Tuesday 19th October 2021

(1 month, 2 weeks ago)

Lords Chamber

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Department for Digital, Culture, Media and Sport

Report

Clause 1: Duty to take security measures

Amendment 1

Moved by

1: Clause 1, page 3, line 22, at end insert—

“(1A) Regulations under subsection (1) may not be made unless a draft has been laid before, and approved by a resolution of, each House of Parliament.”Member’s explanatory statement

This amendment would require Parliamentary approval before regulations regarding the duty to take specified security measures are made.

Lord Fox Portrait Lord Fox (LD)
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My Lords, Amendment 1 applies the affirmative procedure to the regulations made under new Section 105B in Clause 1. It requires secondary legislation to be laid in Parliament in draft and to be subject to a debate and a vote in both Houses. Clause 1 allows the Secretary of State to introduce regulations that have wide-ranging consequences for providers, and there is no provision for any independent or specialist formal oversight of these regulations. This continues a worrying trend whereby the Government make key regulations with no meaningful parliamentary scrutiny. New Section 105A introduced by Clause 1 is wide-ranging. In fact, it covers

“anything that compromises the availability, performance or functionality of the network or service”

—I repeat: “anything”.

This means that the Secretary of State has the means to make regulations that have highly onerous provisions, laying down that any provider must take “specified measures” of any kind. This is currently under the negative procedure, which, as we have noted from these Benches on many occasions, gives a near-certain guarantee of their coming into force with a minimum of scrutiny—none, it is safe to say. In Committee, the Minister’s predecessor was adamant that additional scrutiny was not desirable. She said that this was meant for technical people and had to be explained in technical language, which it was not appropriate for Parliament to discuss. However, there is the rub: the Bill covers a huge range of potential issues and, as I said, there is no formal independent or specialist oversight of these regulations, yet the Government said that they were too technical for Parliament to have its say on them. My noble friend Lord Clement-Jones spoke about the Secretary of State having unfettered power and, as usual, he was right.

Since then, the Government have slightly changed their mind, and this is seen in Amendment 3. We welcome Amendment 3 as far as it goes, which, given that it is effectively a negative process, is not very far. It does demonstrate that the Government now believe that your Lordships’ House can review technical issues and that we are capable of this onerous task, which the Minister’s predecessor deemed us incapable of doing. Clause 1 covers virtually anything the Minister decides, and we are in danger of signing a blank cheque. Amendment 1 addresses this issue and gives Parliament particular scrutiny of how these regulations affect the communications networks that are so vital to the UK’s economy and our public life. I beg to move.

Lord Alton of Liverpool Portrait Lord Alton of Liverpool (CB)
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My Lords, the amendment just moved by the noble Lord, Lord Fox, is about transparency, accountability and parliamentary scrutiny. It puts Parliament into the driving seat. It deserves the support of the whole House, and I hope we will give it.

Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, as we start Report, I welcome the noble Lord, Lord Parkinson, to his new ministerial role. I am sure we all look forward to working with him.

I remind the House that national security must be the first duty of any Government, which is why we welcome the intention behind the Bill. As we have said repeatedly throughout the passage of the Bill, we believe that there are a number of issues with the Bill that need to be addressed, including parliamentary oversight of the new powers, which this group focuses on. As Comms Council UK said, the Bill represents an

“unprecedented shift of power from Parliament to the Minister in relation to how telecoms networks operate”

and that

“the Minister will be able to unilaterally make decisions that impact the technical operation and direction of technology companies, with little or no oversight or accountability.”

With reference to Amendment 1, I shall not repeat the arguments made by the noble Lord, Lord Fox. Suffice it to say that we on these Benches appreciate and wish to stress the importance of parliamentary scrutiny, which we have stressed throughout the passage of the Bill.

I thank the Minister for tabling Amendments 3, 4 and 5. They are very similar to our Front-Bench amendments in Committee and reflect a key recommendation from the Delegated Powers Committee. I thank the former Minister, the noble Baroness, Lady Barran, for her work on these amendments. As noble Lords will remember, the Delegated Powers Committee called the powers in Clause 3 unacceptable and called for the negative procedure for the new telecoms security codes of practice. This important change from the Government ensures adequate parliamentary scrutiny, which is a welcome step forward.

Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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My Lords, I thank the noble Lords, Lord Clement-Jones and Lord Fox, for the amendment standing in their names, and I thank the noble Baroness for welcoming me to the Dispatch Box in my new role.

The question underlying this group is whether the new telecoms security framework will have proper scrutiny. Noble Lords have proposed ways to strengthen that scrutiny throughout the passage of the Bill and your Lordships’ Constitution Committee and Delegated Powers and Regulatory Reform Committee have made their own recommendations, and I thank those committees for their work.

In Committee, the noble Lord, Lord Clement-Jones, invited the Government to make a trade-off, a choice, in his words, between

“a loose definition of ‘security compromise’”

and

“a very tight way of agreeing the codes of practice.”—[Official Report, 13/7/21; col. GC 487.]

With that in mind, I turn first to Amendments 3, 4 and 5 in my name—although I should stress, as the noble Baroness, Lady Merron, kindly did, that they also represent the work of my predecessor, my noble friend Lady Barran. We both listened to the arguments put forward in Committee and these amendments represent her views as well as mine.

We have carefully considered the concerns raised and, as the noble Lord, Lord Clement-Jones, invited us to do, we have proposed how to make that trade-off. The government amendments we have brought forward today affect Clause 3. It provides the Secretary of State with the power to issue and revise codes of practice. The code of practice is a fundamental building block of the new telecoms security framework as it will contain specific information on how telecoms providers can meet their legal duties under any regulations made by the Secretary of State.

In its report on the Bill, the DPRRC noted the centrality of codes of practice to the new telecoms security framework. The committee drew attention to the statutory effects of codes of practice and their role in Ofcom’s regulatory oversight, and because of those factors, the committee recommended that the negative procedure should be applied to the issuing of codes of practice. The noble Baroness, Lady Merron, tabled amendments in Committee to implement that recommendation. We are happy to do that. Our amendments today require the Government to lay a draft of any code of practice before Parliament for 40 days. Your Lordships’ House and the other place will then have that period of time to scrutinise a code of practice before it is issued.

We think that these changes strike the balance that noble Lords have called for today and in previous stages. I hope these government amendments demonstrate that we have listened and are committed to appropriate parliamentary scrutiny across all aspects of the framework.

Amendment 1, tabled by the noble Lords, Lord Fox and Lord Clement-Jones, would apply the affirmative procedure to regulations made under new Section 105B in Clause 1. It would require the regulations to be laid in Parliament in draft and subject to a debate and vote in both Houses.

I share the noble Lords’ desire, echoed by the noble Lord, Lord Alton of Liverpool, to ensure that Parliament has a full and effective scrutiny role in this Bill, but I fear we disagree on the best way to achieve it. The only powers in the Bill that are subject to the affirmative procedure are delegated, or Henry VIII, powers that enable the amendment of penalty amounts set out in primary legislation. The Bill currently provides for the negative procedure to be used when laying the statutory instrument containing the regulations.

In the context of these new powers, the use of the negative procedure is appropriate for three reasons. First, Parliament will have had to approve the clauses in the Bill that determine the scope of regulations—Clauses 1 and 2—and the regulations will not amend primary legislation. Secondly, evolving technology and threat landscapes mean that the technical detail in regulations will need to be updated in a timely fashion to protect our networks. Thirdly and finally, as I noted in Committee, the negative procedure is the standard procedure for instruments under Section 402 of the Communications Act. The negative procedure delivers the right balance between a nimble parliamentary procedure and putting appropriate and proportionate measures in place effectively and efficiently to secure our networks.

The two noble Lords will also be aware that the changes they propose in their amendment are not ones that the Delegated Powers and Regulatory Reform Committee made. I accept that they are keen to explore avenues for scrutiny of this framework, but that committee made its recommendation for increasing the scrutiny of this regime, and the Government have brought forward our amendments to accept it. For these reasons, we are not able to accept the noble Lords’ Amendment 1. I hope that they will be content with what we have proposed in our amendment, and may be minded to withdraw theirs.

In conclusion, the Government were asked to make a trade-off. Through the passage of this Bill, we have been invited to provide greater opportunities for Parliament to scrutinise this regime. We have listened to those concerns and we have brought forward an answer. We feel that our amendments maintain our flexibility to adapt to an ever-changing technology environment and give your Lordships’ House and the other place a greater say in its operation, so I invite the noble Lord to withdraw the amendment.

Lord Fox Portrait Lord Fox (LD)
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My Lords, it was remiss of me not to welcome the Minister formally; I have welcomed him personally, but not formally. Also, it was helpful that he was the Whip during the process thus far, and I should also welcome the new Whip to his seat. I thank the noble Lord, Lord Alton, and the noble Baroness, Lady Merron, for their contributions. The fact that this has been a short debate does not mean to say that it is not an important one. The reason it is short is because we have had the same debate so many times on so many different Bills, with not just this department but others. That is why it is an important issue and why, when the Minister says that we should strike a balance, we agree, but we think the balance is in the wrong place. That is why I am unable to withdraw this amendment and I should like to test the will of the House.

Clause 2: Duty to take measures in response to security compromises

Amendment 2

Moved by

2: Clause 2, page 4, line 30, at end insert—

“(7) In making regulations under this section and any code of practice made under section 105E the Secretary of State must take full account of the advice of the Technical Advisory Board established under section 105ZZ1 and of a Judicial Commissioner appointed under section 227 of the Investigatory Powers Act 2016 concerning the proportionality and appropriateness of any measures therein.”Member’s explanatory statement

This amendment would require the Secretary of State to take into account the advice of the Technical Advisory Board, as established in the amendment in the name of Lord Clement-Jones to insert a new Clause after Clause 14, and a Judicial Commissioner.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, in moving Amendment 2 I will speak to Amendment 7. I add my welcome to both the Minister and the noble Lord, Lord Sharpe, in their new roles.

The Minister has now accepted in his Amendment 3 that there needs to be greater parliamentary scrutiny of codes of practice. I welcome that; I am just sad that Amendment 1 did not squeak through. However, he has not accepted the need for greater technical scrutiny of these codes. As the Minister’s predecessor, the noble Baroness, Lady Barran, said in Committee,

“the whole purpose of the regulations was to specify in greater detail what the duties of providers would be.”

Likewise, she said:

“The codes of practice will provide technical guidance to assist public telecoms providers in meeting their legal obligations.”—[Official Report, 13/7/21; cols. GC 488-93.]

However, as the industry has pointed out, there are no clear mechanisms for technical feedback or expertise to be fed into the drafting of the regulations and codes of practice.

The Minister dealt with these amendments himself in Committee. On the Clause 2 regulations, he assured us:

“Advice to the Secretary of State could”—

I emphasise “could”—

“also include relevant representations by public telecoms providers … DCMS continues routinely to engage with telecoms providers about this Bill and telecoms security more widely.”

He also said that

“Clause 3 requires that any codes of practice are finalised only after consultation with affected providers.”—[Official Report, 13/7/21; col. GC 499.]

Again, he gave no assurance of exactly with whom and how the consultation will take place, and he did not explain why he thought that a specific technical advisory board set up under this Bill was not appropriate. For that reason I have no hesitation in retabling these amendments for further consideration on Report.

As the noble Baroness, Lady Merron, pointed out in Committee, there is good precedent in the Investigatory Powers Act 2016, which

“established a Technical Advisory Board to advise the Home Secretary on the reasonableness of obligations imposed on communications providers.”—[Official Report, 13/7/21; col. GC 462.]

The judicial commissioners set up under that Act could be deployed under this Bill.

This is an opportunity for the Minister to demonstrate a much firmer and more inclusive approach to technical consultation. I hope that he will accept this amendment. I beg to move.

Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling Amendments 2 and 7 again on Report. I will not take up much time discussing them, not least because the Labour Front Bench tabled similar amendments in Committee better to understand what advice the Secretary of State will receive and where it will come from when making regulations under Clause 2. As the noble Lord said, we must ensure that the Secretary of State receives advice from the best experts, not just those who support the Government.

As the former Minister, the noble Baroness, Lady Barran, focused only on the incompatibility of a similar board set up by the Investigatory Powers Act, can the Minister today simply answer this question: without such a board, where will the Secretary of State receive advice, and from whom?

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I thank the noble Lord, Lord Clement-Jones, for his welcome, and both him and the noble Lord, Lord Fox, for retabling these amendments. We share the noble Lords’ ambition in this area. We also want to ensure that the telecoms security framework is informed by world-leading expertise, and that all those affected by the framework have appropriate mechanisms to shape it. The noble Lords’ amendments seek to establish a technical advisory board to advise the Secretary of State on matters of telecoms security. They also state that the Secretary of State should give due consideration to this new board’s advice, and that of a judicial commissioner, before making regulations or codes of practice.

I agree with the noble Lords on the importance of the Secretary of State having access to expert advice in the exercising of these new powers. I hope I can reassure them that she can already call upon sufficient advice through existing structures, and that I can demonstrate why, as we have explained previously, these amendments are not necessary, while giving the greater detail that the noble Lord asked for.

It is worth emphasising the level of expertise that DCMS itself retains, both on the telecoms sector and on security policy. DCMS is the lead Government department for the telecoms sector and has telecoms experts embedded in it. The department has established security and resilience teams with suitably cleared individuals, including people with substantial experience in national security. More widely, the department has established procedures through which it can draw upon further expertise across government and industry. Inside government, for example, the National Cyber Security Centre undertakes regular risk assessments of current and emerging threats, and those assessments are used to inform government policy. Regulations and the code of practice made through this Bill will be informed by the NCSC’s assessments. The Government also have fora in which they discuss emerging threats and new technological developments with the industry. The NCSC’s information exchange is one example. This is a trusted community of security professionals from across the telecoms sector who come together on a quarterly basis to discuss and share information on security issues and concerns.

The noble Lord’s amendment also calls for the new board and the judicial commissioner to be consulted before the establishment of new regulations and codes of practice. We share the noble Lord’s view on the importance of consultation. That is why the Bill is clear that any code of practice must be consulted on before it is introduced. However, we still differ in our opinions on who should be consulted. The consultation requirement in the Bill will enable those directly affected by the code of practice, as well as those with an interest in it, to comment and raise concerns without the need for a technical advisory board to be established. Of course, if your Lordships’ House supports the government amendments today, the code of practice itself will be subject to scrutiny both in your Lordships’ House and in another place. Furthermore, we published an illustrative draft of the regulations in January for the purpose of early engagement with the industry, and the feedback it has provided has been invaluable in our development of the policy. We continue to engage regularly and closely with public telecoms providers and trade bodies, ensuring that any concerns are effectively communicated to us. I remind noble Lords that the Secretary of State can make these regulations and measures in a code of practice only where she actively considers that the measures are appropriate and proportionate under the wording of new subsections 105D(2) and 105D(4).

To conclude, I thank the noble Lords for bringing their amendment back. As I have said, I share their ambition to create a robust, well-informed and evidence-led framework for telecoms security. We believe that we already undertake extensive engagement with the affected groups and bodies. The Bill sets out consultation requirements but even if it did not, the Government have strong relationships with those in the sector and would continue to seek their input. That is where the advice referred to by the noble Baroness, Lady Merron, would come from, as well as from across government, the NCSC and others I have mentioned. For the reasons I have set out, we are not able to accept this amendment and I hope the noble Lord will therefore withdraw it.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, I thank the Minister for that very helpful reply. I think he has gone as far as he can, without accepting my amendment, to try to give assurance to the industry about the nature of the consultation. I still believe that something more formal is required but I am not going to quibble about the sharing of ambition. I am sure that is right. The question is whether in practice we are going to get the result we need. The proof of the pudding will be in the eating and we will see how the regulations and the codes of practice turn out in the end. In the meantime, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Clause 3: Codes of practice about security measures etc

Amendments 3 to 5

Moved by

3: Clause 3, page 5, leave out lines 13 to 16 and insert—

“(2) Before issuing a code of practice under section 105E the Secretary of State must also lay a draft of the code before Parliament.(2A) If, within the 40-day period, either House of Parliament resolves not to approve the draft of the code, the code may not be issued.(2B) If no such resolution is made within that period, the code may be issued.(2C) If the code is issued, the Secretary of State must publish it.”Member’s explanatory statement

This amendment applies a negative resolution procedure to the power to issue a code of practice under section 105E.

4: Clause 3, page 5, line 18, leave out “(2)” and insert “(2C)”

Member’s explanatory statement

This amendment is consequential on the first Government amendment to Clause 3.

5: Clause 3, page 5, line 21, at end insert—

“(5) In this section, the “40-day period”, in relation to a draft of a code, means the period of 40 days beginning with the day on which the draft is laid before Parliament (or, if it is not laid before each House of Parliament on the same day, the later of the 2 days on which it is laid).(6) For the purposes of calculating the 40-day period, no account is to be taken of any period during which—(a) Parliament is dissolved or prorogued, or(b) both Houses are adjourned for more than 4 days.”Member’s explanatory statement

This amendment inserts a definition of the “40-day period” into Clause 3.

Amendments 3 to 5 agreed.

Clause 13: Appeals against security decisions of OFCOM

Amendment 6

Moved by

6: Clause 13, leave out Clause 13

Member’s explanatory statement

This would remove Clause 13 (Appeals against security decisions of OFCOM) from the bill.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, a lack of oversight has been a persistent theme through the passage of this Bill. Included within that is judicial oversight and the fact that under Clause 13 any appeal to the Competition Appeal Tribunal cannot take account of the merits of a case against the Secretary of State. The rationale for this, as the Constitution Committee said in its report,

“is unclear and is not justified in the Explanatory Notes.”

It further said:

“The House may wish to ask the Government to justify reducing the powers of the Competition Appeal Tribunal in respect of appeals under clause 13.”

The clause reverses the Competition Appeal Tribunal’s TalkTalk Telecom Group plc and Vodafone Limited v Office of Communications decision, which addresses, inter alia, the standard of review on an appeal to the Competition Appeal Tribunal under Section 192 of the Communications Act.

The Minister’s predecessor, the noble Baroness, Lady Barran, said in Committee in response to the Clause 13 stand part debate:

“It merely changes the standard to which they will be reviewed. Having these cases reviewed on ordinary judicial review principles, rather than taking account of the merits of the case, aims to ensure a smooth regulatory process that focuses on fair decision-making … this should reduce any incentives for providers to litigate solely for the purpose of delaying the regulatory process.”

Note the word “merely”. This is very much for the Government’s convenience. She continued:

“It is particularly important, given that these decisions relate to the security of a provider’s network, that decisions can be addressed swiftly, and providers can get back to the important work of ensuring that their networks are secure.”

This nevertheless tries to give the impression that this is for the benefit of the providers. The noble Baroness then said that:

“Clause 13 applies to appeals only against relevant security decisions … The Government consider this approach to be appropriate to ensure that Ofcom’s regulatory decisions can only be successfully challenged when they are, broadly speaking, unlawful, irrational or procedurally unfair. By reducing providers’ incentives to litigate to delay regulatory action, the provisions in the clause contribute to Ofcom’s effectiveness as a regulator.”—[Official Report, 13/7/21; cols. GC 516-17.]

Surely in these circumstances, particularly on security, the merits of security decisions are particularly important and this is the legislative equivalent of the Government marking their own homework—or perhaps I should say making it much more difficult for it to be marked. I beg to move.

Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, I thank the noble Lords, Lord Clement-Jones and Lord Fox, for tabling this amendment and the noble Lord, Lord Clement-Jones, for his remarks. It certainly is key that Ofcom is able to do the job that it has been entrusted to do. On the matter of providers, I would say that their primary duty has to be to ensure that the networks are secure. We should expect no less from them. I will be very interested to hear how the Minister responds to the points that have been made in respect of this amendment.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I thank the noble Lords, Lord Clement-Jones and Lord Fox, for tabling this amendment to Clause 13. I know the noble Lord, Lord Clement-Jones, in particular, has taken a keen interest in this area, not just in this Bill but in previous ones as well. I am grateful for the way that he set out the debate again today.

Clause 13 makes provision to ensure that the Competition Appeal Tribunal applies ordinary judicial review principles to appeals against certain security decisions made by Ofcom. Under such principles, those decisions can be successfully challenged only where they are unlawful, irrational or procedurally unfair. In setting the standard of appeal in this legislation, we must find a balance between giving telecoms providers a way to challenge Ofcom’s decisions should they be unfair and ensuring that the regulatory regime is effective and efficient.

Ofcom, as an experienced telecoms regulator, believes that changing the standard of appeal to judicial review principles for certain security decisions has the potential to make the regulatory process quicker and more efficient. The Government agree. We want to avoid either Ofcom or telecoms providers spending months in court.

It was never the intention of Parliament to set the standard of appeal, as it is now, to

“duly take into account the merits of the case”,

as this was dictated by EU law. In 2017 the Government changed the standard of appeal for reviewing decisions by Ofcom from a full merits approach to ordinary judicial review principles via Section 87 of the Digital Economy Act, as the noble Lord, Lord Clement-Jones, will well remember.

However, as EU law continued to apply, the Competition Appeal Tribunal subsequently decided that it had to apply a modified approach to

“duly take into account the merits of the case”.

In essence, this has prevented the provision in the Digital Economy Act, which had been approved by Parliament, taking effect. That rather unhappy outcome would continue to be the case for certain security decisions under the Bill should this clause not stand.

To be clear, Clause 13 applies the judicial review standard only to decisions such as those relating to the issuing of an assessment notice, which should be routine and quickly handled rather than being continuously delayed. It is not being applied to decisions about penalties such as those under Section 105T. Public telecoms providers will still be able to appeal those decisions as they do now, and the tribunal will

“duly take into account the merits of the case”.

Ultimately, we want public telecoms providers to spend their time addressing the security of the network. We do not want them to attempt indefinitely to delay an Ofcom decision by bringing cases against the regulator that do not stack up. We are not breaking new ground by changing to this standard of appeal. Judicial review principles are the normal standard by which most decisions of government and public bodies are legally reviewed.

Parliament has already decided that the standard of appeal for similar decisions under the Network and Information Systems Regulations 2018 should be ordinary judicial review principles. That is consistent with our policy approach in this Bill. Therefore, the Government feel that Clause 13 should stand part of this Bill as it will contribute to the efficiency of the regime and ensure that regulatory decisions are not unduly delayed. It will also ensure legislative consistency. I hope that reassures the noble Lord and that he will be content to withdraw his objection to this clause.

Lord Clement-Jones Portrait Lord Clement-Jones (LD)
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My Lords, I thank the Minister for his response. I am afraid it does not particularly reassure but there will be many other occasions on which we can raise the nature of judicial review, its continual erosion, the Government’s approach to judicial review and their dislike of being challenged. This is fairly thin territory on which to be debating a very large issue in terms of the future of judicial review. I am sure that my other legal colleagues will be more than able to dispute some of those issues. There are many other fish to fry of even greater importance on this Bill so I will withdraw my amendment.

Amendment 6 withdrawn.

Amendment 7 not moved.

Amendment 8

Moved by

8: After Clause 23, insert the following new Clause—

“Network diversification

(1) The Secretary of State must publish an annual report on the impact of progress of the diversification of the telecommunications supply chain on the security of public electronic communication networks and services.(2) The report required by subsection (1) must include an assessment of the effect on the security of those networks and services of—(a) progress in network diversification set against the most recent telecommunications diversification strategy presented to Parliament by the Secretary of State;(b) likely changes in ownership or trading position of existing market players;(c) changes to the diversity of the supply chain for network equipment;(d) new areas of market consolidation and diversification risk including the cloud computing sector;(e) progress made in any aspects of the implementation of the diversification strategy not covered by paragraph (a);(f) the public funding which is available for diversification.(3) The Secretary of State must lay the report before Parliament.(4) A Minister of the Crown must, not later than two months after the report has been laid before Parliament, move a motion in the House of Commons in relation to the report.”Member’s explanatory statement

This new Clause requires the Secretary of State to report on the impact of the Government’s diversification strategy on the security of telecommunication networks and services, and allows for a debate in the House of Commons on the report.

Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, Amendment 8 is in my name. I am grateful to the noble Lords, Lord Fox and Lord Alton, for their support. It is, of course, the same as Amendment 24 that we saw in Committee, which requires that network diversification is reported on annually.

As we heard in Committee, there is wide cross-party support for the principle that our networks will not be secure if the supply chain is not diversified. For me, this is at the very heart of the Bill and what it should seek to address. Unfortunately, we still have a Bill that seeks to secure telecoms security yet seems to think it is possible to be silent on diversification. Even though the former Minister said in Committee that

“diversification is designed to enhance security and resilience”,—[Official Report, 15/7/21; col. GC 551.]

the Government have said that this amendment is not appropriate. The importance of the amendment could not be clearer. I remind noble Lords that, once Huawei is removed, the UK will be left with effectively only two service providers. This is a matter of the highest concern. We need and must have a diversified supply chain. That means diversity of supply at different points in the supply chain and that different networks do not all share the same vulnerabilities of a particular supplier. This is absolutely crucial for network resilience. It will also support British companies and grow British jobs.

If the Government fail to amend the Bill on this point by accepting this amendment, they are putting our national security at risk. Therefore, I will listen closely to the reply from the Minister, but I must stress that I am minded to test the opinion of this House on this matter. I beg to move.

Lord Alton of Liverpool Portrait Lord Alton of Liverpool (CB)
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My Lords, it is a great pleasure to follow the noble Baroness, Lady Merron. Like other noble Lords, I was remiss in not welcoming the noble Lord, Lord Parkinson of Whitley Bay, to his new role earlier on. I think that is because we have all been so familiar with seeing his face throughout the proceedings on this Bill and many others. It is a great pleasure to see him in his new role.

The Government should be convinced by the arguments that the noble Baroness, Lady Merron, just advanced, simply because of what their own advisers have told them: the lack of diversification constitutes

“an intolerable security and resilience risk.”

There was widespread agreement in Committee and elsewhere about that.

I draw the Minister’s attention to the as-yet undebated report of the International Relations and Defence Committee, on which I have the privilege to serve. The report, titled The UK and China’s Security and Trade Relationship: A Strategic Void, was published on 10 September. It refers specifically to the supply chain vulnerability measures in this Bill, but says that

“such vulnerabilities are widespread in the economy.”

It continues:

“In order to retain its freedom of action towards China, the Government should conduct scenario planning on supply chain vulnerabilities and identify where action is needed to mitigate the risks.”

This amendment would give the opportunity for such discussion to take place in the House of Commons. We have to think about only the case of Newport Wafer Fab to see its importance. This was a deal of £63 million regarding the UK’s largest producer of silicon chips, which are vital in products from TVs and mobile phones to cars and games consoles. As we learned in Committee, a group of UK companies has now stepped up to the plate and hopes to acquire Newport Wafer Fab. When the Minister replies, I would be most appreciative if he would say what progress has been made on that.

Lord Fox Portrait Lord Fox (LD)
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My Lords, it is a pleasure to follow the noble Baroness, Lady Merron, and the noble Lord, Lord Alton, in supporting Amendment 8. The Government have talked a good game on diversification but are guilty of much compartmentalisation. They have put diversification on one side and security on the other. As the noble Baroness and the noble Lord suggested, you cannot separate the two. Without a diverse supply chain, there is no security.

The issue of having only two key suppliers, which the noble Baroness, Lady Merron, referred to, is down to the fact that there has been a market failure in this area. If the Government do not intervene proactively to right that market failure, we will not get out of the situation we are in now. The Bill is the only game in town to do that. This amendment is therefore really important. During debates on the Bill, a number of Peers highlighted the words of the Government’s integrated review of security, defence, development and foreign policy. It was clear that a

“diverse and competitive supply base for telecoms networks”

is vital to a secure future. We think these are wise words from the integrated review. As such, we are pleased to support this amendment and will be happy to vote on it in the event that the noble Baroness, Lady Merron, chooses to test the will of the House.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I thank the noble Baroness and the noble Lords, Lord Alton of Liverpool and Lord Fox, for tabling and signing this amendment relating to telecoms diversification. I hope that, during my remarks, I can convince them and other noble Lords that the Bill is not the right place for this amendment for two reasons: first, diversification extends well beyond the security focus of the Bill; and, secondly, legislating for a reporting requirement would be limiting and inflexible as our diversification work evolves. I will also outline the progress made against the diversification strategy, in both government policy and industry outcomes, to seek to reassure noble Lords that progress is being made in this important area.

The Bill will create one of the toughest telecoms security regimes in the world. It will protect our networks even as technologies evolve, future-proofing our critical national infrastructure. Throughout the passage of the Bill, there has been a great deal of debate about how diversification can help to support more secure and resilient telecoms infrastructure. While our work on diversification is intended to support our security and resilience ambitions, not all diversification is necessarily relevant to security and resilience.

The telecoms diversification work that the Government are undertaking moves the market forward by broadening the supplier base in many ways which fall beyond pure security measures; these include boosting quality, innovation, competition and choice within our critical networks. It is for this reason that we have consistently argued that it would be limiting for our 5G diversification strategy to appear on the face of this Bill. Legislating for a reporting element within the Bill, by the same token, would also be restrictive.

Furthermore, as the market and technology evolve, our desired outcomes and areas of focus will evolve too. For example, in the short term, a successful outcome could be a third major vendor in the mobile market. However, once open radio access networks are ready for deployment at scale in urban areas, our measure of success might be the level of interoperability within our networks.

At the moment, we are focusing efforts on diversifying the radio access network, which is where the most critical security and resilience risks are found. In future, a focus on other elements of telecoms infrastructure, including fixed networks, will be necessary to ensure all risks to the ways in which we communicate are tackled. Committing to reporting on specific criteria would limit us to reporting against the risks as we find them today; it would not afford us the flexibility that diversification requires.

While the Government cannot accept this amendment, I hope to reassure noble Lords that our work on diversification progresses—and at pace. The Government’s plans to diversify the market were set out in the 5G Supply Chain Diversification Strategy, which was published in November last year. We also established a diversification taskforce, chaired by my noble friend Lord Livingston of Parkhead, who of course has a wealth of experience in this field having served as the chief executive for BT Group. The taskforce’s role is to provide expert advice to the Government on this important agenda.

The taskforce set out its recommendations in the spring and many of its members have agreed to continue providing expertise as part of the Telecoms Supply Chain Diversification Advisory Council, which had its first meeting last month. Work is already underway to implement many of the taskforce’s recommendations and good progress has been made on the priorities set out in the strategy. For example, research and development was highlighted as a key area of focus, in order to promote open interface technologies that will establish flexibility in the market and allow a range of new, smaller suppliers to compete in a diverse marketplace.

That is why DCMS was delighted to announce the launch of the future radio access network competition on 2 July. Through this competition, up to £30 million will be invested in open RAN R&D projects across the UK to address barriers to high-performance open deployments. This competition is part of a wider programme of government initiatives to foster an open, disaggregated network ecosystem in the UK. This includes the Smart Radio Access Network Open Network Interoperability Centre—or SONIC Labs—a facility for testing interoperability and integration of open networking solutions, which opened in June. A number of leading telecoms suppliers are already working together through this facility.

The Government also continue to work with mobile operators, suppliers and users on a number of other important enablers for diversification, for example by developing a road map for the long-term use and provision of legacy network services, expected to be announced later this year. Alongside this, the Government have led efforts to engage with some of our closest international partners, through both multilateral and bilateral mechanisms, to build international consensus on this important issue. Through the UK’s G7 presidency, the Government made the first step in discussing the importance of secure and diverse supply chains among like-minded partners, and the foundational role that telecommunications infrastructure such as 5G plays in underpinning wider digital and technology infrastructure.

We have also seen movement in the market towards diversification objectives. The industry has taken steps to adopt open radio access networks, such as the European memorandum of understanding, co-signed by Telefónica and Vodafone. Furthermore, organisations such as Airspan, Mavenir, NEC and Vodafone have now announced UK-based open radio access network facilities. This demonstrates that the industry is working alongside the Government here in the UK to drive forward the change needed in the sector. That was further evidenced in Vodafone’s commitment to deploy 2,500 open radio access network sites using equipment provided by leading suppliers, including Samsung and NEC. This is the largest deployment of its kind anywhere in Europe and an important first step in delivering the goal of more open networks.

These commitments show a genuine and significant change in the diversification of our mobile networks. I hope they also demonstrate why placing strict legislative reporting requirements on this area of work would be premature. We are at a point of rapid exploration and experimentation in this work, and I hope that noble Lords would not want to inhibit that work before it has had time to mature.

The noble Lord, Lord Alton of Liverpool, asked about the committee report. It will not fall to me to respond to that report, as I perhaps would have done in my previous role as a Whip covering the Foreign Office, among other departments. We will, of course, reply to it in full in due course. He also asked about Newport Wafer Fab. As I am sure noble Lords will appreciate, I am not able to comment on the detail of commercial transactions or of any national security assessments on a particular case. We will continue to monitor the situation closely and, as part of this, the Prime Minister has asked the National Security Adviser to review this case. Separately, work is under way to review the wider semiconductor landscape in the United Kingdom. The National Security Adviser’s review is ongoing, drawing on expertise from across government as necessary. We will continue to monitor the situation closely and will not hesitate to take further action if needed. The Government are, of course, committed to the semiconductor sector and the vital role it plays in the UK’s economy.

For the reasons that I have set out, therefore, I am not able to accept this amendment. I hope noble Lords have been reassured by what I said, and that the noble Baroness will withdraw her amendment.

Baroness Merron Portrait Baroness Merron (Lab)
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My Lords, I thank the Minister for his reply. I am, of course, disappointed that the Minister cannot see that this amendment seeks to strengthen the Bill. It gives the Government an opportunity to showcase all the things of which the Minister has apprised the House. It is important to look at this proposed new clause. It would require the Secretary of State to report on the impact of the diversification strategy, something of which the Government are proud, and it allows for a parliamentary debate, something I would have hoped the Government would welcome, but this is clearly not the case.

As the noble Lords, Lord Fox and Lord Alton, have indicated, the absence so far of an effective plan to diversify the supply chain is what makes us concerned about security in this country. The Bill is the opportunity to put that right. Therefore, I feel it is only right and proper, in the interests of the security of the country, that we press this matter to a vote and test the opinion of the House.

Amendment 9

Moved by

9: After Clause 23, insert the following new Clause—

“Provision of information to the Intelligence and Security Committee

The Secretary of State must provide the Intelligence and Security Committee of Parliament as soon as is reasonably practicable with a copy of—(a) any direction or notice (or part thereof) that is withheld from publication by the Secretary of State in the interests of national security in accordance with section 105Z11(2) or (3) of the Communications Act 2003;(b) any notification of contravention given by the Secretary of State in accordance with section 105Z18(1) of the Communications Act 2003; (c) any confirmation decision given by the Secretary of State in accordance with section 105Z20(2)(a) of the Communications Act 2003;(d) any reasons for making an urgent enforcement direction that are withheld by the Secretary of State in the interests of national security in accordance with section 105Z22(5) of the Communications Act 2003; and(e) any reasons for confirming or modifying an urgent enforcement direction that are withheld by the Secretary of State in the interests of national security in accordance with section 105Z23(6) of the Communications Act 2003.”Member’s explanatory statement

This new Clause would ensure that the Intelligence and Security Committee of Parliament is provided with any information relating to a designated vendor direction, notification of contravention, urgent enforcement action or modifications to an enforcement direction made on grounds of national security.

Lord Coaker Portrait Lord Coaker (Lab)
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My Lords, I welcome the noble Lord, Lord Parkinson, to his position. I am sure we will end up speaking to each other across the Dispatch Box. I wish him all the best and good luck with the important work he will be doing as a Minister of the Crown. We all wish you well in that role.

Turning to my amendment, we appreciate that, obviously, it is sometimes difficult to strike a balance between the public availability of information, even for debate by Parliament, and national security. This amendment seeks to probe the Government’s thinking. So far, their reassurances have been somewhat lacking.

I often use, and want to use, evidence—not just what I think and others may wish to say—regarding how the Government should use the Intelligence and Security Committee. It was set up by a unanimous decision of both Houses of this Parliament because they recognised that some information is so sensitive that it cannot be put in the public domain, as that would undermine national security. No Member of this Chamber or the other place would argue with that or say that that is wrong in principle. But so far, in respect of the security aspect of telecommunications, the Government have said that the existing processes and way of doing things works. Many of us would disagree with that and feel that more reassurance needs to be offered and that the Government need to rethink this.

In moving this amendment, I will use evidence from the chair of the Intelligence and Security Committee himself. I do not need to go on about this, because he summed it up in one sentence. Speaking about the Telecommunications (Security) Bill in the other place, he said:

“It is both puzzling and exasperating that the Government are yet again refusing to use the Intelligence and Security Committee for the purpose for which it was created.”—[Official Report, Commons, 25/5/21; col 286.]

That is quite a stunning sentence. I could quote the whole speech, but for me that encapsulates it. It is for the Minister say why he is wrong. Why is the chair of the Intelligence and Security Committee wrong to say that about the powers in this Bill and the security issues that will arise in respect of telecommunications now and in future? Why is it wrong for the Intelligence and Security Committee to be the body that looks at that information for us?

Indeed, the Prime Minister himself agreed. Look at the Memorandum of Understanding of 2013, which was an appendix to the ISC’s annual report and governs the remit of the committee. That remit is agreed by the Prime Minister to be the purpose of the Intelligence and Security Committee. The memorandum states:

“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”—

listen to this—

“of those parts of Departments whose work is directly concerned with intelligence and security matters.”

The Prime Minister of the day, in the Memorandum of Understanding, is saying that departments whose work impacts on this should be within the remit of the Intelligence and Security Committee. The Minister therefore needs to explain to us why this amendment is not right.

I do not want to add much to that. I have presented evidence from the chair of the Intelligence and Security Committee and from the Memorandum of Understanding, agreed by the then Prime Minister, setting out the remit of that committee. For all of us who want to be sure that this Parliament has oversight of intelligence and security matters, this is an incredibly important issue. All of us value the security of our country, but we also understand that, at times, it is necessary for Parliament to scrutinise that. What is a sensible way to do that, one that does not compromise national security? Surely, is that through the Intelligence and Security Committee. That is what this amendment seeks to do, and it is for the Minister to explain why it is not necessary and why we should not put it to a vote.

Lord Fox Portrait Lord Fox (LD)
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My Lords, veterans of the National Security and Investment Bill—I am not sure there are any—will recognise this amendment: it is exactly the same argument that was put forward then. The response from BEIS was to set up a unit, within BEIS, that the relevant Minister said would have the necessary clearance to review potential national security information. It was quite clear to those in your Lordships’ Chamber at that time that that group of people would not get to see the sort of information that the ISC is cleared to see. We are in the same situation now. The Minister will say that there are people in his department who, if necessary, will be able to see the relevant information. That will not be the case and to some extent, those in the Minister’s department making decisions that refer to national security issues will be flying a little bit blind. If this is not recognised, that is regrettable. This is a really important area of security, and decisions should be made on the best available information, with the best available people reviewing that information. The clue is in the name: this is the Telecommunications (Security) Bill, and it is the Intelligence and Security Committee that is best able to review that information. That is why I support the noble Lord’s Amendment 9.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My Lords, I thank the noble Lord, Lord Coaker, for his kind words of welcome and for tabling this amendment. The important matter of parliamentary oversight has been raised a number of times in both your Lordships’ House and another place. I welcome the opportunity to clarify further how appropriate oversight of the Bill’s national security powers will be provided for both in this Bill and through existing mechanisms. The noble Lord’s amendment would require the Secretary of State to provide the Intelligence and Security Committee with copies of a directional notice when such documents, or parts of them, are withheld under Section 105Z11(2) or (3) in the interests of national security.

As regards enforcement, this amendment would also require the Secretary of State to provide the committee with copies of notifications of contraventions and confirmation decisions. Further, it would require the provision of reasons for giving urgent enforcement directions when withheld under Section 105Z22(5), as well as the reasons for confirming or modifying such directions when withheld under Section 105Z23(6).

We thoroughly agree with the need for effective scrutiny of the use of the Bill’s national security powers—that is why we have included measures to facilitate parliamentary oversight of the use of those powers. The Bill requires the Secretary of State to lay before Parliament copies of designation notices, designated vendor directions, and variations or revocations of either, unless doing so would be contrary to the interests of national security. We would expect in the vast majority of cases to lay copies of the directions and notices before Parliament. However, on very rare occasions there may be instances where the Secretary of State chooses not to do so because laying the documents would be contrary to the interests of national security. This would only be done in extremis.

We have already demonstrated our commitment to transparency with the publication of the illustrative draft designated vendor direction and designation notice last November. Indeed, it is in the Government’s interest to publish such documents as it sends a clear message to industry of our intent to use the powers in the Bill where necessary. However, while the presumption is to publish the directions and notices, it is right that we have the option to protect the UK if our national security could be put at risk through their publication.

It is worth noting that, under Section 390 of the Communications Act 2003, the Secretary of State is required to prepare and lay before Parliament annual reports on their functions under that Act. Those reports will show when the Bill’s national security powers have been exercised, whether or not copies of directions or notices are laid before Parliament. This will ensure that Parliament will always be made aware of the Secretary of State’s use of the national security powers to issue designated vendor directions and designation notices.

Having thus been made aware, the Intelligence and Security Committee will be able to request relevant information from the vital organisations it already oversees, such as the National Cyber Security Centre. Moreover, the ISC will be able to request such information at any time from the NCSC in relation to its assessment of high-risk vendors. The noble Lord is right to point to the importance of the committee. Given the cross-party support he enjoys, he knows better than most, as a former Security Minister, the important work it undertakes. The ISC will be able to do the work I have just outlined in line with its remit, as set out in the provisions of the Justice and Security Act 2013 and accompanying memorandum of understanding.

At Second Reading, the Noble Lord, Lord West, noted that the ISC had made a request for its memorandum to be formally reviewed. I understand that the chairman of the ISC has written to the Cabinet Office on these matters and that they are under consideration. Discussions and decisions regarding any changes to the ISC’s remit are of course for the Cabinet Office and the ISC to agree. That is the appropriate route for the ISC’s remit to be considered, not this Bill.

As I am sure noble Lords will appreciate, however, the advice of the security services will not be the only factor that the Secretary of State will take into account when deciding what is proportionate to include in a designated vendor direction. As well as the NCSC’s advice, the Secretary of State will consider, among other things, the economic impact, the cost to industry and the impact on connectivity of the requirements in any designated vendor direction. Those go beyond security matters and indeed fall under the work of DCMS; therefore, the Digital, Culture, Media and Sport Committee is best placed to consider those wider impacts. Hence, that is the appropriate body to oversee the Government’s use of the powers to issue designation notices and designated vendor directions, including where those directions and notices are not laid before Parliament. The Government will work with the committee to ensure that it has access to all the information it needs to carry out that oversight.

Those are the reasons why the Government cannot accept the amendment. I hope that the noble Lord will be content to withdraw it on that basis.

Lord Coaker Portrait Lord Coaker (Lab)
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I thank the Minister for a generally helpful reply and for his engagement with the amendment itself, my remarks and those of the noble Lord, Lord Fox. It is helpful when a Minister engages with a debate, rather than just reading the words in front of him. The Minister did that, and that is to be welcomed.

The Minister offered reassurance on many of the issues that I raised—and they are issues. The debate has in some ways gone beyond the Bill itself and will help the debate within government about how to resolve the issue of national security and parliamentary scrutiny. Of particular importance was the Minister saying that the memorandum of understanding between the Government and the ISC is being reviewed. That MoU is crucial, and the debate we have had on this Bill and, indeed, this amendment, should inform the Government of the view of many in this House and beyond that the memorandum of understanding needs to be clarified and perhaps reviewed and changed. I ask the Minister to ensure that that review happens in the discussions that take place within government.

With those remarks, I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

Amendment 10

Moved by

10: After Clause 23, insert the following new Clause—

“Long-term strategy

(1) Within six months of this Act being passed, the Secretary of State must publish a long-term strategy on telecommunications security and resilience.(2) The strategy must include but is not limited to—(a) the objectives of the United Kingdom in working with NATO, Five Eyes partners, and other allies, on research and development, adoption and deployment, standards, and overall strategy;(b) how the strategy will provide security and resilience in the long term;(c) how this Act supports strategic objectives in the Integrated Review of Security, Defence, Development and Foreign Policy;(d) how this Act will complement the powers in the National Security and Investment Act 2021 in the long term and whether a review is needed;(e) whether, for the purposes of telecommunications security, an international advisory body should be set up to help coordinate, influence and develop guidance and standards;(f) how the United Kingdom, in collaboration with its allies, will monitor, horizon-scan for, and respond to, current and emerging threats;(g) whether the United Kingdom security infrastructure is adequately resourced to respond to threats against its telecommunications network;(h) how to secure the adequacy of OFCOM’s resourcing in fulfilling its functions provided in this Act.(3) The strategy must be laid before Parliament.”

Lord Coaker Portrait Lord Coaker (Lab)
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In moving Amendment 10 I will also speak to Amendment 11 in the names of the noble Lords, Lord Alton, Lord Blencathra and Lord Fox, to which I have also put my name.

Amendment 10 seeks to future-proof the Bill. It strengthens the bonds with our international partners, ensures horizon-scanning and provides security and resilience in the long term. It again pushes the Government on a long-term strategy for the security and resilience of our telecoms network. What plans do the Government have for that?

I think all of us in this House understand that this is a fast-changing world, and many of us would not have predicted just a few years ago some of the challenges and threats we face now. Flexibility and adaptability are crucial, and a strategy needs to be put together alongside that. Indeed, the Government themselves have accepted that in their response to the House of Commons Science and Technology Committee document, 5G Market Diversification and Wider Lessons for Critical and Emerging Technologies. Indeed, the Government’s response says that there is a need for strategies and for the Government to look to future threats. Amendment 10 is an attempt to understand how all the Government’s various strategies—I did not count them, but they are putting forward many—will be put together to ensure that we have one overarching strategy dealing with the threats this country faces with respect to security and telecommunications, and in a way that is understandable and meets the challenges we may face in the future. As I say, the purpose of this amendment is to push the Government again on what their strategy is.

Amendment 11 is an incredibly important amendment. Leaving aside the various intellectual arguments, the policy documents that can be quoted, the evidence that can be cited and so on, the ordinary member of the public, who often gets left out of debates such as this, would say something like the following. The Five Eyes, which includes Australia and New Zealand, is one of our most important intelligence communities. Indeed, we have just signed the AUKUS deal, which does not involve all of the Five Eyes but is nevertheless important. Therefore, it is really important that within the Five Eyes there is a commonality of purpose, of understanding and of action.

If we in this country, for example, decided that X technology company was a danger to our national security, I think the ordinary person on the street, man or woman, even a child, would say, “Perhaps it might be a danger to our intelligence network, our telecommunications network, our security system”. It absolutely beggars belief that the Government are resisting an amendment which says that if one of the Five Eyes thinks that there is a problem, we should do something about it. The amendment does not even compel the Government; it merely asks them to review the situation I may have got this wrong, since I have not been in government for a while, but I am positive that if something came across the Minister’s desk, although he might not have it as an amendment in the Bill, he would review it. I fail to understand why the Government would resist an amendment that seeks to say exactly what I have said.

As I said in my previous remarks about evidence, the Government’s own document, their own recently published Global Britain in a Competitive Age: the Integrated Review of Security, Defence, Development and Foreign Policy, agrees with me. It will be interesting to see how the Minister—and I am sure other noble Lords will come forward with their own views—will ensure the future security of the UK telecoms network. If noble Lords want to check that I am not making it up, page 75 says:

“To ensure the future security of the UK telecoms network as the basis for secure and safe CNI. Under the provisions of the Telecommunications (Security) Bill”—

it quotes the Bill—

“supported by the 5G supply chain diversification strategy, we will: manage and mitigate risks from high-risk vendors; introduce a new, robust security framework for telecoms to ensure our networks are secure and resilient to future challenges;”—

long-term strategy—

“and work with partners, including the Five Eyes, to create a more diverse and competitive supply base for telecoms networks.”

I could not put it better than the Government. As spokesperson for Her Majesty’s Opposition, I fundamentally agree with the Government in that paragraph. As the noble Lord, Lord Blencathra, may also point out, the amendment says exactly the same, apart from adding a review, which should happen anyway.

I will be supporting Amendment 11, and I am interested in why the Government would seek to resist something that is included within their own document.

Lord Alton of Liverpool Portrait Lord Alton of Liverpool (CB)
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My Lords, it is a great pleasure to follow the noble Lord, Lord Coaker, and to endorse everything he has just said about Amendments 10 and 11.

In speaking to Amendment 11, about which I hope to seek the opinion of the House if there is not a satisfactory reply to the debate, although I hope there will be, I should say that I moved a similar amendment in Committee on 13 July. As in Committee, the amendment enjoys all-party support from across the House; I am particularly grateful to the noble Lord, Lord Blencathra, but also to the noble Lords, Lord Coaker and Lord Fox, for their support. The noble Lord, Lord Coaker, has spelled out that it would insert a new clause requiring the Government to review any telecommunications company based in foreign countries which have been banned in a Five Eyes country. It is quite straightforward. This amendment would strengthen international action and bolster UK resilience and security.

If such a provision had previously existed in statute, it might have saved this country a great deal of money over the expensive 5G Huawei debacle, which we have known was a security risk since 2013. If the House approves this amendment today, it will send a clear signal that the Bill must be further strengthened to deal with companies that have been banned in other jurisdictions, the need to dig deeper into ownership and investment of companies and the desirability of acting in concert with our Five Eyes allies. Significantly—I suppose this is another development, as the noble Lord just referred to, since Committee—there has been the, in my view, very welcome decision to create AUKUS, the security pact in the Asia-Pacific which, in addition to giving Australia greater defence capacity, also covers AI and other technologies.

At Second Reading, the noble Baroness, Lady Stroud, urged us to work

“in close partnership with our Five Eyes allies”.—[Official Report, 29/6/21; col. 727.]

She was right. The noble Baroness, Lady Merron, asked us to guard against “another costly security debacle”. She was right. My noble and gallant friend Lord Stirrup told us that we

“need to develop an approach … that constantly monitors and rebalances this equation in the context of our complex and dynamic world.”—[Official Report, 29/6/21; col. 715.]

He was right, and the amendments seek to do just that.

In Committee, I detailed many of the companies that have now been proscribed and banned in the United States of America. I would be grateful to hear from the noble Lord, Lord Parkinson—I asked this question in Committee, he will recall—if we have looked at those companies, and what action we are now taking against those that are on the list that President Biden has published. Specifically, I refer to one example, Hikvision. This is what the Foreign Affairs Select Committee of the House of Commons said in its unanimous report. The committee recommended

“that the Government prohibits organisations and individuals in the UK from doing business with any companies known to be associated with the Xinjiang atrocities through the sanctions regime. The Government should prohibit UK firms and public sector bodies from conducting business with, investing in, or entering into partnerships with such Chinese firms”.

I raised that in Committee. Have we acted in concert with principal Five Eyes allies in prohibiting Hikvision or not?

The failure to co-ordinate with allies leads to costs and uncertainty for business and endangers our national interest. The Government’s own estimate, based on the Huawei decision, is that it cost the Exchequer some £2 billion, excluding the broader economic cost of a delayed rollout of the 5G network caused by having to change horses. Earlier collective action could have prevented the later expensive U-turns.

Amendment 11 seeks to better protect our national interest in concert with our allies in the free world. I commend the amendment to the House.

Lord Blencathra Portrait Lord Blencathra (Con)
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My Lords, I am used to hearing powerful speeches from my noble friend Lord Alton of Liverpool, but what a delight it was to hear also the speech of the noble Lord, Lord Coaker. He spelled it out exactly: it beggars belief. I cannot believe that my noble friend, a wise and intelligent Minister, will reject this amendment.

I support Amendment 11, which does not detract from the Bill in any way; it does not sabotage the Bill or pull the guts out of it, it merely adds to our arsenal. All it asks the Government to do, as the noble Lord, Lord Coaker, pointed out, is to review the security arrangements with a telecoms provider if one of our vital, strategic Five Eyes partners bans its equipment. We are not calling for a similar immediate ban, or an eventual ban, we are just saying let us review it and come to a conclusion.

Why do I want this added? My motivation is quite simple: I believe this will be another small warning shot to China that we will start to stand up to its aggression. I share the view of the new head of MI5, Mr Ken McCallum, that Russia is an irritation but China is a threat to world peace and our whole western way of life. Yes, Russia—or Putin, more accurately—is nasty and will happily kill opponents, as we saw in Salisbury, and attempt to interfere in elections, but Russia is not capable and is afraid of the consequences of waging a world war.

China, I believe, does not share that view. It is building that massive economic and military capacity to dominate the whole world. It will overtake the USA in military capability in the next few years and has already overtaken all western powers in its attitude to using force. It is not that China wants war: it believes that war will not be necessary, since it will win when we surrender without firing a shot. If it attacks Taiwan, will the USA and the UK rush to support it? I hope so, but I do not hold my breath. China believes we do not have the moral guts to do as we did with plucky little Belgium before the First World War or Poland before the second, and guarantee their security.

To return to this amendment, it is a small symbol of our intention to begin our moral fightback—to say that we will not be bullied by China, either in our universities and supply chains or in the freedom of the seas. China has been achieving world domination by small incremental steps: making the WHO its puppet; infiltrating universities; subtly taking over international organisations; robbing African countries of all their minerals as payback for loans; and stealing every bit of technology that it can. It is, therefore, by incremental steps, such as this little amendment, that we will show that we will not be cowed—that we will resist and not become China’s slaves.

Lord Fox Portrait Lord Fox (LD)
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My Lords, there are many merits to the plans, set out by the noble Lord, Lord Coaker, in Amendment 10, for the Secretary of State to publish a long-term strategy on telecommunications security and resilience. However, in the interests of time, I will quickly shift my focus to Amendment 11 and disappoint the House by saying that my words will be brief. The House has heard very strong speeches, not just from the noble Lord, Lord Coaker, but from the noble Lords, Lord Alton and Lord Blencathra, and it is a pleasure to see my name alongside theirs on this amendment.

The point has been made three times: this is a very small ask of the Government. Referring back to the point made by the noble Lord, Lord Coaker, working closely with our Five Eyes partners was identified as the whole point—certainly a key objective—in the integrated review. It is one of the central pillars of our security planning. So we are not asking for something outrageous. There is a strong theme of working with our Five Eyes allies across the field of security. The UK has to work with other countries to be effective—and if not with these countries then which?

The UK’s telecoms networks face the same challenges as those of our key allies, and this amendment simply ensures that when it comes to this most crucial component of security—increasingly, communications are at the heart of all our security decisions, whether we are finding things out, transmitting information or looking at what others are doing—we take into consideration what those allies are doing. If we were not doing this, there would be a strong danger of putting a wedge between us and them. Indeed, we began to see that happening with the United States, before this Government decided to change their mind over the Huawei decision—for which some noble Lords present should take a lot of credit.

The question we have to ask ourselves, therefore—it is very difficult to understand the answers, so I look forward to the Minister’s reply—is why the Government are not adopting this amendment. The Minister may take the stance that it is not necessary. If so, it is not a problem and could be included. More worryingly, does the Minister know that this is perhaps the thin end of a wedge, and that there is a lot more technology already installed in our infrastructure across the country that the Government would have to start to remove? If there is, it would be expensive but important to do. Or perhaps the reason is the worst of all excuses: that the Government did not think of it and so are resisting suggestions from others, which is the worst sort of institutional resistance, of a kind that we see all the time.

We on these Benches, therefore, support this amendment from the noble Lord, Lord Alton, and if he sees fit to lead us through that virtual Lobby, we will be virtually beside him.

Baroness Altmann Portrait Baroness Altmann (Con)
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My Lords, I add a brief word of support for all the sentiments expressed so far in this debate, and for the excellent way in which they have been presented. I very much look forward to hearing my noble friend’s reply as to the problem that the Government have in accepting what seems to be their own wording into this Bill, thereby reinforcing this country’s stance against some of the most egregious regimes in the world and staying as close as we can to our Five Eyes allies.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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My Lords, I thank the noble Lords, Lord Coaker, Lord Alton of Liverpool and Lord Fox, and my noble friend Lord Blencathra, for tabling these amendments, which relate to our national security strategy and engagement with our Five Eyes partners.

The Government’s first and overriding priority is to protect and promote the interests of the British people through our actions at home and overseas. That is a message central to our integrated review of security, defence, development and foreign policy, and one that Ministers in the other place have repeated during the passage of this Bill. What I have heard very clearly in this short but powerful debate is that, regardless of party or affiliation, noble Lords across the House agree that we must do what we can to protect our national security interests.

That is precisely why we have introduced this Bill. It is why we have published the integrated review and why we have such close working relationships with our allies—not only in the Five Eyes but also among our European neighbours and beyond. So I welcome the spirit in which Amendments 10 and 11 have been put forward. I say that so that noble Lords will know that we share their instincts and ambitions in this crucial area, even though we cannot support these amendments today, as I will explain.

I start by addressing Amendment 10, tabled by the noble Lord, Lord Coaker. This amendment would require the Government to publish a long-term telecoms security and resilience strategy, covering various topics, within six months of the Bill’s Royal Assent. It would require this strategy to be laid before Parliament. This amendment is similar to the one tabled by the noble Lord in Committee, except that here he has made additional reference to reporting on Ofcom resources.

As I have said, the Government take their responsibility to protect the British public very seriously. We welcome and share the noble Lord’s desire to ensure that this country is prepared to overcome future challenges to the security of our telecommunications. However, we have—as the noble Lord noted—already published and are implementing a number of strategies that will ensure that our national security in general, and the security of our telecoms networks and services in particular, are safeguarded.

I mentioned the integrated review. That overarching review sets out our commitment to security and resilience, so that that the British people are protected against threats. This starts at home, by defending our people, territory, critical national infrastructure, democratic institutions and way of life, and by reducing our vulnerability to the threat from other states, terrorism and serious and organised crime.

The noble Lord asked where the hierarchy lies. While the integrated review sets out our overall approach across government, the UK telecoms supply chain review guides our work on security and resilience in the telecoms sector specifically. The Government continue to implement the recommendations of the UK Telecoms Supply Chain Review Report, published in 2019. Alongside that, we continue our crucial work on supply chain resilience via implementation of the 5G Supply Chain Diversification Strategy, published last year, which we have debated during the passage of this Bill.

More broadly, the Government’s approach to telecoms security is informed by other cross-government priorities. In March we announced our intention to develop a comprehensive national cyber strategy as part of the integrated review. The cyber strategy will set out the UK’s approach to deterring our adversaries and ensuring that the technologies of the future are safe and secure. Furthermore, the Government intend to engage more widely with partners on the details of that strategy and publish it later this year, ensuring that our plans are aligned with funding decisions in the forthcoming spending review.

As set out in Committee, the Government are also in the process of developing a national resilience strategy that will provide a single, coherent approach to the way the UK approaches national resilience. That will be published in early 2022 and will provide a foundation on which to build a clear and co-ordinated approach to the whole range of resilience challenges.

Through his proposed Amendment 10 I think the noble Lord is seeking reassurance that the UK is working with our international partners to achieve shared objectives, and I am very happy to set out how we are doing that. The Government engage regularly with partner countries, including those mentioned in the noble Lord’s amendment: NATO and the Five Eyes allies. We are committed to a strong and deep relationship with our allies. We have held detailed and productive talks with partner Governments throughout the development of the Bill and will continue to do so as and when it is passed.

Similarly, the Government recognise that co-operation on international standards is vital to our joint efforts as we look to the future. We are working closely with the industry, the National Cyber Security Centre, Ofcom and a wide range of international partners to increase the UK’s influence and presence at major standards development organisations, such as ETSI and 3GPP.

Through his amendment the noble Lord is also, I think, seeking reassurance about the adequacy of Ofcom’s funding for its security arrangements. As the telecoms regulator, Ofcom will have a vital role to play in the compliance and enforcement arrangements for the new security framework. We are working with Ofcom to ensure that it has the required resources to meet its new responsibilities. Ofcom’s budget for telecoms security this financial year has been increased by £4.6 million to reflect that enhanced security role.

As I have explained, we will continue to ensure that our approach to telecoms security is kept up to date in response to the changes in threats and technology. For those reasons, I do not believe that Amendment 10 is necessary, and I hope that, when we come to it, the noble Lord will be content to withdraw it and to see that we are indeed working with our allies on this important area, as he rightly asked.

Amendment 11, tabled by the noble Lords, Lord Alton, Lord Fox and Lord Coaker, and my noble friend Lord Blencathra, seeks to ensure that we take account of the actions of our Five Eyes partners. It would require the Secretary of State to review decisions taken by Five Eyes partners to ban telecoms vendors on security grounds. In particular, it would require the Secretary of State to review the UK’s security arrangements with that vendor and to consider whether to issue a designated vendor direction or to take similar action in the UK.

We certainly agree that the UK Government should engage with international partners, including our important allies in the Five Eyes alliance. That is what we have been doing throughout the drafting of the Bill and what we will continue to do once it has passed. Our Five Eyes relationship is robust, and the UK is committed to a close and enduring partnership. The Five Eyes intelligence and security agencies maintain very close co-operation, including regular and routine dialogue between the NCSC and its international partners. This dialogue includes the sharing of our respective technical expertise on the security of telecoms networks and the question of managing the risks from high-risk vendors. There are mechanisms already in place for the NCSC to share this and wider information with DCMS.

We also agree with noble Lords that the Government should consider the policies of our Five Eyes partners when developing our own security policies, and we do that. However, although we take the position of our Five Eyes partners into consideration, our international interests are not limited to the Five Eyes. That is why the approach we have taken in the Bill provides the flexibility for the Secretary of State to take into consideration a variety of relevant information, which includes but is not limited to assessments of our international partners’ policies. I reassure noble Lords that the Bill enables the Secretary of State to consider a decision by a Five Eyes partner—or, indeed, by any other international partner—to ban a vendor on security grounds.

Clause 16 of the Bill sets out a non-exhaustive list of factors the Secretary of State might take into account when she is considering issuing a designation notice. This illustrates the kinds of factors that the Government will proactively be considering on an ongoing basis as part of our work. The Government’s approach to national security needs to remain flexible and adaptable to future challenges. Every country’s approach to national security will be different; security measures taken in one particular country might not always be appropriate in another, for example due to differences in the composition of their telecoms networks or services.

The Government’s consideration of specific countries’ policies when developing their own national security policy should not therefore be mandated or set out in such a restrictive way in primary legislation.

Lord Fox Portrait Lord Fox (LD)
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I thank the Minister, and perhaps I am pre-empting what he is about to say, but it seems that, although he has clearly said the answer that I predicted—“not necessary”—the fact that this amendment was brought shows that it is not clear from this legislation that that is what the Minister will be doing. At the very least, whether this gets voted through or not, there is a conversation to be had when this comes back on Report that takes into consideration whether it just limits itself to Five Eyes or goes broader. Will the Minister undertake to think about those things as well, and perhaps comment on that?

The noble Lord means Third Reading.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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Yes, we are of course on Report; it has been a while since we were in Committee. Yes, the noble Lord is right: we do not feel that this amendment is necessary. I hope that I am setting out how the Bill provides for the Secretary of State to do what I think noble Lords want to do, not least, as I was just explaining, in Clause 16 and the non-exhaustive list of factors referred to there. Our objection is to setting out the Five Eyes partnership specifically and restrictively when there may be other countries and allies we speak to where she will also rightly want to take that into account. It is important that the Government have the freedom to determine their own national security policies so that they remain flexible and can respond rapidly to changing threats and challenges to our telecoms networks. The Government also need to be able to determine exactly how and when they engage with their Five Eyes partners and consider their actions when developing our policies.

Noble Lords are absolutely right to speak of the importance of the Five Eyes alliance; for more than 60 years it has been doing extremely valuable work for the people of this country and, indeed, for the other partner nations in it. But the Five Eyes alliance was not created through legislation and its importance has not relied on it being set out in statute either. In fact, it would be highly unusual to refer to such an alliance in legislation and we feel that this Bill is not the right place to create such an important national security precedent. That is why we are resisting it.

The noble Lord, Lord Alton, suggested that if we had had such a provision it might have saved some time and effort in the past, in particular with reference to Huawei. The Government have always considered Huawei to pose a relatively high risk to the UK’s telecoms networks compared with other vendors. There has been a risk mitigation strategy in place since Huawei first began to supply equipment to the UK’s public telecoms providers. As he knows, in July last year, following advice from the NCSC, the National Security Council considered the impact of US sanctions in relation to Huawei and considered that further action was needed in relation to Huawei as the new US restrictions made oversight of Huawei products significantly more challenging and potentially impossible. That is an illustration of how the UK already regularly reviews security advice and requirements in response to international considerations and what other Governments are doing.

The noble Lord, Lord Alton, also asked about Hikvision. The UK is aware of reporting that has suggested links between Hikvision and human rights violations in Xinjiang. As he knows, the Government have spoken up at international organisations to condemn the ongoing situation in Xinjiang. In January, my right honourable friend the former Foreign Secretary announced a number of measures to help ensure that UK businesses and the public sector are not complicit in human rights violations or abuses there. Decisions on excluding suppliers would be made on a case-by-case basis by central government contracting authorities when undertaking procurements in line with the relevant regulations.

My noble friend Lord Blencathra raised China more broadly, and indeed the UK wants a mature, positive relationship with China based on mutual respect and trust. There is considerable scope for constructive engagement and co-operation but, as we strive for that positive relationship, we will not sacrifice either our values or our security. China is now a leading member of the world community; its size, economic power and global influence make it a vital partner in tackling the biggest global challenges, but it has always been the case that where we have concerns, we raise them, and where we need to intervene, we will.

In conclusion, I want to return to where I started these remarks. The Government view national security as their number one priority, as any responsible Government would. This debate has highlighted that there is broad agreement on the need for robust, strategic consideration of those issues. So, although I am afraid that we cannot accept the amendments in this group, I warmly welcome the intent behind them. I hope that I have reassured noble Lords sufficiently that we understand their concerns, and that they will be content not to press these amendments.

Lord Coaker Portrait Lord Coaker (Lab)
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My Lords, I thank the Minister for his reply. Speaking first to Amendment 10, the Minister gave some reassurance to the House in respect of a strategy. He and I mentioned numerous strategies and I think all of us hope that somewhere along the line they are co-ordinated; otherwise, we will end up with a strategy to deal with a strategy, which is not a good place for anyone to be. I shall leave the noble Lord, Lord Alton, to deal with Amendment 11. I beg leave to withdraw Amendment 10.

Amendment 10 withdrawn.

Amendment 11

Moved by

11: After Clause 23, insert the following new Clause—

“Review of telecommunications companies based in foreign countries

(1) The Communications Act 2003 is amended as follows.(2) After section 105Z29 insert—“105Z30 Review of telecommunications companies based in foreign countriesWhere a Five Eyes partner bans the operation of a vendor of goods or services to public telecommunications providers in its country on security grounds, the Secretary of State must— (a) review the United Kingdom’s security arrangements with that company, and(b) decide whether to issue a designated vendor direction or take similar action with regard to the United Kingdom’s arrangements with that company.””

Lord Alton of Liverpool Portrait Lord Alton of Liverpool (CB)
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My Lords, the Minister was characteristically courteous. I am grateful to him, but I wish to test the opinion of the House.