Telecommunications (Security) Bill (Eighth sitting)

Lord Beamish Excerpts

Committee stage
Tuesday 26th January 2021 Public Bill Committees

[Christian Matheson]

I do not want to detain the Committee all that long. The basis of the new clause is to ensure that Ofcom has the staffing and financial resources, as well as the capacity and technical capability, to undertake its new responsibilities under the Bill.

I remind the Committee that we heard in the evidence sessions that this is only one of several new areas of responsibility that Ofcom has received in recent years. For example, it now has responsibilities for regulating aspects of the work of the BBC. Parliament will be presenting Ofcom with responsibilities in relation to online harms, all of which is to be welcomed, but we have to recognise that there will be an overstretch for Ofcom.

In the area that the Committee is considering, there are technical complications that require specific sets of talents and capabilities which, we have heard previously, are not always in ready supply in the sector. We heard evidence that Ofcom, in common with other public sector bodies, does not pay as highly as some high-end consultancies, suppliers, developers or software houses, and therefore there will be churn. I do not want to stand in the way of anyone’s career development, but understandably there will be churn, in terms of Ofcom’s ability to maintain its responsibilities in what we know will be a continually evolving sector that throws up new technical challenges.

New clause 3 provides a duty on Ofcom to report on its resources, including the

“the adequacy of Ofcom’s budget and funding…the adequacy of staffing levels….and any skills shortages faced”.

In doing so, it will concentrate the minds of senior management at Ofcom, although I have no doubt that those minds will be focused on these matters already. Perhaps they will give this priority, particularly in terms of forward planning, and they will think, “We’re okay at the moment, but are we going to require extra and additional capability in area x, y or z in the next couple of years.” It will also focus and concentrate the minds of Ministers and Parliament, ensuring that Ofcom has the resources and capability to achieve the tasks that we have given it.

We heard many lines of evidence from the expert witnesses. My hon. Friend the Member for Newcastle upon Tyne Central may refer to some of them in her contribution, and I do not want to undermine that. Professor Webb said:

“I doubt Ofcom has that capability at the moment. In principle, it could acquire it and hire people who have that expertise, but the need for secrecy in many of these areas is always going to mean that we are better off with one centre of excellence”.

Emily Taylor of Oxford Information Labs said:

“Ofcom is going to need to upskill. In reality, as Professor Webb has said, they are going to be reliant on expert advice from NCSC, at least in the medium term,”––[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 79, Q95.]

The new clause is about assisting Ofcom to make an audit of what is available and ensuring that it is up to standard in terms of technological changes. It will also ensure that it is looking forward, in the midst of all the other responsibilities that Parliament is asking it to undertake, in order to maintain a level of skills and expertise that will enable it to undertake the snapshot reviews of current networks, as well as reviews of future provision and threats to the network. I hope that the new clause is self-explanatory and I am pleased to present it to the Committee.

[Mr Kevan Jones (North Durham) (Lab)]

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.

[Chi Onwurah]

I support and second the comments and contributions of my hon. Friend the Member for the City of Chester (Christian Matheson) and of my right hon. Friend the Member for North Durham (Mr Kevan Jones), who tabled new clauses 3 and 7. I would also like to congratulate the Committee on having made it through, as it were, the thickets of the Bill as it stands to the sunlit uplands of our new clauses, which are designed to improve it in a constructive and supportive way.

New clauses 3 and 7 both address the challenge of Ofcom’s resources. As Members of the Committee know, I joined Ofcom in 2004. I know that we are not allowed to use props in debates in the Chamber, but the Communications Act 2003, which I am holding in my hand, is the Act with which the Bill is concerned. The changes that the Bill makes are mainly adding to that Act.

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“In relation to Ofcom’s costs, Ofcom is funded in two ways: first, by a levy on the sectors and companies that it regulates and, secondly, through the collection of fees, primarily from our spectrum duties. Our overall funding is obviously agreed by our board but also subject to a cap agreed with Government…We are currently in discussion with the Treasury about the exact technicalities and which of those routes will be used to fund this, but it will be in line with Ofcom’s normal funding arrangements.”––[Official Report, Telecommunications (Security) Public Bill Committee, 19 January 2021; c. 97, Q131.]

[Mr Jones]

This is about resources for Ofcom as a whole, but there will also be debate within Ofcom about how its resources are spent. Without any ring-fenced moneys for security, is my hon. Friend concerned, like me, that not only the external control of the budget but that debate internally might compromise security?

[Chi Onwurah]

My right hon. Friend makes an excellent point. This debate is important for the Bill and important for our new clauses. It is also important that the Minister clarifies what the duties and priorities of Ofcom should be. Having worked for Ofcom at a different point in its history, I can tell hon. Members that when there is, say, a complaint about the behaviour of somebody in the “Big Brother” household that is hitting all the headlines in all the newspapers, that attracts the sudden concentration of resource—unnecessarily, one might argue. There needs to be a counterweight, if you like, to those headline-driven resourcing bottlenecks, which would be either ring-fencing or reporting on how resource is being used to support national security.

All Opposition Members are clear that national security must be the first priority of Government, and therefore the first priority of Ofcom. This is all the more relevant as I pick up the Communications Act 2003, in all its weightiness, where we find the general duties of Ofcom in section 3:

“It shall be the principal duty of OFCOM, in carrying out their functions—(a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition.”

Security is not mentioned—national security or telecommunications security. During the evidence sessions, the argument was made, although I forget by whom, that security was a necessary part of furthering the interests of citizens in relation to communication matters. That is possibly true, but I still think this important issue would be improved by clarity.

As we know, there is a significant pressure on Ofcom’s resources, which changes week by week and month by month depending on what the issues are in the many and increasing domains in which it operates. If these principal duties of Ofcom do not reflect our national security, the concern is that having no direct reporting mechanism to Parliament could mean these resources being used opaquely, with no direct requirement to prioritise national security. I hope the Minister will agree that new clauses 3 and 7 solve a problem the Bill will have in practice. I hope that if he will not agree to the clauses as they stand, he will agree to consider how Ofcom’s prioritisation of national security interests can be made clearer.

[Mr Jones]

As I have said before, I am not a great fan of arm’s length regulators, because it is a way of Government Departments and Ministers off-loading their responsibilities. Given how my hon. Friend has described the Bill, the way this is going means that Ofcom will be larger than DCMS in the future. Does she share my concern about accountability if things go wrong? It is a good get-out for the Government to be able to hide behind Ofcom, rather than Ministers taking direct responsibility.

[Chi Onwurah]

As always, my right hon. Friend raises a good point. Having worked for a quango, I had clear insight into the line between independence and dependence, and into the importance of the political will of the Government, regardless of supposed independence. Equally, I saw how any regulator or supposedly independent organisation can be used as a shield for Ministers who do not want to take responsibility.

My right hon. Friend also raises a good point about the hollowing out of capacity in Government Departments. A consequence of 10 years of austerity and cuts is that DCMS and other Departments do not have the capability, capacity or resources that they previously might have enjoyed. I will point out to the Minister the example of the Government’s misinformation unit. It has no full-time employees and is supposed to exist using resources already in the Department—for something as critical now, with the vaccine roll-out, as disinformation.

My right hon. Friend is right to emphasise that given the relationship between the Government and Ofcom, which is an independent regulator, and given the increase in responsibilities that the Bill represents at a time when other responsibilities are also being added to Ofcom, the Minister cannot have it both ways. He cannot have no visibility when it comes to Ofcom’s resources and capacity while giving it yet more responsibility. In fact, this seems to be responsibility without accountability. I hope the Minister will take on board the suggestions in new clauses 3 and 7.

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[Matt Warman]

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.

[Mr Jones]

I am intrigued. The Minister says Ofcom already has over 900 people, and it is obviously going to have to grow. How big is DCMS? We basically have a mini-Department here.

[Matt Warman]

The right hon. Gentleman asks me a question that I may be able to answer in a moment, depending on a number of factors. As for the thrust of his question, Ofcom is ultimately a serious regulator that has the resourcing to do a serious job. The right hon. Gentleman would be criticising us if it had fewer people, so he cannot have his cake and eat it by criticising the fact it has enough to do the job—but I think he is going to have a go.

[Mr Jones]

Quite the opposite. This just reinforces my point about quangos. If we reach a situation where quangos are bigger than the sponsoring Department it is perhaps best to keep things in-house rather than having arm’s length quangos and the nonsense behind which we hide in this country about so-called independence.

[Matt Warman]

The reality is that the relationship between Government Departments and regulators is very often incredibly close, but independence is an important part of regulation. Although the right hon. Gentleman makes a reasonable point about the optimal size for in-house expertise versus external expertise, it is getting the balance right between Ofcom, the National Cyber Security Centre and DCMS that this Government and the reporting measures we already have are fundamentally committed to providing.

The right hon. Gentleman talked about Ofcom’s resourcing. Ofcom will not be making decisions on national security matters, as we have said repeatedly, but it will to be responsible for the regulation around these issues. As the right hon. Gentleman said, the Intelligence and Security Committee has shown great interest in how Ofcom is preparing for its new role.

As for the point about disclosure and resources, I would be happy to write to the ISC to provide further details in the appropriate forum about Ofcom resourcing and security arrangements. This could include information that cannot be provided publicly, including information about staffing, IT arrangements and security clearances of the sort that we have discussed. I hope that Opposition Members understand that that is the appropriate forum to provide reassurance and to satisfy the legitimate requirements of public scrutiny on this issue.

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[Matt Warman]

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.

[Mr Jones]

According to the website that I have looked at, the figure is 1,170, so it has obviously increased slightly. Still, it makes Ofcom with its new responsibilities nearly as big as, if not bigger than, the sponsoring Department.

[Matt Warman]

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.

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[Matt Warman]

I think an organisation of 937 people can cope with 13 priorities. On one level, however the hon. Lady makes a reasonable point, and it is not one that we disagree with. Security has to be absolutely central to the work that Ofcom will do.

I will not restate the points I have made about how seriously we take the Intelligence and Security Committee and how seriously we will continue to take it. We will continue to write to the Committee on topics of interest as they arise and we are happy to continue to co-operate in the way that I have done; however, as I said in the debate on amendment 9, the primary focus of the ISC is to oversee the work of the security and intelligence agencies, and its remit is defined in the Justice and Security Act 2013. Amending the Bill to require regular reporting to the ISC, as proposed by the new clause, would risk the statutory basis of the ISC being set out across a range of different pieces of legislation.

[Mr Jones]

Will the Minister give way?

[Matt Warman]

Earlier, the right hon. Gentleman was suggesting that it was the memorandum of understanding that he would like to see amended. Now he seems to be suggesting that we should insert the new clause, which will not change the memorandum of understanding.

[Mr Jones]

No, I said in an earlier contribution that if it were done by the memorandum of understanding, I would be quite happy. I know the Minister is limited in the number of civil servants he has beneath him compared with Ofcom, but will he go away and read the Justice and Security Act 2013? It talks about Departments, but it also talks about intelligence more broadly, which is covered by the memorandum of understanding. I do not know why he is pushing back on this issue; it may be because of the Cabinet Office, which has more civil servants than he has. I suggest that we will win this one eventually.

[Matt Warman]

That may well be the case, but the right hon. Gentleman is not going to win it here—that is the important point to make. It is right not to try to address this issue in the new clause, but the Government will continue to take very seriously the work of the ISC, as he would expect.

Additionally, the new clause is designed to require Ofcom to provide annual reports to the ISC, which would, as the right hon. Gentleman knows, be particularly unusual in the context of the work of the Committee, as Ofcom will not be making judgments about the interests of national security under the Bill, or as part of its wider function. Ofcom’s role as regulator seems not to be something that comes under the purview of the ISC, even if I understand the broader point. As I said earlier, however, the NCSC is very much under the purview of the ISC, and there are plenty of opportunities for the Committee to interrogate the work of that excellent agency. I am sure the Committee will continue to take up such opportunities with vigour, but as I have said before, it would not be right to seek to reframe the remit of the ISC through the new clause. I ask the Opposition to withdraw it.

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[The Chair]

Mr Jones, new clause 7 has already been debated. Do you want to put it to a Division?

[Mr Jones]

No, Mr McCabe, it was a probing amendment. We debated some important issues around the accountability of Ofcom. Clearly, we are getting to a point where Ofcom has more staff than DCMS—perhaps, at some future date, Ofcom could take over the role of DCMS.

[The Chair]

I realise that this will come as a devastating blow to all of you, but the final question I must put is that—