Financial Services and Markets Bill

Debate between Lord Naseby and Earl of Erroll

Report stage
Tuesday 13th June 2023 Lords Chamber

[The Earl of Erroll (CB)]

My Lords, I should like to add to this because I have had enough trouble with the PEPs issue for a long time. First, I thank the noble Lord, Lord Moylan, for explaining an important point about why I can get no information from Northern Trust on administering an investment trust in which my wife owned shares in Ireland. We had to get probity in Ireland, but the trust will still not release the money and will not say why. I am getting an absolute blind spot. Even Barclays, which wants money over here to pay off something does not seem to be getting any joy. I suspect that it is because the trust is not allowed to tell us that we are under investigation. That is wrong. If there is a problem, we could unlock it if the trust could just say, “We are trying to investigate this because we think we have to”.

I personally find it offensive that I am deemed to be a risk and a crook. I thought that in this country we were innocent until proven guilty. Actually, this is the other way around. Just because I happen to be a Member of the House of Lords, it is assumed that I am corrupt. This has caused a lot of problems for me and my family, but I am not going any further into detail. We have heard good stories from others, but I do not understand why we are PEPs. I have no access to government contracts and there is no reason to bribe me, sadly. I do not understand the logic behind that, and something should be done. The classification of PEPs should be looked at and revised because a lot of other people who are not PEPs are in places handling government contracts. As far as I know, they are not under permanent scrutiny, so I think you have got the wrong people and it is a nightmare.

[Lord Naseby (Con)]

My Lords, the noble Lord, Lord Eatwell, mentioned the Crown dependencies. I want to ask my noble friend on the Front Bench about the position of the British Overseas Territories.

Telecommunications (Security) Bill

Debate between Lord Naseby and Earl of Erroll

Committee stage
Tuesday 13th July 2021 Grand Committee

[Lord Naseby (Con)]

My Lords, I apologise to my colleagues that I was not able to speak at Second Reading. I am quite clear, as I suspect we all are, that the security of the UK’s telecoms infrastructure is vital. Sadly, we come pretty late to the scene. The expansion of 5G and full-fibre broadband should have happened years ago, so this is not before time.

I read economics at Cambridge and looked at a number of aspects of economic expansion there, particularly in relation to business sectors. It is all very well saying that we will try to prevent the supply chain to the UK network being dependent on a limited number of suppliers. That may be a good idea in theory, but I just reflect that we have a national grid which is every bit as important as 5G; we have one or two aircraft manufacturers, and we have a couple of shipyards, so I just wonder whether there are a whole lot of suppliers out there for the telecoms world—there will be others who are better qualified than me to judge that. However, it is clear that we need to identify areas of risk, and Huawei is clearly one of them.

I would just ask a couple of simple questions. The noble Baroness, Lady Northover, mentioned Five Eyes. Is there a co-ordinating structure for Five Eyes in relation to this particular structure? If so, where is it based, what is our contribution to it and who exactly is doing it?

Some of our colleagues may have read the recent trading standards report that has just come out—I read it only last evening. A massive number of scams is happening at this point in time and we are dealing with the trouble they cause.

Amendment 20 refers to

“a specified country or … sources connected with a specified country, including by ownership or investment”.

I have worked overseas, including in a fair number of countries in south Asia such as Pakistan, India and Sri Lanka, so I ask: who on the ground will actually be doing the work? Quite frankly, I know of nobody in any of our high commissions capable of doing that sort of analysis. Do we have a floating investigatory system? How are we going to judge the evidence properly?

On Amendment 27, we need to take care, clearly, but we must recognise that there may be a valid opportunity in a company that has upset the host Government. You and I would not know the situation, but we should be aware of that fact.

I am a bit sceptical about the security check. I made a freedom of information inquiry—it was nothing to do with telecoms—and, at the end of the day, the reason given for not producing all the evidence following my FoI request was the security of the country. It was never explained in words of one syllable—or indeed in any syllables at all—what aspect of my inquiry would affect the security of the UK. I would like to know this from the Minister: are we relying on Five Eyes or are we relying on Ofcom? Who is it specifically that will be doing this analysis?

[The Earl of Erroll (CB)]

My Lords, I want to say a few words on this. It is highly relevant that we keep a close eye, but on all vendors, including the ones that may seem okay at any given moment—the world keeps changing. I am not an apologist for, and nor do I wish to promote, China in any way whatever, but it happens to be there and it happens to have ripped off a lot of Cisco stuff a few years back and improved it. The Japanese did this to our cars, many years ago—nothing changes.

The real problem is that we do not manufacture this sort of stuff here; some of it is manufactured in Europe, and of course we are no longer part of that, but does that matter anyway? We are reliant for the supply of all this electronic equipment, and the components—such as chips, which I mention specifically —on China and many other places. The Americans also rely on China to manufacture components which they then put in their equipment. We had a security compromise a few years ago, when compromised components were put into some Cisco equipment. It is more complex than trying to ban one company or one country. But there are not many alternatives for us here, and that is the real problem. We need to get some home-grown stuff going and we need to get it done very quickly if we want to be really secure.

What are we going to do about it? The thing that worries me is that you cannot assume that your allies are always your friends in everything. We have to be particularly careful of being dragged into a trade war under the cover of security or defence—and this does happen. The cost of this whole thing is not so much that Huawei will try to cause us problems in some way unknown if we remove it from our system completely; there is the other side of it. If its technology is working and is better, and we can make sure in various ways that we are secure against what Huawei might do, its technology might get us to where we need to be in an internet world a lot quicker. I notice that we have already delayed quite substantially the rollout of broadband everywhere and 5G—everything seems to be stalling because of these rows, which to me are trade rows.

I fully understand the points of the noble Lord, Lord Alton, about supporting regimes that are doing appalling things around the world. The trouble is that there are an awful lot of them. Take the situation he mentioned, to do with cameras. It is actually the software that does the facial recognition, not the camera; it is purely a bit of hardware that takes a very good, high-quality photograph, and there are many alternatives to it. Who is supplying that facial recognition software? That is where I would really target, and I would bet it is China. If there are bits that are useful to us, we need to use them. We need to stay in the world and we need to get ahead. We are not ahead and we are going to drop behind more and more.

The other difficult thing about picking a fight with China is that, if we are really going to go net zero and start going all electric in the next few years, lithium supplies and processing are from China. There is already a shortage of chips and other things in the automotive industry; I am sorry, but we are reliant on an intertwined global supply chain which stretches all over the place. We must be very careful about singling out one country, but we are—and that is why the amendment is useful. We must have something that says that we are keeping a proper eye on the whole lot of them.

--- Later in debate ---

[Lord Naseby (Con)]

My Lords, I am sorry that the noble Lord, Lord Clement-Jones, does not like my analogy of flying. I just remind him of a recent series of Boeing airliners that crashed with a huge loss of life when the security of flying was overridden by a piece of machinery. I stick by my analogy but I will not progress that any further in relation to these amendments.

The Bill says clearly:

“publish the code; and … lay a copy of the code before Parliament.”

However, it does not allow Parliament by right to debate that code and any amendments that come. This is a fast-moving market, as we all know. New opportunities have come up that will have a security dimension to them. There will be new developments, I hope, from our own technical universities so there must be some provision for the expertise that both the House of Commons and the House of Lords have within them to debate. Those of us who have been in Parliament for a few decades know that quite often there are unusual people who have a particular niche that they know something about. That is the benefit of the experience of Parliament.

I agree with the noble Lord that it ought to be done on the affirmative procedure. I sat in the chair for five years during the passage of all the Maastricht and other Bills and there are certain areas where it is absolutely crucial that it should be done by affirmative resolution. Therefore I certainly support that dimension.

[The Earl of Erroll (CB)]

My Lords, I can see that it might be useful to avoid scrutiny sometimes when we have to finesse difficult issues—say, balancing effectiveness and public perception of certain other issues, or whatever. We can also end up with an awful lot of SIs in front of both Houses and everyone feeling rather swamped and bored by them and no one really doing anything about them. The trouble is that we get more and more wide-ranging powers in Bills, and this is a particular example of it. The more we do that, the more careful we have to be about the secondary legislation, because that is where the devil resides and that is where the real control is. We have just passed something that enables a takeover by the Executive. In some cases that may be a good thing; in others it could be very dangerous. To be honest, because of the huge, general issues in these Bills, I now come down in favour of the affirmative procedure. We are going to have to scrutinise it.