Finance Bill

Debate between John Spellar and Iain Duncan Smith

Report stage & 3rd reading
Monday 24th May 2021 Commons Chamber

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

I rise to support the amendments standing in the names of my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), myself and my colleagues.

Let me start by making it very clear, as my right hon. Friend—wherever he is—did so well earlier, that we have a problem here, and I am surprised that the Government do not really want to recognise it and are avoiding it. The unacceptable practices of umbrella companies have now become very clear. Contractors are being forced into schemes and are being forced by recruitment agencies to use umbrella companies, which they may not wish to do and may be concerned about. Opting out of the conduct of employment regulations is often mandatory, which removes the rights contractors had as agency workers. We are seeing kickbacks, problems over holiday pay and the skimming of the assignment rate. We are also seeing mini umbrella companies, which some contractors sign up to, believing them to be compliant, only to then discover that they are employed by a company with a different name and owned by a director in, say, the Philippines—my right hon. Friend mentioned “File on 4”, which has raised this issue.

The problem is that the worse the level of malpractice, the greater the rewards and kickbacks for the agencies, reducing the revenue for the Treasury. I have huge respect for my right hon. Friend the Financial Secretary, who is on the Treasury Bench and who will respond to all of this, and I am sure he and his colleagues in the Treasury are alert to this issue and understand that it is a major problem, but I cannot quite understand why we are not using this Finance Bill to start putting some of this right.

[John Spellar]

Has it not been a systemic problem with the Inland Revenue that these schemes have been cropping up for decades, and that it takes years to deal with them? They are spreading like wildfire, and they are spreading even faster now with social media—it used to be through the pubs and clubs. Ministers need to be on the Inland Revenue’s back saying, “Why are you not dealing with these problems?” There is a timing issue in this.

Huawei and 5G

Debate between John Spellar and Iain Duncan Smith

Wednesday 4th March 2020 Westminster Hall

[Sir Iain Duncan Smith]

My hon. Friend is absolutely right and prompts the question: who has been asleep on their watch? That goes right back to the time when the Labour party was in government and was not even told by civil servants that they had made the decision to approve the involvement of 5G. Saying that is not to blame Ministers; it was the fault originally of civil servants.

Even if the Government disagree about the urgent need for such developments or disagree with my argument about this issue, surely, as my hon. Friend the Member for Folkestone and Hythe (Damian Collins) said, security is a greater priority. Government policy must consider the wisdom of proceeding to deploy vast numbers of IOT sensors in our environment, offices and homes, unless and until current legitimate security concerns about this issue have been laid to rest.

[John Spellar (Warley) (Lab)]

I thank the right hon. Gentleman for securing this extremely important debate. First, may I say that it is quite clear in this Chamber that there is bipartisan support for his position, as indeed there is in the United States among Republicans and Democrats on this issue, and as indeed there is in Australia with the Australian Liberal Government and the Australian Labour party on this issue? Therefore, one must ask: why are the Government pursuing this course? I ask that because the right hon. Gentleman is slightly in danger of accepting the argument that somehow Huawei is light years ahead of other companies in this field. It is probably a few months ahead, given the nature of this industry, which is always changing rapidly, and companies such as Ericsson, Nokia and Samsung are clearly developing, too. What those companies really need are orders, which are what Huawei has had from the Chinese Government, to pull through their development.

[Sir Iain Duncan Smith]

I am grateful, as ever, to the right hon. Gentleman, who is in danger of making my speech before I do, because I am coming on to those points. He will find that we not do not just have cross-party support; we are absolutely linked in our concern about Huawei.

I will come back to this point later, but I am afraid that a lot of this issue is about the way in which the establishment at the moment in the UK has somehow found itself locked into this Huawei process, and we need to break it free; it is like getting somebody free of an addiction to heroin. We need to put it into rehabilitation, which is the point of my speech at the moment.

--- Later in debate ---

[Sir Iain Duncan Smith]

Yes, I agree. My hon. Friend makes a very good point. In fact, I have read a note from Samsung declaring that it is completely feasible to do this work without any involvement from Huawei. Indeed, Samsung made very clear its belief that Huawei is a direct threat to our national security because its system is not a trusted one.

Far from Huawei having some insurmountable technological lead, it seems, when one starts to investigate, that the quality of its work is no better than anybody else’s, and in some cases somewhat worse. I recall even Dr Ian Levy, the technical director of GCHQ’s National Cyber Security Centre, saying about a year ago that Huawei’s security was “very, very shoddy”. He also said that

“it’s engineering like it’s back in the year 2000”.

We need to take stock of this nonsense propaganda that Huawei is light years ahead as an organisation. Yes, it has a lot of people in research and development, but the reality is that its development has been about money.

The Government say that telecommunications companies are all reliant on Huawei. It was said earlier in the debate that telcos are absolutely reliant on Huawei, so delay would leave them significantly out of pocket. According to that line of argument, however, I would argue that reducing Huawei’s involvement to even 35% would leave telcos out of pocket, so we are already halfway there, as it were. It seems daft to try to make that argument.

Of course, the reliance on Huawei comes as a result of it having constantly bid well below other market competitors for UK and other business. After all, there is a long history of the China Development Bank providing low-cost financing for Huawei customers, and that approach is updated every few years. A recent report estimates that, when one takes in tax breaks, grants and low-cost land acquisitions, the subsidy comes to more than $75 billion. No western company in this sector will be able to compete on those grounds.

Despite all that, it is not common knowledge that at least one very significant UK service provider has contacted me to say that it has already made clear that it will not use Huawei in its 5G network. O2 suggests that the idea that these systems cannot be created without Huawei—my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) mentioned this earlier—is complete and utter nonsense.

The NCSC’s guidance does not even mention services. I understand that Huawei is now taking over the managed services for another operator, Three, which opens up yet another huge area to gather information from. If someone has a map of a radio network, they will also have a map of everything connected to that radio network. They will know what each piece is, what it does and how to attack it.

Yet our dependence on Huawei goes even deeper—much deeper than many people realise. I have just noticed that Huawei is present in the emergency services network, which is often referred to as the blue lamp or blue light service. The service is part of our critical national infrastructure, but the issue did not come out in the statements. I am astonished that that would be allowed. We can imagine how dangerous any form of disruption would be to that service. It beggars belief. Then I discovered that MI5 uses a systems provider that is heavily dependent on Huawei equipment. These decisions are barking mad.

[John Spellar]

The right hon. Gentleman mentions Three. My hon. Friend the Member for Leeds North West (Alex Sobel), who is much more technically proficient, has looked that up for me. Three is owned by a company in Hong Kong.

[Sir Iain Duncan Smith]

The point I am making is that the systems and everything else that is being used are making things very vulnerable. The right hon. Gentleman makes my point exactly.

I am worried about the Government mobile system, which I understand the Government are working on. As usual for the civil service, it has some ghastly acronym. It is called gomo for short, which rather describes the process that we have been going through so far with Huawei. The Government have decreed that it will be one supplier only. It stands to reason that unless the Government block untrusted providers from the system, we will likely be handing over control of yet another vital and sensitive system to the organisation under discussion. That is a big question for the Government. Will they ensure that when that contract is let, the supplier will not have any input from untrusted providers such as Huawei? The Minister needs to answer that question.