Contribution
My Lords, I assume that there are no Back-Bench contributions at this point, so I will speak on behalf of the Liberal Democrats to this very significant group of amendments tabled by the Minister as recently as 24 August. I thank her for her introduction today and for her brief meeting shortly after their tabling.
At the outset, from these Benches we express our strong concern about the timing and the sheer scale of the Government’s package of new amendments. To drop 65 amendments of this nature on the eve of Committee, which will completely reshape the architecture of this Bill, after its passage through the Commons, is a major challenge to effective parliamentary scrutiny. The Minister’s letter, also dated 24 August, came alongside these 65 new amendments, so we have had very little time to consider them. As far as I can see, a full Ministerial Statement did not accompany them; we had to rely on the coverage of Computer Weekly to understand the Government’s motives.
The Government have quietly established a major parallel high-risk vendor regime. Under Amendments 102 and 103, the Secretary of State—and now, crucially, under Amendment 101, the Chancellor of the Duchy of Lancaster—are granted unilateral powers to issue vendor-related directions. They can legally order an organisation to prohibit, restrict, remove, disable or modify any software, hardware or digital facility supplied by a designated high-risk vendor. Furthermore, under Amendment 105 they are given the power to establish a mandatory referral scheme, legally forcing companies to submit technology procurement contracts to the Cabinet Office for security clearance before signing.
Let us look closely at the operational mechanism in Amendment 103, which ISC2 has rightly highlighted. The proposed new clause mandates that a company appoints a “skilled person” to oversee compliance and, under subsection (5) of the proposed new clause, permits the Secretary of State to rely on a list of persons published by GCHQ. I ask the Minister: what is this list? Is it public or classified? What objective criteria will govern inclusion? How will conflicts of interest be avoided, and how will independent professional competence be assured? To create statutory compliance roles backed by secret lists is entirely unacceptable.
Under Amendment 108, the Secretary of State can make regulations bringing any specific company into the scope of the Clause 43 directions without bringing them into the NIS regulations as a whole. Under Amendment 127, the Government will insert an emergency “made affirmative” procedure allowing regulations and vendor bans to take effect immediately without prior parliamentary debate. Furthermore, under Amendment 148 the Secretary of State can prohibit a company disclosing that they have received a direction or are in consultation, backed by civil penalties of up to £10 million or £50,000 per day.
There is also a second critical implication—the backdoor regulation of advanced artificial intelligence systems. At Second Reading, the Minister assured the House that advanced AI systems and LLMs were out of scope. These amendments appear to reverse that position. Under Amendment 108, any entity providing essential goods or services can be specified. As our critical infrastructure increasingly integrates agentic AI models, such as GPT-5 or Anthropic’s Mythos, these developers become points of supply chain risk concentration. It seems that, under Amendment 102, the Government can designate AI developers as high-risk vendors and mandate pre-procurement vetting. Is that the case and, if so, why not say so?
The Government will no doubt resist the transparent, legally bounded emergency shutdown power proposed by Amendment 84, with its High Court backstops and seven-day parliamentary reporting, yet here the Government demand sweeping, secretive executive powers to ban software, veto procurement and gag businesses with zero judicial checks. These Benches cannot give these 65 government amendments a free pass. I remind the Minister that, in Grand Committee, unanimity is required for amendments to carry. We insist that the Government come back on Report with strict guardrails and clear limits on executive market intervention without parliamentary consent before these new powers can be exercised.
Quite apart from that, both the Constitution Committee and the Delegated Powers and Regulatory Reform Committee had something to say about the existing powers in the Bill, but neither committee has had a chance to look at these amendments. I am sure that they will have comments to make in due course.