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

Lord Fox Excerpts

Tuesday 27th October 2026 Grand Committee

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

[Lord Fox (LD)]

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

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

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

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

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

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

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

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

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

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

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

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

[Baroness Bloomfield of Hinton Waldrist (Con)]

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

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

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

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

The order adds the need to maintain

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

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

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

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

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

--- Later in debate ---

[Lord Lansley (Con)]

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

[Lord Fox (LD)]

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

[Lord Lansley (Con)]

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

[Lord Fox (LD)]

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

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

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

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