Data Protection and Digital Information (No. 2) Bill (Second sitting)

John Whittingdale Excerpts

Committee stage
Wednesday 10th May 2023 Public Bill Committees

[Stephanie Peacock]

Q Will the new definition in the Bill of what constitutes scientific research help people in your field to conduct more or better research? If so, what impact would this research have on citizens and healthcare?

Jonathan Sellors: I think it is a thoroughly useful clarification of what constitutes research. It is essentially welcome, because it was not entirely clear under the provisions of the General Data Protection Regulation what the parameters of research were, so this is a helpful clarification.

Tom Schumacher: I completely concur: it is very useful. I would say that a couple of things really stand out. One is that it makes it clear that private industry and other companies can participate in research. That is really important, particularly for a company like Medtronic because, in order to bring our products through to help patients, we need to conduct research, have real-world data and be able to present that to regulators for approval. It will be extremely helpful to have that broader definition.

The other component of the definition that is quite helpful is that it makes it explicit that technology development and other applied research constitutes research. I know there is a lot of administrative churn trying to figure out what constitutes research and what does not, and I think this is a really helpful piece of clarification.

[The Minister for Data and Digital Infrastructure (Sir John Whittingdale)]

Q Perhaps I could ask you both to elaborate on how the existing definition and the current lack of clarity have impeded you in carrying out the research you would like to do and how this will change as a result of the Bill.

Tom Schumacher: Maybe I can give an example. One of the businesses we purchased is a business based in the UK called Digital Surgery. It uses inter-body videos to try to improve the surgery process and create technologies to aid surgeons in prevention and care. One of the challenges has been, to what extent is the use of surgery videos to create artificial intelligence and a better outcome for patient research? Ultimately, it was often the case that a particular site or hospital would agree, but it created a lot of churn, activity and work back and forth to explain exactly what was to be done. I think this will make it much clearer and easier for a hospital to say, “We understand this is an appropriate research use” and to be in a position to share that data according to all the protections that the GDPR provides around securing and de-identifying the data and so on.

Jonathan Sellors: I think our access test, which we apply to all our 35,000 users, is to ensure they are bona fide researchers conducting health-related research in the public interest. We quite often get asked whether the research they are planning to conduct is legitimate research. For example, a lot of genetic research, rather than being based on a particular hypothesis, is hypothesis-generating—they look at the data first and then decide what they want to investigate. This definition definitely helps clear up quite a few—not major, but minor—confusions that we have. They arise quite regularly, so I think it is a thoroughly helpful development to be able to point to something with this sort of clarity.

[Sir John Whittingdale]

Q Can you say a little about the extent to which you have been a contributor to the design of the new provisions in the Bill and whether you are happy with the outcome of that?

Jonathan Sellors: The short answer would be yes. I was contacted by NHS England about the wording of some of the consent aspects, some of the research aspects and particularly some of the pseudonymisation aspects, because that is an important wall. Most research conducted is essentially on pseudonymised rather than identifiable data. The way it has been worded and clarified, because it makes an incremental improvement on what is already there in the GDPR, is very useful. I think it is a good job.

Tom Schumacher: Yes, I would say the same. NHS Transformation and the Department for Culture, Media and Sport, particularly Owen Rowland and Elisabeth Stafford, have been very willing to hear points of view from industry and very proactive in reaching out for our feedback. I feel like the result reflects that good co-ordination.

[Damian Collins (Folkestone and Hythe) (Con)]

Q Do you think the definition of what public health means in the context of the Bill is clear?

Jonathan Sellors: Yes, I think it is reasonably clear.

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[Stephanie Peacock]

Q To develop that point, do you think there are enough safeguards in the Bill to ensure that Ministers assess the commercial sense and the impact of any new smart data regimes before regulating for them?

Phillip Mind: Clauses 62 and 64 make provision for the Secretary of State and Treasury to consult on smart data schemes. We think that those provisions could be strengthened. We see a need for impact assessments, cost-benefit analysis and full consultation. The Bill already allows for a post-implementation review, and we would advise that too.

Harry Weber-Brown: I think the other one to call out is the pensions dashboard, which has been driven out of the Money and Pensions Service. Although it has not actually launched yet, it has brought the life assurance industry on the site to develop free access to information. The consumer can see all their pensions holdings in a single place, which will then help them to make better financial decisions.

I think my former employer, the Investing and Saving Alliance, was working on an open savings, investments and pensions scheme. Obviously, that is not mandatory, but this is where the provision for secondary legislation is absolutely imperative to ensure that you get a wide scope of firms utilising this. At the moment, it is optional, but firms are still lining up and wanting to use it. There is a commitment within the financial services industry to do this, but having the legislation in place—secondary legislation, in particular—will ensure that they all do it to the same standards, both technical and data, and have a trust framework that wraps around it. That is why it is so imperative to have smart data.

[Sir John Whittingdale]

Q Would you say a little about the international position? You referred to the UK’s position as a leader in this field. To what extent is that the case? What are the benefits, and what is the risk to the UK’s position if we do not make the changes proposed in the Bill?

Harry Weber-Brown: In part 2 or part 3 of the Bill? The digital verification services or smart data?

[Sir John Whittingdale]

I will come on to digital verification. Let us focus on smart data, to begin with.

Harry Weber-Brown: On that, Australia is certainly one of the leaders. The consumer has a data right under legislation that enables them to recall information from across a variety of sectors, not just financial services, and to have their information in a structured format shared with a data consumer—a third-party provider in open banking. Things are afoot. A lot of work is going on in the States, but less in Europe, interestingly. Legislation is coming through, but I think the big country to watch from our perspective is Australia and what has happened there. Theirs is a more far-reaching approach than, say, we have. That is for the smart data side.

There is a risk that if we do not extend that data right to other financial services, the consumer has a very limited view of what they can actually share. They can share their bank account details and possibly their pensions data as well, but what about their savings and investments, certainly in non-pension type wrappers? Give the consumer a full, holistic view of all their holdings and their debt as well, so that they can see their balance, as it were, and make better financial decisions. That is why we think it is so important to have part 3 of the Bill go through and for secondary legislation to follow behind it.

There is a risk that if we do not do that, the consumer has a very fragmented view. Does that mean that overseas, where it is legislated for, the consumer would have a more holistic view of everything? Would that drive investment overseas, rather than into the UK? As Phillip said, open banking has really heralded a range of fintech providers being able to consume data and provide value-added services on top of that banking data. I think it rebalances the marketplace as well.

Phillip Mind: To build on Harry’s remarks, I think that the real opportunity is for the UK to build a flourishing fintech industry. We have that already; open banking is actually one of our exports. Our way of doing open banking—the standards and the trust framework—has been a successful export, and it has been deployed in other jurisdictions. The opportunity around open data is to maintain that competitiveness for UK fintech when it is trading abroad.

Most of the consequences of extending beyond open banking into other smart data schemes impact UK businesses and consumers. I do not necessarily see that there is a competitiveness issue; it is bounded within the domestic economy.

[Sir John Whittingdale]

Q Moving on to the digital identity provisions, clearly some people are already familiar with this, but there is still a degree of suspicion. To what extent do you think that the consumer needs persuasion about the security and the benefits of digital identity services? Do you see that as being addressed by the provisions in the Bill?

Harry Weber-Brown: That is a very good question. I did quite a lot of consumer research in my previous capacity, and consumers are initially quite sceptical, asking “Why are you asking me for identity details and things?” You have to explain fully why you are doing that. Certainly having Government support and things like the trust framework and a certification regime to make sure that the consumer knows whom they are dealing with when they are passing over sensitive data will help to build the trust to ensure that consumers will utilise this.

The second part to that is what types of services are built on top of the identity system. If I have the identity verified to an AML—anti-money laundering—standard for financial services, I could use it for a whole suite of other types of activity. That could be the purchase of age-restricted products, or sharing data with my independent financial adviser; it could reduce fraud in push payments, and so on. There is a whole suite of different types of services; you would not be using it just for onboarding. I think the Government support of this under digital verification services, part 2 of the Bill, is critical to make sure it happens.

It is opt-in. We are not saying to people that they have to get an identity card, which obviously is not hugely popular; but if we can demonstrate the value of having a digital identity, with support and trust—with the trust framework and certification with Government—we will not necessarily need to run a full marketing campaign to make sure that consumers use this.

Look at other territories—for example, Norway with Vipps, or Sweden’s BankID. I think about 98% of the population now use ID in a digital format; it is very commonplace. It is really a question of looking at the use cases—examples of how the consumer could utilise this—and making sure they receive utility and value from the setting up and the utilisation of the ID. The ID by itself is not necessarily compelling enough; the point is what you can use it for.

Phillip Mind: Trust and acceptance are key issues, and the Bill lays the legislative foundations for that. We already assert our identity digitally when we open accounts, but we do so on a one-off basis. The challenge is to go from doing so on a one-off basis to creating a digital token that is safe and secure and that allows us to reuse that digital identity. For that to work, that token has to be widely accepted, and that is a really complex strategic challenge, but the Bill lays the foundations.

We will transact digitally more and more; that is for sure. At the moment, we have a consultation, from the Treasury and the Bank of England, on a central bank digital currency. Arguably, that would benefit hugely from a reusable digital identity, but we need to be able to create the token in the right way. It could be enabling for people who have access to a smartphone but do not have a passport or driving licence; it could also build inclusion, in terms of identity. So we are very supportive of a reusable digital identity, but it is a big challenge, and the challenge is gaining trust and acceptance.

[Damian Collins]

Q Mr Weber-Brown, you in particular have spoken about the consumer benefits of data sharing—having a wider choice of products and services. What do you see as the principal business benefits for financial service providers? How wide would you like the scope of their access to data to be?

Harry Weber-Brown: Financial services obviously rely heavily on data to be able to fashion their products accordingly and make them personal, so I think it is critical to have a smart data regime where everything is collected in a single format—what is known as an API, an application programming interface, which is a common way of securely sharing data.

Some of the other use cases from smart data that would benefit business would be things like sharing data around fact find. For example, if someone wants to instruct an independent financial adviser, could they not use this as a way of speeding up the process, rather than having to wait on letters of authority, which are written and take time? Similarly, with pension providers, if I wanted to move from one pension to another or to consolidate things, could we use the smart data to get an illustration of what impact that might have, so that before I ported it over I could see that?

For big financial services firms—well, for all of them—efficiencies are delivered because, as my colleague said, we are using digital as opposed to having to rely on manual processing. As long as the safeguards are put in place, that spawns a whole array of different types of use case, such as with regulatory reporting. If I need to report things to the regulator, could I use smart data provision to do that? That would benefit businesses. A lot of the financial services industry still relies on reporting on Excel spreadsheets and CSV files, so if we can digitise that, it would certainly make it a much more efficient economy.

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[Stephanie Peacock]

Q Do you think the provisions in the Bill will help to improve public trust in digital identities?

Keith Rosser: From that 70,000 example, we have not seen evidence yet that public trust has been negatively impacted. There are some very important provisions in the Bill that have to go a long way to assuring that. One is the creation of a governance body, which we think is hugely important. There has to be a monitoring of standards within the market. It also introduces the idea of certifying companies in the market. That is key, because in this market right now 30% of DVSs—nearly one in three companies—are not certified. The provision to introduce certification is another big, important move forward.

We also found, through a survey, that we had about 25% fewer objections when a user, company or employer was working with a certified company. Those are two really important points. In terms of the provision on improving the fraud response, we think there is a real opportunity to improve what DVSs do to tackle fraud, which I will probably talk about later.

[Sir John Whittingdale]

Q Perhaps I could ask you to expand on that now. To what extent would you say that some providers that are not certified are not meeting the standards necessary, or in some cases even promoting fraud?

Keith Rosser: I have every reason to believe that organisations not certified will not be meeting anywhere near the standards that they should be meeting under a certified scheme. That appears really clear. They certainly will not be doing as much as they need to do to tackle fraud.

My caveat here is that across the entire market, even the certified market, I think that there is a real need for us to do more to make sure that those companies are doing far more to tackle fraud, share data and work with Government. I would say that uncertified is a greater risk, certainly, but even with certified companies we must do more to make sure that they are pushed to meet the highest possible standards.

[Sir John Whittingdale]

Q So would you expect that as a result of the Bill, the bar to obtain certification will be higher?

Keith Rosser: Yes. The requirement on DVSs to tackle fraud should be higher than it currently is.

[Damian Collins]

Q I want to follow on from the Minister’s questions. Looking at other legislation that is going through Parliament, particularly the anti-fraud provisions in the Online Safety Bill, one of the important areas is the extent to which regulators should expect companies to have good upstream solutions in place to combat fraud. Rather than chasing every example that they come across, they need things that block it in the first place. Do you see the provisions in this Bill as being helpful? Would you expect regulators to act on that and to direct companies to use systems that are known to be safe?

Keith Rosser: Absolutely. I will give a quick example relating to the Online Safety Bill and hiring, which I am talking about. If you look at people getting work online by applying through job boards or platforms, that is an uncertified, unregulated space. Ofcom recently did research, ahead of the Online Safety Bill, that found that 30% of UK adults have experienced employment scams when applying for work online, which has a major impact on access to and participation in the labour market, for many reasons.

Turning the question the other way around, we can also use that example to show that where we do have uncertified spaces, the risks are huge, and we are seeing the evidence of that. Specifically, yes, I would expect the governance body or the certification regime, or both, to really put a requirement on DVSs to do all the things you said—to have better upstream processes and better technology.

Also, I think there is a big missing space, given that we have been live with this in hiring for eight months, to provide better information to the public. At the moment, if I am a member of the public applying for a job and I need to use my digital identity, there is no information for me to look at, unless the employer—the end user—is providing me with something up front. Many do not, so I go through this process without any information about what I am doing. It is a real missed opportunity so far, but now we can right that to make sure that DVSs are providing at least basic information to the public about what to do, what not to do, what questions to ask and where to get help.

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[Stephanie Peacock]

Q I have a connected but slightly separate question. Would being able to apply for a joint designation notice with the intelligence services aid competent authorities in targeting serious and organised crime, and if so, how?

Helen Hitching: Yes, it will aid it. Again, it brings in the ability to put the data protection framework on the same level, so we can share data in an easier fashion and make it less complex.

[Sir John Whittingdale]

Q Can you say a little bit more about the implications of personal data sharing between countries, the extent to which that might lead to a lowering of standards of protection and how we safeguard against that?

Helen Hitching: The agency does not believe that those safeguards will be lowered. We will still not be able to share data internationally with countries that do not have the same standards that are met by the UK. It will provide greater clarity about which regimes should be used and at which point. The standards will not reduce.

[Sir John Whittingdale]

Q You need to be satisfied that the third country maintains the same level of data protection standards that exists in the UK. To what extent has that been an impediment for data sharing?

Helen Hitching: The agency has had to undertake a test to make sure that there is adequate or, essentially, equivalent protection. That standard is now changing to “not materially lower”, so it will be a lot easier to understand where those protection levels are the same as or not materially lower than the UK’s. It will be simplified a lot.

[Sir John Whittingdale]

Q On a separate issue, at the moment we have a range of bodies responsible for different aspects of surveillance, such as the Biometrics Commissioner, the Investigatory Powers Commissioner and the Surveillance Camera Commissioner. Those are being brought together into either the Information Commissioner or the Investigatory Powers Commissioner. To what extent do you think that will improve the overall oversight of surveillance?

Aimee Reed: Policing thinks that that will significantly simplify things. It will not reduce the level of oversight and scrutiny that will be placed upon us, which is the right thing to do. In terms of the simplicity of that and the regimes that we are under, we are very supportive of that change.

Helen Hitching: Likewise, we are supportive and welcome the simplification. We do note, however, that the Biometrics Commissioner currently has a keen focus on developing technology in a legal manner and consults with the public. We would ask that there remains a focus on that oversight of biometrics, to assure the public that that work remains a priority once the regulation of biometrics transfers to the Information Commissioner’s Office and to make sure that that focus is retained.

[Damian Collins]

Q How easy do you find it to gather data as part of investigations at the moment, particularly if you are working with companies that provide services to individuals? Do you think the provisions in the Bill will make that any easier?

Aimee Reed: On balance, it will make things easier. We are retaining the very different sections of the Act under which different organisations operate, and the sections that look to improve joint working across part 3 and part 4 agencies are very welcome. At the moment that is not about simplifying the relationships between those in, say, part 2 and part 3, albeit data sharing is entirely possible. In essence, it is going to get simpler and easier to share data, but without losing any of the safeguards.

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[Stephanie Peacock]

Q Thank you. This is my final question. Does the Bill offer enough detail on the new threshold for charging or refusing a subject access request that is either “vexatious or excessive” to assure workers that they will still be able to access their personal records from an employer when making a good-faith request?

Mary Towers: The right to a data subject access request—again, like the DPIAs—is an absolutely crucial tool for trade unions in terms of establishing transparency over how their data is being used. Really, it provides a route for workers and unions to get information about what is going on in the workplace, how technologies operate and how they are operating in relation to individuals. It is an vital tool for trade unions.

What we are concerned about is that the new test specified in the Bill will provide employers with very broad discretion to decide when they do not have to comply with a data subject access request. The use of the term “vexatious or excessive” is a potential barrier to providing the right to an access request and provides employers with a lot of scope to say, for example, “Well, look, you have made a request several times. Now, we are going to say no.” However, there may be perfectly valid reasons why a worker might make several data subject access requests in a row. One set of information that is revealed may then lead a worker to conclude that they need to make a different type of access request.

We say that it is really vital to preserve and protect the right for workers to access information. Transparency as a principle is something that, again, goes to really important issues. For example, if there is discriminatory operation of a technology at work, how does a worker get information about that technology and about how the algorithm is operating? Data subject access requests are a key way of doing that.

[Sir John Whittingdale]

Q May I ask a relatively simple question? Obviously your concern is the protection of workers’ rights, and safeguards against discrimination and other potential adverse consequences of technology. We will debate the provisions of the Bill in those areas in the coming weeks—I suspect at some length—but would you nevertheless accept that the overall impact of the legislation, if we get this right, will be beneficial to your members in terms of the promotion of growth and potential future job opportunities?

Andrew Pakes: “If we get this right” is doing a lot of heavy lifting there; I will leave it to Members to decide the balance. That should be the goal. There is a wonderful phrase from the Swedish trade union movement that I have cited before: “Workers should not be scared of the new machines; they should be scared of the old ones.” There are no jobs, there is no prosperity and there is no future for the kind of society that our members want Britain to be that does not involve innovation and the use of new technology.

The speed at which technology is now changing and the power of this technology compared with previous periods of economic change make us believe that there has to be a good, robust discussion about the balances of checks and balances in the process. We have seen in larger society—whether through A-level results, the Post Office or other things—that the detriment is significant on the individuals impacted if legislators get that balance wrong. I agree with the big principle and I will leave you to debate that, but we would certainly urge that checks and balances need to be balanced, not one-sided.

Mary Towers: Why does respect for fundamental rights have to be in direct conflict with growth and innovation? There is not necessarily any conflict there. Indeed, in a workplace where people are respected, have dignity at work and are working in a healthy way, that can only be beneficial for productivity and growth.

[Damian Collins]

Q I have been listening carefully to what you have been saying and it strikes me that there are two issues: the use of technology in the general workplace, and the rights of workers who work through technology to do their jobs. In the workplace itself, data gathering and analysis has always existed to some extent. If we were having this conversation in the 1960s, we would have been talking about people doing time-motion studies of people in factories to work out what efficiency looked like. Is your concern in respect of a general working environment that employers are transparent about what sort of data they gather and how they use it?

Andrew Pakes: That is the first base. The power of technology is changing so quickly, and the informal conversations we have every day with employers suggest that many of them are wrestling with the same questions that we are. If we get this legislation right, it is a win-win when it comes to the question of how we introduce technology in workspaces.

You are right to identify the changing nature of work. We would also identify people analytics, or the use of digital technology to manage people. How we get that right is about the balance: how do you do it without micromanaging, without invading privacy, without using technology to make decisions without—this is a horrible phrase, but it is essentially about accountability—humans in the loop? Good legislation in this area should promote innovation, but it should also have due regard to balancing how you manage risks and reduce harms. That is the element that we want to make sure comes through in the legislation in its final form.