Telecommunications (Security) Bill
Public Bill Committee, 19 January 2021.
Examination of Witnesses
Philip Hollobone (Conservative, Kettering)
We now resume the public sitting. Welcome to our third session of oral evidence on the Bill. All our witnesses today will be giving evidence by video link.
Before calling the first panel of witnesses, I remind all Members that questions should be limited to matters within the scope of the Bill, and that we must stick to the timings in the programme motion that the Committee has agreed. For the first panel, we have until 10 minutes past 10 o’clock.
I now call the first panel of witnesses: Professor William Webb, CEO of Webb Search, and Emily Taylor, chief executive of Oxford Information Labs. Would you please be kind enough to introduce yourselves for the record and make a brief opening statement? We will start—ladies first—with Emily Taylor.
Philip Hollobone (Conservative, Kettering)
Thank you very much. Professor William Webb?
Philip Hollobone (Conservative, Kettering)
Thank you very much indeed. I am now in Members’ hands. Who would like to be first out of the blocks? Kevan Jones.
Kevan Jones (Labour, North Durham)
Thank you both very much for agreeing to come before us this morning. Emily, will you expand on standards issues and how important that will be to how the telecoms sector develops in the future? Who are the leading players in setting standards? You clearly made reference to China trying to get a set of regulations to suit itself. Where are we on what has been described in many documents as the D10—trying to get the democratic nations to influence that agenda? How do you see the way forwardQ 82?
Kevan Jones (Labour, North Durham)
Q It is quite clear from what you have said that China has been active in this sector. That is not unusual; China has done similar types of things in other international bodies. Have we in the west taken our eye off the ball in terms of representation on these bodies, and what will it take to step up to the plate and be involved in these standards settings?
Philip Hollobone (Conservative, Kettering)
Professor Webb, would you like to respond?
Sara Britcliffe (Conservative, Hyndburn)
Good morning, William. You alluded to this in your introduction, but what are the main risks to the Bill achieving the Government’s aims for the security of the telecoms network? Can you expand on how you believe these could be mitigatedQ ?
Sara Britcliffe (Conservative, Hyndburn)
Can I just quickly follow up with both witnesses? Were you consulted on the Bill prior to this?Q
Chi Onwurah (Labour, Newcastle upon Tyne Central)
It is a pleasure to serve under your chairmanship again, Mr Hollobone, and thanks very much to the witnesses for joining us this morning. I should declare that William and I worked at side-by-side desks at Ofcom for some years, so I am well aware of his expertise in this area.Q
I have a couple of questions, starting with you, William. We heard from Mavenir on Thursday that open RAN could provide 2G, 3G, 4G and 5G networks now, but the operators were not looking to purchase networks from it. What is your view on the accuracy of that statement and the maturity of open RAN? What challenges does that pose with regard to the diversification strategy set out by the diversification taskforce?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q What would your recommendations be in terms of an effective diversification strategy? Where is the capability strong?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Emily, what other security threats are not fully addressed by the Bill? How can we ensure that our networks are resilient to future security threats? I am thinking of the consolidation in cloud services, for example. As we move to more software-based networks, more and more of the value is in the cloud services. Say, for example, Amazon Web Services was bought by a Chinese company. Would you consider that a threat to the security of our networks?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I see that William wants to come in. I just want to say that we have also been told that there was a major difference between fixed and mobile architecture when it came to security issues. You seem to be saying that there may be differences, but there are security issues within fixed networks as well as within our mobile networks.
Matt Warman (Conservative, Boston and Skegness)
Q Thank you for your comments so far. You will have seen in the diversification strategy that we completely agree with the points you have made around standards and the importance of international co-operation, so I will not go further into that. But it is interesting that a lot of what you have talked about is the diversification strategy rather than the Bill itself. In terms of where we have put increased duties on Ofcom, for instance, where do you feel that there should be more in legislation, rather than in the diversification strategy itself? It seems that tying our hands is not what you are asking us to do, but there is obviously a balance there, isn’t there?
Matt Warman (Conservative, Boston and Skegness)
Q In response to that, it is worth saying that there will never be such a one-dimensional approach as the one you have described, and I do not think you are suggesting that there is. However, I think we agree that there is a balance to be struck, and, inevitably, that comes in a whole series of advice from agencies and other entities. I was interested in something that Professor Webb said about the carrot and the stick. How would you propose that Governments or, I suspect, Ofcom incentivise operators to provide the greater security that you have been talking about?
Philip Hollobone (Conservative, Kettering)
Emily Taylor?
Matt Warman (Conservative, Boston and Skegness)
It was to both of you, to be fair, but I did mention Professor Webb.
Philip Hollobone (Conservative, Kettering)
You will both get a chance. We will go to Professor Webb.
Chris Matheson (Labour, City of Chester)
Ms Taylor almost answered this question, but I just want to press both witnesses on this. The Minister referred to Professor Webb’s comment on “carrot and stick”, and obviously we are very keen to see diversification of suppliers increase in domestic capability as far as possible.Q
There is one way of looking at this legislation, which is that it can provide a market-led opening for suppliers, in a market that is no longer, in the long term, going to be distorted by, for example, Huawei, with its state backing. Is there any evidence, therefore, that other suppliers—first tier and lower suppliers—are looking at this and thinking, “There is a chance here to get back into the game”?
Ms Taylor, you talked about security being quite a difficult and expensive barrier to overcome, but are there any discussions in the wider sector about there being an opportunity to be had here, or about whether, actually, a stronger diversification strategy is necessary?
Chris Matheson (Labour, City of Chester)
Q It would level the playing field, would it not? Everybody is having to work to the same level of security standards, rather than others thinking they can jump in there and cut in.
Chris Matheson (Labour, City of Chester)
Q If I have got it completely wrong, feel free to say, by the way, that I have got it completely wrong, because you are the experts here, not me.
Finally, could you sum up the chat around the sector at the moment? I get the impression that you are suggesting there is still a way to go to bring confidence that we can diversify across the broad range of the sector, as a result of this proposed legislation, and that there is still more reassurance and consultation required.
Philip Hollobone (Conservative, Kettering)
We have five minutes left; I am afraid there is a hard stop at 10 minutes past 10 o’clock. Two Members are seeking to ask questions, so would our witnesses treat this as a quickfire round, with punchy, pithy responses?
Kevan Jones (Labour, North Durham)
Q Can I ask for your thoughts about Ofcom being the regulator of security? Has it got the capacity or culture to ensure the security of the network, particularly in light of the ISC’s 2013 report on critical national infrastructure? That suggested that civil servants did not even tell Ministers about security threats. Would it not be better to place security with an agency that is responsible for security, rather than with a regulator that has a wide range of responsibilities?
James Sunderland (Conservative, Bracknell)
This is a very explicit question to finish with, but could I ask both of you whether, from a security perspective, you agree with the decision to kick out high-risk vendors from the network? If so, why?Q
Philip Hollobone (Conservative, Kettering)
You have about 30 seconds each, I am afraid.
Philip Hollobone (Conservative, Kettering)
May I thank both our witnesses very much indeed for your informative evidence this morning, and for giving us the benefit of your wisdom and expertise? We are very grateful to you. That brings us to the end of the time allotted for the Committee to ask questions in the first session.
Examination of Witness
Philip Hollobone (Conservative, Kettering)
We now move on to our next panel, which is a solo performance from Dr Alexi Drew, research associate at the Centre for Science and Security Studies at King’s College London. Good morning, Dr Drew. Would you be kind enough to introduce yourself and make a brief introductory statement?
Philip Hollobone (Conservative, Kettering)
Thank you very much indeed. I am in the hands of Members. Who would like to ask the first question?
Kevan Jones (Labour, North Durham)
Q Thank youfor appearing before us today, Dr Drew. I would like your opinion on what the strategy is behind Huawei, possibly in terms of linking Huawei with the Chinese Government’s strategy in the telecoms sector. What is the bigger picture or vision they have for this sector?
Kevan Jones (Labour, North Durham)
Q So the strategy is about market domination in certain areas?
Kevan Jones (Labour, North Durham)
Q Clearly there is Huawei’s domination in Europe, but what is the strategy when it comes to belt and road? We have seen investments in certain strategic areas such as the ports in Pakistan, Sri Lanka and other places. What is its strategy for telecoms? Is it a similar type of initiative?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Thank you for providing your expertise, Dr Drew. We heard from one of our previous witnesses that the security aspects here might be part of, if you like, a battle for the heart of the internet when it comes to embedding values into the standards that drive it. You seem to be saying that that is a part of China’s requirements to monitor and surveil its domestic population, so I wondered what your thoughts were on that expressly.
Also, you have great experience in evolving security threats. In your view, does the Bill address major telecommunications threats to national security—future and evolving threats? For example, do you think this Bill would have helped to mitigate the impact of the recent SolarWinds Orion network monitoring hack, which was also mentioned by a previous witness?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Thank you very much for that. The Bill does not create any incentives for network operators to diversify their supply chain, or place any requirements on them to make notifications of changes to their supply chains or their networks that could have security implications. There is no proactive requirement on network operators to do that, or to actively participate in standards development—and we have heard about the importance of standards development and the huge presence of China in that space. Do you have any thoughts about how we could address those incentives, and also the power of standards development?
Sara Britcliffe (Conservative, Hyndburn)
Q Good morning and thank you for joining us, Dr Drew. In July last year, the Secretary of State made it very clear that the ban on procurement by the end of last year would have an effect on the roll-out. My question is: what will be the impact of the Bill on telecoms providers and infrastructure roll-out, as well as the 2027 deadline?
Sara Britcliffe (Conservative, Hyndburn)
Q Can I just quickly follow up on that? I think you have answered it. Were the Government right not to quantify the impact of any delay in roll-out of 5G and full-fibre networks in their impact assessment?
Matt Warman (Conservative, Boston and Skegness)
Q Thank you for what you have said thus far. Some of it has touched on the National Security and Investment Bill, which I think is a complementary part of this. A lot of what you talked about regarding any reservations you might have was around, essentially, the resources for Ofcom—something that I think we will be talking about quite a lot in Committee. I am looking forward to saying that Ofcom will have all of the resources that it needs. I wonder how you think the Government could best demonstrate, beyond that short statement, that Ofcom is getting the resources that it needs.
Matt Warman (Conservative, Boston and Skegness)
Q Although is it fair to say that the best way that we demonstrate that capability currently is in the capabilities that we see clearly demonstrated at NCSC and GCHQ?
Matt Warman (Conservative, Boston and Skegness)
I am, of course, talking about co-operation between NCSC and Ofcom.
Kevan Jones (Labour, North Durham)
Q Can I just come back on that? I agree with you that GCHQ has difficulty in retaining staff, as you quite rightly say, Dr Drew, when they get to a certain senior level. I think it is about more than that; it is about culture, as well. Ofcom has a wide number of responsibilities in this sector. Would it not be better, for the security element of this, to give that to the National Cyber Security Centre and GCHQ, rather than leaving it to an organisation, which—we have been told—even if it got the culture right, would take a long time to get there?
I think the Minister is relying on good co-operation between the two organisations, but it is clear from the 2013 ISC report on critical national infrastructure and Huawei that civil servants with a bent for looking at economic development did not have their eye on the ball in terms of security, and they did not even tell Ministers about security concerns that were clear then.
Kevan Jones (Labour, North Durham)
Q I do not disagree with you about the balancing act between security and economic development, which will be important. This Bill leaves it with the Secretary of State for Digital, Culture, Media and Sport, who is not a natural fit for security, and there will clearly be tension between the two. Do you therefore think that these key decisions—not the actual work on them—should not be vested with the Secretary of State, but should perhaps have the sign-off of the Cabinet and the NSC?
James Sunderland (Conservative, Bracknell)
Q Dr Drew, as a graduate of King’s College, it is great to have you with us. The Bill as currently written provides the Government with unprecedented new security powers. Might this in some way perhaps disincentivise new entries to the market?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q We have talked a lot about 5G—indeed, we have been accused of fetishising 5G. The Government are currently consulting on security issues and fixed networks. Do you see major architectural differences or market differences in the security threats for fixed networks? Are they similar, and should a similar approach be taken to the removal of high-risk vendors? With regards to Ofcom, its principal duties are set out in the Communications Act 2003—I know this very well, having worked for it. They are
“to further the interests of citizens in relation to communications matters; and to further the interests of consumers in relevant markets, where appropriate by promoting competition.”
Do you think there is an argument to add a further security duty, if that is going to take such a large portion of Ofcom’s capacity?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q I have just one quick follow-up question. Thank you very much for your evidence. The Bill separates out the diversification strategy, and in fact it does not refer to the diversification strategy. Is it possible for the UK to have secure networks without a diverse supply chain for them?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Thank you very much.
Philip Hollobone (Conservative, Kettering)
Dr Drew, there are no further questions from Members, so I thank you very much indeed for your time this morning and for sharing your expertise with the Committee.
Examination of Witnesses
Philip Hollobone (Conservative, Kettering)
We now move to the next panel, which consists of Simon Saunders, director of emerging technology at Ofcom, and Lindsey Fussell—I hope I pronounced that correctly—group director for networks and communications, also from Ofcom. In the previous two sessions we have been talking about you quite a lot, and now is your chance to respond. Could I ask you to introduce yourself and give a brief opening statement, starting with Lindsey?
Philip Hollobone (Conservative, Kettering)
Thank you both very much. James Wild will start the questions, followed by Sara Britcliffe.
James Wild (Conservative, North West Norfolk)
Clearly, these are new substantial duties on network providers and on you as the regulator to enforce them. What assessment have you made of the resourcing and additional expertise that Ofcom will require to take on these new dutiesQ ?
Philip Hollobone (Conservative, Kettering)
Simon Saunders?
Philip Hollobone (Conservative, Kettering)
Simon, do you have anything to add?
James Wild (Conservative, North West Norfolk)
Q You refer to needing 40 to 50 new additional staff. Have you begun recruiting those people yet and how confident are you that you will be able to get them? The security world is a competitive space and these are highly sought skills. How confident are you that you will be able to get those people in place in order to monitor and enforce the powers in the Bill?
Philip Hollobone (Conservative, Kettering)
Simon, do you have anything to add?
Sara Britcliffe (Conservative, Hyndburn)
Q You never know, you might become shadow Minister when you move on from the job at Ofcom, as we have seen. My question is quite simple: do you believe that the Secretary of State is the right person to exercise the powers?
Sara Britcliffe (Conservative, Hyndburn)
Yes.
Kevan Jones (Labour, North Durham)
Q Your responsibilities are quite broad, and this is an expansion for you. You have already talked about recruiting staff for this task. How many of those staff will have to have STRAP clearance?
Kevan Jones (Labour, North Durham)
Q I am sorry, but I do not accept what you have just said. If you are going to be the guardian of security as a member of the ISC who has STRAP clearance, you are talking about highly sensitive information, which, quite rightly, is guarded by the agencies for national security reasons. You will have to have a number of people who are STRAP-cleared. All I am asking is what that number is.
Kevan Jones (Labour, North Durham)
Q Personally, I do not see how you can do the job without having STRAP clearance making these decisions. As you know, you may have had STRAP clearance in the past, but it is not historic; you need to have it currently.
Kevan Jones (Labour, North Durham)
Q You said in response to Sara’s question about whether the Secretary of State is the right person to make these decisions that you are not necessarily making the decisions. Clearly, however, there will be a pull between your role in promoting the sector in terms of economic development, and national security. You will have an opinion on that. How will you balance that judgment?
Kevan Jones (Labour, North Durham)
Q That will be a very difficult judgment to balance. I suggest that you read the 2013 ISC report, which is very informative on this issue and about where the balance went the other way, in terms of civil servants arguing then that economic development was better than actual security. So I think it will be a very difficult judgment to make.
Can I ask you about an issue regarding oversight? Frankly, I am not a great fan of quangos, because I think their accountability is limited and they allow Ministers to offload difficult responsibilities on to people who have very little parliamentary oversight. Regarding the oversight of your organisation from Parliament’s point of view, some of these decisions will clearly be highly classified. The Digital, Culture, Media and Sport Committee will not be able to look at them, because of the security classification. So how will we ensure that you and Ministers will consider the importance of security around these issues?
Kevan Jones (Labour, North Durham)
Sort of.
Kevan Jones (Labour, North Durham)
Q But the Secretary of State is not Parliament. The Secretary of State can hide behind things, or choose what he or she wants to put in the public domain. Do you think that the Bill needs to establish some role for Parliament at least to have an annual report, whether it is to the DCMS Committee or, if it has classified information in it, to the ISC?
Chris Matheson (Labour, City of Chester)
Q To follow up on one of Mr Jones’s questions, you say that you will not be taking decisions on national security matters. Who decides within Ofcom whether it is a national security matter or not?
Chris Matheson (Labour, City of Chester)
Q Who takes the decision, then, to refer it to the NCSC? Where in Ofcom does that decision sit?
Chris Matheson (Labour, City of Chester)
Q Can I ask something slightly different now? Do you have much internal movement in Ofcom? Do you have an internal jobs board? Do people move around and develop their careers there?
Chris Matheson (Labour, City of Chester)
Q That is the point I am getting at. If I think about recent changes at Ofcom, you have had responsibilities for monitoring the BBC, for example. Online harms is coming to Ofcom. It seems that quite a lot is being asked of you, and demanded of you. How can we be sure that you have the capacity to manage the workload, and the technical capacity to manage these very challenging issues?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Thank you very much for sharing your expertise with us. As a previous employee of Ofcom, for six years, I am, not surprisingly, perhaps, a huge admirer of your work, and, to reflect what was implied by the hon. Member for Hyndburn, I think that Parliament will always benefit from increased telecoms expertise here.
I want, with permission, to ask a question about three areas: security, assets and costs, and duties. I share some of the scepticism of my right hon. Friend the Member for North Durham about the statement that Ofcom will not be making decisions on national security. You will clearly have duties with regard to national security and one of the key duties is to ensure compliance of our entire network—all our networks—with national security requirements. So how are you going to ensure that compliance without taking decisions on security? You seem to suggest that it is just going to be a set of protocols, if you like, from the National Cyber Security Centre, and you are just going to look at ticking the boxes to see that they are met; but in practice that cannot be the case. It is far more complex than that, particularly with regard to emerging technologies.
Another issue is that the Bill puts all the requirement to ensure compliance on Ofcom, in terms of Ofcom seeking information, Ofcom requiring information, Ofcom setting out notices to inspect, and so on. For example, let us say that one of our network operators—I shall not name one—decides to buy all its cloud or virtualisation equipment from a Chinese manufacturer that is not designated a high-risk manufacturer. Would Ofcom be informed of that change in its network? How would that pass to the National Cyber Security Centre—or would it not? Without that kind of duty in place, is there a risk of what you do becoming a meaningless tick-box exercise and, particularly, of its not addressing future and emerging security threats? That is my first question.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q How can you make that assessment without taking decisions about national security? If you are relying, as you seem to be saying, on the National Cyber Security Centre to make those decisions for you, how are you, or they, accountable to Parliament for that? There is a basic issue here, in that you feel that you are not responsible for national security. However, we do not see how that responsibility for national security is made accountable if you do not have any responsibility for it but you have responsibility for compliance. You have not answered my question as to how a change in the networks would be made known to you or the National Cyber Security Centre when there is no requirement for that at the moment, as far as I can see.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q With regard to asset registry and expectations of having that, having spent a significant amount of time looking in the back offices of operators as to what they have, I know that they are certainly not up to date. We have heard from other witnesses that they do not always have up-to-date and comprehensive asset registers. To rely on an expectation seems a low bar.
Can I come on to duties? I have the Communications Act here, which has got a lot thicker since I left Ofcom. The two duties are the “interests of citizens” and the “interests of consumers” with regard to competition, but there is not a duty on security. Does that not suggest that if there is a conflict between competition or communication matters, that will be prioritised over security if there is not an explicit duty to maintain the security of our networks?
James Sunderland (Conservative, Bracknell)
Q The Bill provides powers to fine vendors up to 10% of their annual turnover or up to £100,000 per day for failing to meet standards. Could I ask for your view, please, on how that compares internationally, and whether you feel that that is appropriate?
Matt Warman (Conservative, Boston and Skegness)
Q Thank you for all the work you have done on this matter so far. I wonder if you could just say a little bit more about the responsibilities that Ofcom has had, as you put it, since 2011 on telecoms security. I think that perhaps the extent of that is not as well understood as it could be.
Matt Warman (Conservative, Boston and Skegness)
Q I think you are also aware that this legislation is backed up by a number of statutory instruments to give further powers.
Matt Warman (Conservative, Boston and Skegness)
Q Would you like to give an assessment of whether you think that is sufficient to address the concerns around, for instance, asset registers, which we have talked about before?
Philip Hollobone (Conservative, Kettering)
Any other questions from Members?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q A word on costs, perhaps. You said in your opening statement that you expected it to cost about £6 million to £7 million for Ofcom. How will those costs be funded or raised? In terms of costs on operators, clearly a requirement to do a complete asset register, for example, could be a very significant cost for an operator. What kind of costs do you see? Do you see limits being placed on the costs that operators could incur in complying with Ofcom demands or requests?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Could you therefore confirm that the costs will be in line with the size of the operator, so small start-ups will not be expected to pay the same as Vodafone, for example? We have not talked at all about the diversification strategy, yet there is agreement that we cannot have secure networks without effective diversification of the supply chain. Are you in a position to monitor the diversification of operator supply chains, and is that something you would expect to be doing?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q But currently your duties are all to do with the stick, in terms of the enforcement of security requirements, and nothing to do with diversification or the incentives for that?
Philip Hollobone (Conservative, Kettering)
This will have to be a very quick answer, because we have to stop at 11.25 am.
Kevan Jones (Labour, North Durham)
Q You have said that you will take advice from the National Cyber Security Centre. What happens if you disagree with its advice? Who takes the final decision on what is national security?
Kevan Jones (Labour, North Durham)
Q Yes, but what happens if you disagree with it?
Kevan Jones (Labour, North Durham)
Yes.
Kevan Jones (Labour, North Durham)
Q May I suggest that you read the Intelligence and Security Committee’s report from 2013 on critical national infrastructure, because exactly that happened when a Department overruled the Security Service? I think you will find yourselves in a similarly sad position with this legislation.
Philip Hollobone (Conservative, Kettering)
Thank you very much indeed to our two witnesses. We are very grateful to both of you for your time this morning and for the expertise you have shared with us.
Steve McCabe (Labour, Birmingham, Selly Oak)
Good afternoon. We come to our fourth panel of witnesses today, consisting of Dr Andy G. Sellars, Dr Nick Johnson and Heba Bevan OBE. We have until 2.45 pm for this session. I will ask the witnesses to introduce themselves for the record, starting with Dr Sellars.
Dean Russell (Conservative, Watford)
As you know, there are very many benefits to a 5G network in terms of the speed, application development and the new era that it can bring, but would you mind focusing for a moment on the new security risks that 5G will also bring, pleaseQ137 ?
Chris Matheson (Labour, City of Chester)
Thank you for those answers. I have just a couple of questions. First of all, following on from Mr Russell’s question, the impression I get—I am not an expert—is of a network that is a bit like a bowl of spaghetti. There are bits here, there and everywhere. and there are bits of different generations that are all added on. How easy would it be from your point of view, with your different areas of expertise, to audit and identify within any part of that chain in the network exactly where there is equipment—hardware, software, chips or whatever—that perhaps needs to be removed or checked?Q
Is there a shelf-life of the older versions? I am surprised that we are still talking about 2G—that it has not been removed. Is there a shelf-life for those elements and will they be removed from what I term “the network”, which is of course the whole global telecommunications infrastructure of the UK? Nick, do you want to start on this question?
Chris Matheson (Labour, City of Chester)
Q No, that is grand. Heba or Andy, do you want to add anything to that?
Chris Matheson (Labour, City of Chester)
Q Heba, did you want to add anything?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am sure Members would appreciate further details on the Intel example, if you can provide that.
David Johnston (Conservative, Wantage)
Can I ask about the diversification strategy, which is a question I asked some of the other witnesses? The Government are rightly investing a significant amount in this. We all agree that it is needed. What do you think success looks like? Our problem at the moment is that if we take out Huawei, we have only two vendors we can use. What range would you like to see, and in what sort of timeframe?Q
David Johnston (Conservative, Wantage)
Q May I briefly interrupt? I accept that there are not many suppliers now. Given the money that the Government are going to invest in trying to support having more suppliers, how many would you like to see and by what timeframe?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am conscious of the time. Dr Sellars, do you have anything to add to that?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. I want to try to squeeze in both Sara Britcliffe and Chris Matheson before we go the Minister and the shadow Minister, so we need short questions and succinct answers.
Sara Britcliffe (Conservative, Hyndburn)
Mine is quite a simple question: what do you support in the Bill? Can I come to you first, NickQ ?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am sorry to interrupt, but I want to move on to Heba Bevan. The question was, what is there in the Bill that you really approve of?
Steve McCabe (Labour, Birmingham, Selly Oak)
That would be helpful, thank you.
Chris Matheson (Labour, City of Chester)
Q Thank you for squeezing me in, Mr McCabe. I will direct this question to Ms Bevan; it should really be directed to the Minister, but unfortunately procedure does not allow that. There is a quote on the UtterBerry website:
“I am delighted UtterBerry has been selected as a champion of British technology excellence through the TechHub programme—just one of the new initiatives we have launched in partnership with industry and the Chinese government.”
That is from Sherry Madera, the deputy director general of the Department of International Trade at the British Embassy in China. Are our firms still being pushed to share communications technology with China as this Bill is going through?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you for clearing that up. Chi Onwurah.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
It is a pleasure to serve under your chairmanship, MrQ McCabe.
I will be brief, as we are running out of time, but thank you for your expertise. My question to Andy Sellars and Heba Bevan is about the diversification strategy. In what areas do you think the UK has the capability to exploit the opportunities of this diversification strategy, particularly in hardware versus software? We have been told that hardware is beyond our manufacturing capabilities, yet you seem to be making a success out of it, Heba. What barriers are new entrants and smaller companies likely to experience and what kind of interventions should the Government make that are not fully addressed by the diversification strategy in order to ensure a UK capability in this area?
My question to Dr Johnson: we heard from Mavenir earlier, which said that open RAN could provide 2G, 3G, 4G and 5G networks now. We have also heard of the operational challenges associated with that. What is your view on the maturity of open RAN technology? We will start with Andy.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q What interventions would support them?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am really sorry to do this to you, but I think I had better interrupt and go to the Minister or we will run out of time completely.
Matt Warman (Conservative, Boston and Skegness)
Q Thank you, Mr McCabe, and thank you to all the witnesses, and particularly Dr Sellars for the map of UK brilliance, which is really appreciated. In short—given that we have four minutes—we have £250 million of this diversification funding to spend over the next three years or so. My question to you three is simply how you would spend it. Thirty seconds each: 250 million quid.
Steve McCabe (Labour, Birmingham, Selly Oak)
Chi, I think you had something outstanding, and you have got just about a minute and a bit to do it.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q It was a question to Dr Johnson with regard to open RAN maturity as an IP.
Steve McCabe (Labour, Birmingham, Selly Oak)
Did you have anything else, Minister?
Matt Warman (Conservative, Boston and Skegness)
Not that we can do in 90 seconds.
Steve McCabe (Labour, Birmingham, Selly Oak)
I am sorry we had to hurry you a bit, there, but we are trying to get through quite a lot this afternoon. Can I just thank all our witnesses for your evidence and the extra bits that you said you would possibly forward to us. That would be much appreciated. Thank you, on behalf of the Committee. That brings this session to a close.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q We move on immediately to the fifth panel. We are going to hear now from Helen Duncan, who is the managing director of MWE Media, and Mike Fake—have I pronounced your name correctly?
Steve McCabe (Labour, Birmingham, Selly Oak)
Q I apologise. I have got it now; that is very clear. It was kind of you to clear it up for me. Mike Fake, director and co-founder of Lumenisity, and Dr David Cleevely CBE, who is an independent investor in several telecommunications companies. We have until 3.30 pm for this session. Could we start with Helen Duncan? I ask you to introduce yourself for the record.
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. Mr Fake.
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. The first question is from James Sunderland.
James Sunderland (Conservative, Bracknell)
Thank you for the opportunity to ask the first question. Welcome and thank you for giving us your time. I note from the biographical notes that all three of you have clear commercial backgrounds with what appear to be British-owned firms. I am very pro-British myself, as you would expect as a British MP, so may I ask your opinion on the extent to which the telecoms Bill will offer opportunities to British firms?Q
Dean Russell (Conservative, Watford)
Q I would like to understand what the impact would be of bringing forward the 2027 deadline with regard to many of these measures. If I could ask Mike in the first instance, please?
Dean Russell (Conservative, Watford)
Thank you. Could I ask Helen the same question?
Dean Russell (Conservative, Watford)
Thank you. David too?
Kevan Jones (Labour, North Durham)
Could I just follow up on Dean’s point about the actual date? The date that has been set is 2027, and the equivalent that is going to go in is basically going to be two vendors, Ericsson and Nokia. I think it was you, Mike, who said earlier that there are opportunities for UK diversification. What will drive that? If you have operators who have put brand-new equipment in in the lead-up to 2027, what will be the incentive for those companies to look at alternatives to thatQ ?
Kevan Jones (Labour, North Durham)
Q Not to cut across you, but, while I accept all that, if from the operator’s point of view they have just invested a lot of capital in ripping out equipment and putting new equipment in up until 2027, what will the incentive then be for those operators necessarily to look at new technologies?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Welcome to all of you, and thank you so much for joining us. May I say, particularly to Helen Duncan—I should also have mentioned this earlier when we had Heba Bevan—that it is great to have two other female electrical engineers giving evidence to the Committee. I hope we have many more such qualified representatives of the technology sector in Committees in the future.
We have talked a little about how we got here; Helen, you worked for Marconi, and I worked for Northern Telecom, which bought STC, one of our last UK companies providing telecoms equipment. Without putting words into your mouth, I think the situation could be characterised by a lack of investment in innovation and in British sovereign capability. Now that we are seeking to reverse that, or to jump ahead of that, what interventions could best guarantee the long-term security and resilience of the UK telecoms network, with UK sovereign capability supporting it? Is the £250 million diversification strategy set to achieve that? Can you give examples—I am looking for quite concrete examples—of what you might add or change? David, you talked about needing to give the right incentives to the mobile operators. The telecoms supply chain review was quite clear that there is not an incentive right now in the supply chain to deliver security in mobile networks. What interventions and what incentives should there be?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q That’s great. David?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Great. Thank you very much.
Steve McCabe (Labour, Birmingham, Selly Oak)
Mike, did you want to say anything else?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am just going to go to the Minister, and then I will come back.
Matt Warman (Conservative, Boston and Skegness)
Q Thank you for the evidence you have given so far. It seems to me, over the course of a lot of the evidence that we have heard over the last several sessions, that there is a lot of consensus on standards being hugely important and on building on clusters, in both existing businesses and the networks that David was just talking about. If you look into the short and medium term, what are the immediate interventions that you would make, rather than the longer term things to build up in the next few years?
Steve McCabe (Labour, Birmingham, Selly Oak)
We have about 11 minutes left. I will go to Kevan Jones, who I think had a question that was prompted by a reply to the Minister. Then I will try to go back to Chi and to the Minister before we finish.
Kevan Jones (Labour, North Durham)
Q It is just a quick one. We are talking a lot about Government, and what Government can do, which is fine. But when it comes to attracting sufficient private sector investment in some of these emerging technologies, how will you kick-start that? I ask because that will be the acid test for growing some of these companies.
Steve McCabe (Labour, Birmingham, Selly Oak)
Q When you say that that has to be significant and large, do you want to put a figure on it? [Laughter.]
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you for that. Chi Onwurah.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Helen, you were absolutely right to emphasise, in terms of how we got here, with no UK telecommunications network capability, that as well as being about under-investment, which I mentioned, it was about acquisitions—many acquisitions of UK capability and capacity. We have the National Security and Investment Bill going through the House; in fact, that is coming back for Report tomorrow. It will make national security—although not economic security—a ground for intervening in acquisitions and investments, but it will not make investment in companies any easier. We are talking about concrete measures—what measures could Government take, or could be taken, to make significant additional investment available or easier?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
We could perhaps have a telecoms business bank?
Steve McCabe (Labour, Birmingham, Selly Oak)
Do you have anything you want to add to that?
Steve McCabe (Labour, Birmingham, Selly Oak)
I am going back to the Minister, Chi, because I am conscious of time.
Matt Warman (Conservative, Boston and Skegness)
Q Thank you. It is a very simply question in some ways in that it follows up on a lot of what David has been saying. Obviously, when we have talked about £250 million, that is to work with the private sector, and where we have run test beds and trialled programmes, we have talked about match funding. Presumably, you would think that is a sensible approach, but I wonder what you think the limits, or what a reasonable proportion of Government investment in a company might look like, rather than simply the traditional match-funding model. I know this is sort of “how long is a piece of string”, but in terms of stakes and all that sort of thing, there is obviously a spectrum, isn’t there?
Matt Warman (Conservative, Boston and Skegness)
That is perhaps not the phrase, but you get the gist.
Steve McCabe (Labour, Birmingham, Selly Oak)
I am afraid we have run out of time. I know we could have gone on a bit longer, but thanks very much to our witnesses. That concludes this session.
Examination of Witness
Steve McCabe (Labour, Birmingham, Selly Oak)
We will now hear from Doug Brake, director of broadband and spectrum policy at the Information Technology and Innovation Foundation. We have until 4 o’clock for this session.
Good afternoon, Mr Brake. Will you introduce yourself for the record, please?
Steve McCabe (Labour, Birmingham, Selly Oak)
Thank you. I call Sara Britcliffe.
Sara Britcliffe (Conservative, Hyndburn)
Q I have a quick question that I asked the previous witnesses. What is it that you support in this Bill?
James Wild (Conservative, North West Norfolk)
What is your view on the implications of the Biden Administration for potential American involvement in the diversification strategy in telecoms more broadly?Q
Kevan Jones (Labour, North Durham)
Q Regarding that co-operation between nations, clearly it has not just been the UK that has responded to the threat from Huawei; we were forced to go down our present track by the American sanctions against China over semiconductors. Going forward, how do you see that co-operation developing and how do we prevent a situation whereby, with its scale and obviously its resources, the United States dominates any future standards and also technology areas? They might talk about co-operation, which they do in a lot of areas, but when it comes down to brass tacks, it is America first in terms of business. And that is not a Trump comment.
Kevan Jones (Labour, North Durham)
Q Regarding the ban on semiconductors, obviously that is worth a lot to the US in terms of exports, mainly to China. Do you see that changing? Also, do you think there is a danger—not in the short term, obviously, but in the longer term—that China will then create a separate semiconductor market, which could be a threat not only to the US but to others, in that they will buy into markets and try to get standards that are different from those of the US?
Dean Russell (Conservative, Watford)
During my previous career as a physics researcher many years ago, I was fortunate to work at places such as the Advanced Photon Source synchrotron facility in Argonne, Illinois. I worked extensively in the semiconductor space, looking at materials such gallium nitride and other group III nitrides. What I learned back then, working very extensively with American scientists and scientists from around the world, was the importance of that root-and-branch look at semiconductors, innovation and having a decades-long view. From your perspective, how much does that fit in with a joined-up international approach to create diversity, both at the end stage and at the really early research stageQ ?
James Sunderland (Conservative, Bracknell)
Thank you for coming in. A quick question: can you put in layman’s terms what the roll-out of 5G anywhere means in broadband terms? Can you also place that in terms of rural areasQ ?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Thank you very much for joining us, Doug. It is particularly interesting to have your American perspective. As you may have heard, my first job as a hardware engineer was with Nortel, a Canadian-American company that had just bought one of the last UK companies in this area. Nortel ended up seeking chapter 11 and having most of its IP bought by Huawei. What are your views on how we got ourselves into this position of not having a single UK or US supplier that can supply to our UK networks? How do you think we can work together to rebuild our telecoms sectors? You talked about pursuing transformational change and an industrial strategy to do that. What might you say to the Minister about how the UK Government should be working with the US, and about what sorts of vehicles there might be to work together and with other allies to achieve that?
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q Perhaps you could contribute the article you mentioned and the key points made as written evidence.
Chi Onwurah (Labour, Newcastle upon Tyne Central)
Q The second part of my question was about how we can work together.
Steve McCabe (Labour, Birmingham, Selly Oak)
I am just going to interrupt you there. I am sorry, but I am conscious of time and I want to give the Minister a fair opportunity.
Matt Warman (Conservative, Boston and Skegness)
Q Thank you for that interesting evidence. This follows on from Chi’s question, in a sense. I think it goes without saying that we will be very keen to work with America in the future, and the opportunity to do so is significant. I have held conversations with my Swedish and Finnish counterparts, but when it comes to further international co-operation, if you were in my position, where would you look to first? Do you think the Bill is forward leaning enough to bring that collaboration up a gear, if that makes sense?
Matt Warman (Conservative, Boston and Skegness)
Q On that long-term point, do you think that both the Bill and the strategy allow Government to retain the kind of flexibility we will need for them to persist for the long term? We do not want to be revisiting primary legislation too often on this, even though we obviously need to keep aspects of it under review?
Steve McCabe (Labour, Birmingham, Selly Oak)
I think that brings us virtually to time. Thank you, Mr Brake, for your evidence. That was the final evidence session for the Bill, so I thank all the witnesses. The Committee meets again on Thursday morning for line-by-line consideration. I believe that will be at 11.30 am in Committee Room 14.