Telecommunications (Security) Bill

Iain Duncan Smith Excerpts

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

[Oliver Dowden]

I am pleased to say that the Minister for Digital Infrastructure has met every one of the parties my hon. Friend named; indeed, I have met many of them. Essentially, we are working across three strands. First, we are working with the existing vendors—there were three, now to become two—to secure them and make sure we do not lose a further one. We are also working with new potential incumbents such as NEC and Samsung. In addition, we are working across a range of countries, in particular the D10, to ensure that we work together to improve standards in telecoms.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I am grateful to my right hon. Friend, who is being customarily generous in giving way, but can I just make a point to him and hear his answer? This situation has constantly been wrongly described as a market failure. It was not a market failure; the failure was in the reality of one country abusing and breaking World Trade Organisation rules on subsidies. The key problem has been that China has subsidised its providers dramatically, even over 100% on contract, which has killed this market over the last 10 years. Once we release the market by stopping that, the private sector will come back into this industry because competition will be real competition, not broken competition. That is the key point.

[Oliver Dowden]

My right hon. Friend highlights one of a range of different market distortions that have been going on. To a certain extent, there will be some market correction, but the Government also need to intervene, and our diversification strategy addresses that. If we are to get existing vendors who are not currently in the UK market back in, or to create a new open RAN solution, we need to provide financial incentives, and the diversification strategy touches on many of the steps that we propose to take.

We are taking concrete steps towards a solution, but diversification is not just a problem to be solved. It is also an opportunity to be seized. As part of our strategy, we will invest in homegrown solutions that will put us at the forefront of developing 5G technology and all the transformative benefits it brings. The next phase of this work will be taken forward by the Telecoms Diversification Task Force, chaired by Lord Livingston, formerly of BT, and others. I am grateful for the work that he, industry and academic experts have done in developing the strategy and in taking it forward.

The Bill has not been designed around one company, one country or one threat. Its strength is that it creates an enduring, flexible and far-reaching telecoms regime, one that keeps pace with changing technology and changing threats, that supports billions of phone calls, email exchanges and file transfers in this country every day, and that is essential to the UK’s economy and its future prosperity.

I listened carefully to the concerns of Members on both sides of the House in designing the legislation, and I have sought to address those concerns head on in the Bill as it stands before the House. I genuinely hope that the Bill will command cross-party support and that we will be able to work together in the national interest to ensure the security of our telecoms networks. I commend the Bill to the House.

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[Jo Stevens]

I do not want to step beyond my brief and interfere in that of my shadow Cabinet colleague, but we certainly should not be doing business with any companies that breach both human rights and workers’ rights. We have international labour standards in place and these are not companies with which to do business.

Turning now to broadband and 5G roll-out, and the delays and the costs layering on top of them, we have already seen delays in the roll-out of second and third generation fixed broadband, and we are now at the bottom of the OECD tables. In fact, only last week the Government sneaked out in the Chancellor’s spending review plans to water down their broadband promises. Instead of keeping to their manifesto promise to roll out gigabit-speed broadband to every home in Britain by 2025, the Chancellor revealed that the Government are now aiming to have a minimum of 85% coverage by that date. The budget for that plan remains the same, but now only £1.2 billion of the £5 billion will be made available up until 2024, so this will impact on the so-called levelling-up agenda.

The Government’s delay in dealing with the issue of high-risk vendors until now has also meant that there will be added delays and costs to the roll-out of 5G. The Secretary of State accepted that in July, when he said that the cumulative delay would be two to three years. However, the Government’s impact assessment for the Bill does not establish the effect of removing Huawei from the core network on the timescale for the 5G roll-out, so has the Secretary of State’s position, set out in July, of a two to three-year delay changed at all, and why does the impact assessment fail to address that issue? Also in July, the Secretary of State predicted that removing Huawei would cost operators up to £2 billion, but that could be a huge underestimate, because BT alone is saying that it will cost it £500 million, and the costs could be far greater, including the knock-on effects in terms of lost revenue and wider economic benefits.

As well as those economic consequences, there is another impact, because the provision of 5G for most of the UK will increase the digital divide without significant measures to tackle it. The three central problems at the heart of this divide are lack of internet connection, lack of technological devices, and lack of the skills to use new technology in a meaningful way. The Government have promised, and so far failed, to solve the lack of connection, which is a particular problem for under-served communities. There is nothing about 5G that will make it a better option for those communities, who are already lacking affordable access to fast internet. In addition, there is the distinct possibility that in order to access mobile 5G internet, users will need newer and more expensive devices built for those increased speeds. The pandemic has highlighted these divides and thrown into stark relief the need for help and support for those whose lack of connection, skills and equipment is a real barrier both in terms of employment and other meaningful connections.

There is one other significant consequence to the Government’s delay, and that is the new 4G-based emergency services network. That is now unlikely to completely take over from the existing platform until 2024-25. This delay is costing taxpayers millions. If the Government are forced to keep airwaves going beyond 2022, every year of delay adds an extra cost of about £550 million. The core of the ESM network does feature Huawei equipment, but EE has said that it is already working to strip this out and hopes to complete that by 2023. However, can the Secretary of State reassure the House that the presence of Huawei kit in the 4G ESM network will not have any impact on its lifespan, financial implications or security status and safety concerns?

I turn now to the removal of high-risk vendors’ equipment from the 5G networks. For the purposes of this debate, it is probably easier to refer to it as the removal of Huawei equipment, because that is where everybody’s current focus is. This must all be removed from networks by 2027. There is the “no new purchasing” rule from the end of this month, and the Secretary of State has announced today that existing stocks cannot be used after September 2021. However, there are questions for the Government around the implementation of this that I hope the Minister will be able to answer.

I have five specific questions. First, given that the Bill is based on a distinction between the core and the edge of the networks, how confident are the Government of the durability of the barrier between the core and the edge? Secondly, what steps are the Government taking to prioritise the removal of any existing Huawei equipment from the more sensitive core part of the network, and how much equipment does Huawei have in it? Thirdly, are the Government proposing to provide help to businesses who have invested in Huawei equipment ahead of this decision, and will there be legal support, as many operators may have to honour contracts that they cannot actually use or possibly afford? Fourthly, what steps will the Government be taking to work with local authorities and others to minimise disruption to businesses and individuals when removing the equipment? Fifthly and finally, what steps are being taken to minimise the costs to business?

I have one other point, from a different policy angle. When Australia banned Huawei from participating in its 5G network in 2018, China imposed retaliatory measures on Australian goods. The Government’s impact assessment does not address the economic consequences of potential retaliatory measures, so can they explain what steps are being taken to plan for that possibility?

[Sir Iain Duncan Smith]

The hon. Lady makes reference to what the Chinese Government have been doing with regards to the Australians, which is appalling and breaches WTO rules. In a way, her request for the Government to formulate plans against such a breach is really a request of the WTO to act in this case, as it should have done earlier against China’s abuses and breaking of the WTO rules.

[Jo Stevens]

The right hon. Gentleman makes a valid point.

This Bill gives huge powers to the Secretary of State under the auspices of national security, but it does not define what that means. The Secretary of State will be responsible for making national security judgments and decisions in relation to potential high-risk vendors. The impact assessment suggests that he will not do so unilaterally and that he will consult with the NCSC, but it is incumbent on the Government to explain why they consider that the Secretary of State for Digital, Culture, Media and Sport—I mean nothing personal to the right hon. Gentleman in saying this—is the appropriate decision maker on issues of national security. Would it not be better for the Secretary of State to conduct a multi-agency review prior to using these national security powers, as my right hon. Friend the Member for Doncaster North (Edward Miliband) has suggested in relation to the National Security and Investment Bill, which hands similar powers to the Secretary of State for Business, Energy and Industrial Strategy?

The lack of a definition of national security in this Bill raises particular concerns about the significant level of discretion afforded to the Secretary of State, the transparency with which such decisions will be made and the ability of Parliament to scrutinise those decisions. On another issue relating to scrutiny, Parliament is being asked to vote on this primary legislation before significant elements of how it will operate have been published, because secondary legislation will set out specific security requirements that providers must meet and the codes of practice that have been mentioned. Those will only be available after the Bill has received Royal Assent.

We have concerns about the role and the scope of the powers given to Ofcom in this legislation. These are new powers, which are pretty onerous. With Ofcom also expected to be named as the regulator in the promised online harms Bill—when that finally arrives—we are concerned about the resourcing of and the expertise within Ofcom to be able to deliver its statutory duties and responsibilities. We are concerned not so much about the volume of work, but that the administering of this new security regime may require skills that Ofcom, and potentially DCMS, are unlikely currently to possess. The impact assessment with the Bill suggests a combined monitoring cost for DCMS and Ofcom of £7 million to £12 million over a 10-year period. Do the Government really think that this resourcing budget will be sufficient?

Finally, I turn to the issue of diversification of the telecoms sector. In the ’80s and ’90s, as BT was privatised, our telecoms supply chain was allowed to fall mainly into foreign hands, although they were the hands of our allies. Conservative Governments over the last decade squandered the world-leading position that our broadband infrastructure had been left in by the last Labour Government. Successive Conservative Governments have lost, given away or under-invested in our sovereign telecoms capability as that supply chain has become dominated by high-risk vendors. There are of course added benefits to reducing reliance on a small number of global vendors, including increasing competition, driving innovation and improving resilience, but, as BT and others have warned, it will take time to move at scale towards new approaches. 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 that the Government can and should help to accelerate that progress, because in doing so, there is the potential to create opportunities for the UK to take the lead, as well as to create much-needed jobs. The strategy published today will need significant scrutiny. The £250 million announced in the spending review last week is obviously welcome, but it lacks sufficient detail, and we look forward to hearing more about how it will be spent.

The Secretary of State claims that this Bill will give the UK one of the toughest telecoms security regimes in the world and allow us to take the action necessary to protect our networks, and I hope he is right. We will not oppose the Bill’s Second Reading, but we have many concerns that will need to be considered and addressed in Committee. The Bill that the House eventually passes must take steps to ensure that our telecoms supply chain is resilient in the future, or we will be forced to return here in a short time to deal with the next Huawei.

We must be mindful, as with all legislation, that we seek to anticipate the problems of the future rather than just deal with the issues that we face today. We of course fully support steps to remove high-risk vendors from the network, but they must go hand in hand with credible measures to diversify the supply chain. We are in this situation because there are no viable alternatives to Huawei, homegrown or otherwise, and that is, in part, a result of the chronic under-investment and lack of leadership from the Government on digital infrastructure. We have to ensure that this does not happen again.

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[Mark Pritchard]

The hon. Gentleman is absolutely right, and I am delighted that the Secretary of State has set out that there is going to be a new national telecoms lab. I am not sure whether he has decided on the location, but I commend the telecoms expertise of Shropshire and the west midlands to the Minister.

The Government’s own telecoms supply chain review, published by DCMS in July 2019, found that

“the telecoms market is not working in a way that incentivises good cyber security”—

perhaps another example of British understatement. This Bill will end that, and rightly so.

In its October 2020 report, the Defence Committee, ably led by my right hon. and gallant Friend the Member for Bournemouth East (Mr Ellwood), concluded that the current 5G

“regulatory situation for network security is outdated and unsatisfactory.”

I thank all the members of that Committee for the work that they have done in highlighting that.

I welcome the fact that the Bill will strengthen the security framework for technology used in 5G and full-fibre networks, including electronic equipment and the hardware and software at phone mast sites and telephone exchanges, and that it will give the Government new powers to issue directions to public telecoms providers to manage the risk of perceived high-risk vendors. It is right that the Bill will allow the Government to impose controls on telecom providers’ use of any goods, services or facilities supplied by high-risk vendors.

I very much welcome the Government’s new powers to limit and remove high-risk vendors, such as Huawei, about which we have heard so much already, from the UK telecoms network. I also very much welcome the new and revised timetable that the Government have announced today for doing this. In saying that, I hope that the Government are not being overly ambitious, as we heard from other hon. Members, but it is right to establish the principle today and move more swiftly on this key issue of national security and diversity in the marketplace.

I welcome the Bill incentivising better security by financially penalising providers that operate below minimum security standards, but I hope—the Minister is here—that a carrot-and-stick approach will be the default DCMS and Ofcom approach, rather than just a stick, as it is the private sector’s co-operation that will help us to move forward on this. It is very much key to the market diversification that the Government want and, more widely, to the partnership in cyber-security resilience in both the private and public sectors. We do not want to have enmity with the very people that the Government need to work more closely with in dealing with these issues.

The Bill makes Ofcom responsible for monitoring and enforcing telecoms providers’ compliance with their security duties where providers do not meet their obligations. I gently ask the Government whether they feel that Ofcom has the necessary teeth. Will Ofcom outsource or buy in any additional and required expertise?

The Bill, rightly, does not allow vendors to have access to the UK telecoms network denied, removed or limited for any reasons other than the protection of the UK’s national security, again making sure that we are not putting up new barriers to new entrants to the marketplace. It is also welcome that the Bill does not give the Secretary of State the right to limit or remove vendors to protect or improve the commercial interests of other vendors in the marketplace. I hope that the Minister will elucidate this important point so that there can be, from today, investor, shareholder and commercial safeguards that will allow any of those reading Hansard in the private sector to be reassured.

I would like to ask the Minister some questions. How will the Government ensure that Ofcom has sufficient staff with the necessary skills to undertake this work before it assumes its new responsibilities, which are separate from the point of buying in or outsourcing? Even if someone is buying in or outsourcing, they need to have the skills to know what they are outsourcing to and for, and so it is with buying it in, making sure that they are getting the right people in.

How will the Minister’s Department ensure that Ofcom is provided with the necessary information and relevant data on what is a new area of expertise and work for it, particularly in this detail? I welcome the fact that the Bill requires the Secretary of State to lay before Parliament a copy of all designated vendor directions and designation notices, except where doing so would be contrary to the interests of national security. However, when such information cannot be laid before Parliament, as was alluded to by my right hon. Friend the Member for New Forest East (Dr Lewis), the Chair of the Intelligence and Security Committee, will the Minister undertake to provide that information to the Intelligence and Security Committee so that Parliament and the public know that there is sufficient and adequate oversight?

Finally, as the shadow Secretary of State asked, given the recent experience of the Australian Government, what can the Minister say today on the record to deter any temptation by the Chinese Government to take any similar retaliatory measures against the UK? Does he agree that if they were so tempted—I hope they would not be—perhaps the £20 billion trade surplus for China might focus calmer and more reasonable heads in Beijing today?

[Sir Iain Duncan Smith]

I hear my hon. Friend’s point, but does he not agree that one of the greatest bastions against this behaviour by the Chinese Government would be for all members of the free world, particularly the Five Eyes, to come together both to condemn their behaviour and to themselves talk about introducing sanctions against China if it carries on behaving like this?

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[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I welcome the Government bringing forward this Bill now, and I congratulate them on having listened, which is not always something that Governments can be accused of. The Secretary of State and his Minister, whom I welcome—the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Boston and Skegness (Matt Warman) —have listened to many concerns, and measures to address them are now embedded in the Bill.

China recently said that if there was any further interference, it would poke the eyes out of the Five Eyes. This Bill puts the missing fifth eye back into the Five Eyes, because we have been laggard, lazy and late on this, and I think this would probably be the case across the board, so perhaps that is a positive. The right hon. Member for North Durham (Mr Jones) made a very good speech. He was right to say that this is not about China. There are plenty of security risks, as my right hon. Friend the Member for New Forest East (Dr Lewis), the Chair of the Intelligence and Security Committee, said. Russia is a massive security risk to us and has probably carried out more cyber-attacks on us than anybody else. That is debatable, but it has a very big criminal network that attacks us the whole time.

I accept that. However, the difference is that China is now the driving force for our introducing this Bill, because it poses a very different kind of threat. The fact is that China has juxtaposed the ability to dominate in a market sense, which sucks us in—I will come to project kowtow and the mistakes that were made—while at the same time forcing us to often turn a blind eye to some of the work it did, which we do not do with Russia and some of the more immediate threats. It is a peculiar and different challenge, which is now embedded in the Bill.

My right hon. Friend the Member for New Forest East made the important point that the nature of our exposure has been known about for some considerable time, and we should not have ignored it. I thank my colleagues who joined the Huawei interest group early on, in winter last year, and who have campaigned to try to tighten up these security measures. Following that, the Inter-Parliamentary Alliance on China was set up, which is now made up of politicians on the left and right from 38 countries, and they are asking us to tighten up our security co-operation and ensure that we get this right.

This Bill is long overdue, and it is welcome, but I want to highlight three issues in it. First, although it is not in the text of the Bill, the Government have now announced that they accept 2027 as the end point for Huawei as a provider that may be high-risk and that no new Huawei equipment may be installed from September 2021. That is very welcome. In fact, the September 2021 date is better than I would have expected at this point, so I congratulate the Government on being very clear about that. That is a more important date than 2027, in effect, because it opens the market and allows others to recognise now that they have a possibility of re-entering a market that was closed to them by one company in particular—there are other companies in China—that has manipulated the normal rules of market adherence and subsidy. It has been a disaster for us not to recognise that on that basis alone, forgetting the security risks as well.

I am, however, concerned by another point about the process, which leaves the Secretary of State to make these decisions going forward, against criteria that are laid out, and I will come back to that. I think my right hon. Friend the Member for New Forest East said, “Who will be the advisers? Who will advise?” That is absolutely right, and the Secretary of State should listen to the Chair of the Committee on that point. It is important to structure who will advise the Secretary of State and how that will happen. Perhaps the Committee can have a very strong look at that and advise the Government on how to structure that.

There should be a more formal structure embedded in the Bill, otherwise it will be too easy for a Secretary of State, under pressure from the Business Secretary or a Chancellor, such as one we once had, who was very keen on a golden era, to be leant on and told, “Do you really need to go down this road?” That will happen. I sat as a Secretary of State, and I can tell the House that all that stuff happens, and anyone else will say that, too. A more structured approach would not allow the Secretary of State to miss the right people on advice. That will be very important.

The descriptions in the proposed new sections of the Communications Act 2003 under clause 16 of the Bill are important, and I will come back to those, because the list gives the Secretary of State plenty of scope. Tightening up the advice means that that scope will not therefore be wasted.

We are here because of the mistakes of the golden era—the great kowtow, as I would rather call it—where we too often ignored the realities of what was going on in security terms for the sake of this great drive that we would benefit massively from the opening up of trade with China. There was also a mistaken belief: too often, liberal democracies and all of us who believe in freedom of speech and the general freedoms believe, rather arrogantly, that all we have to do is open up markets and everyone else will realise that their system must be wrong and therefore they will change it.

That was the great belief. I was told it endlessly in government, “Don’t worry about this sort of stuff. China will change once they realise exactly how wonderful it is to trade with the west.” Well, they did not. They do not want to change, because they think that their form of government is a better form of government. They will say, “We are opened up to the markets. We are getting the benefits of the marketplace.” China was invited to join the World Trade Organisation back in 2001. There have been real problems since then with market forces, but I want to come back to the security elements.

The worry is that others of the Five Eyes spotted what was going on long before us, and we ignored a lot of the evidence that we should have been tightening up much, much earlier. We should have been concerned. I cannot remember which Member said that security should be the No. 1 consideration, over everything else. We lost that—I hate to say that—and considered it just one of the things we might look at.

[Mr Kevan Jones]

I am not one for doing the Government’s job or supporting them, but I do not think we did that actually, in terms of the Huawei cyber-security evaluation centre. We were ahead of other countries that did not do that, including the United States, and let Huawei into their country networks without any checks whatever. But the issue has to be security. I know that the right hon. Gentleman has strong views about China trade, but security has to be at the heart of things, which I think is where we have been up to now.

[Sir Iain Duncan Smith]

I have to say that I do not agree with the right hon. Gentleman on this. Although the Huawei cyber-security evaluation centre was installed, when I sat and listened to people from it making a presentation to us earlier in the year, it was almost as though we were watching people who were kind of squeezing their own genuine, real opinion, which would have been coming via GCHQ, about how the real threat was formed. Their arguments did not stand up, even in the face of people who were not every day working on security.

The truth is we need to be careful, and it should have been a tighter position from the word go. The very fact that the Government are bringing this measure forward now suggests that that was not the case. [Interruption.] Listen, I am critical of my own Government. I resigned from the damn thing at one point. I have to say that I therefore do believe it is possible for great Governments, like mine, to get things wrong.

[Dr Julian Lewis]

In defence of the Huawei cyber-security evaluation centre, its sixth annual report, from September this year, is absolutely devastating in its criticisms of Huawei’s failures to be secure or to make improvements when insecurities have been highlighted.

[Sir Iain Duncan Smith]

I agree completely. The point is that when we were talking about this earlier on, it was clear that that was, underneath it all, the centre’s real opinion, but it was kind of moving and modifying. It was also used in a political way, by the way, which I did not think was right. An opinion is either there or it is not; do not get people in to brief Back Benchers about what they should be thinking. I thought that was wrong.

We are absolutely in the right place at this point and the Bill goes a long way towards achieving that. However, we need to do some other things that could be in the Bill. For example, the Bill is about security but it does say on the front that it goes slightly wider than security: the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Boston and Skegness (Matt Warman) signed the bit that says:

“In my view the provisions of the Telecommunications (Security) Bill are compatible with the Convention rights.”

That convention is the European convention on human rights. We need to ask ourselves whether that idea applies to many regimes—not just China—and companies that come from those regimes that may be guilty of human rights abuses.

I asked the Minister previously, in a private context, whether he would consider including in proposed new section 105Z8 of the Communications Act 2003, on designation notices, the inclusion of the ability, where it may arise, to do something in the area of genocide and the involvement of companies in that process. There is very strong evidence in a couple of cases—particularly in the Uyghur case—of the use of slave labour, which should result in those companies being outlawed. The Minister may argue that this Bill might not be the appropriate vehicle for that because it is specifically about security, but every Bill has on its face that we abide by human rights laws. I am not trying to widen the Bill’s scope; I am giving the Minister the opportunity to have that extra element as part of his possible designations. After all, we are dealing with countries and nations that have, particularly in China’s case, torn up much of the book on co-operation and diplomacy.

Let me raise a final point before I conclude. My hon. Friend the Member for The Wrekin (Mark Pritchard) has gone, but he mentioned Australia. One of our Five Eyes partners, Australia, had the temerity to ask for an inquiry into the covid outbreak. Since then, the Chinese have attempted, in essence, massively to beat up Australia in a very undiplomatic and aggressive manner. It started with abuse of the individuals who asked for an inquiry and then went further into abuse of the Government. Subsequently, it has gone on to sanctions: the Chinese has now broken WTO rules, with sanctions of more than 200% on Australian wine.

In the past couple of days, the Chinese have produced what I think is called a meme—which is a mocked-up instrument on the internet—that shows something about an Australian soldier trying to kill a child. This is appalling behaviour and I want my Government, at some point, to be very clear that such behaviour is simply not to be borne. Although we have said that we stand with China, the key thing about this sort of thing and our co-operation with our Five Eyes partners is to do more than stand with China: we should condemn behaviour like that that deliberately targets and demeans a democratic nation that goes by the rule of law and human rights, which is something that China does not do. I do hope that the Minister will pass on to his colleagues that no matter what we do with this Bill, we need to make sure that we stand up with our Five Eyes partners, now that we have the National Security and Investment Bill and are moving in that direction, and never allow any one of them to be isolated and picked off one at a time. I commend the Bill to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

The next listed speaker has withdrawn, so we go straight to the Chair of the Defence Committee, Tobias Ellwood.

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[Anthony Mangnall (Totnes) (Con)]

It is a pleasure to be able to speak in this debate and to follow my hon. Friend the Member for West Dorset (Chris Loder), who was so kind about me it almost makes me think he has set me up for a fall. It is also very good to be able to follow my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) who we might think, having listened to his speech, has every single high-tech industry in his constituency. If that is the case, I am sure he will be willing to share some of it with the south-west.

My maiden speech was made during consideration of the Telecommunications Infrastructure (Leasehold Property) Bill, and the shadow Minister was good enough to attend. After that, I have taken a keen interest in this topic and the issues of national security that surround it. The Minister has consistently met me, members of the inter-parliamentary alliance on China and those who had concerns about Huawei, and I thank him for doing so. The result that we have got today is a real progression and benefit to our national security network, and also an example of what we can do when the House works together in a consensual way.

We know that the international landscape is now far more varied and dangerous, and that it seeks to exploit domestic networks. A recent example of this was highlighted in a Bloomberg article that cited Nortel, a Canadian company that was so badly hacked—reportedly—by Huawei in 2000 that it led to the collapse of the company over a period of 10 years. Some 5,000 employees were working in my constituency in the early 2000s. That shows that a company supported by the Chinese state can have a dangerous impact on companies around the world, as well as on our own state infrastructure.

The steps in the Bill are very welcome. Not only will they check the dominance of international companies such as Huawei, but they will identify potential future threats. As right hon. and hon. Members have said, this is not an anti-China Bill or an anti-Huawei Bill; it is about national security and identifying future threats that we may face. It is also an opportunity to focus on our domestic market and what we can do to create new businesses and opportunities and use our homegrown talent. As the Secretary of State mentioned, the £250 million national telecommunications lab will be a perfect opportunity to cultivate and innovate new technologies and encourage new people to go into the sector. My hon. Friend the Member for The Wrekin (Mark Pritchard) was kind enough to suggest that it should be based in his constituency, but I might also suggest that it comes down to the south-west and Paignton in my constituency, which has the high-tech EPIC centre focused on photonics. I will put that in there, and I hope to meet the Minister to discuss how we might make that happen.

As we know, how far we can go with this depends on how our willpower is positioned and our determination to cultivate British talent, skills and innovation. The diversification point has been made several times, and much has been said, but we also have to be conscious of the need to create the environment that will see new entrants into the marketplace. Relying on Ericsson and Nokia is all very well, but we can and will be able to develop new companies with our Five Eyes colleagues—the same point was made by the US Secretary of State earlier this year, looking at opportunities to build new companies together. Where diversification is limited, there are correct measures to guide and limit high-risk vendors in our telecommunications network, and those are contained in the Bill, notably in clauses 15 and 23.

I also take the point that the right hon. Member for North Durham (Mr Jones) made about parliamentary oversight. I hope the Chair of the Intelligence and Security Committee, my right hon. Friend the Member for New Forest East (Dr Lewis), will forgive me for suggesting that if the Government are unwilling to bring forward proposals for parliamentary oversight, they could go to that Committee so that it could scrutinise them. I apologise for adding to his workload, and I hope he does not think that that is a poor suggestion.

My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) mentioned convention rights, including human rights. One of the biggest grievances many of us have had in terms of Huawei’s role in our telecommunications infrastructure network relates to China’s violations of human rights. The Minister might say that this is not the right time or the right Bill to look at human rights, and if it is not the right Bill, I hope he will say in his closing remarks when the right time to address this point is. I know there are other opportunities, alongside the National Security and Investment Bill, but I would be keen to hear at which point we might address human rights.

[Sir Iain Duncan Smith]

I am listening carefully to my hon. Friend’s excellent speech. The Minister will note, as I pointed out to him, that this Bill is signed off on the basis of the application of rights, including human rights. Every Bill has the right to be amended.

[Anthony Mangnall]

I thank my right hon. Friend for his experience and knowledge in guiding me on that point. Of course, I accept that he is right on that matter. In that case, how might we address the issue I have raised?

We have righted a wrong. We have addressed an issue on which we have been seen as out of kilter with our international allies. Now, we have the opportunity to go further and to pass this fantastic piece of legislation. We can harness the international community and, as with the Augean stables, clear up the mess. We can make sure that, in future, we have a robust and secure telecommunications infrastructure network that is the pride of Britain.

--- Later in debate ---

[Sir Iain Duncan Smith]

I hear what my hon. Friend says, but surely he would concede that, as this Bill deals specifically with vendors and the vendors are themselves located, originally, in countries that may have been guilty of these abuses of whatever nature, should those companies be found to be using slave labour—such as some that are already referenced in this Bill—that would be a reason not to have them. Would he not think that they were high-risk vendors for the very simple reason that they abused those human rights?

[Matt Warman]

As I said earlier, we would want to apply those standards not just to telecoms companies but to the garment industry and in a host of other areas where we know that there is the potential for similar abuses. I absolutely hear what my right hon. Friend says, but Britain can do better than focus simply on the relatively narrow aspect of telecoms.

Telecommunications (Security) Bill

Iain Duncan Smith Excerpts

Report stage & 3rd reading
Tuesday 25th May 2021 Commons Chamber

[Stephen Flynn (Aberdeen South) (SNP)]

It is a pleasure, once again, to follow the Chair of the ISC, the right hon. Member for New Forest East (Dr Lewis), as I did during the passage of the National Security and Investment Bill. He speaks with great wisdom and experience on these matters, and the Minister would do well to heed such advice from his Back Benches. It is also a pleasure to follow the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who also speaks with great experience in this field. I have been fortunate enough to sit on a number of Bill Committees with her, and it is clear that telecommunications is very much her forte.

Let us consider the Bill in a wider context, before I drill down on the new clauses. We are essentially looking at foreign investment in our critical, national infrastructure. In real terms this is not a new thing. We are all aware, I hope, of the ISC report from 2013 on that very matter, and Huawei, and its role within our infrastructure, did not necessarily come as a surprise to anyone. I read the Bill’s Second Reading with much interest. The Labour party was trying extremely hard to absolve itself of any blame in that regard, which made for light entertainment over the past evenings. Of course, the Government are just as complicit in that regard, and complicit with a small c, because they were not necessarily looking at things with the view that they have now.

From my experience in this House, the Government have not covered themselves in glory when it comes to this topic. When I came into this place in 2019, one of the first key issues that was talked about—aside from Brexit, of course—was Huawei’s role within the UK, and we have seen the Government flip-flop from one view to another. It is testament to the hard work of many Government Members that they got the Government to realise just how serious this topic is and, indeed, was in years gone by.

Although there are concerns, the only thing that has really changed in the many years since 2013 is the seriousness with which the Government are treating this matter, and that seriousness extends to my colleagues and me. As my hon. Friend the Member for Gordon (Richard Thomson) made clear on Second Reading and in Committee, we are supportive of the Government’s efforts in this regard, as we were with the National Security and Investment Bill, but there are a couple of areas where the Government still need to provide a level of assurance. Notwithstanding the remarks that have rightly been made in relation to scrutiny by the ISC, importantly we need to be clear that the Government are going to pick up the tab in Scotland for all the equipment that will now be made surplus to requirements. We cannot have a situation where that is not the case, because it is their actions that have led to the situation we are in. We also need to ensure that the replacement strategy is both safe and secure, so that we do not find ourselves in a situation such as this ever again.

Notwithstanding the justified security concerns that we all have, perhaps the key thing lies in and around the issue of telecommunications. As was referenced by the shadow Minister, although not in the same detail, there are around 1 million people in rural Scotland who do not even have access to 4G. Of course, telecommunications is reserved to the UK Government—it is the responsibility of the Under-Secretary of State for Digital, Culture, Media and Sport, the hon. Member for Boston and Skegness (Matt Warman), and he will be cognisant of the fact that the 4G roll-out has not been as good as it should be. We all want to see the 5G roll-out, to ensure that we are in as advanced a position as possible, but we must ensure that the same mistakes are not repeated. I would certainly welcome assurances from the Minister in that regard.

That leads me to the SNP’s amendment 1, which seeks to ensure that the Government consult in full with the Governments in Scotland, Wales and Northern Ireland. It is vital that we have that link and that, while we remain a part of the United Kingdom, the UK Government work in partnership with the Scottish Government on such serious matters.

It will come as no surprise to the Minister that we are supportive of the new clauses tabled by Labour on ensuring that there is diversification, that there is parliamentary oversight and scrutiny, and that the ISC plays a key role. I would like to hear from its Members that they are equally supportive of the view that the devolved Administrations should play a key role in telecommunications.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

It is always a pleasure to return to old arguments and ensure that they are still live, and I intend to do just that. From the beginning, I have supported the process and initiative taken by the Government; it was not without struggles early on. I do not intend to go into the details, but I will refer to them. Back in 2019 and early 2020, it became quite a battle over whose advice was better. It seemed to me at the time—and, in a way, I do not blame the Government for this—that the National Cyber Security Centre gave the Government poor advice about the security risk, which was tempered by the Government’s need to go ahead and get 5G moving.

That is always the problem that we face. If organisations are to give Government advice on security risks, it must be completely separated on the basis that that is their advice; they must not temper it to suit the Government. We have seen that happen all the way through—it is not just this particular Government. They have made the right decision, and I will come back to that, but if we go back, this has happened also with Labour Governments and Conservative Governments of the past. Successive Governments have underestimated the growing risk that is coming particularly from China, but also from other countries. They were already aware of the risk from Russia.

--- Later in debate ---

[Ms Nusrat Ghani (Wealden) (Con)]

No, but I will never waste an opportunity, as it is obviously a joy to intervene on my right hon. Friend, who was asking how much deeper our relationship can go with a country that has sanctioned parliamentarians in this House for basically raising human rights abuses and security concerns.

[Sir Iain Duncan Smith]

I am getting so used to just doing what I am told by my hon. Friend when it is necessary that she only has to look in this direction and I give way to her—my apologies.

What I was really trying to get to the bottom of is that I do not think that this is feasible any longer. The Bill illustrates the dichotomy that lies at the heart of the Government’s position. We are trying constantly to talk about these trade relationships, but at the same time we recognise that the country that we are discussing them with is a totalitarian state that is guilty of what many, including myself, believe is a genocide of a whole ethnic group—more than one ethnic group. It is a state that is intolerant, that is suppressing democracy and free speech in Hong Kong, that is threatening Taiwan and India, and that has said that it is in possession of the South China sea. I could go on with that list. We can recognise the compilation of all those things and that there is a security risk, and yet at the same time in the other place we are told, “Don’t worry. We are still trying to do trade deals.”

It is quite interesting that we have reopened an economic and financial dialogue under a JETCO—a joint economic and trade committee—which was originally paused because of the imposition of the national security law in Hong Kong. The discussions have now restarted, although we did not hear much fanfare. We sort of discovered that they had restarted, but there was no announcement from the Dispatch Box that we were restarting them. There are no dates involved, but the discussions are restarting, despite the sanctions against individuals and so on, and despite our sanctions against Chinese officials—although I still wish that we could do more.

I note also that the European Union was heading in the same direction with its agreement, only now, because of the sanctions on its MEPs and so on, it has decided that it is not going to do that. I simply raise the question: if we think that this country and this Government —the Chinese Communist party, the Government of China—are such a potential threat, should we really be trying to reopen those doors, despite the sanctions that we have in place, the sanctions that they have put in place, and the very clear threat that they now pose to our security?

I simply say to my hon. Friend the Minister that I was going to move my amendment, which would have said that the Government should immediately declare many of these companies high-risk vendors by the very nature of the security law that exists in China. However, I would also say, in support of what has been said already, that the Government need to use the internal possibilities in our Parliament. We have a Committee that is cleared to the highest level of security in these areas, and it is important that we use that Committee. If the Government get private advice from the Committee about what it thinks is going wrong with their position, I think that will benefit and improve them.

I therefore ask my hon. Friend to take my amendment into consideration and to answer that point, to think seriously about how we can strengthen the Bill further and, if he can, to make the reservations of this place felt to his colleagues in Government. We are deeply concerned about trying to ride two bicycles at the same time: recognising a deep and growing threat to democracy not just here but around the world from the Chinese Communist party, while trying to beg China to do trade deals with us, notwithstanding the fact that it behaves so badly.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD) [V]]

It is a pleasure to join you, Madam Deputy Speaker, from the far north of Scotland. Before I make two points that will be familiar to the House, may I compliment the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) on a most interesting speech? I afford myself a wry smile; we are where we are today, which is rather different from where we were when I attended the Westminster Hall debate in which he made the same point. I think that he would be allowed some quiet satisfaction at having changed the Government’s course as significantly as he has, because—I shall return to this point—this is about the defence of the realm.

Let me make a second initial remark, with reference to the hon. Member for Aberdeen South (Stephen Flynn). As a former Member of a place based in Holyrood, in Edinburgh, I wholeheartedly support the notion of working with the devolved Administrations. It makes absolute sense. If we believe in the security of the realm, we all have to work together for the better good.

As I have said already, my two points will be familiar to the House. The first is that, having done the armed forces scheme, I know it is very useful in bringing elected Members face to face with the realities of the defence of this country. For me, it was something of a wake-up call. There is no doubt, as the right hon. Member for Chingford and Woodford Green said, that there are nations out there—Russia, China, North Korea and others—that do not concern themselves with the good health of the United Kingdom. We have only to look at the hijacking of the Ryanair airliner in recent days, or indeed the crime that was committed in Salisbury, to see that the actions of states can be very bad indeed for us as a country, so in some ways this whole debate is a bit of a wake-up call. We have to ask ourselves where we stand in the world, what we can do and whether we are going to stand up for what we believe is right.

The Bill has the support of my party, in that it helps to protect the vital interests of the United Kingdom and the people who live in and love our country, as we all do. The key point emerging from that is that, as others have said, there will have to be an element of co-operation with other countries that share our ideals and interests. We think of the Five Eyes countries, of our European friends and of other countries all over the globe—perhaps India, perhaps South Korea, perhaps Japan—that we could work with more closely to further the best interests of us all.

My second point—yes, I am going to talk about this yet again, so perhaps I should offer an apology to the Chamber—is on something that the hon. Member for Aberdeen South referred to: we talk about 5G in the UK, but there are parts of Scotland that do not have 4G. As the shadow Minister, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), said, there are bits of Scotland where connectivity is very poor indeed. In the past, I have made the perhaps not very clever joke that in parts of my constituency, we might even be better off with two tin cans and a length of string, so there is a lot of work to be done, to say the least.

Telecommunications (Security) Bill

Iain Duncan Smith Excerpts

Consideration of Lords amendments
Monday 8th November 2021 Commons Chamber

[Julia Lopez]

I appreciate the hon. Member’s comments. When the Secretary of State is looking to designate a vendor, she will put that to the House to be scrutinised, and we will be scrutinised on this issue through the usual procedures that I have outlined in my previous comments.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I welcome the Minister to her place. If we look back over the past few months, even the past year or so, we see very much that the resistance early on by the UK Government with Huawei, when other Five Eyes countries were banning it, has led to a remarkable back-cost for replacing all this stuff because we failed to take an early decision. While the amendment may not be perfect, it indicates clearly a big weakness in the Government’s position, even in this very good Bill. If Five Eyes countries, which are our main allies in intelligence, spot there is a problem, we should pause, investigate the reasons why, and then come back to the House with the reasons why we disagree or agree. The amendment aims at doing that, so perhaps the Government should think about amending the Bill in such a way.

[Julia Lopez]

I appreciate my right hon. Friend’s comments, but it is important that we do not put in primary legislation the specific partners that we should have to listen to on these specific issues. It would create a hierarchy of diplomatic networks.

[Sir Iain Duncan Smith]

With respect, these are not specific partners; these are our closest allies when it comes to intelligence sharing. They do not get any closer than this. Working with them, as we do in sharing intelligence, means that using systems for sharing that intelligence would corrupt our own ability. I wonder whether the Minister could just slightly reset: these are not just partners.

[Julia Lopez]

I appreciate my right hon. Friend’s comments. The amendment would require us to do something that has been part of the legislation from the outset. We believe that our existing approach is the right way to continually consider the decisions of our international allies and partners, whether or not they are part of Five Eyes. That brings me to the second objection to the amendment, which is that it is unnecessary because we regularly engage with our Five Eyes partners and are committed to a close and enduring partnership with them. We agree with the other place that where possible, the UK Government should consider the actions of other countries when developing our own policies, and that is exactly what we do already. It is what we have been doing before and during the passage of this legislation.

The intelligence and security agencies across Five Eyes retain close co-operation, which includes frequent dialogue between the National Cyber Security Centre and its international partners. This dialogue includes the sharing of technical expertise on the security of telecoms networks and managing the risks posed by high-risk vendors. There are mechanisms in place for the NCSC to share this and wider information with the Department for Digital, Culture, Media and Sport.

Collaboration with our Five Eyes partners forms an intrinsic part of our national security work. The alliance was not created through legislation and it has not required legislation for us to develop and strengthen that relationship, and the amendment would set an unhelpful precedent. We do not need the amendment to compel us to work with our Five Eyes partners.

That takes me to our third reason for resisting the amendment, which is that the UK needs to have the flexibility to develop and encourage international relationships in addition to Five Eyes. Naming individual countries in this way would set an unhelpful precedent for national security legislation in future. As I have acknowledged, it is important that we consider the policies of our Five Eyes partners, namely New Zealand, Canada, Australia and the US, when developing our own policies, but we also need to consider the policies of a wide range of other countries, including those of our European neighbours, such as France and Germany, and those of other nations, such as Japan, South Korea and India. Stipulating in primary legislation the countries whose policies the UK Government should consider when developing our own national security policies, whether Five Eyes or other countries, would be unhelpful, given the wide-ranging nature of our international collaboration. It would be highly unusual to refer to specific countries in legislation in this way, and this Bill is not the right place to create such a precedent.

The fourth reason for resisting the amendment is that it is impractical because of the many different ways in which other countries operate their national security decision making. The amendment would require us to act whenever a ban takes place in another Five Eyes country, but it may not be immediately clear when a country has taken a decision to ban a vendor, particularly if they have relied on sensitive intelligence to make that decision.

It may not always be apparent why a particular country has banned a particular vendor. There could be any number of reasons why a foreign Government would choose to restrict a company’s ability to operate within that country. Those reasons may not be based purely on national security grounds. I welcome the intention behind the amendment, but we cannot accept it because we feel that it is duplicative, impractical, restrictive and, ultimately, unnecessary.

In summary, the House is presented with a strengthened Bill as Lords amendments 1, 2 and 3 will increase the chances of parliamentary scrutiny of the telecoms security framework. As I have set out, however, it would be inappropriate to agree to Lords amendments 4 and 5. I thank the other place for its scrutiny of the Bill. I commend Lords amendments 1, 2 and 3 to the House and ask that the House disagrees with Lords amendments 4 and 5.

--- Later in debate ---

[Chi Onwurah]

As always, my hon. Friend makes an excellent point, and as a telecoms engineer, it has been sad to see the lack of an industrial strategy for our telecommunications capability, which strengthens our UK capability. We have excellent engineers and excellent research. We should be leading in future telecommunications capability, and an industrial strategy would ensure that was the case. It would also help collaboration with our allies. For example, the US does not have a vendor that can provide our 5G networks at the moment, and collaboration with our allies and an industrial strategy or plan could make such a difference globally and locally to our security and economic strength.

[Sir Iain Duncan Smith]

Is the main point in all of this that this was not a market failure? Although an industrial strategy is important, in reality this is a national security failure. Huawei has undercut the market progressively for nearly 15 years through its subsidies, breaking every rule and driving every company out of business. The single biggest problem we face is having a proper functioning market that requires those involved in it to obey the rules. China does not, and everyone has paid lip service to that. Is that the real problem?

[Chi Onwurah]

I both agree and disagree with the right hon. Gentleman. I agree totally that national security is not a function of the market, and the fact that we have a network that is not secure is not a market failure but a failure of government and foresight. China had an industrial strategy. That is why it has a vendor in all the networks across the world—

[Sir Iain Duncan Smith]

To break the rules—

[Chi Onwurah]

Not to break the rules, but to work with other nations whose values we share, and in the long term to develop and support companies in this area.

--- Later in debate ---

[Andrew Rosindell (Romford) (Con)]

I rise to speak in favour of Lords amendment 5, which was tabled by Lord Alton and Lord Blencathra.

The Five Eyes alliance is one of the most important strategic alliances that the UK shares. It is one of the world’s most comprehensive intelligence-sharing alliances, bringing together nations that have a strong bond forged through our shared history and values. The Government have recently taken a great stride towards strengthening our relationship with two of our Five Eyes partners, Australia and the United States, through the AUKUS agreement. I believe that Lords amendment 5 would further strengthen our ties with those great allies and ensure that we look to the future of the security and resilience of our telecommunications network.

Telecommunications networks have become the foundation of our economy, allowing business, Government and communities to connect and share information. This ability to connect and communicate is now a fundamental part of the way in which our society operates. Only last year, however, the Government were still considering using the services of a Chinese company, Huawei, to manage the introduction of 5G technology in our country. That was deeply worrying, owing to the complete subservience of the Chinese tech companies to the Chinese Communist party. The unholy alliance of these so-called private companies and an authoritarian Government who have no respect for basic values such as privacy has allowed the CCP to increase internal surveillance to a level never seen before. We would be foolish to think that the CCP would not have used its access to the information accumulated by Huawei through its involvement in our 5G roll-out, given the immense levels of intelligence that it would have been able to gain from that.

This debacle of Huawei shows that we must be extremely careful in protecting the security of our vital infrastructure. Letting companies that are so intertwined with a malign Government manage the implementation of our telecommunications systems would be no less than an act of national self-harm. If one of our close strategic allies makes the decision to ban a telecommunications company from operating within its borders, it will have a good reason for doing so. Taking the time to consider the rationale for such decisions will cost us little, whereas I worry that not doing so could be catastrophic for our national security. I hope that this House will approve amendment 5, as it will send a clear message that technology companies that work against our national interest will not be allowed to operate in the United Kingdom. I hope that the Minister will reconsider the Government’s position.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I will be brief, as much has been said already. However, I want to say a bit to my hon. Friend the Minister about Lords amendment 4. I also, by the way, want to recognise my hon. Friend the Member for Boston and Skegness (Matt Warman), who is no longer a Minister but who was in charge of much of the Bill’s passage. I thought that he did an excellent job. It is a very good Bill which is long overdue, and there is much to praise in it.

I think that Lords amendments 4 and 5 are worthy of a little more assessment. Lords amendment 4 does have merits, because it recognises that there is a real problem about diversification. The point that I was trying to make to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) earlier was not an argument against any kind of strategic review or industrial policies; it was the argument that if a nation is in a sense rogue, in terms of its ability to stay within the market, and subsidises companies deliberately for strategic effect, that is why the number of companies will fall from 15 to three in the free world, which is what happened in this case. I think the amendment is about the need to recognise the fact that diversification, if not pursued deliberately, will lead us into the hands of a country like China, which then forces us eventually to have only one vendor on price, because that country has subsidised it.

As for Lords amendment 5, I heard the argument of my right hon. Friend the Member for New Forest East (Dr Lewis), the Chairman of the Intelligence and Security Committee, but I would not regard this as “gilding the lily”. I do not much like lilies and I think they could do with a bit of gilding, but I think that this is more a case of locked doors, and if the amendment is about putting an extra door into the security panoply, I think it is important. I will be brief, but last year, along with many others, I had very strong arguments with the Government about Huawei, and we were disregarded, disregarded, disregarded. The Government even led out all the great security experts who told them that they could control everything, saying, “Don’t worry, we can manage the risk”—until it finally became apparent to them that they could not. We faced that at the time. Other Five Eyes members had already said that this was not on, but we seemed to disregard their views. So I simply say that this is not about gilding the lily; it is about reminding the Government that they must abide by these provisions.

I should also make the point that there are many other companies to which we should be giving real consideration right now, and which are being looked at and banned by the Five Eyes—such as Hikvision and ByteDance—and I urge the Government to think again about those as well.

[Matt Warman (Boston and Skegness) (Con)]

I want to thank the various Members who have paid tribute to my small role in this Bill. I say simply to the right hon. Member for North Durham (Mr Jones) that I regard all reshuffles as an upgrade, so I welcome the Minister to her place. I mean that sincerely. I would also like to pay tribute to the officials—some of whom are in the Box today—who do not get enough credit for getting the Bill to the place that it is in. Ultimately, this is the Bill that will remove Huawei from our 5G network, and that is something that we should all welcome. It addresses a number of the issues that I raised and discussed robustly, as my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) said, during the process of getting the Bill to this point.