5G Network

Alun Cairns Excerpts

Tuesday 24th November 2020 Westminster Hall

[Alun Cairns (Vale of Glamorgan) (Con)]

I beg to move,

That this House has considered business and economic opportunities after Huawei’s exclusion from the 5G network.

It is a privilege to serve under your chairmanship, Ms Eagle. I am grateful to the Members present for their interest; I am sure that there will be cross-party support for my objective. I want to use the UK’s excellence in areas of new technology as an opportunity to help to grow the UK economy and to support the Government’s levelling-up agenda across the UK.

Some time has passed since the decision was taken to exclude Huawei from the UK’s 5G network. Governments around the world faced challenges over Huawei’s dominance in this field. Concerns around security contradicted the will or demand to roll out the technology as quickly as possible. A tension between the two was created. We all know the difficult decision that the Government took to exclude Huawei’s influence, and we look forward to the Telecommunications (Security) Bill, which will be presented shortly.

Alternative providers need to be found and developed, and that is an opportunity for the UK to step up in specific areas. As a free marketeer, my instinct is to let the market decide, and that remains true, but with the UK having considerable expertise in the field, the Government can play an active part in setting the direction, creating the parameters and providing the greatest certainty to allow for private investment, particularly in the fields where as a nation we are in a leading position. Announcements on open standards such as Open RAN—radio access network—highlight that the Government understand that, and their focus should be recognised. It will diversify the market, improve resilience and innovation and facilitate the UK to play a leading position in a field recently dominated by the Chinese.

The reach and influence of 5G technology will extend much further than previous generations of communication. Its capacity to carry much larger volumes of data at very high speeds means that our connected lives will be taken to a new plane, from the internet of things to connected vehicles and smart cities, and many more areas that we have not even thought of yet.

There are several fundamental elements needed to achieve that, including a range of areas, such as radio frequency and satellite communications, 5G and base station capabilities, backhaul technologies and cyber-resilient networks among others. I highlight those elements, because I believe the UK already has specific expertise there, which can be developed further, as I will comment on later. All of them come together using compound semiconductors. These very high capacity chips enable more data to be managed effectively.

It was once described to me that if a silicon chip is a country lane, a compound semiconductor is a great big highway. That encapsulates the opportunity and possibilities 5G will create. Interestingly, they also minimise energy consumption and will play a big part in our net zero target. It is with great pleasure that I can say that the world’s first cluster of compound semiconductor technology is in south Wales, developed from companies such as IQE, SPTS Technologies and Newport Wafer Fab. Many others have followed since. All are supported by the Compound Semiconductor Applications Catapult.

I want to pay particular tribute to the work of Dr Andy Sellars from the Catapult, who first sparked my interest in this field when I was the Secretary of State. Government investment has been significant through the Department for Business, Energy and Industrial Strategy, UK Research and Innovation and the Cardiff capital region city deal. It was a privilege to play an active part in supporting the projects and to see Swansea University and Cardiff University research play its part, along with other universities from Bristol to Cambridge and many more. I also had to ensure that the Department for International Trade was also aware of their expertise. It was good to see Andy Sellars in a prominent position at the GREAT Festival of Innovation in Hong Kong, highlighting the possibilities and seeking to attract interest and investment globally. It was an extremely impressive show, as recognised by everyone. It was a privilege to be there to see it in action.

The fundamental elements I have highlighted, however, are also areas where the UK has specific expertise that can be developed with an appropriate framework. The high-speed radiofrequency technology along with satellite communications needed to maximise coverage is one example. The UK’s investment in OneWeb shows that the Government understand the opportunity. There is also a cluster of complementary technology companies in the north east, such as VIPER RF, Diamond Microwave and aXenic. These are all supported by the Satellite Applications Catapult in the region. Elsewhere in the UK, iconicRF has a very strong reputation internationally.

I pay tribute to the Minister for his active interest in this area, which has given a lot of support to the industry and encouraged further investment, but there is more to do. As part of the network improvements, there will be a need to upgrade base stations with the specific need to develop small cell technology. Blu Wireless in Bristol is an example of the UK’s expertise that also benefits from the compound semiconductor cluster that I have already referred to, which also forms part of the western gateway region. Also in the western gateway economic region lies the UK’s strength in cyber-resilience, including Airbus, Thales, GCHQ and Bristol University’s quantum optical network strength, among others.

Another essential element is backhaul, which takes data from the cellular base stations and feeds into the network. The introduction of 5G applications will mean a need to develop from its strength beyond 400 gigabits per second. Filtronic in Durham and Cambridge Broadband Networks are forerunners in this area, too. The final piece of the jigsaw is test and validation. This is critical to guarantee the interoperability between the vital elements that I have already referred to. The world’s leading test and validation company, Spirent, has its headquarters in the UK. It also operates in the United States. Bringing all those together highlights our expertise in discrete areas of 5G apparatus—a technology and infrastructure project for which demand will grow exponentially. We have an opportunity to develop a plan to ensure that those companies and others are well positioned to benefit from that opportunity, but how do we do that?

There are examples of support across Government, such as for the automotive sector, that offer a model of how to engage with the industry to develop the necessary clusters of consortia. For example, the Advanced Propulsion Centre plays a role in facilitating the shift to electric vehicles. Its modest budget has attracted significant private sector investment in the field. In one case, the APC supports a consortium of 13 companies that work with the Compound Semiconductor Applications Catapult in south-east Wales, to which I have already referred, to create the UK semiconductor supply chain to power McLaren’s electric sports car.

On the back of that project, further consortia have been formed with BMW and Mini to benefit from UK technology. In total, the catapult is working on approximately £100 million-worth of projects, 50% of which have been funded by the private sector. I suspect that the private sector proportion will continue to grow because of the cluster of excellence that has been created.

Another model, in a different field, is the ventilator challenge that the Government set up in response to covid-19 to encourage manufacturers to innovate to meet the global shortages of ventilators. A consortia of companies brought together by the High Value Manufacturing Catapult built more than 15,000 ventilators, which represents five years of production, in just three months. That was pulled together in the national interest and would not have happened if the Government had not played a facilitating role.

A third example is the development of energy generation projects, which have received similar support. The certainty that the Government gave to offshore wind energy installation has allowed the UK to dominate the engineering field in that sector. Similarly, the commitment to small modular nuclear reactors is leading to a world-first in the UK that has the potential to be a major export. Again, I pay tribute to the Department for Business, Energy and Industrial Strategy, the DIT and the Wales Office, when I had a personal interest in it, because Wales has a strong presence in the opportunity.

The Minister will be pleased that I am not calling for a new agency or for identical models to be used, but I am asking for the same principles to be applied that were established for electric vehicles, ventilators, offshore wind and SMRs to prompt further investment from the private sector. The Government have a part to play in providing certainty on policy. The Department for Digital, Culture, Media and Sport is playing a significant part, but it also needs to act as a facilitator to bring some of those excellent companies together and to work with BEIS because of the cross-departmental agenda.

I also gently say to the Minister, and other hon. Members, that not all Government Departments are as joined-up as we would like them to be. Sometimes there needs to be an able Minister with a great pedigree who has the opportunity to bring people together, such as the Minister before us. The market potential is significant and would be a welcome boost to many parts of the United Kingdom.

Companies have a part to play too. If I have any criticism of them, it is that they do not shout loud enough about their expertise or their potential. I deliberately stated where most of those companies are based, because their siting is relevant to the Government’s levelling-up agenda. The western gateway that I referred to is sited in some of the most deprived parts of the UK, but there is the excellence in that region to bring together complementary expertise that does not exist anywhere else in the world. Similarly, the north-east has a leading position in radio frequency and satellite technology, as I have highlighted, and we all know about the Government’s ambitions to grow the economy in that part of the country.

The Government’s decision on Huawei could be a pivot to develop our expertise further and to scale up research in manufacturing, which would lead to a major increase in UK components for our 5G network and a huge export market. At the same time, that would remove the security risks that many hon. Members were concerned about. I look forward to the Minister’s response.

--- Later in debate ---

[Matt Warman]

It is a crucial complement to the Bill introduced by us today. We will be putting in place all the right incentives to ensure that the requirements being imposed by us through primary and secondary legislation can be met, or even beaten, within the timescale that we will be laying out. We cannot impose requirements on individual companies to make specific procurement decisions through legislation, but we can make sure that they are as secure as they need to be, and that the programme fits in a way that works for the market and for our national security. I know that the hon. Lady will take a close interest in both the primary and the secondary legislation, which will fill in some of that picture.

My right hon. Friend the Member for Vale of Glamorgan was right to imply that while we are now more dependent as we move away from Huawei, we have an opportunity to work both with the existing incumbents—primarily Nokia and Ericsson—and new incumbents. We are already working towards increasing the presence in our markets of those incumbents and, crucially, towards that Open RAN future of interoperability and far greater opportunities for our companies to thrive.

[Alun Cairns]

I underline my point that many of the component businesses to which I referred will have the opportunity to work with Ericsson and Nokia, as well as with other leaders in the field that are alternatives to Huawei, so the UK can play a prominent role even if it is not the headline, first-tier organisation.

[Matt Warman]

My right hon. Friend is absolutely right. That is why the Government have been working as fast as they can on the 5G supply chain diversification strategy, which not only meets our short-term needs but prioritises the bold and ambitious approach that, as we both agree, makes it possible for our companies to make the most of their place in a global market, not just the UK. To reiterate what has already been said, that approach is built around supporting incumbents and attracting new suppliers, and also around accelerating the development and adoption of the Open RAN interoperable standards. They are all major opportunities, both nationally and internationally.

As discussed, the decision taken on high-risk vendors means that the UK is more resilient in respect of Nokia and Ericsson, and although 5G is now available in over 90 towns and cities with the support of those two companies, we need to seize the emerging opportunities to grow that number as rapidly as we can. That is why the Government are looking through a series of R&D interventions of the sort that the catapult has been so pivotal in accelerating.

Of course, we also want to bring new suppliers into the UK market. It is worth saying, as the hon. Member for Newcastle upon Tyne Central did, that the presence of the NEC global centre of excellence in the UK is not just an important sign of what is already there, but an important signal of the esteem in which the global supply chain holds the UK’s enthusiasm for adopting 5G.

I will take the opportunity to say that we have no intention whatsoever to delay the 2027 target for the majority of the UK population to be covered by 5G. It is already in 100 towns and cities, and the figure is increasing all the time. I also take the opportunity to point out that the chair of the taskforce mentioned by the hon. Lady, which is expert in both commercial and academic senses, is Lord Livingston of Parkhead. I am sure she knows that Parkhead is a part of Glasgow and is some way north of Bristol, but we are keen to focus on the diversity and expertise of that taskforce. Ultimately, we have prioritised expertise in the taskforce rather than the geographic location. She makes a fair point but, as I say, Glasgow is consistently north of Bristol.

--- Later in debate ---

[Alun Cairns]

It is a privilege to have the opportunity to respond to a debate in which everyone has been in agreement. I pay tribute to the Minister and the shadow Minister for the healthy banter between them.

We recognise the real economic opportunity in parts of the UK where there are specific economic challenges. This is a great opportunity for the levelling-up agenda and for making great advances in technology in the UK—in the 5G network in the UK and globally. They come together, and the UK can play a prominent part.

I am also grateful to the hon. Member for Aberdeen South (Stephen Flynn) and my hon. Friend the Member for Wakefield (Imran Ahmad Khan) for their contributions. They recognise the challenges that the Government have faced and the opportunities ahead of us.

We need to move away from the headline, first-tier organisations, because most of the expertise lies in a diversified supply chain. We have named some of the organisations in the supply chain, but there will be many more that we are not aware of, such as start-ups that have broken through in some of these fields. Ministers in DCMS, BEIS and beyond need to play a facilitating role in responding to the latest emerging technology and in creating a framework where companies can come together to further enhance the research and excellence in the field. They must take this opportunity for the UK to play a prominent part not only through its own network, but in the exports sought by those nations around the world that do not have that base level of excellence and research.

Question put and agreed to.

Resolved,

That this House has considered business and economic opportunities after Huawei’s exclusion from the 5G network.