Cyber Security and Resilience (Network and Information Systems) Bill (Second sitting)

Lincoln Jopp Excerpts

Tuesday 3rd February 2026 Public Bill Committees

[Emily Darlington (Milton Keynes Central) (Lab)]

Q I have a question for Ian Hulme. In your role at the ICO, you are clearly looking at data security. Data is obviously one of the main goals of cyber-attacks. Data issues cut across every sector, and you are looking at a really broad sector of data, from individual identifiers to names, addresses, bank accounts or whatever it might be. This could happen in any sector. How does the Bill give you additional powers to take action, particularly on those co-ordinated through AI or foreign actors, and do you think it is sufficient for what you feel we will be facing in the next five years?

Ian Hulme: We need to think about this as essentially two different regimes. The requirements under data protection legislation to report a data breach are well established, and we have teams, systems and processes that manage all that. There are some notable cases that have been in the public domain in recent months where we have levied fines against organisations for data breaches.

The first thing to realise is that we are still talking about only quite a small sub-sector—digital service providers, including cloud computing service providers, online marketplaces, search engines and, when they are eventually brought into scope, MSPs. A lot of MSPs will provide services for a lot of data controllers so, as I explained, if you have the resilience and security of information networks, that should help to make data more secure in the future.

[Lincoln Jopp (Spelthorne) (Con)]

Q One of my favourite aphorisms is, “Institutions get the behaviours they reward.” We had a cry from Amazon Web Services this morning about how, when a regulator deals with a company in the event of a cyber-security attack, please remember you are dealing with a victim.

I have dealt with the ICO before. Maybe it was the company that I worked in and led, but there was a culture there that, if you had a data breach, you told the ICO. There was no question about it. How are you going to develop your reactions and the behaviours you reward in order to encourage a set of behaviours and cultures of openness within the corporate sector, bearing in mind that, as was said this morning, by opening that door, companies could be opening themselves up to a hefty fine?

Stuart Okin: In the energy sector, we have that culture. It is one of safety and security, and the chief executives and the heads of security really lean into it and understand that particular space. There are many different forums where they communicate and share that type of information with each other and with us. Incident response is really the purview of DESNZ rather than us, but they will speak to us about that from a regulatory perspective.

Ian Hulme: From the ICO’s perspective, we receive hundreds of data-breach reports. The vast majority of those are dealt with through information and guidance to the impacted organisation. It is only a very small number that go through to enforcement activity, and it is in only the most egregious cases—where failures are so egregious that, from a regulatory perspective, it would be a failure on our part not to take action.

I anticipate that is the approach we will take in the future when dealing with the instant reporting regime that the Bill sets out. Our first instinct would be to collaborate with organisations. Only in the most egregious cases would I imagine that we would look to exercise the full range of our powers.

Natalie Black: From Ofcom’s point of view, we have a long history, particularly in the telecoms sector, of dealing with a whole range of incidents, but I certainly hear your point about the victim. When I have personally dealt with some of these incidents, often you are dealing with a chief executive who has woken up that morning to the fact that they might lose their job and they have very stressed-out teams around them. It is always hard to trust the initial information that is coming out because no one really knows what is going on, certainly for the first few hours, so it is the maturity and experience that we would want to bring to this expanded role when it comes to data centres.

Ultimately the best regulatory relationships I have seen is where there is a lot of trust and openness that a regulator is not going to overreact. They are really going to understand what is going on and are very purposeful about what they are trying to achieve. From Ofcom’s point of view it is always about protecting consumers and citizens, particularly with one eye on security, resilience and economic growth. The experience we have had over the years means that we can come to those conversations with a lot of history, a lot of perspective, and, to be honest, a bit of sympathy because sometimes those moments are very difficult for everyone involved.

[The Chair]

We have only five minutes left for this session, so if we can have concise questions and answers we might get everyone in.

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[Dr Gardner]

Q I am interested in who you report to should you identify a cyber-incident. I am talking about not just data breaches but wider ones that can affect operational systems. Which regulators do you deal with? If it is multiple regulators, do you feel there is a case for having one distinct regulator to cover cyber-resilience and manage that quite difficult landscape?

Brian Miller: That is a great question. I will touch on some different parts, because I might have slightly different information from some of the information you have heard previously. On reporting—Stewart will deal with the data protection element for reporting into the Information Commissioner’s Office—we report to the Scottish Health Competent Authority. It is important that we have an excellent relationship with the people there. To put that in context, I was speaking to them yesterday regarding our transition to the CAF, as part of our new compliance for NHS Greater Glasgow and Clyde. If there was a reportable incident, we would report into the SHCA. The thresholds are really well defined against the confidentiality, integrity and availability triad—it will be patient impact and stuff like that.

Organisationally, we report up the chain to our director of digital services, and we have an information governance steering group. Our senior information risk officer is the director of digital, and the chief information security officer role sits with our director of digital. We report nationally, and we work really closely with National Services Scotland’s Cyber Security Centre of Excellence, which does a lot of our threat protection and secure operations, 24/7, 365 days a year. We work with the Scottish Government through the Scottish Cyber Co-ordination Centre and what are called CREW—cyber resilience early warning—notices for a lot of threat intelligence. If something met the threshold, we would report to the SHCA. Stewart, do you want to come in on the data protection officer?

Stewart Whyte: We would report to the Information Commissioner, and within 72 hours we also report to the Scottish Government information governance and data protection team. We would risk assess the breaches and determine whether they meet the threshold for reporting. Not every data breach is required to be reported.

From the reporting perspective, it would be helpful to report into one individual organisation. I noticed that in the reporting requirements we are looking at doing it within 24 hours, which could be quite difficult, because sometimes we do not know everything about the breach within that time. We might need more information to be able to risk assess it appropriately. Making regulators aware of the breach as soon as possible is always going to be a good thing.

[Lincoln Jopp]

Q To come back to Dr Spencer’s original question about the scope of the legislation, the current situation, as I understand it, is that there is a carve-out for small and medium-sized enterprises because we do not want to put too much regulatory burden on them, but, under the new proposed legislation, operators of essential services that are SMEs will be designated by their regulator. That brings us back to the question of which regulator that would be. Do you currently use that designation for operators of essential services, or would you have to do a piece of work, presumably looking at a number of different regulators’ points of view, to designate the operators of essential services?

Brian Miller: We would work with the Scottish Health Competent Authority as our regulator; I cannot speak for other regulators and what that might look like. We are doing work on what assurance for critical suppliers outside the Bill looks like just now, and we are working across the boards in Scotland on identifying critical suppliers. Outside of that, for any suppliers or any new services, we will assess the risk individually, based on the services they are providing.

The Bill is really valuable for me, particularly when it comes to managed service provision. One of the questions I was looking at is: what has changed since 2018? The biggest change for me is that identity has went to the cloud, because of video conferencing and stuff like that. When identity went to the cloud, it then involved managed service providers and data centres. We have put additional controls around that, because the network perimeter extended out into the cloud. We might want to take advantage of those controls for new things that come online, integrating with national identity, but we need to be assured that the companies integrating with national identity are safe. For me, the Bill will be a terrific bit of legislation that will help me with that—if that makes sense.

[Lincoln Jopp]

Q I want to make sure I have understood exactly. Is the regulator going to tell you who your operators of essential services are, or are you going to tell the regulator?

Brian Miller: I think we would work with the regulator, but we are looking for more detail in any secondary legislation that comes along. We have read what the designation of critical suppliers would be. I would look to work with the Scottish Health Competent Authority and colleagues in National Services Scotland on what that would look like.

Stewart Whyte: On how we would make that decision, from our perspective we are looking at what the supplier is providing and what sort of data they are processing on our behalf. From the NHS perspective, 90% of the data that we process will be special category, very sensitive information. It could be that, from our side, a lot of the people in the supply chain would fall into that designation, but for some other sectors it might not be so critical. We have a unique challenge in the NHS because of the service we provide, the effect that cyber-crime would have on our organisations, and the sensitivity of the data we process.

[Dr Spencer]

Q Your evidence is really helpful. To help with my understanding, if you look across all the suppliers in your service, are there any that you would not consider to be critical, such that if you clicked your fingers now and one of them disappeared, it would not have a material impact on your ability to maintain patient safety and deliver healthcare? Irrespective of the debate about size, what suppliers do you not determine to be critical?

Stewart Whyte: For me, it would be a slightly different assessment from Brian’s. We would be looking at anything where there is no processing of personal data. For me, that would not be a critical supplier from a data protection perspective. But there might be some other integration with NHS board systems that Brian might have concerns about. There is a crossover in terms of what we do, but my role is to look at how we manage data within the NHS. If there are suppliers where there is no involvement with identifiable data of either staff or patients, I would not see them as a critical supplier under this piece of legislation.

[Lincoln Jopp]

Q Brian, from your side, what about, say, PPE, gloves or blood? There must be other things that are non-data that are, nevertheless, essential services.

Brian Miller: I do not want to step out of my lane. There will be clinical stuff that absolutely would be essential. I would not be able to speak in any depth on that part of it; I purely look at the cyber element of it. As an organisation, we would be identifying those kinds of aspects.

In terms of suppliers, you are absolutely right. We have suppliers that supply some sort of IT services to us. If we are procuring anything, we will do a risk assessment—that might be a basic risk assessment because it is relatively low risk, it might be a rapid risk assessment, or it may be a really in-depth assessment for someone that would be a critical supplier or we could deem essential—but there are absolutely suppliers that would not fall under any of that criteria for the board. The board is large in scale, with 40,000 users. It is the largest health board in the country.

[Dr Spencer]

Q Do you have integration with your local primary care IT systems? For example, GPs have the old EMIS system and so on; is that integrated into your network? From your perspective, would that be a critical supplier that would need to be regulated?

Stewart Whyte: Yes. There is a lot of information sharing between acute services and primary care via integrated systems. We send discharge letters and information directly to GP practices that then goes straight into the patient record with the GP. There is a lot of integration there, yes.

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[Dr Gardner]

Q Very quickly—I apologise if I am taking too much time—accountability is slightly different from liability. In the case of a cyber-breach that has caused harm, where would you see the liability lying?

Chris Parker: That is a harder question. There is precedent here—of course, we can think back to the precedents that this great building has set on allowing things such as, post-Clapham train disaster, the Corporate Manslaughter and Corporate Homicide Act 2007 putting it very firmly on boards, evolving from the Health and Safety at Work etc. Act 1974. We are not there yet, but do not forget that we are starting to legislate, as is everyone else in Europe and America who are on this journey.

I believe that we will see a requirement at some point in the future. We all hope that the requirement is not driven by something terrible, but is driven by sensible, wise methodology through which we can find out how we can ensure that people are liable and accept their liability. We have seen statements stood up on health and safety from CEOs at every office in this country, for good reason, and that sort of evolution may well be the next phase.

Carla and I talk about this a lot, but we have to be careful about how much we put into this Bill. We have to get the important bit about critical national infrastructure under way, and then we can address it all collaboratively at the next stage to deal with very important issues such as that.

[Lincoln Jopp]

Q I want to come back to that point. Chris, you said something like, “SMEs find it very difficult, if not impossible, to bear the regulatory burden, so we have to be very careful when designating SMEs as operators of essential services.” To me, that says that you think the Bill, as currently drafted, will place too much of a regulatory burden on SMEs. Is that correct?

Chris Parker: I was referring to strategic and critical suppliers, which is a list of Government suppliers. We are advocating that the level of governance and regulatory requirement inside an organisation is difficult, and it really is. It requires quite a lot of work and resource, and if we are putting that on to too small a supplier, on the basis that we think it is on the critical path, I would advocate a different system for risk management of that organisation, rather than it being in the regulatory scope of a cyber-resilience Bill. The critical suppliers should be the larger companies. If we start that way in legislation and then work down—the Bill is designed to be flexible, which is excellent—we can try to get that way.

As a last point on flexibility—this is perhaps very obvious to us but less so to people who are less aware of the Bill—there is a huge dynamic going on here where you have a continuum, a line, at one end of which you have the need for clarity, which comes from business. At the other you have a need for flexibility, which quite rightly comes from the Government, who want to adjust and adapt quite quickly to secure the population, society and the economy against a changing threat. That continuum has an opposing dynamic, so the CRB has a big challenge. We must therefore not be too hard on ourselves in finding exactly where to be on that line. Some things will go well, and some will just need to be looked at after a few years of practice—I really believe that. We are not going to get it all right, because of the complexities and different dynamics along that line.

Carla Baker: This debate about whether SMEs should be involved or regulated in this space has been around since we were discussing GDPR back in 2018. It comes down to the systemic nature of the supplier. You can look at the designation of critical dependencies. I am sure you have talked about this, but for example, an SME software company selling to an energy company could be deemed a critical supplier by a regulator, and it is then brought into scope. However, I think it should be the SMEs that are relevant to the whole sector, not just to one organisation. If they are systemic and integral to a number of different sectors, or a number of different organisations within a sector, it is fair enough that they are potentially brought into scope.

It is that risk-based approach again. But if it is just one supplier, one SME, that is selling to one energy company up in the north of England, is it risk-based and proportionate that they are brought into scope? I think that is debatable.

[Andrew Cooper (Mid Cheshire) (Lab)]

Q Carla, I want to come back on the potential for unnecessary over-reporting of incidents. I cannot speak for the Minister, but I am sure it is not his intention that every phishing email is reported. I was listening carefully to what you said about your proposed tiered approach, and I can imagine, say, a situation where you are United Utilities and you intercept somebody trying to put a pre-emptive virus on to one of your industrial control systems. There has been no impact on customers or your infrastructure, because you have caught it. However, I would argue that it is quite important that United Utilities share that information with the regulator and that that information is disseminated to Severn Trent, Thames Water and whoever else needs to know, so they can patch their systems, look out for the virus or find out whether they have been infected already.

I can imagine that the legislation has been worded as it is to try to capture that situation where activity might occur, but not have an impact. Would you accept that that is important, and how would that fit in with the tiered approach that you described?

Carla Baker: I completely get your point. We have looked at that; my legal colleagues have looked at things such as spyware, where you have malware in the system that is not doing anything but is living there, for example, or pre-emptive, where they are waiting to launch an attack, and we think this amendment would still cover those scenarios. It is not necessarily cause and impact: the lights have not gone out, but if there is, for example, a nation state actor in your network, we think the amendment would still cover that.

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[Tim Roca]

Q The Committee heard this morning about the public sector’s level of technical debt. This Bill is important in terms of safeguarding essential services, but we heard that an important factor—notwithstanding this Bill—is tackling the enormous number of legacy systems. How do you see us running the two in parallel?

Kanishka Narayan: That is a great question. Broadly, the Bill takes a risk-based and outcomes-focused approach, rather than a technology-specific one. I think that is the right way to go about it. As we have heard today and beyond, there are some areas where frontier technology—new technology such as AI and quantum, which we talked about earlier today—will pose specific risks. There are other areas where the prevalence of legacy systems and legacy database architectures will present particular risks as well.

The Bill effectively says that the sum total of those systems, in their ultimate impact on the risk exposure of an organisation, is the singular focus where regulators should place their emphasis. I would expect that individual regulators will pay heed to the particular prevalence of legacy systems and technical debt as a source of risk in their particular sectors, and as a result to the mitigations that ought to be placed. I think that being technology agnostic is the right approach in this context.

[Lincoln Jopp]

Q Going back to our conversation with the head of IT security and compliance at NHS Greater Glasgow and Clyde and what could be designated an operator of essential services, and our subsequent conversation with Palo Alto, how do you envision that bit of the Bill working? Taking Glasgow as an example, while neither of us are doctors, we both broadly know what happens in hospitals—and there is also a doctor sitting to my right on the Committee, should we need one. On the example that I gave, given what is written in the Bill, how do you think it should work?

Kanishka Narayan: Do you mean operators of essential services, or critical suppliers, as in the third party element?

[Lincoln Jopp]

I meant operators of essential services.

Kanishka Narayan: The Bill effectively specifies operators of essential services as large participants in the essential services sectors. I think that that definition is very straightforward. The hospital in this question would be an operator of an essential service. If the question extends to critical third party suppliers—

[Lincoln Jopp]

Q Sorry, I misspoke. I mean an SME that is deemed a critical supplier. Who is going to deem them so? Which of the many regulators at play in that hospital is going to decide who is a critical supplier?

Kanishka Narayan: There are two things to say on this. There is at least a four-step test on the face of the Bill for what would qualify as a critical supplier. First, a critical supplier has to supply to an operator of an essential service, in this case the hospital. Secondly, the supplier itself must engage with important network and information systems. Thirdly, the disruption to that third party supplier would have to cause a material disruption to the operator in question—in this case, if the third party supplier falls over from a cyber-security point of view, there would be material and business continuity disruption to the hospital. Fourthly, not only that, but that disruption would have to be sufficiently severe in its impact to be in scope. That is one set of things. Underlying that is a further test in the Bill, whereby alternative provision of that third party supply could not be secured in a practicable way. The combination of those tests means that the scope set out for the critical third party suppliers is extremely tight and robust.

Then there is still the question, having gone through that five-step test, of the particular burden placed on relevant suppliers in scope. My expectation and hope would be that regulators take a much more proportionate approach there than to set the precise same conditions on those suppliers as they do on the operator in question; in particular, that the burden on them is placed specifically in sight of the directional risk that they pose to the operator, rather than the risk in sum for that third party supplier.

The first thing is therefore that the Bill clearly specifies a very tight scope. The second is that it does not seem to me, as a relative novice to both the medical world and cyber-security, unusual to have a specification of this nature in a Bill. Given my professional context, I am particularly conscious of the very clear and critical third party comparable requirement in the Financial Services and Markets Act 2000, which focuses on both cyber-security and supply chain risks. That has worked relatively proficiently in that context, so I hope that there are some good lessons to learn from that.

[Lincoln Jopp]

Q That is a very clear answer on the steps that have to be followed. Do you envisage that each regulator in, for example, the NHS Greater Glasgow and Clyde will follow the steps from their perspective? The first one might produce 20 SMEs that need to be in scope, and the next one might produce another 20, and so on. There might be a bit of overlap. Is that the way it is meant to work, or are all the regulators meant to get together and say that they have looked at it holistically, done the step test, and now have the answer?

Kanishka Narayan: The way in which I would envisage it is that each individual regulator assesses the critical nature of the risk posed to its regulated operators. If a hospital has a third party supplier, and the presence and nature of its supply means that there is a critical risk exposure for the hospital, that would be in scope for some degree of regulation in the Bill. To your question, if there is a comparable but separate hospital in a part of England that is separately regulated, but has the same third party supplier, there is obviously a question of whether that third party supplier would end up being regulated twice if the criticality threshold is met. In that instance, and in other similar instances of multiple regulators covering the same third party supplier, I would expect a high degree of co-ordination. In fact, the provisions in the Bill, as well as my hopes for subsequent guidance, are focused on our efficiency and proportionality when there are multiple regulators. However, I think the assessment has to be undertaken by each regulator on a separate basis, because the question being assessed is not the nature, the sum risk, of the third party supplier in itself, but the risk posed by its relationship to the operator it is providing to—if that makes sense.

[Lincoln Jopp]

Q To be very clear, the three regulators we had here today were the Information Commissioner, Ofgem and Ofcom. If they thought that they had a locus because of something that that hospital did, all three would do the step test, they would come up with their bucket of SMEs that they wanted to bring into scope, and those would be added together and that would be the impact.

Kanishka Narayan: Yes, I guess, added together in the sense that they would be separately regulated, but they would all come within the scope of the regulations. Where there is an overlap in the party being regulated, my hope is that the Bill provides for individual regulation, but is very much open to the prospect of a lead regulator engaging in a softer way with the other regulators, as long as each regulator feels that that has assured them of the risk.

[Andrew Cooper]

Q We have heard evidence today about the appropriateness of individual sectoral regulators being responsible for this, versus a single regulator. Perhaps unsurprisingly, the sectoral regulators were in favour of a sectoral approach, and we heard differing views from other people. The hon. Member for Bromsgrove already covered the point about whether there are sufficient skills available to staff up all the sectoral regulators to the appropriate level to adequately cover this function.

We have heard quite a bit about how important it will be, if taking a sectoral approach, to make sure that sharing information between regulators works smoothly, and that there are no information silos. The witness from Ofcom talked about an annual report to the National Cyber Security Centre. That sent chills down my spine, though I am sure she did not mean it quite in that way. How will you ensure that there is an adequate flow of information between regulators in a timely manner? They might not realise that there is cross-sectoral relevance, but when that information is provided to another regulator, it might turn out that there is. How do you address the importance of a single point of reporting that we heard about time and again from witnesses today?

Kanishka Narayan: Those are really important points. In terms of supporting the quality, frequency and depth of information sharing, first, the Bill provides the legal possibility of doing that in a deeper way. It gives the permission and the ability to do that across regulators.

Secondly, in the light of the implicit expectation of that information sharing, the National Cyber Security Centre already brings together all the relevant regulators for deeper conversation and engagement on areas of overlap, best practice sharing, and particularly the sharing of information related to incidents and wider risk as a result. I hope that will continue to be systematic.

On the question of a single reporting avenue, the National Cyber Security Centre, from an incident and operational point of view, is clearly the primary and appropriate location during the implementation of the Bill. From my conversations with the centre and its conversations with the regulators, I know there has been engagement to ensure that it remains a prompt venue for regulators to feed in their information.