Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss clauses 37 to 39.

Clause 36 sets out that the Secretary of State may issue a code of practice for regulated entities. The code will describe recommended steps to help these entities to comply with their duties and requirements under the NIS regulations and any new regulations made under the Bill. This will make it simpler for regulated persons to understand what is expected of them, thereby driving consistency and complementing sector-specific guidance from regulators.

The clause will also make enforcement clearer and more effective, as regulators must take the code into account when they assess compliance. The code is designed to be flexible: it can be updated as threats and technology change, and can be tailored to different types of organisations, ensuring that guidance is current, relevant and practical for all.

Given the importance of the measure in providing practical recommendations to regulated entities, it must be consulted on before it is prepared or revised, and this process is set out in clause 37. Before the code can be brought into force, a draft must be laid before Parliament, providing ample opportunity to scrutinise and, if necessary, reject it within a 40 day period. If either House objects, the Secretary of State cannot proceed with that version and may prepare a new draft. If the draft is approved by Parliament, the Secretary of State may issue it and must publish it, and it then comes into effect immediately, unless otherwise specified. The clause also clarifies how the 40-day period is calculated, to ensure consistency and transparency in the process.

As we know too well, cyber-threats continue to evolve as new tactics and technologies are deployed, which is why the clause includes a power for the Secretary of State to amend the procedure for issuing the code. The Secretary of State may, for example, wish to add or amend consultation requirements or extend the 40-day period.

Clause 38 establishes how the code of practice will be used and treated in legal and regulatory settings, to ensure it has the intended effect. For regulated persons, the code of practice is intended to be formal guidance, with recommendations on how to comply with their duties, but not to be legally binding itself.

As we know, there can be more than one way for businesses to meet their obligations and ensure that they have in place appropriate and proportionate security and resilience measures. It is therefore important that there is a degree of flexibility in how they do this, to accommodate sector-specific nuances and business needs. None the less, it is crucial that the code has sufficient legal status and that the good practice it contains is not simply ignored. That is why the code can be admissible as evidence in court when deciding whether legal obligations have been met, and why the courts and regulators must consider it as evidence when assessing compliance.

Clause 39 establishes a formal process for the withdrawal of the code of practice, in case that is ever needed.

Clause 36 provides that the Secretary of State may issue a code of practice for regulated entities to set out measures that they should take to demonstrate compliance with their duties under the NIS regulations, or any requirements imposed by the Secretary of State under clause 29. If done well, the code could be a repository of best practice, setting proportionate, consistent and effective standards for regulated industries. That will require constructive and open consultation with regulated sectors to identify the challenges facing those sectors and how best to address them.

One issue that came up in oral evidence was the question of the lag between regulation making and industry adoption. David Cook of DLA Piper commented that, after Laws come into effect, the process of businesses understanding where they need to get to

“often requires a multi-year programme of reform.”––[Official Report, Cyber Security and Resilience (Network and Information Systems) Public Bill Committee, 3 February 2026; c. 5, Q1.]

The code of practice is not envisaged to be legally binding, in the sense that a failure to comply is not of itself evidence of a failure to meet obligations under the NIS regulations or the Bill. However, clause 38 states that it would be admissible as evidence in legal proceedings so, in that sense, the code is binding in all but name. In view of that, and the fact that codes can be revoked and reissued, can the Minister provide reassurance to regulated industries that a lead-in time will be built into any requirements to allow businesses to prepare to achieve full compliance?

First, to ensure that the Shadow Minister and I are representing the intent behind the code clearly, in legal terms it is not the case that an organisation that fails to follow the code of practice is automatically a regulated organisation that has broken the law. Clause 38 makes it clear that not following the code does not by itself constitute a breach of duty or mean that an organisation is automatically liable to legal action. Organisations can take different approaches to complying with security duties, but if they adopt an approach that is not within the code, they may need to explain why their approach still meets the required standards set out in the regulations, and regulators will be required to take the code into account when preparing guidance.

On the shadow Minister’s question about ensuring appropriate timing and preparation for companies, I would very much expect that the regulators in question would be closely regulated entities to ensure the proportionate implementation of codes.

We heard from the Information Systems Audit and Control Association that codes work best when they reflect operational reality. Given their evidential status, can the Minister reassure the Committee that codes will remain practical and iterative and not quietly harden into rigid compliance rules?

I am very happy to give the broad assurance that we will keep codes under review from time to time, and that any changes to the code will require deep consultation with regulators and businesses to ensure that the codes keep in touch with moving technology.

For the sake of clarity on the legal status of the codes, I entirely agree with the Minister that it is important to get this right, and my understanding of codes of practice in a different area—statutory codes of practice relating to the Mental Health Act—is that case law says that deviation from the code of practice should be done only for cogent reasons. That is a pretty high bar to pass in terms of deviations. I should declare an interest as a former consultant psychiatrist and someone who operated subject to that particular code of practice.

For absolute certainty, will the Minister write to the Committee and make the status very clear, along with reference to relevant case law in terms of other codes of practice? Does the Clause override that jurisprudence or not? That would settle the question as the Bill goes through Parliament.

Order. Interventions are getting a bit out of control again. I remind hon. Members that they should be brief.

I agree with the Shadow Minister. The Bill’s focus is on the assessment of compliance with ultimate security duties. The codes of practice will set out approaches to do so, but they will not be the only approaches. I would be happy to write to the shadow Minister and the Committee on the particular legal interpretation, and any relevant case law that might apply.

Question put and agreed to.

Clause 36 accordingly ordered to stand part of the Bill.

Clauses 37 to 39 ordered to stand part of the Bill.