Telecommunications (Security) Bill
Debate between Chi Onwurah and John HayesMonday 30th November 2020
(3 years, 11 months ago)
Commons ChamberRead Full debate Telecommunications (Security) Act 2021 View all Telecommunications (Security) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I start by thanking Members from all parts of the House for a well-informed debate with many impressive contributions. My first job as a hardware engineer was with Nortel, which has been mentioned by a number of Members. Having spent 23 years in the sector before entering the Commons, I am thrilled that the main debating chamber of our parliamentary democracy should spend so many hours dedicated to our telecommunications infrastructure. I regret that Members who wanted to take part in this debate, particularly from the Opposition Benches, and who could have done so remotely, were not able to do so because of an arbitrary decision by the Leader of the House.
However good the debate is, it cannot make up for the wasted decade under this Government. Successive Tory Governments have squandered the world-leading legacy position on broadband infrastructure left by the last Labour Government. Since then, we have seen delays in the roll-out of networks and the development of a dependency on high-risk vendors. The UK’s sovereign telecoms capabilities and our national security have been neglected, resulting in the Huawei debacle and ultimately this Bill.
My hon. Friend the Member for Cardiff Central (Jo Stevens) put it so eloquently: national security is the first duty of any Government, and Labour will always put that first. The point was made strongly by a number of Members, including the right hon. Members for New Forest East (Dr Lewis) and for Chingford and Woodford Green (Sir Iain Duncan Smith).
Given where we are, we support the aims of the Bill. National security should be the priority of any Government, and our telecommunications infrastructure is clearly critical to our defence, our security and our economic prosperity. That point was made by a number of Members, including the hon. Member for The Wrekin (Mark Pritchard).
We must make sure that we do not find ourselves in a similar position again and that our telecoms network and supply chain are resilient and protected in future, even, critically, as the geopolitical environment evolves. Our telecoms infrastructure lacks security and resilience. We have taken no steps to maintain or develop a sovereign communications capability, and the Government’s broadband strategy, if we can call it that, has far more U-turns, dither and delay than meaningful policies. We want to work with the Government to get issues of national security right, but the Bill is far from perfect.
Members have raised many issues, and I will focus on just three: cost, resource and diversification. I have found telecoms operators to be extremely responsive to the need to take action on the issue of, and in the cause of, national security and to replace high-risk vendors, but six months since the decision to strip out Huawei was finally made, we still do not know how the Government plan to achieve this. They seem to have decided that that is for the private sector to sort out.
The impact assessments, of which there are two, admit that the Government cannot figure out what the impact will be. They have chosen not to give operators any legal protection on existing contracts, but have again not quantified that impact. The Government are apparently happy to pass on the costs of their mistakes, indecision and poor planning to the operators, stating that the costs of removing Huawei are
“commercial decisions that are for the mobile operators to make.”
Yet clearly there was a failure Government here, as 5G security was not sufficiently safeguarded, in the ways that the right hon. Member for South Holland and The Deepings (Sir John Hayes) set out so clearly. Will there be a delay in 5G roll-out? Again, we are not clear, and depending on what is factored in, various research projects have found the costs to be anything from £6 billion to £18 billion. If the Government plan to leave this entirely to the mercy of the market, I would say that all the information-gathering skills Ofcom has will not give us an accurate integrated view of progress and effectiveness. There is no mention of working with local authorities to ease this or to make it quicker, cheaper or more effective.
I joined Ofcom in 2004, just a few weeks after it was born, when it was to be a light-touch regulator, small and nimble. Over the years, it has acquired responsibility for critical national infrastructure; the BBC; the Post Office; soon, we understand, the entirety of online harms; and now, it would appear, national security as well. As Members have pointed out, this Bill refers only to the Secretary of State and Ofcom when it comes to making these key decisions. Of the two, I have to say that I would have more confidence in Ofcom, but the Bill says very little about the resources or the skills that will be provided. This is a huge job, an issue that my right hon. Friend the Member for North Durham (Mr Jones) set out so clearly in what was a truly excellent contribution. One still has to ask: is it sufficiently well scoped? It is a huge job, but is it actually scoped? Is it the role of Ofcom to consider the security of our current networks, or should it be forward-looking? Members have set out what kind of a challenge that would be. Members also touched on the importance of human rights with regard to China’s record. How is that to play on national security decisions?
Sir John Hayes
The real point about Ofcom is whether it acquires those skills or what the processes will be for it to access them from the intelligence community and the National Cyber Security Centre, which would seem to be a much more straightforward way of quickly tooling up to do the job the hon. Member describes.
Chi Onwurah
I thank the right hon. Member for that intervention, and indeed for his contribution to the debate. I agree with him, although I think that is something we need to work out and probe in Committee, because currently there is no reference to that, or no plan to do that. I think we should certainly be taking into account and using our existing resources, and we all know that these kinds of resources and skills are both expensive and hard to find at the moment. The right hon. Member makes an important point.
On 14 July, the Secretary of State, who is not in his place, said in this House that he had
“set out a clear and ambitious diversification strategy.”—[Official Report, 14 July 2020; Vol. 678, c. 1377.]
I asked him repeatedly over the summer when he would publish this clear strategy that he had already set out. Answer came there none, and I could only conclude that he had misspoken. However, I did think that today we would get that strategy, but unfortunately not. Yes, there is actually a diversification strategy, which has been published, but it is neither clear nor ambitious. It is far more concerned with bringing new vendors into the UK than with developing our sovereign technological capability. Indeed, as it diversifies opportunities for Nokia and Ericsson, we could call it an effective Scandinavian industrial strategy. Apart from a vague commitment to link the scale of home-grown suppliers to the Government’s broader growth and productivity agenda, there is no clear plan—no plan at all—to build UK sovereign capabilities, which the right hon. Members for Vale of Glamorgan (Alun Cairns) and for Bournemouth East (Mr Ellwood) emphasised as being important.
Just today, Mobile UK, the mobile operators industrial body, emphasised that the Bill and the 5G diversification strategy are intrinsically linked but not, it would appear, by the Government. The diversification strategy also does not refer to fibre, although the Bill applies to our fibre networks too and may impact the Government’s constantly shifting roll-out targets.
Network operators need to be confident in the maturity, performance, integration and security credentials of new vendors and technologies before they are deployed in their main networks. We agree with the Secretary of State that the Government can help accelerate that process, and in doing so there is potential to create opportunities for the UK to take the lead, as well as much-needed high-skilled jobs. The hon. Members for Totnes (Anthony Mangnall), for Strangford (Jim Shannon) and for Bracknell (James Sunderland) all agreed about the importance of diversification, but all the diversification strategy says about developing UK technology, jobs and capability is that it will be part of the industrial strategy, which we have yet to see. Clearly, we do not have a diversification strategy.
National Security and Investment Bill
Debate between Chi Onwurah and John HayesTuesday 17th November 2020
(4 years ago)
Commons ChamberRead Full debate National Security and Investment Bill 2019-21 View all National Security and Investment Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
As my right hon. Friend the Member for Doncaster North (Edward Miliband) set out very well in opening the debate, we support the Bill. Inward investment is crucial for businesses across the UK and our economy, but it is also crucial that the UK has the powers in place to scrutinise and intervene in business transactions that could have implications for our national security.
In fact, we would have welcomed this Bill a long time ago. It is clear that the Government have failed to keep pace with other countries, including the United States, France and Germany, that have already taken steps to update the legislation in line with evolving security threats. From serious questions about Huawei’s dominant role in the UK’s 5G network, as raised many times by the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), to the takeover of Imagination Technologies by Canyon Bridge, it is inarguable that the Government have been slow off the mark on foreign acquisitions and the possible implications for national security.
Right hon. and hon. Members from all sides agreed on that, including, I think, the Chairs of the Business, Energy and Industrial Strategy Committee, the Science and Technology Committee and the Foreign Affairs Committee, and all five—I think it was five—members of the Intelligence and Security Committee who spoke. I thank colleagues from across the House for their contributions and apologise in advance if I cannot do justice to all of them.
This has been an excellent debate, one that I think showed the House at its best; we heard informed and considered speeches and, where there was disagreement, it was reasoned and open. There is strong agreement across the House that new legislation is necessary to combat changing security threats and to balance those considerations against the ambition to ensure that the UK remains an attractive country in which to invest.
Companies in fast-developing fields, from quantum computing to telecommunications to artificial intelligence to cryptography, are no longer just companies; they are strategic assets that are fundamental to our nation’s security. Until now, Ministers have failed to modernise the takeover regime to keep up with this changing landscape, the pace of technological development and what that means for security. Instead, they have continued to operate within a legal framework that, as we have heard, was created almost two decades ago, before Facebook or Twitter were even invented. My hon. Friend the Member for Warrington North (Charlotte Nichols) explained the impact of that uncertainty on the nuclear industry and investment in her constituency.
That is why we strongly welcome the Bill now and agree that it is necessary. It is essential that we get the specific provisions of the Bill right, in order not to deter foreign direct investment while also balancing the need to protect our national security. First, there is the definition of national security, which was raised by many, particularly the hon. Member for Isle of Wight (Bob Seely). The right hon. Member for South Holland and The Depths (Sir John Hayes)—[Interruption.] The Deepings, sorry.
Chi Onwurah
The right hon. Gentleman is always very deep in his responses. He suggested it was deliberately left undefined in the Bill. The sectors that will be subject to mandatory notification are also not defined in the Bill and, we are told, will be set out in secondary legislation. I thank the hon. Member for Bolton North East (Mark Logan) for his provisional mnemonic and wish him well in updating it.
Definitions, and the lack of them, are important because the proposed powers are not limited by size of turnover or share of supply threshold. They could apply to almost every business transaction within the sectors, and the definition of national security therefore must be set out to help provide clarity for businesses and investors, but it is unclear—perhaps the Minister could provide some of that clarity—whether the takeover of the UK artificial intelligence company DeepMind by Google would have been called in on national security grounds under the scope of this Bill.
In Committee, Labour will seek further details on how the retrospective powers to render acquisitions void would be applied and whether an assessment has been made of the economic and legal consequences for businesses and their employees of acquisitions being rendered void after the fact. The hon. Member for Dundee East (Stewart Hosie) highlighted the Government’s capacity, or lack of it, to process the sheer volume of estimated notifications that the Bill will provoke. We need also to look at how businesses, small businesses in particular, will be supported to cope with the new regulations, which may prove difficult to navigate. We will ask also whether an assessment has been made by Government of the impact the changes could have on investment in small businesses—a chilling effect—including university start-ups, particularly those in the 17 key sectors, which was a point made by the hon. Member for The Wrekin (Mark Pritchard).
Labour will also seek assurances about transparency and oversight and how the powers are applied—a worry of the hon. Member for Beckenham (Bob Stewart)—including calling on the Government to explore giving the Intelligence and Security Committee a role in scrutinising the use of powers under this legislation. My right hon. Friend the Member for North Durham (Mr Jones) was right to emphasise the importance of the involvement of and access for the intelligence services.
We hope to work with the Government to ensure that we establish a robust, transparent and fair regime that protects national security, while allowing the UK to continue to enjoy the opportunities that overseas investment affords businesses across our country and economy, but the Bill is also a missed opportunity. It is a missed opportunity to demonstrate what the Government mean by “industrial strategy” and to show that it is more than a slogan. It is a missed opportunity to help UK businesses in key sectors to flourish and grow here in the UK, sustaining and creating jobs—a point on which my hon. Friend the Member for Aberavon (Stephen Kinnock) was particularly eloquent.
Time and again, we see vibrant, growing UK companies sadly lost overseas. While we recognise that foreign acquisition can breathe new life into a company, supporting jobs and growth in the UK, far too often we see UK companies pawned off or stripped for parts. Far too often we see UK companies bought out and wound down to eliminate the competition, with the consequent loss of high-skilled jobs. Nowhere is that more evident than in the technology sector, which must be a key part of any 21st century industrial strategy.
We have lost far too many businesses to Silicon Valley, weakening our technological sovereignty. The takeover of leading UK technological company Arm by the US company Nvidia was announced recently, and while Ministers claim to have scrutinised the deal, they have not been forthcoming with the details. When Arm was previously taken over by SoftBank, legal assurances were extracted about the future of the company’s Cambridge headquarters and the UK workforce. Have Ministers extracted the same legal assurances at this time? Will the Minister come clean today?
The Business Secretary said himself that the UK should be open for business but not for exploitation. However, key companies have been cherry picked by companies in San Jose, with the UK consequently losing out. It is therefore not clear that the current takeover regime is fit for purpose.
The weaknesses in the current regime are about not just national security but industrial strategy. Under the current regime, the Secretary of State has the power to intervene in qualifying businesses on four public interest grounds: media plurality, national security, stability of the UK finance system, and the capability to combat and mitigate the effect on public health emergencies.
Sir John Hayes
The coincidence, as I described it, between national interests and national security is profound and is proven. When a company is taken over and technology transfer takes place, it is possible for a nation that is hostile to our interests to gain a sufficient understanding to develop systems that endanger this country, including, in some cases, weapons systems.
Chi Onwurah
The right hon. Member is talking to a chartered engineer who strongly believes that our capability in engineering and the kind of key technologies of which he talks is a basis for our national security, and that national security, without some degree of important technological sovereignty, is difficult to wholly achieve. I look forward to debating that in Committee.
It is worth pointing out that the Government’s powers have been used only sporadically in previous interventions, and they are seemingly not underpinned by any real strategy. The hon. Member for East Worthing and Shoreham (Tim Loughton) made a similar point.
Many Conservative Members are vehemently opposed to extending the remit of the Bill to cover industrial strategy, including, but not limited to, the hon. Members for Totnes (Anthony Mangnall), for North West Norfolk (James Wild), for Cities of London and Westminster (Nickie Aiken), for North East Bedfordshire (Richard Fuller), for Wantage (David Johnston), for Rother Valley (Alexander Stafford), for Newcastle-under-Lyme (Aaron Bell) and for South Dorset (Richard Drax). Labour believes, however, that the Government should be able to intervene in the takeover of a critical business on industrial strategy grounds. That power should be paired with defined criteria and transaction thresholds to give businesses and foreign investors clarity and confidence, and to truly make it clear that we are open for business and not exploitation—to coin a phrase.
Why did the Government not bring forward legislation to ensure that technology firms remain in the UK and to end the current ad hoc approach to industrial strategy being pursued by Ministers? That has seen binding commitments often negotiated at the last minute, companies lost, and no clarity as to the rhyme or reason why the Government choose to intervene or not. I urge the Secretary of State and the Minister to continue to approach the Bill in the spirit of collaboration, to address the undefined areas and issues that we have raised, and to shed some light on their long-term industrial strategy, including their plans to keep high-growth technological companies flourishing in the UK.