BBC Funding

Alun Cairns Excerpts

Thursday 7th December 2023 Commons Chamber

[Lucy Frazer]

I wish to correct the hon. Lady: we are not cutting the BBC’s budget but increasing it, by 6.7%. What we are not doing is increasing it by 9%. She will know from speaking to companies or households in her constituency whether those companies have had a 9% increase in their funding. Have the Government had a 9% increase in their funding? We are creating a careful balance to ensure that we support the BBC with this rise of 6.7% to provide those services, while thinking carefully about the cost of living and bills for households up and down the country.

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

I thank my right hon. and learned Friend for her statement on restricting the increase in the BBC licence fee. I also recognise the reassurance she has given S4C, which is facing a particularly challenging time and needs stability. As she said, the licence fee still raises £3.8 billion. Departments, local authorities and most public organisations have to publish details and invoices in respect of sums in excess of £500. I have tried on two occasions in the House to introduce legislation to force the BBC to do the same. Within the review, will she consider how we can increase transparency and scrutiny of the £3.8 billion that is spent, so that we can introduce better efficiency gains and scrutinise closely where money might be wasted?

[Lucy Frazer]

My right hon. Friend makes an interesting point. I do not think it will form part of this review, but it is an interesting point that I will reflect on and consider further.

Channel 4 Privatisation

Alun Cairns Excerpts

Tuesday 14th June 2022 Commons Chamber

[Lucy Powell]

So the hon. Gentleman now thinks that Channel 4 is not important to Leeds. Perhaps he might want to take up the issue with Leeds MPs and Leeds constituents, who take a very different view. They support what Channel 4 is doing in its levelling-up agenda, which is evident for all to see.

Channel 4 supports skills and widens access to the industry. At a time when employers are crying out for talent and people across the country are looking for jobs, Channel 4 is supporting thousands of young people and apprentices each year. The Secretary of State has said that her defining mission is

“ensuring that everybody from every background has access to the arts”,

so why is she undermining an important access driver in this way? Thanks to its unique publisher-broadcaster model, Channel 4 invests half a billion pounds a year on average in the independent production sector. That has helped to grow and start many of our most successful production houses.

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

The hon. Lady refers to spending on original content. In 2006, it was £516 million; by 2020, because of the fall in advertising income, it had fallen to £329 million. Does she accept that the current model of Channel 4 cannot survive and that it needs reform?

[Lucy Powell]

No, I do not. This year, it is the most profitable and successful that it has ever been, so I think the right hon. Gentleman’s figures are wrong.

--- Later in debate ---

[Ms Dorries]

As someone who has worked in the industry, my hon. Friend is deeply knowledgeable about how Channel 4 and the industry works. As I said in a previous answer, “Up Next”, the broadcasting White Paper, makes it very clear that that distinctive British content that makes Channel 4 so successful is part of the criteria.

The broadcasting White Paper is a fantastic piece of work, and I strongly recommend that everybody in the House reads it, as it makes it very clear what the Government’s objectives are for the broadcasting sector. Furthermore, we are taking the decision as a Government to look at broadcasting in the round—to look at the whole broadcasting landscape in the UK. I know that the conversation and the debate are focusing mainly on Channel 4, but we have to consider broadcasting in the round right now.

In addition, Channel 4 faces a series of unique challenges—challenges that other public service broadcasters with different ownership models do not face. Streamers such as Netflix spent £779 million on UK original content produced in 2020, more than twice as much as Channel 4. While other PSBs, such as the BBC and Channel 5, have the freedom to make and sell their own content, Channel 4 has no inhouse studio. Its ownership model restricts it from borrowing money or raising private sector capital. It is left almost entirely reliant on ad revenues. Those revenues were already shifting rapidly online, and the competition is only set to heat up now that Disney+ and Netflix have confirmed their plans to enter the advertising market. In addition to that, we have, later this year, new, huge streamers coming into our homes, which will also, quite probably, be operating on an advertising model.

Under its current form of ownership, Channel 4 has fewer options to invest, fewer options to innovate and, crucially, fewer tools with which to grow. There are serious challenges that require serious plans to overcome, not the kneejerk reaction or hyperbole of the Opposition.

[Alun Cairns]

Will the Secretary of State join me in calling on the Opposition to engage positively in this debate? We all respect the interest in the independent sector and we all want to see it grow, and it will have that opportunity under the new model. Rejecting any form of change will simply undermine the industries that we are seeking to support.

[Ms Dorries]

I could not agree more. Labour may not like to hear it, its refusal to even engage with the profound changes in the broadcast landscape is further evidence that it does not have a serious plan for broadcasting. If it really wants to protect Channel 4 and to protect the wider broadcasting ecosystem, it is not enough to consider only Channel 4’s current success.

--- Later in debate ---

[John Nicolson]

The hon. Gentleman is shaking his head. Feel free to intervene, rather than groan in agony. Apparently he cannot marshal the words to match his facial expressions.

Millions of Channel 4 viewers will have noticed the adverts on Channel 4, but the Secretary of State apparently has not, yet she presumes to pontificate on Channel 4 while junior Ministers breathlessly wait. It is like watching an unbenevolent Mr Dick from Charles Dickens fly his kite. [Interruption.] It is a literary reference. People may laugh at the clips, but such wilful ignorance debases the policy-making process. When she is misunderstanding the most fundamental part of her brief, but still thinks it appropriate to patronise the Channel 4 management and staff, it is painful to witness. Nor was that a one-off; the Secretary of State thought that Channel 5, as has already been quoted, had been privatised. She told Iain Dale of LBC that it was, citing the privatisation of Channel 5 as a model for Channel 4 privatisation. She said that it was privatised

“three years ago, five years ago maybe”

when she did that particular interview. There was only one problem: Channel 5 was never privatised. It was another excruciating on-air exhibition of ignorance.

The Secretary of State may not know much about the sector, but does she at least have the public on her side as the Government lunge at Channel 4? Apparently not, although she does not seem to know it. Let us look at the consultation she set up to assess public opinion on the proposed privatisation. At a November DCMS Committee session, the Secretary of State said:

“what is the point of having a consultation that 60,000 people respond to if I had already made my mind up what I was going to do with Channel 4? That would be an abuse, I think, and a waste of money and effort on behalf of a large number of civil servants. I would really like to see what those 60,000 responses say first.”

The message was clear: she would listen to the public, those who watch and love the channel.

People did respond to the Government when asked for their view. As the Secretary of State said, 60,000 responded in an impressive display of public engagement. What did the figures show after they were analysed? Those figures, which the Secretary of State told us it would be an abuse to ignore, were interesting. Some 96% of the public were against Channel 4 privatisation, although in yet another moment of tragicomedy, the Secretary of State announced to the Select Committee at her latest appearance that 96% of the public were in favour of privatisation.

[Alun Cairns]

I am not sure whether the hon. Gentleman is advocating no change for Channel 4, but if he is, how will he accommodate the fall in advertising income and its impact on the spend in Scotland, Wales, Northern Ireland and the English regions?

[John Nicolson]

As other hon. Members have already explained, Channel 4 is making record profits. Since the system seems to be working so well, I do not see the point of breaking it.

[Alun Cairns]

It is spending less.

[John Nicolson]

It is making plenty of programmes. In fact, the Secretary of State already said that so many production companies are being successful that they cannot keep up with the current demands. Conservative Members need to marshal their arguments and work out which they are advocating.

Once again, so we are all clear: 96% of the public in the Government’s own consultation process, which the Secretary of State said it would be an abuse to ignore, said that they opposed Channel 4 privatisation—so much for respecting the public will. It appears that the public matter as little as industry experts.

Let us turn to one of the main arguments put forward for the privatisation of Channel 4. The Secretary of State often says that she wants it to be able to compete with

“streaming giants such as Netflix and Amazon”.

She may have noticed that they do not have war correspondents, or at least that those who do appear are actors in movies, not journalists dealing with breaking news. The comparison is far from ideal, but let us briefly explore it anyway.

Amazon Prime is owned by a trillion-dollar company that uses its video streaming end as a loss leader. Unlike Channel 4, it does not make a profit, so it is far from a role model. What about Netflix, the other role model that the Secretary of State has in mind for a privatised Channel 4? That is not going so well either. It has racked up billions of dollars of debt and its share price has fallen by more than 70% in the last six months, which demonstrates the volatility of the market.

Unlike the Secretary of State’s chosen examples, Channel 4 is a commercial success that runs a profit, not a loss. Its real competitors are the current UK public service broadcasters such as the BBC and ITV. We all know that the future is digital and here Channel 4 leads the UK. We all know that linear numbers are down, but it is in a strong position to benefit from that trend as it is the UK’s biggest free streaming service, despite having a considerably smaller budget than the BBC. Also, of course, because it is publicly owned, it can reinvest extra revenue.

What if the nightmare happened and the Secretary of State got her way? Some on the Tory Benches—I suspect not those invited to participate in this debate—may be swithering and wondering what the future of Channel 4 will hold. They might consider that the Secretary of State, however dodgy her grasp of facts and of the issue, has promised that Channel 4 will remain a public service broadcaster. They might think, “We will have sold off another piece of the family silver, but at least we can all muddle through and things might not change that much.”

Well, not so fast: although the Secretary of State did promise that, whatever fate befalls Channel 4, it would always remain a public service broadcaster free at the point of use, that undertaking fell apart somewhat under cross-examination at the Select Committee. We discovered that Channel 4’s buyer need only keep it as a public service broadcaster for 10 years. The Secretary of State has now made it clear that the Government will have no locus over the broadcaster once that period is over. When asked if the owners would have to consult the Department after 10 years, the Secretary of State said:

“No, it will be privately owned. It will be up to owners.”

So I say to Tory Back Benchers who are uncertain about what to do, if the new owners want to make Channel 4 a streaming service, they can. If they would like to ditch the award-winning “Channel 4 News” with its new chief anchor Krishnan Guru-Murthy, it is up to them. The Secretary of State may be too scared to go into the studio to face him about Channel 4 privatisation, but do those Tory Back Benchers not want him and the news channel to be around to tackle the next Labour Prime Minister? Short-termism may come back to bite them. Say goodbye to “Unreported World”, which sends intrepid correspondents off to tackle unreported stories in some of the world’s most dangerous hotspots. They are astonishingly brave, but the show is expensive to make. Would a privatised company make it? No one at the channel thinks so.

The new owner could break up the company and sell it off. They could move it out of the UK. It is up to them entirely. The Secretary of State may argue that that is unlikely or would not make commercial sense, but do you really trust her judgment? Do you think she understands the detail? Will she even be around once this Prime Minister is gone? Who knows—it doesn’t really matter. What is important is that, once this 10-year period is over, the Government will have absolutely no power; it will be too late.

Reasoned argument has been tried and tested over Channel 4 privatisation. The arguments for privatisation never stack up. As a previous Secretary of State told me:

“too expensive, too unpopular, and too little in return.”

That Secretary of State had listened to the experts. This one does not seem to want to listen to the experts.

With an 80-plus seat majority, this ultimately, as we all know, will be up to Tory Back Benchers. Those of you not on the Government payroll do not much like your leader—we saw that and we saw how you voted. That we know and you often tell me you do not really believe in the culture wars—

Channel 4 Privatisation

Alun Cairns Excerpts

Wednesday 27th April 2022 Commons Chamber

[Julia Lopez]

I always enjoy engaging with the hon. Gentleman. The Government do not see “profit” as a dirty word; profit is key to creating investment in the companies and kinds of content that he is concerned about. He is right to celebrate Channel 4. We celebrate it and all the fantastic content that it brings, but this is about maintaining and increasing spend on content. That is why we will have a series of reforms in tomorrow’s broadcasting White Paper that I hope will reassure him of our intentions as a Government to have a sustainable PSB sector. I go back to the point that, through the PSB system, we get commitments in the remit to the kind of news content that he is absolutely right to highlight as incredibly important to our soft power.

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

Channel 4 spent £516 million on original content in 2006. That number fell to £329 million because advertising incomes fell at a similar pace. Does my hon. Friend agree that unless we do something, Channel 4 is at risk of stagnating, and that we can keep a similar news remit, commitment to diversity and investment in nations and regions in a different model?

[Julia Lopez]

I agree about the fundamental trends that my right hon. Friend highlights, and about some of his concerns. Channel 4 has fundamentally accepted those concerns in providing us with a range of alternative options, which we have looked at very carefully. We believe that the route we are highlighting is right because, through that, we will have a more sustainable public service broadcasting system, and we will be able to maintain the content and our commitments to some of the less commercially viable programming that audiences very much value.

BBC Funding

Alun Cairns Excerpts

Monday 17th January 2022 Commons Chamber

[Ms Dorries]

The BBC, as I have said, will continue to receive billions of pounds-worth of funding, and it will continue to meet its mission and core purpose, but I cannot dictate how it spends its money and I do not have editorial control. It is up to the BBC to decide how it spends its licence fee settlement.

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

I warmly welcome my right hon. Friend’s statement and recognise the priority she has given to Welsh language broadcasting and its importance to the Welsh-speaking community in Wales. In supporting her statement and helping the BBC to achieve its objectives under the new settlement, will she call on the BBC to follow other public sector organisations in improving its transparency and to publish every invoice in excess of £500, just like every other organisation does?

[Ms Dorries]

S4C plays a vital role supporting the Welsh economy, culture and society. The funding will support S4C in reaching more Welsh language speakers, including younger audiences. I am sure S4C heard what my right hon. Friend just said, and I shall certainly take his points back.

Oral Answers to Questions

Alun Cairns Excerpts

Thursday 18th November 2021 Commons Chamber

The Secretary of State was asked—

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

1. What plans she has for the future of the BBC licence fee.

[The Secretary of State for Digital, Culture, Media and Sport (Ms Nadine Dorries)]

The Government have committed to maintaining the licence fee funding model for the duration of the charter period. Ahead of the next charter review process, we will undertake a detailed look at the TV licence model to ensure that it is fit for the future.

[Alun Cairns]

I warmly welcome the encouraging comments made by the Secretary of State, publicly and in the Chamber, on the BBC. There is the potential to cut or at least freeze the licence fee. It raises over £3.5 billion a year, much of which is used to create quality broadcasts. However, significant sums are used to squeeze out competition from the independent sector. This is the most regressive form of taxation, akin to the poll tax, so does she agree that a freeze or a cut would be not only a welcome boost to hard-pressed families, but a way of facilitating innovation within the BBC and encouraging competition from outside, creating a much more dynamic broadcast provision?

[Ms Dorries]

I thank my right hon. Friend for his question. My priority is to secure a settlement that delivers value for money for those hard-pressed constituents and for the licence fee payer, while making sure that the BBC can continue to provide those very high-quality services to which he just referred. I have been having constructive discussions with the BBC and I believe that we are close to reaching an agreement. I hope he understands that I am unable to comment further while negotiations are taking place and are ongoing.

Football Governance

Alun Cairns Excerpts

Monday 14th June 2021 Westminster Hall

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

It is a privilege to serve under your chairmanship, Ms Elliott. I pay tribute to my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) for securing this extremely important debate, and for the way he introduced it.

In the brief time I have, I want to highlight two key issues. First, I remind colleagues that although it is the English Football League pyramid, four Welsh teams are part of that: Swansea, Cardiff, Wrexham and Newport. We are always aware of the Union of the United Kingdom, and we share our passion for football and sport in the same way. Therefore, although Welsh teams share the privileges of the English Football League structure, we are also subject to the same risks as all the other clubs. We must remember that fans come from all over the United Kingdom and beyond. Whatever actions come out of the petition and review, they will be relevant to fans wherever they are in the UK or around the world.

The second issue I want to highlight is that the presence of four clubs in the English pyramid system does not detract from the importance of the Welsh pyramid structure. I refer to an experience that is relevant to the English structure: Barry Town football club, which is now known as Barry Town United. I declare an interest as the honorary president. It was a highly successful club over many years, with a long history that included European success. It has passionate fans, just like every other football club, but it also has the most professional coaching structure. I pay tribute to Gavin Chesterfield and his wife Hannah Chesterfield, and the whole structure behind him, for what they have achieved. I hope hon. Members will indulge me for a moment to highlight that.

In 2013, we ended up with a disgruntled owner who had lost interest in the club and initially allowed the supporters to run the club for most of the season. He then decided, for whatever reason—we can all make judgments on that—to withdraw the club from the league with two games left in the season, in spite of having an extremely successful season. Of course, we wanted to qualify as a phoenix club, but the regulatory challenges meant that we, a local club, ended up in the High Court, costing us tens of thousands of pounds to get reinstated. We eventually won, but that was purely because of the passion of the supporters, the coaching structure and the supporters committee that ran it.

In the 15 seconds I have remaining, I must say that much of the attention of this debate has understandably focused on wealth and the exploitation of fans through overcharging, merchandising and drawing them to a super league. But there are local clubs with owners that are disgruntled for whatever reason, and the structures and laws as they stand do not lend themselves to the fans taking control, unless they are as determined as the fans and supporters of Barry Town United.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Nigel Huddleston)]

It is a pleasure to serve under your chairmanship, Ms Elliott. You must have been biting at the bit to contribute directly to today’s debate, because I know how knowledgeable and passionate you are about this topic.

I am very grateful to my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) from the Petitions Committee for having brought forward this debate on reform of the structure of football in this country, and to all colleagues from across the House and from various nations who have made constructive contributions. Again, their knowledge, insight, passion, experience and expertise has been incredible, and I am sure that many stakeholders in football have been listening.

I also thank Aston Villa fan Angus Yule, who started the petition on the 50+1 rule, and the Blackpool Supporters Trust, which started the petition for an independent regulator for football, as well as the tens of thousands of people who took the time to sign those petitions. We are having this debate because football fans want changes to be made to the structure of football in this country, and I thank them for their passion and their commitment to improving our national game. Both petitions received well over 100,000 signatures, which clearly signals the level of interest in this subject.

I also note the responses of fans to the Petitions Committee’s survey, which the hon. Member for Jarrow (Kate Osborne) mentioned and which asked the original petitioners for their views on the most important issues facing football governance in England today. They have highlighted areas of concern, including the need to protect the football pyramid, how revenue is distributed, club ownership, and the ability of fans to influence decisions. The Government’s independent fan-led review will look at those issues closely, as well as fans’ views and suggestions for how we can change the structure of our game for the better.

Fans have a crucial part to play in the reform of our national game. They bear the brunt and fallout of bad ownership decisions; they see where the structures are not working for the good of the game; and they can articulate most clearly how important local clubs and grounds are to the local community, and how club badges and names give a sense of heritage, belonging and place. Our independent review has already started its work at pace and is hearing from fans, football authorities and experts from the worlds of finance, governance and regulation to build the framework for the future of football in England. The review’s chair, my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), who quite clearly commands the respect of many who have spoken today, has already met many fan groups. I have regular meetings with the chair, but I also meet fan groups myself, most recently in Manchester, and I look forward to meeting more fans over the coming weeks and months.

In addition, the review team will shortly launch a survey to allow all fans to contribute their views. I will ensure that Members are notified when that survey is launched. That is quite important, because we have a lot of football fans in the country, and some of them are not necessarily specifically fans of an individual club, so it is important that their views are heard as well.

[Alun Cairns]

I pay tribute to the Minister for his work and the way he is following this issue. Will he consider engaging with fans outside England? The point has been made that across the United Kingdom, there are fans of clubs that may predominantly be in England.

[Nigel Huddleston]

I am confident that we will be able to do that, in electronic form, through surveys and through other mechanisms, for the very reasons he expressed. I had the pleasure of visiting Wrexham last year, and it has interesting new owners; that shows commitment and shows that it is possible to invest appropriately if international owners have the right attitude. That is important, because we should not taint all potential investors, including overseas investors, with the same brush.

The first petition calls for the enforcement of the 50+1 rule for professional football club ownership, in reaction to the—thankfully unsuccessful—move to create a European super league. The House’s opposition to that showed that football can unite us in opposition to certain things, as well for things that we want. On that point, the hon. Member for Luton South (Rachel Hopkins) mentioned the incident that occurred this weekend, which we were all very alarmed by. I wish Christian Eriksen a speedy and full recovery.

As Members will be aware, the 50+1 rule has been used in German football, during which time English football has pursued a very different model. There are clearly pros and cons to both approaches, and the terms of reference of our fan-led review include the consideration of models from other countries, so we are looking at that model. Members will be aware of the complexities of retrofitting the German model into the English system and of the benefits that some—though by no means all—wealthy individual owners have brought to our clubs. The review will consider whether any aspects of these alternative ownership models could be beneficially translated into the English league system. At this stage, it is for the chair and panel to consider all the options available. I would not want to prejudge their recommendations, but work is under way and the review’s interim report is due next month.

The review is also looking at other options that fans are keen to explore, such as voting rights, with fans having a greater say in how their clubs are run, and whether that would mean direct engagement and involvement with the club’s board and executives. The review will also consider giving fans some form of voting rights or golden share on key issues affecting the club. The Football Supporters’ Association supports that option, and it was supported by hon. Members today, including my hon. Friend the Member for Loughborough (Jane Hunt) and others.

What the panel, the Government and, most importantly, fans seek from the final recommendations is a stable and sustainable framework for our national game for the future and beyond. Key to that sustainability is responsible club ownership; integrity in club governance; recognition of the proud footballing history and heritage of our national game, as mentioned by many hon. Members; recognition of and understanding the value that football clubs bring to their local communities; and most importantly, recognition of the value and expertise that fans can contribute to their clubs.

We do not want to see again the destruction of clubs like Bury. Neither do we want to see clubs seeking to break the framework of English football simply to become wealthier at the expense of other clubs. We do not want our cherished and historic football grounds to be taken away from their communities. We do want stable and responsible ownership of our football clubs. We want fans to be involved in the crucial decisions affecting their clubs, and we want to maintain the thrill, excitement, uncertainty and competitiveness that give English leagues their status and make them the envy of the world.

I turn to the second petition, which calls for the introduction of an independent regulator for football in England by December this year. The strength of feeling on this issue among hon. Members was fairly clear. Again, I cannot pre-empt or prejudge the chair’s recommendations or the Government’s response, but there has been a clear message in this debate and many others that I have attended with the hon. Member for Wirral South (Alison McGovern). I fully understand the weight of feeling behind the huge amount of support for the petition, which has had more than 140,500 signatures. It clearly demonstrates fans’ appetite for better regulation of the structures in football.

BBC: Dyson Report

Alun Cairns Excerpts

Monday 24th May 2021 Commons Chamber

[Mr Whittingdale]

I absolutely assure the right hon. Lady that there is no question of dismantling or defunding the BBC. It is a priceless national asset, and one of the most serious consequences of the revelations of the past week is that its reputation and trust in it have been badly damaged. It is essential that it retains its position as the most trusted and reliable broadcaster in the world, and there is work to be done to restore that reputation.

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

The BBC has seen a string of public scandals, from Jimmy Savile to the treatment of Lord McAlpine, Sir Cliff Richard and many others. All have stemmed from a drive to secure sensationalist media headlines, along with groupthink and a “we know best” approach. The BBC’s capacity to scrutinise, investigate and report on itself is in tatters, which is particularly worrying considering its huge resource, how it seeks to dominate the news space and its lack of transparency. Does my right hon. Friend agree that reform is needed, not only in the specific areas that Lord Dyson has pointed to, but of its culture, transparency and whether its dominance is undermining news plurality?

[Mr Whittingdale]

I agree with my right hon. Friend. He is entirely right that this is not a one-off incident. There have been dreadful failings by the BBC in its journalism in recent years, and he mentioned three of them. I would say that all of those happened before the new charter was put in place, but we need to assess the effectiveness of the charter to ensure it is properly working, and that is something that we will start work on straightaway.

European Football Proposal

Alun Cairns Excerpts

Finance (No. 2) Bill: (Freeports (Stamp Duty Land Tax)) (Ways and Means) & Ways and Means resolution
Monday 19th April 2021 Commons Chamber

[Oliver Dowden]

I assure the hon. Gentleman that we will be doing three things. First, we are backing the actions by the football governing authorities. Secondly, at the same time, we are looking at all options—he raised some important further options—and we will proceed at the fastest pace required to deliver a result. Thirdly, these events give rise to major questions, which have become ever more apparent to me. We had the promise in our manifesto. My dealings with football over the past years, as we have sought to negotiate the support that the game requires, have demonstrated again the need for governance reform and the need to look at finance and whether an independent regulator is required. All these things will now be examined by my hon. Friend the Member for Chatham and Aylesford.

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

I congratulate the Secretary of State on his statement and on the announcement of the fan-led review. Does he agree that the pyramid structure of the English football league gives focus to football clubs right across the country to compete and progress to the highest level based on performance and competition? Does he recognise that it also provides the opportunity for community links and rivalry across the country, even between Wales and England, when clubs such as Swansea, Cardiff, Newport and Wrexham choose to compete in and are welcomed into the English football structure? Will the review he has announced also consider the interests of those clubs that are not in England but compete in the English football league?

[Oliver Dowden]

As almost always, I agree with every word that my right hon. Friend has said. I am happy to give him precisely that assurance. He is absolutely right to highlight the two biggest problems with this super league: it removes a large element of the competition and the joy of the game, and it risks taking money away from grassroots football, which is central to the game.

Telecommunications (Security) Bill

Alun Cairns Excerpts

2nd reading & 2nd reading: House of Commons & Carry-over motion & Carry-over motion: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons & Ways and Means resolution & Ways and Means resolution: House of Commons
Monday 30th November 2020 Commons Chamber

[Oliver Dowden]

To clarify the position for the right hon. Gentleman, mobile network operators cannot purchase from December this year—so they can purchase it now— and the installation limit will then apply from September 2021. The point of these measures is to address the concerns that Members rightly raised that companies could be incentivised to purchase large amounts of stock, stockpile it and then roll it out right the way through to 2027. I told the House in July that I would set us on a clear and unambiguous path to 2027, and these measures do exactly that.

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

Does the Secretary of State agree that, associated with the Bill, there needs to be a plan for the greatest diversity in the supply chains? That is the long-term solution, because part of the challenge is that we have ended up focusing on one supplier, Huawei, which has been dominant in this field. What action is he taking in that area?

[Oliver Dowden]

I thank my right hon. Friend for his intervention. The interventions are tempting me to jump around points that I intend to make, but he is right about the importance of diversification. We have published the diversification strategy, which is available for Members to examine, and I will come on to it in a moment.

It is this Bill and this Bill alone that gives Members the assurances they seek for the security of our networks both now and in the future. Further to the point made by my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), operators are already taking our approach seriously—they are working now to meet the Government’s requirements. For example, BT has signed a deal with Ericsson for 5G equipment to enable it to phase out Huawei and is already in the process of using Ericsson products to replace Huawei in its core. Where operators can go further and faster without jeopardising the stability of our network, we will of course encourage them to do so, but it would be a big risk to force them to go even further. BT and others have warned that moving faster could put our networks under considerable strain, creating significant risk of blackouts, and it would take longer for 5G to reach the parts of the country where it would make the most difference.

--- Later in debate ---

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

It is a privilege to speak in support of this Bill and to have the opportunity to support many of the calls that colleagues have made.

Only just over a week ago, the Minister and I were in Westminster Hall debating an allied subject to this Bill when we discussed the challenges and opportunities that came from excluding Huawei from our 5G network. I do not want to repeat all the points that were made in that debate, but in the short time since then, the Government have taken significant, welcome steps—something the Minister hinted at—in developing policies associated with the Bill. Today’s publication of the 5G supply chain diversification strategy sees a welcome plan that contributes to the solution that Huawei brought about, as does the neutrORAN pilot that was announced earlier today.

As a backdrop, it is worth recalling that it was the lack of diversity in the supply chain of this specialised area of technology that created a tension between the desire to roll out 5G as quickly as possible and the potential exposure of our national security to high-risk vendors. Among a whole range of factors, we were being forced to weigh up, or were tempted by, the economic and social benefits that 5G could bring within a relatively short timescale against the risks of being exposed to largely one company with its umbilical cord attached to one nation and the potential security risks associated with that country—obviously, China.

The Government ultimately, and rightly, decided that the concern for the latter outweighed the former, and this Bill is the result. That is welcome, but simply passing the Bill will not necessarily reduce the risks if we continue to be exposed to a limited number of vendors. That is why the diversification strategy and the neutrORAN pilot are also important. It is worth highlighting that in any vital supply chain, diversity is key, but a few organisations in the commercial world allow supply chains to become too constrained. The commercial risks, let alone the security risks, are far too great.

It is worth recognising that the reach and influence of 5G will be far greater than any previous generation of communications. Its capacity to carry much larger volumes of data at very high speeds well beyond 400 Gbps capacity means that our connected lives will be taken to a whole new level. Some have mentioned the internet of things, connected vehicles, smart cities and even smart energy networks, and many more areas that we have not even thought of will become connected in an ever greater, independent way, highlighting the risks that we could have faced if this Bill had not been brought forward. However, all these innovations lead to an exponential growth in connectivity and pressures on spectrum that has its natural limits, which also need to be overcome. Smart cell technology is likely to be part of the solution, meaning that more apparatus than ever before will need to be adopted, along with a greater dependence on the fibre networks that will take it from the small cells. However, this also highlights the need for quantum encryption—something I will come to later, because it is not included in the strategy plan that the Minister published earlier today.

It is therefore obvious that alternative suppliers need to be developed, not only because of the risks we are considering but because of the unprecedented demand for equipment needed to deliver the connectivity that will be called for. There is significant value in this—in the research and development, in the intellectual property and in the manufacturing opportunities, all of which need to be exploited. A fundamental turning point for me was during the summer, when the Government announced their intention to adopt open standards such as open RAN. This signalled that the Government understand the challenges, and the need to encourage more investment and innovation in this space. This was a hugely welcome step, and will be pivotal to diversification in the marketplace. Furthermore, today’s neutrORAN pilot project shows that the Government are determined to be at the forefront of the technological advances.

I would add that we need to ensure these pilots are particularly open—very open—to UK businesses. In last week’s debate, I went into detail to highlight the many individual companies that show the UK has exceptional expertise in specific areas, such as radio frequency and satellite communications, base station capability, backhaul and cyber-resilience. I went through a whole list of organisations in last week’s Westminster Hall debate; I will not go through them again, but I will just highlight a few.

Many right hon. and hon. Members have referred to cyber risk, but south-east Wales and the western gateway have among the greatest cyber-resilience expertise anywhere, certainly in Europe: Thales, Airbus, and quantum technology at the University of Bristol, along with GCHQ. It also happens to coincide with the disproportionate strength that south-east Wales has in compound semiconductors, which I will come on to in a moment, and the satellite and radio frequency expertise that exists in north-east England, highlighting that this coincides with the levelling-up agenda that the Government also want to pursue. Today’s Bill will lead to new economic opportunities in different parts of the country.

Enabling the technology through all these elements is a great economic opportunity. 5G will only work with the compound semiconductor technology that I mentioned earlier—high-capacity chips that enable more data to be managed effectively. I said last week that if a silicon chip is a country lane, compound semi-conductors are great big highways: that is the volume of data that will be carried by the 5G network. The world’s largest cluster for compound semiconductor technology is in south-east Wales, part of the western gateway economic region. Companies such as IQE, SPTS Technologies, Newport Wafer Fab and others work with the Compound Semiconductor Applications Catapult, as well as universities from Cardiff and Swansea to Cambridge and Bristol.

It is worth noting that the UK has great expertise in silicon chip design, but we do not manufacture such chips any longer. In contrast, we design and fabricate compound semi-conductor chips, so supporting and encouraging further investment in this sector can maintain manufacturing capacity as well. Their energy efficiency is also a key benefit, particularly with technology consuming 2% to 3% of global energy demand.

Finally, I mentioned quantum encryption earlier. So much more use will be made of fibre technology as part of the small cell element of the 5G roll-out. Quantum encryption is vital if we are going to maintain our defences against the cyber threat that so many colleagues have talked about.

It is a privilege to support this Bill. There are so many elements that must coincide and go along with it, and I am glad that the Minister is taking large leaps in the right direction.

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.