Telecommunications (Security) Bill (Fourth sitting)

(Limited Text - Ministerial Extracts only)

Committee Debate: 4th sitting: House of Commons
Tuesday 19th January 2021 Public Bill Committees

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)]

Q Thank you, Mr McCabe, and thank you to all the witnesses, and particularly Dr Sellars for the map of UK brilliance, which is really appreciated. In short—given that we have four minutes—we have £250 million of this diversification funding to spend over the next three years or so. My question to you three is simply how you would spend it. Thirty seconds each: 250 million quid.

Dr Sellars: I would prioritise the funding in terms of where the vulnerabilities are in the network, in terms of the ability of the UK to fulfil those vulnerabilities and in terms of what markets it would open up. There are specific parts in the telecoms stack that are likely to be more vulnerable than others, where the UK has prime capability and where we could then develop an export opportunity. I can provide some more detailed answers in writing if that is helpful.

Dr Johnson: For my 30 seconds I would spend it on basic research, cementing the intellectual property position of the UK.

Heba Bevan: I would agree with Dr Sellars—Andy: we need to increase the amount of spending around vulnerability and strengthening the network. One other point is about spending it on areas outside the UK so it would generate more jobs around the north.

[The Chair]

Chi, I think you had something outstanding, and you have got just about a minute and a bit to do it.

[The Chair]

Did you have anything else, Minister?

[Matt Warman]

Not that we can do in 90 seconds.

[The Chair]

I am sorry we had to hurry you a bit, there, but we are trying to get through quite a lot this afternoon. Can I just thank all our witnesses for your evidence and the extra bits that you said you would possibly forward to us. That would be much appreciated. Thank you, on behalf of the Committee. That brings this session to a close.

Examination of Witnesses

Dr David Cleevely, Helen Duncan and Mike Fake gave evidence.

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[The Chair]

I am just going to go to the Minister, and then I will come back.

[Matt Warman]

Q Thank you for the evidence you have given so far. It seems to me, over the course of a lot of the evidence that we have heard over the last several sessions, that there is a lot of consensus on standards being hugely important and on building on clusters, in both existing businesses and the networks that David was just talking about. If you look into the short and medium term, what are the immediate interventions that you would make, rather than the longer term things to build up in the next few years?

Dr Cleevely: Thank you, Minister. On the short-term stuff, I am very reluctant to dash in on some of these things. I have started a few businesses. It is always a mistake to try to spend money too quickly, because you do not quite know how it is working, but if you are asking me where I would specifically spend some money, I would start to spend it on groups of people and existing researchers, connecting them up, having seminars and workshops, starting to fund little bits of research, opening up some competitions, and getting some ideas for where the standards might be—putting oil in a mechanism that has seized up and become somewhat rusty.

With relatively little money—we are talking about nothing like Heba’s amounts that you need to spend on a fab plant—I think you could free up a lot of stuff, but you need to put in, at the same time, quite a lot of investment in monitoring all of that, so that you are learning from the process. There are a lot of brilliant engineers and brilliant people in the United Kingdom. My impression is that we do not do enough to connect them up, so my first action would be to use the catapults, the academies, our brilliant universities and fabulous corporations.

Honestly, as we have already heard, we have some marvellous stuff going on in telecoms manufacture. Start to bring those people together. That costs money to service and to actually make it work. That is where I would start, and I would have a framework for what kind of information we were going to get out of that, so that it was not just a nice party, as good as that is, or a talking shop. A distributed catapult would be one way of thinking about it.

Helen Duncan: I absolutely agree with what David has just said. I would also suggest one specific area where some intervention could be very timely, given that a lot of antenna engineers were made redundant just before Christmas when a company called Axell Wireless went into administration. Antennas have not been mentioned, but Huawei holds an awful lot of intellectual property in antennas. That will be a weakness going forward. In the past, we had some significant antenna capability in this country, most of which was bought up by Cobham, which has now said it has no interest in telecoms at all. It was because they sold Axell Wireless that it has now gone into administration. That is a specific case, but it is just one example of an area where it is not too late to reverse a particular trend.

Mike Fake: I completely support David and Helen’s comments.

[The Chair]

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.

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[The Chair]

I am going back to the Minister, Chi, because I am conscious of time.

[Matt Warman]

Q Thank you. It is a very simply question in some ways in that it follows up on a lot of what David has been saying. Obviously, when we have talked about £250 million, that is to work with the private sector, and where we have run test beds and trialled programmes, we have talked about match funding. Presumably, you would think that is a sensible approach, but I wonder what you think the limits, or what a reasonable proportion of Government investment in a company might look like, rather than simply the traditional match-funding model. I know this is sort of “how long is a piece of string”, but in terms of stakes and all that sort of thing, there is obviously a spectrum, isn’t there?

Dr Cleevely: Well, Minister, my instinct is not for the Government to not take stakes in companies, so I think that that is beginning a distortion of—

[Matt Warman]

That is perhaps not the phrase, but you get the gist.

Dr Cleevely: The primary way to do it is: first, let’s set the rules and regulations. Secondly, let’s put some pump priming into the networks to allow people to talk. Thirdly, let’s see if we can get the procurement sorted out so that these companies can actually get the lifeblood pumping through them. Fourthly, if you really need to, because of security or other strategic interests, are there things such as the British Business Bank or other mechanisms that can act as intermediaries? You do not want the Government directly intervening in this stuff. That is the hierarchy in which you deal with this. On exactly how that works in a particular case, I have not spent enough time thinking of a detailed response.

[The Chair]

I am afraid we have run out of time. I know we could have gone on a bit longer, but thanks very much to our witnesses. That concludes this session.

Examination of Witness

Doug Brake gave evidence.

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[The Chair]

I am just going to interrupt you there. I am sorry, but I am conscious of time and I want to give the Minister a fair opportunity.

[Matt Warman]

Q Thank you for that interesting evidence. This follows on from Chi’s question, in a sense. I think it goes without saying that we will be very keen to work with America in the future, and the opportunity to do so is significant. I have held conversations with my Swedish and Finnish counterparts, but when it comes to further international co-operation, if you were in my position, where would you look to first? Do you think the Bill is forward leaning enough to bring that collaboration up a gear, if that makes sense?

Doug Brake: I think there are two different opportunities. First, in the efforts of diversification, this is necessarily a globalised sector. The incumbents are massive companies with huge global economies of scale, so in order to transform the industry structure, it is going to have to be a global effort. We need all the countries aiming in this general strategic direction.

I think the document is sufficiently forward leaning. At a high level, one of the most important first steps is identifying this as a strategic imperative—that this is a goal that is shared by Governments across the world—and taking a genuine interest and focus, especially on the level of venture capital investment. Just the creation of the document is a hugely important first step. As for continued research, the real focus is on research and development and test beds. They are the key tools that we need to test and scale up, to identify real challenges and complexity.

I am not sure if this quite fits the answer, but there is a challenge around systems integration. We need to identify real leaders in systems integration. When you have real risk in pulling together different components from different suppliers, into what is essentially critical infrastructure, the risk of failure—at least, the downsides of failure—is extreme, so operators are often eager to have a single company that they can go to if something goes wrong, which can integrate all the different components. There is an important opportunity, to the extent that policy can help support those efforts.

There is all sorts of opportunity for global collaboration and for rowing towards the direction of this diverse supply chain. I think you have put together a very thoughtful piece in moving that forward. Then again, I go back to saying that this is not a silver bullet in addressing the long-term challenges around innovation mercantilism from China and Chinese companies. I think there should be more co-ordination and collaboration, especially when it comes to trade policy. Again, this is outside my area of expertise—I am 5G, specifically—but the more we can co-ordinate to be honest and up front about the real challenges and work to scale back the problem, the better.

[Matt Warman]

Q On that long-term point, do you think that both the Bill and the strategy allow Government to retain the kind of flexibility we will need for them to persist for the long term? We do not want to be revisiting primary legislation too often on this, even though we obviously need to keep aspects of it under review?

Doug Brake: I think that this is absolutely the right direction to be moving in. Clearly, you need the tools to be able to analyse the risk, identify high-risk vendors and work away from potential security risks associated with that. So, absolutely, you need the tools, but there is always a broad challenge when it comes to cyber-security of the negative extra challenges, where private-sector providers might not always face all the downside of cyber-security breaches.

You can solve that by increasing the cost and increasing the downside to cyber-security risk. I think it is much wiser to help work with Government to lower the cost of doing cyber-security well. The UK, from what I can tell, is a real leader in this regard, setting up NCSC. To be able to work closely the private sector, to identify those risks and eliminate them, is much better than just turning up the dial on the downside to cyber-security breaches, or things of that nature.

I would tweak the Bill in that direction. I guess much of this can be done through implementing regulations, but, to my mind, focus more on collaboration and co-ordination with the private sector, rather than simply increasing the downside as well as the compliance costs with the legislation.

[The Chair]

I think that brings us virtually to time. Thank you, Mr Brake, for your evidence. That was the final evidence session for the Bill, so I thank all the witnesses. The Committee meets again on Thursday morning for line-by-line consideration. I believe that will be at 11.30 am in Committee Room 14.

Ordered, That further consideration be now adjourned. —(Maria Caulfield.)