The Chair

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I remind the Committee that with this we are discussing the following:

Amendment 22, in clause 20, page 35, line 30, at end insert—

“(9) The Secretary of State must provide the Intelligence and Security Committee of Parliament with a copy of any notification under this section relating to a designated vendor direction, designation notice, a notice of a variation or revocation of a designated vendor direction or a notice of a variation or revocation of a designation notice to which subsection (2) or (3)(b) of section 105Z11 applies.”

This amendment would require the Secretary of State to provide the Intelligence and Security Committee of Parliament with a copy of any notification under this section which relates to a direction or notice that has not been laid before Parliament on grounds of national security.

Amendment 23, in clause 20, page 37, line 41, at end insert—

“(10) The Secretary of State must provide the Intelligence and Security Committee of Parliament with a copy of any confirmation decision relating to a designated vendor direction, designation notice, a notice of a variation or revocation of a designated vendor direction or a notice of a variation or revocation of a designation notice to which subsection (2) or (3)(b) of section 105Z11 applies.”

This amendment would require the Secretary of State to provide the Intelligence and Security Committee of Parliament with a copy of any confirmation decision which relates to a direction or notice that has not been laid before Parliament on grounds of national security.

Amendment 24, in clause 21, page 39, line 9, at end insert—

“(6) The Secretary of State must provide the Intelligence and Security Committee of Parliament with a copy of any urgent enforcement direction relating to a designated vendor direction to which subsection (2) or (3)(b) of section 105Z11 applies.”

This amendment would require the Secretary of State to provide the Intelligence and Security Committee of Parliament with a copy of any urgent enforcement direction which relates to a direction that has not been laid before Parliament on grounds of national security.

Amendment 25, in clause 21, page 40, line 6, at end insert—

“(8) The Secretary of State must provide the Intelligence and Security Committee of Parliament with a copy of any confirmation of an urgent enforcement notification relating to a designated vendor direction to which subsection (2) or (3)(b) of section 105Z11 applies.”

This amendment would require the Secretary of State to provide the Intelligence and Security Committee of Parliament with a copy of any confirmation of an urgent enforcement notification which relates to a direction that has not been laid before Parliament on grounds of national security.

I need to understand, Mr Matheson, what your intention is.

The Chair

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With this it will be convenient to discuss clauses 19 to 23 stand part.

Matt Warman

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I will be brief, but it is important to cover the Government amendments. The clause provides that any increase in expenditure attributable to the Bill is paid out by Parliament. Clause 27 covers the extent of the Bill and clause 28 provides for the commencement of the Bill’s provisions.

I turn to the small set of amendments that the Government deem necessary, given that the Bill will be carried over to the second Session. The Bill creates new national security powers for the Secretary of State to address the risks posed by high-risk vendors through the issuing and enforcement of designated vendor directions in clauses 15 to 23 and 24. Amendment 1 enables clauses 15 to 23 to come into force on the day on which the Bill receives Royal Assent. Amendment 2 ensures that the higher penalties also come into force. Amendment 3 removes the subsection of clause 28 providing for sections to come into force at the end of the two-month period. Finally, amendment 4 ensures that the provisions of clause 24 that are not commenced early come into force via commencement regulations on a day determined by the Secretary of State. Without the amendments, the provisions relating to those powers would come into force two months after the Bill receives Royal Assent, which could put at risk the timely implementation of this important policy.

Question put and agreed to.

Clause 26 accordingly ordered to stand part of the Bill.

Clause 27 ordered to stand part of the Bill.

Clause 28

Commencement

Amendments made: 1, in clause 28, page 46, line 19, leave out “section 14” and insert “sections 14 to 23”.

This amendment would cause clauses 15 to 23 to come into force on Royal Assent.

Amendment 2, in clause 28, page 46, line 19, at end insert—

“(ca) section24, so far as it relates to section18;”.

This amendment is consequential upon Amendment 1. Clause 24 provides for higher penalties to be available for certain contraventions of information requirements, including contraventions associated with section 105Z12 of the Communications Act 2003, which is inserted by clause 18.

Amendment 3, in clause 28, page 46, line 25, leave out subsection (2).

This amendment is consequential upon Amendments 1 and 2.

Amendment 4, in clause 28, page 46, line 30, at end insert—

“(ba) section 24 (so far as not already in force by virtue of subsection (1));”.—(Matt Warman.)

This amendment is consequential upon Amendments 1 and 2.

Clause 28, as amended, ordered to stand part of the Bill.

Clause 29 ordered to stand part of the Bill.

New Clause 3

Duty of Ofcom to report on its resources

‘(1) Ofcom must publish an annual report on the effect on its resources of fulfilling its duties under this Act.

(2) The report required by subsection (1) must include an assessment of—

(a) the adequacy of Ofcom’s budget and funding;

(b) the adequacy of staffing levels in Ofcom; and

(c) any skills shortages faced by Ofcom.’.—(Christian Matheson.)

This new clause introduces an obligation on Ofcom to report on the adequacy of their existing budget following the implementation of new responsibilities.

Brought up, and read the First time.

The Chair

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With this it will be convenient to discuss new clause 7— Review of Ofcom’s capacity and capability to undertake duties (No.2)—

‘(1) The Communications Act 2003 is amended as follows.

(2) After section 105Z29 insert—

“105Z30 Review of Ofcom’s capacity and capability to undertake duties

The Secretary of State must, not later than 12 months after the day on which the Telecommunications (Security) Act 2021 is passed, lay before Parliament a report on Ofcom’s capacity and capability to undertake its duties under this Act in relation to the security of public electronic communications networks and services.”.’

This new clause would require the Secretary of State to report on Ofcom’s capacity and capability to undertake the duties provided for in the Telecommunications (Security) Bill which would be inserted into the Communications Act 2003 under the cross-heading “Security of public electronic communications networks and services” (which would encompass all the clause numbers which start with 105).

Mr Kevan Jones (North Durham) (Lab)

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I would like to speak to new clause 7, which stands in my name. It is related to new clause 3, in the name of my hon. Friend the Member for City of Chester. As he has just said, Ofcom has had an expansion of its duties in the last few years and become a little bit like a Christmas tree with added responsibilities, but none of them will be as important for the nation’s future as this. That is not to decry any of the expertise or other duties that Ofcom has, but national security and the security of our national telecoms infrastructure, is a vital new task. I have said before that my concern about Ofcom centres on national security. That is why I have tabled amendments to the Bill. My fear is that Ofcom will not have the necessary expertise, although I am not suggesting that it cannot develop into a good regulatory body looking at security and our national telecoms infrastructure.

I tabled parliamentary questions on Ofcom’s budgets and headcounts, and I am glad to see that its budget and personnel have increased as its tasks have grown. That was not the case in 2010, when its budgets were subject to some quite savage cuts. My concern—I will call this my Robin Day approach—is that we have to future-proof Ofcom to ensure that the organisation not only has the budget but also has the personnel it needs. I do not want to suggest that the Minister would want to cut Ofcom’s budget at present, as it does important work. However, it is a regulator and perhaps does not have the clout of a Government Department, so any future Chancellor or Treasury looking for cuts disguised as efficiencies could see it as easy, low-hanging fruit.

Ensuring that the Secretary of State undertakes duties highlighting Ofcom’s efficiency puts a spotlight on the basis of considerations by future Administrations of any political persuasion. That will be important, not just in the early stages but as we continue. It may take a while for Ofcom to get up to speed, but I want to ensure that that continues. The obligation for the Secretary of State to report on Ofcom would at least give me comfort that first, it is being looked at and, secondly, that civil servants cannot in future just assume that an easy cut can be made but which might then impact on our national security.

I raised another subject with the head of Ofcom when she appeared before the Committee. I do not really want to rehearse the discussions again, but as the Bill progresses the Minister will have to give assurances on security, and try to demonstrate the close working relationship between Ofcom and the security services. That will be important, as it will give credibility to the expectation that Ofcom can actually do the job that we have set out. If the Minister does that, it will reassure people who may not be convinced that Ofcom has the necessary expertise, and ensure that that close working relationship continues, not just now but in future, so that national security is at the centre of this.

There will always be a balance—as I said, we saw it in the National Security and Investment Bill—between wanting, quite rightly, to promote telecoms as a sector, and national security. I fall very much on the side of national security being the important consideration, and we need to ensure that that is always the case. It is important that national security and intelligence agencies are able to influence these decisions, not just in respect of Ofcom but also in respect of Ministers in future.

Matt Warman

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I thank the hon. Lady for her contributions. To address her central point, it would not be possible for Ofcom to meet the duties Government have tasked it with without addressing the foundational issue of security. It is important that we bear in mind that that is not an exhaustive list, but security will always be a foundational point.

The new clauses would require the Secretary of State to lay a report before Parliament within 12 months of Royal Assent. New clause 3 would require Ofcom to publish an annual report on the adequacy of its budget, resourcing and staffing levels in particular.

As the Committee is aware, the Bill gives Ofcom significant new responsibilities. Ofcom’s budget is approved by its independent board and must be within a limit set by the Government. Clearly, given the enhanced security role that Ofcom will undertake, it will need to increase its resources and skills to meet these new demands. As such, the budget limit set by the Government will be adjusted to allow Ofcom to carry out its new functions effectively. This is of a piece with the direction of travel we are going in. In 2012, Ofcom had 735 employees. Last year, it had 937 employees, so as its remit has expanded, so has its headcount. That will continue to be reflected in the level of resourcing that it will be given.

Matt Warman

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Ultimately, a mechanism already exists by which Parliament is able to scrutinise Ofcom’s resourcing. Ofcom is required under the Office of Communications Act 2002 to publish an annual report on its financial position and other relevant matters. That report, which is published every March—I am sure the hon. Gentleman is waiting with bated breath for the next one—includes detail on Ofcom’s strategic priorities as well as its finances, and details about issues such as its hiring policies.

Chi Onwurah

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rose—

Matt Warman

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How to choose?

Matt Warman

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I give way to the hon. Lady.

Matt Warman

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I would say that there is a sensible place to put some of that information, which is the communication to the ISC that I have offered, and there is a sensible place to put other information, which is the annual reporting that already exists. Hopefully the hon. Lady can find some comfort in the fact that both the information that cannot be shared publicly and the information that can will be subject to an appropriate level of parliamentary and public scrutiny.

Matt Warman

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I thank the hon. Gentleman for that intervention. I hope that now that I have given those various reassurances, hon. Members are appropriately comforted.

Everyone is waiting for the headcount of DCMS; I am assured that it is 1,304 people, some 300 more than that of Ofcom. I do not know whether that makes the right hon. Member for North Durham happier or more sad.

Matt Warman

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We can discuss the optimal sizes of quangos and Departments outside this room. However, the right hon. Gentleman is obviously right that Government Departments and regulators need the resources they require to do their job properly. I hope that by describing the various mechanisms I have provided hon. Members with the reassurances they need to withdraw the new clause.