Draft Electronic Communications and Wireless Telegraphy (Amendment etc.) (EU EXIT) Regulations 2019

Liam Byrne Excerpts

Monday 7th January 2019 General Committees

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hosie, and a very happy new year to you and the Committee.

I was grateful to the Minister for providing such a long and detailed explanation of the regulations, but nevertheless I was quite surprised that she did not explain to the Committee just how the regulations have a bearing on the big game in town: whether we are going to secure an adequacy agreement on data transfer between the UK and the EU in the event of no deal, or indeed at the end of the transition period.

The absolutely critical nature of this adequacy agreement was well discussed during the passage of the Data Protection Act 2018. Over 40% of European tech companies are based in this country, and 75% of our cross-border data flows are with other countries in the European Union. Services are getting on to about half our exports and are data-enabled, and yet under the new regime we will be treated as a third country. I think the Minister is trying to ensure a degree of regulatory harmonisation with the EU on telecoms. That is important in itself, but frankly it will mean very little unless it contributes meaningfully to ensuring that we have an adequacy agreement in place, especially in the event of no deal.

As the Minister will know, the Irish data protection authority issued guidance just before Christmas underlining that the UK will be treated as a third country, and that there is no guarantee that an adequacy agreement will fall into place. It also made the point that it has taken a long time for an adequacy agreement to be pronounced in some cases, even when a country looks like it meets the requisite conditions. In Argentina, it took about 18 months; in other cases it took something like five years. If we face such an elongated timetable before we get such an agreement in place, there will be a very meaningful impact on UK services exports extremely quickly.

Will the Minister let us know her views on two or three important questions? First and foremost, do the institutions that will acquire this new power actually have the capability to implement the new regulations? We are transferring supervisory responsibilities from agencies in the European Union to domestic authorities. The Minister did not say anything about whether she is satisfied that Ofcom and other regulators have the capability to perform those new responsibilities satisfactorily.

Secondly, we heard nothing about any kind of contingency planning for no deal if the adequacy agreement is not forthcoming. We heard nothing about when the timeframe for negotiating it might start.

Finally, can the Minister assure us that there will not be a regulatory race to the bottom? The tone that she struck in her remarks suggested that she is trying to ensure the regulatory regime remains in lockstep. Is that indeed her view of how regulation will evolve in this country when it comes to data adequacy?

We have some pretty big new telecoms regulations to get sorted over the next few years. The advent of 5G will require authorities in this country to work incredibly closely with their former partners in the EU. It is obviously a matter of regret that we will not have voting rights over the way the new standards are set. It would be extremely welcome if the Minister can assure us that we will nevertheless be able to influence some of those cross-European standards.

This set of regulations is important in itself, but it is merely a piece in a much bigger jigsaw puzzle. If the Minister is not able to get the jigsaw puzzle right, significant bits of British industry will shut down very quickly. I hope she can reassure us about a few of those points.

[Margot James]

I thank the right hon. Gentleman for his questions and remarks. I will reassure him on the question of adequacy, as far as I am able. In the event of a deal, the Commission has agreed to start adequacy discussions at the beginning of the transition period, which will last two years. He made the point that, once the Commission starts adequacy discussions, they usually take an average of two years. I am optimistic that we will have concluded adequacy decisions and got an adequacy agreement by the end of the implementation period.

In the event of no deal, that is less easy to predict. I have no doubt that the Commission will wish to start adequacy discussions if the country leaves without a deal. The right hon. Gentleman and I agree—I hope, anyway—that that is unlikely, but it is possible, hence the need for this statutory instrument. In that event, it is harder to predict, but the Government’s absolute intention is to secure an adequacy agreement. We will co-operate with the Commission as soon as it initiates discussions.

[Liam Byrne]

I want to make sure I have understood this correctly. Is the Minister saying to the Committee that, in the event of no deal, it is harder to predict whether an adequacy agreement will come into force?

[Margot James]

No. I am sorry if I gave that impression. It is harder to predict the timing of the adequacy decision. I am confident that we will get an adequacy decision whether we leave with a deal or with no deal, but I feel more confident that it will be a swift process if it takes place in the context of our implementation period and our discussions about the future framework, in line with the political declaration. There is a framework, which is highly beneficial to the swift agreement of an adequacy decision if we leave with the deal that the Prime Minister has negotiated. I urge the right hon. Gentleman to support that deal, if he is so concerned about the timing of an adequacy decision.

Let me move on to supervisory powers. The draft regulations will not introduce new powers; they will merely facilitate the smooth operation of existing powers by the regulator in accordance with UK legislation, without the need to consult the EU or to satisfy, report to or consult the Commission. They will allow the regulator to pursue its existing powers without needing to do things that are required by our membership of the European Union but that will no longer apply once we have left.

I absolutely concur with the right hon. Gentleman and reassure him that the draft regulations are not a race to the bottom in terms of consumer protection, regulation of the telecoms industry or support for the regulator. We are introducing them because we wish to maintain existing powers, rights and protections. The UK has a robust telecoms regulatory framework; the draft regulations will make no changes to that regime, beyond correcting deficiencies in retained EU law. I think we can all agree that it is essential for the regulations to be in place in the unlikely event of a no-deal outcome.

Question put and agreed to.