Security Committee and how seriously we will continue to take it. We will continue to write to the Committee on topics of interest as they arise and we are happy to continue to co-operate in the way that I have done; however, as I said in the debate on amendment 9, the primary focus of the ISC is to oversee the work of the security and intelligence agencies, and its remit is defined in the Justice and Security Act 2013. Amending the Bill to require regular reporting to the ISC, as proposed by the new clause, would risk the statutory basis of the ISC being set out across a range of different pieces of legislation.

Kevan Jones Portrait Mr Jones
- Hansard - -

Will the Minister give way?

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Earlier, the right hon. Gentleman was suggesting that it was the memorandum of understanding that he would like to see amended. Now he seems to be suggesting that we should insert the new clause, which will not change the memorandum of understanding.

Kevan Jones Portrait Mr Jones
- Hansard - -

No, I said in an earlier contribution that if it were done by the memorandum of understanding, I would be quite happy. I know the Minister is limited in the number of civil servants he has beneath him compared with Ofcom, but will he go away and read the Justice and Security Act 2013? It talks about Departments, but it also talks about intelligence more broadly, which is covered by the memorandum of understanding. I do not know why he is pushing back on this issue; it may be because of the Cabinet Office, which has more civil servants than he has. I suggest that we will win this one eventually.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

That may well be the case, but the right hon. Gentleman is not going to win it here—that is the important point to make. It is right not to try to address this issue in the new clause, but the Government will continue to take very seriously the work of the ISC, as he would expect.

Additionally, the new clause is designed to require Ofcom to provide annual reports to the ISC, which would, as the right hon. Gentleman knows, be particularly unusual in the context of the work of the Committee, as Ofcom will not be making judgments about the interests of national security under the Bill, or as part of its wider function. Ofcom’s role as regulator seems not to be something that comes under the purview of the ISC, even if I understand the broader point. As I said earlier, however, the NCSC is very much under the purview of the ISC, and there are plenty of opportunities for the Committee to interrogate the work of that excellent agency. I am sure the Committee will continue to take up such opportunities with vigour, but as I have said before, it would not be right to seek to reframe the remit of the ISC through the new clause. I ask the Opposition to withdraw it.

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None Portrait The Chair
- Hansard -

Mr Jones, new clause 7 has already been debated. Do you want to put it to a Division?

Kevan Jones Portrait Mr Jones
- Hansard - -

No, Mr McCabe, it was a probing amendment. We debated some important issues around the accountability of Ofcom. Clearly, we are getting to a point where Ofcom has more staff than DCMS—perhaps, at some future date, Ofcom could take over the role of DCMS.

None Portrait The Chair
- Hansard -

I realise that this will come as a devastating blow to all of you, but the final question I must put is that—

Telecommunications (Security) Bill (Fifth sitting)

Kevan Jones Excerpts
Committee stage & Committee Debate: 5th sitting: House of Commons
Thursday 21st January 2021

(3 years, 2 months ago)

Public Bill Committees
Read Full debate Telecommunications (Security) Act 2021 View all Telecommunications (Security) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 January 2021 - (21 Jan 2021)
I hope the Committee will approve the amendment and I look forward to contributions from the Minister and others.
Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
- Hansard - -

It is a pleasure to serve under your chairmanship, Mr Hollobone. I apologise for my late arrival, but I was asking a question of the Health Secretary on the vaccine roll-out. When we look back at the time before the pandemic, would we have thought that part of our critical national infrastructure would be vaccine production? As my hon. Friend the Member for Newcastle upon Tyne Central said, that is a good example of the changing nature of these things. Will the threats to telecoms change? Yes, they will. Last night we discussed the National Security and Investment Bill, which addresses some of the same issues.

I tabled the amendment to focus on and consider the supply chain. There has been much concentration, quite rightly, on Huawei—not just the history, but the threats. As the Minister knows, I was a keen supporter of the Government’s initial response to Huawei. From a technical point of view, I think allowing 35% and making sure that Huawei was not in the core network was the right response. That all changed with the US sanctions on semiconductor exports to China, which changed the security advice. Again, I agree with that.

It will be interesting to see whether, if President Biden were to change that, we would change the security advice back. Frankly, I doubt that because of the direction of travel. I do not think there will be great change in the new Administration’s approach to China. It might be more nuanced and less belligerent, but I do not think it will fundamentally change. I know from sitting on the NATO Parliamentary Assembly and meeting fellow members from both sides of the House in the US Congress that there is a pretty unified bipartisan position on China.

The debate around Huawei has concentrated on the hardware. My amendment, which is a probing amendment, tries to see what coverage we will have in the telecoms network supply chain. There has been much talk about compromising the main components, but each of these networks are very complicated. We need only look at any electronic equipment used today, whether that is a telephone or a microwave oven, to see that they are very complex pieces of kit. The components are not all sourced here in this country—it would be impossible to do that—but are supplied from around the world. However, in terms of electronics, the major suppliers of a lot of these components are the Chinese, or Chinese companies that manufacture in different parts of south-east Asia, for example.

This is not just about how we get diversification in this sector, although trying to get some home-grown innovation is going to be important. To be honest, I think the opportunity is going to be in software and open RAN, because that is where we can get an advantage if we get our ducks in a row, not only through investment but through Government initiatives and other things. It is about trying to minimise the risk that will be there now that we are going to have two vendors. Now that Huawei is no longer in the network, we are going to have Ericsson and Nokia, both of which are going to be there for the foreseeable future. What will the regulator do to look at the supply chain around their components, for example? From the evidence we took from Dr Drew, it is quite clear that China is using not just these networks and the components that go into telecoms, but other things, including the belt and road initiative, for geopolitical purposes.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I thank my right hon. Friend for giving way, and for the excellent points he is making. He mentioned the evidence we took in our session with Dr Drew. Is it not true that in those evidence sessions, we heard about the complexity of our networks and the extent to which network operators were not always aware of where their components were or, in this case, the level of components? Is it not the case that my right hon. Friend’s amendment will not only increase the visibility of the different components in the supply chain, but should help the Department and Ofcom understand where these components are, where they are going and the way they are changing through soft upgrades?

Kevan Jones Portrait Mr Jones
- Hansard - -

I agree. The issue with both Ericsson and Nokia is that they will have Chinese components in their hardware. This is an incredibly complex situation, as my hon. Friend said: we are talking about not just one piece of kit that most of us have in our pockets, but hundreds of thousands of components, pieces of software and other things. What I am trying to put on the record, and what I want the Minister to respond to, is the question of how we get an understanding of any risks that are involved in that, and how the regulator and the Government are going to look at ways in which national security could be compromised, not by the main company being owned by a Chinese state entity, a Russian state entity or any actor that we feel is a threat to us, but by a key component.

I have not yet really understood how the regulator will look at that issue further down the supply chain, and whether it will ask a supplier of kit to the telecoms network, “What is the level of threshold or security that you need?” That is hard enough with hardware, but with open RAN and software—we are talking about bits of code—it is going to be incredibly difficult. One of the issues is around vulnerabilities, and various things have been said about the vulnerability that Huawei poses to our telecoms network. However, I suggest people read the Huawei assessment centre’s annual reports—I am rather sad, because I read such documents. One thing sticks out every single year, and it is not that the Chinese are doing anything nefarious. The reports are highly critical of Huawei for its shoddy workmanship and engineering, but that type of shoddy engineering and a lack of attention to security will lead to security concerns in our telecoms network.

Amendment 7 is designed to tease out from the Government their thinking about the supply chain. We do not want to be over-burdensome on it, because we want to get innovation in the supply chain. We do not want to suddenly give researchers and other people in the supply chain huge regulatory hurdles to jump over, because that would stifle the development that we are looking for. It is about how individual components and the overview of the supply chain will be regulated. I have tabled a later amendment about Ofcom, but again it comes back to the point I made yesterday about the National Security and Infrastructure Bill. What has to be at the heart of it all, every single time, is not to stifle innovation and prosperity, but what has to come first every time is national security.

As I say, amendment 7 is a probing amendment, and I want to understand where the Government are at in terms of the supply chain, the security they feel they need over the supply chain and, more importantly, the visibility of the supply chain.

Matt Warman Portrait The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)
- Hansard - - - Excerpts

It is a pleasure to serve under your chairmanship, Mr Hollobone. I echo the thanks of the hon. Member for Newcastle upon Tyne Central to you and the House staff for facilitating this Public Bill Committee. I also echo her praise for the temperature of the room and especially her commitment to crack on and not fill it with further hot air. That is to be welcomed.

Like the hon. Lady, I will briefly talk about the broader context of the Bill before I directly address this group of amendments. As we all know, security should be the first priority for any Government, and the Bill demonstrates this Government’s commitment to securing the UK’s telecoms networks.

Clauses 1 to 14 raise the bar for security across the whole telecoms sector, and the subsequent clauses—15 to 23— provide the mechanism for the Secretary of State to manage the role of high-risk vendors. The part that telecoms plays in our security is undeniable and has become even more evident in the midst of this global pandemic. At present, the internet provides absolutely everything for workplaces, schools, families and friends, and the Government are committed to improving that through our gigabit programme. New technologies have the potential to be transformative, but they have the opportunity to reach their full potential only if they are secure, and the Bill will ensure that.

Before I explain the Government’s response to amendments 7 and 8, it is necessary to explain briefly how they would interact with clause 1. New section 105A in clause 1 places a duty on providers to take “appropriate and proportionate” measures. Those measures oblige providers to identify and reduce the risks of security compromises and require them to prepare appropriately for those risks. New section 105A also addresses the interaction between the duty and the national security and law enforcement activity, such that these activities are appropriately excluded from the definition of a security compromise. I will return to new section 105A later—I know that will excite the Committee.

Alongside the overarching security duty in new section 105A, new section 105B gives the Secretary of State the powers to make regulations that impose duties to take specific security measures. Clause 1 creates a duty for providers to take “appropriate and proportionate” measures to protect their networks and services from security compromises. “Security compromise” is then defined in new section 105A.

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It is accompanied by amendment 8, which provides a definition of supply chain components. I take it from what the right hon. Gentleman said that the intention of the amendment is that providers should not necessarily need to be directed by the Government not to use such components, but should proactively reduce their use of such equipment or take other appropriate measures. In many ways, these are the sorts of things that we would expect see in documents such as the code of practice. We are very keen to be as transparent as we can, as quickly as we can, and I hope that the right hon. Gentleman would say that we have already tried to adopt that spirit in some of the documentation and draft legislation that we have published around the Bill.
Kevan Jones Portrait Mr Jones
- Hansard - -

I would, and this is really a probing amendment to get an understanding of what the Government think, but may I ask the Minister a direct question about the national security bodies—GCHQ and others? If they came across a component or something that a supplier was producing that raised concerns, how would their concerns be translated into saying that a red warning should be put on a certain component in a supply chain?

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I simply say that, as the right hon. Gentleman knows, the NCSC and others already work very closely with the networks. What he seems to be talking about, in some ways, is a very day-to-day way of talking about security concerns. That happens a lot already, and what the codes of practice and other documents will do is set up the framework by which that is formalised. As he knows, that process of very quick action being taken as soon as something is spotted, both by the networks themselves and by our agencies, is already well established, and the Bill gives considerably greater force to it.

As the right hon. Gentleman knows, the Bill is aimed at ensuring that providers take responsibility for the security of their networks and services in a way that has not happened, in legislative terms, in the past, and it then provides the Government with the powers that we need to enforce that. In so far as any supply chain components give rise to risks to the security of a network or service, new section 105A already requires providers to take appropriate action and proportionate measures to identify those risks. I appreciate that this is a probing amendment, but in a sense what the right hon. Gentleman is seeking to do through it is already there, and it will be enforced in the documents, such as the code of practice, that I have mentioned.

Furthermore, the addition of the presence of a supply chain component as a security compromise would not be consistent with the security framework’s definition of a security compromise, but I do not think that we need to get into too much detail about that in the context of a probing amendment. The concept of a security compromise is used in other provisions in the Bill, and it is important that we are consistent.

More fundamentally, the right hon. Gentleman’s amendment would put the onus on providers, rather than the Government, to determine a national security risk, but, as he implied, it is absolutely down to the NCSC and, ultimately, the Government and agencies to make that definition. Placing the responsibility for determining what does and does not constitute a threat to national security on the shoulders of all individual providers is not the right thing to do, and I think, to be fair, the right hon. Gentleman is not really suggesting that it is, either.

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Kevan Jones Portrait Mr Jones
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Clearly NCSC does a tremendous job in terms of education of members of the public and companies —as the Minister outlined, that is a key part of its role. Does he see, therefore, a role for Ofcom as part of that, in terms of ensuring that the supply chain and operators are aware of their responsibility not only under the Bill, but to ask the right questions about supply chains from what might be deemed as high-risk vendors?

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

In so far as codes of practice will be published by Ofcom, the answer to the right hon. Gentleman’s question is yes. The more nuanced answer is that it is a co-production between Ofcom, the Government, NCSC and others.

To conclude, the Government are immensely sympathetic to the issues that the right hon. Gentleman and the hon. Lady seek to probe, but we take the view that this amendment would do something that is, ultimately, already covered in the Bill. I hope that, in that spirit, she will withdraw the amendment.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I thank the Minister for his response. I am concerned that there is not greater clarity on the role of the supply chain components and the supply chain more generally. We will come to that in further amendments. Given where we are and how we got here, we must take a forward-looking approach to future risks and vectors for risks. This amendment is important in probing that, but I do not seek to put it to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Kevan Jones Portrait Mr Jones
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I beg to move amendment 9, in clause 1, page 3, line 26, at end insert—

“(2A) The Secretary of State must provide the Intelligence and Security Committee of Parliament with a report on the specified measures.”

This amendment would ensure that the Intelligence and Security Committee of Parliament is provided with any information relating to specified security measures which the Secretary of State requires the provider of a public electronic communications network or a public electronic communications service to take.

We are now going to have a debate reiterating a speech I gave yesterday on the National Security and Investment Bill, because it covers the same issues. I will go into the details in a minute, but the amendment attempts to ensure parliamentary oversight of the way in which this Bill will operate. Such scrutiny traditionally comes from the Select Committee that mirrors the Department —the Select Committee on Digital, Culture, Media and Sport—but the decisions taken by the Government and the Secretary of State will be based on evidence that cannot be put into the public domain, because much of it is highly classified. In Parliament, only the Intelligence and Security Committee has the required STRAP clearance to see that evidence. It is important to ensure that the Executive is held to account for taking such decisions and for the public and Parliament to know that decisions have had parliamentary oversight from the ISC.

I do not want to give the impression that the ISC is looking for work, because I have been a member for a number of years and we are busy with a lot of inquiries—I have three to four hours’ reading every week looking through reports from the agencies. However, it is important that the ISC can at least look at the intelligence that lies behind decisions. The amendment does not propose that the ISC should have a veto or be a regulator, because that would not be correct. Decisions about high-risk vendors are for Ofcom and the Secretary of State.

We had the same debate yesterday on the National Security and Investment Bill, because the same issues come up there: decisions will be taken on national infrastructure, and the justification for them will be based on highly classified secret intelligence to which the Business, Energy and Industrial Strategy Committee will not have access. People might say, “Isn’t this the ISC getting involved in the day-to-day work of the BEIS Committee?” No, it is not. The ISC already has such a responsibility for Defence Intelligence and the National Cyber Force—military cyber-security—and we stick just to that; we do not go into wider Defence policy issues. Likewise, we scrutinise MI6, whose home Department is the Foreign, Commonwealth and Development Office. Again, we do not get into general foreign policy issues, which are rightly for the Foreign Affairs Committee. I do not think there is an easy way for the Government to provide for parliamentary scrutiny at the moment, but I want to go through and explain one.

I have some sympathy with the Minister, just like I had some sympathy with the Secretary of State for Business, Energy and Industrial Strategy yesterday on the National Security and Investment Bill. I know exactly where the problem is, and it is not in the Minister’s Department or in BEIS: it is in the Cabinet Office, which seems to have an issue with the ISC and jealously guards anything that we ask for, ensuring we get only some information even though we are legally entitled to it under the Justice and Security Act 2013. There is usually a tug of war, and on every occasion I have seen it the ISC has won—it is legally allowed the information—but that does not stop the civil servants. I must say that this is not Ministers’ fault; it is the culture in the civil service.

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James Sunderland Portrait James Sunderland (Bracknell) (Con)
- Hansard - - - Excerpts

Given that most MPs do not fully understand what the ISC does, does the right hon. Gentleman not agree that the Government are probably best placed to make the decision on this particular matter?

Kevan Jones Portrait Mr Jones
- Hansard - -

No, I do not. I know the hon. Gentleman is a new Member, and I actually quite like him, but what is he arguing for? A dictatorship? That the Executive should decide everything? Knowing you, Mr Hollobone, you would take a very dim view of that. You have form on holding the Executive to account—all Governments.

The ISC is there to look at information and provide parliamentary scrutiny. As for the nature of the information we receive, we have all the clearances from top secret going up to STRAP, including STRAP 3, which is intelligence that has a limited circulation and people have to be added to the list. We have access to that as well, which allows us to consider that information.

Our annual reports, which we supply to Parliament, can be debated by Parliament. We can produce reports. For example, most recently, there was the Russia report, which highlighted what the Government had not done rather than what it should have been doing. The contention from the Cabinet Office is that if information goes to the ISC, it is in the public domain. That is a little bit insulting. We do public reports, which have information that can be put into the public domain, but there are always secret annexes that go to the Prime Minister and are not made public, which allow us to question decisions and highlight issues that we think the Prime Minister should take notice of. It is a valuable mechanism for scrutiny.

The argument that will come from the Cabinet Office is that DCMS is not covered. It is. The memorandum of understanding says:

“The ISC is the only committee of Parliament that has regular access to protectively marked information that is sensitive for national security reasons: this means that only the ISC is in a position to scrutinise effectively the work of the Agencies and of those parts of”

the Government

“whose work is directly concerned with intelligence and security matters.”

I accept that DCMS’s day-to-day work is not covered in the description of national security, whether or not this is an issue of concern to individuals. I think it is. There could be an argument as to why the Department for Digital, Culture, Media and Sport got this legislation and whether it should perhaps be put in another Department. I do not agree with that, because I think the general issue of telecoms fits well into the Department’s wider briefs.

Increasingly, a number of Departments are getting involved in, or taking responsibility for, areas that involve national security. BEIS and the National Security and Investment Bill is a good example.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

My right hon. Friend is far too modest to set out his vast experience with and long-standing membership of the Intelligence and Security Committee. Does he agree that the geopolitical and technological shifts in the last decade in particular—perhaps the last two decades—have meant that the threats to our security come from a broader range and, more specifically in a more technologically-based range, and we have seen our defence requirements move to cyber-security? Therefore, as he said, the increased need of Departments to consider security issues means that the Intelligence and Security Committee’s ability to review items that require security clearance is important. Does he understand why the Government will not allow the Committee to do that?

Kevan Jones Portrait Mr Jones
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My hon. Friend knows that modesty is one of my trademarks, but no, I do not—I do not understand it, nor do I understand where the Government are coming from. I do not think that the problem is with the Minister or his Secretary of State; I think it is the culture of the Cabinet Office, trying somehow to test the Justice and Security Act to destruction. Its argument, basically, is that DCMS is not on the list of organisations, but the Act and the memorandum of understanding are clear: we have jurisdiction over matters that relate to national security, which this clearly does.

Christian Matheson Portrait Christian Matheson
- Hansard - - - Excerpts

I am grateful to my right hon. Friend for providing inspiration for a speech that I will make later, when I will make similar points on similar provisions. Listening to him and to the hon. and gallant Member for Bracknell—whom I also like, incidentally—talk about the alternatives, it strikes me that there are only three: to provide classified information to be laid before the whole House or the DCMS Committee; to do the right thing and to provide that classified information to the Intelligence and Security Committee, which was surely established for exactly that purpose; or to have no scrutiny at all. It is one of those three alternatives. Surely the Government are not pushing for no scrutiny at all.

Kevan Jones Portrait Mr Jones
- Hansard - -

I must say that this is the first time I have heard that one of my contributions to a Bill Committee is inspirational. I shall mark that as something to be remembered. However, my hon. Friend summarises the position very clearly: the DCMS Committee cannot deal with this, because the nature of the information garnered could not be shown to them, given its classification. We would not want to do that because this is highly sensitive information—meaning no disrespect to the members of that Select Committee. Some of it is not our intelligence; some of it will come from our Five Eyes partners, so it is about guarding not just our secrets, but theirs. Any leaking or compromise of that type of intelligence affects not only our ability with this type of work, but our relations with our Five Eyes partners. The next option, the ISC, is the obvious one. The third option means that the Government must put through a Bill that does not allow Parliament to scrutinise these matters at all. I do not think that that is what the Minister, or his counterparts in BEIS, believe. I think we will have a to and fro on this, and will get there eventually, but it will be hard work.

As my hon. Friend the Member for City of Chester says, scrutiny is important in helping to ensure that there is not only public but parliamentary confidence that the decisions are at least being looked at. Some of the decisions will be very controversial and the Government need covering. Will that be onerous for the Department? No, because all it will entail is that the report should include the decisions taken and the reasons why. We can ask, and be supplied with that, and that, I think, is important.

Yesterday, speaking on the National Security and Investment Bill, the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Stratford-on-Avon (Nadhim Zahawi) said that the ISC can ask for the information and demand that the Secretary of State comes before it. There are two important points about that. First, yes, we could do that. However, and as I said yesterday I do not for one minute suggest that the Secretary of State or the Department would want to refuse, but there is no legal justification behind it. If a future Secretary of State said “No, I am not appearing or giving you the information,” there would be nothing at all that the ISC could do.

I remind the Committee as I reminded the two Ministers in yesterday’s debate that we are all, as the great Robin Day once said, “here today, gone tomorrow” politicians, so any legislation we pass here must be future-proofed. Not only must we be satisfied with it; it must go on. The other important aspect of what the Under-Secretary said was the recognition of the ISC’s role in asking for information in relation to the National Security and Investment Bill. However, if it is possible to ask for information a mechanism is needed to guarantee it. I think that is also the case for the Bill that we are considering.

It will be interesting to see how the Minister responds, and whether he really believes what he will tell me, but there is a mechanism available and it would be easy and not burdensome. I stress that not for one minute is it suggested that the ISC would veto decisions or have any involvement in them. As with much of our work, apart from certain issues, it would be retrospective, looking back at decisions that had been taken. If mistakes, issues and concerns are raised, we can raise those directly with the Prime Minister and Departments. That is another check and balance in the system, of which I think you, Mr Hollobone, would approve, in view of your vociferous wish, whatever the Government, to hold the Executive to account. The mechanism is pretty straightforward. Either we put it on the face of the Bill or we get it into the memorandum of understanding.

There is an increasing problem with the involvement of more and more Government agencies that are not traditionally involved in national security, such as the new Joint Biosecurity Centre, which falls within Department of Health and Social Care. All the information that they will get is classified, so how, again, will Parliament scrutinise it? That will be important.

Christian Matheson Portrait Christian Matheson
- Hansard - - - Excerpts

Perhaps my right hon. Friend will reflect on a third issue. The Committee cannot ask for information if it does not know that it exists. If there is no obligation to report orders to the Committee there is no way for it to know that they have been made, and that it needs to scrutinise them.

Kevan Jones Portrait Mr Jones
- Hansard - -

There is, but to give a bit of background, we are quite tenacious on the Committee and if we do not get what we ask for we usually keep on and get it eventually. Some of the agencies are better than others, but overall the working relationship with GCHQ has always been a very good one. The amendment would help the Bill, but I think we will to and fro on this.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I start by acknowledging the incredibly important work that the ISC does. Its role in overseeing the work of the UK intelligence community is vital to maintaining public trust, as the right hon. Member for North Durham described, and its members make important contributions to public debates on national security matters of all kinds. The right hon. Gentleman has done that for a number of years. Because he is a member of the ISC, he will know that I have proactively engaged with it on the substance of the Bill. I did so enthusiastically—if any Minister can ever regard a Select Committee appearance enthusiastically—and in recognition of the interest that I knew that Committee would have in the Bill. I will be writing again to the ISC on a number of matters raised in the Bill, and I have instructed officials from my Department to continue to engage with the ISC as the Bill proceeds through Parliament, building on the work that it has already done and on the transparency that we have already demonstrated by publishing the draft of the security framework regulations on 13 January, copies of which have been provided to the members of the ISC and a number of other interested Committees. I hope that all that demonstrates the Department’s commitment to working constructively with the ISC, despite the fact that, as the right hon. Gentleman said, DDCMS does not normally fall within the ISC’s formal remit.

It is none the less important to acknowledge that the ISC is not the only legitimate avenue to scrutinise this framework. We fully intend to make use of all the appropriate parliamentary procedures.

The regulations and the explanatory memorandum accompanying them will all be there for the ISC to scrutinise. There is also further guidance to providers in connection with the measures specified in the regulations that can be provided in the code of practice, which must be published, with a copy laid before Parliament. Also, beyond the usual arrangements for secondary legislation, new section 105Z of the Communications Act 2003 provides for Ofcom to produce security reports. Clause 11 of the Bill enables those reports to be published by the Secretary of State, and clause 13 provides for a review of the effectiveness of the framework, including any regulations, after five years.

It is in that context that I point to the enthusiasm with which we have engaged with the ISC. We will continue to do so and ultimately—this is perhaps the reason why the right hon. Gentleman described this process as an ongoing campaign, rather than something that we should address piecemeal—the ISC is clearly defined in the Justice and Security Act 2013. I do not think it would be right to address the memorandum of understanding that he referred during our consideration of the Bill. We should not go at it in piecemeal fashion. The role of the ISC as set out in that MOU is to oversee the work of the security agencies, to provide oversight of certain intelligence or security matters within Government. Ultimately, if the right hon. Gentleman wants to change the MOU, that is a broader issue for him to take up. I note that he is not the only Member of this House to have made that point, but it is not my place to take a view on the role of the ISC; that should be for the ISC itself.

I am confident that we will continue to engage with the ISC; I personally will certainly do so. I know that the DCMS Committee will continue to take an interest, and I will simply say that we will co-operate as fully as possible. I will set out more in the letter I mentioned, and I look forward to the future salvos in the right hon. Gentleman’s campaign.

Kevan Jones Portrait Mr Jones
- Hansard - -

I make no criticism of the Minister, because he has been very proactive, as has his Secretary of State. The problem is this: we have two pieces of legislation going through Parliament. We do not have security Bills very often in this place, and now we have two in a very short period of time. Both make eminent sense and I support them, but this is not something that comes up regularly.

In terms of the Minister’s co-operation, I have no complaints about the way he has operated, but he is not going to be there forever and neither is his Secretary of State, so we need to put in place something that will weather the passage of time, and create an arrangement whereby it will be seen that Parliament is scrutinising these measures. I do not know why the Government—I am sure it is not the Minister, or even his Secretary of State—are resisting this. Frankly, I am not really bothered whether it goes on the face of the Bill or in the MOU, but the Justice and Security Act 2013 is very clear that as a Committee, the ISC has the ability to look at this.

I accept that it would be wrong to get into issues around this Bill that are quite rightly, as the Minister said, for the relevant Select Committee—the Committee on Digital, Culture, Media and Sport—to deal with. We would never do that, so I will withdraw this probing amendment, but we will come back to this issue. I am not usually a betting man, but I suspect that by the time this Bill and the other Bill go through, we will have got to where both I and the Minister—I think, privately—think we should be. I therefore ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

I beg to move amendment 21, in clause 1, page 3, line 26, at end insert—

“(2A) The Secretary of State must make regulations under subsection (1) requiring providers of public electronic communications networks and public electronic communications services to carry out an audit of the goods, services and facilities supplied, provided or made available for the purposes of the provision of their network or service to ascertain whether they present a risk to the security of that network or service.”

This amendment is a probing amendment designed to learn how the Government plans to ensure network operators have a comprehensive audit of hardware of interest because, for example, it is manufactured by a designated or high-risk vendor.

The amendment goes to the heart of two of our key themes: the scrutiny of the powers in the Bill and the effectiveness of the accompanying diversification strategy. It is a probing amendment, designed to enable us to understand—or to have the Minister clarify—plans to ensure that network operators carry out a comprehensive audit of hardware that is relevant to the Bill because, for example, it is manufactured by a designated or high-risk vendor.

We tabled the amendment for a number of reasons. The first is the Government’s decision, which we welcome, to strip Huawei out of our telecommunications networks. There are questions about where that equipment is located, the level of software provision, and in particular the exact nature of the revision of the equipment within the network. In addition, the Government have not provided a plan for locating and removing Huawei from our networks; instead, they have opted to leave it entirely to private sector providers.

That might seem appropriate, but as someone with 20 years’ experience in the telecoms sector, I have to say that it is generally not the case—I am not insulting any individual provider—that providers know exactly where every bit of equipment is located and what level of software or build is associated with the equipment.

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Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

As always, my hon. Friend makes an excellent point. Indeed, the audit, which I agree is burdensome if the information is not already in the management systems, which it should be, would, I hope, be less burdensome than the potential fines for not meeting the basic requirements of knowing what is in the network and where it is. Also, that challenge has been made more complex by the subcontracting of different parts of the telecoms networks.

For example, network providers such as Vodafone or Three have primary vendors—currently Ericsson or Nokia—but there might be subcontractors who provide particular elements of the network and particular management elements. We hope that that will be increasingly the case as we seek to open up the supply chains and make them more diverse. A basic and critical requirement for the Bill to be effective is to have a more diversified supply chain. More suppliers go hand in hand with a diversified supply chain, and therefore different types of equipment, of which we will need to keep track.

Kevan Jones Portrait Mr Jones
- Hansard - -

The hon. Member for Bracknell has argued that regulations are somehow burdensome on business and unnecessary. It is only when things go wrong that we look back and think, “Wait a minute. That regulation or audit, which was suggested in an amendment, was vitally important.” We must get the context right. These amendments are being tabled not for their own sake but to ensure that security is improved.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

My right hon. Friend makes an excellent point. As someone who worked for a regulator for six years, I might be expected to agree with my right hon. Friend on the point of regulation; in this context, regulation should not be seen as a burden. As my hon. Friend the Member for City of Chester set out, it should be seen as a carrot—an incentive—to get things right. Imagine we had known and been able to see how Huawei’s presence in BT’s network, over the last 15 years or so, would rise from small beginnings to becoming the principal vendor. That might have rung more alarm bells and been an incentive to have transparency.

Regulation is also about levelling the playing field and enabling more effective competition. The better providers will do that, but some providers may not. We want a level playing field, particularly because the 2019 UK Telecoms Supply Chain Review said that there was not an incentive for security in mobile networks. It concluded specifically that there was no incentive for security in mobile networks. Given that conclusion and some of the points provided in the evidence sessions, the Bill does not address incentives to ensure security by design in our mobile networks. It has burdens and fines for not doing that, but it does not have positive incentives.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

Again, my hon. Friend makes an excellent point with regard to the way in which Huawei grew in the telecoms sector. I do not want to detain the Committee on that history, but Huawei grew by under-cutting existing vendors, building up scale and making its profits by locking in network providers, despite issues with the quality of the equipment, which, as we have discussed, our security services identified.

Having visibility of network equipment, as well as the level of concentration of any one provider, will enable us, in part, not to get into such a situation of dependency in future. Again, I would emphasise that this is about incentivising what should happen but is unfortunately not always the case. That is not simply my view or that of the Labour party; it is the view of witnesses who participated in our evidence sessions. For example, Andrea Donà said:

“It is vital that the secondary legislation that accompanies the Bill clarifies assets in the telecoms network architecture that will be in scope of the security requirement, so that we can work knowing what we have audited, and knowing that the auditors always shared with NCSC. We need a clear understanding between Ofcom and us as providers before the legislation is enforced, so that we understand exactly the boundaries and the scope, and we all work together, having done the audits, to close any vulnerabilities that we might have.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 13-14, Q10.]

Dr Bennett said:

“I would hope that those at the top level are clear about it, but I would be surprised if there were not occasions when they had used subcontractors to do maintenance and the imperative had been to sort out the fault ASAP. Knowing precisely what components had gone in could be wrong, and that might come up in an audit. I think it becomes more important as you flow down the levels.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 49, Q62.]

Dr Bennett later said:

“I have said that audit is needed of the assets in the network. The costs of being audited and of dealing with audits are very high, and they are costs that small companies may not have the resources to meet.”––[Official Report, Telecommunications (Security) Public Bill Committee, 14 January 2021; c. 52, Q67.]

Ofcom said that it was more or less impossible to meet the requirements set out in the codes of practice for the operators, unless it had a detailed asset register of everything in its system. We will expect to see evidence of that, and we expect that it will be regularly checked, audited and so on. We recognise the potential costs of an audit, particularly for smaller providers, although most of them have newer networks and equipment and should have a lot of this information already available. Ofcom is anticipating that this is something it would need to have access to, yet there is no requirement in the Bill or, as far as I can see, in the delegated legislation that has been published to make that requirement.

I have mentioned that this is a probing amendment. I am not sure that it is necessary to have it on the face of the Bill, and it might be that it will be provided for in delegated legislation, but we need a clear and strong strategy for the detection and removal of high-risk components, vendor hardware and software. Otherwise, the Bill will not protect our national security effectively. I hope the Minister will give clarification on that.

Kevan Jones Portrait Mr Jones
- Hansard - -

rose—

None Portrait The Chair
- Hansard -

Order. Mr Jones wants to speak, but he will have to wait until this afternoon.

Ordered, That the debate be now adjourned.— (Maria Caulfield.)

Telecommunications (Security) Bill (Sixth sitting)

Kevan Jones Excerpts
Committee stage & Committee Debate: 6th sitting: House of Commons
Thursday 21st January 2021

(3 years, 2 months ago)

Public Bill Committees
Read Full debate Telecommunications (Security) Act 2021 View all Telecommunications (Security) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 21 January 2021 - (21 Jan 2021)
None Portrait The Chair
- Hansard -

Before we resume, I have been asked by Mr Speaker to remind people that, when they are not speaking, they should wear a mask. I know this is extremely inconvenient for lots of people, not least me—my glasses steam up. I do not want to be taking names or issuing yellow cards, but may I ask you to try to be mindful of Mr Speaker’s concerns and do the best you can? Hopefully we will all be okay.

Clause 1

Duty to take security measures

Amendment proposed (this day): 21, in clause 1, page 3, line 26, at end insert—

‘(2A) The Secretary of State must make regulations under subsection (1) requiring providers of public electronic communications networks and public electronic communications services to carry out an audit of the goods, services and facilities supplied, provided or made available for the purposes of the provision of their network or service to ascertain whether they present a risk to the security of that network or service.’.—(Chi Onwurah.)

This amendment is a probing amendment designed to learn how the Government plans to ensure network operators have a comprehensive audit of hardware of interest because, for example, it is manufactured by a designated or high-risk vendor.

Question again proposed, That the amendment be made.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
- Hansard - -

I am demasked. Welcome to the Chair, Mr McCabe. It is a pleasure to serve under your chairmanship. The amendment’s intention is similar to that of new clause 7, which we spoke about earlier. My hon. Friend the Member for Newcastle upon Tyne Central is trying to probe, like I was, how we get operators to ensure that there is a full audit of their telecoms networks. This is not an easy situation. I accept what the Minister said about trying to strike a balance between prosperity—not wanting to put undue burdens on operators—and ensuring security. As my hon. Friend said, with her huge expertise in the field, these networks are not static entities; they develop over time. The example that she cited was that some of the kit in networks is many years old, which may now create security issues that were not evident when the equipment was introduced.

We are not talking about too onerous a burden on the network operators, because they are large companies. I accept that they will be resistant to anything that adds cost because, at our insistence of wanting cheaper phone calls and mobile technology, prices are competitive between the various operators. My hon. Friend therefore makes a good point that there must be a clear level playing field between the operators.

The Bill will ensure that existing Huawei kit is taken out by 2027, even though the networks did nothing wrong by putting in that kit in the first place. Without wanting to carry on my campaign against the Cabinet Office, the Intelligence and Security Committee’s 2013 report “Foreign involvement in the Critical National Infrastructure” shows that the Cabinet Office was made aware of BT’s contract with the Chinese company Huawei in 2003. That the Cabinet Office felt it was not important enough to tell Ministers so until 2006 reinforces my point about its role. That brings me to Ofcom and its capacity, which I will come to later. If we want the most robust system, we will need a system by which we know what is in the network.

There are two issues. I think it is possibly easier for future deployments, because we know what we are putting in. In the debate around Huawei and the security risks, I think it has been very clear. Let us be honest: an operator would be very silly to put in a piece of equipment that was deemed to be high risk for any future roll-out. However, as my hon. Friend says, it is what is already in the network. We accept that some of that will be taken out as a result of the Huawei issue, but a huge amount of equipment will still be in there.

That is before we look at software. What saddens me about the entire debate around Huawei and the telecoms sector is that it has been very hardware-centric. We know that the risks to our network from software are greater in some respects; we have seen examples of where network compromise is easier, too. Again, how do we get a robust framework in terms of the audit around software—not just what has already been used, but what will be used in the future?

Chi Onwurah Portrait Chi Onwurah (Newcastle upon Tyne Central) (Lab)
- Hansard - - - Excerpts

My right hon. Friend is making some excellent comments. He has raised another issue, which I perhaps did not highlight in my speech, which is that there might be existing equipment that is not necessarily seen as having a security implication but that, as the network evolves, will pose a security threat in the future. I gave an example in the evidence sessions. Say Amazon Web Services was to be bought by a Chinese company. As our networks move the functionality into the software, that will be running in the cloud over the Amazon Web Services infrastructure, which would have a huge potential security impact. An effective audit of where that equipment is now would be critical to knowing the level of that threat.

Kevan Jones Portrait Mr Jones
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I do not disagree with my hon. Friend. That is why we need to get into the idea of the audit. As I said earlier, we basically need a level playing field for operators; we do not want one to have an advantage over another. We also need a clear picture of what we are asking in terms of the audit. On the point she makes regarding web services and the cloud, there is an issue there that I think is worth referring to. It links today’s Bill with the National Security and Investment Bill, which we were discussing yesterday. There was a lot of discussion around what we define as critical—a point she has already raised.

For yesterday’s Bill, the question was what is critical to national infrastructure—for example, a company that is developing software that is then acquired by a state that we deem is a security risk to us. If that equipment or software is being used in our telecommunications network, does that mean that the network is compromised, and how do we guard against that? There are provisions in the National Security and Investment Bill that enable the Government to stop the acquisition of companies that we consider vital to our national security, but unless we know that in advance, how will we make that decision?

If we have a situation where a small company is providing software for part of our critical national infrastructure for telecoms, how will that be joined up? How will we be able to use the provisions in the National Security and Investment Bill, so that the Business Secretary can block the sale? Likewise, how do we get that connection? We can do that only by the Minister and Ofcom having a very clear indication from day one—I do not think it will be possible from day one, but from some time into it—what is in our network, not just now, but into the future. That will be important.

That brings us to the role of Ofcom. We have seen a development of regulators in this country. I am not a great fan of regulators, because I think it is a way for Ministers to palm off their responsibilities to third parties and then stand back and saying, “If it all goes wrong, it is nothing to do with me, guv—it is these independent organisations.” A long time ago—perhaps it is a bit old-fashioned—the General Post Office used to be responsible for this type of thing, and I am currently reading the excellent new history of GCHQ that has come out, which I recommend to everyone. It is fascinating to read about some of the challenges—things that apply to this Bill—such as, in the first world war, what was conceived as national security and who was responsible for it. Was it the GPO, the military or someone else?

How will Ofcom be able to look at a network and say, “Yes, we are satisfied that there is nothing in there that is a matter of national security”? They do not know. I do not think for one minute that we are going to have a situation whereby this Government or any future Government will suddenly throw so much money at Ofcom that a huge army of inspectors will be climbing up poles and going into operators’ offices to check source codes and so on. That is not going to happen.

From a practical point of view, the operators will have to be responsible for providing that information to Ofcom. Whether it is in the Bill or in the guidance, it must be clear what is expected of operators. It is no good looking back in hindsight and saying, “We should have done that,” when something happens. The operators will just say, “You did not tell us we had to do that,” or, “We didn’t know about that.” It has to be very clear, to prevent a competitive advantage between different companies, that there is one standard. They also have to know what we are asking for. Then, taking the telecoms hat off and putting the national security hat on, from the Government’s point of view, that needs to be very clear as well, because we need to be reassured that the components and software in those networks, now and in the future, are not a national security risk.

That brings us to an issue that I have already raised. I am not someone who thinks that every time we go to bed at night, we should look under the bed to see whether the Chinese are there, unlike some members of the China Research Group, but there is an issue about the way in which China will look at supply chains as a way of getting access, for two reasons. The first is national security. The second is commercial reasons—dominating the market, which is what China has done with Huawei. How will we identify that, without having some type of audit process? I do not think that everything to do with China is bad, but a huge number of the components in all our mobile phones in our pockets today will have come from China, including Ericsson and Nokia hardware.

James Sunderland Portrait James Sunderland (Bracknell) (Con)
- Hansard - - - Excerpts

I am enjoying the right hon. Gentleman’s logic. He talks a lot of sense, which is great. I am really intrigued by his insistence that the Government place these obligations on the National Cyber Security Centre and Ofcom. In my humble view, and knowing how those organisations work, it is likely to be the case that the Joint Forces Intelligence Group, GCHQ or the National Cyber Security Centre inform Government where there have been transgressions of security and breaches. I am intrigued by the counter-logic with where I think we need to be.

Kevan Jones Portrait Mr Jones
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This is a remarkable day. This morning I was told that my contribution to the debate was inspiring, and now I am being told that I am talking sense—I thank the hon. Gentleman for making my day.

The hon. Gentleman is right, but he is also wrong. He is right in the sense that there are threats that will come through GCHQ and others—they will say to operators, “You’ve got to be careful of these things.” Where he is wrong, though, is with the idea that somehow GCHQ can take a guess at what is in the network. It does not have that capability. Going forward—the emphasis in this country, in the Bill, in terms of looking at telecoms security—yes, the bar has been raised substantially.

There will be occasions when GCHQ—it does it already —contacts operators and others to say, “Beware of this software or this thing.” I accept that as a proactive approach, but handling backwards will also be important. How do we have a gold-plated system, whereby we have GCHQ doing what the hon. Member for Bracknell suggested they are already doing, but one that also matches up with operators taking responsibility to say, “We have spotted something and are doing something about it”? It is pulling the two things together.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

Part of the challenge is that the operators do not know themselves and, as we have discussed, there are no incentives for them to find out. To give an example, Virgin Media took over from NTL, which I think took over from the 13 different cable providers in the franchises of the ’80s, and the BT mobile network was bought partially from EE—so there are takeovers and acquisitions, and partners may not know, and do not necessarily have an incentive to find out unless we put in a requirement.

Kevan Jones Portrait Mr Jones
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My hon. Friend makes the point precisely: the way in which telecoms have developed in this country has been piecemeal, only developing now into the four main operators. I hope we will try to get others into the market.

We are to blame for that, as consumers, because we have demanded ever lower prices for our mobile services. Does that suggest that the operators have taken shortcuts? No, I am not suggesting that, but consumer preferences have driven down price, and therefore the costs of what those operators provide in delivering the services that we all take for granted. Let us be honest: the Chinese saw the opening door for Huawei—that is why they bought into and flooded the market, putting Government loans behind it. Can we blame the operators for saying, “Well, actually, this is a good deal—we can get good deals”? But they cannot.

I am interested to know from the Minister how, looking forward, we are going to do that. I accept that something will be done under the regulations that the Government will put out, but how will we look backwards as well? As my hon. Friend the Member for Newcastle upon Tyne Central said, there is a lot of legacy equipment there, and it is important for Ofcom to have a clear understanding of what is in the networks.

Matt Warman Portrait The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)
- Hansard - - - Excerpts

It is a pleasure to serve under your chairmanship, Mr McCabe.

We are redefining UK telecoms security, but I worry that we are also redefining the aspiration of the hon. Member for Newcastle upon Tyne Central to crack on, so I will try to be brief. The good news that I can deliver, briefly, is how the aspirations of both the hon. Lady and the right hon. Member for North Durham are met in the legislation, and how we envisage those aspirations’ being implemented.As the Committee is aware, the Government have published an early draft of the security regulations. Certain draft requirements are relevant to the aims that we have talked about today. If hon. Members look at regulation 3(3)(a), with which they will be familiar if they are insomniacs, they will see a duty for network providers

“to identify, record and reduce the risks of security compromises to which the entire network and each particular function… of the network may be exposed”.

That is already there and key to the issues that hon. Members have been talking about.

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None Portrait The Chair
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This must be down to that productivity seminar they sent me on. Still, nothing lasts forever.

Clause 3

Codes of practice about security measures etc

Kevan Jones Portrait Mr Kevan Jones
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I beg to move amendment 6, in clause 3, page 5, line 4, at end insert—

“(ia) the National Cyber Security Centre;”

This amendment would require the Secretary of State to consult the National Cyber Security Centre on any draft code of practice about security measures under new section 105E.

None Portrait The Chair
- Hansard -

With this it will be convenient to discuss the following:

Amendment 10, in clause 3, page 5, line 8, at end insert—

“(iiia) the National Cyber Security Centre;”

This amendment requires the Secretary of State to consult the National Cyber Security Centre before issuing a code of practice about security measures.

Amendment 5, in clause 4, page 7, line 41, after “OFCOM”, insert—

“and the National Cyber Security Centre”.

This amendment would require providers to inform the National Cyber Security Centre, as well as OFCOM, of any security compromise.

Kevan Jones Portrait Mr Jones
- Hansard - -

We are romping through the Bill, aren’t we? Two clauses in less than 15 minutes.

Again, these amendments are probing. I might sound like a broken record, but my aim with them is to ensure that national security and those who deal with national security decision making are at the centre of the decisions that are taken. Amendment 6 would require the Secretary of State to

“consult the National Cyber Security Centre on any draft code of practice about security measures under new section 105E.”

The Minister will say, “Well, it is self-evident that they will do that,” but going back to my Robin Day analogy from this morning, legislation needs to survive him, me and everyone else. The guidance will change over time, and we have to ensure that whoever is sitting in the Minister’s seat in 10 years’ time—hopefully, it will not be the current Minister, not for any unfair reason, but because he has gone on to higher and better things—the onus is on the Secretary of State to consult. Having that on the face of the Bill, or at least some discussion about it, would reinforce that, because the Secretary of State will move on, and there will be new civil servants, who might not have as clear an indication as the Minister will give today, or perhaps a Minister who thinks that this is the key part.

It might be a bit anorak-ish, but the problem with the national security world, which I inhabit occasionally, is that people can see everything through the national security prism—although I am not sure that that is the case for everyone. It will be important to ensure that the individuals at the National Cyber Security Centre have a real input, and not just to say that they will be consulted. The NCSC, which was introduced at the tail end of the coalition Government, is the only positive thing I can think of that that Government did. We now have a world-beating centre that protects our national security and also does a very strange thing: it looks to the secret world, but also looks outwards, engaging with the industry and individual citizens, too.

That is now being replicated around the world. I chair the science and technology committee of the NATO Parliamentary Assembly. On our visit to the UK the year before last, we visited the centre, and most of my parliamentary colleagues from across the world, including the US, were quite impressed with how it balanced complete secrecy about things that need to be kept secret and having that outward-looking approach. I am really just trying to see how we can ensure that going forward.

Amendment 5 seeks to ensure that the NCSC, as well as Ofcom, is informed of compromises and breaches. I am sure the Minister will tell me that Ofcom and the NCSC have such a symbiotic relationship that that information will automatically be transferred, but again we are assuming a lot about what will be done. It is important that this Committee at least discusses how we ensure that that continues. I will come to Ofcom personnel, but various comments have been made. I asked the head of Ofcom about Ofcom’s expertise in dealing with these issues, and this comes back to the point I made to that witness. This is about mindset. Whether we like it or not, people in the security world think differently from the rest of us in how they approach things. Ofcom will have a learning curve, not only in recruiting the individuals with the capability to do this work, but in ensuring the culture to react to these issues. My two amendments seek to ensure not only that national security is at the heart of the Bill, but that practitioners have a clear focus on national security risk.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

I understand the hon. Lady’s point, and I will come to something that I think will address it in a moment. Before I do, I will speak to amendments 6 and 10, as they would be functionally identical amendments to new section 105F in clause 3.

New section 105F sets out the process for issuing a code of practice. It requires a statutory consultation on a draft code of practice with the providers to whom the code would apply, Ofcom and other persons such as the Secretary of State considers appropriate. The amendments would apply an additional requirement to formally consult the NCSC when publishing a draft code of practice. I can reassure the Committee that we will continue to work closely with technical experts at the NCSC, as we have done over a number of years.

The telecoms supply chain review demonstrated the Department’s capability to work with our intelligence and security experts to produce sound recommendations, backed by the extensive and detailed security analysis that I know Members of all parties would like to see. That initiated the next phase of the collaborative work that culminated in the introduction of the Bill, and the codes of practice continue that theme. The purpose of such codes is to provide technical security guidance on the detailed measures that certain public telecoms providers should take to meet their legal obligations.

We have already been clear that NCSC guidance will form the basis of an initial DCMS-issued code of practice. The NCSC has already developed a set of technical measures that is in the process of being tested with the industry, and those technical measures have been refined and improved over the last two years. The NCSC will continue to update the measures to reflect any changes in the landscape of threats, as the right hon. Member for North Durham described, and the relationship between the work of the DCMS and that of the NCSC means that such changes would be reflected in the code of practice. Alongside the DCMS and Ofcom, the NCSC will play a key role in advising public telecoms providers on how to implement detailed codes of practice.

Kevan Jones Portrait Mr Jones
- Hansard - -

I agree with the Minister, in the sense that I think he and the Secretary of State at the DCMS are committed to there being very close working, but as I said, he ain’t gonna last forever. An issue will come up —in fact, it came up last night on the National Security and Investment Bill—when operators and others say, “Actually, from a commercial point of view, this is more paramount,” or, “This is what we should be doing.” The Secretary of State will come under a lot of pressure to perhaps look at prosperity issues rather than security issues. I just wonder whether, without the relevant provision in this Bill, a future Secretary of State could say, “Well, I’m going to ignore that issue, because I want to pander to”—well, not pander to—“accept the commercial and prosperity arguments.”

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The right hon. Gentleman keeps going on about ministerial impermanence, but I will not take it personally.

Kevan Jones Portrait Mr Jones
- Hansard - -

I talked about promotion.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Too kind! The key part to this is that, obviously, Ofcom remains an independent regulator and will be working closely with others. The right hon. Gentleman makes a fair point about the inevitable balance between national security and a whole host of other issues, but ultimately that independence is absolutely essential. In the light of our long-standing and established working relationships across the DCMS, NCSC and Ofcom, it seems reasonable to say that there is a track record demonstrating what he has asked for. But given the Committee’s interest in the role of the NCSC in this regime, I will just make one last point. Its role is not explicitly described in the Bill, as the NCSC already has a statutory remit, as part of GCHQ, to provide technical security advice and to receive information on telecoms security for the purpose of exercising that function.

The NCSC and Ofcom will very soon publish a statement setting out how they will work together. I think that addresses some of what the hon. Member for Newcastle upon Tyne Central mentioned; I believe she has some familiarity with Ofcom. I think it is right, because they are independent, that that statement comes from them, as well as the Government expressing a view on this. The statement will include information on their respective roles and their approach to sharing information on telecoms security, and it should provide greater clarity, which hon. Members are entirely legitimately asking for, about the NCSC’s role, including how it will support Ofcom’s monitoring, assessment and enforcement of the new security framework.

I hope that the sorts of matters that I have talked about provide the kind of reassurance that Members have asked for.

Kevan Jones Portrait Mr Jones
- Hansard - -

A statement is a welcome step forward, but—the Minister can write to me on this; he need not respond to me today—what is its legal weight? Again, I am not wanting to consider the Minister’s demise, but I would like to know that future Secretaries of State and Ministers will use it as the template and will not be able to say, “Well, we are going to ignore that statement.” That would be very welcome, because it would bind the two organisations together, which is important, and ensure that the security aspects were taken into consideration, but will the Minister just write to me, saying what weight the statement would have? I have to say that I sympathise; I do not like Christmas tree Bills that start having things added on. If it could be done in a complete way, I would be quite happy with that. The only thing that I want to know is, basically, what its status will be in future. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The Committee has already heard me talk about some of this, but I think it important to provide a little more detail. The code of practice, which we have discussed, is a fundamental building block of the regime and will contain more specific information on how telecoms providers can meet their legal duties. It will provide guidance on how, and to what timescale, certain public telecoms providers should comply with their legal obligations, and will be based on technical analysis by the NCSC. Individual measures will therefore reflect the best protections against the most pressing threats to network security. The code will, for example, set out the detailed technical measures that should be taken to segregate and control access to the areas of networks that process and manage customers’ data.

We recognise of course that different companies have different ways of setting up and running their networks, and because our telecoms market is dynamic and competitive, providers range in scale from multinational giants such as Vodafone down to innovative local start-ups. We want therefore to ensure that the code of practice is proportionate, and that public telecoms providers take appropriate security measures.

I will touch as briefly as I can on how we intend to achieve that proportionality through a tiered system. Tier 1 will contain the largest national-scale public telecoms providers. Should any of those providers have a significant security incident, it could bring down services to people and business across the UK. Those operators will have the greatest level of oversight and monitoring from Ofcom. Tier 2 will contain medium-sized public telecoms providers. Those providers may not be as large, but in many cases they are critical to regions and to business connectivity. They are expected to have more time to implement the security measures set out in the code of practice.

Tier 3 will contain the smallest public telecoms providers, including small businesses and micro-enterprises, which, of course, must also comply with the law. They are not anticipated to be subject to the measures in the code of practice, but will need to comply with their legal duties as set out in new sections 105A and 105C, and in any regulations. Our expectation is that Ofcom would regulate those providers more reactively.

New section 105F describes the process for issuing a code of practice. When the Government publish a draft code of practice, we will consult with industry, Ofcom and any other appropriate persons. Specifically, publishing the first code of practice will include consulting on the thresholds of each of the tiers that I have described and on the timings for their implementation. Following the consultation period, and once the code is finalised, it will be published and a copy will be laid before Parliament.

New section 105G gives the Secretary of State the power to withdraw a code of practice. Again, that will follow consultation with industry and Ofcom. A notice of withdrawal will be laid before Parliament. The legal effects of the code of practice are described in new section 105H. To be clear, the code of practice is guidance only; it is an important tool that operators should use to comply with their legal duties.

Kevan Jones Portrait Mr Jones
- Hansard - -

Is the Minister saying that the code of practice is the standard that providers are expected to meet? Is it the legal bare minimum or do we expect them to do more than what is set out in the code of practice? What is the direction of travel?

Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

The legislation places a duty on providers. Meeting the strictures of the code of practice would be the way of demonstrating that they were meeting that duty as an initial step, but of course, we see individual companies making decisions, for a host of reasons, to exceed codes of practice in every area of regulated life,

and I would expect that to continue in the area in question as well.

Where relevant, provisions in a code could be taken into account in legal proceedings before courts or tribunals, which I think gives some sense of their status. That would include any appeals against Ofcom’s regulatory decisions heard by the Competition Appeal Tribunal. Ofcom will take account of the code of practice when carrying out its functions as required in new section 105H(3) in relation to telecoms security, as I have just described.

Under new section 105I, if Ofcom has reasonable grounds for suspecting that a telecoms provider is failing, or has failed, to act in accordance with a code, it can ask public telecoms providers to explain either how they meet the code of practice or, if they do not meet it, why. For example, if the network set-up of a particular telecoms provider meant that it could achieve a level of security equivalent to that in the code by other means, it could explain that in its statement responding to Ofcom. In such a case Ofcom might be satisfied that the provider was complying with its security details, but hon. Members will see that we are again trying to ensure a proportionate approach to the relevant part of the framework.

We believe that the code of practice will provide an appropriately flexible framework, which will be able to change as new security threats evolve, providing clarity for telecoms operators on what is required of them by this new telecoms security framework.

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Matt Warman Portrait Matt Warman
- Hansard - - - Excerpts

Obviously, there could be an overlap in those notification requirements, but our expectation would not be that anyone would receive multiple notifications. That is why there is an emphasis on the nature of communications being clear and obvious to laypeople.

Kevan Jones Portrait Mr Jones
- Hansard - -

Speaking gives me an opportunity to take my face mask off. I will make a few points about clause 4, which is broadly welcome because it clarifies for operators what their responsibilities are, not just from a national security point of view but from a consumer point of view. I think there is an issue, though, which my hon. Friend the Member for Newcastle upon Tyne Central raised.

Again, I do not want the Minister to respond now, but I think the crossover with the Information Commissioner might be one area that we need some clarity on. Is there an example of this? Yes—the TalkTalk case. People might look at this Bill and think national security is about the Russians or the Chinese hacking, but that was a criminal act that led to a lot of people’s data being compromised. From a constituency point of view, as any Member of the House at that time will know, trying to get TalkTalk to do anything about that, in terms of the losses that people incurred, was virtually impossible. That is why these clauses are so important.

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Kevan Jones Portrait Mr Jones
- Hansard - -

My hon. Friend is correct. A lot of the debate has been about hardware, but the biggest threat to our national security, in terms of telecoms, is from hacking and cyber-attacks. The changing nature of the threat is interesting. There are state actors and there is organised crime, acting on of behalf of states, but there is also, as referred to by my hon. Friend, some poor teenager who thought it was a good idea. The TalkTalk case showed the emphasis they put on the security of their network. Not just clause 4, but the whole Bill, puts the onus on the operators, which is why it is so welcome. Never again could they be accused of not knowing their responsibilities.

New section 105J requires providers to take “reasonable” steps to inform users about the risk, the nature of the security compromise, the steps the user could take in response, and the name and details of the person to contact. That is fine, but how to respond might be a matter for Ofcom. That is important, because people might then quickly take steps to stop compromises to their security.

The Bill lays out penalties for telecoms operators, but what about the consumer and people who have lost money because of data breaches? Do I assume that the Bill does not change that? It beefs it up, but I assume that any mitigation or compensation that should be paid to individuals who have been compromised would be an issue for Ofcom. When we had the TalkTalk compromise, getting TalkTalk to do anything was like trying to get blood out of a stone. That is important from the point of view of consumers.

It is important that the Secretary of State is informed, but how will that be done? I presume GCHQ and others would do that. Would that lead to lessons learned or to a notice being given to other operators that that has happened? Would that be done by Ofcom, the National Cyber Security Centre or GCHQ, or would it be a combination of all of them? It comes back to the point made by my hon. Friend the Member for Newcastle upon Tyne Central: this is a risk and this clause puts the onus initially with the operators, where it should be.

Chi Onwurah Portrait Chi Onwurah
- Hansard - - - Excerpts

We are cracking on at such a pace that I lost my place somewhat. I had forgotten that we are now discussing clause 4. My apologies, Mr McCabe.

My right hon. Friend the Member for North Durham has already addressed some of the points that I wanted to make, but let me say that we welcome the duty being placed on providers to report security incidents. I have long campaigned, in relation to cases such as the TalkTalk incident, to make that duty clearer and more comprehensive regarding the information that needs to be shared with users and those who are affected, and for them to have some kind of right of redress, which is effectively part of the Bill.

I welcome the requirement in clause 4 to inform others of security compromises, but will the Minister provide more clarity? There is some indication of the range of actors that the providers and Ofcom must inform, but I do not feel that there is an understanding of the level of information that will be shared with different actors. For example, if the public are to be informed of a security breach, compared with the requirement from the Information Commissioner’s Office, which, as I said, actually goes far enough, what level of information might be shared with other actors, such as other networks? My right hon. Friend talked about who else might be informed. It is also clear that the sharing of information will probably need to evolve over time, as the nature of compromises and their potential reach changes. I wonder how these requirements might be adapted to reflect that.

I will just say a little about the sharing of information with overseas regulators. If that is clearly set out in the Bill, I am unable to find it. Presumably, such data sharing will still have to conform with the requirements of our data protection legislation. Will it also reflect international data-sharing gateways for criminal prosecution purposes?

Those are just some general comments. We welcome the clause.

Matt Warman Portrait Matt Warman
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I will reply briefly. On the point about compensation, essentially new section 105W of the Communications Act 2003, which is inserted by clause 8, covers the civil liability point, which I think opens the door that the right hon. Member for North Durham seeks to open. Then there are the notifications to industry of what is essentially best practice and recent threats. Of course, as he implied, there is a balance to be struck with the existing work of all those involved, but ultimately it would feed into the codes of practice, so there is both an informal and a formal mechanism, if I can put it like that.

On the hon. Lady’s final point about the international sharing of information, it would depend on the nature of the information, as she implied. Some of it would pertain to national security, and some of it would pertain to the kind of criminality that she has spoken about about, where there are existing provisions as well. In that sense, of course, it is all covered by our own data protection regime, which has the sorts of carve-outs I have just described but operates in that holistic framework.

Kevan Jones Portrait Mr Jones
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Will the Minister write to us on the issue of data and the link to the Information Commissioner?

Matt Warman Portrait Matt Warman
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I am not sure I fully understand the right hon. Gentleman’s point.

Kevan Jones Portrait Mr Jones
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I raised the point, as did my hon. Friend the Member for Newcastle upon Tyne Central, that we are asking operators to inform individuals about data compromises. That is welcome, but as my hon. Friend said, there might also be a breach of the Information Commissioner’s regulations, and we just wanted to get some idea of how the two would mesh together. I do not expect the Minister to know now, but could he write to us to say how the two would interact?

Matt Warman Portrait Matt Warman
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As I said in response to the hon. Lady, there is obviously a potential overlap. The focus of this Bill is on clarity of communication to the consumer, but I am very happy to write to the right hon. Gentleman or the Committee with further details of that potential overlap.

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Christian Matheson Portrait Christian Matheson
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I am really grateful for that intervention—not just for the context that my hon. Friend gave, but for prompting me to think that having such a tight-knit sector, and the character of the sector, works both ways. Ofcom might appoint as an inspector to undertake one of the audits somebody who is on very good terms with the business or the provider. They will perhaps take their foot off the pedal and not do quite as thorough an investigation, because they know the business and trust them. As a result, the inspection would not be as thorough.

Kevan Jones Portrait Mr Jones
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My concern is also that the Government do not have a good track record on applying the standards that have been developed over many years to ensure proprieties in public appointments. No doubt somebody who would fit the bill for the role would be Dido Harding, who was responsible for TalkTalk and is now having huge success, as we have been told by the Prime Minister, with Test and Trace. She seems to have a common thread, but success does not seem to be part of that.

Christian Matheson Portrait Christian Matheson
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Who am I to disagree with my right hon. Friend and his years of experience? So far, we have been fairly consensual in this Committee, because we want the Bill to pass. My right hon. Friend is absolutely right: we have seen a certain level of—

Kevan Jones Portrait Mr Jones
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Chumocracy.

Christian Matheson Portrait Christian Matheson
- Hansard - - - Excerpts

I was going to say cronyism, but chumocracy is a far nicer way to put it, and we have seen it in the way consultancy contracts have been dished out during the current crisis. My right hon. Friend is absolutely right to say that there can be as little scope as possible for people who are perhaps not quite as qualified as they should be to be given such jobs.

Christian Matheson Portrait Christian Matheson
- Hansard - - - Excerpts

My hon. Friend says that it is not in the scope of the Bill, but so wide is the definition of “another person” that, quite frankly, anything or anyone could be in the scope of the Bill. Again, the possibility is there, and it would not be down to the Minister. I know him—he is a friend and a man of integrity. As my right hon. Friend the Member for North Durham said, however, the next Minister to come along, in this Government, at least, might not be. Who knows? In four years’ time, we might not have that problem.

This is an important aspect of national security, so I ask the Minister for clarity. It goes to the heart of the question of accountability—where responsibilities for inspections should lie. Similarly, in the second part of the amendment, we are seeking clarity on a limit on the amount that can be spent on inspection. We certainly do not want Ofcom to be swayed into decisions about whether inspections can go ahead based solely on fears that it might wrack up big costs. Nor can those costs be allowed to spiral if the first part of the amendment is not adopted and private contractors are brought in but abuse the system. I refer the Committee to the comments made by my right hon. Friend the Member for North Durham a while ago—such abuse does happen.

It is often not helpful to put a financial cost limit on the face of the Bill, if only because it can become outdated over time. To be honest with you, Mr McCabe, the truth is that the £50,000 limit specified in the amendment is arbitrary. We plucked it out of thin air to illustrate a point.

Kevan Jones Portrait Mr Jones
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I thought that was the case was when I looked at it. Frankly, for anyone to do that job in telecoms for £50,000 would be very unusual.

Christian Matheson Portrait Christian Matheson
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Fortunately, we will not push the amendment to a vote, so we will not have to put that point to the test. It is an arbitrary figure and I hope the Minister will not fixate on it. It simply illustrates the point that there is a question of open-ended costs. We will not push the amendment to a vote, but we think there is a vagueness and a lack of clarity that needs addressing. I urge the Minister to consider these issues and whether Ofcom would be assisted by the greater clarity that these probing amendments would bring.

Telecommunications (Security) Bill (Fourth sitting)

Kevan Jones Excerpts
Dean Russell Portrait Dean Russell
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Thank you. David too?

Dr Cleevely: I would like to echo what Helen said, but in a rather different way. There is an engineering problem, which is what we have been dealing with, but there is also a human behavioural problem. Anybody who has worked in a large corporation or worked on these large projects will know that the way in which people approach the problem, and the way they think about it, the way they want to programme it and the urgency they feel, is driven as much by the psychological issues as it is by the technical. I would urge you to think through how you would encourage the behaviour that you want to see. Now, obviously Government can do that by simply issuing an edict and forcing a deadline, but there may be other ways that you can get more innovation and a more rapid shift than the 2027 deadline, simply by thinking through with the industry—going back to Helen’s point about the engineers on the ground—about what is required. A little bit more detailed thinking on that could yield some very positive result.

Kevan Jones Portrait Mr Kevan Jones (North Durham) (Lab)
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Q Could I just follow up on Dean’s point about the actual date? The date that has been set is 2027, and the equivalent that is going to go in is basically going to be two vendors, Ericsson and Nokia. I think it was you, Mike, who said earlier that there are opportunities for UK diversification. What will drive that? If you have operators who have put brand-new equipment in in the lead-up to 2027, what will be the incentive for those companies to look at alternatives to that?

Mike Fake: That is a difficult problem to solve, but I think it is important that innovation is a powerful force, and you can turn around things in this new world very quickly. Although you have old legacy systems, and you replace everything from overseas vendors with old legacy systems, you need to keep moving forward. In terms of optics, we probably have one of the world’s leading telecom fibre optics innovation capabilities in the world, through the universities. We have a whole bunch of small and medium-sized enterprises out there, and they are struggling to make that step to some scale and to get that innovation deployed in the network. But I think innovation—

Kevan Jones Portrait Mr Jones
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Q Not to cut across you, but, while I accept all that, if from the operator’s point of view they have just invested a lot of capital in ripping out equipment and putting new equipment in up until 2027, what will the incentive then be for those operators necessarily to look at new technologies?

Helen Duncan: I do not think it is necessarily the case that they will just use Ericsson and Nokia equipment. Vodafone, for instance, has committed to equipping something like 2,500 cell sites with open RAN equipment, so they are taking a forward-looking view and trying to stimulate that themselves.

Dr Cleevely: If I may intervene here as well, it is curious, is it not? The economists will tell you that sunk costs are sunk costs and you should always move forward, and that is something to hold on to. Human nature says, “Well, we’ve invested in this—let’s see if we can sweat that asset to make the most of it.” A constructive dialogue with your finance director or chief financial officer is always an essential part of all this, and, for example, it is important to understand what is driving the risk that a company is running, its weighted average cost of capital and its cost of borrowing on the market.

Essentially the point is this: if you can get more business and improve your service, and get more customers and make more money, as a result of doing investment, then that is what you will do. The key point here is whether we can find a way of making it clear and straightforward to the most truculent of finance directors or chief financial officers that this is a good investment for the future. In there lies the key, because you need to get the incentives right.

Chi Onwurah Portrait Chi Onwurah
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Q Welcome to all of you, and thank you so much for joining us. May I say, particularly to Helen Duncan—I should also have mentioned this earlier when we had Heba Bevan—that it is great to have two other female electrical engineers giving evidence to the Committee. I hope we have many more such qualified representatives of the technology sector in Committees in the future.

We have talked a little about how we got here; Helen, you worked for Marconi, and I worked for Northern Telecom, which bought STC, one of our last UK companies providing telecoms equipment. Without putting words into your mouth, I think the situation could be characterised by a lack of investment in innovation and in British sovereign capability. Now that we are seeking to reverse that, or to jump ahead of that, what interventions could best guarantee the long-term security and resilience of the UK telecoms network, with UK sovereign capability supporting it? Is the £250 million diversification strategy set to achieve that? Can you give examples—I am looking for quite concrete examples—of what you might add or change? David, you talked about needing to give the right incentives to the mobile operators. The telecoms supply chain review was quite clear that there is not an incentive right now in the supply chain to deliver security in mobile networks. What interventions and what incentives should there be?

Helen Duncan: Starting from how we got into this situation, in the 1990s we had three incumbent base station manufacturing companies in the UK, which were Orbitel in Nottinghamshire, and Motorola and Lucent Technologies, both in Swindon. They survived for different lengths of time: Orbitel closed down in 1996 when Ericsson took over, Motorola ceased base station manufacturing in 2002, but stayed open and was then sold to Nokia, and Lucent became Alcatel-Lucent and was closed down. Mergers and acquisitions have clearly played a huge part, as did the dotcom bubble and, as I mentioned, the removal of funding from the defence sector.

Heba made the point that to support semiconductor manufacture in the UK, the £250 million would not even start to scratch the surface. We need to concentrate a little bit further up the food chain. We have some very good capability in this country in component and subsystem manufacture based around the chips. We have some good design capability for chips that are then manufactured in the larger foundries elsewhere in the world. Supporting those activities, the design and the manufacture of components and subsystems, would give us a good basis and improve resilience.

I also want to mention that we have some capability in this country in the test and measurement sector with Spirent and VIAVI Solutions—although VIAVI is an American-owned company, it manufactures RF and wireless test equipment in the UK. By definition, test is ahead of the curve on development. If you can make equipment to test something, you can actually make that equipment, because it is much more complicated to make the test equipment than it is to make the base station or the handset itself. Those companies deserve our support as well. That was a very long question, Chi; I am not sure I covered every aspect you were asking about.

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None Portrait The Chair
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We have about 11 minutes left. I will go to Kevan Jones, who I think had a question that was prompted by a reply to the Minister. Then I will try to go back to Chi and to the Minister before we finish.

Kevan Jones Portrait Mr Jones
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Q It is just a quick one. We are talking a lot about Government, and what Government can do, which is fine. But when it comes to attracting sufficient private sector investment in some of these emerging technologies, how will you kick-start that? I ask because that will be the acid test for growing some of these companies.

Helen Duncan: I think hardware technology has a very poor image with investors and we could probably take an initiative to try to improve that, including trying to attract the right people to take up careers in hardware rather than software, as it is seemingly becoming not so glamorous but it underpins the whole thing.

Dr Cleevely: Helen, I think you are right. It is very interesting that these days, if you want to get investment in a company—I have personal experience of this—you present it as a software company that needs a little bit of hardware to make the software work; you do not say at all that it is a hardware company. That is one thing to note.

More seriously, on the general point about private investment and interest in these things, this is a matter of setting up the rules of the game so that it makes sense for the private investors and the private people to get involved. None of this is achieved by Government; none of it is entirely achieved, indeed, by the private sector. This is one of these areas, these issues, where you need to think about how Government set the rules up and set the incentive structure so that the private sector explores the environment—because Government cannot work out exactly how this is going to turn out. The private sector can then explore it. That is why, for example, procurement is so important. If you can procure from a number of different sources and encourage people to move forward, you will explore the possibilities of innovation much more rapidly than any single company or any single Government can. We need to construct the rules of the game so that the private sector can start to deliver what the private sector is really good at. I talked about oiling the wheels; I am talking about unblocking drains at this point. We really need to make sure that the mechanism is working properly.

Mike Fake: I would support that. I will just add that some of the mechanisms that we could explore are things like the competitions where Government put in a certain amount and private industry puts in a matching amount, but it has to be significant; it has to be a large investment—something that will make a difference, something that will take the thing from the early innovation stage through to full-scale manufacture, in the UK.

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James Wild Portrait James Wild (North West Norfolk) (Con)
- Hansard - - - Excerpts

Q What is your view on the implications of the Biden Administration for potential American involvement in the diversification strategy in telecoms more broadly?

Doug Brake: That is a good question. A lot of people are asking that question and trying to figure out exactly where this will go. I think that at a high level we have passed through the confrontation with Huawei and China over some of these innovational mercantilist policies that we have seen, which have undermined the global innovation of wireless equipment. I don’t think that will change at a high level. No politician in Washington in the US wants to be seen as soft on China. I think there will continue to be policies that attempt to roll back some of the innovation mercantilism that we have seen in the wireless equipment space. I expect and hope that it will be done with a more measured and co-ordinated effort with like-minded allies such as the UK and with less scattershot policies across the US Government.

What we have seen over the last several years in the United States is a variety of different agencies doing what they can to mitigate the risks. It is less a co-ordinated whole of Government approach in the US and more a disjointed and fragmented policy response across different agencies, so I am hopeful that under a Biden Administration we will see a much more co-ordinated effort and one that is more co-operative with allies.

Kevan Jones Portrait Mr Jones
- Hansard - -

Q Regarding that co-operation between nations, clearly it has not just been the UK that has responded to the threat from Huawei; we were forced to go down our present track by the American sanctions against China over semiconductors. Going forward, how do you see that co-operation developing and how do we prevent a situation whereby, with its scale and obviously its resources, the United States dominates any future standards and also technology areas? They might talk about co-operation, which they do in a lot of areas, but when it comes down to brass tacks, it is America first in terms of business. And that is not a Trump comment.

Doug Brake: It is a good question. To start with, I will take the first part of your question, with regard to the export controls that the Administration put in place with the aim of trying to kneecap Huawei; I think it is fair to say that.

First, from our perspective, ours was not a very well-thought-through strategy—right? Without co-ordination and without a broad coalition to address those sorts of trade practices, in effect in the US we really only shot ourselves in the foot. It undermined any of the technology companies or equipment providers that were attempting to sell components and chips to Huawei. So to my mind, if you are not going to succeed in killing Huawei, or if there are ineffective strategies that undermine your own industry, I am hopeful and expectant that we will see a change in the policy going forward.

That said, if there was a desire from a broader coalition internationally to make some more extensive efforts—something like a NATO for trade, to address these unfair practices—that could be a very effective strategy, if it was done with a broader coalition.

In answer to your second question, the long-term goal of diversification of the radio access network supply chain is to allow for a much more diverse and modular system, in which any number of companies can compete within different niche areas of the market. Admittedly, there are some areas of that—high-performance, generic server infrastructure, as well as software—that the US does quite well. However, I think that opening up the supply chain would allow for a number of companies internationally to compete quite strongly.

Also I think there is a question about the extent to which different countries are willing to aggressively pursue an industrial strategy to support the sort of change that could give them a potential comparative advantage in pursuing this sort of transformational change to the telecommunications supply chain.

Kevan Jones Portrait Mr Jones
- Hansard - -

Q Regarding the ban on semiconductors, obviously that is worth a lot to the US in terms of exports, mainly to China. Do you see that changing? Also, do you think there is a danger—not in the short term, obviously, but in the longer term—that China will then create a separate semiconductor market, which could be a threat not only to the US but to others, in that they will buy into markets and try to get standards that are different from those of the US?

Doug Brake: I think it is absolutely right that there is a real risk if we cut off supply to China, particularly in semiconductors. We have already seen an aggressive action on their part to stand up an indigenous semiconductor industry. This is getting a little outside of my area of expertise; semiconductors is not some place that I know super well. However, I think that it is absolutely correct that there is a real risk that the extent to which we try to cut off Chinese companies will see them double down efforts to create their own indigenous supply chain. So—absolutely.

I am hopeful that we see either a change to that or a much broader international coalition to double down on those efforts. I think that it is more likely that we will see a Biden Administration ease some of those restrictions, or work through the current legal means to allow for licences for companies to sell semiconductors to Huawei and others.

Dean Russell Portrait Dean Russell
- Hansard - - - Excerpts

Q During my previous career as a physics researcher many years ago, I was fortunate to work at places such as the Advanced Photon Source synchrotron facility in Argonne, Illinois. I worked extensively in the semiconductor space, looking at materials such gallium nitride and other group III nitrides. What I learned back then, working very extensively with American scientists and scientists from around the world, was the importance of that root-and-branch look at semiconductors, innovation and having a decades-long view. From your perspective, how much does that fit in with a joined-up international approach to create diversity, both at the end stage and at the really early research stage?

Doug Brake: That is absolutely right. This is a long-term effort. I worry about some who tout ORAN as something of a silver bullet that we can make a quick transition to, that it is a flash cut for existing equipment providers to an open RAN sort of system—a more modular and diverse ecosystem. It is something that is going to take a number of years. I honestly worry that it is late for ORAN to be incorporated into 5G, at least on a broad scale. For greenfield networks, it is a different story and it might make sense to go with these open and modular systems from the get-go.

I worry that this is much more a conversation about putting in the tools, resources, testing facilities, the labs, R&D, et cetera, to put us on a path for years down the road so that this becomes the industry standard. I do think, absolutely, that this is the time to be looking at those early stage investments to be driving further and, frankly, looking down the road to 6G, to be able to put in place the policies and efforts to transition the industry to this more diverse future, and put those in place now for years to come.