Telecommunications (Security) Bill

Lord Fox Excerpts

Committee stage
Thursday 15th July 2021 Grand Committee

[The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)]

I have received a request to speak after the Minister, from the noble Lord, Lord Fox.

[Lord Fox (LD)]

I thank the Minister and other speakers for this debate, which is really important. The Minister was basically saying in her response, “Don’t worry, we’ve got this covered.” If the Government did indeed have it covered, I suggest that ripping out 40% of the 5G network at the cost of several billion pounds to the industry is a pretty poor cover. The point made by the noble Baroness, Lady Stroud, that it took Back- Benchers to highlight this rather than the Government was particularly apposite.

The Minister portrayed the decision to remove Huawei almost as if it was a success of the process. Will she acknowledge that these billions of pounds are growth that we will not get, that they are investment in this country that has been wasted, and that it has put the country in danger in the process? Will she further acknowledge that there might be others who are able to help in the process of avoiding a repeat of what is a huge debacle?

[Baroness Barran (Con)]

I tried to present the breadth and depth of approaches that the Government are taking to address this incredibly serious and complex problem. If I may borrow the word used by the noble and gallant Lord, Lord Stirrup, we have tried to show some agility in responding to changing circumstances. The noble Lord will be aware that there were changes to the US foreign-produced direct product rules in May 2020 which changed the risk profile of our engagement with Huawei, and we acted on that, so I do not feel that I have to apologise at this point.

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[Lord Fox (LD)]

My Lords, I commend the noble Lord, Lord Coaker, and my noble friend Lady Northover for this amendment, which I would have signed had she not done so already. We heard at Second Reading an excellent speech from the noble Lord, Lord West, explaining not only why this amendment is important but why certain figures who would normally speak in this debate are not doing so. He explained that the ISC is seeking to change its MoU. As such, he and others would not speak in this particular debate.

However, we have an analogous debate to refer to, which has already been mentioned. Those of us who are veterans of the National Security and Investment Bill have been through this already. I think the noble and gallant Lord, Lord Stirrup, is the only other person in this Room who was involved in it. I certainly spent some of my life on that Bill.

We sent back to the Commons an amended version of that Bill. Your Lordships adopted an amendment not dissimilar from the one in front of the Committee today. That decision was made, as we heard from the noble Lord, Lord Coaker, because the BEIS Select Committee is not enabled to deal with the level of security information it needs to properly scrutinise the operation of BEIS for the National Security and Investment Act. There is exactly the same situation here. I gather, anecdotally, that the BEIS Committee is already hitting issues with getting the information it needs under that Act.

We also heard anecdotally on Tuesday of the debacle over the Newport Wafer Fab, where the BEIS Secretary of State has failed to use the power given to him by the National Security and Investment Act to do something around national security. The noble Baroness, Lady Stroud, is no longer in her place, but once again the ministry was forced by Back-Bench action to reconsider what it was doing. This should not be how things work. It is beginning to look like these are rhetorical points, rather than actually being usable. I hope the same fate does not befall this legislation and that it actually gets used rather than shelved. But in the same way as BEIS, DCMS will have a Select Committee that cannot access the information it needs to scrutinise the activities covered in this Bill.

The noble Lord, Lord Coaker, notwithstanding the stifling atmosphere of this Committee Room, managed to do a very close approximation of complete incredulity over why the Government should not listen to this fantastic advice. I can say that, having gone through the last Bill and seen how resistant the Government are to advice of this sort, this is neither an accident nor a sin of omission. This is a sin of commission. The Government are very clear that they do not want proper scrutiny of what they are doing, and if this Bill remains as it is, there will not be the scrutiny that is needed. Neutering of that scrutiny is not an accident but a deliberate act of the Government.

[Baroness Barran (Con)]

My Lords, I thank the noble Baroness, Lady Merron, for tabling this amendment, and the noble Lord, Lord Coaker, for moving it. The role and remit of the Intelligence and Security Committee, as noble Lords have remarked, have been raised a number of times in the other place and at Second Reading of this Bill, so I welcome the opportunity to clarify how appropriate oversight of the Bill’s national security powers will be provided for in the Bill and through existing mechanisms.

Amendment 22 would require the Secretary of State to provide the Intelligence and Security Committee with copies of designation notices and designated vendor directions when such notices, or parts of them, are withheld under Section 105Z11(2) or (3) in the interests of national security. It would also require the Secretary of State to provide copies of notifications of contraventions, confirmation decisions, the reasons for giving urgent enforcement directions when withheld under Section 105Z22(5), and the reasons for confirming or modifying such directions when withheld under Section 105Z23(6).

I will try to correct the suggestion made by the noble Baroness, Lady Northover, and the noble Lord, Lord Fox, that the Government are trying to avoid parliamentary scrutiny on this particular point. That simply is not borne out by the way that the Bill is drafted. We are very clear about where parliamentary scrutiny should take place. I recognise the desire of your Lordships for the Intelligence and Security Committee to play a greater role in the oversight of national security decision-making across government, including in relation to this Bill. As I mentioned earlier, through the oversight of the National Cyber Security Centre, the Intelligence and Security Committee can request information around NCSC advice on, and activities relating to, high-risk vendors.

However, this amendment would extend the role of the Intelligence and Security Committee in an unprecedented way. As noble Lords are aware, the activities of the Department for Digital, Culture, Media and Sport are not within the ISC’s remit. That committee’s remit extends to the intelligence agencies and other activities of the Government in relation to intelligence or security matters, as they are set out in its memorandum of understanding.

The noble Lord, Lord Coaker, asked what he called the “central question” of how this will work in practice in terms of security access. My understanding is that according to the Osmotherly rules detailing how the Government may share information with Select Committees, members of the Digital, Culture, Media and Sport Committee are able to view and handle classified and other sensitive material, subject to agreement between the department and the chair of the committee on appropriate handling. Documents may also be shared with the chair of the DCMS Committee on Privy Council terms, subject to agreement between the committee chair and the department.

The advice of the intelligence agencies will not be the only factor that the Secretary of State will take into account when deciding what is proportionate to include in a designated vendor direction. As well as the advice of the National Cyber Security Centre, the Secretary of State will consider, among other things, the economic impact, the cost to industry and the impact on connectivity caused by the requirements in any designated vendor direction. The ISC does not have the remit to consider non-security issues such as the economic and connectivity implications of the requirements in designated vendor directions. The Digital, Culture Media and Sport Select Committee can consider those wider aspects and that is why it is the correct and appropriate body to see copies of designation notices and designated vendor directions that are not laid before Parliament. Any future changes to the ISC’s remit would be best managed through consideration of the Justice and Security Act 2013 and the associated memorandum of understanding.

For the reasons that I have set out, I am unable to accept the amendment and I hope that the noble Lord, Lord Coaker, will therefore withdraw it.

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[Lord Fox (LD)]

Once again, this is a short but important debate, and one of a continuing series. In response to the noble and gallant Lord, Lord Stirrup, we had a short discussion that, to some extent, was crying over spilt milk about why industrial capacity in telecommunications in the United Kingdom is where it is. I think the noble Earl, Lord Erroll, largely agrees with me that it is to do with the purchasing decisions made by near-monopolistic private sector companies based on price. If that is not a lesson for the Government to take forward, we are all doomed anyway.

To turn to the detail of these two amendments, as both the noble Baroness, Lady Merron, and the noble and gallant Lord, Lord Stirrup, have set out, they are about people. Without overrepeating it, I come to the point I was talking about earlier, which is that BEIS is going through a similar process. It is setting up a unit that is supposed to scan the entire industrial landscape for supposed security problems and alert the Minister to decisions that should be made about the future of those companies. These people will have many of the same skills and face many of the same issues, going forward.

First, does the Minister think there is a sufficient pool of people available to cover both these units? Is it sensible to have two units operating in parallel to, and probably in isolation from, each other, with the BEIS unit setting up a telecoms capability, which DCMS will also have? Perhaps the Minister can tell us what conversations are going on between DCMS, Ofcom and BEIS to avoid that duplication. We have already heard that there are too few people so, frankly, it does not make much sense to have two departments competing for the same people.

More broadly, the noble Baroness, Lady Merron, is completely correct that there is a huge issue with the availability of people. Unless the Government pick up major programmes to train and retrain people and look at skills that are completely necessary to move forward, we will be left high and dry without the skills we need to create the sorts of industries that the noble and gallant Lord, Lord Stirrup, suggested we need. That will take time, so perhaps the Minister can say what the plan is. What is the process and what discussions are going on with trainers, universities and employers to deliver the skill set we need?

Of course, we would want to review all this annually, which is why these amendments are here, so the Government necessarily come to Parliament to explain how they are getting on and what they are doing. I am sure the Government do not want us to be suspicious of what they are doing, and the best way to avoid that suspicion is to be open and transparent, rather than try to operate in a black box.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, these amendments, both tabled by the noble Baroness, Lady Merron, highlight the two important issues that our short debate covered—the role of Ofcom in relation to the Bill; and skills and training, and their effect on telecoms security. I am pleased to have the opportunity to outline some of the work that has already been done in these areas, which I hope explains why we consider these amendments not to be needed.

Amendment 26 would require the Government to complete a review of, and publish a report on, the impact of levels of skills and training on the security of the telecoms network and supply chain. It would require the Government to publish the report within six months of Royal Assent.

The Government certainly agree that it is crucial that public telecoms providers and organisations such as Ofcom have access to people with the skills that they need to keep our networks safe. DCMS published research this year as part of its annual survey, Cyber Security Skills in the UK Labour Market, which found that 50% of UK businesses have a basic technical skills gap. It also found that they do not have confidence in their ability to carry out basic cybersecurity functions and do not outsource these skills.

That is why the Government have a range of programmes already in place to support the growth of cybersecurity skills. Over the past five years, work funded by DCMS has supported over 160,000 young people to forge a career in the cyber sphere. The department has also funded a range of schemes to help adults or career changers to acquire new skills, most recently through the Cyber Launchpad initiative and projects sponsored through the fast track digital workforce fund.

Clearly, there is still much more work to be done to close the cyber skills gap. However, we are making progress. When compared with the 2018 survey, Cyber Security Skills in the UK Labour Market 2021 found that organisations were less likely to report a basic cyber skills gap in areas such as firewall configuration, restricting administrator rights and patching.

Specifically on skills in the telecoms sector, we know that telecoms providers need to have access to people with the right skills to ensure that their networks and services are secure, as the noble and gallant Lord, Lord Stirrup, rightly said. That is why we are creating a pipeline of these skills for the future, with telecoms apprenticeships currently available across the sector, and over 4,500 people starting this year alone.

The creation of the UK telecoms lab, as announced by my right honourable friend the Secretary of State in the other place last November, will facilitate knowledge sharing and promote skills development in telecoms security. The lab will collaborate with DCMS, the National Cyber Security Centre, the newly established UK Cyber Security Council and industry. It will develop and deliver training packages and support the establishment of professional bodies and communities. I hope that these initiatives demonstrate how seriously the Government take the task of supporting telecoms skills, and cyber skills in particular, and why we feel that the review proposed in the amendment is not needed.

I will speak more broadly about our skills agenda. The Department for Education has targeted specific investment in key areas of learning, such as science, technology, engineering and mathematics—STEM—and technical and digital subjects, which could support careers in telecoms. That includes: £2.5 billion of investment in the national skills fund to support adults to retrain and gain the skills they need for the future; nearly £2.5 billion made available for high-quality industry-designed apprenticeships; £500 million a year towards T-levels; up to £290 million to establish institutes of technology across the country, which will be the pinnacle of technical training; and a new £18 million growth fund to support further and higher education providers to expand high-quality higher technical education.

The noble Baroness, Lady Merron, asked about the impact of skills on the removal of Huawei equipment. We have no plans or intention to delay the 2027 target for the removal of Huawei equipment from 5G networks. Indeed, BT, for example, has already shared in the media that it is making good progress on removing Huawei from 5G networks, starting in Hull. We believe that we are on track.

Amendment 23 would require Ofcom to publish an additional statement as part of its annual report, under paragraph 12 of the Schedule to the Office of Communications Act 2002. This statement would contain information about the adequacy of Ofcom’s resourcing, and telecoms providers’ compliance with their security duties. It would also contain Ofcom’s assessment of any future or emerging risks to telecommunications networks, identified by interrogating telecoms providers’ asset registries.

I reassure the Committee that this amendment is also not needed. The Bill already contains a range of reporting mechanisms that will ensure that Ofcom’s role can be properly scrutinised. I will address three of these mechanisms in particular.

First, Ofcom will need regularly to report to the Secretary of State under new Section 105Z, providing information to assist him with the formulation of policy on telecommunications security. New subsection (4)(a) makes it clear that this report must include information on providers’ compliance with the duties imposed on them by the Bill.

Secondly, Ofcom will need to report on telecoms security in its annual infrastructure report. Clause 11 specifies that this should include information on the extent to which providers are complying with their security duties under new Sections 105A to 105D. Thirdly, by virtue of Clause 14, the Secretary of State will need regularly to report to Parliament on the effectiveness and impact of the new telecoms security framework.

The amendment would address three issues. I will take each in turn. The first concerns Ofcom’s resources, on which the noble Baroness, Lady Merron, began. As my noble friend the Minister mentioned at Second Reading, Ofcom’s security budget for this financial year has been increased by £4.6 million. This funding will allow Ofcom more than to double its headcount of people working on telecoms security, ensuring it has the necessary capacity to deliver its new responsibilities under the Bill. The noble Baroness asked specifically about staffing. Ofcom will work with a recruitment partner to secure the specific cyber skills needed to implement this work. This will include seconding in technical expertise to develop its capability further.

As we discussed earlier in the Committee, Ofcom will also work closely with the NCSC, which will share its expertise to support Ofcom’s implementation of the new regime. The noble Baroness mentioned the relationship between Ofcom and the National Cyber Security Centre. As she noted, the two organisations are in the process of developing a memorandum of understanding and have published a statement summarising how they intend to work together. The three key principles set out in that statement are, first, that the NCSC will provide expert technical cybersecurity advice to Ofcom to support implementation of the new telecoms security framework; secondly, that Ofcom and the NCSC will exchange information where necessary and permitted by law; and, thirdly, that the NCSC will continue to provide incident management support during serious cybersecurity incidents to telecoms operators and to Ofcom as necessary. That statement can be found on Ofcom’s website.

The second area of the amendment is a requirement for Ofcom’s annual report to include information on providers’ compliance with their duties under new Sections 105A to 105D. This reporting would duplicate provisions elsewhere in the Bill. Ofcom is already required to report publicly on providers’ compliance with those duties in Clause 11.

The final point in the amendment is about publishing information on emerging and future security risks. This has also been accounted for in the Bill. New Section 105Z(4)(f) already requires that Ofcom report to the Secretary of State any emerging risks it becomes aware of in its annual report on security. The noble Baroness asked about informing the public. It would be at the discretion of the Secretary of State whether to publish this information.

I can assure the Committee that Ofcom takes a forward-looking approach to regulation to ensure that it is robust in the face of market and technological developments. For example, its recent Technology Futures report looked at innovative technologies that will shape the communications industry, with input from the world’s leading technologists.

I hope that I have provided assurance that adequate and detailed reporting requirements for Ofcom are already outlined in the Bill. As I have set out, it already includes provision for reporting on Ofcom’s work, so additional requirements about skills and training are not necessary. I hope that the noble Baroness will therefore be content not to press her amendments.

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This is an issue of parliamentary accountability and political will. I see no reason why my noble friend the Minister would not accept this amendment. I look forward to hearing from her how the Government intend to hold their diversification targets to account.

[Lord Fox (LD)]

I thank the various noble Lords for their contributions. I will speak to Amendment 24, which bears my name, but I recommend that the noble Baroness, Lady Stroud, reads the Chancellor’s Mansion House speech, in which he calls for a nuanced relationship with China. Failing that, she could read my speech on the first group of amendments, in which I challenged how nuanced a relationship can be with a country threatening both our security and that of its own people. At the heart of the Government’s challenge is to be all things to everyone in this argument. They are doomed to fail if they try to do that.

I turn to the amendment I am supposed to be speaking to. As we discussed at Second Reading, there are essentially three strands to the diversity strategy. The first leg is supporting incumbent suppliers. I was corrected by the Minister: this refers not to domestic suppliers but suppliers we already have, presumably— although it is not explicit—with the ones we do not want having been weeded out. The second is attracting new suppliers into the UK market, and the third is accelerating open interface solutions, which I assume helps the second of those strands in particular.

There is not a strand about growing a domestic industry; some of us—I am one of them—were confused about this. It mostly seems to be about taking advantage of other countries’ businesses that we can trust—or think we can at the moment; I refer the Committee to earlier comments by the noble Earl, Lord Erroll, about today’s allies not always being tomorrow’s allies—rather than massively growing our own national capability. Bearing in mind those three legs, it would be helpful to hear from the Minister how the improvement in the domestic share of this market is planned.

In her letter to many of us on the subject of diversification, the Minister made the point that Vodafone has already attracted six new suppliers, two of which were Samsung and NEC, into the market through the open RAN deployment. I think I asked her at Second Reading when open RAN would become a significant player in telecoms delivery in this country. If she gave an answer then I am afraid I mislaid it, so can she tell us when open RAN will become a significant player or whether it is something of a sideshow? I do not mean that in a bad way; it is a recognition of where it really is in the market at the moment.

The biggest challenge I have with this is that the Government have launched a lot of strategies. They usually come with a glossy document and a picture of a smiling Secretary of State. I can confirm that this strategy is no exception. We have a very nice picture of the Secretary of State, Oliver Dowden, on page 3, but it does not come with a timeline and a delivery plan. The Government would not issue a strategy if they did not have a delivery plan, so I am sure there must be one. I think it would help us all if we understood what the delivery plan is. Perhaps the Minister could share with the Committee the timeline for the delivery of this strategy, otherwise many of us might suspect that it is something that gets only launched, not delivered. I understand that money has been put into it but, again, that does not guarantee that outcomes will be forthcoming.

This amendment has been tabled to reveal how that timeline is going and how the outcomes are being delivered. That is what it is for. It would enable the Government’s spending of taxpayers’ money on delivering this strategy to be tracked by Parliament. That seems a perfectly reasonable function for Parliament to have.

The Minister might come back and say that DCMS is being asked to lay all sorts of things before Parliament. If that is the case, I think that all of us, including me, the noble Baroness, Lady Merron, who spoke very capably on this, the noble Earl, Lord Erroll, the noble Baroness, Lady Stroud, and others are quite capable of coming up with a composite annual report that covers not just the items in Amendment 24, but those in Amendment 25 on strategy, Amendment 23 on Ofcom’s performance, and Amendment 26 on skills. Taken together, I am sure we could put together a composite annual report in the next round of discussions that would save DCMS having to make several different annual reports. I suspect that that might be a way forward and look forward to the Minister embracing this idea, because of course DCMS wants to demonstrate how it is delivering its diversification strategy.

[Baroness Barran (Con)]

I am grateful to all noble Lords for their contributions to this short debate and consideration of the Government’s ambitious diversification strategy. The amendment tabled by the noble Baroness, Lady Merron, raises the important issue of diversification, which I know is of great interest to your Lordships, as it was to Members in the other place. Diversification is a key part of the Government’s broader approach to ensuring that our critical networks are healthy and resilient. That is why the Government set out their 5G diversification strategy last autumn, and we are fully committed to ensuring that this strategy comes to fruition.

Our long-term vision for the telecoms supply market is one where, first, network supply chains are disaggregated, providing network operators more choice and flexibility; secondly, open interfaces that promote interoperability are the default; thirdly, the global supply chain for components is distributed across regions, creating resilience and flexibility; fourthly, standards are set transparently and independently, promoting quality, innovation, security and interoperability; and finally, security and resilience is a priority and a key consideration in network design and operation. However, the Bill focuses on setting clear security standards for our public networks and services. As the noble Baroness, Lady Merron, pointed out, although diversification is designed to enhance security and resilience, not all diversification activity is relevant to the security and resilience of our networks. That is why we believe the amendment would not be appropriate.

The Government have already made progress since the publication of our strategy, including the creation of the Telecoms Diversification Taskforce, which set out its recommendations in the spring. Work is already under way to implement several of those recommendations. Research and development was highlighted by the task force as a key area of focus in order to promote open-interface technologies that will establish flexibility and interchangeability in the market. As raised by the noble Baroness, Lady Merron, and the noble Lord, Lord Fox, it will also allow a range of new smaller suppliers to compete in a more diverse marketplace.

That is why the Department for Digital, Culture, Media and Sport was delighted to announce the launch of the future radio access network competition on Friday 2 July. Through this, we will invest up to £30 million in open radio access network research and development projects across the UK to address barriers to high-performance open deployments. This competition is part of a wider programme of government initiatives, which includes the SmartRAN Open Network Inter- operability Centre—more friendlily known as SONIC Labs—a facility for testing interoperability and integration of open networking solutions, which opened on 24 June. A number of leading telecoms suppliers are already working together through this facility.

We welcome recent announcements from operators including Airspan, Mavenir, NEC and Vodafone to introduce open radio access networks into their infrastructure. This demonstrates that industry is working alongside us, here in the UK, to drive forward the change needed in the sector. We continue to work with mobile operators, suppliers and users on a number of other important enablers for diversification; for example, we are developing a road map for the long-term use and provision of legacy network services, including 2G and 3G. Alongside this, the Government have led efforts to engage with some of our closest international partners, including the Five Eyes, to build international consensus on this important issue.

We are also working to deliver on UK issues in standard- setting bodies, and working with industry, academia and international partners to ensure that standards are set in a way that aligns with our overall objectives. Ensuring that standards are truly open and interoperable will drive market growth and diversification. Through the UK’s G7 presidency, we took the first step in discussing the importance of secure and diverse supply chains among like-minded partners and the foundational role that telecommunications infrastructure, such as 5G, plays.

The noble Baroness, Lady Merron, asked how we were planning to spend the initial £250 million, which we announced to kick off work to deliver our key priorities. These priorities have been informed by the recommendations of the Telecoms Diversification Taskforce and include: establishing a state-of-the-art UK telecoms lab; exploring commercial incentives for new suppliers; launching test beds and trials for new technologies such as open RAN; investing in an R&D ecosystem; and seeking to lead a global coalition of like-minded partners on an international approach to diversification. In response to questions from the noble Baroness and the noble Lord, Lord Fox, about the growth of UK businesses, we have been clear that we are focused on investing in the UK and in UK businesses, but do not think that a UK-only solution is a wise or realistic option.

We are working closely with operators and suppliers to develop targeted measures that address the needs of industry to deliver our long-term vision for the market. We responded to the task force’s findings in July and outlined our next steps and the use of that initial investment. If the noble Earl, Lord Erroll, has not seen the government response, I am sure he would find it interesting. It also sets out our plans to create a diversification advisory council, which will meet quarterly. I hope that responds to his question.

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[Baroness Merron (Lab)]

My Lords, I am pleased to speak to Amendment 28, which stands in my name. It is the result of a number of recent developments, which I shall refer to. Noble Lords will be aware that on 2 July the Government published their response to the Telecoms Diversification Taskforce’s report and in it announced that the taskforce was now to transition into the Telecoms Supply Chain diversification advisory council, which came up earlier today. The Minister will recall that in response to a Written Question from me she said:

“The Advisory Council will play a key role in overseeing and offering scrutiny to the delivery of the 5G Supply Chain Diversification Strategy. We will also draw on the expertise of the Advisory Council for wider telecoms supply chain diversification issues beyond the RAN (Radio Access Network).”


That is all well and good. However—and this is the point that the amendment seeks to unravel—the Government have also announced that Mr Simon Blagden will be the new chair of this permanent council. Noble Lords will be aware that Mr Blagden was the non-executive director of Fujitsu UK during the Post Office scandal and has donated more than £215,000 to the Conservative Party.

As we have all discussed, diversification is inherently linked to security, so the new advisory council has to provide sound, expert advice that will secure our telecoms network, and we need confidence in that. The point I want to explore with the Minister, as she is already aware from Written Questions that I have submitted, is that the appointment of Mr Blagden raises a number of serious questions about the council’s independence and how the appointment will be able to benefit national security.

In addition to tabling Amendment 28, I have a number of questions to tease out all these points. It is also worth noting that in the past 24 hours there have been reports of a telecoms company, IX Wireless, having given—it has come to light through correct declarations of course—more than £20,000 to Conservative MPs, while the Secretary of State has given this same company glowing endorsement at a launch event, with a promotional film, which I have seen, showing him in his ministerial office with the executives of that company.

I should say to the Minister that it is a question not just of how things are but of how things look. Of course there will be facts on which I am sure the Minister can enlighten us. I have a number of questions in that regard for her relating to an inquiry about the appointment process that was in place for Mr Blagden. Who was involved and which Minister made the final decision? Will there be payment for Mr Blagden in his role as chair? How will the council give independent advice and what happens if Ministers reject that advice? Will there be security experts as members of the advisory council? What knowledge did Mr Blagden have of the faults with the Horizon system during his time at Fujitsu? Can the Minister confirm that Mr Blagden has no remaining financial interests in Fujitsu?

I know that the noble Baroness may not be in a position to answer those questions now. In which case, I hope that she will write to me before we go into the Summer Recess. I beg to move.

[Lord Fox (LD)]

Before I comment on that excellent speech from the noble Baroness, Lady Merron, I want to return to the answer that the Minister gave on the Newport Wafer Fab issue, which proves the point that we were making on the need for the ISC to be involved. Regarding the ISC issue, the Government furnished themselves with the National Security and Investment Act, which was supposed to deal with issues such as this. However, the Prime Minister has chosen to refer it back not to the people running that unit but to the National Security Adviser, which proves the point that someone with access to national security information is needed to make decisions of this nature, rather than an organisation that does not have access to the information. It absolutely proves the point that our amendment on the ISC is completely appropriate, just as it was appropriate for the BEIS analogue of what is happening here.

The noble Baroness, Lady Merron, made an excellent speech and I am not going to attempt to adorn it either with my normal flippancy or with detail. There is just one issue that I wish to raise regarding Simon Blagden. Are there any outstanding legal liabilities from his time at Fujitsu? In other words, has his activity been fully exonerated or is there potential legal recourse? Other than that, I echo the point that perception of these issues is as important as reality. If the Government continue to operate in a black-box way, everybody will assume that things are going on that they cannot see and that should not be happening. It is therefore in the Government’s interests to be transparent about how that person in particular was appointed and how the advisory council will operate.

[Baroness Barran (Con)]

My Lords, I thank the noble Baroness, Lady Merron, for tabling the amendment and for giving me an opportunity to provide an update on the work of the Diversification Taskforce and the new diversification advisory council.

The Government recently announced the council, building on the work of the Diversification Taskforce, chaired by my noble friend Lord Livingston of Parkhead. I should like to take this opportunity to offer my thanks to him and the taskforce members for volunteering their valuable time and knowledge to their excellent review. Their recommendations and expertise will remain crucial to helping us bring greater resilience and competition to our future networks as the taskforce now transitions to the new diversification advisory council.

The Government recognise that diversification is a broad and complex issue relating to matters of security and resilience, technology and geopolitics. It is for this reason that we sought the advice of the experts appointed to the diversification task force. Many of the task force members will continue to provide advice as part of the new advisory council. In appointing the membership of the advisory council, the Government have followed all standard processes. The Government have ensured that the council comprises experts from both industry and academia across a wide range of subject matters, including security, of course.

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Moved by

[Lord Fox]

29: After Clause 25, insert the following new Clause—
“Oversight by the Investigatory Powers Commissioner
(1) The Investigatory Powers Act 2016 is amended as follows.(2) After section 229(3)(j) insert—“(k) the exercise by the Secretary of State of functions under section 105Z1 of the Communications Act 2003”.”Member’s explanatory statement
This amendment would give the Investigatory Powers Commissioner oversight of the power given to the Secretary of State in this Bill to outlaw the use of individual vendors.

[Lord Fox (LD)]

I am moving this amendment on behalf of my noble friend Lord Clement-Jones, in whose name it is, who unfortunately could not come today. He figured that this would be taken on day three of the process, but we have got ahead of ourselves. I also thank the noble Earl, Lord Erroll, for his support for this amendment when he spoke to the second group. It is appreciated. I know that he has had to leave.

As Comms Council UK has pointed out, new Clause 105E is not the only new clause to give the Secretary of State extensive powers; there are others. New Clause 105Z1, for example, gives powers to the Secretary of State to outlaw the use of individual vendors, potentially with no parliamentary oversight, if the Secretary of State considers that it would be contrary to national security.

Clause 15 creates a scheme for dealing with particularly high-risk vendors by inserting new clauses into the Communications Act 2003. These empower the Secretary of State to give designated vendor directions where they consider it

“necessary in the interests of national security”

and the requirements imposed are

“proportionate to what is sought … by the direction.”

The designated vendor direction can impose wide-ranging requirements on providers on their use of

“goods, services or facilities … made available by a designated vendor specified in the direction.”

While vendors are entitled to notice of their designation if “reasonably practicable” to do so, they are not entitled to be consulted or informed of the reasons for the designation if the Secretary of State considers it contrary to national security. Vendors are also entitled to notice when directions are imposed on providers or when a designated vendor direction is revoked, but this right does not apply if the Secretary of State considers it contrary to national security.

The effect of all this is that, while a vendor may know of its designation, the providers with which it does business can have various restrictions imposed because of their relation to the designated vendor without the vendor knowing the reasons or possibly the existence of such directions. This is complicated but serious, and in several scenarios the vendors would have no real prospect of mounting any legal challenge, even under the closed material procedures provided for in the Justice and Security Act 2013.

Cutting to the chase, this amendment would give the Investigatory Powers Commissioner oversight of the power given to the Secretary of State in the Bill to outlaw the use of individual vendors. Without this, we are telling suppliers that they essentially have to operate without full legal protection. I cannot help thinking that this will discourage the future investment we need. I am interested to hear how the Government think they can mitigate an essentially Orwellian situation in which people find themselves in an adverse legal position but they do not know why, and sometimes they do not even know that they are there. I beg to move.

[Baroness Merron (Lab)]

My Lords, I thank the noble Lords, Lord Clement-Jones and Lord Fox, for tabling this amendment. I do not have too much to add to this brief and interesting debate, but I take the opportunity to thank the Constitution Committee for its report on the Bill.

At Second Reading the Minister said:

“Oversight of the Investigatory Powers Act regime by the Investigatory Powers Commissioner is considered appropriate because of the potential intrusion into the private lives of individuals as a result of the use of covert powers. The national security powers in this Bill are very different from those in the Investigatory Powers Act”.—[Official Report, 29/6/21; col. 747.]


However, she did not say why it would be wrong for the commissioner’s remit to change. This is the one point I put to the Minister, and it would be helpful to have a response.

--- Later in debate ---

[Lord Fox (LD)]

I thank the Minister for his response—but not much. There is a tendency, which has come through in this and lots of other Bills, for representatives of Her Majesty’s Government to stand up and completely ignore important committees of this House. The Constitution Committee and the Delegated Powers and Regulatory Reform Committee are not any old committees; they are very serious. The way in which their advice—or rather more than advice—has been dismissed across the board by both Ministers in this debate is a serious development. I implore representatives of Her Majesty’s Government to take those committees more seriously, because their not being observed is somewhat an abuse of process.

That said, I will read the Minister’s response in detail, with a suitably socially distanced lawyer to advise me. I do not think we have heard anything that makes this amendment less needed but, at this stage, I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Moved by

[Lord Fox]

30: After Clause 25, insert the following new Clause—
“Definition of public electronic communications network
In section 151 of the Communications Act 2003, in the definition of “public electronic communications network”, at the end insert “, including—(a) landline communications systems;(b) mobile data, audio and video networks;(c) digital surveillance networks;(d) satellite delivered networks;”.”Member’s explanatory statement
This amendment clarifies the definition of “public electronic communications network”.

[Lord Fox (LD)]

We are down to the irreducible minimum. During my Second Reading speech, I asked the Minister about the range of technologies covered by the Bill. I do not recall getting a meaningful answer, so I thought I would try again using this as a probing amendment.

The noble Baroness, Lady Merron, talked about the creativity of your Lordships. I am now going to test your memory functions, which I know can sometimes be stretched in this House. I would like your Lordships to cast your minds back to 2003, the year when the Nokia 1100 mobile phone was introduced. Few noble Lords will remember the number, but most of you will remember the phone. It was an iconic phone that took over mobile telephony. For those who would like to see one, I have two and, for as long as 3G is available, they will continue to work. More than 250 million of these basic GSM phones were sold. It was the best-selling consumer electronics device in the world at that time—the state-of-the-art communications device—and was discontinued in 2009.

Meanwhile, at the same time, the Communications Act 2003 was introduced to regulate machines such as the Nokia 1100. This has not been discontinued but has enjoyed several patches along the way. As I have said, this is a probing amendment seeking to clarify the definition of “public electronic communications network” within the 2003 Act. I think you see what I have done; I have tried to illustrate that the world has changed a bit since 2003.

The amendment seeks to amend Section 151 of the Communications Act by adding a contemporary definition of the range of communication networks that increasingly have emerged since the Act was conceived, when Nokia ruled the roost. It would introduce a new clause to the Bill that would define the “public electronic communications network” as

“landline communications systems … mobile data, audio and video networks … digital surveillance networks … satellite delivered networks”.

My first question to the Minister is: in her opinion and that of the department, which of these categories is covered by the Bill and which is not? I also have some specific scenarios that I would like the Minister to consider. The noble Baroness, Lady Merron, will be pleased to note that they are focused on the consumer—an issue she addressed earlier in the week.

First, when broadband or 5G are delivered by satellite, whether by the BEIS-owned OneWeb or the Musk-owned SpaceX, to what extent is the satellite element covered by this legislation?

Secondly, when a facial recognition camera captures an image, sends that image to a database using a closed network and, in turn, contacts either a public sector or private sector operative via a smartphone, which part of this—if any—is covered by the legislation?

Thirdly, data is being relayed back and forth over smart speakers—Alexa and its, or her, colleagues—so do these transactions fall within the purview of the Communications Act or the Bill? For example, with smart speakers, does the Bill cover only the transmission and not the speaker itself? If that is true, what, if anything, covers the security integrity of the speaker and its software?

My fourth question concerns data travelling between smart meters, home thermostats, camera doorbells and the ever-increasing internet of things. How is their security and integrity protected by the Bill? If the answer is that they are not protected, where do these modern manifestations of communications fit in? How is the security of these things being protected for the consumers of today?

This is not just a piece of legislative housekeeping. The noble Lord, Lord Alton, raised other potentially risky companies in his speech on Amendment 1; at Second Reading I raised a range of other companies. I will not repeat them but they are in Hansard. These are just a few of the businesses involved in the sorts of activities that I have just outlined, so by understanding which activities are included in the Bill we may start to understand which companies and technologies it includes. It is about how satellites, cameras, smart speakers and the internet of things fit in the purview of what is now called communications. Times have changed since 2003. Can the Minister please update us? I beg to move.

[Baroness Merron (Lab)]

My Lords, I thank the noble Lords, Lord Fox, Lord Clement-Jones and Lord Alton, for tabling this amendment. The noble Lord, Lord Fox, has set out why they believe this definition of a public electronic communications network is needed. I also appreciated his reference to the importance of consumers, who, after all, are core in all our discussions.

It is important to hear from the Minister whether she believes that this definition is limiting for security purposes and what impact it would have. Perhaps she can advise on whether she feels that anything is missing which should be in there. Would this definition inhibit the future-proofing ability of the Bill? I look forward to hearing from the Minister.

--- Later in debate ---

I hope, in the words of the noble Lord, Lord Clement-Jones, that that is a chink of sunshine at the end of the afternoon for the noble Lord, Lord Fox. With that, I ask him to withdraw his amendment.

[Lord Fox (LD)]

My Lords, there are more Bills to follow; I fear that I am being drafted into the purchasing Bill and the other Bill that the Minister just mentioned.

The Minister is wrong to conflate data protection with security—we are talking not about data protection but about security. There is a big difference between the role of the ICO and that of security. I do not think that that helps answer the questions that I was asking.

Perhaps this is for the Bills to come rather than today’s Bill, but there is something about the collective threat. If everybody’s smart meter is shut down that is a national emergency, not a personal emergency. There is a national security issue around personal data devices and somewhere, whether in this Bill or those to come, there needs to be the recognition that collective security happens when everybody’s systems are secure from threat. If I were a terrorist, it would be much easier to do those kinds of things than doing some big, national thing that is protected by the National Cyber Security Centre.

That is the point of what I am putting forward. The internet of things increases the security risk to every home all the time. Similarly, every time someone turns on their GPS locator, they are putting themselves into a system that is followed. The Minister carefully used the phrase wholly or majority use data. Increasingly with cars and satellite navigation systems, and when we move to electric and autonomous locations, all that data is becoming publicly available. In other words, my car is fed into your car, which is fed into her car to make sure that we do not run into each other. The idea that somehow you can draw these lines and say that only 10% of the data is used in a public way and 90% is not starts to become irrelevant, if it is not already. That is what I am trying to highlight.

I did not expect for a minute the Minister to say that the Government would amend Section 105 of the Act. The point was to really highlight this issue, because if the Government do not address it in this way or another then personal security on a mass level is compromised, which then becomes a national security issue. That was the point of the amendment. Having raised it, I beg leave to withdraw the amendment.

Amendment 30 withdrawn.