Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2026

Tuesday 27th October 2026 Grand Committee

Considered in Grand Committee

15:45

Moved by

[Baroness Anderson of Stoke-on-Trent]

That the Grand Committee do consider the Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2026.

Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).

[Captain of the King’s Bodyguard of the Yeomen of the Guard and Deputy Chief Whip (Baroness Anderson of Stoke-on-Trent) (Lab)]

My Lords, first, I apologise that you have the B team, as I think we are referring to ourselves today. My noble friend Lady Twycross has unfortunately been taken ill and I am sure that, on behalf of the Committee, we will be sending her our best wishes.

Telecommunications networks and services underpin the modern economy and society of the UK, enabling businesses in every sector of the economy to function and grow, and ensuring that individuals everywhere are connected and digitally included. These networks support critical national infrastructure and services that people and public bodies rely on every day, including calls to emergency services, ambulance and hospital communications, and medical alarms. The Government have committed to ensuring that everyone has access to high-quality, secure and resilient digital connectivity. A sudden disruption to connectivity services would have a serious impact on individuals and businesses across the country that depend on reliable telecommunications networks.

On Monday 5 October, BT Group plc announced that it had acquired TalkTalk Telecom Group out of administration. As has been widely reported, it had been seeking a buyer for its consumer and wholesale businesses for some time, but no deal was reached. Given the possibility that the disconnection of TalkTalk’s customers could put lives at risk and disrupt the continuity of the supply of telecommunications, on 5 October the Secretary of State issued a public interest intervention notice under the Enterprise Act 2002. Under that Act, the Secretary of State may issue a public interest intervention notice where they believe that one or more of the public interest considerations specified in Section 58 of the Act may be relevant. It also allows for the Secretary of State to specify a public interest consideration that is not specified, but in their opinion ought to be. Where a new public interest consideration is specified, the Secretary of State is required to seek to have that consideration specified in Section 58 of the Act as soon as practicable.

The considerations that the Secretary of State specified in the public interest intervention notice of 5 October were: the need to maintain in the UK the capability to combat and mitigate the effect of public health emergencies; and the need to maintain in the UK the continuity of the supply of telecommunications services for the purposes of preventing disruption to the economy and society of the United Kingdom, including in particular disruption to public services, critical national infrastructure and the supply to customers who are or may be vulnerable.

The first of these, relating to public health emergencies, is already specified in Section 58 of the Enterprise Act 2002, while the second, relating to the need to maintain the continuity of the supply of telecommunications services, is a new consideration which the Secretary of State believes ought to be specified in the Act. Introducing this new consideration will allow the Secretary of State to have regard to a broader range of considerations and impacts that may arise within the specific context of a qualifying merger, where there are concerns about widespread and/or significant disruptions to telecommunications services. This would include considerations around maintaining critical national infrastructure connections and the impacts on society and the economy of widespread or significant prolonged connectivity disruption. Such disruption could affect businesses, employment and government services. Critically, this enables the Secretary of State to consider the impact on vulnerable people such as those who rely on telecare services, people with disabilities and health conditions, older people and people dependent on communications services to access emergency assistance.

This kind of intervention is not unprecedented. New public interest considerations have been specified in this manner before to address urgent matters—for example, the public interest consideration in maintaining the stability of the UK financial system was introduced for the Lloyds TSB Group plc/HBOS plc merger in 2008.

We believe it is important that the legislative framework is now updated to reflect the importance of telecommunications in our society and to guard against the serious consequences that widespread disruption of connectivity could have. The Secretary of State’s intervention in the BT/TalkTalk merger is driven by serious concerns that there could be sudden disruption to vital broadband and phone services affecting millions of people. The Government have a responsibility to protect the public where essential services could be put at risk. That is why the Secretary of State is intervening to ensure that wider risks to the public are properly considered alongside competition concerns.

The Competition and Markets Authority has reported to the Secretary of State with an assessment of competition considerations and a summary of representations received on public interest considerations; this was provided on 19 October. The Secretary of State will consider the Competition and Markets Authority’s report alongside wider evidence of the public interest considerations. Only then will the Secretary of State decide whether to refer the case for a more detailed investigation on competition or public interest grounds or both, or to clear the transaction without any further investigation. The Government are committed to promoting competition in the broadband market and our statement of strategic priorities highlights the importance of this. The UK has a strong pro-competition regulatory framework environment that has supported significant commercial investment in fibre broadband across the UK.

The order does not determine the outcome of the merger process. It will, however, serve to allow the Secretary of State to consider the potential impact of significant disruptions to telecommunications services on public services and wider society, alongside the public health emergencies consideration, also mentioned in the intervention notice, and any competition issues. I hope that noble Lords will agree with the rationale I have presented on the need for the legislative framework to be updated so that these important considerations can be accounted for going forward. I beg to move.

[Lord Lansley (Con)]

My Lords, I am grateful to the Minister, not least for stepping in and giving us the opportunity to hear such a clear exposition of the purpose of the order that we are debating this afternoon. Of course, the order adds continuity of telecommunications services to the public interest considerations specified under the Enterprise Act 2002. If these things are a minority sport, I am sorry to say that I have been playing it a long time, as I was on the Standing Committee on the Enterprise Bill in 2002 and was also around when, under the Communications Act, we put the news media and others into the specified considerations. I also probably participated in debates in 2020 putting public health into the specified considerations.

This is a short debate with a limited number of participants, but it is quite an important debate. In the past, adding specified considerations has always been regarded as a significant step that we should consider very carefully. This order, which puts this issue into the specified considerations for when the public interest intervention notice can be issued, is a recognition of the importance of the objective. Things such emergency calls, hospital communications, medical alarms and the activities of businesses dependent on reliable connectivity are all important and we must protect those services. Indeed, the particular point of this is to protect vulnerable customers.

However, the order also extends ministerial discretion within merger control. We should therefore examine how that discretion will be exercised, how competition will be preserved or promoted, and whether another framework for company failure could reduce the need to rely on it. The immediate context is BT’s acquisition of TalkTalk’s consumer and wholesale businesses. Ofcom has explained that failure could affect vulnerable customers served indirectly through resellers as well as people whose telephone numbers have been transferred from TalkTalk to other providers but whose services still depend on its network. Those are serious risks. Nevertheless, customers also have a lasting interest in effective competition, choice, fair prices, innovation and investment. The acquisition of a competitor by a dominant operator requires proper examination, even where the circumstances demand urgency.

I am not asking the Minister to prejudge the Competition and Markets Authority’s conclusions. Indeed, we do not know what its conclusions are. The letter was delivered in the afternoon of 19 October and the conclusions have not yet been published. I am however asking for assurance that the public interest consideration will supplement rigorous competition scrutiny and will not become a reason to dispense with it.

Under this framework, the Secretary of State determines the overall public interest outcome. Following a detailed investigation, she must accept the CMA’s finding on whether there is an anti-competitive outcome, but she may weigh that against the specified public interest considerations. The choice of remedies, therefore, involves ministerial judgment.

That distinction matters. A conclusion that an acquisition is necessary to preserve services does not establish that every competition remedy would threaten continuity. A remedy protecting wholesale access or competing providers may be entirely compatible with uninterrupted service. Any decision to reject, weaken or defer a recommended pro-competition remedy should, therefore, be specifically justified.

That brings me to the alternative approach to which I referred. On 17 March this year, during Ofcom’s analyst and investor call, Natalie Black, who is Ofcom’s group director for infrastructure and connectivity, stated:

“We don’t have a special administration regime in the UK”.


She described arrangements for protecting consumers in co-operation with the department, but she identified no statutory telecoms special administration regime.

Water legislation provides an instructive comparison. It expressly provides for continuity following a licensed supplier’s exit and allows Ofwat to direct eligible replacement suppliers to take responsibility. The eligibility requirements qualify that power, but the mechanism exists. The telecommunications industry has arrangements that it describes as the “supplier of last resort”. The published process relies on best efforts by upstream providers, envisages eventual disconnection and would be superseded by an administration. It does not, therefore, provide statutory customer allocation, as in the water industry case.

So, should we consider a framework that allows Ofcom to seek a court-appointed special administrator to maintain essential networks while a business is restructured or transferred, alongside arrangements for replacement suppliers to take responsibility for customers? Such a framework would not necessarily remove every need for this public interest consideration, but it could reduce the need to invoke continuity as a justification for accepting what might potentially be lasting competition harm. A statutory special administration regime could, therefore, address both problems by maintaining essential services during failure and ensuring that customers could be transferred in an orderly manner if the business could not be saved.

Such a regime would require legislation, appropriate funding arrangements and design. However, in the first instance, the Government could establish which elements Ofcom could introduce under its existing powers and which additional powers would then be required from Parliament. The choice should not be presented as one between continuity and competition; a properly designed failure regime could protect both. It could keep essential services operating, give regulators time to identify alternative purchases, enable orderly customer transfers and ensure that competition remedies were properly tested before any acquisition was approved.

I ask the Minister to respond on four points. First, can she confirm that the Government will treat effective Competition and Markets Authority competition remedies as a priority objective, and depart from them only where the Secretary of State publishes a clear explanation of both the continuity risk and why a pro-competitive option would not suffice?

Secondly, will she ensure that the CMA’s report on the BT and TalkTalk transaction is made available to Parliament promptly, subject to the necessary confidentiality protections? I would have liked to have seen it and read it, together with the Government’s response and the reasons for any decision affecting competition, before this debate, but, clearly, that has not happened.

Thirdly, can the Minister commit to requiring that any undertakings accepted in the public interest contain precise obligations, independent monitoring and meaningful consequences for breaches—including protections for wholesale customers, resellers and competing providers, where necessary?

Fourthly, I ask the Minister to review with Ofcom the case for a telecommunications special administration regime, including statutory customer allocation arrangements, and to publish the conclusions from such a review with a timetable for deciding whether legislation is required.

16:00

From my point of view, the principle is straightforward. Customers should not lose essential services because a provider fails, but neither should the risk of failure be used to justify a permanent and avoidable weakening of competition. This order should therefore be accompanied by a firm commitment to build a framework that protects continuity during failure, preserves customer choice and ensures that any exceptional intervention is transparent, proportionate and consistent with the long-term consumer interest in effective competition.

[Lord Fox (LD)]

My Lords, it is always a pleasure to speak in the same debate as the noble Lord, Lord Lansley, who has been his normal comprehensive self. I will touch on many similar themes, with one or two additional ones. I thank the noble Baroness, Lady Anderson, for introducing this order, and I think we all hope that the noble Baroness, Lady Twycross, quickly recovers and is back in her place.

From these Benches—or chairs—we accept that the Government faced a real emergency at the start of this month and that they had to act quickly. The facts are stark. TalkTalk had about 2.5 million customers after a long and unsuccessful sale process, and it was on the brink of liquidation. Around 250,000 of those customers are vulnerable, and many rely on telecare alarms and monitoring devices that need a working connection. TalkTalk’s network also carries traffic for schools, hospitals, emergency care and businesses across our critical national infrastructure. A sudden and disorderly collapse was not an option for any responsible Government to contemplate—I will come back to that issue shortly.

Therefore, of course we do not oppose this order. In our view, adding the continuity of supply of telecommunications services to the public interest considerations in Section 58 follows a sensible line. Financial stability was added, as we have heard, during the 2008 crisis, and public health emergencies during the pandemic. Telecoms are now as essential to our economy and our society as either of these—and, indeed, one might ask why it took a crisis to get this on to the list.

However, supporting the principle does not mean that waving the order through without scrutiny is a good idea. I will raise four sets of concerns, some of which touch on what we heard from the noble Lord, Lord Lansley, but the first does not, and that is process. This order was made at 4.07 pm on 12 October, laid an hour later and came into force the next day. The public interest intervention notice was issued on 5 October, a week before the order existed, and already relied on this proposed new ground. In other words, the Government issued a notice on a public interest consideration that was not yet law and then made the law to match the notice. That was highlighted by the Secondary Legislation Scrutiny Committee and should be noted by this Committee.

I understand why the Government acted at speed, but Parliament is now being asked to approve, after the event, a power that was already shaping a live merger case. Can the Minister confirm what legal advice the Government took on issuing a notice that cited a ground not yet on the statute book? Will the Minister accept that this way of legislating should be the rare exception—perhaps a unique exception, I suggest—and must not become a template?

The second point is competition—the noble Lord, Lord Lansley, has touched on that already. Let us be clear about what the public interest mechanism does. It allows the Secretary of State to weigh broader considerations against the competition assessment and, if she chooses, to override it. This is a very significant power, and here it is being exercised in favour of the incumbent, or it would be.

After this acquisition, BT’s share of the retail broadband market will rise significantly. Openreach, which, as we know, is BT’s own wholesale arm, is TalkTalk’s largest supplier. TalkTalk’s wholesale business, PlatformX, serves other providers which now find their supplier owned by their biggest competitor. Rival operators have publicly called this a stitch-up presented as a rescue. I do not say that that charge is right, but the Government must be able to show that it is wrong.

The CMA delivered its report to the Secretary of State on 19 October and its contents have not yet been published, so I ask the Minister: will that report be published so that Parliament and the market can see the competition analysis that the Secretary of State is weighing? Will the Government commit that any clearance will come with robust, enforceable undertakings? Those should cover wholesale access on fair terms for PlatformX customers, protections for retail prices and choice, and a firm ring-fence between Openreach and BT’s retail arm in how TalkTalk customers are treated. What is the Government’s assessment of the effect on the altnets, whose investment has done so much to bring competition into full fibre?

The third issue is the gap that this order exposes—again, the noble Lord, Lord Lansley, raised the same issue. BT’s own briefing makes the point frankly: energy and water have special administration regimes and gas and electricity retail have a supplier of last resort regime. Telecom has neither. When a major provider fails, our only real lever is to find a buyer and in practice, that buyer is likely to be the largest player in the market. That is not a resilience strategy; it is just hope.

This order treats a symptom. It gives the Secretary of State a merger tool but it does nothing for the next failure where no buyer appears, or where the other buyer is one whose acquisition would do lasting damage to the competition. Will the Government commit to consult in this Session on a special administration regime for systematically important telecoms providers? Will they ask Ofcom to advise on a supplier of last resort mechanism, especially for vulnerable customers and telecare users? These are the people who matter most as the digital voice switchover continues. Those protections should not depend on whether a willing buyer happens to exist.

The fourth issue is on security and definitions. BT told Ofcom that TalkTalk still runs Huawei equipment in parts of its network and said that legacy network will be kept entirely separate. Can the Minister tell us how that separation will be monitored, by whom, and on what timetable the Telecommunications (Security) Act removal requirements will be met? The noble Baronesses on the ministerial side were not in Parliament when we debated this in full, and Parliament’s will was very clear that this technology should be removed from our telecoms supply chain. On drafting, new subsection (2EA) refers to telecommunications services without defining the term, so can the Minister confirm what the definition is intended to be? Does it extend beyond fixed and mobile access to the data centres, cloud and interconnection services on which our digital economy now depends? As we debate the cyber security and resilience Bill, we need a consistent view as to what counts as critical digital infrastructure, rather than one definition in each statute.

The Government acted to prevent real harm to real people and for that they deserve credit, but an emergency fix carries obligations. It must be transparent, so publish the CMA report. It must be competitive, so impose strong undertakings, and it must be followed by a proper, durable framework for telecoms failure, so that next time Ministers are not legislating against the clock to approve a deal that has already happened. I look forward to the Minister’s reply.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I too thank the noble Baroness, Lady Anderson, for bringing forward this order for scrutiny and for so gamely stepping in at the last minute. We wish the noble Baroness, Lady Twycross, well for a speedy recovery.

This secondary legislation would enable the Secretary of State to take into account a wider range of public interest considerations when deciding whether to intervene in takeovers in the telecommunications sector. The department has argued that this merely closes a gap in the existing framework. However, it follows the commercial decision by BT to take over TalkTalk, which was then investigated by the Competition and Markets Authority, which reported to the Secretary of State on 19 October. I agree with the noble Lords, Lord Lansley and Lord Fox, that it is a shame that this report was not available before today’s debate. Can the Minister elaborate on its findings and the next steps?

I echo the concerns of the noble Lord, Lord Fox. The Secondary Legislation Scrutiny Committee has drawn this order to the special attention of the Committee. Will the Minister confirm that this legislation is not retrospective? What will be the implication for existing mergers and how do the Government intend to maintain investor confidence? I confirm that I am happy for any of my questions, of which there are many, to be answered by the Minister in writing at a later stage.

The department claims that there is a precedent for the use of these powers to amend the public interest grounds. Can the Minister specify these precedents? We must be cautious of potential government overreach and we should allow the independent regulator to do its job properly. An overzealous Secretary of State could use these powers in such a way that fundamentally undermines the UK’s competitiveness. What safeguards will there be to prevent overuse of these powers leading to investor flight?

The order adds the need to maintain

“the continuity of the supply of telecommunications services for the purposes of preventing disruption to the economy and society of the United Kingdom, including, in particular, disruption to—(a) public services; (b) critical national infrastructure; (c) supply to customers who are or may be vulnerable”.

Such changes must be tightly defined. Can the Minister say how such disruption will be measured? Can we apply the same criteria for judging the Government’s own policies? This addition will give the Secretary of State the power

“to guard against the serious consequences that widespread disruption of connectivity could have for public safety, critical infrastructure, essential services and the orderly functioning of society”.

How do the Government define and how will they assess the “orderly functioning of society”? Can the Minister indicate whether this additional consideration will be used imminently?

There are legitimate concerns over the timing and potential use of this order. I hope that the Minister will be able to give the Committee assurances on these points, even if that is in writing.

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, I thank noble Lords for their best wishes for my noble friend and for their indulgence of me at the Dispatch Box on this matter. I will reflect on Hansard and write regarding any points that I miss, but I hope to be able to give some substantive answers to noble Lords who have participated.

The debate shows a recognition of the importance of telecommunications services to the functioning of the UK’s modern economy and society. It is important that everyone in the UK has access to high-quality, secure and resilient digital connectivity. The new public interest consideration inserted by the order will enable the Secretary of State to have regard to a broader range of considerations and impacts that may arise within the specific context of a qualifying merger where there are concerns about widespread and/or significant disruption to telecommunications services.

I will now respond to the specific points raised, starting with the issues around competition concerns and BT increasing its market share, as raised by the noble Lord, Lord Fox. This is why the Secretary of State asked the CMA to assess the competition impacts independently. As part of the process, the wider telecoms market and other interested third parties were able to make representations to the CMA. The UK telecoms market is highly competitive. The statement of strategic priorities, designated on 27 April this year, highlights that competition in the fixed telecoms market supports investment, innovation and consumer choice. As a result, the UK benefits from relatively low consumer pricing and prices have declined in recent years when adjusted for inflation. Ofcom, as the independent regulator, plays a key role in supporting competition, including by imposing proportionate remedies on Openreach where necessary.

The UK’s pro-competition approach has driven fibre rollout, as referenced by the noble Lord, Lord Lansley, with over 100 alternative networks entering the market in recent years. According to Ofcom, as of January 2026, 77% of residential premises have access to more than one network and 61% have access to more than one gigabyte-capable network.

16:15

With regards to the urgency of the order, as raised by the noble Lord, Lord Fox, and the noble Baroness, Lady Bloomfield, in order for the Secretary of State to take the new public interest consideration of the continuity of the supply of telecommunications services into account as part of their decision, the new consideration has to be added to the Enterprise Act 2002 before a decision is made on the merger. As the new consideration is not yet specified in the Act, it requires the Secretary of State to seek to have that consideration specified in Section 58 as soon as practicable. However, we believe this to be a unique exception.

With regard to the issues raised by the SLSC, mentioned by all participants in the debate, this is not a case of retrospective action. The order does not determine the outcome of the merger process. The Enterprise Act 2002 provides the Secretary of State with powers to specify new public interest considerations, including for an extant case, by stating as much in the public interest intervention notice, and therefore seeking to secure the approval of Parliament as soon as practicable. This is not unprecedented. New public interest considerations have been specified in this manner before to address urgent matters, as I said earlier, with regards to the Lloyds TSB Group/HBOS merger.

This order will allow the Secretary of State to provide for careful consideration of telecommunications services supply as part of the overall public interest assessment in the BT/TalkTalk merger case.

The noble Lord, Lord Lansley, also raised the question of the precedent for treatment of a future merger. The Secretary of State has taken an exceptional decision to intervene to enable a decision on the BT Group/TalkTalk merger that takes account of both the competition impacts and the public interest, given the public health and public interest considerations associated with this merger. This order does not set a precedent for treating future mergers arising in the market in the same way. It gives the Secretary of State the power to consider competition and public interest concerns where they arise. Where no public interest considerations arise, responsibility for competition assessment of mergers remains with the CMA, as under the Act.

The noble Lord, Lord Lansley, raised an important point about a framework for an administration regime. On the statutory administration regime going forward, we consider that there is a case for considering further powers for government to intervene in potential future telecoms in order further to protect consumers. We will reflect on his comments, too.

On the issue raised by the noble Lord, Lord Fox, on the remedies and security considered, while the judicial process is ongoing, we are unable to comment on the substance of the merger and the specifics of the issues considered, but we have heard the noble Lord.

With regards to investor confidence, the Government are committed to promoting competition in our statement of strategic priorities, which, as I have said, highlights this. The UK consumer benefits from a low mobile cost—I have already read that, so I will leave that out. It is a magic piece of paper, but not that magic.

[Lord Lansley (Con)]

I am most grateful to the noble Baroness for those several responses to the questions raised. We all mentioned the fact that we have not seen what the CMA has said.

[Lord Fox (LD)]

The noble Lord is asking the question I was about to ask.

[Lord Lansley (Con)]

If the noble Baroness can give us a prospective timetable for when the Secretary of State is going to make decisions, that would be helpful.

[Lord Fox (LD)]

And give a commitment that the CMA report, in full, will be published.

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, you were two magic pieces of paper early. I will go straight to the issue of the CMA’s report. In line with the requirements of the Enterprise Act 2002, the Secretary of State will publish a non-confidential version of the CMA’s report once it has made a decision. All the noble Lords who participated raised that point.

I have answered the majority of the substantive points. I will reflect on Hansard and, if I have not answered something, I will write to noble Lords. I thank everyone who has contributed to this debate today, and the officials who have worked on this.

Motion agreed.