Cyber Security and Resilience (Network and Information Systems) Bill

Baroness Kidron Excerpts

2nd reading
Tuesday 14th July 2026 Lords Chamber

[Baroness Kidron (CB)]

My Lords, there is a risk of agreement breaking out at this juncture. I too very much welcome the cyber security Bill and agree with others who have raised the omissions. There is nothing for the private sector and nothing on local authorities. It focuses on the size of service provider rather than risk and, in doing so, fails to learn from the battles during the Online Safety Act which established beyond doubt that the size of the company does not equate to the risk it poses in any system. There is also no mandate for executive responsibilities, as in NIS2 in Europe. All these things feel like critical omissions but, above all, there is nothing on AI, as we have just heard. That is where I will focus my remarks.

In February, Darktrace, a cyber security firm based in Cambridge, surveyed cyber security professionals; 73% of them reported that AI-powered threats are already significantly impacting their organisations. Nine out of 10 said they needed major upgrades to their defences. Only weeks ago, the US Government instructed Anthropic to withdraw two frontier models, going from zero regulation of AI to a 100% ban within 90 minutes. This was on the understanding that it posed a national security threat, with capabilities that experts anticipate will be mirrored by other frontier models, including Chinese ones, within months. It seems extraordinarily ill advised, therefore, that AI is not front and centre of the Bill. Clearly, this is a decision rather than an omission so, when she responds, can the Minister explain why, given the scale of the cyber security threat presented by AI, the Government have chosen not to identify it and tackle it explicitly in the Bill?

The absence of AI from the Bill also means the absence of the AI Security Institute. AISI is recognised globally as world leading, yet since this Government came to power its name has been changed from “Safety” to “Security” institute. We have heard repeatedly from insiders that they have been instructed not to upset the Americans. Most recently, a decision was made to fold its societal resilience team—which dealt with things including psychological harms, child safety, environmental harms, synthetic media abuse and faults with using AI for hiring, police and credit scoring—in favour of the existential threat agenda, which frontier companies prefer to discuss because industry prefers to talk about the harms of the future rather than the ones that are here right now.

I sit on the Joint Committee on the National Security Strategy and simply cannot overstate the repeated cries from security experts for society-wide resilience and a broader definition of security, including information integrity and digital sovereignty. They understand that threats to security are structural and multifaceted and need constant oversight. Can the Minister say why we are not using this Bill to strengthen and empower AISI as an independent statutory body to ensure the safety and security of the nation and to provide a constant source of wisdom and expertise over AI across all domains, with a statutory remit that allows it to investigate the full spectrum of unsafe security risks and mandatory rules for AI safety training and reporting of security incidents directly to it?

It is easy to dismiss these issues as outside the cyber security remit, but that is not the case. I was at a conference about agentic AI last week where medical researchers showed that, in 51% of cases where a person should go to hospital, AI told them not to. This has profound consequences for the health of a nation. More chilling still, the same experts pointed out that, as AI becomes integrated with health records and prescribing systems, a malign actor or hostile state could in one fell swoop manipulate the online prescriptions of an entire nation.

Similarly, in my conversations with specialist police they have said that they are extremely worried about the way digital services are fuelling an ever-growing pipeline of extremists. Recent research by the Center for Countering Digital Hate shows that eight out of 10 chatbots are willing to plan a school shooting or an attack on a synagogue. In 2025, for the first time, automated traffic overtook human traffic online, much of it concealing its identity, leaving operators unable to distinguish benign automation from hostile traffic. This enables the mass harvesting of data used to facilitate a future cyber attack at scale. As non-human traffic climbs, our exposure to cyber attacks grows with it.

At best, the Bill is unclear how these sorts of harms impact our security and adds to the mishmash of provisions and the powers taken by the Secretary of State in several previous Bills. At worst, these issues are not covered at all. The Minister in the other place said that the Bill is “technology agnostic”. Can the Minister explain what that means in practice? AI is not simply another risk to be regulated; it changes the nature, speed and scale of cyber attacks themselves.

Two weeks ago, I and several other noble Lords received a briefing from the Institute for AI Policy and Strategy and the Centre for Long-Term Resilience. They are at the forefront of tracing emerging technologies and threats and have set out a clear strategy built around four ideas: delay, defend, detect and disrupt. They have practical proposals under each heading to improve the Bill, giving us greater oversight and transparency and narrowing and neutralising the spectrum of risk. But as it stands, the Secretary of State, as she has done on so many occasions, has taken powers herself rather than offering Parliament a coherent plan of action.

In short, the greatest omission from the Bill is that it focuses primarily on what a limited set of companies and service providers should do and too little on the resilience of the wider digital system. Over the last two years, we have seen the way in which dependencies on US tech have muted our ability to protect children and creatives and made our NHS, government data and our economy vulnerable. A truly secure cyber policy is a sovereign one which gives the Government control over key chokeholds in the system and oversight over critical infrastructure while encouraging a far greater range of providers. It is one that retains valuable data in the UK, prioritises UK tech companies and deliberately works alongside other middle powers by building relationships in which we are a rule-maker rather than a rule-taker. That, to my mind, is the real opportunity presented by this Bill. It is an opportunity yet to be realised.

Cyber Security and Resilience (Network and Information Systems) Bill

Baroness Kidron Excerpts

Committee stage
Tuesday 1st September 2026 Grand Committee

Moved by

[Baroness Kidron]

3: Clause 4, page 3, line 18, at end insert—
“(3A) A data centre also meets the threshold requirement in this paragraph, regardless of its rated IT load, if the Office of Communications considers that an incident affecting the data centre would be likely to have a significant impact on the economy or the day-to-day functioning of society in the United Kingdom or any part of it, having regard in particular to the data centre’s customer base and level of interconnection with essential services.”Member’s explanatory statement
The amendment seeks to add a risk-based designation criterion alongside the existing megawatt thresholds for operators of essential services.

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[Baroness Kidron (CB)]

My Lords, I am very sorry that I missed the early part of that debate because I feel it might impact on some of the things I say. However, when I read the government amendments, I could not see anything in them that made the amendments unnecessary, so I will read carefully all aspects of the first group but I intend to progress with the amendments that I have tabled. I will speak to Amendments 3, 8 and 13 in my name and in the names of the noble Baronesses, Lady Harding, Lady Berger and Lady Morgan. Together, they would expand the scope of services in the Bill so that so-called “small but risky” services were included.

Amendment 3 stipulates that smaller data centres could be included if Ofcom considers that an incident affecting the data centre would have a significant impact on the economy or on the day-to-day functioning of society in the UK, taking into account the data centre’s customer base and its role supporting other essential services. Currently, data centres that are for an enterprise purpose only are covered in the Bill only if the rated IT load is 10 megawatts or greater. This is a mid-size data centre. However, there are commercial data centres that can be much smaller than this and are threatening. Perhaps most notable is a recent example from Denmark where the small cloud hosting providers, CloudNordic and AzeroCloud, suffered a ransomware attack that resulted in the paralysing of all company systems and the servers being shut down. Their hundreds of customers lost all their data, and it was unrecoverable. “Customers” is a bland word, but imagine that you are a hospital treating patients, a university conducting years of scientific research or a small business with its entire operation at stake: the loss of your data risks lost livelihoods, and possibly even lives.

Meanwhile, many experts are calling for an expansion of smaller data centres. They are less taxing on the natural and local environment, more embedded in local communities and are in contrast to mid and large centres, whose environmental costs hit local communities, use up water, increase the strain on the grid, are possibly noisy and ugly and favour the hyperscale business models of big tech. If smaller data centres are an attractive alternative to unpopular larger ones, it is even more essential that they are in scope of these regulations.

Amendment 8 stipulates that a relevant digital service provider would be included if the ICO or AISI determines that the provision of a service poses a risk to public safety, national security or the security of network and information systems. Amendment 3 would do something similar for relevant managed service providers, with the ICO establishing whether a managed service provider poses a risk. Currently, services are excluded if they have fewer than 50 employees and a turnover equivalent to below £8.5 million—it is actually given in euros. I anticipate that the reasoning is not wanting to impose unnecessary burdens on small and micro-sized businesses with fewer employees and resources. I recognise that that is as a concern, but it is equally important to understand that small businesses of all kinds, including those that host critical services and infrastructure in the UK, are regularly victims of cyber attacks. The Government’s own Cyber Security Breaches Survey for 2025-26 records that 42% of micro-sized business and 46% of small businesses in the UK have been the target of cyber attacks. It is simply not the case that small means that risks are contained. The Government’s own figures show that, of the more than 100,000 UK tech companies, 95% have fewer than 50 employees.

These amendments would replicate the rationale of amendments to the then Online Safety Bill from the noble Baroness, Lady Morgan, on Report. I know that she would have liked to be here to speak to them, but she is unable to be here today. Her amendments stipulated that services under the Online Safety Bill should be categorised by risk or size. I will not rehearse what noble Lords have heard many times, but the lesson of that Bill is that the Government of the day got it wrong, as did the regulator. In the connected world, a small component of a global system can cause havoc.

When this Bill first entered the other place, I went to a briefing by Politico where its four experts spoke repeatedly about how narrow the Bill was and how focused it was on providing for a small subset of issues relating to cyber security and safety with a vision of hyperscale vendors. They were a combination of exasperated and incredulous that, even as we saw the increasing cost to the economy, the damage to businesses caught up in it and the devastation to individuals, as well as what all agreed was a national security threat, the Government had not sought to offer a vision for how all these might be protected. When it came to questions, the first was to ask why the experts thought the Government had been so unambitious. The answer was unedifying: to prevent the Lords hijacking the Bill.

I hope that the new Administration who start today have moved on and that we will have a more collegiate approach. I have read all the amendments currently laid, including the ones in this group, and in almost all cases they seek to do what is the stated intention of the Bill: to make the country more resilient. In the world of cyber security, size is not a proxy for risk; it is much more complex than that. The amendments in my name and those of others seek to ensure that we learn lessons from the Online Safety Act. I beg to move.

[Baroness Harding of Winscombe (Con)]

My Lords, I support Amendments 3, 8 and 13 in the name of the noble Baroness, Lady Kidron, to which I have added my name. I will not repeat too much all her comments on our learning from the Online Safety Act that small does not mean low risk. However, it should not be a surprise that those of us who championed that amendment to the then Online Safety Bill have again put our names to it. We have learned the hard way that, in online safety, risk can come from the smallest providers.

I have learned it personally. I retired from TalkTalk 10 years ago and I remember, what must have been 11 years ago—I promise this is not a cyber attack story—a mapping exercise across all the telcos, mobile and fixed, looking at our even then incredibly complex data centre networks across Europe. I am sure this has all changed and is much more complex, but I remember discovering, as a result of that exercise, that all of us were routing traffic through the same small data centre in central Europe and none of us was aware that we were doing so. These networks are expanding so fast and data centres and managed service providers are growing so fast that it is impossible for people to retain perfect knowledge 100% of the time, so a small provider really can be a node that brings down the whole network. It is not just in child safety that we have learned that small can mean very risky; it is also the case in the world of physical digital infrastructure, which we have known for some time in telecoms. That is why these amendments are so important.

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[Baroness Lloyd of Effra (Lab)]

I thank the noble Baroness, Lady Kidron, for her introduction and my noble friend Lady Harding for setting out the motivation for ensuring that we have the right balance of risk and regulation here. The amendments from the noble Baroness, Lady Kidron, seek to allow for the designation of systemically important data centres, RDSPs and RMSPs which do not already meet the threshold. The Government have considered this issue in the development of the regime and have taken an approach which reflects the markets of the various digital services in scope of the regime.

In respect of data centres, the Government agree that a data centre’s significance is not determined solely by size and recognise that smaller facilities may play an important role in supporting the economy and wider society. For that reason, the Bill already provides a route for such operators to be brought into scope outside the standard threshold requirements. The competent authority, Ofcom, has powers to gather information from operators and assess whether designation is appropriate in individual cases.

However, with respect to the RDSP and RMSP measures, the existing small and micro-enterprise exclusions have been designed to be proportionate and avoid imposing undue burden on entities with limited resources and market coverage, while focusing on providers whose disruption would have significant societal impact or economic risk to the UK. Although many small and micro-enterprises operate in the digital and managed services market, large MSPs hold a disproportionate share of market value. The largest MSPs account for 86% of revenue in the UK, despite representing just 4% of all MSPs. It is the disruption of these services that is most likely to cause significant harm to the UK.

The Bill also has measures in place to bring small or micro digital or managed service providers into the scope of the Bill if they are considered to provide a critical service to a regulated entity. If these entities meet the designation criteria, they can be designated as a critical supplier and be subject to mandatory cyber security and resilience requirements. I assure the noble Baroness that I recognise the discrepancy between these two regimes and her concerns, and I am content to explore this, and the points made by the noble Lord, Lord Markham, further, and to provide a more detailed response on Report.

On the issue raised by the noble Lord, Lord Clement-Jones, for his amendment which would amend the relevant managed services definition by excluding specific services, I take seriously the importance of providing clear definitions in the Bill. That is why the definition in the Bill is designed to capture services posing a risk to the UK economy and society, both today and beyond. I reassure the noble Lord that the relevant managed services that would be excluded by this amendment are already likely to be excluded by virtue of them not meeting the definition in the Bill. However, we cannot and should not list every service not in scope or we risk providing a definition that quickly becomes outdated and fails to accommodate new trends in both technology and services—a point frequently made by noble Lords in respect of the development of technology and online services. The Bill requires a delicate balance to ensure that the definition includes the right level of detail. The regulator, the Information Commission, will provide guidance on the application of the regulations prior to commencement of the RMSP provisions, including elements of the RMSP definitions.

On the point raised by the noble Lord, Lord Clement-Jones, on privileged access, MSPs pose risks because they provide ongoing management of customers’ IT services and often have deep and broad access to the networks, infrastructure and data those customers rely on, so the Bill focuses on any connection or access to network and information systems relied on by the customer rather than only access whether privileged or administrative. That is because requiring privileged access would narrow the definition and include some firms we intend to regulate as providers composed of cyber risks through non-privileged access without holding elevated administrative rights. For that reason, I caution against adding these exclusions to the definition of a managed service.

Finally, Amendments 4 and 5 are tabled in my name. They are targeted and technical amendments that improve the clarity and consistency of the Bill by strengthening the definition of load control in Clause 6. They clarify that the relevant activity must be carried out for system balancing purposes. System balancing purposes are defined as purposes which contribute to the,

“balancing, flexibility, security or stability of the electricity system”.

The policy intention has not changed. This amendment simply provides greater clarity about the activities the regime is intended to capture. It will reduce the risk of misinterpretation, provide greater certainty for industry and regulators and support effective regulatory oversight. This will ensure that the regime captures the activities intended to fall within scope and reduces the risk of inadvertently capturing activities that are not relevant to the operation and resilience of the electricity system.

Regarding the questions about the further scope of the Bill in respect of local government and the Government’s cyber action plan, I believe we will return to that in later groups.

[Baroness Kidron (CB)]

I am very grateful to the Minister for suggesting that there will be some consideration of the gap, as she put it, and I look forward to that. I want to raise one thing, which is that I was very struck by her reference to a small number of companies having 86% of the market. In a sector that is dominated by the concentration of power in very small numbers of companies owning many pieces of the stack, is she not worried that making those companies protected and safe and the smaller ones not may further serve to increase the concentration of power and market concentration? Is that not a problem for the future?

[Baroness Lloyd of Effra (Lab)]

The purpose of the Cyber Security and Resilience (Network and information Systems) Bill is to further enhance the scope and powers we have to protect essential services connected through network and information services. The market as it exists today is as I described. What is within the scope is not the totality of our approach to supporting the further cyber resilience of the UK economy. That is why, for example, we have CRCs locally to support SMEs so that whatever size they are, they can get assistance on the best cyber protection they can take. It is why we have Cyber Essentials and why the NCSC provides advice—all that the economy needs to take appropriate action to be secure. That is one aspect. The second aspect is that small and micro digital managed service providers are in scope of the Bill if they are considered to provide a critical service to a regulated entity, so even very small entities could possibly be in scope if they are so designated.

The last point I shall make—and I am sure we will come on to this further when we come to talk about AI—is that the Government are doing a huge amount in regulation and funding through public finance institutions to support the development of UK technology companies and UK innovators and to ensure that they have the right procurement contracts with the public sector so that they can grow and so that the entirety of our companies can benefit from the best global managed service providers and the best UK managed service providers.

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Moved by

[Baroness Kidron]

6: Clause 7, page 6, line 31, after “engine” insert “, an AI product or service”
Member’s explanatory statement
This amendment probes whether the definition of “relevant digital service” being inserted into the NIS Regulations by this bill includes generative-AI models, including but not limited to AI agents and large language models.

[Baroness Kidron (CB)]

My Lords, in moving this amendment, I shall speak also to Amendment 75 in my name; I thank those noble Lords who have added their names in support. I was glad to add my name to Amendments 12, 85 and 86 in the name of the noble Lord, Lord Tarassenko, and Amendment 84 in the name of the noble Lord, Lord Clement-Jones.

At the heart of these amendments is the place of artificial intelligence in the Bill. This concern was powerfully raised by noble Lords at Second Reading and repeatedly raised by colleagues from all sides in the other place—as well as, I rather suspect, earlier in this Session. Amendment 6 is a probing amendment. It seeks to understand whether AI products and services are categorised as relevant digital services and, therefore, whether providers of AI products and services will be subject to the same duties in the Bill as other providers of relevant digital services, such as online marketplaces and search engines.

The reason I raise this and wish to have clarification is that, in the NIS regulations, the definition of an online search engine is

“a digital service that allows users to perform searches of, in principle, all websites or websites in a particular language on the basis of a query on any subject in the form of a keyword, phrase or other input, and returns links in which information related to the requested content can be found”.

This sounds a lot like a definition that could cover many of the LLMs and AI agents, so I ask the Minister whether AI services are already covered under the categorisation of online search engines or absolutely not. I would also like her to confirm whether, if an AI service did not offer links or was restricted to a particular subject matter but had all these other features, it would automatically fall out of the regime—that is, whether some are covered and some are not.

At Second Reading in the other place, the Minister said—the Minister here just gave this answer, I believe—that the Bill enables the Secretary of State to require an organisation using AI

“to cease using and isolate an AI model”—[Official Report, Commons, 16/6/26; col. 779.]

but suggested that those powers are “a backstop” and do not focus on the safety of AI products systematically. I find myself confused because, on the one hand, it seems that the definition could include them but, on the other, it seems that there may be reasons why some might be out of scope. It appears that AI is not properly considered proactively but, if there is a disaster, the Secretary of State can do something. When the Minister speaks, I would be grateful if she could answer those two questions directly. This is a probing amendment, as I say, and it would be helpful, in the course of considering the Bill, to understand that categorically.

Amendment 75 would establish a series of red lines for AI products and services classified as relevant digital services. These red lines have excellent parentage; they reflect the work of Professor Stuart Russell and are signed up to by some of the most eminent AI founders and professionals around the globe. They also reflect the global call for AI red lines launched during the United Nations General Assembly.

In short, they provide that AI services must not be capable of evading human oversight, shutdown or control, nor be able to autonomously self-replicate, self-improve or acquire compute. They provide that AI providers would be prohibited from creating systems capable of autonomously conducting sophisticated attacks on critical infrastructure, that support terrorists and hostile states in attacks on such critical infrastructure, or that can deceive or manipulate populations at scale. They also prevent capabilities that relate to the availability, authenticity, integrity or confidentiality of stored or processed data, which follows the exact language of the Bill. Proposed new subsection (3) of the amendment would require AISI to ensure that these red lines are adhered to. This is an essential amendment and I believe the UK is singularly well placed to introduce it. There is increasing evidence and understanding of the risks, and both the public and experts are calling for action.

I was going to quote many people, but will say just that, a couple of weeks ago, I spoke to Jonathan Hall KC, the Independent Reviewer of Terrorism Legislation and the Independent Reviewer of State Threats Legislation. He is among the many people who have warned publicly about the risk of AI used to support terrorist action and subvert information in the public domain. Recent polling has found that 85% of the UK public would like this to happen; they would like red lines.

I fully support Amendments 12, 85 and 86 in the name of noble Lord, Lord Tarassenko, which seek to establish a greater role for AISI in these regulations and to give it statutory powers. I leave it to the noble Lord to explain the amendments in full, which I am sure he will do much better than me, except to say that, in July, some other noble Lords and I were briefed by one of the frontier companies, which gleefully said that it worked to a set of ethical standards. However, when pressed—repeatedly, by noble Lords—the company admitted that it wrote, interpreted and managed those standards itself and was free to abandon them in an instant. Have we not learned from countless experiences before, in online safety, privacy and AI itself, that allowing tech companies to set and mark their own homework endangers the public and our national security?

Amendment 92 from the noble Lord, Lord Clement-Jones, has a similar aim to that of the noble Lord, Lord Tarassenko. I hope that, during the passage of the Bill, the Government find a unifying approach with both noble Lords to back AISI in its functions and separate it from political control. The AISI organisation is the envy of the world, with the capability to oversee a regime for robustly and fairly ensuring that AI is trusted. I beg to move.

[Lord Tarassenko (CB)]

My Lords, I will speak to Amendments 12, 85 and 86 in my name, and in support of Amendment 6 in the name of the noble Baroness, Lady Kidron, to which I have also added my name.

At Second Reading, several noble Lords spoke about the AI-shaped hole in the Bill. I shall not repeat their arguments but will present other evidence, including incidents that have been reported since Second Reading in mid-July, on why this AI-shaped hole needs to be filled. Three serious incidents have been reported since just mid-July: one involving OpenAI’s GPT-5.6 Sol and an unreleased model, one involving Anthropic’s Claude models and one involving multiple AI agents during a cyber evaluation by the AI Security Institute—AISI.

AI models, within an appropriate harness, are now capable of operating as autonomous agents. They can break a complex command—for example, “Find a vulnerability in this network”—into sequential tasks, adjust strategy dynamically and execute without further human intervention. These AI agents are built with tool-use capabilities, enabling them to plan but also execute and adapt multistep workflows autonomously.

More details have emerged of the Hugging Face hack which occurred on 11 July, just before the Second Reading debate. A report published last week by three researchers from METR and Redwood Research reveals the scale of the incident. Around 1,200 agents in separate sandboxes collaborated on a message board in an attempt to cheat on a task on which they were being evaluated, with around 700 participating in the actual cyber attack on the open source AI platform Hugging Face. As we know, this is the incident that prompted Anthropic to check whether its own AI agents with Claude models at the core of the harness had carried out similar cyber attacks; this check uncovered three cases that were then reported to the affected companies.

Finally, at the beginning of August, AISI published an incident report detailing unsanctioned online actions by AI agents doing cyber capability evaluation tests conducted at the end of July. Out of 122 evaluation runs carried out by AISI across seven frontier models, 10 runs produced 19 distinct unsanctioned actions on the live internet. The report highlighted behaviours such as cross-agent co-ordination and out-of-bounds target pursuit.

However, it is not just frontier AI models that we should worry about. The cyber capabilities of leading open-weight models, such as GLM-5.2 and DeepSeek V4 Pro, are now reckoned to be only four to seven months behind those of the closed-source frontier models of US big tech. In many ways, these open-weight models carry even greater risks. Once the models have been released, safeguards can be removed and copies can be run on private systems beyond monitoring. Cyber attackers can then fine-tune the weights for malicious purposes, perform ablation on safety refusal directions within the model’s neural network and strip out any safety layers. The open-weight model then becomes an uncensored agent engine that will execute malicious instructions without refusal. It will process malicious requests as neutrally as if they were standard requests. We are not far away from cyber attacks from unknown AI agents based on modified open-weight models.

It is now beyond any doubt that autonomous AI agents running frontier AI models, both closed source and open weight, are or will soon be capable of co-ordinating complex cyber attacks. It is therefore not surprising that a group of 100 companies, including Google, Microsoft, Anthropic and OpenAI, as well as UK-based companies such as Arm, BT, PwC and KPMG, signed an open letter last week warning that cyber attacks orchestrated by frontier AI models will become more widespread and more sophisticated in a matter of months. The letter outlines three main principles or actions.

The Minister conceded at the end of Second Reading that

“AI capabilities are moving very fast”,


but asserted that

“strong cyber fundamentals still work”.—[Official Report, 14/7/26; col. 620.]

This is true, but the first principle listed in the letter is that existing security practices will no longer be sufficient to protect against cyber attacks orchestrated by frontier AI agents. Amendment 6 would therefore require the definition of “relevant digital service” being inserted into the NIS regulations by this Bill to include generative AI models, including large language models and AI agents. They are fast becoming the main factor in the cyber security arms race.

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[Baroness Lloyd of Effra (Lab)]

I thank noble Lords for their amendments, and I recognise the concerns that have been expressed. Technology is evolving at a rapid pace, and it is important that we harness the benefits and, equally, protect against the risks it may pose.

The noble Lord, Lord Holmes of Richmond, asked about the approach that we take. We understand how quickly technology is evolving, and it is important that we have a flexible and future-proof approach. If we limit ourselves to specific technologies, we will not capture new developments. For instance, when the NIS regulations were introduced in 2018, we could not have predicted the role that AI and quantum would play in cyber. That is why the Bill takes an “all hazards, all threats, all technologies” approach. This requires regulated entities to manage all the risks relevant to their network and information systems. For example, if AI forms a part of the system that the essential service relies on—for example, in the provision of drinking water—that entity must assess and mitigate the risks it poses.

More generally, the Government take the concerns very seriously. The UK is taking a leading role with our approach to AI security. I will set out my response to each amendment in turn, but while we do not consider the amendments proposed to be the right approach, I reassure noble Lords that the Government are exploring whether additional targeted interventions may be needed in future to address the most significant AI-related national security risks. As the Government’s thinking is at an early stage, I would be open to future engagement with noble Lords on potential options. Any future approach would need to have carefully designed measures, with the evidence base proportionate to and targeted at the risks in question, while minimising unintended impacts on growth, innovation and the operation of critical services.

I turn to the amendments. The intention of the NIS regime is to require organisations to protect themselves from risks that could compromise their network and information systems, which could include a cyber attack, a natural disaster or even human error. That protection would be appropriate and proportionate to the risks faced by those organisations, including state-of-the-art technology such as AI. I reassure noble Lords that this would include relevant risks from AI embedded within the systems of regulated organisations. To take one example, healthcare providers in scope of the regime would be required to manage risks associated with the AI products they use to provide their services. This is because essential services in scope must look at, and work to mitigate, risks posed to their network and information systems.

As AI is increasingly becoming embedded across the economy, we will keep its impact on the regulatory landscape under review. The Bill is focused on the cyber security and resilience of network and information systems; broader questions about the regulation of AI systems are more appropriately addressed through separate discussions, for example on online safety.

Bringing providers of AI services—those companies at the cutting edge of frontier AI development—and their products into the scope of the NIS regime, which Amendment 6 seeks to do, would not address the harms that can be posed by some AI products and services. Specifically, it would not prevent their misuse by hostile actors. Instead, the Government are already taking firm action in more appropriate ways, which also speaks to the concerns that Amendment 75 would aim to address and which the noble Baroness, Lady Foster, asked about.

First, the UK AI Security Institute, as noble Lords are well aware, is world leading in its research on advanced AI capabilities. AISI was set up to build a rigorous scientific understanding of the capabilities of the most advanced AI systems and the risks they pose. It works with developers to strengthen security before models are released and ground policy decisions in evidence rather than speculation, especially as they relate to national security matters.

Secondly, the UK Government are taking a leading role in addressing these risks in both the domestic and international setting. As the noble Lord, Lord Tarassenko, and others have set out, including the noble Viscount, Lord Camrose, it is critical that this approach has global impact. Our AI cyber security code of practice has formed the basis of the world’s first global standard, EN 304 223, which sets baseline security requirements for developers and deployers across the AI life cycle. This demonstrates our global leadership and commitment to shaping international technical standards, which go wider than some of the issues raised in this Bill.

Underpinning all this is a simple but powerful message, which was set out in a joint Five Eyes statement in June. It recommended that as AI capabilities evolve all industry, including vendors, should seek to step up their cyber defences. This is a clear call to action for all organisations, including the Government, and a reminder that the key tenets of cyber hygiene still stand strong. That is also why we are committed to building a national-scale AI-enabled cyber defence for the UK, Cyber Shield. It will scan UK systems continuously to discover vulnerabilities and apply national-level mitigations.

The noble Baroness, Lady Kidron, tabled Amendment 75, which sets out several red lines on AI capabilities that would enable an AI system to facilitate significant risks to the UK. The noble Baroness will recognise that AI is one of many technologies that can be used for beneficial and harmful purposes, as she has mentioned on previous occasions. In addition to the example of chemistry questions, banking services can be used to connect families but might also be used to finance illegal terrorist activities. Equally, while powerful AI capabilities can be used by malicious actors to cause harm to the UK, they might also be used by the national security community to defend the UK and by UK organisations and companies to protect themselves from harm. It is therefore not in the UK’s national interest to restrict UK organisations and the public sector accessing powerful AI capabilities, especially given the global nature of AI risks. It is also unlikely that AISI would be able to give conclusive assurances regarding AI models in the way envisaged in this amendment. Testing shows what a model can do, but not conclusively what it cannot, as the noble Viscount, Lord Camrose, pointed out.

The noble Lord, Lord Tarassenko, tabled Amendment 12, which would require RDSPs to follow guidance issued by the AI Security Institute. For the reasons I set out on Amendment 6 and because it is not AISI’s role to provide guidance of this nature, I do not think it would be appropriate. I will set out more detail on AISI’s role later in my response.

On Amendment 84, tabled by the noble Lord, Lord Clement-Jones, we have chosen to go further than our EU counterparts and the NIS2 regime to respond to these risks by bringing forward powers in the Bill to direct regulated entities if there is a national security risk in relation to their network and information system. This may be used, for instance, to require a regulated entity to cease using and isolate an AI model.

We believe this is a more proportionate and effective response, as data centres operate in highly complex ecosystems and AI systems are often distributed across different data centres and jurisdictions. It is much less desirable to direct multiple data centres to shut down, with the impact this could have on services that rely on them, than to direct them to cease using an AI model. This is important, as our economic security will grow as UK companies grow as they increase AI adoption as we develop our domestic capabilities and attract global talent, underpinned by our data centre and digital infrastructure.

I refer to my introductory remarks on exploring further targeted interventions. This includes examining whether proportionate containment powers could provide a more effective and targeted response, including powers to restrict access to specific AI systems where necessary to prevent or mitigate serious harm. The amendment tabled by the noble Lord, Lord Clement-Jones, also seeks a regular report on AI security. In December 2025, the AI Security Institute published Frontier Al Trends Report, which sets out high-level trends on AI progress based on two years of government-led testing of leading models.

Amendments 85, 86, 92 and 98, tabled by the noble Lords, Lord Tarassenko and Lord Clement-Jones, are a testament to AISI’s leading role and expertise. They seek to provide AISI with powers to address potential risks arising from frontier AI models. I have already set out the important role that AISI plays building a rigorous scientific understanding of the capabilities of the most advanced AI systems and the risks they pose, working with developers to strengthen security before models are released and grounding policy decisions in evidence rather than speculation. These amendments would give AISI a role that it was not designed to fulfil. AISI’s focus on frontier technology and trusted relationships with the world’s leading AI labs allow it to keep pace with the fast-moving technology, thereby providing critical awareness of the most novel and serious AI risks. This amendment would undermine the voluntary collaboration on which AISI operates. A regulatory role for AISI is therefore the wrong answer, but the Government remain committed to ensuring that AISI is equipped to fulfil its vital role and will continue to keep the House updated on its work as appropriate.

As I have just set out, such amendments raise a real risk of placing barriers on AI adoption and deployment in the UK. Due to the scope of the Bill, the amendments cannot address wider AI harms or cyber security in the wider economy. I share concerns about the potential of hostile actors using frontier AI models against our essential services. Placing these restrictions on their deployment in the UK, as amended, would not be effective.

I shall respond to the direct question asked by the noble Baroness, Lady Kidron, on large language models. Large language models are not typically considered online search engines in respect of the CSRB. While some LLMs can be seen to share similar characteristics and may utilise online search engines, their functions tend to be much broader.

I hope that I have addressed the points raised—well, I hope that I have at least touched on all the points raised today. On the points made on changes to the Government, I very well recall the numerous discussions that we have had on AI over the past few months and continue to be the point of continuity on them. As I have said, the Government will be happy to engage with noble Lords as options are being considered. We always stand ready to protect our national and economic security.

[Baroness Kidron (CB)]

If I have understood what the Minister said, the NHS must protect itself, but the AI that is attacking it has no duties or obligations under the Bill to check itself before it is used in those ways. That is what I think is the Government’s position, and I would be grateful, when she responds, if she could answer that.

I also want to say two other things. One is that I think these issues will come back on Report, so I would be grateful for some proper discussion before then, so that we can see whether we come to a certain place. I do not have it at my fingertips—I may be helped by one of my colleagues—the amount of search that now happens through AI, but it is almost ludicrous to suggest that LLMs are not search. It is deliberate that I got that answer.

[Lord Tarassenko (CB)]

It is 5 trillion a year.

[Baroness Kidron (CB)]

Five trillion, a year. I am grateful to the Minister for answering my question because, very often, that does not happen. That really points at a problem.

Cyber Security and Resilience (Network and Information Systems) Bill

Baroness Kidron Excerpts

Committee stage
Thursday 3rd September 2026 Grand Committee

[Baroness Kidron (CB)]

My Lords, I am very glad to support all the amendments; I will not read them out again. The noble Baroness, Lady Harding, has already convincingly set out the case. I really hope that the Minister recognises that these amendments are born out of lived experience, which is characteristic of this House and very precious when considering how legislation actually impacts in the world at times of crisis.

The amendment specifically calls for staged incident reporting, to create a drumbeat of information and oversight so that damage can be minimised. Cyber attacks move quickly and are extremely confusing for those involved. Staged incident reporting enables regulators to have a more immediate understanding, so that they can offer support, anticipate spread and learn lessons for strengthening guidance in the future.

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[Baroness Harding of Winscombe (Con)]

I apologise, I stand to speak to a whole other group of amendments that suffer from the same challenge of needing to be repeated four times, which is why I suggested to the clerks that we degroup them, otherwise we would have got into a real muddle.

This group seeks to address the obligation to report incidents to customers, as the Minister referenced in her remarks earlier. Currently, the Bill requires notification only where a customer is,

“likely to be adversely affected”.

The obligation is to explain the nature of the incident and why the customer is affected. My amendments seek to broaden and deepen that duty. Customers must be notified where an incident has caused or has the potential to cause severe operational damage or financial loss, where I hope my drafting has not fallen prey to the issue that my noble friend Lady Neville-Jones, addressed in Amendment 17. If it has done so, we obviously need to address that.

The duty is extended to cover related natural or legal persons who could suffer considerable damage as a result. The regulated entities must also advise customers on what measures to take in response. Probably most importantly in this group of amendments, the entities must keep customers updated until the incident is resolved, whereas at the moment the Bill only requires them to notify customers once and then leave them hanging, waiting to find out what is going on. Together these amendments would ensure that customers are told promptly what to do and are kept informed throughout the incident until it is resolved. They also follow the NIS2 directive in requiring advice on protective measures and go a little further by making it a requirement to communicate to related persons as well.

Sadly, I have personal experience in this, not from my TalkTalk times but much more recently. I suspect anybody who is on a board or who has chaired a business has experienced this. An organisation that I chair is the customer of a managed service provider that recently experienced an incident. It did not tell us. The incident was to do with some of our staff payroll information, so it was sensitive and important. When it did tell us, it then did not keep us informed about what was going on. So I feel that pain.

I know that some noble Lords may have concerns that we do not want to create panic by endless notification. I absolutely agree. Hence my attempt to define this as severe operational damage. I would very much welcome input between now and Report if we can tighten that wording to make sure that this does not represent lots of unnecessary email alerts telling you that a system three stages back in the tech stack might have been affected. But when your customers’ data has been exposed in a cyber attack through a managed service provider, data centre or digital service that you use, it is entirely reasonable that those companies have a requirement to inform and keep you updated during the incident. That is all that these amendments seek to do. I beg to move.

[Baroness Kidron (CB)]

My Lords, for reasons that I do not understand, I do not have my name on these amendments, given all the others from the noble Baroness that I do, but I support them. It is funny, because when I came back from holiday in August, I had no fewer than five emails from companies saying that there had been data breaches in which I was involved, and I had that exact thought—“What now? What do I do? What’s next? How serious?”—and did nothing.

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[Baroness Harding of Winscombe (Con)]

I am sorry, it is me again. In a break with tradition, we have only one amendment in this group. That is because this amendment would insert a proposed new clause, as opposed to lots of small changes to existing clauses. Amendment 72 is in my name and, once again, I thank the noble Baroness, Lady Kidron, for adding her name.

This proposed new clause seeks to ensure that organisations regulated under the Bill must report any near misses, cyber threats or incidents currently under the thresholds as set out in the Bill that could affect their network and information systems. I am, again, mindful that it is important that this is consistent with the extremely well-made points of my noble friend Lady Neville-Jones in Amendment 17. It is welcome to have discussions on whether the wording is right, because the purpose is to get the near miss, rather than a huge deluge of meaningless reporting.

As it stands, the Bill requires regulated entities to report only what has happened, and only if it crosses a threshold based on factors such as scale, duration and the number of people affected. However, my amendments look to close the gaps in the event of, for example, an attack an organisation has stopped before it has caused major damage, but had the attack had been successful, it would have had a substantial effect across the whole industry. Other examples are where there are very credible warnings of an expected attack that does not occur, or where there is an incident that falls just below the thresholds that could still be significant.

The intention of this amendment—unlike in my other two groups, it is quite a probing amendment to see if we can work together to capture the spirit of this—is to close a reporting gap where significant incidents may not be reported simply because of the way we have drawn up the definitions in the Bill.

As in the other two groups that I have led, this follows the EU NIS2 directive, although the NIS2 directive creates a voluntary rather than a mandatory reporting provision for this. My view is that the taboo for going public on cyber attacks is so great that voluntary reporting is not the way to do this. It is better for all organisations to know the black and white of what they can do, what they should do and what they do not have to do. In some sectors, certainly the one I worked in—telecoms—there is a fair amount of voluntary sharing. But even there, there is such a taboo about speaking to your regulator about a problem that this needs to be made this mandatory rather than voluntary. Other than that, this seeks to replicate what is in the EU NIS2 directives. With that—I think noble Lords have probably heard enough of me—I beg to move.

[Baroness Kidron (CB)]

My Lords, I support Amendment 72 and I have signed it. I recognise the probing nature of this, but I also recognise the problem it seeks to address. The knowledge that a cyber threat or cyber attack has failed may be incredibly important intelligence because, on the whole, someone trying to create a cyber threat will not retire after the first time that it did not work out; they will try somewhere else, so the intelligence element of this is so crucial.

Some of the people in cyber security talk about seven stages of cyber attack. The first stage is reconnaissance: you are just having a look round and trying to identify vulnerabilities. The second stage is weaponisation: you are developing the means to target that weakness, which can be as simple as an email. It is not until the third stage that the attack begins. But there are still three or four more stages, each of which can provide a barrier and each of which can be the place at which the attack stops. It is not uncommon for attackers to carry out multiple attempts to find or exploit a vulnerability, or indeed to do a small-scale attack in order to then do something larger down the line. In all these cases, there is something absolutely critical for the regulator and possibly the enforcement community to know.

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Moved by

[Baroness Kidron (CB)]

74: After Clause 21, insert the following new Clause—
“Liability of senior executivesAfter regulation 18 of the NIS Regulations insert—“Liability of senior executives(1) This regulation applies where a designated competent authority or the Information Commission has reasonable grounds to believe that—(a) a person that is a body corporate, a partnership (including a Scottish partnership) or an unincorporated body has failed to comply with a duty referred to in regulation 17(1), (2), (2ZA) or (2ZB), and(b) the failure was committed with the consent or connivance of, or is reasonably attributable to any neglect on the part of, a senior executive or group of senior executives, deliberately or carelessly. (2) The competent authority or the Information Commission may serve a notice of intention to impose a penalty on the senior executive(s) if it considers that a penalty is warranted having regard to the facts and circumstances of the case.(3) Before serving a senior executive(s) notice, the authority or the Information Commission must inform the senior executive(s), in such form and manner as it considers appropriate having regard to the facts and circumstances of the case, of—(a) the alleged failure and the office’s alleged consent, connivance or neglect, and(b) how and by when representations may be made in relation to the alleged failure and any related matters.(4) A senior executive(s) notice must be in writing and must specify the following—(a) the reasons for serving the notice;(b) the alleged failure or failures and the senior executive(s) alleged consent, connivance, neglect or carelessness which are the subject of the notice;(c) any remedial actions required;(d) the amount of the penalty and the number of penalties which the authority or the Information Commission is minded to impose.(5) The authority or the Information Commission may, after considering any representations made in accordance with paragraph (3)(b), serve a penalty notice on the officer with a final penalty decision if satisfied that a penalty is warranted having regard to the facts and circumstances of the case.(6) A penalty imposed under this regulation must be of an amount which the authority or the Information Commission determines is appropriate and proportionate in the circumstances, having regard to the matters mentioned in regulation 18(6) for each infringement individually.(7) If the authority or the Information Commission is satisfied that no further action is required, having considered any representations submitted in accordance with paragraph (3)(b), it must inform the senior executive(s) in writing as soon as reasonably practicable.(8) In this regulation “senior executive(s)”—(a) in relation to a body corporate, means a CEO, director, manager, secretary or other similar senior executive of the body, or a person purporting to act in any such capacity;(b) in relation to a partnership, means a partner or a person having control or management of the partnership business, or a person purporting to act in any such capacity;(c) in relation to an unincorporated body other than a partnership, means a member of its governing body, or a person purporting to act in any such capacity.””Member’s explanatory statement
This amendment seeks to create provision in the Bill for executives or senior managers to be held responsible for failure to comply or report on the measures placed upon regulated bodies within the Bill.

[Baroness Kidron (CB)]

My Lords, Amendment 74 is in my name and those of the noble Baronesses, Lady Morgan and Lady Ludford. The noble Baroness, Lady Morgan, is very sorry that she cannot be in the Committee this afternoon but she particularly wanted me to thank the Minister for their helpful meeting last week. This amendment and Amendment 167 in the name of the noble Baroness, Lady Ludford, relate to the governance of regulated bodies that will be caught under this Act. The reason for this legislation is to reflect the rapidly changing cyber environment and to strengthen areas of current vulnerabilities of those organisations providing services critical to societal or economic life.

As we have discussed, regulators will be given powers to designate critical suppliers whose disruption could have a significant impact on essential services. As we have discussed in previous groups, many of us think the Bill does not go far enough in setting out who those critical suppliers are. We are going to see similar amendments in other forthcoming Bills that make provision for senior manager liability when new responsibilities are legislated. This is something that we have been through in other Bills: the only way to change the culture of an organisation is to start at the top.

I am sure that boards will grumble when they accept new duties, but they will keep their regulators happy were they to be in sight of the law. What really makes the difference to successful implementation is knowing that if it can be proven—I shall read out proposed new subsection (1)(b)—that

“the failure was committed with a consent or connivance of, or is reasonably attributable to any neglect on the part of, a senior executive or group of senior executives, deliberately or carelessly”,

that individual will be held responsible. I point noble Lords to recent court cases in the area of social media, where disclosure has repeatedly shown that senior executives knew of harm or stood in the way of harm mitigation for years. The idea that this might capture an unwilling or unwitting senior executive is shown clearly not to be the case by what I have just read out.

I understand that the Minister and the noble Baroness, Lady Morgan, also discussed this in the context of financial services and a regime introduced after the 2008 financial crash with the very intention of changing the culture of financial service businesses and focusing senior minds on the damage those businesses can do if they do not meet their responsibilities. A more recent example is the introduction of the consumer duty by the Financial Conduct Authority, which required relevant boards to appoint an individual consumer duty champion, something that the noble Baroness, Lady Morgan, was involved in. I also point to the Building Safety Act that was a response to the Grenfell Tower disaster.

I am hoping that the Government are sympathetic to this amendment, but if they find themselves unable to be sympathetic, I would be interested also to hear the Minister’s thoughts on whether we could require the relevant regulator to introduce a named senior manager regime, which indeed we did in the Online Safety Act.

The final point I make is that the senior manager must be senior. The intention behind the amendment is to change the culture of an organisation to ensure preventive action is taken to avoid penalties. As I said at the outset, culture change starts at the top. The services covered in the Bill are, by definition, considered by Ministers to be critical to national life, which means that the most senior governing body should be discussing them and responsible for them. While day-to-day management may be delegated, overall oversight and responsibility should sit at the top. For that reason, I support—as I know the noble Baroness, Lady Morgan, supports—Amendment 167, tabled by the noble Baroness, Lady Ludford. Her proposed new clause would focus the minds of those at the most senior levels of organisations caught by the Bill, and I really hope that the Government support this ambition. I beg to move.

[Baroness Ludford (LD)]

My Lords, I am pleased to speak to Amendment 167 and grateful for the support from the noble Baroness, Lady Kidron—the support is mutual, as I co-signed her amendment. The two amendments are complementary, because Amendment 74 is about the liability of senior executives while Amendment 167 is about board oversight of an individual executive, responsibility and accountability. I was interested to hear the noble Baroness refer not only to financial and consumer conduct but to building safety as areas where such responsibility exists.

I am simultaneously involved in the Public Office (Accountability) Bill—the Hillsborough law—which will introduce a duty of ethical conduct, candour and transparency on public authorities and public officials. Perhaps what some of these other sectors have in common is that it has been an after-the-event thought that maybe boards and senior executives ought to have some kind of responsibility in this area. If we have had a catastrophe, often with a great deal of harm created—such as Hillsborough—maybe it would be a good idea if the people at the top, who are often extremely highly paid, took some interest in the area, rather than regarding it as some sort of lowly service, rather like cleaning the loos in the HQ building. I know it is now routine to refer to examples such as Jaguar Land Rover and Marks & Spencer, but there have been huge financial effects of cyber attacks. This is not some negligible issue; cyber security ought to be a core responsibility for senior people.

I am sitting close to the noble Baroness, Lady Harding, who today has referred to her own personal experience—we all remember it. I am sure it was painful for her and very public. She has actually been through it, so nobody knows better what it can be like when you have a big cyber data breach or cyber attack. It really is long past due that this ought to be a top responsibility of boards, directors and senior executives. Yet we understand—I think I get this from my noble friend Lord Clement-Jones—that the Government’s own Cyber Security Breaches Survey reveals that board-level ownership of cyber risk in the UK has declined from 38% to 27% over the past three years. It is going precisely in the wrong direction.

I do not think I need to persuade anyone here of how important it is for senior people in an organisation to be aware and carry not only responsibility, awareness and accountability but liability, so that it hits where it hurts if something goes wrong. Personally, it seems pretty much a no-brainer, and I hope the Minister will agree.

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[Baroness Lloyd of Effra (Lab)]

I am happy to write to explain how the security and resilience requirements fit into the structure of the Bill and the consultation and scrutiny that they will undergo.

[Baroness Kidron (CB)]

The noble Lord, Lord Clement-Jones, has done a lot of my work for me. I thank everyone who contributed. I was really struck by the expertise in this Room. We started this afternoon by talking about the importance of lived experience. I say very strongly to the Minister that I have been in the House long enough to see Acts of Parliament pass, be regulated and fail because we did not really understand how they were going to hit when they were in the world.

The comments on this group are really worth listening on, particularly those on Amendment 167. I say both to the noble Viscount, Lord Camrose, and to the Minister that there is such a high bar of connivance in Amendment 74. There is no accident. The words are “deliberately”, “knowingly”, et cetera—I read them out as part of my introduction. I will take up the noble Viscount’s offer to come to speak to him and persuade him, and I ask the Minister to really think about this, because we have heard that culture does not change without an incentive. This is an incentive to say that if you are seen to grossly mislead and undermine the regulation, then you are liable. That is what good law does. I beg leave to withdraw the amendment.

Amendment 74 withdrawn.

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Moved by

[Baroness Kidron]

83: After Clause 28, insert the following new Clause—
“Digital Sovereignty Strategy (relevant network and information systems)(1) The Secretary of State must prepare and maintain a Digital Sovereignty Strategy (“the Strategy”) in relation to relevant network and information systems.(2) The Strategy must—(a) set out the Government’s assessment of the risks to relevant network and information systems arising from or related to—(i) dependence on hardware, software, or digital products and services that may be subject to foreign influence or interference,(ii) extra-territorial legal requirements that may be imposed on non-domiciled suppliers,(iii) vulnerabilities, undue control, or supply-chain dependency on foreign states or entities,(iv) inadvertent or deliberate extraction or training on UK datasets without licence or permission, and(v) foreign actors’ access to UK sovereign data assets and data held in trust on behalf of the public including, but not limited to, the National Health Service, the British Broadcasting Corporation, the Meteorological Office, security and surveillance assets, defence assets, education assets, and assets from museums and other cultural institutions;(b) set out the technological developments, market concentration, or strategic dependencies that may affect the security or resilience of relevant network and information systems in the UK;(c) set out the Government’s approach to mitigating the risks identified under paragraph (b); (d) include an assessment of—(i) the role of open source software, open standards, and open architectures in strengthening the resilience, transparency, and security of relevant network and information systems,(ii) the security and maintenance needs of open source software components used, or proposed to be used, in relevant network and information systems,(iii) the skills, capabilities, and capacity of UK-based developers, maintainers, and technical experts required to support the use of open source components in relevant network and information systems,(iv) options to increase the use of open source components and to diversify open source suppliers, reduce strategic dependencies, and enhance domestic capability in key technologies used in relevant network and information systems,(v) options for international collaboration in the production of open source components used in relevant network and information systems,(vi) options to prioritise procurement from UK-based businesses, services and suppliers used in relevant network and information systems,(vii) capital markets and pension funds holding capital in UK-based relevant network and information systems, and(viii) any legislative, regulatory, procurement, or policy measures the Government considers necessary to support digital sovereignty through open source components and reduce systemic risk in relation to relevant network and information systems.(3) The Secretary of State must, within the Strategy, set out a Digital Sovereignty Dashboard used to measure the technological sovereignty of the UK in relation to relevant network and information systems, including relating to—(a) infrastructure, including infrastructure concentration,(b) data-jurisdiction exposure,(c) value of information and cultural assets of the United Kingdom, and(d) dependency on foreign states.(4) In preparing the Digital Sovereignty Dashboard, the Secretary of State must consult—(a) the Office for National Statistics,(b) the Competition and Markets Authority,(c) the National Cyber Security Centre,(d) the AI Security Institute, and(e) any other persons the Secretary of State deems relevant.(5) The Secretary of State must publish the Strategy and any revisions to it, subject to the redaction of information the publication of which would be reasonably likely to prejudice national security.(6) The Strategy must be reviewed at least once in every three-year period but may be updated whenever the Secretary of State considers that significant new risks have arisen.(7) In this section—“Digital sovereignty” means the ability of the United Kingdom to maintain secure, resilient, and reliable access to and control over the hardware, software, data, and digital services on which relevant network and information systems depend;“open source” has the meaning given to it in the definition published by the Open Source Initiative;“relevant network and information system” means a network and information system belonging to—(a) an operator of an essential service, (b) a relevant digital service provider,(c) a relevant managed service provider, or(d) a critical supplier,within the meaning of the NIS Regulations.”Member’s explanatory statement
This new clause would require the Secretary of State to prepare, maintain, and lay before Parliament a Digital Sovereignty and Resilience Strategy addressing risks to relevant network and information systems from foreign ownership, interference, and technological dependence. The Strategy would include a Digital Sovereignty Dashboard, which would provide evidence on UK procurement, innovation and resilience and keep an up-to-date understanding of emerging risk.

[Baroness Kidron (CB)]

My Lords, Amendment 83, in my name and those of the noble Baroness, Lady Ludford, and the noble Lords, Lord Holmes and Lord Tarassenko, would require the Secretary of State to publish and maintain a digital sovereignty strategy. Before the Recess, many of us participated in a debate on digital sovereignty, and the level of agreement across the Chamber was absolutely overwhelming about the importance of UK national sovereignty and the current threats to it from our current arrangements with the tech sector, particularly US-based behemoths. The same sentiment is articulated by Amendment 166 in the name of noble Baroness, Lady Ludford, and it is a sentiment shared in the other place, where Conservatives, Liberal Democrats and Greens all tabled similar Motions.

During the debate, I identified four areas in which the UK has surrendered its leverage to make its own decisions. We surrendered our political leverage by deferring to the power of US tech; we surrendered our economic leverage by placing UK businesses at a structural disadvantage and entering into expansive and extractive contracts; we surrendered our technological capability as we failed to invest in UK capacity and businesses; and we ensured our strategic vulnerability by depending on foreign companies for key infrastructure. Together, these weaken our economy, our security, our safety and, above all, our autonomy: the ability to choose. I doubt that any single government strategy put us in this position, but it reveals a lack of strategy that we find ourselves here.

Amendment 83 would set out a requirement for the Secretary of State to establish a digital sovereignty strategy. Proposed new subsection (2)(a) would require an assessment of the risks to networks and information systems from

“dependence on hardware, software, or digital products and services that may be subject to foreign influence or interference, extra-territorial legal requirements that may be imposed on non-domiciled suppliers”—

such as cloud providers through the US CLOUD Act—

“vulnerabilities, undue control, or supply-chain dependency on foreign states or entities”,

the use of

“UK datasets without license or permission”

and vulnerabilities to valuable data assets that belong to the British public, including those related to the NHS, BBC, and Met Office. The rest of proposed new subsection (2) sets out further requirements to assess the risk of

“technological developments, market concentration or strategic dependencies”

and give consideration to vital elements of sovereignty, including open source technology and assets, talent procurement, capital markets and international collaboration with mid-sized partners whom we retain leverage with.

Finally, proposed new subsections (3) and (4) call for the development of a dashboard enabling the measurement of digital sovereignty. I am working with computer scientists at the British Computing Society who are developing a prototype for this and I urge the Government to look at this work and consider developing it, for their own procurement purposes and to provide it as a tool for the wider business community.

I set that out in some detail because I rather suspect that, if we had a proper strategy across the nation, we would not have had the conversation that we just had in our debate on the previous grouping. Sovereignty is now firmly on the agenda. This is partly due to the export ban on Anthropic and Claude Fable 5 introduced by President Trump in June, but stories highlighting our sovereign vulnerability across the digital stack predate that event and have continued since.

Dependency is not built overnight. It is the result of a systemic and concerted effort by entrenched big tech companies across many years to make themselves indispensable to the UK state, businesses and society, and of successive UK Governments failing to invest in our businesses, communities and people and choosing always to buy oven-ready tech, irrespective of the economic, societal and individual costs.

Just as dependence is not built overnight, neither can sovereignty be reclaimed overnight; nor is it a zero-sum game in which every part of the stack can or should be replaced. None the less, to restore any independence at all, we require an equally systematic and concerted approach to build where we can, to buy only products and services that adhere to our laws, to recognise our unique skills and assets, and to work co-operatively with other like-minded countries. That begins with a strategy that establishes a clear route for government and is fed into experts, free from lobbying and scrutinised by Parliament—which is the very purpose of the amendment in front of us. I beg to move.

[Baroness Ludford (LD)]

My Lords, I shall speak to my Amendment 166. It offers an alternative route to the same destination, although the amendment in the name of the noble Baroness, Lady Kidron, is probably superior because it is fuller and more comprehensive; I readily concede that. Her amendment would add an important element—a digital sovereignty dashboard prepared by the Office for National Statistics, the Competition and Markets Authority, the National Cyber Security Centre and the AI Security Institute—so that we can measure whether anything is changing. The cross-party agreement on this matter, which the noble Baroness referenced, is important and might help persuade the Minister of the force of the argument.

The Competition and Markets Authority puts Amazon Web Services and Microsoft together at between 70% and 80% of the UK’s public cloud market. That is not only a duopoly but a digital sovereignty issue. In its report Rewiring the State, which was published in June, the Science, Innovation and Technology Committee in the other place found that major departments, including HMRC and the NHS, were locked into multiyear agreements that further entrench those dependencies. The National Audit Office has found no shared strategic approach across government towards the handful of very large suppliers that now dominate these markets and are, to a large extent, American. Research done by the British cloud provider Civo found that 83% of UK IT leaders believe that geopolitics threatens their ability to control their data, while only 35% know precisely where that data resides.

I have a history, as a Member of the European Parliament, of being involved in all the arguments about transatlantic data transfer and what happens to the data when it is in the US; this was all in the wake of the war on terror, Guantanamo and so on. We are back in that territory, I guess. It is not just about the economic side of non-national control; it is also about your vulnerability to decisions—including, sometimes, decisions that you do not like—about what happens to the data.

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[Baroness Lloyd of Effra (Lab)]

Going back to the point made by the noble Lord in an earlier intervention, the Bill is a substantive Bill that substantially increases coverage of the digital infrastructure on which much of our economy relies. That is a very important point. As I mentioned at the start of my remarks just now, the question of whether the Bill is the right place to articulate the breadth of many of the issues that have been raised is, indeed, a good one. I am not sure that it is the right place to articulate all the very good questions that have been asked, because some are much more wide-ranging than the scope of the Bill.

[Baroness Kidron (CB)]

My Lords, I thank all who have spoken for their excellent contributions. I will make three quick points. First, in the course of the afternoon, I opened the Explanatory Notes, which is always a bit of a danger. I just want to put on the record that paragraph 2 states:

“These reforms are intended to better protect the services and other activities that are essential to the day-to-day functioning of society in the UK, and the economy, through safeguarding relevant network and information systems (the systems that allow computers and other devices to communicate with each other) and their surrounding environment”.


I do not think that the Bill, as it stands, does that job, and the last two groups have absolutely illustrated that.

The second thing that I would like to say to the Minister, and I absolutely recognise all the things that she mentioned, is that I did find myself counting, and it was 11. We do not have a strategy. It is 11, but it does not cover the scope of what we are discussing; it does not even cover the scope of security.

The third thing, which I am slightly loath to say but will now say, because otherwise we will get nowhere, is that I have been in the room with Ministers when they have indicated directly that they cannot do something because of America’s desire—absolutely categorically, yeah? That is the bit that we did not get from the Minister. Sovereignty is about being able to impose and choose our laws, and to decide what we can and cannot do and what we are willing to risk and give up for it.

I am not saying that it is easy, but I think everybody in the Committee has been completely reasonable in saying that we are not trying to replace the stack; we are trying to talk about chokeholds and we are trying to be strategic. What we are really trying to do is make the country safe and secure and, dare I say, make it respond to its own laws. I do not think that anything that the Minister said has dealt with that fact. It was not asking for much to actually have a think about what strategy is and have a look at how we might get to a better place. Let us have a vision of where we want to go and work out how to get there. Individual things and departments and leaving things out is not the answer.

This is an easy amendment for the Government to say yes to and I hope that, by Report, they will. I beg leave to withdraw the amendment.

Amendment 83 withdrawn.