Climate and Ecology

1st reading
Wednesday 10th May 2023 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:20

[Olivia Blake (Sheffield, Hallam) (Lab)]

I beg to move,

That leave be given to bring in a Bill to require the United Kingdom to achieve climate and nature targets; to give the Secretary of State a duty to implement a strategy to achieve those targets; to establish a Climate and Nature Assembly to advise the Secretary of State in creating that strategy; to give duties to the Committee on Climate Change and the Joint Nature Conservation Committee regarding the strategy and targets; and for connected purposes.

It is a great honour to introduce the Climate and Ecology Bill. I pay tribute to the Bill’s current sponsor and former promoter, the hon. Member for Brighton, Pavilion (Caroline Lucas), who has long championed this Bill, as well as to Lord Redesdale, who did likewise in the other place. I am proud to lead this cross-party effort for the UK to embed in law the ambition and the action we need to tackle the environmental crisis.

The Bill has been drafted and is supported by many of Britain’s leading climate and ecology scientists. We must align our policies with the latest science and with what the UK has agreed internationally. This is not a matter of partisan politics; it is a matter of survival. It is about providing a sustainable way of life for our nation today and for generations to come. I urge all colleagues to join the growing all-party cohort of Members from both Houses who back this Bill, and I am especially grateful to the hon. Member for St Ives (Derek Thomas) for supporting it so enthusiastically.

This Bill is our chance to position the UK as a world leader on climate and environmental action. Our ability to prevent temperatures rising by more than 1.5°C is in the balance. Now is the time not to give up on that aim, but to redouble our efforts to meet it. As the Prime Minister of Barbados, Mia Mottley, told us in Glasgow, 1.5 is the only way to survive.

The double-headed climate and nature crisis is affecting people’s lives now, especially in the global south, but increasingly here in the UK as well. Just think of the climate change-triggered heatwaves in India and Pakistan, the floods we have seen worldwide and, of course, the floods and heatwaves of recent years here in the UK. There is no room for complacency and no time to waste.

Nature provides our best chance to mitigate climate change and its worst impacts, such as extreme flooding and drought. As Sir David Attenborough has shown us, nature is not a “nice to have”; it is all we have. As one of the world’s most nature-depleted nations, we must aim higher and we must do better.

We cannot solve the climate crisis without saving our key ecosystems, restoring habitats and protecting our much-loved species. The UK’s critical carbon sinks and stores, such as peatland, woodland, soils, wetlands and seas, are deteriorating, reducing their capacity to absorb carbon. In some cases, they have even become net carbon sources rather than sinks and stores. Protecting nature must take equal priority with cutting emissions.

Half of the world’s annual economic output, some $44 trillion, is being put at risk by the depletion of natural resources. Alongside that, up to 300 million people face an increased risk of floods and hurricanes due to the loss of buffering coastline habitats, and the loss of pollinators is already causing some 430,000 deaths every year by reducing the supply of healthy food. It is clear that we must act with all urgency, at home and abroad, and stand united for nature.

That is why the Bill is such an important piece of legislation. It is the only piece of proposed or existing legislation that would tackle the intertwined crises of climate and nature together to ensure a strong, integrated response. If enacted, it would create a joined-up plan to cut emissions in line with the 1.5°C target, while halting and reversing nature loss by 2030. By following the science and involving the British public, we can deliver the transition to a zero-carbon, nature-positive future, allowing us to live in harmony with nature. The ongoing Ukraine and energy crises remind us all too clearly of the need to transition fairly and rapidly away from fossil fuel dependency. We need to see action at home and abroad, and legislation is very much part of the solution.

The Bill centralises the importance of social justice and the fact that the UK cannot and must not offshore environmental destruction at the expense of the global south. That means we must take responsibility for our emissions footprint and our overseas footprint, and deal with the root causes of climate and ecological breakdown. The Bill also seeks to protect people by ensuring that no one is left behind via its fairness provisions and through the inclusion of a climate and nature assembly to incorporate public opinion in the unprecedented pace of change that is now required.

Clause 1 contains the Bill’s apex climate and nature targets. Having a net zero date is an important marker, but we need to understand the area below the curve—in other words, how much carbon we can emit into the atmosphere before we breach 1.5°C. The Bill would limit the UK’s total carbon emissions to no more than its proportionate share of the Intergovernmental Panel on Climate Change’s remaining global carbon budget for a 67% chance of limiting heating to 1.5°C.

By transitioning to a renewable energy future, we would not only end our reliance on deadly fossil fuels, but create the jobs of the future and tackle the soaring cost of living crisis at source. Bridging the ambition gap between current emissions reductions and what is needed for 1.5°C is essential if we are serious about restoring the natural world, and it could not be more urgent.

We know that human activities have already altered 70% of the Earth’s land, degrading up to 40% of it, and 87% of its oceans. The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services has found that 1 million animal and plant species now face extinction and that mammal, bird, amphibian, reptile and fish populations decreased globally by 68% between 1970 and 2016.

That is why the Bill’s nature target is to halt and reverse the UK’s overall contribution to the degradation and loss of nature in the UK and overseas. It is aligned with the international commitment to halt and reverse the destruction of nature by 2030, which the UK signed up to at the UN biodiversity conference, COP15, in 2022.

Current legislation contains a target to halt the decline in the abundance of species by 2030, as well as a longer-term target to increase species populations. However, the absence of any concrete plan to address the current rate of decline means that the state of nature is on course to worsen considerably by 2030, which risks pushing ecosystems beyond danger points from which they may not be able to recover.

The Bill’s holistic nature target would therefore see the health, abundance, diversity and resilience of species, populations, habitats and ecosystems visibly and measurably on the path to recovery by 2030, measured against a baseline of 2020. That is what this moment requires: to follow the science, to invest in nature and to restore our once-wild isles.

Clause 2 is focused on the development of a climate and nature strategy. It states that the strategy must produce a just transition for all, by protecting vulnerable communities and providing financial support for workers transitioning from fossil fuel and ecosystem-intensive industries into the jobs of the future. The clause contains measures that must be met in achieving the Bill’s apex targets, including accounting for all of the UK’s imported emissions, as well as those that take place on UK soil, so that the UK is not offshoring our pollution; ending the exploration, extraction, export and import of fossil fuels by the UK as rapidly as possible; ensuring that all UK policies prioritise avoiding the loss of nature; and ensuring that the UK takes account of its entire ecological footprint and all the destruction to nature caused by the production, transportation and disposal of the goods and services we consume.

The transition to a zero-carbon, nature-positive UK will affect how we all live, travel and work, so we should all have a role in planning how we get there. The climate assembly set up by six Select Committees that reported in September 2020, as well as the citizens’ assemblies that have taken place on climate and biodiversity in Ireland and the many others around the world, demonstrate the value of including citizens in the difficult decisions that we will have to take.

From my work in Sheffield Hallam on the climate manifesto, which comprises ideas directly sourced from my constituents, I know the importance of democracy in the transition to net zero and in protecting nature. For that reason, clause 3 would provide for a representative sample of the UK population to consider expert advice and reports on recommendations for inclusion in the strategy as part of the temporary nature and climate assembly. Clause 4 contains duties on the Committee on Climate Change and the Joint Nature Conservation Committee to evaluate, monitor and report on the implementation of the strategy. Clause 5 ensures that measures in areas of devolved competence would be agreed by the Scottish Parliament, the Welsh Parliament and the Northern Ireland Assembly.

As my hon. Friend the Member for Newport West (Ruth Jones) said so well during a debate on the principles last November:

“We know that climate action must be nature-positive action and that we must halt and reverse the loss of biodiversity by 2030 for the benefit of all people and the planet.”—[Official Report, 9 November 2022; Vol. 722, c. 150WH.]

This Bill brings that vital issue to the fore. I am delighted that so many members of local councils, including Councillor Georgia Gould, and local Mayors, including the Mayor of London, have recognised that and are backing the Bill. It is time that we got the action we need from the Government to ensure that we can survive.

Question put and agreed to.

Ordered,

That Olivia Blake, Geraint Davies, Caroline Lucas, Colum Eastwood, Ed Davey, Wera Hobhouse, Liz Saville Roberts, Stephen Farry, Sir Peter Bottomley, Derek Thomas, Alan Brown and Brendan O’Hara present the Bill.

Olivia Blake accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 November, and to be printed (Bill 304).

Northern Ireland (Interim Arrangements) Bill (Allocation of Time)

Ordered,

That the following provisions shall apply to the proceedings on the Northern Ireland (Interim Arrangements) Bill:

Timetable

(1) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at today’s sitting in accordance with this Order.

(b) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.

(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion six hours after the commencement of proceedings on the Motion for this Order.

Timing of proceedings and Questions to be put

(2) When the Bill has been read a second time:

(a) it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;

(b) the Speaker shall leave the chair whether or not notice of an Instruction has been given.

(3) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.

(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:

(a) any Question already proposed from the chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) the question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;

(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other questions, other than the question on any motion described in paragraph (15)(a) of this Order.

(5) On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

(6) If two or more Questions would fall to be put under paragraph (4)(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.

(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.

Consideration of Lords Amendments

(8) (a) Any Lords Amendments to the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(9) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (8) of this Order.

Subsequent stages

(10) (a) Any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(b) Proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under sub-paragraph (a) shall thereupon be resumed.

(11) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings to a conclusion in accordance with paragraph (10) of this Order.

Reasons Committee

(12) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order.

Miscellaneous

(13) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on the Bill.

(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

(15) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.

(b) No notice shall be required of such a Motion.

(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.

(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.

(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.

(16) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(b) The Question on any such Motion shall be put forthwith.

(17) (a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held on a day on which the Bill has been set down to be taken as an Order of the Day shall be postponed until the conclusion of any proceedings on that day to which this Order applies.

(b) Standing Order No. 15(1) (Exempted business) shall apply to proceedings in respect of such a debate.

(18) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

(19) (a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on this Order or on the Bill on a day on which the Bill has been set down to be taken as an Order of the Day shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of the proceedings on the Bill on that day.

(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Mr Steve Baker.)

Northern Ireland (Interim Arrangements) Bill

2nd reading
Wednesday 10th May 2023 Commons Chamber

Second Reading

13:32

[The Minister of State, Northern Ireland Office (Mr Steve Baker)]

I beg to move, That the Bill be now read a Second time.

It is, of course, with profound regret that I return to the Dispatch Box to bring forward legislation in the absence of a Northern Ireland Executive. I am sure that right hon. and hon. Members across the House will agree that this is not a position that any of us would want to be in. The Government remain committed to supporting the restoration of the Executive in Northern Ireland as soon as possible. Functioning governance for Northern Ireland by its elected representatives is the best outcome for citizens.

Last month, we all came together to reflect on the 25th anniversary of the Belfast/Good Friday agreement, and to mark the progress that Northern Ireland has made over the past quarter-century and the peace and prosperity that the agreement has brought. Of course, we also reflected on the work that remains to be done. The anniversary is an opportunity for us all to recommit to building an even brighter future for Northern Ireland. We need to see Northern Ireland’s political leaders come together and restore the devolved institutions established by the agreement, which is the surest way of delivering on the priorities of Northern Ireland’s peoples and of safeguarding our Union.

We have been very clear that to strengthen and protect the Union, we must persuade people and demonstrate that devolved government within the UK is what works best for Northern Ireland. It is in that spirit that we agreed the Windsor framework, seeking to restore the balance of the agreement and solve the issues posed by the Northern Ireland protocol. Now is the time for the parties to move forward together for what is the best possible future for Northern Ireland, and to deliver on the priorities of its people. That includes a more prosperous economy and better, more sustainable public services.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Minister quite correctly draws attention to the fact that the best way for Northern Ireland to have success in the future is to get devolved government up and running within the United Kingdom. Does he agree that that can best be done when all main sections of the community in Northern Ireland buy into the process of governance by which they would be governed?

[Mr Baker]

Yes, of course. My right hon. Friend the Secretary of State and I agree that it must involve all sections of the community. I will be very frank with the hon. Gentleman: I recognise that the Windsor framework is a hard compromise for many sections of the Unionist community because it leaves in place some European Union law in order to have an infrastructure-free border. That is why it is also a hard compromise for Conservative Eurosceptics and for me. But I recognise that, of all the plausible futures for Northern Ireland before us, the one that is best for the people of Northern Ireland is to accept the Windsor framework, including the Stormont brake and the consent mechanism, to restore devolved government and move forward together.

As I said when I answered the final oral question earlier, Northern Ireland has an amazing opportunity. Northern Ireland Members will know better than me the incredible strength of the entrepreneurial private sector in Northern Ireland. What I see is a sector that could, with political stability, soar. With privileged access to the UK, to the EU, and to our free trade agreements under UK services law, we could achieve amazing things that will secure Northern Ireland’s prosperity, and, I believe, secure consent for Northern Ireland’s place in the Union. But I think that, for the moment, I had best leave unsaid what will happen if people continue to go without good-quality devolved government and where that will lead. If that is a topic that Members wish to pursue, perhaps we can have a different debate. I hope that is helpful to the hon. Member for East Londonderry (Mr Campbell).

I want to be absolutely clear that my right hon. Friend the Secretary of State, the Prime Minister and I all wish to preserve Northern Ireland’s place in the Union, respecting the UK’s commitments under the Belfast/Good Friday agreement. We are Unionists, although I am aware that there are some commentators for whom we can never be Unionist enough—but I am allowing myself to digress and I should get back on track.

[Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)]

It may just be the way in which the Minister phrased what he said, but this is important: our ability to trade with the rest of the United Kingdom is not a privilege; it is a right. It is a right under article 6 of the Act of Union that we have the economic right to trade, barrier-free, with the rest of our own country. Yes, privileged access to the EU, but let us not talk about “privileged access” to the UK market. We are part of the United Kingdom.

[Mr Baker]

The right hon. Gentleman is absolutely right, and I apologise to him and to Northern Ireland Members. I had it in my head to say “privileged access to the EU”, but seeing him sitting there, I wanted to mention the UK first. It was a mistake. He is absolutely right that Northern Ireland’s right to trade unhampered into the UK is one that, as we explained at oral questions earlier, we continue to stand by and preserve, and which, under the Windsor framework, we have permanently guaranteed. I am grateful to him for clarifying that point. I will press on.

Before I provide an overview of the Bill, I should say a few words on Northern Ireland’s public finances. As the Bill’s provisions indicate, we are acutely concerned about the long-term sustainability of public finances in Northern Ireland. It was with considerable disappointment that my right hon. Friend the Secretary of State found it necessary once again to step in and set a budget for Northern Ireland for 2023-24 in the absence of a Northern Ireland Executive and Assembly. As the Secretary of State has made clear on multiple occasions, the extent of the budget pressures facing Northern Ireland Departments is extremely challenging. Departments are facing difficult and unavoidable decisions in the current difficult and frustrating circumstances.

The Government recognise that we need an Executive in place to take some of those difficult decisions and make the choices on budget priorities—choices that officials should not have to face without Ministers. We stand ready to work with a restored Executive on that, but in the meantime, we the Government of the UK have a responsibility to ensure that public services and the management of public funds can continue in their absence, so we will in due course take forward legislation to put the budget on a legal footing. Members of this House will have the opportunity to debate those allocations in detail at that time, if and when we come to it.

[Stephen Farry (North Down) (Alliance)]

There is concern about the nature of the current civil service guidance. The Government believe that the civil service has the capacity to take decisions; civil servants do not believe that they have the vires to take decisions, particularly in relation to statutory functions. Does the Minister recognise that we are at somewhat of an impasse in the current status quo, and that there is a danger that we end up either with difficult decisions being deferred, which makes them more painful, or with a managed overspend, which is another very undesirable situation?

[Mr Baker]

I do recognise those aspects. We have published today revised guidance and those relatively small changes are now available on gov.uk. We will certainly be interested in the hon. Gentleman’s views, and those of all relevant parties, on that guidance. In a nutshell, I agree with him that the best way forward is to restore the institutions. I am trying not to hector, but we are all very frustrated. As I have repeatedly said, I recognise that the Democratic Unionist party and Unionism more broadly face a very difficult compromise, but I am committed, as I know the hon. Gentleman is, to saying that devolved government in Northern Ireland is the best way forward.

[Simon Hoare (North Dorset) (Con)]

Will my hon. Friend give way?

[Mr Baker]

I will, and once I have done so I will try to press on.

[Simon Hoare]

I am grateful to my hon. Friend for giving way. Picking up on the point raised by the hon. Member for North Down (Stephen Farry) with regard to the role of civil servants, is the Minister able to consider seconding GB civil servants with experience of delivering dynamic change management to both the Northern Ireland civil service and the Northern Ireland Office in order to help deliver those changes? Although we hope it will for a short period of time, all hands are needed to the pump.

[Mr Baker]

My hon. Friend makes a very sensible suggestion. I am sure it will be considered in due course, but I hope he will not mind me saying that it would be best if that request came from a restored Executive. I know that I sound like a broken record, but that is the present issue.

I will press on. First, I express my sincere thanks to Opposition Members for continuing to ensure that Northern Ireland is served as well as possible and for not making it a political football. I appreciate that most sincerely.

The Bill does three important things. First, it continues the provisions relating to decision making for Northern Ireland civil servants, which Parliament passed in December in the Northern Ireland (Executive Formation etc) Act 2022. Those provisions, which clarify the decisions that civil servants in the Northern Ireland Departments can take in the absence of Northern Ireland Ministers and an Executive, are due to expire on 5 June. Under this Bill, those powers will continue until an Executive are restored. This will avoid a governance gap arising if an Executive are not in place by 5 June. As before, senior officers will be required to have regard to guidance, now published, set by my right hon. Friend the Secretary of State and the Government. That draft is out there, and we will take representations on it.

The second thing that the Bill does, and this is a little more novel, is give power to the Secretary of State to explore, with Northern Ireland Departments, options for budget sustainability, including further revenue raising, in Northern Ireland. Alongside allowing him to commission advice, the Bill will allow the Secretary of State to direct consultations to be held by Northern Ireland Departments on those matters. These powers are time-limited and apply only until an Executive are formed.

[Colum Eastwood (Foyle) (SDLP)]

I am grateful to the Minister for giving way. He has talked about revenue raising. It is possible that a new model for funding higher education will be looked at. Given that all Governments have said that they want to ensure an expansion in student numbers in Derry, can he guarantee that that hope and desire will be protected under any new funding model?

[Mr Baker]

As the hon. Gentleman knows, I cannot guarantee what a restored Executive will choose to do, but I can guarantee that we will listen to him and all relevant stakeholders. Indeed, we meet the university frequently—I did so on a recent visit. We certainly wish to take the advice of the universities and, indeed, representatives from Northern Ireland as we work towards commissioning advice. Without wishing to preview what we are likely to do, of course student finance is an important matter to consider. I am grateful to the hon. Gentleman.

The powers are deliberately focused on official advice and consultations on budget sustainability. Final decisions on implementation are best taken by locally elected representatives, and this Bill does not give the Secretary of State any power to direct implementation of such budget measures.

The third thing the Bill does is ensure greater political oversight of the management of public money in the absence of the Assembly, by providing for Northern Ireland Departments’ accounts and associated documents to be laid in the House of Commons. In previous absences of the Northern Ireland Assembly, the law has provided for that scrutiny to fall to Parliament, and the provision in this Bill will do that again. This provision will be active for all periods where there is no functioning Assembly, on the basis that public bodies must always be scrutinised to ensure good management of public money.

In conclusion, the measures in this Bill will ensure a continuation of the current Government’s arrangements in Northern Ireland.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister very much for what he has said so far. My constituents are concerned about the issue of childcare. I know that the moneys allocated by this House for childcare are for England alone, but as we approach the council elections, my constituents and others I have met on the doorsteps over the past few days have informed me that they are very concerned that Northern Ireland has not been offered childcare arrangements similar to those in England. Whether that will come through the Barnett consequentials or elsewhere, it has to happen. I am making a constructive comment, and I hope that the Minister will accept it as such. Only 60% of employed women with dependent children work full time, as opposed to 95% of men with dependent children. It is clear that the lack of affordable childcare—this is what they are telling me on the doorstep—is holding back women in Northern Ireland. What can be done through this interim arrangements Bill to enable childcare provision in Northern Ireland?

[Mr Baker]

I have enormous empathy for what the hon. Gentleman says. He is right to say that without childcare, women will be held back. That is why my right hon. Friend the Chancellor included so much on childcare in his Budget statement. As awkward as it is for me to once again be a stuck record, the hon. Gentleman knows that it is a devolved area. Barnett consequentials are relevant and it will be for a restored Executive to put these things in place. I am not for a moment pretending that this is a perfect or permanent solution for governance in Northern Ireland. These are interim arrangements and we very much hope, for reasons that I have begun to sketch, that we might be able to persuade Unionism to support the return of the institutions so that we can make sure that Northern Ireland gets all of the services for which he passionately and rightly argues.

The measures in the Bill will ensure the continuation of governance arrangements should there be no Executive when they expire on 5 June. They are not, and cannot be, a substitute for devolved government, as I have just said. They are by no means ideal, particularly in the context of this financial position. I want particularly to thank Northern Ireland civil servants, because they are in a very difficult position and we are extremely grateful to them for the burden that they are taking on. We continue to be grateful, and we will continue to give them what support we can.

The marking of the Belfast/Good Friday agreement has reminded us all of the importance of making the institutions in Northern Ireland work. This Government believe that an effective and functioning devolved government is crucial to showing that the Union works for the whole community in Northern Ireland. That is why the restoration of the Executive remains a Government top priority. We will continue to do everything we can to make that happen, and as we do so we will keep these arrangements under review. But for now, I commend the Bill to the House.

13:48

[Peter Kyle (Hove) (Lab)]

I thank the Minister for setting out the measures in the Bill. We will not oppose it, as it is necessary to allow civil servants to keep running Departments in Northern Ireland in the absence of an Executive. It is also welcome that Northern Ireland Department accounts will be laid before Parliament, to allow some scrutiny in this period.

Of course, what we would all like to see instead of this Bill is the restoration of accountable local government. Six months ago, on Second Reading of the Northern Ireland (Executive Formation etc) Bill, I said—

[The Secretary of State for Northern Ireland (Chris Heaton-Harris)]

Ah!

[Peter Kyle]

I am repeating what I said because I am not sure that the Secretary of State was paying as much attention as he might have done at the time. I said:

“The longer the Executive are collapsed, the hollower the 25th anniversary of the Belfast/Good Friday agreement…will be. Power sharing is the essential and hard-won outcome of that agreement. It is incumbent on the UK Government and the European Union to engage with the concerns of the Unionist community that led to its withdrawal from the institutions. Equally, any solution that emerges must be acceptable to the nationalist community to allow power sharing to resume.”—[Official Report, 29 November 2022; Vol. 723, c. 827.]

I will happily repeat that again if the Secretary of State missed it this time.

However, something has gone wrong. On paper, we have an agreement between the United Kingdom and the European Union that intends to restore power sharing, yet Stormont is still empty. The 25th anniversary was not hollow, but it is a missed opportunity that Stormont has not returned despite the Windsor framework and all the good will generated by the anniversary itself. Listening to Tony Blair at the Queen’s University conference, it was clear how persistence from a prime ministerial level was crucial to finding a solution in 1998. He described the

“seemingly endless days and nights”

of negotiation. It was a huge commitment for a new Prime Minister to make, and it was also a risk.

Tony Blair’s deep optimism about Northern Ireland’s future, then and today, shone through. He also paid tribute to the extraordinary leadership across Northern Ireland’s communities, saying that

“this agreement only happened because leaders were prepared to put their leadership in peril for the good of their people.”

The current Prime Minister needs to display a similar commitment and similar leadership—to stay the course and keep showing up, even when there are no prime ministerial visits. There is clearly a disconnect between what he believes the framework has achieved and what some members of the Unionist community say that it does. These challenges are not insurmountable, but progress can only be achieved if Westminster remains deeply committed and deeply engaged. We on the Labour Benches supported the framework in the national interest, so we would welcome an update to Parliament on its implementation and what is still needed from either side for its effects to be felt.

Ultimately, it might only be perseverance that builds back some of the trust in the UK Government that people in Northern Ireland have lost. More defined processes would be very helpful, so that we avoid a disconnect between what the Government are trying to achieve and what actually happens. In the Windsor framework, the Government committed to further legislation that would ease Unionist concerns about Northern Ireland’s place within the United Kingdom. In a recent session of the Northern Ireland Affairs Committee, the Secretary of State said that he was

“yet to be able to determine the exact items”

that would go into such legislation. Perhaps the Minister could elaborate on when that mystery legislation will appear, and what the consultation process for it will be.

The Labour party will always take a constructive approach when it comes to Northern Ireland. There are clauses in the Bill that give the Secretary of State power to ask for advice on options for raising public revenue. Those have led to some very useful discussions on the fiscal framework in which the Executive operate. In particular, I praise the work of the Northern Ireland Fiscal Council, whose updated estimate of the relative need for public spending has grabbed the attention of all parties. The Secretary of State also said to the Northern Ireland Affairs Committee that

“there is the ability, will and understanding of the public finances necessary for us to come together with a plan for transformation.”

It does feel like movement is building to improve Northern Ireland’s financial stability. It would be good to hear what the next steps are for the Secretary of State once he receives the requested advice on policy options from civil servants.

The powers in the Bill last only as long as there is no Executive, so there will hopefully be a limited opportunity to use them. The decision-making powers we have given to civil servants will also now last until the Executive are formed, instead of there being a six-month deadline. I pay tribute—just as the Secretary of State and his Minister, the hon. Member for Wycombe (Mr Baker), did—to all civil servants who are being asked to go far beyond what should be expected of them. The head of the civil service, Jayne Brady, gave evidence last week to the Northern Ireland Affairs Committee. She highlighted some of the challenges that the civil service is facing on how to make decisions within the budget that the Secretary of State now has to set out. In her words, even with the Bill,

“there will be decisions that we will not be able to make because they will not be aligned with the legal construct we are operating in.”

In summing up, the Minister should address that possible gap and what decisions might fall into it.

One of the themes from meetings that I recently had with Northern Ireland groups is that it is difficult to understand where responsibility ultimately lies. That really worries me—as a Parliament, it should worry all of us. The Secretary of State has been clear that we are not moving into direct rule; what we have instead is limited interventions from Westminster that keep public services functioning with limited scrutiny. The situation cannot continue forever. I hope that we can build on the momentum of the 25th anniversary and the recognition of how special the peace process was and continues to be, and I hope that we see power sharing restored soon.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Chairman of the Select Committee.

13:55

[Simon Hoare (North Dorset) (Con)]

I support this Bill as a necessity, without any particular enthusiasm, and I echo and endorse entirely what my hon. Friend the Minister said in exhorting political parties to get back into Stormont to deliver for people. I also echo the point made by the shadow Secretary of State, the hon. Member for Hove (Peter Kyle), about the importance of learning from the process of talks and leadership that got us to the Good Friday agreement. We cannot sit like latter-day Mr Micawbers, waiting for something to turn up; we have to try to make the weather. I suggest to my hon. and right hon. Friends on the Government Front Bench that if conversations are not already being had with Dublin as one of the two capital co-guarantors of the Good Friday agreement, they should re-inject some energy, pull people in and find out precisely what the issues are and what, if anything, can be done to address them and rebuild trust, in order to get back to serving the people of Northern Ireland through directly elected politicians.

Over this coronation weekend, I learned from our vicar in Blandford Forum a new Henry Ford quote—it was new to me, although possibly not to anybody else. Henry Ford once said that if he had asked the population at the time what they wanted, they would not have said a motor car; they would have said that they wanted a faster horse. Sometimes, we as politicians have to make the weather, and show leadership and shape the debate, rather than merely echo what the base has to say. That requires the vision, the courage and the bravery that we saw from that political class in the mid-1990s, running through to the Good Friday agreement. I am an optimist, and I believe that that spirit of delivery in public service still exists. It is not beyond the wit of this place and the political parties in Northern Ireland to resurrect it and to see Stormont come back.

I think we all recognise that for too long, bold and brave policy initiatives in Northern Ireland have been slightly less to the fore. There has been a tendency to ask for additional moneys from the Treasury, and the Treasury coughing up and providing it through some avenue or another. Everybody is conscious of the unique history of Northern Ireland as part of the United Kingdom, and therefore of the additional needs for public expenditure and intervention that are required, which are different from any other part of the UK. However, as we, hopefully, move forward—we discussed this at the Select Committee this morning, and Sir David Sterling certainly echoed this point—in order to deliver step changes of improvement for those who use public services, a greater reliance on match funding from the Treasury needs to be looked at. That means that local politicians in Northern Ireland deliver new streams of money, either through revenue or expenditure savings, and the Treasury provides new money. To just continually provide new money with no concomitant reform from Belfast does not serve any particular purpose, and arguably raises too many questions in the minds of English voters as to why they are not getting a greater share of the public purse than, for example, those in Northern Ireland, because they too readily and easily forget the difficult history.

[Gavin Robinson (Belfast East) (DUP)]

The Chairman of the Northern Ireland Affairs Committee will remember that back in January, he and I argued the toss on issues of how Northern Ireland is financed. Since then, I appreciate that he took a letter from me. He understood exactly where I was coming from on the structural improvements required for the funding of Northern Ireland and launched an inquiry in that regard. I appreciate those efforts, but I regret that even today he is talking about coughing up on a regular basis more and more money from the Treasury, when he knows from the Fiscal Council that this is not a separate discussion about reform, though that is necessary and important for the delivery of public services. Northern Ireland is structurally underfunded by this Parliament, and it has been for years, with a compounding impact on the ability to deliver public services. Rather than pitch us against his constituents in England, would it not be better for him to reflect on the structural underfunding, the resolve to get Northern Ireland to a more sustainable place with public finances and the need to use a comparator such as Wales, which went through exactly the same process 15 years ago, culminating in a financial uplift 10 years ago?

[Simon Hoare]

Let me answer that point first. The hon. Gentleman makes a perfectly valid point, and I am grateful to him for being the genesis for the Committee’s current inquiry, which is proving incredibly useful. He is right to talk about the disparity, and perhaps the phrase “coughing up” might not have been the most elegant I could have used, but he knows me well enough to know that elegance is not one of my greatest strengths. I can almost feel a second letter of “I agree with you” coming from him. He will be pleased to know that the one he sent me some months ago adorns the wall of the downstairs loo, as a rare thing of him agreeing with something that I said in this place in a debate on Northern Ireland.

In all seriousness—this is a point we discussed upstairs in Committee—constituents in England, Wales and Scotland are paying for things that residents of Northern Ireland currently are not paying for. While he is right to point to some of the structural imbalances, it does need to be a two-way street. There should not be an opportunity for the continuance of water and other things being outwith the charging mechanisms while expecting additional resource from Treasury to meet that gap. If he has looked at the reports of the Fiscal Council, he will see clearly the amount of money that could be generated by introducing charges.

[Claire Hanna (Belfast South) (SDLP)]

This is an interesting discussion, and the hon. Member for Belfast East (Gavin Robinson) has, on a number of occasions, made sensible points about the challenges of delivering public services with the economy of scale that we have in Northern Ireland. Would the hon. Member for North Dorset (Simon Hoare) agree that when we look to a wider economy of scale, perhaps on the island of Ireland, services become considerably more viable? Would he further agree that it opens up the opportunity of using numerous other fiscal levers to take us outside the locked-in cycle of just being dependent on pocket money from UK Governments? Would he further agree that the substantial budget surplus that the Republic is currently identifying and enjoying could help with some of these problems?

[Simon Hoare]

The hon. Lady digs the most elegant of tiger traps, hoping I will jump into it, but I will swerve around it. She makes a point that most people in their heart of hearts would agree with, which is that if a greater bang for the public sector buck can be achieved, which then has a direct benefit for outcomes in health, economic development, education and so on, that should be explored. Part of the reason why so many people in this place were keen to ensure the openness of the border north-south was that huge exchange of people, trade and ideas that takes place on a daily basis. Purely in the need to try to drive as much efficiency for the taxpayer as possible, nothing should be ruled in or out. If, however, her intervention was an elegant way of inviting me to endorse the idea of joint authority, I am afraid I will have to disappoint her, because devolution is the only game in town as far as I am concerned, and the Minister articulated that, too.

I move to my final point, because I know that others wish to speak. Under new section 5A in the Bill, which concerns advice and information, any direction from the Secretary of State falls or lapses at the end of the current period in which there is no Executive. What that could effectively mean—perhaps the Bill is deliberately opaque on this—is that all the work, consultation, information, advice and so on is lost. Does it get passed to Ministers in Stormont as a piece of work that they may or may not wish to consider? We know that the Secretary of State perfectly properly—although that in itself is a debatable point—cannot take decisions based on the advice or consultation. However, if that good work, particularly that undertaken by civil servants—as always, they will be rising to the challenge of trying to deliver not just existing public services, but public service reform—is to be meaningful, I would hope that the advice and information tabled to the Secretary of State would be passported over to the relevant new Minister in the Executive.

It is clear, certainly in the evidence sessions that we have held, in meetings that the Committee has had and on visits to Northern Ireland, that the public are ahead of us on this. They know that there are problems with public service. The right hon. Member for East Antrim (Sammy Wilson) made the point to me some while ago that a resurrected Stormont could not solve all the problems, and he is right to make that point, but it can certainly play a part in trying to find solutions to very many of them. The public appetite for public service reform is acute, as people face the cost of living crisis post covid and the economy faces all the challenges as a result of Ukraine and the associated knock-on effects. I would like to hear from the Minister what will happen to that advice.

I join the Minister in praying, exalting, urging—whatever. The people of Northern Ireland deserve so much better than this. They do not deserve interim arrangements. They do not deserve or need temporary sticking plasters. They need fundamental, robust, energised and engaged public service. The appetite is there, and I believe that it is growing across the political parties in Northern Ireland. I hope that we can get Stormont back up and running because, as we all know, devolution really is the only show in town.

[Mr Deputy Speaker (Sir Roger Gale)]

I call the Scottish National party spokesman.

14:07

[Richard Thomson (Gordon) (SNP)]

Let me say at the outset that I wish we were not here once again discussing this issue, but we all know exactly why we are. For the purposes of form, I will say once again that my firm belief is that Northern Ireland is best governed when it is governed locally, and the best place for MLAs to be is in Stormont, getting on with what the people of Northern Ireland would expect them to be getting on with: the job they were elected to do.

The Bill may be necessary to help close what is being termed as the governance gap in the absence of an Executive, but the damage of not having the Assembly up and running and the Executive in place is obvious in terms of good government in Northern Ireland. Decisions taken in Northern Ireland by politicians elected in Northern Ireland with a mandate from the people of Northern Ireland will always be much better taken, much better informed, much more legitimate and have far greater transparency than any decision, with the best will in the world, ever taken in this place on devolved matters on their behalf.

Where the preferences and priorities of voters in Northern Ireland run counter to those of the Government in Westminster, it is an inevitability that when Ministers in Westminster exercise those powers, it will be in line with their own preferences and priorities, rather than necessarily those in Northern Ireland. That lack of legitimacy matters, as does the absence of political direction, which has results in the decision-making process.

From my own time in local government, I developed a great admiration for council officers and officials. They were knowledgeable and expert, and in a lot of cases they were delegated and tasked with many things, including taking many decisions that were considered operational or that were not considered to be of the scope or scale that needed a direct political decision from an elected politician. However, the primary role of a senior official in most cases is to advise, rather than decide, and where any decisions of a major or strategic nature need to be taken, they ought to be taken in line with the democratic mandates and priorities that have been established at the ballot box. The absence of locally appointed Ministers and a sitting Assembly to scrutinise the choices that Ministers make when big decisions are required is highly unsatisfactory.

Make no mistake, big decisions are going to be required pretty urgently, because following the setting of the recent budget by the Secretary of State, the Northern Ireland Fiscal Council has stated that some £800 million of cuts, savings or revenue-raising measures are going to be required to fill the budget gap. To drill down a little further, the education sector in Northern Ireland faces a 2.7% cut, the Department for Infrastructure is going to be around £146 million short of its estimated requirements for the financial year and the Department of Finance says that it is now a matter of trying to

“plot the least harmful course we can”.

I think Northern Ireland deserves better than simply plotting the least harmful course that can be plotted, and it requires some major political choices to be made about how budgets are to be balanced, services are to be provided and better outcomes can be achieved.

Those are the sort of budgeting and policy decisions that simply cannot be taken or cannot be addressed in the form of salami-slicing in line with the ministerial decisions taken in years past. So the measures in this Bill that will allow the Secretary of State to request advice and information on developing options for a sustainable approach to the public finances, including revenue raising, are necessary, if inadequate. I would just say that it risks an element of paralysis by analysis and consultation in Whitehall. It certainly represents a very poor substitute for the people of Northern Ireland and the good operation of the services that they depend on, and it falls some way short of the level of scrutiny that ought to be applied to the spending of public money.

In drawing my remarks to a close, we support this Bill, but what we support most of all is the best solution of seeing a swift return of the Assembly and the Executive. We would urge the Secretary of State and his ministerial team to continue to do all they can in that regard to bring about that much better situation.

14:12

[Sammy Wilson (East Antrim) (DUP)]

In my opening remarks, can I first thank the spokesman for the Opposition, the hon. Member for Hove (Peter Kyle), for what I regard—this is probably the death knell for him in his position—as a very balanced presentation of the situation we face in Northern Ireland? He recognised, because of the experience he had over the period when we were remembering the signing of the Belfast agreement, the balance that is required there, and the fact that devolved Government in Northern Ireland cannot operate without the support and consent of both communities and their representatives in Northern Ireland.

That is something I think the Minister has still failed to recognise: he does not understand. It is quite clear from some of his remarks today that he does not understand the deep opposition to the current arrangements for governing Northern Ireland, and the difficulties that those arrangements cause for the Unionist population. Quite frankly, we still see the arrangements—whether the Northern Ireland protocol version or the Windsor framework version—as ones that damage our ability to trade with the rest of the United Kingdom to which we belong, and that will lead to divergence in the long run between Northern Ireland and the country to which we belong.

While the Minister may be prepared to accept the compromise, as he says, of some EU law applying to Northern Ireland as the means of having what he described as an “infrastructure-free border”, we do not see it as an infrastructure-free border. An infrastructure is being built in Northern Ireland, and further infrastructure will be built. Indeed, as I pointed out during Northern Ireland questions earlier today, it is not just in Northern Ireland that we are now going to have that infrastructure; we are going to have it in Cairnryan, Liverpool and Holyhead for goods moving from Northern Ireland into GB. I am afraid that is not what he or I campaigned for when we campaigned to leave the European Union. I do not think he should expect Unionists to compromise on being part of the country that many of them fought and died to remain in during a terrorist campaign of over 35 years in Northern Ireland.

The Minister’s second point was that, despite calls for the Assembly to get up and running, he is concerned—I will quote his words back to him—

“about the long-term sustainability of public finances in Northern Ireland”,

as well as that the pressures are “extremely challenging” and the Northern Ireland Executive have “difficult …decisions” to make. However, he knows that even if the Executive were up and running, and working splendidly, and everyone was co-operating and prepared to make the hard choices, there still would not be enough money in the pot.

The Minister knows—he actually referred to this—that the Fiscal Council has already made it clear that, in relation to the application of the Barnett formula, Northern Ireland is the only part of the United Kingdom that falls below the needs assessment on which public finance, spending in Northern Ireland and the block grant should be based. We are below it, and we are falling further below it. We are continuing to fall, and the gap is getting wider. When that happened and it was identified in Wales, there was immediate recognition of the problem. Wales had not actually fallen below the percentage, although it was moving towards it, and the Holtham commission made recommendations that ensured not only that a floor was set for moneys to be made available in Barnett consequentials for Wales, but that there were transitional arrangements.

I think this is important, because a lie is being spread around Northern Ireland. The Minister says he is not hectoring us today about getting us back into the Assembly, but I am afraid he does plenty of hectoring when he gets across the water, including putting on Facebook, or wherever, about chanting with groups to get back into Stormont, when he knows full well that getting back into Stormont is not going to grow the purse, change the financial situation or make it any easier. The extremely challenging difficulties for long-term sustainability will still be there, so let us not fool anybody.

I do accept that the Assembly had some responsibility for the situation we are in, but when I was Finance Minister in Northern Ireland we always balanced our budget. In fact, we were able to get three-year rolling budgets, so there was certainty for Departments, and we were able to make efficiency savings of 3% almost every year. However, some bad decisions have been made, and the fact that Sinn Féin could not get any of the parties to agree to the budget proposals brought forward when the Executive was functioning is an indication that there is such a role there. The Finance Minister was not capable of delivering a budget on which we could reach agreement, hence the overspend that has occurred. The impact of all that is that even if the Assembly were up and running, the detriment to public services in Northern Ireland would not disappear.

Let us look at some of the implications of the current budget and draw some comparisons. This year, Whitehall Departments will have an increase of 1.8% in resource spending. People argue that is not enough—it does not meet inflation, pay pressures and so on, and I accept that—but in Northern Ireland resource spending will fall by 0.9%.

For education, the budget in England will go up by 6.5% in the next year; in Northern Ireland it will fall by 2.7%, and £100 million of that fall is on special education. Almost every week we see people coming to our constituency offices who are desperate about their youngsters, who need support because they are autistic or have attention deficit hyperactivity disorder, or one of many other educational disadvantages, yet they cannot get assessed, let alone get support. Of course, the pressure on teachers’ pay will further add to school budgets.

In health, over the period to 2024-25 spending in England will go up by 32.9%. In Northern Ireland it will go up by 18.1%. So, again, we will fall further behind even though we have the difficulties and waiting lists that we currently face.

In policing, the Government have recently been boasting that they have reached their target of 20,000 extra police officers in England. In Northern Ireland, despite the promises made in New Decade, New Approach, as a result of the budgetary pressures we have a fall in police officers to well below what Patten recommended was needed to police Northern Ireland.

To add to that, although the Minister knows that Northern Ireland is not being fully funded—the Fiscal Council has told him that—that the Barnett squeeze is getting greater and that the gap will increase, we are being told that if there are any Barnett consequentials for Departments in Northern Ireland this year as a result of, for example, the Government nicely agreeing to pay increases, Northern Ireland will not get them, because they will be used to repay the overspend on what is already accepted to be an underfunded budget. It was last year, the year before and the year before that—in fact, I think it goes right back to 2017. That is what we are facing.

Just last week, I spoke to a school principal who said, “If there’s a pay increase for teachers, as the education budget has been cut by the degree that it has, I cannot afford to pay it unless I sack teachers.” It will be the same with nurses and right across the public service. Indeed, at a time when cuts are biting, the Department for Communities has said that it has got a £27 million deficit, so it does not have the money to recruit the extra staff it needs to process benefits, because of the increasing demand for them.

Those are all the consequences. So given the scale of the gap, let us not pretend that, somehow or other, if the Executive were up and running tomorrow, fairy dust would just fall on Northern Ireland and all of those fiscal problems would disappear—they would not. That is not a reason for not wanting devolved Government back, but it is an indication that we should not be selling the lie to people in Northern Ireland of, “Get back into government and suddenly all of the problems that you are facing—in health, education, communities, policing and everything else—will disappear.”

One of the reasons for amendment 5 is that the DUP recognises that, in order to look at the long-term sustainability of public services in Northern Ireland, we need to know what the Fiscal Council is saying and put in place an arrangement—

[Mr Deputy Speaker (Sir Roger Gale)]

Order. I do not wish to interrupt the right hon. Gentleman, but Committee consideration will follow this stage, so I would be grateful if he confined his remarks to Second Reading.

[Sammy Wilson]

Thank you, Mr Deputy Speaker. I was not going to go into the amendment in any detail—we can do that later—but I just wanted to refer to the fact that the Fiscal Council had made its comments.

When we look at the Bill, as has been described by a party leader in an earlier comment in Northern Ireland, we see that most of it is actually about ways of raising finance and advising how there should be consultation. Clause 2 talks about the consultation on different ways of raising finance as if that is how we will fill the gap. That takes money out of an economy that the Government have already damaged through the protocol, with the difficulties that has caused to Northern Ireland businesses and the costs that people there now face as a result of it being more difficult to get goods from the cheapest source—GB—with which they would normally have traded. Now they have to buy more expensive, and probably lower quality, goods from an EU supply chain. There are also the extra costs on businesses, and indeed the extra cost on the public purse, because £500 million now has to be devoted to the trader support service to help companies over the hurdles caused by the protocol.

Is the answer simply to raise more finance in Northern Ireland? I accept that people in Northern Ireland have things such as free prescriptions that, it could be argued, we could well look at. I remember a debate about free prescriptions. As Finance Minister, I was not keen on them, but I was told at that stage—it was true—that the cost to be spent on administering the distinction between people eligible for free prescriptions and those who were not would hardly compensate for the amount of extra money.

However, let us look at the extensive source of revenue that we do have in Northern Ireland: the rates. It has been estimated that even if we increased rates by 107%—if we more than doubled them—which would have a massive impact on households in Northern Ireland, we would raise only about 5% more revenue to the block grant that we have at present. The argument could be made if rates in Northern Ireland were much lower than those in the rest of the United Kingdom, but actually they are higher than those in Manchester, Sunderland, Liverpool and many other parts of England. So it is not as if we do not already tax people in Northern Ireland where we can to a level that is commensurate, we believe, with their ability to pay.

Clause 2 is included in the Bill to say, as has been widely spread around Northern Ireland, “If the Assembly is not up and running, it is more likely that other ways of raising revenue will be imposed on people in Northern Ireland, so get your politicians back, because otherwise you’ll be charged for things for which you weren’t in the past, or given extra charges on things you are being charged for at present.” I must say to the Minister that that kind of blackmail is not the way to restore the Assembly.

The Assembly will be restored when, first of all, the terms of the Belfast agreement are adhered to so that the views of Unionists, as well as nationalists, are respected, and Unionist Ministers are not required to sit in the Assembly and implement the very arrangements that we then come here and complain will destroy us as a part of the United Kingdom. I hope Members understand that. That is what is being asked of Unionists: to go into the Assembly under court direction and implement the Windsor framework, even though we know that in the long term it will be detrimental to the Union. We will talk about amendments later, but departmental officials will have to make some very controversial decisions. That will require some ministerial direction, hence why we believe there should be provision in the Bill for ministerial direction of civil servants, so that difficult decisions can be made and we can try to make some reforms.

I will make one last point, which relates to one made by the hon. Member for Belfast South (Claire Hanna). Can we not look at ways to better use public money? I say that with some knowledge of the steps that Unionist Ministers have taken in the past in recognition of the fact that there are better ways. The Altnagelvin cancer unit, in the constituency of the hon. Member for Foyle (Colum Eastwood), is a good example. It was indicated to us—I was Finance Minister at the time and the DUP held the health Ministry—that we could not afford a cancer unit in the north-west and the Irish Government could not afford a cancer unit of their own in the north-west, so we co-operated. They provided some of the capital and we provided some of the capital. They provided some of the running costs—they still do—and we provided some of the running costs. So this idea that Unionists are not willing to look at how we can make reforms, take decisions and make public finance more sustainable is just not on.

I look forward to the day when devolution is restored and we can work in a co-operative way, but it will not happen until there is respect for the Unionist view in Northern Ireland. And even when it does happen, it will not be effective if the resources are not there to enable us to make the kinds of changes that are required.

14:32

[Colum Eastwood (Foyle) (SDLP)]

It is great to hear that the Democratic Unionist party now supports north-south co-operation. It would be good if we were to allow the north-south bodies to operate properly as well. I totally agree with the right hon. Member for East Antrim (Sammy Wilson) and the hon. Member for Belfast East (Gavin Robinson) about the deficiencies of the Barnett formula. The SDLP, many years ago, proposed moving away from the Barnett formula to a more needs-based approach. It is just a pity that DUP Ministers at that time campaigned loudly and actively against it. However, we are here now.

This is a Bill that nobody wants, least of all the civil service which is being asked to use these powers. We know why we are here: the DUP refuses to form a Government. Many of the arguments some of us are using today were used by the DUP when Sinn Féin pulled the Government down and kept it down for three and a half years. It seems to me that people cannot even learn the lessons they were trying to teach others. We know how that ended: Sinn Féin realised halfway through that boycott that it was doing nobody any good. The waiting lists were still getting longer and certain people were beginning to get the blame for that. My view is that we have a responsibility to all the people in all our constituencies, no matter what their politics are, to have a Government functioning and working together. I heard again today from the DUP that devolution cannot work without the consent of both communities. That is painfully true and obvious, but is it okay, then, to have direct rule, which is basically what this is becoming, operating without the consent of the nationalist community? That is what we are being asked to have, and that will have its own consequences as we move through the process.

The shadow Secretary of State for Northern Ireland, the hon. Member for Hove (Peter Kyle), rightly referenced the 25th anniversary of the Good Friday agreement—the immense change it has brought about and the bravery of that political generation to make very hard decisions and take very big steps, much bigger than those we are asking people to take today. Its impact has been profoundly significant for many people, particularly in my generation.

Over the last number of years, we have faced chaos in our politics inflicted by a Brexit vote somewhere else, because the people in Northern Ireland voted to remain by a majority. That has been the genesis of the crisis we are in today. We argued for a couple of years about the protocol and its implications. Now we have the Windsor framework, which gives us the opportunity to trade into both markets. We have had former American Presidents, the current American President, former US Secretaries of State and the current US Secretary of State, countless Senators and Members of the House of Representatives coming over and telling us that they want to help us by bringing jobs to Northern Ireland. There is not a single other place in the world where American politicians are saying they want jobs to leave America for. That just does not happen. It goes against the political current in the United States of America right now. This is a huge opportunity, and it is an opportunity that we need to grasp. Frankly, I do not understand why we cannot do two things at the one time.

[Paul Girvan (South Antrim) (DUP)]

I thank the hon. Gentleman for giving way. On the point he just made about investment into Northern Ireland, that was promised to us 25 years ago but the Republic of Ireland, with its fiscal taxation policy, sucked in all the inward investment that we were to get. We never benefited from the major companies that, over the last 17 years, went into the Republic of Ireland when they should have come to Northern Ireland.

[Colum Eastwood]

That is a very interesting take on the fact that next year the Irish Government will have a budget surplus of €16 billion and we are squabbling over the crumbs from London’s table. There is another question the hon. Member should ask himself: why are we not trying to join the thriving economic entity that is the Republic of Ireland? Our people would be a lot better off.

The point I was making is, in my view, very obvious. I accept that DUP Members still have some difficulty with some issues, and I am happy to sit down and work through them. I will speak to the Irish Government, the British Government and whoever we have to speak to, to help us to get over this hump. The reality, though, is that we are well capable of doing that at the same time as getting into government and dealing with the health crisis. I know we will not be able to solve all the issues overnight, but we will not be able to solve them by doing nothing at all. Why can we not sit down as grown-ups and work through the difficulties, while at the same time implementing the changes required to help people in Northern Ireland get off the waiting lists, to help people create jobs, and to bring in investment that keeps our young people at home instead of sending them off to work somewhere else? That is not beyond the wit of the political class in Northern Ireland today, given all the hard things that had to be done, including by the DUP, in the peace process we have had since before 1998. We can do this very, very simply. There is no logic any more in holding up the institutions of the Good Friday agreement so that we can deal with outstanding issues. We can do both at the one time.

The Bill and the budget are imposing huge cuts on the most vulnerable in our society. The extended schools programme is aimed at schools in disadvantaged areas and at kids who are the most disadvantaged in our society. It brings things like counselling for young people, breakfast clubs and after-school clubs. It is being axed because of this budget. We are axing free baby books for kids. Every year, 20,000 families are given access to free books and reading advice from the Book Trust, a vital tool we can give to our children. Anybody who has kids understands that teaching them to read as early as possible is a really important life skill. We are cutting that—that is where the axe is falling as a result of this budget.

We are also cutting special needs places in nursery schools. Little Orchids in my constituency, which looks after kids from two to four years’ old, was told a couple of days ago that it would have to halve the number of children that it can help in its facility. They are the people affected by this particular budget. We are also told that there will be no new school buildings or extensions. Many of the teachers’ and children’s classrooms are crumbling. None of that work will start this year, and we do not know at all when it will.

In all the discussions we have on radio stations, in TV studios and here about the need for health service transformation, as difficult as it will be, we have all bought into doing the hard things needed to make the health service more sustainable, to get 500,000 people off waiting lists and to make a health service that we can be proud of. Right now, we have a health service that is not free at the point of delivery because people cannot get access to it without paying. Many people in my constituency are going to the credit union to get loans that they cannot afford to pay back, so that they can have the vital surgery they need to live their lives in a normal and comfortable way. There is no space in this budget for proper health service transformation. Those 500,000 people will remain on waiting lists, which will grow and grow.

I made this point earlier to the Minister, but I will make it again: we can talk about the detail of revenue raising at any point, but I want to make it clear that the Irish Government, the British Government and the former Northern Ireland Executive all committed to expanding university places in Derry, which has been waited for and campaigned on for many decades. In any new funding model for higher education, that needs to be protected, and the opportunity needs still to be there for expansion of university places in Derry. If we are really serious about rebalancing the economy regionally and giving people the opportunity to create jobs and get employed in their own areas, that has to be our No. 1 priority.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

The hon. Member is making a powerful speech, but he knows that his city is the only city on the island of Ireland without an independent university. We have campaigned for many years for the expansion of Magee, but it is not happening the way that we or John Hume envisaged it. What is his view on one day going for an independent university in the great city of Derry?

[Colum Eastwood]

I thank the hon. Member for his intervention and his work on this issue. There was a short period when we did not have an MP for Foyle in this Chamber making these points. The hon. Member and others stepped up on that issue, and we were very grateful to him. The people of Derry have been starved of a university since 1964. That has massively damaged our economic opportunities—that along with the bombing campaign that blew the place to bits. We are now 25 years on from the Good Friday agreement, and we still have not maximised that opportunity.

We have a university in Derry—we are clear about that—but it is not big enough and it does not do enough to attract the kind of students who, in turn, will attract the economic opportunities that we want. I have been clear with the leadership of Ulster University that people are very weary, tired and lacking in trust in that institution. The leadership needs to come up urgently with a plan to expand university places to at least 10,000 students or people will begin to look elsewhere, as the hon. Member says. We must be realistic and serious, and we must make this happen because we cannot wait any longer to have proper university provision for the people in my city.

We are now basically in a period of direct rule, and we are moving inch by inch closer to London-only rule. That flies in the face of the Good Friday agreement and every single agreement that we have made since. I urge this Government to think carefully about what happens next, because this situation cannot be allowed to run and run. If we are not to have institutions at Stormont, and if locally elected people are not to have representatives running the place because they are denied that opportunity, the British Government need to look seriously at a greater role for the Irish Government in the affairs of Northern Ireland. I say that advisedly because in a number of periods when we were denied institutions at Stormont, it was only that promise that encouraged some people to get back and to form a Government representing all the traditions on the island. That is well worth considering.

We are knocking on doors and speaking to people. An awful lot is said about Unionist concerns, which we listen to and try to be respectful of, but many of the people we speak to say, “Why would we have any faith in the DUP to work with nationalism? Why would we have any faith in Stormont to deliver for us?” People are beginning to think differently about their future. I will argue every day to end the divisions on our island and to build a new Ireland, but I caution those who stand up and talk about the precious Union a lot in his place that they are opening a door to something that they might end up regretting, because more and more people are moving away from support for Stormont. I do not want that to happen. I think we can do two things at once. We can have locally elected people running the institutions of Northern Ireland. There is a better way to do this in the longer term.

[Sir Jeffrey M. Donaldson]

The hon. Member is touching on a very important point, which I think is overlooked. The UK Government and Unionism recognised that a hard border was not the solution in relation to Brexit. Why? It would have undermined nationalist sensitivities in relation to the agreement and the political institutions. We sought to find a way forward that respected the integrity of the United Kingdom and avoided a hard border on the island. Even the Taoiseach has recognised that the protocol went way too far in creating an Irish sea border. Although the hon. Member is right that nationalist sensitivities must be given regard, so too must Unionists’ sensitivities because consensus is the way forward, as the former Member for Foyle John Hume often said from that seat.

[Colum Eastwood]

I have tried my best to understand the concerns of Unionism, and I think the European Union and the British Government have as well, to be fair. That is why we have the Windsor framework. If there are still outstanding issues, let us talk about them. Even when we were threatened with a hard border, we did not walk away from government. We did not stop working in the institutions. We wanted to sit down and continue to work with our neighbours—even those who we disagreed with—because that goes right to the heart of the Good Friday agreement.

Walking away and boycotting will solve nothing, in our strong view. If there are outstanding issues, and if there are solutions that do not impact upon the principle of protecting all-Ireland trade and avoiding a hard border, we will be open to looking at those and to working with the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson) and his colleagues to achieve some modicum of change around that. My appeal to him is this: let us sit down, work together in our substantial common interest, work the common ground, get back into Stormont and try—as hard as it might be—to begin to fix some of the problems that beset all our people.

14:48

[Gavin Robinson (Belfast East) (DUP)]

I appreciate being called earlier than I had anticipated, Mr Deputy Speaker. We had a brief conversation earlier, and despite what you said, the prospect of another four and a half hours of debate is probably too tantalising to ignore. Although normally I do not speak for long, I may take the opportunity to speak a little longer this afternoon. [Interruption.] I jest.

Like others, I lament the fact that we are debating this Bill this afternoon and dealing with a Northern Ireland Office that, yet again, I am sorry to say, is missing a crucial opportunity. It is a Northern Ireland Office that has lost any sense of strategic direction; it has lost the ability to engage, understand and resolve some of the pressures that we have in Northern Ireland. I lament the fact that the relationships from which we benefited over the last few decades no longer exist, and I lament, more than anything else, the fact that, while the Bill has been described this afternoon as legislation that closes a constitutional gap—or continues a governance gap—that opportunity has been 100% missed.

It did not need to be this way. The Northern Ireland Office had been actively engaged with the Northern Ireland civil service over the last three or four months, and had drafted provisions for the Bill that would have given the Secretary of State step-in powers and the opportunity to assist with some of the difficult decisions that are facing our Northern Ireland public service Departments. However, the NIO actively chose to leave those provisions out of the Bill. I know that this is not a Committee stage, but because new clause 5 has not been selected, I will say now that we tabled it to highlight the point that the choices that now rest with permanent secretaries in Northern Ireland are unfathomable. The opportunity was there for political direction on the taking of decisions when political direction was required, but those in the Northern Ireland Office have chosen not to take it. They will continue to say what they have said over the last few months—“It is not for us to make political choices”—but that is a political choice that they have made.

When the Government raised the rates in Northern Ireland this year, while still talking about revenue raising and the need for more finance to come from Northern Ireland, they made a political choice. They increased the burden on homeowners, domestic ratepayers, by 6%, and excluded businesses by freezing their regional rate. They made a political choice. When they talk about revenue raising, they know that some £1.5 billion to £1.7 billion a year is raised from revenue. If every domestic and non-domestic ratepayer in Northern Ireland paid 50% on top of their bills that are due next week, that would still not cover the shortfall that faces Northern Ireland Departments as a result of the budget given to them by the NIO.

When that budget was delivered last week, it was delivered in the explicit knowledge of the decisions that permanent secretaries would have to make, but cannot make. Everyone in the Chamber is aware of the legislative preclusions that prevent them from making those decisions. Members know the impact of the Buick and JR80 judgments. They know that the permanent secretaries cannot do that. They had indicated in advance to the Northern Ireland Office—to the Secretary of State and the Minister of State—that the budget that they were handed would mean they would have to take decisions that would conflict fundamentally with the statutory obligations and duties that they have to undertake. They cannot do it.

While the flexibility on the £279 million is useful in one sense, it is hugely dangerous in another, given the damage that it will do through the breach of parity in public pay awards between Northern Ireland and the rest of the United Kingdom. Anything that is agreed in the forthcoming weeks and months in England will benefit public workers in England but not those in Northern Ireland, and that gap will grow. The flexibility is useful, but given the direct knowledge of the underspend and the challenging decisions that will have to be taken, it is outrageous that that is the sort of offer that our Departments have received.

[Stephen Farry (North Down) (Alliance)]

I agree with much of what the hon. Member is saying about the failure of the Northern Ireland Office to address the governance gap, but does he not think it is a little bit difficult for people to hear him say such things when his party has the power to address all the concerns he has been raising if they return to the Executive? While he is right to criticise the Government, surely he should also exercise some self-reflection on the role of his own party, because all those ills could be cured by him and his colleagues tomorrow.

[Gavin Robinson]

I find it amazing that the hon. Gentleman has made that point. He knows it is the biggest falsehood that is being peddled today, and it was addressed earlier by my right hon. Friend the Member for East Antrim (Sammy Wilson). If the Executive were up and running tomorrow, the fundamental damage being caused by the budget and the fundamental choices having to be made would still be there, but the resource would not. Departments are saying today that there is an £800 million shortfall in their ability to deliver, and that they will now have to take decisions that conflict with their statutory obligations, and that same choice will be there tomorrow unless the Government say that they will reflect on the systematic and systemic underfunding of the Northern Ireland budget, and will recognise that the Barnett formula must be assessed on the basis of need. Unless that happens, the choices that are there today will be the choices that are there tomorrow.

Let me spell it out. What do we know from the Department of Justice? It is hundreds of millions of pounds short of what it needs. The police alone do not have enough money to cover last year’s shortfall, let alone an additional £35 million shortfall this year. Where can they make the cuts? They can make them through headcount and non-pay. On headcount, we know that devolution was restored in 2020 under the New Decade, New Approach agreement, which recognised that policing numbers needed to reach 7,500. In March this year the figure was 6,700, and it is projected to be 6,400 in March next year. That is the sort of choice that is available today to a permanent secretary, and would be available tomorrow to a restored Government.

Earlier today, the Minister of State was answering questions about the cost of living crisis, but yesterday we heard from the Department for Communities about the extent of its shortfall. A third of the social homes that were planned to be built this year cannot be built: 2,000 were projected, and 1,400 will be delivered. No money is available for the new health assessments associated with benefits, and there is not enough money to progress the assessment of benefit applications. That is what has been delivered by the NIO: choices that are there today and would still be there tomorrow if there were a return to devolution.

Then there is the enormous shortfall in the Department for Infrastructure, where the permanent secretary is highlighting her statutory obligations and the money she does not have in order to meet them. So what are her choices? To stop gritting the roads? To stop treating waste water? How often do we hear about the importance of climate issues and looking after our environment? But that is one of the choices available to the permanent secretary in the Department for Infrastructure. Another is to turn off the street lights. I do not think that the Secretary of State or the Minister of State or the NIO is interested in streetlights. The only thing in which they seem to be interested at present is gaslights, because the politics of all this has been about gaslighting people in Northern Ireland. What is psychologically questioning our understanding of how finances work, and telling us that we are overfunded when we know that we are structurally underfunded—standing in this Chamber and saying, “Oh, but Northern Ireland gets 121% of what people in England get”, when we know that that is less than what Northern Ireland needs—if it is not gaslighting? That is the diet that we have had over the past number of months, and it seems certain that that is the diet that we are going to continue to get.

The Northern Ireland Fiscal Council has been explicit. When I talked about the Northern Ireland Fiscal Council in this Chamber in January and last year, whoosh, it went straight over people’s heads. It meant nothing. I know that sometimes the figures in these documents are boring, but they are crucially important in terms of the ability to deliver public services for everyone in Northern Ireland.

I represent a constituency that has some incredibly affluent areas, but it also has some incredibly deprived areas where social deprivation is a real thing. Wards in my constituency feature in the top 10 most deprived wards in Northern Ireland. In the Mount ward, at the bottom of my constituency, just off the Newtownards Road, 25% of children are leaving primary school without basic literacy and numeracy skills. Forget the 11-plus—they are going on to secondary school without the basic ability to read, write and count. What has this budget delivered? It has delivered an end to the extended schools programme and an end to free books for babies. Just a few months ago, the Northern Ireland Affairs Committee visited EastSide Learning in my constituency. The chairman cheekily asked, “I see those books—the spines haven’t been broken. Does anyone read them?” He was informed that they were brand new books, but the Department of Education is not going to be able to give brand new books to children in my constituency any more. It is outrageous.

The Pathway funding, which is about ensuring the social, emotional and cognitive development of young children before they get to nursery and primary school, is not going to be there. The Department of Education has said that from June there is no money available for such vital developmental early years intervention. Whether it is the Dee Street and the Ballymacarrett youth centre or the Bloomfield Community Association youth centre, all of these interventions matter. The public services that are delivered in Northern Ireland matter, and this budget fundamentally constrains the opportunity to provide for the needs of those children and our constituents right across Northern Ireland. The opportunity was there, and it should be there, to make a difference.

I want to make this point with as much power as I can: we can debate and talk every day of the week about the pressures that exist with the Northern Ireland protocol, the Windsor framework and the impediments to the return to devolution. Whether people agree with me on those issues or they ignore those issues, that is fine; we will continue to work for resolution. But the point needs to be understood that we cannot and will not have sustainable government in Northern Ireland if we do not have sustainable finances alongside a return to devolution.

The idea that any elected representative is going to stand up in government to stand over the dismal budget that has been provided is for the birds; it is not going to happen. I want to see Northern Ireland work. I want to see Northern Ireland as a place where all communities within our Province are at peace with one another and enjoy the benefits of the country that we have the privilege to live in. These issues need to be resolved and that can happen only when the finance is there to deliver positively for those people.

[Sir Jeffrey M. Donaldson]

My hon. Friend is making an excellent contribution to the debate and I fully support what he has said about a needs-based approach. Indeed, I think of the work of the Atlas Women’s Centre in Lisburn, in my constituency, which has used Pathway funding to help some of our youngest children to develop the skills they need for mainstream education. Does my hon. Friend agree with me that in seeking to change the way that our public services are funded, it is essential that in Northern Ireland we also recognise the need for the reform of those public services and that part of what we need from Treasury is investment for reform?

[Gavin Robinson]

The truth is that the shortfall from last year and the shortfall in this financial year need to be covered—that is the short term. The medium term needs to be about getting reform agreed, and the long term needs to be about sorting out how Northern Ireland is funded and providing a stable way for doing so.

There are huge opportunities. Some people like to dismiss it and some people do not want to listen to it, but the last thing we want to see is a return to devolution where the foundations are unstable. We want sustainable government in Northern Ireland. We want the ability to deliver proudly positive public services for the people of Northern Ireland, and we want to resolve the issues that have created the impediment thus far. There is nothing new in that. Sometimes it takes quite a while for people to hear and listen.

We are getting there. I am sorry that we are having to go through another Bill like this and that opportunities are being missed to deal with delivery for the people in Northern Ireland, through one way or another. We want to protect public services. We want to protect the street lights and end the gaslights. It would be nice to have a debate on these issues where we could talk practically and factually about what the impediments are, which all of us work to resolve.

15:06

[Stephen Farry (North Down) (Alliance)]

It is a pleasure to follow my neighbour, the hon. Member for Belfast East (Gavin Robinson). This debate is happening in something of a twilight zone, in the sense that we have a twin budget and governance crisis. Frankly, neither is being adequately addressed today.

The Northern Ireland Office is operating in hope, and possibly expectation, that at some point the DUP will return to the Executive of the Assembly. Indeed, there is an overwhelming logic to that. If people want to make Northern Ireland work, then the Assembly and the Executive have to work, and that has to be seen as the overarching issue. Any notion of a democratic deficit that may happen elsewhere pales into insignificance compared to the current democratic deficit that we are facing.

As much as I agree with parts of the analysis given by my neighbour, the hon. Member for Belfast East, around the fact that the Northern Ireland Office is not stepping in on governance, others are not stepping in on governance either. I appreciate that the overall context is difficult—that may not change—but governance is core to solving this issue. We are in a frankly intolerable situation in that regard.

If my colleagues in the DUP are genuine about returning to the Assembly—some optimistic voices expect them to reach that conclusion in the next weeks or months—the longer they leave it, the more damage is going to be done to Northern Ireland. My message to them is, if they are going back, they should tell us they are going back and let us get on with it. If they are not going back, then they should say so and let us put in place alternative governance arrangements. The drift is killing us, both metaphorically and literally.

In terms of governance, the guidance is insufficient and in some ways contradictory. The Government may think it is perfect clearly, but it is evident that the Northern Ireland civil service does not think that. For example, we have a situation where our guidance is telling civil servants to act in the public interest, not to undermine statutory services or commitments, not to take major public sector decisions and to avoid long-term damage. It is hard to see how taking cuts is consistent with any of those criteria, but that is what they are now being expected to do.

I fear we are, yet again, at something of an impasse. That will lead to two potential outcomes: first, we will see certain decisions being deferred till later in the financial year. If decisions on cuts are taken even later in the year, the pain and impact becomes even sharper than it would be today. Alternatively, we will see a situation where it is impossible for them to live within the spending envelope that has been allocated, and we will see yet another overspend at the end of this financial year, with all the associated complications for planning that will flow from that.

The current situation we are facing is contributing to lengthening waiting lists and will reinforce educational underachievement, block the skills pipeline and compromise our ability to tackle economic inactivity. To date, the civil service approach has been to focus almost entirely on the very narrow ground of what are viewed as non-statutory activities—discretionary spending, in other language—but that is often some of the most effective spending, as it is often aimed at early intervention or prevention, which goes a long way to addressing steeper cost pressures that may emerge elsewhere in the public sector later in the process. For instance, if we do not address mental health in the community, we end up with more people having to be admitted to secondary care, which is more costly, and the same goes for skills and educational underachievement.

I recognise that this is a genuine dilemma for the Government and that we do not want a drift to formal direct rule because of all the implications that flow from that, but I must say to them that the current status quo is unsustainable and something must give. This is not the same context as that between 2017 and 2020, when there was a much more stable financial environment. I appreciate that direct rule is not palatable, and if it does have to happen, there will have to be an Irish dimension to it—people will have to face up to that. I clarify, however, that that is not joint authority, which I consider to be a different concept outside the context of the principle of consent. However, a consultative role for the Irish Government in direct rule has been established going back to the Anglo-Irish agreement, and, again, if people are uncomfortable with that reality, they know the options open to them to stop that happening.

On the finances, I recognise there are major structural problems in Northern Ireland’s public sector and expenditure profile. Some of that has been self-inflicted: the roof has not been mended while the sun was shining in previous years. A lot of decisions around reform have been ducked and opportunities have been missed by previous Executives. At the same time, however, we must recognise that there is a wider context. I do not want to labour this point today, but our current crisis in Northern Ireland is happening in the context of the UK public finances, which took a major hit towards the end of last year, and that has had a ripple effect throughout UK public spending, including the Northern Ireland block grant. We also, of course, have the Barnett squeeze, which I will discuss later.

Given all I have said, it is true that this year’s budget allocation will more or less be along the lines set out, regardless of whether an Executive were in place. It is, however, utterly disingenuous to say that the presence of an Executive is irrelevant in that regard. The governance gap fundamentally matters: without an Executive there is not a process for managing the pressures as efficiently and effectively as possible. That matters much more in the context of a crisis than when there is a surplus. It is like when a business is falling apart and running out of options and all the finance directors and the managing director have left their posts and others are trying to make do as the situation develops. The impact of cuts will be sharper without an Executive, because there cannot be early decision making on difficult decisions—I have made that point in relation to the civil service guidance. Some decisions cannot be taken because the governance structure is not sufficient, while other decisions will be deferred, and there will be a lack of strategic approach. Also, early intervention and prevention in particular are being targeted for cuts given the absence of a wider programme for government and a strategic framework. We will be storing up even greater problems in our public sector for subsequent years; the legacy of what is happening at present may be with us for a generation unless we swiftly get a handle on it.

We have long since lost the opportunity of a three-year multi-year budget, where we could have had planning from one year to the next and had some degree of stability and certainty in finances, allowing some long-term decision making. Crucially, with an Executive in place we would be in a much better place to go to the Treasury and ask for a financial package, and indeed make the case in relation to the Barnett squeeze. But in the context of a vacuum, all we will be looking at is cuts after cuts and decline and more decline, lost economic opportunities and damage to our public services.

In terms of our economy, this comes at a time when people want to do business with Northern Ireland. We have had the Good Friday agreement 25th anniversary, and I commend the Northern Ireland Office on its contribution to that, alongside many others, but people are now talking about a prosperity decade lying ahead, and the Government have welcomed that. We are having a trade conference in Northern Ireland in September, and Joe Kennedy III, the US economic envoy, has offered to bring a trade mission to Northern Ireland. All that is sitting there for us, but unless we have political stability and are investing in our skills, infrastructure and research and development, we are not going to be able to take advantage of those opportunities. They will not last indefinitely: there is a sweet spot at the moment and we must seize this opportunity. Instead we are seeing some of the key economic drivers being cut and undermined and, rather than taking opportunities, we are going in the opposite direction, and things are going to be getting even worse.

We must look to ways in which we can break this cycle, and all of this requires an Executive to be in place, but for us there are three ways in which this can be done. First, we must look for an invest-to-save transformation package for Northern Ireland. Most people recognise that we need to transform our public services to invest in our economy. There will be a lot of scepticism around this, and I have heard, for example, the comments of the hon. Member for North Dorset (Simon Hoare), Chair of the Northern Ireland Affairs Committee, about previous packages. We will have to learn the lessons from previous interventions and we will have to accept a lot of conditionality if that were to come. But unless we escape the cycle of cuts and the platform we are on, we are not going to transform our public services and invest in our economy. So we need to have that conversation. My party has put forward some proposals to the Government and I hear other Members talking in similar terms. We need to come together as political parties, ideally with a devolved Executive, to make this case. If that is to happen, it will need to be tied to a plan, which we have in place, including reform, that we stick to over multiple years.

The second area is inefficiency in our economy. That includes the cost of managing intervention in society and looking to other areas such as what we are doing on the health service. There are counterproductive, knee-jerk reactions to the budget crisis. For instance, the more we use agency workers, the more expensive that becomes, rather than investing in long-term staff, which is much more cost effective—that is counterproductive in terms of costs. Domiciliary care is necessary to take people out of hospital beds, which are more expensive, but, again, that will be sacrificed in a difficult budget setting—so, again, it is very counterproductive. In education, there is duplication between what happens in post-16 school settings and in further education. That is not sufficiently streamlined. We estimate that there is potentially £70 million in duplication there, which could be addressed with a proper 14-to-19 plan.

Finally, there is the Barnett squeeze issue. There must be an assessment in the work of the Fiscal Commission; much more work needs to be done on that, but we need an Executive to be batting for us with the Treasury to make that case for a different approach.

For me, the budget crisis is by far the biggest political issue facing Northern Ireland. With respect to my colleagues, it is a far bigger issue than the Windsor framework. I regard the Windsor framework as now being a done deal, and I welcome it: it is a progression from the original version of the protocol. There are issues to clarify on the margins, with more detailed guidance, but the fundamental structure is in place and we need to move on. To some, the issues being debated are relatively abstract and pale into insignificance compared with the impact on people’s everyday lives in terms of health and education.

Again, I say to Unionist colleagues: the best way to secure the Union is not through a narrower and narrower circle, based on defending an abstract notion of sovereignty; it is by making Northern Ireland work. The Union is based on the principle of consent. That lies in people seeing Northern Ireland working, and without an effective Executive and Assembly, they are getting the message that Northern Ireland is not working. From their perspective, that narrative needs to be turned around very quickly, rather than continuing the stand-off on the increasingly narrow ground of the Windsor framework.

15:20

[Jim Shannon (Strangford) (DUP)]

Thank you for calling me, Mr Deputy Speaker: as so often in this House— and there is nothing wrong with this, by the way—I am called last, but always very pleased to make a contribution to the debate.

My colleagues who have preceded me outlined the precarious situation we are in due to the punishing budget that has been set. The Minister may well say that that is a different debate—and perhaps rightly so—but there can be no other topic. Interim arrangements within which the Secretary of State will continue to act in the absence of the Assembly can be acceptable only if the Secretary of State intends to act, instead of sitting and watching foundational aspects of the country crumble, in an attempt to strongarm Unionists into accepting an incomplete and damaging framework.

We are happy—I state this very honestly and truthfully— to work with the Prime Minister, and with the Secretary of State and Government, to find a workable solution, but there must be a massive effort to find that solution, with engagement that understands the position of Unionism. I understand that the mechanisms in place need the assent of this House to continue. However, the question that Northern Ireland MPs must ask themselves today is whether we are willing to play a part in this distraction from the harm that Government are seeking to do to Northern Ireland and their people, who dare—that is us: we dare—to demand parity of esteem within this United Kingdom of Great Britain and Northern Ireland. Obviously, different political parties are making their plea to find a way forward, and we have different interpretations of that, but we are all trying to secure a way forward for everyone.

In preparing for today’s debate on the Bill, I met a number of playgroups in my constituency to discuss the interim arrangements. I want to flag the removal of the pathway fund for early years, due to the ridiculous funding cuts faced by the Department of Education under the budget, which is only one of the harms that I am concerned that this Bill will perpetrate. A constituent of mine emailed me in the last two weeks regarding the likelihood that the pathway fund project that her child attends will cease at the end of June 2023. This is a massive issue in my constituency. I have met a number of playgroups over the last week or 10 days, and they have all made similar requests. I quote this lady:

“The project offered by the local provider helps support the social and emotional, cognitive and physical development of my child, using a holistic approach, delivered in a safe and engaging environment. My child should not have to miss out on being able to access this service which provides them the opportunity to learn and develop because of the removal of the Pathway Fund in our local community.”

She continues:

“As parents we continue to be reminded that the early stages of a child’s life is the most important and we inevitably try our best to ensure our children have the best start in life. Opportunities to access and engage in projects that support, not only my child’s development but my own as a parent, are not readily available within this area. I am significantly worried about the negative impact the loss of the Pathway Fund will have on my child, our family and the local community.”

This debate on the interim arrangements Bill gives us the opportunity to highlight this issue. The same concern has been replicated in my constituency of Strangford by more than eight playgroups that have contacted me. Early years development, as outlined in the Prince of Wales’s groundbreaking report, is absolutely essential—there is not an MP in this House, and certainly not on the Opposition side of the Chamber, who does not recognise that. This situation will have a dire long-term effect on the children in my constituency, as well as throughout Northern Ireland.

I had three boys. They are young men now—35, 33 and 31—but when they were small, they attended the playgroup and nursery. I could see the engagement at an early stage that my boys had at that playgroup, which is similar to the one I have mentioned. It gave them social engagement and the chance to build friendships. They kept those friends from nursery and the playgroup the whole way through to primary school and secondary school, and today, in adult life, they still have those friends.

I have often said that Northern Ireland has been used as Europe’s political football to score points. When I look at my children’s education, I can see how vital it is, and yet children’s education will potentially be reduced. The Secretary of State for Northern Ireland will have received my meeting requests, which I sent to him just last week, to discuss this very issue. Following that action, let me say that the education and future of our children is not, and can never be considered—I use these words deliberately—as cannon fodder. Continuity funding is what we are requesting, and it needs to be allocated. That is my plea today on behalf of parents throughout my constituency and across Northern Ireland, including in constituencies whose MPs do not even take their seats here—we are here to advocate for them as well. This interim arrangements Bill allows for things to continue. The view of Unionists on the ground in Northern Ireland who I have spoken to is that they are to be punished by the Government here.

The hon. Member for Foyle (Colum Eastwood), who is not here—I am sure he is not too far away—referred to the Republic of Ireland as the place we should be looking towards. I will give the House a couple of wee facts about that. In the Republic of Ireland—which is where he seemed to indicate he wishes to be—anyone who wants an appointment with their GP has to pay €45 to €60 each time. If they have to go to accident and emergency, they pay €100 every time. Anyone 16 or over who has to stay overnight in the hospital pays €80, while the cost of living in the Republic of Ireland is 21% higher than in the United Kingdom. And anyone who wants a Big Mac from McDonald’s—I am not a fan; I do not buy them—will have to pay £2 more in the Republic of Ireland than they will in Northern Ireland or across the United Kingdom. Those are just examples of that paradise that the hon. Gentleman refers to—which is not a paradise at all—so let us keep things in perspective when we look at costs.

I spent last weekend, as I know my colleagues also did, at community events and meetings with constituents. The huge majority, reflecting that opinion, urged us to work for a solution: to get back to Stormont while standing firm for Unionism. That is the key, and it is disappointing that, while we are pushing for a solution that recognises the position of Unionism where it is, we are unfortunately not getting the reply from Government that we would wish for. That is the challenge for the United Kingdom Government and the Minister of State, and that what we are attempting to do. I humbly ask my Government to work with us and not against us to find the solution to the difficulties for our businesses and to legislate for our constitutional position, so that we are not at the whim of Government and whatever position they have taken that most expediently deals with the Northern Ireland issue.

It is important to put on record where we are with the Windsor framework. One of the reasons why, at this moment in time, my party has not accepted the Windsor framework is that we have sought legal opinion on whether it is worth the paper it is written on. The legal opinion from one law firm is that it is not. The Loyalist Communities Council, the Orange Order and the Unionist Forum each sought a legal opinion from three different law firms, and every response was the same. The Stormont brake is not worth the paper it is written on. The European Research Group, of which the Minister was once the leader, also sought a legal opinion, and the response it received is that the Windsor framework is not worth the paper it is written on. I have great respect for the Minister, but what a disappointment it is to find that his opinion today is so different from that which he had when a member of the ERG.

I understand the necessity for this Bill, but the Government have to take a giant step to embrace Unionism and its viewpoint. Northern Ireland Unionists are being treated abysmally.

[Sammy Wilson]

It is not just a case of asking the Government to embrace Unionism. This is about the Government standing up for the country they claim to govern, because through the protocol and the Windsor framework they have handed responsibility for lawmaking to a body outside the United Kingdom.

[Jim Shannon]

Those words are salient. I am sure the Minister is taking note, and hopefully he will give a positive reply. My right hon. Friend is right. We are clearly second-class citizens.

This punishing Bill hurts not only Unionists but everyone in Northern Ireland. If I am to endorse the Bill, which allows the Secretary of State to continue wielding the necessary powers, I ask for an assurance that the extension will bring about a signal change, which the Government are currently not doing. As my right hon. Friend said, this Bill causes great concern even to the staunchest British heart in Northern Ireland. What are we clinging to? That is the question he asked.

I remind myself of those who shed their blood to protect Northern Ireland and the United Kingdom, including many relatives of mine. Every year we celebrate the anniversary of the Ballydugan four, who were murdered by the IRA 33 years ago—no one was held accountable. My cousin Kenneth was murdered by the IRA—no one was held accountable. Billy Montgomery’s son Stuart was murdered by the IRA in Pomeroy—no one was held accountable.

All these people gave their life, and their family’s lives, for this great United Kingdom of Great Britain and Northern Ireland. In their name and memory I once again ask that we are treated justly and fairly, because we have shed our blood and served in uniform for this country. I served in the Ulster Defence Regiment and the Territorial Army, and my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson) served in the Ulster Defence Regiment too. We are not afraid of serving in uniform because it is the right thing to do. As British people, we think we should do that, and many others do too.

When this extension is granted once again, as I am sure it will be because of the Government’s strength, I urge the Government and the Minister to take this fresh opportunity to engage with constituents and work for the benefit of the whole Province, both those of a Unionist persuasion, as we are, and those of a nationalist persuasion. I love this country, this great United Kingdom of Great Britain and Northern Ireland, and I say we are better together, but that means everyone being equal, and at this moment we are not.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

On a point of order, Mr Deputy Speaker. Have you been notified of any change to the business, either today or tomorrow, in the light of the announcements in The Daily Telegraph—I believe a written ministerial statement has also been published—about the Government’s proposed fundamental changes to the Retained EU Law (Revocation and Reform) Bill? We have debated the Bill at great length in this place, and I understand from The Daily Telegraph that the Business Secretary is proposing changes to regulatory reform, in addition to deleting certain regulations, but that has not been notified to us.

I know you will be as concerned as I am about parliamentary scrutiny of any substantial changes, and I am sure the Business Secretary would not wish to evade that scrutiny in taking back control to this place so that we are able to understand what the Government intend. Have you been informed of whether we, as parliamentarians, might have an opportunity to scrutinise any of these proposals?

[Mr Deputy Speaker (Sir Roger Gale)]

The straight answer is no. Mr Speaker has repeatedly made it plain that he expects information to be relayed to the House before it is announced to the media. However, from what the hon. Lady has said, it sounds as though a written ministerial statement has been made. There has been no indication to the Chair at this stage of any change to the business. That may, of course, change tomorrow.

15:34

[Tonia Antoniazzi (Gower) (Lab)]

I feel an enormous sense of déjà vu as I stand here once again to speak about Northern Ireland. As was mentioned by my hon. Friend the Member for Hove (Peter Kyle), the shadow Secretary of State, we will not be opposing this Bill today. It is vital that, in the absence of an Executive, public services continue to function to support the people of Northern Ireland.

Like other Members across the House, I want to pay tribute to the civil servants who have spent more than a year working in these testing circumstances; it is not ideal, but it has been necessary. The removal of the six-month limit of this legislation will at least allow for continuity of governance as we hopefully move closer to the restoration of power sharing. The fact is, however, that these civil servants are confined to “business as usual” and are unable to take any new or bold decisions. Such decisions would be at the feet of Ministers and subject to scrutiny by politicians elected by the people of Northern Ireland to represent their interests. Without a functioning Executive, key levels of scrutiny from Committees are missing from those big decisions.

Public services in Northern Ireland are under severe pressure, with the impact of that felt throughout all of Northern Irish society. Just last week, for example, it was reported that since 2015 about 10,000 children have not been fully inoculated, with workforce shortages and delivery capacity in GP practices being given as the reasons for that. Deep-rooted issues such as that require proactive solutions, which should rightly be made by elected officials.

Furthermore, as was highlighted in Northern Ireland questions earlier today, the significant cuts included in the Northern Ireland budget are of great concern. I am grateful that the Secretary of State has included measures in this Bill that will allow for departmental accounts to be laid before Parliament for some scrutiny, but ultimately such scrutiny would be best applied by those on the ground in Stormont, who are answerable to the people of Northern Ireland. The Northern Ireland (Executive Formation etc) Act 2022 allowed the Secretary of State more time before calling an election in Northern Ireland. I would welcome hearing what steps he plans to take during this time to ensure that by the time of the next election, a functioning Executive will stay in place.

Despite the introduction of the Windsor framework, this deadlock has yet to shift and the people of Northern Ireland are suffering the most negative impacts of that. It is clear that there is a gap between the Government and the Unionists, which must be bridged in order for progress to be made. Dialogue between the Government, the European Union and the Unionist parties must continue. Of course, any way forward must take into account the nationalist communities, such is the nature of power sharing.

The recent celebrations for the 25th anniversary of the Good Friday agreement should highlight how important it is that we prioritise the restoration of power sharing and of a functioning Executive. I encourage the Secretary of State and the Minister to do all they can to try to push matters forward. I also ask that they work with the Prime Minister to ensure that he shows that he is fully committed to the restoration of power sharing. We cannot afford to spend another year debating issues that the devolved Administration would usually cover, while public services decline further and the cost of living crisis deepens. This Bill ensures that there is enough governance for now, but I sincerely hope it will not be needed for much longer.

15:34

[Mr Baker]

With the leave of the House, I rise to close the debate, and I thank all those who have participated in it. Once again, we have seen that on the main substance of the Bill there is wide agreement. There is agreement that it is necessary but regrettable, as we continue to seek to avoid the governance gap.

I will now seek to respond to as many points as I can. The shadow Secretary of State raised the issue of some difficult decisions being too much for officials. We recognise that the Bill is an interim arrangement. It clarifies the powers that civil servants need in order to maintain public services in the absence of an Executive. We recognise that civil servants will be uncomfortable taking some of the difficult decisions that are needed. Indeed, it is possible that they will feel unable to take them, but that, of course, is why we need the Executive back. I am aware that we are sounding like a stuck record, but getting the Executive back is what we are seeking to do.

Before I go any further, I will just say to the hon. Member for Gower (Tonia Antoniazzi) that I know the Prime Minister would want me to say that he is fully committed to the return of devolution, but that is a point to which I shall return later.

My hon. Friend the Member for North Dorset (Simon Hoare), who chairs the Northern Ireland Affairs Committee, asked about advice. He raised a great point and I am happy to clarify that it is our intention that the options developed for budget sustainability will be shared with the new Executive, and we hope that the new Executive will act swiftly to implement such measures. Further to various points that he made in relation to direct rule, I am absolutely clear that the Bill does not give us any powers to implement measures. I hope that is helpful to my hon. Friend—it is just the powers of the Secretary of State to direct that there should be advice and consultations, which would fall away.

The hon. Member for Gordon (Richard Thomson), who speaks for the SNP, made a speech to which I listened very carefully. I am happy to say that, on this occasion, I did not spot any areas where I disagreed with him, but I shall have to revisit Hansard. I am grateful to him for the manner in which he has approached this debate, and I can assure him that it made a pleasant change.

A number of Members have talked about the budget. I know that if the moment comes that we are forced to bring forward a budget Bill, we will no doubt touch on all of the issues in detail, but I hope the House will forgive me if I do not go into any further detail on that this afternoon. What I will say is that we will have to bring forward a Bill if there is not an Executive, which I and the Secretary of State will regret should that be necessary.

On the issue of funding, the Government have, for many years, recognised the unique challenges that Northern Ireland faces. We have provided about £7 billion in additional funding to Northern Ireland since 2014, on top of the Barnett-based block grant and the Northern Ireland budget. Per person, that is around 20% higher than the equivalent UK Government spending in the rest of the UK. I am well aware of the Fiscal Council’s report, which suggests that, on a needs basis, it should be even higher, but I have to say that 20% extra would go a long way in Wycombe—the streets are not all paved with gold there.

[Gavin Robinson]

Will the Minister give way?

[Mr Baker]

I will, if the hon. Gentleman will let me finish my point.

We do need the Executive back, and not because we believe all the problems will go away—far from it—but because we need the problems to be addressed by Northern Ireland Executive Ministers. I am very clear that the road ahead will be long and hard for those Ministers.

[Gavin Robinson]

Does the Minister accept that, within the next two years, the upward trajectory for the budget in England is 6%, but the trajectory in Northern Ireland is 3.6%? Per household, that equates to £2,000 less in Northern Ireland than for his constituents in Wycombe.

[Mr Baker]

I am confident that the hon. Gentleman has done his homework, but I hope he will forgive me for saying that I will not confirm the figures when I do not have them immediately in front of me in the terms that he has put them. As I mentioned in oral questions earlier today, for all of us in this House, and indeed in all the devolved institutions, we do need to engage with the fiscal projections of the Office for Budget Responsibility. There is no doubt in my mind that, for the rest of our political careers and far beyond, there will be a problem with meeting the many demands of age-related spending. All of us will need to rise to that challenge, as it will need, in particular, healthcare reform. The Bengoa report is long since overdue in implementation. I also talked earlier about healthcare.

A total of £600,000 a day is spent maintaining a divided education system. It cannot be right just on a cost basis, never mind all of the social divisions that it leads to. That conversation needs to be had. I have made that position clear. The Government’s position is very clear: we are in favour of integrated education. I know that there will be a spectrum of views on this, but when it comes to funding, we are all clear that the problems that are faced will endure. We are clear that there will need to be a conversation about the Barnett formula—I am aware of the Barnett squeeze—but none of these things will be anything like plausible to solve, in a way that will be acceptable to all sections of the community, until the Executive is restored.

[Sammy Wilson]

I ask the Minister, whose party talks all the time in this House about choice in education, why he wishes to shoehorn education in Northern Ireland into one particular system. Does he not accept that, in Northern Ireland, there are those who choose to have church education, those who choose to have grammar school education, and those who want to have integrated schools? Does he not accept that the same choice that he would have for his constituents should be available to people in Northern Ireland?

[Mr Baker]

I absolutely do. Since the right hon. Gentleman mentions my constituents, I am happy to tell him that we are a grammar system in Wycombe and that the Highcrest Academy has built what it calls an “all ability” school there, which I regard as a comprehensive. Strangely enough, I helped it against the forces of the hard left, which were trying to avoid building an all ability school under the grammar system, and I rather approve of its ability to bring back choice for parents.

We have a co-operative school in my constituency, which I support, and a Catholic school—by the way, Muslim parents, and there are many in Wycombe, choose freely to send their children to the Catholic school. I am all in favour of school choice for my constituents and for the right hon. Gentleman’s constituents, but the question is at what cost. That question is one that he and his colleague Members of the Legislative Assembly need to answer in a re-formed Executive.

However, when I go over to Northern Ireland as a Minister and meet young people who say to me, “I was 16 before I met my first Catholic”, or “I was 18 before I met my first Unionist”, there is so much wrong with that. I find myself amazed that that is even a conversation in the 21st century. Yes to choice, but at what cost?

[Stephen Farry]

I welcome what the Minister says in relation to integrated schools, but I have two points for him. First, I want to reinforce that there is significant demand for integrated schools right across the community in Northern Ireland. Secondly, and most relevant to this debate, does he recognise that moving from a split system to more of a shared, integrated system involves some degree of investment? The problem is that the Department of Education cannot do that at present, in a context of declining budgets where it is trying to protect what it has.

[Mr Baker]

The hon. Gentleman’s point is very well made; he knows that I hear it now and have heard it in the past.

We are clear that finances in Northern Ireland are not sustainable, but we are also clear that it is for an Executive to act on it. In the absence of an Executive, the Government through this Bill will ensure that time is not lost in starting to think about and work on that. We will commission advice from the Northern Ireland civil service on the options for budget sustainability in Northern Ireland, and we are happy to engage with any Member of the House in more detail about what we commission.

I heard what the hon. Member for Foyle (Colum Eastwood) said, and I am particularly interested in engaging with him and the universities. I also recognise the point he makes about places in Derry. He is right that Northern Ireland will never be a laissez-faire paradise, and it will be necessary for policy to embrace the point he makes about rebalancing towards Derry/Londonderry.

We are happy to engage with hon. Members, although I do not wish to pre-empt any particular piece of advice we might commission. We are absolutely clear that it is for locally accountable leadership to take these difficult decisions, but we are clear that those decisions will endure.

Questions were asked about future strategy, but the Government are clear about our strategy for Northern Ireland: devolution, moving forward with the Windsor framework and making the most of our new, constructive relationship with the EU and Ireland to improve that framework in a collaborative way when problems arise, as they inevitably will. Since this point came up earlier, we will then also work towards the review of the trade and co-operation agreement and try to improve our overall position.

While we are doing that—because, as has been said, we can do more than one thing at once—we will do everything we can to cheerlead for Northern Ireland. It is an amazing place, loved by people all over the world and full of talented people with an incredible capacity for innovation and development. They deserve investment, and I for one want to see that they get it.

Finally, I join in the lament about the gap that has opened up between the Government and Unionists. Once again, this has been a painful debate for me to listen to. Sometimes hon. Friends in the DUP have directed their remarks at me, but I would say to them that I do not wish to be hard on them. I must say to my right hon. Friend the Member for East Antrim (Sammy Wilson) that I do not regret having given voice to people in Fermanagh who said, “Get on with it.”. That is what people want in Northern Ireland. There was no chanting—it was just a cry of “Get on with it”, and I am not sorry that I gave voice to that sentiment.

Hon. Members will have noticed that I have tried to be as emollient as possible in recent days—I really have. I have put on record that this is a difficult compromise for me too. I know that it is an even more difficult compromise for them to go back into the Executive with the Windsor framework, but I just say again that we have to choose from available futures.

Everybody here knows that it is not enough just to say what you want; you have to know how you will get it. I am clear, as we go forward with the Bill, that we do not want to be here again with Bills of this nature. We want to celebrate a return of devolved government, and yes, by all means, continue a conversation about the detail of the Windsor framework and what we can do to support the Union and Unionism. But, my goodness, I want us to get to the point, beyond this Bill, where we are celebrating the return of devolved government to solve the real problems that we face, and celebrating a Northern Ireland that has a much better and brighter future.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Northern Ireland (Interim Arrangements) Bill

Committee of the whole House & 3rd reading
Wednesday 10th May 2023 Commons Chamber

Considered in Committee (Order, this day)

[Dame Rosie Winterton in the Chair]

Clause 1

Departmental Functions

15:51

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I remind Members that in Committee, they should not address the Chair as “Deputy Speaker”. Please use our names. Madam Chair, Chair, and Madam Chairman or Mr Chairman are also acceptable.

[Claire Hanna]

I beg to move amendment 6, page 1, line 12, leave out “when an Executive is formed” and insert—

“when the Executive Committee of the Northern Ireland Assembly has completed a formal meeting at which substantive business has been transacted”.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Clause stand part.

Amendment 5, in clause 2, page 2, line 15, at end insert—

“such as providing advice in relation to the Northern Ireland Fiscal Council’s 2023 Report, Updated estimate of the relative need for public spending in Northern Ireland, and the precedent arising from the December 2016 Agreement between the Welsh Government and the United Kingdom Government on the Welsh Government’s fiscal framework”.

Amendment 7, page 2, line 21, leave out “may” and insert “must”.

Amendment 8, page 2, line 21, at end, leave out paragraph (a) and insert—

“(aa) consulting the Equality Commission, the Northern Ireland Human Rights Commission and the Northern Ireland Fiscal Council;

(ab) who else is to be consulted;”.

Amendment 9, page 2, line 24, leave out from “consultation” to end of line 27.

Amendment 2, page 2, line 28, at end insert—

“(4A) The Secretary of State must direct a Northern Ireland department to commission a report to provide an assessment of expenditure costs associated with communal divisions for the purpose of developing options for improving the sustainability of public finances in Northern Ireland.”

This amendment would provide a report to make an updated assessment of the financial costs associated with a divided society and how they could be redirected to improve financial sustainability.

Amendment 3, page 2, line 28, at end insert—

“(4A) The Secretary of State must engage—

(a) with Northern Ireland departments to explore options to transform public services and the economy in order to identify options for improving the sustainability of public finances in Northern Ireland;

(b) with the Treasury on options to provide an invest to save fund to support the transformation and sustainability of public finances in Northern Ireland.”

This amendment would direct the Secretary of State to explore an invest-to-save transformation fund.

Amendment 4, page 2, line 28, at end insert—

“(4A) The Secretary of State must engage with Northern Ireland departments and the Northern Ireland Fiscal Council to produce a needs-based assessment of funding compared to the Barnett formula in order to address the financial sustainability of Northern Ireland, specifically considering changes in relative need arising from differences in population characteristics and socio-economic conditions between Northern Ireland and England, to prevent the funding premium from falling below relative need.”

This amendment would direct the Secretary of State to explore the prospect for a needs-based spending floor and percentage uplift in Barnett consequentials to reflect relative need in Northern Ireland.

Clause 2 stand part.

Amendment 11, in clause 3, page 3, line 20, after “2022” insert—

“during a period when the Assembly is not functioning”.

This amendment would limit the exemption from Assembly scrutiny of directions under this Bill to only periods when the Assembly is not functioning, rather than throughout the period when there is no Executive.

Clauses 3 to 7 stand part.

New clause 2—Assembly power to exercise accountability over section 5A directions—

“(1) In a period where the Assembly is functioning but there is still no Executive, nothing in this Act will prevent a committee so mandated by the Assembly from seeking or taking evidence from relevant Northern Ireland departments or consultees named in any direction by the Secretary of State under section 5A of the Northern Ireland (Executive Formation etc) Act 2022 in respect of options which might be considered or developed on foot of such a direction.

(2) In such a period as described in subsection (1), a committee report adopted after a vote of the Assembly shall duly inform relevant departments and the Secretary of State in respect of relevant stated options for raising more public revenue in Northern Ireland or otherwise improving the sustainability of public finances in Northern Ireland.”

[Claire Hanna]

I rise to speak to amendment 6 in my name and that of my hon. Friend the Member for Foyle (Colum Eastwood), and to make brief comments on a couple of other amendments.

We absolutely echo and share the frustrations of others that we are doing yet another of these Bills in this place. I am struggling to think of a single such Bill—certainly in the three and a half years that we have been here—that was neither a cause nor an effect of Stormont dysfunction, which occupies rather too much time here and limits our potential. We understand the need for interim decision making, but the Bill risks going too far in bypassing Assembly scrutiny. Our amendments aim to address that by guarding against the potential use of graduated responses or the other fairly unedifying stunts that we have seen when the Assembly is being used as a political tool or weapon, and against the cynical use of such Bills to do things that damage public services in the name of reform, as a way to avoid responsibility and scrutiny.

The DUP’s new clause 1(3) instances the possibility of the Assembly functioning in some way alongside these new powers in the absence of an Executive. I want to be absolutely clear: there is, as others have said, no alternative in the here and now to devolution under the Good Friday institutions. People are ready to suspend their disbelief one more time and go back in to make that work, but a graduated response allowing these powers to be deployed to do all the grisly stuff through indirect rule, and turning it into some soap opera where everybody is hopping up and down and opposing the changes, will not be appropriate.

We cannot set up civil servants to instigate and drive controversial issues only to get them out of the way before everyone goes back in. We absolutely need reform in public services, but we need it to be done with scrutiny, not just as a mask for austerity. It needs to be done in a way that builds public trust so that people say, “Yes, you may lose service A, but you will gain service B and C”. Amendment 6 would support and evidence some of those necessary reforms by designing in a role for the Fiscal Council—a body that we have been hugely supportive of—as well as for the Human Rights Commission and the Equality Commissions as consultees. Those bodies are truly creatures of the Good Friday agreement. They are there for a reason and they should have a role in this as well, to give them a locus and so that, as I say, it is not used in a cynical way.

I want to address briefly the contradictions in the messaging we are getting about sustainable finances. There is, rightly, a serious public conversation going on about the sustainability of Stormont’s finances and structures. It is absolutely right to tackle the lack of responsibility-taking in our region, which in its century of existence has never enjoyed good governance. It is appropriate that we do that in a genuinely transformative way.

I also want to address the contradiction in what has been said about sustainable services in the light of the punishing and severe budget we face. What is more sustainable to invest in than children and young people, their health, education, future and resilience? The proposed cuts to the extended schools programme, Bright Start mental health support, pathway funds, education authority schools and youth services—alongside the loss of European social funding for Women’s Centre, which provides childcare and many other forms of family support—are the furthest thing from being sustainable. St Malachy’s youth club in the market area of my constituency does a mind-blowing array of interventions with young people, including homework support, citizenship, fitness, nutrition and lawfulness, making them good citizens and getting them ready for the world and the jobs out there. What is sustainable about its finances being cut by over a third, which will undermine all of its work with those young people? We have put off hard decisions for too long, but it is really important that this Bill is not used as a mask for the same austerity that we have had for over a decade, which does not change outcomes and limits the potential of our young people and of our economy, because they are its future.

I want to address a couple of other amendments. Amendment 1 is a vital intervention by the hon. Member for Walthamstow (Stella Creasy), who has, crucially, been vigilant on the ticking timebomb of the Retained EU Law (Revocation and Reform) Bill, which has the potential not only to deepen and widen the implications of any sea border for goods and for rights, but to dramatically undermine economic sectors and actors on this island. We have absolutely no interest in doing that, so I hope that the reports that there has been change of direction on that very damaging Bill—like others, we wish to hear about those reports in the appropriate place and to have the opportunity to scrutinise them—are correct.

Finally, I support amendment 4, tabled by the hon. Member for North Down (Stephen Farry), which is prudent and sensible in addressing the cost of division. It is time to get on. There is endemic division in our schools and communities. It is time to get past pointing at it and to start the process of reform, transformation and giving people a feasible way to live shared and integrated lives.

[Gavin Robinson]

I rise to speak to amendment 5, tabled by my party leader, my right hon. Friend the Member for Lagan Valley (Sir Jeffrey M. Donaldson), our Chief Whip, my right hon. Friend the Member for East Antrim (Sammy Wilson), and other colleagues. I hope that the Minister of State has considered it positively, and I look forward to hearing that the Secretary of State agrees with it. He will know that it does not any way undermine the substance of his Bill, but that it will be hugely important in assisting him in gathering information as part of his consultation exercise, as we navigate and chart our course through the myriad issues discussed this afternoon relating to dangers to public finances.

I do not think that anyone in the Chamber will disagree that I have probably said enough. The long and short of my aspiration is that the Minister of State, given all the pleasant support he has received from us to date, will look favourably on amendment 5.

[Stephen Farry]

I cannot promise to be quite as brief as my colleague, the hon. Member for Belfast East (Gavin Robinson), but I will try. Essentially, I want to speak to those amendments that stand in my name: amendments 2, 3 and 4, which are all focused on the issue of financial sustainability. We recognise the line that the Government have put into the Bill, and I seek to encourage the Minister to take it forward in a substantive way.

16:00

We are making three suggestions in that regard, the most significant of which relates to a potential financial package for Northern Ireland. Such a package needs to be on an invest-to-save basis, and directly linked to a very select number of areas: health, education, the economy, skills, infrastructure, and climate change mitigation would be our proposals in that regard. I acknowledge that we have to learn lessons from previous interventions from the Government through financial packages, and that the package will have to come with conditions. It will need to be linked to a very clear plan from an Executive about how reform will be taken forward—it would need to be over several years—but we do need to have transformation in Northern Ireland, as many people have acknowledged in this debate. Of course, before we can do transformation, we need to have a stabilisation of the finances, and we cannot do any of that in the context of a burning platform where we are in a spiral of cut after cut and decline after decline.

We have the Bengoa report as the template for health transformation. It will take investment to make it happen, but through investment we will have much better outcomes for the people of Northern Ireland, and it will be on a more cost-effective basis. There is a real incentive for the Government to buy into this; if we do not invest, we will see waiting lists in Northern Ireland getting even longer. I would make the point that our waiting lists are already the longest in the UK, not by a small margin but by a very significant gap.

The same applies to education. We have a massive problem of educational under-attainment in Northern Ireland. That is a major drag on our economy, as well as a blight on some people’s long-term economic and life opportunities, and the education funding gap between Great Britain and Northern Ireland is widening ever further. The Minister’s colleague, the hon. Member for Worcester (Mr Walker)—who was one of his predecessors in the Northern Ireland Office, and currently chairs the Education Committee—has particularly reinforced that point about the growing gap in funding.

We have to grow our economy, which means investment in skills, and also investing in the right skills. The Government themselves are being very clear about the need to tackle Northern Ireland’s disproportionate level of economic inactivity—again, as part of the wider mission across the UK. If we can address those issues, the productivity gap between Northern Ireland and Great Britain will narrow; if we do not, it will widen, with all the attendant consequences that will flow from that. We have to take full advantage of the opportunities we have, including dual market access, the potential trade mission, and the trade conference that the Government are doing. I understand the reluctance and scepticism around this issue, but frankly, I do not see any alternative if we are to break that vicious cycle.

I would use the analogy of a business that is struggling, where the business model is out of date and is not functioning. One of two things will happen: the business will die, or it will restructure. Often, if a business wants to restructure, it has to seek external finance to do so, but again, that finance will come with conditions around how that restructuring is taken forward. We have proposals in with the Government, and we welcome further engagement in that regard. I appreciate that such engagement is probably best done on a structured basis with the Northern Ireland parties; it should be done as quickly as possible, but there does need to be some sort of structure to that.

Amendment 2 relates to the costs of a divided society, which have already been mentioned by my colleague, the hon. Member for Belfast South (Claire Hanna). Our amendment seeks the commissioning of a revised, updated report from a Northern Ireland Department—importantly, as a prelude to action finally being taken in this area. There are some very significant costs arising from duplication and, indeed, distortion in Northern Ireland’s public expenditure profile, which is linked to the legacy of division and violence, and ongoing patterns in how services are provided. It is apparent in four particular ways. One is direct costs. For example, our policing costs and public order costs are higher than the rest of the UK. Secondly, we have some degree of parallel provision, done either implicitly or in some cases explicitly by Government, for different parts of the community. It is not just at Assembly level; it happens with councils, too. Education would be the most clear-cut example in that regard, but it is far from the only one.

Thirdly, there are contextual issues, such as the environment in which public agencies are operating. A clear example is the provision of housing in Northern Ireland, where trying to navigate around patterns of segregation makes it slightly more difficult—perhaps much more difficult—to provide new social housing. There are issues of territoriality of land for redevelopment. We need to get past that if we are to deliver housing more efficiently and effectively. Like elsewhere, there are real pressures on housing for people. Finally, there are opportunity costs from division and lack of political stability for tourism, inward investment and wider economic opportunities.

I reinforce that there have been a series of reports in this area already, notably by Deloitte in 2007 and the Ulster University Economic Policy Centre in 2016. We have had some recent commentary from Ulster University’s “Transforming Education” project, but the work is fundamentally now seven years out of date, and it needs to be re-done if we are to use it as a genuine platform to take forward further reform and transformation.

Finally, I reiterate the point that a number of people have made today about the need for a reassessment of the Barnett formula and how it works for Northern Ireland, with potentially a move to a much more needs-based assessment. The estimate for the shortfall in our finances, if I have my figures are correct, was £362 million for the outgoing financial year. That will rise to £485 million in this financial year. That is a significant element of the differential and the pressures that Northern Ireland Departments are facing.

I will not seek to push any of the amendments to a vote today, but I certainly would like to use this platform to encourage the Government to take seriously those three particular angles around financial sustainability. Work can be done now in preparing for a return to devolution in the near future, but time is not on our side if we are to make the best use of the scarce resources available to us.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Thank you, Madam Chair. [Interruption.] Apologies, Dame Rosie, it is hard to remember all the different protocols, but I hope I can make up for it in making a short contribution. I put on record a number of concerns. I recognise that amendment 1, which we tabled to address the concerns directly, has not been selected, so let me speak in support of amendments 6 and 8 from my colleagues, as well as new clause 2. I think they all get at the same point, which is why it matters to have scrutiny.

Members in this Chamber who know of my interests in human rights in Northern Ireland might expect me to come at this issue from the question of what is happening with the delivery of abortion services in Northern Ireland. For several years now, that has been done by the Government, rather than the devolved Assembly overseeing it, because of the challenges within Northern Ireland. That powerfully makes the case, for example, for using the Fiscal Council or consulting the Northern Ireland Human Rights Commission, which has been a diligent and doughty defender of the rights of women in Northern Ireland to equal access to abortion.

However, I want to talk about the points that my amendment raised about the use by this Government of the powers in the Retained EU Law (Revocation and Reform) Bill, knowing that right now something very different is happening to that legislation, which nobody is clear about, as the Government are yet again hiding from scrutiny on it. That is not a new concern when it comes to Northern Ireland, because for months now we have been asking the Government to come clean about how they intend to use the powers in the Retained EU Law (Revocation and Reform) Bill in Northern Ireland. So far as I am aware, with today’s announcement there is no change to how that Bill approaches devolution, so let us be clear that it gives the Secretary of State, in proxy of the devolved Administration, the power to decide when the sunset clause that was in the legislation, which I think has now been removed, would kick in, and to replace, restate or revoke legislation. Those are serious powers over how thousands of regulations would be interpreted in Northern Ireland. In the absence of a sitting Assembly, those powers are falling to this Government and a Minister who cannot even be bothered to respect the issue, listen or engage with what is being said. That, again, tells us something about how seriously they take these powers. I digress, but I am sure that whatever I am saying about how he treats the employment rights of people in Northern Ireland is not as important as what he is talking to his Parliamentary Private Secretary about.

As ever with Northern Ireland and devolution, these are complicated issues. They are complicated in two different ways—first in the EU regulations that may or may not be at stake, and also in north-south co-operation, and the restrictions and requirements that are made in order to have convergence. Let me say a little, if I can, to resolve why those complications may happen, and therefore why amendments on the role of the Fiscal Council or the Human Rights Commission—or, indeed, about the ability to take evidence on, frankly, what the Government are doing on behalf of the people of Northern Ireland on this issue—matter.

This issue covers devolved competencies of things such as employment skills, pensions and child support, and environmental laws such as planning and equal opportunities. Northern Ireland Members will no doubt be as shocked as I was to discover that this Government were planning to delete, without any public consultation, people’s right to a basic protection that originally came through EU regulation, which was that if their company went bust, they would be entitled to at least 50% of their pension pot. Rules on pensions are devolved competencies, but the Government announced in the Retained EU Law (Revocation and Reform) Bill Committee that they will revoke at the end of this year the EU regulation holding businesses to account which makes sure that people have at least some basic protection. I do not know the status of that now, but it is a good example of the sort of legislation we would be talking about.

Obviously, Members who have huge experience of devolution would point out to me that when the UK left the European Union, the UK and the EU agreed the protocol—if I can dare to mention that word—which talked about maintaining the necessary conditions for north-south co-operation and protected the 1998 Good Friday agreement. In doing so, Northern Ireland stayed dynamically aligned over many of these areas of legislation, and the Minister may therefore say that this is not an issue to be concerned about and that it does not need this level of scrutiny, because these issues are covered by the protocol. However, Queen’s University Belfast is very clear that about 300 areas of EU regulation are not covered by the protocol, and therefore would be automatically deleted by the Retained EU Law (Revocation and Reform) Bill. They would cover many of these issues, and there is also the issue about direct effect cases, which is where the judgment about protecting people’s pension pot comes from.

The 142 areas of co-operation identified in 2017 as being underpinned by EU policy frameworks and north-south co-operation are the areas up for grabs. Indeed, there is ongoing co-operation in 61 areas. Let me give some examples of the sorts of EU laws that we would be talking about. There is the single-use plastics directive, the regulation on clinical trials of medicinal products for human use, directives about medicines, directives about organisation in agricultural markets—I know that is a deep concern for many of my colleagues representing constituencies in Northern Ireland—and EU Acts on the regulation of energy and electricity markets. This is not small fry when we add it all together.

The point of the amendment I tabled and of the questions we have been asking the Government is how, in the absence of Stormont to scrutinise, these devolved competencies may be used, given the potential impact of changing these regulations in undermining the Windsor framework and therefore changing the alignment on which many of these deals have been done. Those are not my words, but concerns raised by the European Union. The fact is that the Government have consistently tried to avoid even answering the question. They have suggested that the Stormont brake would apply, but it does not, because this is about existing legislation—not new legislation, but existing legislation. People currently have the right to have their pension pot protected, but we still do not know quite what will happen to that pension pot protection at the end of this year for anybody in the United Kingdom. However, certainly in Northern Ireland, where the competency of the devolved authority would be expected to be a part of it, the lack of clarity about how the Government are proceeding on this is deeply troubling, especially when we are entering into another process of having to bring in these interim arrangements, so there is even less scrutiny of how they are using those powers.

I have asked through freedom of information requests for information about the kinds of meetings the Government are having, because they have told us in answer to a written question:

“UK Government Officials have been proactively engaging with their counterparts in the Northern Ireland Civil Service on the progress of the Bill”.

What that means in layman’s terms is that some decisions must have been made about how to use those competencies, and we know that these interim arrangements will exactly cover the period during which those decisions are being made. Now, add into the chaos the announcement that the Retained EU Law (Revocation and Reform) Bill will be changed and we have a recipe for people in Northern Ireland with nobody having an eye on the ball when it comes to their basic rights, because the Government will not be clear or be scrutinised about those conversations and which devolved competences they may use to amend those rights.

16:15

I hope that the Minister can understand why many of us have concerns about the Retained EU Law (Revocation and Reform) Bill—not least about it destabilising the Windsor agreement by removing those levels of alignment—and think that the principle of accountability and scrutiny matters. For many years, he told us that Brexit was about taking back control, but time and again we have seen that the Government do not mean taking back control to democratic institutions; they do not mean taking back control to Parliament. After all, as far as I am aware, nothing in the new retained EU law Bill proposals would change that fundamental transfer of power from the Executive back to Parliament. Therefore, even if the sunset clause has gone, those powers would still be for the UK Government, not for the UK Parliament; the UK Parliament where Northern Ireland Members would be part of conversations and could even have a say on statutory instruments and various regulations—what little say there would be. This is solely about Ministers using their ministerial powers on behalf of the people of Northern Ireland, with no accountability at all, and without even being honest about having the powers and the areas that will be affected. Removing the sunset clause does nothing to the fundamental challenge, especially if we are continuing to bring in legislation, which we absolutely need, to keep the Northern Ireland civil service functioning.

In simple terms, these amendments speak to the simple question: what is the Minister doing on behalf of the Northern Ireland people when it comes to their basic rights? The Bill also covers things such as people’s employment rights and whether people in Northern Ireland will still be entitled to maternity leave, environmental protections and consumer compensation—everyday rights that people across the United Kingdom have particularly relied on. However, in Northern Ireland, the question of alignment and changing alignment takes on an added complexity and added damage. It could undermine the Windsor agreement, and it could mean that people in Northern Ireland have fewer rights than those in the rest of the United Kingdom. Above all, if we continue to be unable to get Stormont back up and running, that could mean Government Ministers in back rooms with civil servants making decisions without any accountability to elected representatives in Northern Ireland or any commitment to any accountability.

I hope that the Minister will at least accept that there is a problem because the powers will be operational now—during the passage of the Bill. I hope that he will commit to coming back to the House and talking to representatives from Northern Ireland—if no one else—about how they are using and interpreting their devolved competences when it comes to retained EU law, as it sounds like the retained EU law Bill will continue on.

The Minister said that his comments about Northern Ireland having a special relationship with the European Union were a slip of the tongue. Well, some of us want all of the United Kingdom to have a special relationship with the European Union so that, now that we have left the European Union, we can all trade and still have those opportunities. But if changes are not to be made in Northern Ireland, why should they be made in the rest of the United Kingdom?

The retained EU law Bill is a power grab—Members in Northern Ireland know how much the Government enjoy that—and, at every single opportunity, those of us who are the true patriots and the true democrats need to wrest it back and challenge the Government on how they will exercise it. The amendments would do exactly that. I hope that the Minister will look on them with kindness.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I call the shadow Minister.

[Tonia Antoniazzi]

I will keep my comments brief as I do not want to repeat what was said on Second Reading. Labour does not oppose the Bill as it is a necessary step to ensuring that governance in Northern Ireland can continue in the absence of a functioning Executive. The amendments show a clear indication from the Northern Ireland parties that improving Northern Ireland’s financial stability is a priority. Indeed, the Northern Ireland Fiscal Council’s recent work was highlighted a number of times. The Secretary of State mentioned during Northern Ireland questions that he had been in conversation with the Fiscal Council. It would be great to hear his assessment of its report and how he intends to proceed with that information.

Continued engagement with the Northern Ireland parties, as well as with bodies such as the Northern Ireland Fiscal Council, is paramount to best representing the people of Northern Ireland. I hope that such engagement from the Secretary of State and the Minister will continue.

[Mr Steve Baker]

I very much appreciate the contribution everyone has made. Everybody who has spoken in today’s debate is very much seized of the issues and very well informed. They have made their points with great force.

The hon. Member for Gower (Tonia Antoniazzi) raises the Northern Ireland Fiscal Council, so I will turn first to amendments 4 and 5 on relative need and needs-based spending. Provisions in the Bill already allow the UK Government to work with the Northern Ireland civil service on fiscal sustainability for the benefit of people across Northern Ireland, so neither amendment is strictly needed. I do not think it would be right for me to commit the Secretary of State to a particular piece of advice or consultation, but we have of course heard the debate—I listened extremely closely to it—and we are all fully committed to the sustainability of the finances, and to treating people justly and fairly.

[Gavin Robinson]

The Minister knows that the DUP tabled amendment 5 and there is a decision to be taken on whether to press it, or amendment 4 tabled by the hon. Member for North Down (Stephen Farry), to a Division. If the Minister does not wish to commit the Secretary of State to accepting our amendment or to commissioning advice on the basis of the work of the Fiscal Council, it would be very useful if he would at least commit the Secretary of State to engaging with me and colleagues on this issue, so that when advice is commissioned and he is consulting, we can incorporate this as part of the advice he seeks.

[Mr Baker]

Yes, of course. We would be delighted to engage with the hon. Gentleman. We have already said, in relation to commissioning advice and the draft guidance, that we are very happy to engage with Members of all parties, and I am grateful to him for that intervention.

On amendment 6, on the Executive Committee, we believe—with apologies—that it would be unworkable. The decision-making provisions apply only to functions exercised in the absence of Ministers, so once Ministers have been appointed, they can no longer have any practical effect.

[Claire Hanna]

Is the Minister aware—I cannot remember which year it was, because there have been so many crises —of the in-out Ministers stunt? I think it was conducted in mid to late 2015. Ministers resigned on a rotating basis over a period of months, so Ministers were in place but there was not a functioning Executive. It is that kind of carry on we are trying to guard against.

[Mr Baker]

I confess freely that the hon. Lady has me at a disadvantage. I am grateful to her for that point and I shall certainly ask my officials to brief me on that matter.

[Claire Hanna]

Weary experience.

[Mr Baker]

Yes, and I confess that my mind boggles that such a thing should have happened. Equally, I recognise that, standing here right now, I am not aware of the full circumstances. I certainly hear what the hon. Lady says, but even so I hope she will understand that right now I cannot accept the amendment.

Turning to amendments 7, 8 and 9 on specific consultees, we believe that this would be unnecessarily restrictive. Requiring the Secretary of State to direct the Department to consult the specified bodies listed in the amendment is not necessary. The consultee lists for the Northern Ireland Departments are well known and recognised, so we do not wish to pick out the three bodies over any others because it would beg the question, why not include them all? In particular, picking up on the Fiscal Council, the Secretary of State has already confirmed, I think through me, that he is engaged with the Fiscal Council. He is happy to commit to the Committee that he will ensure that it, and all the bodies listed in the amendment, will be consulted on budget sustainability. We therefore ask the hon. Member for Foyle (Colum Eastwood) not to press the amendment to a Division.

On amendment 11, on scrutiny and the scrutiny of Ministers, the approach in the Bill to the power of the Northern Ireland Assembly to call for witnesses and documents is consistent with previous circumstances where the UK Government have taken certain powers to give direction to Northern Ireland Departments. If UK Government Ministers give Northern Ireland Departments a direction, it is right and proper that the line of accountability comes here to Parliament, where UK Government Ministers are accountable. It is not appropriate for the Northern Ireland Assembly to be able to hold UK Government Ministers to account in that way.

On amendment 2, on communal divisions, the hon. Member for North Down (Stephen Farry) makes his points extremely well. He knows—I think I have illustrated it—that I feel his pain on this issue, but we already have, for the purpose of pursuing fiscal sustainability, the ability to take advice and pursue consultations. I certainly look forward to further conversations with him and to taking his advice on where we should look in relation to communal divisions. I will be glad to meet him to consider that issue further. On his amendment 3, on transformation, the Secretary of State would have the powers under the Bill to commission advice and go for consultations to achieve budget sustainability through transformation. I hope that the hon. Member will accept that the amendment is not strictly necessary, but once again, I hear him and he makes his point very well and with great force.

On the Retained EU Law (Revocation and Reform) Bill, I hope the hon. Member for Walthamstow (Stella Creasy) will accept that it is not the responsibility of the Northern Ireland Office to take it through the House, but I listened carefully to what she said about its impact on Northern Ireland. I am conscious that her amendment was not selected, so I hope that she will not mind if I do not go any further.

[Stella Creasy]

The Bill explicitly gives the Minister, in the absence of Stormont, the powers to use the devolved competences. Is he saying that he has not looked into those powers at all, or is he not prepared to talk about how he is exercising them?

[Mr Baker]

As on the face of the Bill, we will be able to seek advice from officials in the Northern Ireland Departments and require consultations, but we will have no powers to implement any of the measures on which we have taken advice. We are clear that devolution is the best way to govern Northern Ireland, as we have said many times.

With that, I am grateful to everyone who has participated in the Committee.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I believe that the hon. Member for Belfast South (Claire Hanna) wishes to withdraw her amendment.

[Claire Hanna]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 7 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

16:27

[Mr Steve Baker]

I beg to move, That Bill be now read the Third time.

It is not an especially happy occasion. As the House has fleshed out, we see before us the many difficult decisions that lie ahead. But it is a necessary occasion, as we have all agreed.

I want to place on record my thanks to everyone involved in the Bill’s passage through the House for their support of its expedited passage. I particularly thank the Front Benchers of all parties for their collaborative and constructive engagement on the legislation, recognising the importance of getting it on the statute books to avoid a governance gap from 5 June. I place on record my appreciation to the House authorities, particularly the Clerks who, as ever, have guided us in an expert fashion. I thank the excellent Diggory Bailey in the Office of the Parliamentary Counsel for the expert fashion in which he and colleagues drafted the Bill. I thank my colleagues and officials in the Government Whips office for helping us progress in a smooth fashion, and in particular on this occasion for not putting me under undue time pressure. I am most grateful to them, as always.

I conclude by repeating what I said at Second Reading. People in Northern Ireland rightfully expect to see these decisions taken in Stormont not Westminster, and I agree with them. I think the House does, too.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Secretary of State.

[Peter Kyle]

I rise briefly to express my gratitude to the Minister for seeing the Bill so deftly through all its stages today, and also to share his thanks to those who made it happen and those who have spoken today.

The Minister has repeated numerous times today a sentiment that we all share, which is in fact shared by all the Northern Ireland parties and leaders themselves: namely, the desire for Stormont to be up and running again. I would just remind him, when he points to and urges members of Northern Ireland parties, that he is a Minister in the UK Government, and the UK Government have some skin in the game. They have some agency when it comes to the functioning relationships within Northern Ireland—those core relationships between the Irish Government, all the Irish parties and the UK Government.

16:29

[Mr Baker]

For such a matter to come up so late in the debate is just one of those things, but I think that I have a good track record on renewing the relationship with Ireland and with the European Union. The hon. Gentleman is right to say that we have agency, and I am determined, as is the Secretary of State, to work with everyone as expeditiously as possible to make a success of restoring the Executive.

[Peter Kyle]

On numerous occasions today the Minister has urged the Northern Ireland parties to get back in. It is my job to hold his feet to the fire as well, and to point out that he, as a UK Government Minister, has skin in the game on this one. It was, of course, some of the actions of the UK Government that led to some of the challenges that are faced in Northern Ireland, which proves that what happens here in Westminster—the decisions taken in Downing Street and in Whitehall—has a profound impact over there. So rather than always looking to those parties to sort out the problems that have sometimes been created through decisions taken over there, the Minister must be a very active participant in that process.

[Sammy Wilson]

Does the hon. Gentleman accept that while the Minister may say that he has built bridges with the EU and the Irish Government, he has built a bonfire on the bridge with the Unionists?

[Peter Kyle]

My job, at times like this, is not to take the opportunity that the right hon. Gentleman has put before me, but to stand to one side and allow this conversation to unfold between his party and the Government. Clearly there is some healing to do in that relationship—a relationship that has at times been so close that it has led to the two parties serving in the same Government, and to his party supporting the Government—but at present there is dysfunction there, which I accept and acknowledge and view from afar, while trying as hard as I can on behalf of the Labour party to do everything possible to ensure that we can build strong relationships that can heal the divides and get Northern Ireland going again.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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

Committee stage
Wednesday 10th May 2023 Public Bill Committees

The Committee consisted of the following Members:

Chairs: † Mr Philip Hollobone, Ian Paisley

† Amesbury, Mike (Weaver Vale) (Lab)

† Bristow, Paul (Peterborough) (Con)

† Clarke, Theo (Stafford) (Con)

† Collins, Damian (Folkestone and Hythe) (Con)

† Double, Steve (Lord Commissioner of His Majesty's Treasury)

† Eastwood, Mark (Dewsbury) (Con)

Henry, Darren (Broxtowe) (Con)

† Hunt, Jane (Loughborough) (Con)

† Huq, Dr Rupa (Ealing Central and Acton) (Lab)

Long Bailey, Rebecca (Salford and Eccles) (Lab)

† Monaghan, Carol (Glasgow North West) (SNP)

† Onwurah, Chi (Newcastle upon Tyne Central) (Lab)

† Peacock, Stephanie (Barnsley East) (Lab)

† Richards, Nicola (West Bromwich East) (Con)

Simmonds, David (Ruislip, Northwood and Pinner) (Con)

† Wakeford, Christian (Bury South) (Lab)

† Whittingdale, Sir John (Minister for Data and Digital Infrastructure)

Huw Yardley, Bradley Albrow, Committee Clerks

† attended the Committee

Witnesses

John Edwards, Information Commissioner, Information Commissioner's Office

Paul Arnold, ICO Deputy Chief Executive and Chief Operating Officer, Information Commissioner's Office

Eduardo Ustaran, Global co-head of the Hogan Lovells Privacy and Cybersecurity practice, Hogan Lovells

Vivienne Artz OBE

Bojana Bellamy, President, Centre for Information Policy Leadership

Neil Ross, Associate Director for Policy, TechUK

Chris Combemale, CEO, Data and Marketing Association

Dr Jeni Tennison OBE, Founder and Executive Director, Connected by Data

Anna Thomas, Co-Founder and Director, Institute for the Future of Work

Michael Birtwistle, Associate Director (AI Law and Regulation), Ada Lovelace Institute

Public Bill Committee

Wednesday 10 May 2023

(Morning)

[Mr Philip Hollobone in the Chair]

Data Protection and Digital Information (No. 2) Bill

09:25

[The Chair]

Before we begin, I have a couple of preliminary announcements that Mr Speaker has asked me to draw to your attention. Hansard colleagues would be grateful if Members emailed their speaking notes to [email protected]. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings.

Today we will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I hope we can take these matters formally—without debate. The programme motion was discussed yesterday by the Programming Sub-Committee for this Bill.

Ordered,

That—

1. the Committee shall (in addition to its first meeting at 9.25 am on Wednesday 10 May) meet—

(a) at 2.00 pm on Wednesday 10 May;

(b) at 9.25 am and 2.00 pm on Tuesday 16 May;

(c) at 11.30 am and 2.00 pm on Thursday 18 May;

(d) at 9.25 am and 2.00 pm on Tuesday 23 May;

(e) at 9.25 am and 2.00 pm on Tuesday 6 June;

(f) at 11.30 am and 2.00 pm on Thursday 8 June;

(g) at 9.25 am and 2.00 pm on Tuesday 13 June;

2. the Committee shall hear oral evidence in accordance with the following Table:

[The Chair]

Copies of written evidence that the Committee receives will be made available in the Committee Room and circulated to Committee members by email. We will now go into private session to discuss lines of questioning.

09:26

The Committee deliberated in private.

Examination of Witnesses

10:50

John Edwards and Paul Arnold gave evidence.

[The Chair]

We are now sitting in public again and the proceedings are being broadcast. Before we hear from the witnesses, do any Members wish to make a declaration of interest in connection with the Bill?

[Jane Hunt (Loughborough) (Con)]

I am not sure whether this is a declaration of interest, so I will mention it just in case. I have had a meeting with Leicestershire Police Federation and I am interested in an amendment that it would like tabled.

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

I am not sure whether this is directly relevant to the Bill or adjacent to it, but I am an unpaid member of the board of the Centre for Countering Digital Hate, which does a lot of work looking at hate speech in the online world.

[Mark Eastwood (Dewsbury) (Con)]

Given that one of today’s witnesses is from Prospect, I wish to declare that I am a member of that union.

[Stephanie Peacock (Barnsley East) (Lab)]

I am a proud member of a trade union. I refer the Committee to my entry in the Register of Members’ Financial Interests.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I am a proud member of two trade unions.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

Should we declare our membership of any union?

[The Chair]

My advice is that it is always better to declare.

[Dr Huq]

Okay. I am a member of Unison, formerly the National and Local Government Officers Association.

[Christian Wakeford (Bury South) (Lab)]

I am also a member of a union.

[Mike Amesbury (Weaver Vale) (Lab)]

I am a member of Unison and the GMB.

[The Chair]

We will now hear oral evidence from John Edwards, the Information Commissioner, and Paul Arnold, the deputy chief executive and chief operating officer of the Information Commissioner’s Office. 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 order, which the Committee has agreed. For this panel, we have until 9.55 am. Will the witnesses please introduce themselves for the record?

John Edwards: Kia ora! My name is John Edwards. I am the Information Commissioner. I took up the job at the beginning of January last year. I was previously the Privacy Commissioner of New Zealand for eight years.

Paul Arnold: I am Paul Arnold, the deputy chief executive and chief operating officer of the ICO. I took up that position in 2016.

[The Chair]

May I gently say to the witnesses that this is a big room, so you will need to project your voices so that we can hear your evidence?

[Stephanie Peacock]

Q Good morning and welcome. The Bill creates a new body corporate to replace the corporation sole. What impact, both in the short and long term, do you think that will have on its ability to carry out its functions?

John Edwards: The corporation sole model is fit for a number of purposes. That was the structure that I had back home in New Zealand. For an organisation such as the Information Commissioner’s Office, it is starting to buckle under the weight. It will benefit, I think, from the support of a formal board structure, with colleagues with different areas of expertise appointed to ensure that we bring an economy-wide perspective to our role, which as we have heard from the declarations of interest spans almost every aspect of human activity.

There will be some short-term, transitional challenges as we make the transition from a corporation sole to a board structure. We will need to employ a chief executive, for example, as well as getting used to those structures and setting up our new accountability frameworks. But I think, in the longer term, the model proposed in the legislation is well proven across other regulators, both domestically and internationally.

[Stephanie Peacock]

Q I would like to ask about the independence of the ICO as it stands. Do you have any experience of being directed by the Secretary of State in a way that has threatened the regulator’s impartial position?

John Edwards: No, I do not.

[Stephanie Peacock]

Q If the Bill is passed in its current form, the Secretary of State—whoever that might be—will have the ability to approve and veto statutory codes of practice produced by the commission, as well as to set out a statement of strategic priorities to which the commission will have to adhere. Do you perceive that having any impact on your organisation’s ability to act independently of political direction?

John Edwards: No, I do not believe it will undermine our independence at all. What I think it will do is to further enhance and promote our accountability, which is very important.

To take your first challenge, about codes of conduct, we worked closely with the Department for Digital, Culture, Media and Sport and subsequently the Department for Science, Innovation and Technology to ensure that we got the appropriate balance between the independence of the commission with the right of the Executive and Parliament to oversee what is essentially delegated lawmaking. I think we have got there. It is not a right to veto out of hand; there is a clear process of transparency, which would require the Secretary of State, in the event that he or she decided not to publish a statutory code that we had recommended, to publish their reasons, and those would be available to the House. I do think there is an appropriate level of parliamentary and Executive oversight of what is, as I say, essentially a lawmaking function on the part of the commission.

[Stephanie Peacock]

Q If the Secretary of State can veto a code of practice that the commission has produced regarding the activities of Government, will that not mean that they are, effectively, marking their own homework?

John Edwards: I do not believe so. The code of practice would be statutory—it is only the most serious statutory guidance that we would issue, not the day-to-day opinions that we have of the way in which the law operates. But, also, it is a reflection of the commissioner’s view of the law, and a statement as to how he or she will interpret and apply the very general principles. A failure of the Secretary of State to table and issue a proposed code would not affect the way in which the commissioner discharges his or her enforcement functions. We would still be able to investigate matters and find them in breach, regardless of whether that finding was consistent with the Secretary of State’s view of the law.

[Stephanie Peacock]

Q I will come on to a slightly different topic now. The ICO will play a huge role in enforcing the measures in the Bill. Is there enough clarity in the Bill to ensure that the commission is able to do that effectively? For example, are you clear on how the commission will enforce the law surrounding terms like “vexatious” and “excessive” with regards to subject access requests?

John Edwards: Yes. We are in the business of statutory interpretation. We are given a law by Parliament. A term like “vexatious” has a considerable provenance and jurisprudence; it is one that I worked with back home in New Zealand. So, yes, I am quite confident that we will be able to apply those.

[Stephanie Peacock]

Q Linked to that, what about terms like “meaningful human involvement” and “significant decision” with regards to automated decision making?

John Edwards: Sorry, what is your question?

[Stephanie Peacock]

Parts of the Bill refer to there being “meaningful human involvement” and “significant decisions” within automated decision making. That might be in an application for a mortgage or in certain parts of employment. Do you feel that you can interpret those words effectively?

John Edwards: Yes, of course. You are quite right to point out that those phrases are capable of numerous different interpretations. It will be incumbent on my office to issue guidance to provide clarity. There are phrases in the legislation that Parliament could perhaps look at providing clearer criteria on to assist us in that process of issuing guidance—here I am particularly thinking of the phrase “high risk” activities. That is a new standard, which will dictate whether some of the measures apply.

[Stephanie Peacock]

That is useful. Thank you.

[Damian Collins]

Q Continuing with that theme, the Bill uses a broader definition of “recognised legitimate interests” for data controllers. How do you think the Bill will change the regime for businesses? What sort of things might they argue they should be able to do under the Bill that they cannot do now?

John Edwards: There is an argument that there is nothing under the Bill that they cannot do now, but it does respond to a perception that there is a lack of clarity and certainty about the scope of legitimate interests, and it is a legitimate activity of lawmakers to respond to such perceptions. The provision will allow doubt to be taken out of the economy in respect of aspects such as, “Is maintaining the security of my system a legitimate interest in using this data?” Uncertainty in law is very inefficient—it causes people to seek legal opinions and expend resources away from their primary activity—so the more uncertainty we can take out of the legislation, the greater the efficiency of the regulation. We have a role in that at the Information Commissioner’s Office and you as lawmakers have just as important a role.

[Damian Collins]

Q How would you define that clarity that the Bill is seeking? If a data controller thinks, “Well, if I have legitimate business interests, I can make an excuse for doing whatever I like,” that surely is not what the Bill intends. How would you define the clarity that you say the Bill seeks?

John Edwards: You are right that it is the controller’s assessment and that they are entitled to make that assessment, but they need to be able to justify and be accountable for it. If we investigate a matter where a legitimate interest is asserted, we would be able to test that.

[Damian Collins]

Q How would you test it?

John Edwards: Well, through the normal process of investigation, in the same way as we do now. We would ask whether this was in the reasonable contemplation of the individual who has contributed their data as a necessary adjunct to the primary business activity that is being undertaken.

[Damian Collins]

Q Does this change things very much? It sounds like you are saying that business may assert it has a legitimate interest, but if you think it does not, you can investigate and take action as the law stands currently, effectively.

John Edwards: Yes, that is right. But the clarity will be where specific categories of legitimate interest are specified in the legislation. Again, that will just take out the doubt, if there is doubt as to whether a particular activity falls within scope.

[Damian Collins]

Q Is more clarity needed about the use of inferred data? Major social media platforms rely on inferred data to drive their recommendation tools and systems. There are then questions about whether inferred data draws on protected data characteristics without user permission. A platform might say that that is part of its recognised legitimate business interests, but users might say that it is an infringement of their data rights. Is that clear enough?

John Edwards: I am afraid that I have to revert to the standard, which is, “It depends.” These are questions that need to be determined on a case-by-case basis after examination ex post. It is a very general question that you ask. It depends on what the inferred data is being used for and what it is. For example, my office has taken regulatory action against a company that inferred health status based on purchasing practices. We found that that was unlawful and a breach of the General Data Protection Regulation, and we issued a fine for the practice. Again, the law is capable of regulating inferred data, and there is no kind of carte blanche for controllers to make assumptions about people based on data points, whether collected from or supplied by the individual or not.

[Damian Collins]

Q Your predecessor raised the issue of the use of inferred data among users’ protected data characteristics—political opinions, religious beliefs, sexual orientation—and said that, without the user’s informed consent, that could not be legal. Do you agree with that?

John Edwards: I am not aware of the statement she made or the context in which she made it, so it is difficult for me to say whether she agreed it. Certainly, informed consent is not the only lawful basis for a data processing activity and it may be that data about protected activities can be inferred and used in some circumstances. I would be happy to come back to you having checked that quote and to give you my views as to whether I agree with it in the context in which it was made.

[Damian Collins]

Q These are quite important matters because inferred data is such an important part of data processing for major platforms, be it a company assessing someone’s attitude to risk and how that affects the way they might use a gambling product, versus taking someone’s personal, private information, inferring things from it and making them open to suggestions they may not want to receive without their informed consent. That is a grey area, and I wonder whether you think the Bill provides greater clarity, or you think there needs to be more clarity still.

John Edwards: I think there is sufficient clarity. I am not sure whether the Bill speaks to the point you have just made, but for me the overarching obligation to use data fairly enables us to make assessments about the legitimacy of the kinds of practices you are describing.

[The Chair]

It is a really tight timetable this morning and we have nine minutes left. The Minister wants to ask some questions and there are three Members from the Opposition. I will call the Minister now. Perhaps you would be kind enough, Minister, to leave time for one question each from our three Members of the Opposition.

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

Q Thank you, Mr Hollobone. Good morning, Mr Edwards. Both the structure and powers of your office are going to change as a result of the Bill. Do you believe that the existing structure and the absence of the powers you will gain under the Bill have in any way impeded the carrying out of your functions?

John Edwards: The obligation to investigate every complaint does consume quite a lot of our resources. Can I ask my colleague to make a contribution on this point?

Paul Arnold: As the commissioner says, that duty to investigate all complaints can challenge us in terms of where we need to dedicate the majority of our resources.

To the previous question and answer, our role in trying to provide or maximise regulatory certainty means being able to invest as much resource as we can in that upstream advice, particularly in those novel, complex, finely balanced, context-specific areas. We are adding far more value if we can add that support upstream.

The additional statutory objectives that are being added through the Bill overall will be a real asset to our accountability. Any regulator that welcomes independence also needs to welcome the accountability. It is the means through which we describe how we think, how we act and the outcomes that we achieve. Those extra statutory objectives will be a real aid to us and also an aid to Parliament and our stakeholders. It really does crystallise and clarify why we are here and how we will prioritise our efforts and resources.

[Sir John Whittingdale]

Q In the interests of time, I will ask you one other question. Mr Edwards, you had experience as the New Zealand Privacy Commissioner for some time. New Zealand is one of the countries recognised as having data adequacy by the European Union. Can you give us a view, based on your experience of dealing with the European Union, of whether there is any concern about the Bill that might put at risk the UK’s data adequacy recognition from the EU?

John Edwards: I do not believe there is anything in the Bill that would put at risk the adequacy determination with the European Union. The test the Commission applies is whether the law is essentially equivalent. New Zealand lacks many of the features of the GDPR, as do Israel and Canada, each of which has maintained adequacy status. The importance of an independent regulator is preserved in this legislation. All the essential features of the UK GDPR or the rights that citizens of the European Union enjoy are present in the Bill, so I do not believe that there is a realistic prospect of the Commission reviewing negatively the adequacy determination.

[The Chair]

It is a brutal cut-off, I am afraid, at 9.55 am. I have no discretion in this matter. It is a quick-fire round now, gentlemen. We need quick questions and quick answers, with one each from Carol Monaghan, Chi Onwurah and Mike Amesbury.

[Carol Monaghan (Glasgow North West) (SNP)]

Q Clause 40 sets out the criteria by which a data controller can refuse data access requests. Do you think this is appropriate? Are you concerned that it may lead to a situation in which only those who can afford to pay a potential fee will be able to access their data?

John Edwards: Yes and no. Yes, I do believe it is an adequate provision, and no, I do not believe there will be an economic barrier to people accessing their information rights.

[Chi Onwurah]

Q The Bill’s intent is to reduce burdens on organisations while maintaining high data protection standards. Do you agree that high data protection standards are promoted by well-informed and empowered citizens? What steps do you think the Bill takes to ensure greater information empowerment for citizens?

John Edwards: Yes, I do believe that an empowered citizenry is best placed to enjoy these rights. However, I also believe that the complexity of the modern digital environment creates such an information asymmetry that it is important for strong advocates such as the Information Commissioner’s Office to act as a proxy on behalf of citizenry. I do not believe that we should devolve responsibility to citizens purely to ensure that high standards are set and adhered to in digital industries.

[Mike Amesbury]

Q Drawing on your expertise, is there anything missing from the Bill that you would have liked to see?

John Edwards: I do not believe so. We have been involved right from the outset. We made a submission on the initial White Paper. We have worked closely with officials. We have said that we want to see the Bill get to a position where I, as Information Commissioner, am able to stand up and say, “I support this legislation.” We have done that, which has meant we have achieved quite significant changes for the benefit of the people of the United Kingdom. It does not mean that we have just accepted what the Government have handed out. We have worked closely together. We have acted as advocates, and I believe that the product before you shows the benefits of that.

[The Chair]

We have a late entry—the last question will be from Rupa Huq.

[Dr Huq]

Q When I was on the Criminal Finances Bill Committee, lots was promised, but the National Crime Agency then claimed that it was not financed enough to pursue all the unexplained wealth orders that were promised. Do you think that a beefed-up Information Commission will be sufficiently well resourced to do all the things it is meant to do?

John Edwards: In short, yes. We are having discussions about the funding model with DSIT. We are funded by levies. There are two questions: one is about how those levies are set and where the burden of funding our office lies in the economy, and the second is about the overall quantum. We can always do more with more. If you look at the White Paper on artificial intelligence and the Vallance report, you will see that there is a role for our office to patrol the new boundaries of AI. In order to do that, we will have to be funded appropriately, but I have a good relationship with our sponsor Department and am confident that we will be able to discharge all the responsibilities in the Bill.

[The Chair]

Gentlemen, thank you very much indeed for your evidence. You can now breathe, relax and enjoy the rest of your day.

Examination of Witnesses

Eduardo Ustaran, Vivienne Artz and Bojana Bellamy gave evidence.

09:53

[The Chair]

Q We will now hear oral evidence from Eduardo Ustaran, global co-head of the privacy and cyber-security practice at Hogan Lovells, who is appearing via Zoom; Vivienne Artz OBE, who is in the room; and Bojana Bellamy, president of the Centre for Information Policy Leadership, who is also appearing via Zoom. For this session we have until 10.25 am. Will the witnesses introduce themselves for the record, starting with Vivienne Artz?

Vivienne Artz: Good morning. My name is Vivienne Artz. I am the chair of the International Regulatory Strategy Group data committee, I have more than 25 years’ experience in financial services, including acting as a chief privacy officer, and I now do advisory work across a range of sectors, including in the context of financial crime.

[The Chair]

Will Eduardo Ustaran please introduce himself? Can you hear us, Mr Ustaran? No. Can you hear us, Bojana Bellamy? No. Okay, we will start with our witness who has been kind enough to join us in the room.

[Stephanie Peacock]

Q Welcome. Vivienne, would you be in favour of implementing a smart data regime in your industry? If so, why?

Vivienne Artz: Yes, we are interested in implementing a smart data regime because it will allow broader access to data for innovation, particularly in the context of open banking and open finance. It would require access to information, which can often be limited at the moment. There is a lot of concern from businesses around whether or not they can actually access data. Some clarification on what that means, in respect of information that is not necessarily sensitive and can be used for the public good, would be most welcome. Currently, the provisions in the legislation are pretty broad, so it is difficult to see what it will look like, but in theory we are absolutely in favour.

[Stephanie Peacock]

Q Could you give more detail on who you think would benefit or lose out, and in what ways?

Vivienne Artz: Consumers would absolutely benefit, and that is where our priority needs to be—with individuals. It is an opportunity for them to leverage the opportunities that the data can provide. It will enable innovators to produce more products and services that will help individuals to better understand their financial and personal circumstances, particularly in the context of utility bills and so on. There are a number of positive use cases. There is obviously always the possibility that data can be misused, but I am a great advocate of saying that we need to find the positive use cases and allow business to support society and our consumers to the fullest extent. That is what we need to support.

[Stephanie Peacock]

Q Brilliant. What are your thoughts on giving the Secretary of State the power to amendment data protection legislation further? Do you think it is necessary to future-proof the Bill?

Vivienne Artz: It is necessary to future-proof the Bill. We are seeing such an incredible speed of innovation and change, particularly with regard to generative artificial intelligence. We need to make sure that the legislation remains technology-neutral and can keep up to date with the changes that are currently taking place.

[Stephanie Peacock]

I have more questions if our other witnesses are with us.

[The Chair]

We still have not heard definitively whether our other guests can hear us or speak to us, so we are waiting for confirmation from the tech people. In the meantime, I invite the Minister to question Vivienne Artz.

[Sir John Whittingdale]

Q You have a lot of experience in respect of international data transfers. The European Union has a number of data adequacy agreements around the world, but the process to establish them has been slow. How do you think the Bill will make it easier for us to improve international data agreements? What prospects are there for the UK to establish such agreements, and with which countries?

Vivienne Artz: The Bill provides for the opportunity for the Government to look at a range of issues and to move away from an equivalence approach to one in which we can consider more factors and features. The reality is that if you compare two pieces of legislation, you will always find differences because they come from different cultural backgrounds and different legal regimes. There will always be differences. The approach the UK is taking in the Bill is helpful because it looks at outcomes and broader issues such as the rule of law in different jurisdictions.

What is said on paper is not necessarily what always happens in practice; we need to look at it far more holistically. The legislation gives the Government the opportunity to take that broader and more common-sense view with regard to adequacy and not just do a word-by-word comparison of legislative provisions without actually looking at how the legislation is implemented in that jurisdiction and what other rights can support the outcomes. We can recognise that there is a different legal process and application but ask whether it still achieves the same end. That is what is really important. There is an opportunity not only to move more quickly in this space but to consider jurisdictions that might not be immediately obvious but none the less still offer appropriate safeguards for data.

[Sir John Whittingdale]

Q Obviously it is already possible for us to undertake international data transfers to countries with which we do not have an adequacy agreement. Can you set out the advantages of having a general adequacy agreement in terms of data transfer and the benefits to the UK economy?

Vivienne Artz: The current process is incredibly cumbersome for businesses and, if I am honest, it provides zero transparency for individuals as well. It tends to be mostly a paperwork exercise—forgive if that sounds provocative, but putting in place the model clauses is very often an expensive paperwork exercise. At the moment, it is difficult, time-consuming and costly, as the case may be.

The thing with adequacy is that it is achieved at a Government-to-Government level. It is across all sectors and provides certainty for organisations to move forward to share information, sell their goods and services elsewhere and receive those goods and services, and for consumers to access those opportunities as well. Adequacy is certainly the ideal. Whether it is achievable in all jurisdictions I do not know, but I think it is achievable for many jurisdictions to provide confidence for both consumers and businesses on how they can operate.

[Sir John Whittingdale]

Thank you.

[The Chair]

We can see Mr Ustaran and Ms Bellamy and they can hear us, but we cannot hear them, so we will carry on with questioning Vivienne Artz.

[Carol Monaghan]

Q A number of organisations have expressed concerns about moving to a situation in which we can refuse subject access requests or indeed charge a fee. Do you believe the thresholds in the Bill are appropriate and proportionate?

Vivienne Artz: I do think the thresholds are appropriate and proportionate. In practice, most organisations do not actually choose to charge, because actually it costs more to process the cheque than it is worth in terms of the revenue. Certainly, some sectors have been subject to very vexatious approaches through claims-management companies and others, where it is a bombarding exercise and it is unclear whether it is in the best interests of the consumers, or whether it is at their understanding and behest, to make a genuine subject access request.

I am a great supporter of subject access requests—they are a way for individuals to exercise their rights to understand what data is being processed—but as a result of quirks of how we operate often in the UK, they are being used as a pre-litigation investigative tool on the cheap, which is unfortunate and has meant that we have had to put in place additional safeguards to ensure they are used for the purpose for which they were provided, which is so that individuals can have transparency and clarity around what data is being processed and by whom.

[Carol Monaghan]

Q Do you think the threshold for something to be considered vexatious or excessive is well understood?

Vivienne Artz: We have heard from the Information Commissioner that they are fairly clear on what that terminology means and it will reflect the existing body of law in practice. I will be perfectly honest: it is not immediately clear to me, but there is certainly a boundary within which that could be determined, and that is something we would rely on the Information Commissioner to provide further guidance on. It is probably also likely to be contextual.

[Carol Monaghan]

Q How frequently do we expect such requests to be refused off the back of this legislation?

Vivienne Artz: I think it depends on the sector. I come from the financial services sector, so the types of subject access requests we get tend to be specific to us. I think organisations are going to be reluctant to refuse a subject access request because, at the end of the day, an individual can always escalate to the Information Commissioner if they feel they have been unfairly treated. I think organisations understand their responsibility to act in the best interests of the individual at all times.

[The Chair]

Q Ms Bellamy and Mr Ustaran, we can now hear both of you. Would you be kind enough to introduce yourselves?

Bojana Bellamy: Thank you for inviting me to this hearing. My name is Bojana Bellamy. I lead the Centre for Information Policy Leadership. We are a global data privacy and data policy think-and-do-tank operating out of London, Brussels and Washington, and I have been in the world of data privacy for almost 30 years.

Eduardo Ustaran: Good morning. My name is Eduardo Ustaran. I am a partner at Hogan Lovells, based in London, and I co-lead our global privacy and cyber-security practice, a team of over 100 lawyers who specialise in data protection law all over the world.

[The Chair]

Thank you. Chi Onwurah and Damian Collins are lined up to ask questions, but I want first to ask the shadow Minister whether she has any further questions, followed by the Minister. Because we have one witness in the room and two online, please will whoever is asking the question indicate whom you are asking it of?

[Stephanie Peacock]

Q Good morning to our guests joining us via Zoom. Ms Bellamy, in your opinion has it been difficult for businesses to adapt to the EU GDPR? If so, do you think the changes in the Bill will make it easier or harder for businesses to comply with data protection legislation?

Bojana Bellamy: Yes, certainly it has been hard to get businesses to comply with GDPR, in particular small and medium-sized businesses. I think the changes proposed in the Bill will make it easier, because it is more about outcomes-based regulation. It is more about being effective on the ground, as opposed to being prescriptive. GDPR is quite prescriptive and detailed. It tells you how to do things. In this new world of digital, that is not very helpful, because technology always goes in front of and faster than the rules.

In effect, what we see proposed in the Bill is more flexibility and more onus on organisations in both the public and private sector to deliver accountability and effective protection for people. It does not tell them and prescribe how exactly to do that, yet they are still accountable for the outcomes. From that perspective, it is a step forward. It is a better regime, in my opinion.

[Stephanie Peacock]

Q Mr Ustaran, what do you perceive the value of EU adequacy to be? What would be the consequences for your businesses and other businesses and the UK market of losing such an agreement?

Eduardo Ustaran: From the point of view of adequacy, it is fundamental to acknowledge that data flows between the UK and the EU and the EU and the UK are essential for global commerce and for our digital existence. Adequacy is an extremely valuable element of the way in which the current data protection regime works across both the EU and the UK.

It is really important to note at the outset that the changes being proposed to the UK framework are extremely unlikely to affect that adequacy determination by the EU, in the same way that if the EU were to make the same changes to the EU GDPR, the UK would be very unlikely to change the adequacy determination of the EU. It is important to appreciate that these changes do not affect the essence of UK data protection law, and therefore the adequacy that is based on that essence would not be affected.

[Stephanie Peacock]

Q You have answered my next question—thank you—but I will pose it to the other witnesses, who may have something to add. In the previous session, the Information Commissioner said that he did not think the Bill was a threat to adequacy. That is comforting, but it is not confirmation, because the only people who have the power to decide whether adequacy stands are the European Commission. Do you think any of the measures in the Bill pose a risk to the adequacy agreement?

Bojana Bellamy: I certainly agree that adequacy is a political decision. In many ways—you have seen this with the Northern Ireland protocol—some of these decisions are made for different purposes. I do not believe there are elements of the Bill that would reduce adequacy; if anything, the Bill is very well balanced. Let me give you some examples of where I think the Bill goes beyond GDPR: certainly, on expectations of accountability on the senior responsible individual, which actually delivers better oversight and leadership over privacy; on the right to complain to an organisation and on organisations to respond to these complaints; and on the strong and effective Information Commissioner, who actually has more power. The regulator is smarter; that, again, is better than GDPR. There are also the safeguards that exist for scientific research and similar purposes, as well as some other detailed ones.

Yes, you will see, and you have seen in public projects as well, that there are people who are worried about the erosion of rights, but I do not believe that exception to subject access requests and other rights we talked about are actually a real erosion. I think it just clarifies what has been the law. Some of the requirements to simplify privacy impact assessment and records of processing will, in fact, deliver better accountability in practice. They are still there; they are just not as prescriptive. The Information Commissioner has strong powers; it is a robust regulator, and I do not believe its independence will be dented by this Bill. I say to those who think that we are reducing the level of protection that, actually, the balance of all the rules is going to be essential equivalency to the EU. That is really what is important.

May I say one more thing quickly? We have seen the EU make adequacy decisions regarding countries such as Japan and Korea, and even privacy shield. Even in these cases, you have not had a situation where the requirements were essentially equivalent. These laws are still different from GDPR—they do not have the right of portability or the concept of automated decision making—but they are still found to be adequate. That is why I really do not believe that this is a threat. One thing we have to keep absolutely clear and on par with the EU is Government access to data for national security and intelligence purposes. That is something the EU will be very interested in to ensure that that is not where the bar goes down, but there is no reason to believe so and there is nothing in the Bill to tell us so.

Vivienne Artz: I concur; I do not think the Bill poses any threat to adequacy with the EU. With regard to the national security issue that Bojana raises, I would also point out that the UN rapporteur noted that the UK has better protections for Government access to data than many EU member states, where it is often a very political approach as opposed to a practical approach and really looking at what the outcomes are. There is nothing in this Bill that would jeopardise adequacy with the EU.

[The Chair]

We have 12 minutes left and two Members are indicating that they wish to ask questions after you, Minister.

[Sir John Whittingdale]

Q I will be very quick, Mr Hollobone. Ms Bellamy, you have suggested that in some ways the regime that the Bill puts in place is superior to that of the existing GDPR and that it certainly does not risk our adequacy recognition in any way. Given the development of technology and the increasing use of things like AI, to what extent do you think the EU might follow the same sort of path that the Bill sets out to try to create a more flexible and a state-of-the-art regime?

Eduardo Ustaran: That is a very important question to address because perhaps one of the ways in which we should be looking at this legislative reform is a way of seeing how the existing GDPR framework that exists both in the EU and the UK could, in fact, be made more effective, relevant and modern to deal with the issues we are facing right now. You refer to artificial intelligence as one of those issues.

GDPR in the EU and the UK, is about five years old. It is not a very old piece of legislation, but a number of technological developments have happened in the past five years. More importantly, we have learned how GDPR operates in practice. This exercise in the UK is in fact very useful, not just for the UK but for the EU and the world at large, because it is looking at how to reform elements of existing law that is already in operation in order to make it more effective. That does not mean that the law needs to be more onerous or more strict, but it can be more effective at the same time as being more pragmatic. This is an important optic in terms of how we look at legislative reform, and not only from the UK’s point of view. The UK can make an effort to try to make the changes more visible outside the United Kingdom, and possibly influence the way in which EU GDPR evolves in the years to come.

Bojana Bellamy: I agree that we need a more flexible legal regime to enable the responsible use of AI and machine learning technologies. To be very frank with you, I was hoping the Bill would go a little further. I was hoping that there would be, for example, a recognition of the use of data in order to train algorithms to ensure that they are not discriminatory, not biased and function properly. I would have hoped that would be considered as an example of legitimate interests. That is certainly a way in which the Government can go further, because there are possibilities for the Secretary of State to augment those provisions.

We have seen that in the European AI Act, where they are now allowing greater use of data for algorithmic AI training, precisely in order to ensure that algorithms work properly. We have Dubai’s data protection law and some others are starting to do that. I hope that we have good foundations to ensure further progression of the rules on AI. The rules on automated decision making are certainly better in this Bill than they are in GDPR. They are more realistic; they understand the fact that we going to be faced with AI and machine learning taking more and more decisions, of course with the possibility of human intervention.

Again, to those who criticise the rules, I would say it is more important to have these exposed rights of individuals. We should emphasise, in the way we have done in the Bill, the right to information that there is AI involved, the right to make a representation, the right to contest a decision, and the right to demand human review or human intervention. To me, that is really what empowers individuals and gives them trust that the decisions will be made in a better way. There is no point in prohibiting AI in the way GDPR sort of does. In GDPR, we are going to have something of a clash between the fact that the world is moving toward greater use of AI, and that in article 22 on automated decision making, there is a prohibition that makes it subject to consent or contract. That is really unrealistic. Again, we have chosen a better way.

As a third small detail, I find the rules on research purposes to be smarter. They are rather complicated to read, to be frank, but I look forward to the consolidated, clean version. The fact that technological development research is included in commercial research will enable the organisations that are developing AI to create the rules in a responsible way that creates the right outcomes for people, and does not create harms or risks. To me, that is what matters. That is more important, and that is what is going to be delivered here. We have the exemptions from notices for research and so on, so I feel we will have better conditions for the development of AI in a responsible and trusted way. However, we must not take our eyes off it. We really need to link GDPR with our AI strategy, and ensure that we incentivise organisations to be accountable and responsible when they are developing and deploying AI. That will be a part of the ICO’s role as well.

[The Chair]

Five minutes left. This will be the quick-fire round. I have two Members indicating that they wish to ask questions—Chi Onwurah.

[Chi Onwurah]

Q Thank you, Mr Hollobone. We have heard that the intent in the Bill is in part to reduce the burden on organisations from data protection. We heard you set out what some of those burdens might be. The organisations affected by this Bill, and the organisations with which you work in different ways, operate in different jurisdictions. I think you, Ms Artz, set out quite well the challenges of having—or trying to have—the same regime in different jurisdictions. If forced to make a choice between following the European Union regime and following a divergent UK regime, what choice would the organisations with which you work make?

[The Chair]

Please choose one witness.

[Chi Onwurah]

Mr Ustaran, please.

Eduardo Ustaran: This is a question that many organisations that operate globally face right now. You must understand that data protection law operates all over the world and data flows all over the world, so consistency is really important in order to achieve compliance in an effective way. Therefore, a question—a very valid question—is, “Do I comply with the EU GDPR across the board, including in the UK, or should I make a difference?”

The reality is that when you look at the way in which the UK data protection framework is being amended, it provides a baseline for compliance with both the UK and EU regimes, in the sense that much of what is being introduced could potentially be interpreted as already being the case in the EU, if you apply perhaps a more progressive interpretation of EU law. Therefore, I think we should look just a little bit further than just saying, “Well, if I do comply with EU law, will I be all right in the UK?”

Maybe the way to look at it—something I see some organisations exploring—is, “If I were to take the UK interpretation of the GDPR on a wholesale basis, would that allow me to operate across the world, and certainly in the EU, in a more effective and efficient but still compliant way?” This is something that companies will be exploring, and it is not as easy as simply saying, “Well, I will just do EU law across the board.”

[Chi Onwurah]

Could I—

[The Chair]

Sorry. It must be one quick question and one quick answer. We must finish at 10.25 am. Damian Collins.

[Damian Collins]

Q Ms Artz, one of the complaints about the current GDPR regime has been, for example, that oligarchs use it aggressively to target investigative journalists conducting legitimate investigations into their business activities, to bombard them with data access requests. Do you think that the provisions in the Bill around vexatious requests will help in that situation? Do you think that it will make any difference?

Vivienne Artz: I think it will help a little bit in terms of the threshold of “vexatious”. I think the other piece that will help is the broadening of the provisions around legitimate interests, because now there is an explicit legitimate interest for fraud detection and prevention. At the moment, it is articulated mostly as to prevent a crime. I would suggest that it could be broadened in the context of financial crime, which has anti-money laundering, sanctions screening and related activities, so that firms can actually process data in that way.

Those are two different things: the one is processing data around sanctioned individuals and such like in the context of suspicious activities, and the other is the right of a subject access to remove their data. Even if they make that subject access request, the ability now to balance it against broader obligations where there is a legitimate interest is incredibly helpful.

[The Chair]

I thank all three witnesses for their time this morning and their extremely informative answers to the questions. Our apologies from Parliament for the tech issues that our two Zoom contestants had to endure. Thank you very much indeed. We will now move on to our third panel.

Examination of Witnesses

Neil Ross and Chris Combemale gave evidence.

10:24

[The Chair]

Q Welcome. We will now hear oral evidence from Neil Ross, Associate Director for Policy at techUK, and Chris Combemale—I hope I pronounced that correctly—the Chief Executive Officer of the Data and Marketing Association. Gentlemen, this session, as you have seen from the previous two, has to end no later than 10.50 am. I will be grateful if you could be kind enough, please, to introduce yourselves to the Committee for the record.

Neil Ross: Thank you for having us before the Committee. My name is Neil Ross. I am the Associate Director for Policy at techUK, the trade association that represents the technology sector in the UK. We have 950 companies in our membership.

Chris Combemale: I am Chris Combemale, the CEO of the Data and Marketing Association. I have 40 years’ experience as a practitioner in marketing and advertising. I started on the agency side, including well-known brands, leading marketing technology business and first-generation cloud marketing technology.

[The Chair]

I apologise for getting your surname pronunciation wrong, Mr Combemale.

Chris Combemale: That’s okay, it happens all the time. It is actually of French heritage, rather than Italian.

[Stephanie Peacock]

Q Welcome to the witnesses. TechUK’s response to the withdrawn Bill last autumn stated that it

“could go further in seeking the full benefits of data driven innovation”.

Does this amended Bill go further?

Neil Ross: Yes, it does. If we go back to the statement of the Information Commissioner earlier, the most important part of the legislation is to provide increased clarity on how we can use data. I think there were about 3,000 responses to the consultation, and the vast majority—particularly around the scientific research and the legitimate interest provisions—focused on providing that extra level of clarity. What the Government have done is quite clever, in that they have lifted examples from the recitals—recital 157, as well as those related to legitimate interests—to give additional clarity on the face of the Bill, so that we can take a much more innovative approach to data management and use in the UK, while still maintaining that within the broad umbrella of what means we qualify for EU adequacy.

[Stephanie Peacock]

Q How have your members found adapting to GDPR? Will the Bill make it easier or harder for those that you represent to comply?

Neil Ross: Most tech companies have adapted to GDPR. It is now a common global standard. The Bill makes the compliance burden a little easier to use, allows us to be a little more flexible in interpretation of it and will give companies much more certainty when taking decisions about data use.

One really good example is fraud. Online fraud is a massive problem in the UK and the Government have a strategy to deal with it, so having that legitimate interest that focuses on crime prevention—also those further processing rights around compliance with the law—means that we can be much more innovative and adaptive about how we share and process data to protect against and prevent fraud. That will be absolutely vital in addressing the shared objective that we all have to reduce online fraud.

[Stephanie Peacock]

Q On the changes to requirements to report suspicious activity related to unsolicited direct marketing, do the telecoms companies among your members have the technical capability to identify instances of mass unsolicited direct marketing in order to report as required?

Neil Ross: No. That is one area where we think further work is needed in the Bill. I think you are referring to clause 85. When we responded to the consultation, we said that the Government should try to create equivalence between the private communications requirements and the GDPR to give that extra level of flex. By not doing that and by not setting out specific cases of where telecoms companies have to identify unsolicited calls, the Government are being really unfair in what they are asking them to do. We have had concerns raised by a range of companies, both large and small, that they might not have the technical capability and that they will have to set up new systems to do it. Overall, we think that the Bill makes a bit of a misstep here and that we need to clarify exactly how it will work. TechUK and some of my colleagues will be suggesting to the Committee some legal amendments for how to do that.

[Stephanie Peacock]

Q On that point, do the telecoms companies feel that they have been consulted properly in the making of the legislation?

Neil Ross: No, not on that clause, but yes in relation to the rest of the legislation.

[Stephanie Peacock]

Q I was asking about that. Chris, will the changes to the cookies set out in the Bill benefit, first, the consumer experience and, secondly, your members or businesses?

Chris Combemale: Yes. First, on the consumer experience, I think that we all recognise that the pop-up consent banners for cookies are generally ticked as a matter of course by consumers who really want to go about their business and get to the website that they want to do business on. In a way, it is not genuine consent, because people are not really thinking deeply about it.

In terms of business, a number of the cookies, which are really identifiers that help you understand what people are doing on your website, are used just on a first-party basis by websites, such as e-commerce websites and business-to-business websites, to understand the basic operational aspects and statistical measurement of how many people are going to which pages. Those are websites that do not take any advertising and do not share any data with third parties, so the exemptions in the Bill generally would make those types of companies no longer need cookie banners while providing no risk to the customers, because the company uses the cookies purely to understand the behaviours of its own website traffic and its own customers. In that sense, we strongly support the provisions and the exemptions in the Bill.

[Stephanie Peacock]

Q Is the technology available to centralise cookies by browser?

Chris Combemale: I think it can be eventually, but we oppose those provisions in the Bill, because they create a market imbalance and give control as a gateway to large companies that manage browser technology, at the expense of media owners and publishers that are paying journalists and investing in content. It is incumbent upon all else that media owners are able to develop first-party relationships with their audiences and customers to better understand what they need. If anything, we need more control in the hands of the people who invest in creating the content and in paying the journalists who provide those important democratic functions.

[Stephanie Peacock]

Q Is there a concern that centralising cookies by browser will entrench power in the hands of the larger tech companies that own the browsers?

Chris Combemale: It certainly would give even greater market control to those companies.

[Stephanie Peacock]

Q Is the risk in centralising cookies by browser that we could confuse liability, for example who is responsible for a breach of cookie regulation?

Chris Combemale: I think it could be. For us, the essential principle is that a business, whether a media owner, e-commerce business or publishing business, should have control of the relationships between its products and services and its customers and prospects for its customers. By nature, when you give control to a third party, whether a large tech company or another company, you are getting in between the relationship between people and the organisations that they want to do business with and giving control to an intermediary who may not understand. At the least point, if you register with a website after, for instance, changing your browser setting, that should take precedence over the browser setting: your choice to engage with a particular company should always take precedence over a centralised cookie management system.

Neil Ross: I think that what the Government have done in relation to this is quite clever: they have said that their objective is to have a centralised system in the future, but they have recognised that there are a number of different ongoing legislative and regulatory activities that have a significant bearing on that. I think it was only last week that the Government introduced the Digital Markets, Competition and Consumers Bill, clause 20 of which—on conduct requirements—would play a large role in whether you could set up a centralised system, so there is an element of co-ordinating two different but ongoing regulatory regimes. I think we agree with Chris that the steps on analytical cookies now are good but that we need to have a lot more deep thought about what a centralised system may or may not look like and whether we want to go ahead with it.

Chris Combemale: May I come in on that final point? What makes sense to us is a centralised system for managing opt-outs as opposed to managing consent. As the Data and Marketing Association, we operate the telephone preference service and the mailing preference service, which give consumers the opportunity to opt out from receiving unwanted cold calls or unwanted direct mail. There is already a system in place with digital advertising—an icon that people can use to opt out from the use of personal data for personalising digital ads. I think it makes sense that, if people do not want to receive certain things, they can opt out centrally, but a centralised consent opt-in gives too much control to the intermediaries.

[Stephanie Peacock]

Thank you.

[Sir John Whittingdale]

Q Mr Ross, I know that techUK has been supportive of a number of elements of the Bill, particularly around the opportunities created by the use of smart data. Will you set out your view of the opportunities, and how the Bill will help to attain them?

Neil Ross: Smart data is potentially a very powerful tool for increasing consumer choice, lowering prices and giving people access to a much broader range of services. The smart data provisions that the Government have introduced, as well as the Smart Data Council that they are leading, are really welcome. However, we need to go one step further and start to give people and industries clarity around where the Government will look first, in terms of what kind of smart data provisions they might look at and what kind of sectors they might go into. Ultimately, we need to make sure that businesses are well consulted and that there is a strong cost-benefit analysis. We then need to move ahead with the key sectors that we want to push forward on. Similarly to on nuisance calls, we will send some suggested text to the Committee to add those bits in, but it is a really welcome step forward.

[Sir John Whittingdale]

Q Which particular sectors offer the most opportunity?

Neil Ross: I do not want to name specific sectors at this point. We are having a lot of engagement with our members about where we would like to see it first. The transport sector is one area where it has been used in the past and could have a large use in the future, but it is something that we are exploring. We are working directly with the Government through the Smart Data Council to try to identify the initial sectors that we could look at.

[Sir John Whittingdale]

Q Thank you. Mr Combemale, will you set out some of the obstacles for your organisation, and how you would like the Bill to reduce them?

Chris Combemale: I think the single biggest one that has troubled our members since the implementation of GDPR is the issue around legitimate interest, which was raised by the hon. Member for Folkestone and Hythe. The main issue is that GDPR contains six bases of data processing, which in law are equal. For the data and marketing industry, the primary bases are legitimate interest and consent. For some reason it has become widely accepted through the implementation of GDPR that GDPR requires consent for marketing and for community activities. I am sure that you hear in your constituencies of many community groups that feel that they cannot go about organising local events because they must have consent to communicate. That has never been the intention behind the legislation; in fact, the European Court of Justice has always ruled that any legal interest could be a legitimate interest, including advertising and marketing.

If you look at what we do, which is effectively finding and retaining customers, the GDPR legislation says in recital 4 that privacy is a fundamental right, not an absolute right, and must be balanced against other rights, such as the right to conduct a business. You cannot conduct a business without the right to find and retain customers, just as you cannot run a charity without the right to find donors and volunteers who provide the money and the labour for your good cause. The clarification is really important across a wide range of use cases in the economy, but particularly ours. It was recognised in GDPR in recital 47. What the legislation does is give illustrative examples that are drawn from recitals 47, 48 and 49. They are not new examples; they are just given main text credibility. It is an illustrative list. Really, any legal interest could be a legitimate interest for the purpose of data providing, subject to necessity and proportionality, which we discussed earlier with the Information Commissioner.

[Carol Monaghan]

Q We have heard already this morning that a number of words and phrases could have some ambiguity associated with them, such as the word “excessive”, and the Bill allowing certain cookies that are “low risk”. Do you think that the phrase “low risk” is well enough understood?

Chris Combemale: In the sector that I represent, we have a fairly clear understanding of the gradients of risk. As I was saying earlier, many companies do not share data with other companies. They are interested solely in the relationships that they have with their existing customers or prospects. In that sense, all the customer attitudes to privacy research that we do indicates that people are generally comfortable sharing data with companies they trust and do business with regularly.

[Carol Monaghan]

Q Would that then be the definition of low risk?

Chris Combemale: I would not want to suggest what the legal definition is. To us in direct marketing and in the Data and Marketing Association, existing customer relationships—loyal customers who trust and are sometimes passionate about the brands they interact with—are low risk. Higher risk is when you come to share data with other companies, but again much of that activity and data sharing is essential to creating relevance. With the right protections, it is not a hugely high-risk activity. Then you can move on up, so the higher the degree of automation and the higher the degree of third-party data, the greater the risk, and you have to put in place mitigations accordingly. I am not a lawyer—I am just a poor practitioner—so I cannot define it from a legal point of view, but it is clear in the context of our industry how risk elevates depending on what you are doing.

[Carol Monaghan]

Q I might come back to that in a second, but I think Neil wanted to add something.

Neil Ross: I was going to say that you can see how Chris has interpreted it through the lens of his industry, but the feedback we have had from our members, who operate across a range of industries, suggests that there is quite a lot of confusion about what that terminology might mean. The rest of the Bill aims to clarify elements of the GDPR and put them on the face of the Bill, but this provision seems to be going in the other direction. It raises concern and confusion.

That is why our approach has always been that you are going to get more clarity by aligning the Privacy and Electronic Communications Regulation 2003 more with the GDPR, which has clear legal bases, processes and an understanding of what is high and low risk—a balancing test, and so on—than through this fairly broad and poorly understood term “low risk”. We have concerns about how it will operate across a range of sectors.

[Carol Monaghan]

Q Chris, you said that you are not a lawyer and cannot define what low risk is, but there will of course have to be some sort of definition. Have we captured that well enough?

Chris Combemale: Coming back to our discussion about legitimate interest and the proportionality balancing test, or legitimate interest impact assessments, when you are thinking about what you are planning to do with your customers, it is a requirement of good marketing without the legislation, but also within the legislation, to think about how what you are planning to do will impact your customers’ privacy, and then to mitigate. The important thing is not to say, “There’s no risk,” “It is low risk,” or “It is high risk”; it is to understand that the higher the risk, the greater the mitigations that you have to put in place. You may conclude that you should not do something because the risk level is too high. That is what balancing tests do, and decisions and outcomes result from them.

[Carol Monaghan]

Q The potential difficulty here is that the responsibility is being put on the company. You have described a responsible company that categorises levels of risk and takes action accordingly. Without a clear definition, if it were a less scrupulous company, would there be a grey area?

Chris Combemale: We do a lot of work combating rogue traders, and we provide evidence to cases from our work with the telephone preference service and other activities. Rogue traders—especially those with criminal intent—will generally ignore the legislation anyway regardless of what you do and whether it lacks clarity or not, but I think you are right. An important part of GDPR is that it puts a lot of responsibility on companies to consider their particular activity, their particular customer base and the nature of their audience. Age UK, a charity that has a lot of vulnerable elderly customers, has to have greater protections and put more thought into how it is doing things than a nightclub marketing to under-30s, who are very technologically literate and digitally conversant.

When we do customer attitudes to privacy studies, we see three broad segmentations—data unconcerned, data pragmatist and data fundamentalist—and they require different treatment. It is incumbent on any company, in a marketing context, to understand who their audience and their customer base is, and design programmes appropriately to build trust and long-term relationships over time. That is an important element of GDPR, from a marketer’s perspective. I should add that it should not take legislation to force marketers to do that.

[The Chair]

There are five minutes left and there are two Members seeking to ask questions.

[Damian Collins]

Q With regards to children’s data rights, do you think the Bill will have any implications for the way in which the age-appropriate design code has been implemented by companies working within it at the moment? It is not expressly written into the Bill, but do you expect there to be change?

Neil Ross: No, I do not expect so. Given some of the exemptions for further processing, it might help improve compliance with the law, because compliance with the law in the public interest is then a basis on which you could process data further. It might make it easier for companies to implement the age-appropriate design code.

[Damian Collins]

Q Can you give any examples of that?

Neil Ross: It just gives additional clarity on when and where you can use data on various grounds. There are a wide range of circumstances that you can run into in implementing the age-appropriate design code, so having more flexibility in the law to know that you can process data to meet a legal objective, or for a public interest, would be helpful. The best example I can give is from the pandemic: the Government were requesting data from telecoms companies and others, and those companies were unsure of the legal basis for sharing that data and processing it further in compliance with a Government or regulator request. The Bill takes significant steps to try and improve that process.

[Damian Collins]

Q Could you give an example more directly related to children?

Neil Ross: I do not have one to hand, but we could certainly follow up.

[Mike Amesbury]

Q The Bill enables the commissioner to impose a fine of £1,000. Is that a reasonable deterrent?

Neil Ross: That is in relation to clause 85?

[Mike Amesbury]

Q For non-compliance.

Neil Ross: We do not think it is particularly appropriate for this scenario, given that the telecoms operators are just informing the ICO about activity that is happening on their service. It is not that they are the bad actors in the first instance; they are having to manage it. Ultimately, the first step is to clarify the aims of clause 85, and then whether the fine is appropriate is a subsequent question.

[Mike Amesbury]

Q For some companies, £1,000 will be small fry.

Neil Ross: It will vary from company to company. Most companies will always seek to comply with the law. If you feel you need some kind of deterrent, that is something for Parliament to consider. The first step is to make sure that the law is really clear about what companies are being asked to do. At the moment, that is not the situation we are in.

[The Chair]

There are two minutes left. Chi Onwurah has the last question.

[Chi Onwurah]

Q Mr Combemale, you set out some of the challenges of having centralised cookie management, and how that would give more power to the browsers. What you did not set out was how we could give more control and power to customers—citizens—over how they use their data. What are you doing to ensure that consumers have more control over how their data is used? You talked about the little thing that you can click to stop our personal data being used—that has been in place for some time now and it is great. If we have the time, Mr Ross, what is your sector doing as well, because the technology should be there to help and empower people?

Chris Combemale: I think a lot of what our sector does voluntarily—setting aside the legislation—is the creation of what are called permission centres. You will be familiar with them from when you go to a website and it asks about categories of information or products that you are interested in. That allows consumers to express their interest. Within the legislation there is very clear data notification, required at the point that data is collected, which requires companies to ask you what you want to do. Whether it is consent or legitimate interest, consumers always have the right to opt out.

With marketing, there is an absolute right to ask not to receive marketing of any kind, whether that is email, direct mail or telephone, at any time. Companies have an obligation to follow that. When it comes to marketing, which is my subject matter expertise, consumers are very well protected and do exercise their rights to opt out. They are further protected by central services, for example the telephone preference service. That is a law that companies can look up; 70% or so of households have registered their telephone number there. I think there are a large number of protections in place, both through the legislation and voluntarily.

[The Chair]

Q Mr Ross, you have 30 seconds.

Neil Ross: There has been a big drive among many tech companies to explain better how they use and handle data practices. There is a drive within the sector to do that anyway. Some of that has come from legislative regulatory activity—for example, the Online Safety Bill and other places.

One thing I would say about this legislation is that it does give people more control over data through the privacy management frameworks. By taking a less strict tick-box approach to data-handling practices, there is the opportunity for core sectors or interest groups such as trade unions to put forward what their ideal data-handling practice should be for a company. As long as that complies with what the ICO sets out or the broad guardrails, then you can see a range of different handling practices adopted, depending on which sector you are in. That flexibility gives some power back to consumers and other interest groups.

[The Chair]

Gentlemen, you have been brilliant. Thank you very much indeed for your time this morning. We will now move on to the fourth panel.

Examination of Witnesses

10:50

Dr Jeni Tennison, Anna Thomas and Michael Birtwistle gave evidence.

[The Chair]

Q We will now hear oral evidence from Dr Jeni Tennison, founder and executive director of Connected by Data; Anna Thomas, co-founder and director at the Institute for the Future of Work; and Michael Birtwistle, associate director of AI law and regulation at the Ada Lovelace Institute. For this session we have until 11.25 am. Will the witnesses, from right to left, please be kind enough to introduce themselves to the Committee for the record?

Dr Tennison: Thank you very much for inviting me here today. My name is Dr Jeni Tennison. I am the executive director of Connected by Data, which is a campaign to give communities a powerful say in decisions about data. Prior to that I was the CEO of the Open Data Institute. I am also the co-chair of the data governance working group in the Global Partnership on Artificial Intelligence.

Anna Thomas: Good morning and thank you for having me. I am Anna Thomas, a founding director of the Institute for the Future of Work, a research and development institute exploring the impact of new technologies on work and working lives. I was formerly an employment barrister at Devereux Chambers. The institute is also the strategic research partner for the all-party parliamentary group on the future of work.

Michael Birtwistle: Good morning. I am Michael Birtwistle, an associate director at the Ada Lovelace Institute, responsible for law and policy. The Ada Lovelace Institute is an independent research institute with a mission to make sure that data and AI work for people and society. I was previously a policy adviser at the Centre for Data Ethics and Innovation.

[The Chair]

Welcome. Stephanie Peacock will start the questions.

[Stephanie Peacock]

Q Good morning. To go first to Dr Jeni Tennison, do you think the general public and workers have a good level of trust and understanding in terms of how their data is being used? What does the Bill do, if anything, to help build or improve on that trust and understanding?

Dr Tennison: Surveys and public attitudes polling show that when you ask people about their opinions around the use of data, they have a good understanding about the ways in which it is going wrong, and they have a good understanding about the kinds of protections that they would like to see. The levels of trust are not really there.

A poll from the Open Data Institute, for example, shows that only 30% trust the Government to use data ethically. CDEI has described this as “tenuous trust” and highlighted that about 70% of the public think that the tech sector is insufficiently regulated. I do not think that the Bill addresses those issues of trust very well; in fact, it reduces the power individuals have and also the level of collective representation people can have, particularly in the work context. I think this will diminish trust in the way in which data is used.

[Stephanie Peacock]

Q Do you believe the Government have consulted the public and data subjects such as workers appropriately during the process of formulating the Bill?

Dr Tennison: Obviously, there was a strong consultation exercise around the data reform Bill, as it was then characterised. However, there are elements of this Bill, in particular the recognised legitimate interests that are listed, that have not had detailed public consultation or scrutiny. There are also not the kinds of provisions that we would like to see on ongoing consultation with the public on specific questions around data processing in the future.

[Stephanie Peacock]

Q What value do subject access requests hold for citizens, and how will changing the threshold for refusing a request or changing a request to “vexatious or excessive” impact citizens’ ability to exercise their rights?

Dr Tennison: Subject access requests are an important way in which citizens can work out what is happening within organisations with the data that is being held about them. There are already protections under UK GDPR against vexatious or excessive requests, and strengthening those as the Bill is doing is, I think, going to put off more citizens from making these kinds of requests.

It is worth noting that this is a specific design of the Bill. If you look at the impact assessment, this is where most of the cost to business is being saved; that is being done by refusing subject access requests. So I think we should be suspicious about what that looks like. Where we have been looking at the role of subject access requests in people exercising their rights, it is clear that that is a necessary step, and delays to or refusals of subject access requests would prevent people from exercising their rights.

We think that a better way of reducing subject access requests would be to have publication of things like the risk assessments that organisations have to do when there is high-risk processing—so that there is less suspicion on the part of data subjects and they do not make those requests in the first place.

[Stephanie Peacock]

Q Thank you. I have a couple of questions for Anna Thomas now. Do the current laws around automated decision making do enough to protect workers and citizens from harm?

Anna Thomas: Referring partly to our work in “Mind the gap” and “The Amazonian Era”, as well as the report by the all-party parliamentary group on the future of work about use of AI in the workplace, we would say no. The aim of the Bill—to simplify—is very good. But particular areas in the Bill as it stands—eroded somewhat—are particularly problematic in the workplace. The automated ones that you ask about are really important with regard to the reduction of human involvement. But in addition to that are the need to assess in advance what the risks and impacts are, the requirement for consultation, and the access to relevant information. Those are all relevant and overlap with the automated decision making requirement.

[Stephanie Peacock]

Q Linked to that, do you believe that the safeguards outlined in the Bill—having a right to human review, for example—are enough to protect workers from the potential harm of automated decision making?

Anna Thomas: Not in themselves. There is potential, in those areas, to correct that or to improve it in the course of the Bill’s proceedings, in order that the opportunities, as well as the risks, of putting this new Bill through Parliament are seized. But, no, because of the transformation of work and the extent of the impact, as well as the risks, that new technologies and automated technologies are having across work, not just on access to work, but on terms, conditions, nature, quality and models for work, the safeguards—there is, I think, increasing cross-party consensus about this—should be, in those areas, moving in the other direction.

[Stephanie Peacock]

Q My final question is to Michael. Do you believe that the current regulation does enough to govern the use of biometric technologies?

Michael Birtwistle: No, we would say that it does not. The Ada Lovelace Institute published a couple of reports last year on the use of biometric data, arguing for a much stronger and coherent regulatory governance framework for biometric technologies. These are a set of technologies that are incredibly personal. We are used to their being talked about in terms of our faces or fingerprints, but actually it is a much wider range, involving any measurement to do with the human body, which can be used in emotional analysis—walking style or gait, your tone of voice or even your typing style. There is also a set of incoming, next-generation AI technologies that rely quite heavily on biometrics, so there is a question about future-proofing the Bill.

We have made two broad proposals. One is to increase the capability of the Information Commissioner’s Office to look specifically at biometrics—for example, to create and maintain a public register of private entities engaging in processing of biometric data, to have a proper complaints procedure, to publish annual reports and so on. There is a set of issues around increasing the capability of our institutions to deal with that.

Then there is a second question about scope. First, the current focus of biometric data and definition is on identifiability of personal data. There are many potentially problematic use cases of biometric data that do not need to know who you are in order to make a decision about you. We think it would be wise and would future-proof the regulation of this powerful technology to also include classification or categorisation as the purpose of those biometric technologies.

[Damian Collins]

Q You make a very interesting point there, Mr Birtwistle. With automated decision making, a lot of that could be done anonymously. The user is just the end product. They are being targeted through systems and do not need to be identified; the systems just need to know what their data profile is like in order to make a decision.

I am interested in the views of the other members of the panel as well. Do you think there needs to be a greater onus on data controllers to make clear to regulators what data they are gathering, how they are processing it and what decisions are being made based on that data, so that, particularly in an automated environment, while there may not be a human looking at every step in the chain, ultimately a human has designed the system and is responsible for how that system is working?

Michael Birtwistle: I think that is a really important point that is going to be very relevant as we read this Bill alongside the AI White Paper provisions that have been provided. Yes, there is definitely a need for transparency towards regulators, but if we are thinking about automated decision making, you also want a lot of the safeguards and the thinking to be happening within the firms on a proactive basis. That is why the provisions for automated decision making within the Bill are so important. We have concerns around whether the more permissive automated decision making approach in the Bill is actually going to lead to greater harms occurring as, effectively, it turns the making of those automated decisions from a sort of prohibition with exceptions into something that, for anything other than special category data, is permitted with some safeguards, which again there are questions around.

[Damian Collins]

Q On that point, just to be clear, as long as what someone is doing is not clearly and purely illegal, legitimate interest means you can do whatever you want.

Michael Birtwistle: Legitimate interest still has a balancing test within it, so you would not necessarily always be able to show that you had passed that test and to do whatever you want but, certainly, the provisions in the Bill around automated decisions bring legitimate interest into scope as something that it is okay to do automated processing around.

[Damian Collins]

Dr Tennison?

Dr Tennison: On your first point, around the targets of decisions, one of the things that we would really argue for is changing the sets of people who have rights around automated decision making to those who are the subject of the decisions, not necessarily those who data is known about for those decisions. In data governance practice, we talk about these people as being decision subjects, and we think it is they who should have the rights over being informed about when automated decision making is happening, and other kinds of objection and so forth. That is because, in some circumstances, as you said, there might be issues where you do not have information about someone and nevertheless you are making decisions about them, or you have information about a subset of people, which you are then using to make a decision that affects a group of people. In those circumstances, which we can detail more in written evidence, we really need to have the decision subjects’ rights being exercised, rather than the data subjects’ rights —those who the data is known about.

On the legitimate interest point you raised, there is this balancing test that Michael talked about, that balances the interests of data subjects as well. We think that there should also be some tests in there that balance public interests, which may be a positive thing for using data, but also may be a negative thing. We know that there are collective harms that arise from the processing of data as well.

[Damian Collins]

Q I just want to make sure I have understood that point correctly. Let us say that someone is a recipient of an advert, not because they have been personally targeted, but because they have been targeted through data-matching tools such as lookalike audiences on Facebook. Would that be the sort of thing you are referring to?

Dr Tennison: Yes, it could be, or because they are using a specific browser, they are in a particular area from their IP or something like that. There are various ways in which people can be targeted and affected by those decisions. But we are not just talking about targeted advertising; we are talking about automated decisions in the workplace or automated decisions about energy bills and energy tariffs. There are lots of these decisions being made all the time.

[Damian Collins]

Q Is the gig economy an example of where the systems are biased towards workers who are always available for jobs, or biased towards people based on their proximity to a particular location for work?

Dr Tennison: Yes. Or they may be subject to things like robo-dismissal, where their performance is assessed and they get dismissed from the job, or they are no longer given jobs in a gig economy situation.

[Damian Collins]

Q Effectively a form of constructive dismissal.

Dr Tennison: Yes.

[The Chair]

I can see Anna Thomas chomping at the bit.

Anna Thomas: I would back up what Jeni is saying about group impacts in the workplace context. It is very important that individuals know how systems are used, why and where they have significant effects, and that risks and impacts are ascertained in advance. If it is just individuals and not groups or representatives, it may well not be possible to know, ascertain or respond to impacts in a way that will improve and maximise good outcomes for everybody—at an individual level and a firm level, as well as at a societal level.

I can give a few examples from work. Our research covers people being told about the rates that they should hit in order to keep their job, but not about the factors that are being taken into account. They are simply told that if you are not hitting that, you will lose your job. Another example is that customer interaction is often not taken into account, because it is not something that can be captured, broken down and assessed in an automated way by an algorithmic system. Similarly, older workers—they are very important at the moment, given that we need to fill vacancies and so on—are feeling that they are being “designed out”.

Our research suggests that if we think about the risks and impacts in advance and we take proportionate and reasonable steps to address them, we will get better outcomes and we will get innovation, because innovation should be more than simply value extraction in the scenarios that I have set out. We will improve productivity as well. There is increasing evidence from machine learning experts, economists and organisational management that higher levels of involvement will result in better outcomes.

[The Chair]

Mr Birtwistle?

Michael Birtwistle: I very much agree with my other panellists on those points. If you are thinking about concrete ways to improve what is in the Bill, the high level of protection around automated decision making is currently in article 22B. That looks at decisions using special category data, which, as an input, you could also add in there, looking at the output. You could include decisions that involve high-risk processing, which is already terminology used throughout the Bill. That would mean that, where automated decision making is used around decisions that involve high-risk processing, you would need meaningful human involvement, explicit consent or substantial public interest.

[Carol Monaghan]

Q Jeni, can I come back to you on automated decision making? You have suggested that a requirement to notify people when an automated decision is made about them would be a useful inclusion in the Bill. Do you think enough consideration has been given to that?

Dr Tennison: The main thing that we have been arguing for is that it should be the wider set of decision subjects, rather than data subjects, who get rights relating to notification, or who can have a review. It is really important that there be notification of automated decision making, and as much transparency as possible about the details of it, and the process that an organisation has gone through in making an impact assessment of what that might mean for all individuals, groups and collective interests that might be affected by that automated decision making.

[Carol Monaghan]

Q We can probably broadly split these decisions into two categories. Decisions are already being made by algorithms online, according to what we are looking at. If I look up a paint colour online, and then start getting adverts for different paint companies, I am not too worried about that. I am more concerned that decisions could be made in the workplace about me, or about energy tariffs, as we have heard. That is more serious. Is there a danger that if we notify individuals of all the automated decisions that are made, it will end up like the cookie scenario—we will just ignore it all?

Dr Tennison: I do not think it is a matter of notifying people about all automated decision making. The Bill suggests limiting that to legally or otherwise significant decisions, so that we have those additional rights only as regards things that will really have an impact on people’s lives.

[Carol Monaghan]

Q And you are not comfortable that those have been considered properly in the Bill.

Dr Tennison: I am not comfortable that they are directed to the right people.

[Carol Monaghan]

Q The subject, rather than the decision maker.

Dr Tennison: Yes.

[Carol Monaghan]

Anna, did you want to come in on that?

Anna Thomas: The last question about the threshold is really important, and it tends to suggest that work should have separate consideration, which is happening all over the world. Last week, Canada introduced its automated decision-making directive, and extended it to work. We have been working with it on that. Japan has a strategy that deals expressly with work. In the United States there are various examples, including the California Privacy Rights Act, of rules that give work special attention in this context. Our proposal for addressing the issue of threshold is that you should always provide notification, assess, and do your best to promote positive impacts and reduce negative ones if the decision-making impacts access to work, termination, pay, contractual status or terms, and, for the rest, when there is significant impact.

[Carol Monaghan]

Q Is there a danger that automated decisions could impact the Equality Act, if biases are not properly accounted for?

Anna Thomas: Yes, absolutely. In our model, we suggest that the impact assessment should incorporate not just the data protection elements, which we say remain essential, but equality of opportunity and disparity of outcome—for example, equal opportunity to promotion, or access to benefits. That should be incorporated in a model that forefronts and considers impacts on work.

[Mike Amesbury]

Q Anna, how would you strengthen the Bill? If you were to table an amendment around employees and AI, what would it be?

Anna Thomas: I would advise very clear additional rights, and a duty to notify in advance what, how and why AI is being used where it has these impacts, and where it meets the threshold that I was just asked about. I would also advise having more consultation throughout design, development and deployment, and ongoing monitoring, because AI changes, and there are impacts that we have not thought about or cannot ascertain in advance.

There should also be a separate obligation to conduct an algorithmic impact assessment. The Bill does nudge in that direction, but it says that there should be an assessment, rather than a data protection impact assessment. We suggest that the opportunity be grasped of clarifying that—at least in the workplace context, but arguably there are lessons more widely—the assessment ought to cover these fundamental aspects, and impacts at work.

[Dr Huq]

Q It is good to see the Ada Lovelace Institute represented; she was a pioneering woman computer scientist who lived in my constituency, so it is a bit ironic that the one man here is representing the institute.

Michael Birtwistle: My colleagues could not be here, unfortunately, but they would have been better representatives in that sense.

[Dr Huq]

I want to touch on the equality issue again. A 2019 UN report on the digital welfare state made the point that algorithms repeat existing biases and entrench inequalities. How do we get around that? There are a lot of issues around trust and people’s rights and protections when it comes to this data. On top of those, there is this issue. Does the legislation address that? How can we overcome it?

Dr Tennison: As I have mentioned, there need to be more points in the Bill where explicit consideration of the public interest, including equality, is written into the sets of considerations that organisations, the ICO and the Secretary of State need to take into account when they are exercising their rights. That includes ensuring that public interest and equality are an explicit part of assessments of high-risk processing. That will help us to make sure that in the assessment process, organisations are made to look beyond the impacts on individuals and data subjects, and to look at the whole societal and economic impacts—even at the environmental impacts—that there might be from the processing that they are looking to carry out.

Anna Thomas: I agree. To add to what I said before, it would help to require a technical bias audit as well as a wider equality impact assessment. One idea that you may wish to consider is this: in the same way that the public sector has an obligation sometimes to consider the reduction of wider inequalities, you could have—well, not a full private sector model requiring that; that may need to be built up over time. We could, at the very least, require consideration of the desirability of reducing inequalities of opportunity and outcome as part of determining our reasonable and proportionate mitigations in the circumstances; that would be easy to do.

Michael Birtwistle: I agree. There is also a question about institutional capability—ensuring that the institutions involved have the capability to react to the use of these technologies as they evolve. Specifically, it would be great to see the ICO asked in the Bill to produce guidance on how the safeguards in article 22C are to be implemented, as that will have a large effect on how automated decision making will be lived in practice and built into firms. The powers reserved for Ministers around interpreting meaningful human involvement, and legal and similarly significant effect, will also have a big impact. It would make more sense for that to be with the ICO.

[Dr Huq]

Can I add one yes/no question?

[The Chair]

Yes.

[Dr Huq]

Q If we have an already overburdened regulatory framework, and we put AI on top of it, will it just fall through the cracks? Is there a danger that AI gets forgotten?

Michael Birtwistle: Yes, if regulators are not properly empowered.

Anna Thomas: I strongly agree, but they could be properly empowered and resourced, and in some instances given extra powers to interrogate or to redress what they have found. We advised that there should be a forum in 2020, and are delighted to see the Digital Regulation Cooperation Forum. That could be given additional resources and additional bite, and we would certainly like to see work forefronted and involved in activities. The forum would be well placed, for example, to provide dedicated cross-cutting guidance on impacts in work.

Dr Tennison: I agree with the other panellists. The only thing I would add is that I think that the involvement of the public will be absolutely essential for moving trust forward in those circumstances.

[The Chair]

The last question is from Chi Onwurah.

[Chi Onwurah]

Q Dr Tennison, could you give an example of the kind of abuse that you are most concerned about taking place if this Bill is passed unchanged, so that we can better understand your concern? And do I have time to ask—

[The Chair]

You have four minutes.

[Chi Onwurah]

Great. Ms Thomas, presumably all the automated decisions will be subject to employment law. Would employees have the information they need to appeal decisions and take them to an industrial tribunal?

Dr Tennison: You asked what kind of abuse I am particularly concerned about. I echo some of Anna’s concerns around the work context and what that looks like. We have recently been doing some case studies, which again I can share, and they really bring home the kinds of issues that workers are subject to as automated decision making is rolled out in organisations.

More broadly, though, I am concerned about the gradual drift of reducing trust in the public sphere when it comes to the use of data by Governments and organisations. In some ways, I am more concerned about this leading to people not adopting technology and opting out of data collection because they are worried about what might happen. That would hold us back from the progress and the good uses of data that I would really like to see.

Michael Birtwistle: I agree with that very much. We need to think about past public concern around GP data sharing, contact tracing and the Ofqual exams algorithm. When people see their data being used in unexpected ways, or in ways that make them feel uncomfortable, they withdraw their consent and support for that use, and we as a society lose the benefits that data-driven technology can bring.

Anna Thomas: Employment law and the other laws in that context certainly help in some areas; for example, there is unfair dismissal protection, and redundancy protection under the information and consultation regulations. However, it is a patchwork, and it is not clear. Clarity is needed for businesses, to reassure people at work that the principles in the AI White Paper ultimately apply to their data, and to promote prosperity and wellbeing as widely as possible.

[The Chair]

I thank our three witnesses very much indeed; you have all been fantastic. We are very grateful to you for being here. That brings us to the end of our morning session. The Committee will meet again at 2 o’clock, here in the Boothroyd Room, to continue taking oral evidence. We heard from 10 witnesses this morning and will hear from 13 this afternoon.

Ordered, That further consideration be now adjourned. —(Steve Double.)

11:23

Adjourned till this day at Two o’clock.

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

Committee stage
Wednesday 10th May 2023 Public Bill Committees

The Committee consisted of the following Members:

Chairs: † Mr Philip Hollobone, Ian Paisley

Amesbury, Mike (Weaver Vale) (Lab)

† Bristow, Paul (Peterborough) (Con)

† Clarke, Theo (Stafford) (Con)

† Collins, Damian (Folkestone and Hythe) (Con)

† Double, Steve (Lord Commissioner of His Majesty’s Treasury)

† Eastwood, Mark (Dewsbury) (Con)

Henry, Darren (Broxtowe) (Con)

Hunt, Jane (Loughborough) (Con)

† Huq, Dr Rupa (Ealing Central and Acton) (Lab)

† Long Bailey, Rebecca (Salford and Eccles) (Lab)

† Monaghan, Carol (Glasgow North West) (SNP)

† Onwurah, Chi (Newcastle upon Tyne Central) (Lab)

† Peacock, Stephanie (Barnsley East) (Lab)

† Richards, Nicola (West Bromwich East) (Con)

Simmonds, David (Ruislip, Northwood and Pinner) (Con)

† Wakeford, Christian (Bury South) (Lab)

† Whittingdale, Sir John (Minister for Data and Digital Infrastructure)

Huw Yardley, Bradley Albrow, Committee Clerks

† attended the Committee

Witnesses

Tom Schumacher, Chief Privacy Officer, Medtronic

Jonathan Sellors MBE, Legal Counsel and Company Secretary, UK Biobank

Harry Weber-Brown, Chief Engagement Officer, ZILO

Phillip Mind, Director, Digital Technology and Innovation, UK Finance

Keith Rosser, Chair, Better Hiring Institute

Helen Hitching, Deputy Director and Chief Data Officer, National Crime Agency

Aimee Reed, Director of Data, Metropolitan Police

Andrew Pakes, Director of Communications and Research, Prospect

Mary Towers, Policy Officer, TUC

Alexandra Sinclair, Research Fellow, Public Law Project

Ms Laura Irvine, convener of the Privacy Law sub-committee, Law Society of Scotland

Jacob Smith, UK Accountability Team Leader, Rights and Security International

Alex Lawrence-Archer, Solicitor for AWO (a data rights agency)

Public Bill Committee

Wednesday 10 May 2023

(Afternoon)

[Mr Philip Hollobone in the Chair]

Data Protection and Digital Information (No. 2) Bill

Examination of Witnesses

Tom Schumacher and Jonathan Sellors gave evidence.

14:00

[The Chair]

Welcome back. We are now on to our fifth witness panel and we will hear from Tom Schumacher, chief privacy officer at Medtronic, who has kindly joined via Zoom, and Jonathan Sellors, legal counsel and company secretary at UK Biobank, who is in the room. We have until 2.25 pm for this panel. Could the witnesses please introduce themselves for the record?

Jonathan Sellors: Good afternoon. I am Jonathan Sellors, general counsel of UK Biobank. To those who may not know, we are the largest globally accessible clinical research resource in the world. We comprise 500,000 UK-based participants, and we make de-identified data available to researchers to conduct clinical research in the public interest.

Tom Schumacher: Thank you so much for inviting me. I am Tom Schumacher, and I work for Medtronic as the chief data and privacy counsel. Medtronic is the world’s largest medical device maker, with 90,000 employees around the world and three manufacturing sites in the UK. We are headquartered in Ireland.

[The Chair]

Thank you both for joining us. Stephanie Peacock.

[Stephanie Peacock (Barnsley East) (Lab)]

Q 82 Welcome to you both. My first question is to both witnesses. How easy is it currently for service users and care teams to access and share all of their relevant health and care data?

Jonathan Sellors: I am not sure I am the expert on this particular topic, because my experience is more research-based than in IT systems embedded in clinical care.

Tom Schumacher: I am also not as intimately familiar with that issue, but I would say that interoperability is absolutely critical. One of the challenges we experience with our technologies—I assume this is also the case for your health providers—is the ability to have high-quality data that means the same thing in different systems. That is a challenge that will be improved, but it is really a data challenge more than a privacy challenge. That is how I see it.

[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.

[Damian Collins]

What do you mean by that?

Jonathan Sellors: Like any lawyer, if I were asked to draft something, I would probably always look at it and say I could possibly improve it. However, I would actually look at this and say it is probably good enough.

[Damian Collins]

Q What do you think it means? What is the scope of it?

Jonathan Sellors: If I may, can I come back to you on that with a written response, when I have given it slightly further consideration? Would that be okay?

[Damian Collins]

Q Yes. What I would be interested in is that there could be medical research linked to physical ailments. It could also include mental health, which could, in this context, open up quite a wide range of different fields of research for commercial application as well—understanding people’s stimulus response to fear, anxiety and so on, some of which could have medical application and some of which could be purely commercial.

Jonathan Sellors: I think that, with health-related research that is in the public interest, it is relatively straightforward to spot what it is. Most research is going to have some commercial application because most of the pharma, molecules and medical devices are going to be commercially devised and developed. I do not think that the fact that something has a commercial interest should count it out in any way; it is just about looking at what the predominant interest is.

[Damian Collins]

Q I think that is right. I would welcome it if you were able to write to the Committee with some further thoughts on that. My point, I suppose, is that we have a pretty good idea of what we think public health research could be in this context, whether it is for commercial or non-commercial reasons. However, we want to be certain about whether that opens up other channels of research that others may regard as being not about solving public health problems, but just about the commercial exploitation of data.

Jonathan Sellors: Right, thank you. I understand.

Tom Schumacher: I concur with what the previous speaker said. In the medical device industry, we really focus on what is considered more traditional research, which fits well within the refined research definition that the Bill contains.

[Damian Collins]

Q I have a final question. We have this legislation, and then different tech companies and operating systems have separate guidelines that they work to as well. One of the issues the Government faced with, for instance, the covid vaccine app, was that it had to comply with the operating rules for Google and iOS, regardless of what the Government wanted it to do. Thinking of the work that your organisation has been involved in, are there still significant restrictions that go beyond the legal thresholds because different operating systems set different requirements?

Jonathan Sellors: I do not think I am really the best qualified person to talk about the different Android and Apple operating systems, although we did a lot of covid-related work during the pandemic, which we were not restricted from doing.

Tom Schumacher: I would say that this comes up quite a lot for Medtronic in the broader medtech industry. I would say a couple of things. First, this is an implementation issue more than a Bill issue, but the harmonisation of technical standards is absolutely critical. One of the challenges that we, and I am sure NHS trusts, experience is variability in technical and IT security standards. One of the real opportunities to streamline is to harmonise those standards, so that each trust does not have to decide for itself which international standard to use and which local standard to use.

I would also say that there is a lot of work globally to try to reach international standards, and the more that there can be consistency in standards, the less bureaucracy there will be and the better the protection will be, particularly for medical device companies. We need to build those standards into our product portfolio and design requirements and have them approved by notified bodies, so it is important that the UK does not create a new and different set of standards but participates in setting great international standards.

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

Q In relation to medical research, concerns have been raised that the Bill might risk a divergence from current EU adequacy and that that might have quite a significant detrimental impact on collaboration, which often happens across the EU on medical research. Are you concerned about that, and what should the Government do to mitigate it?

Jonathan Sellors: I think that it is absolutely right to be concerned about whether there will be issues with adequacy, but my evaluation, and all the analysis that I have read from third parties, particularly some third-party lawyers, suggests that the Bill does not or should not have any impact on the adequacy decision at all—broadly because it takes the sensible approach of taking the existing GDPR and then making incremental explanations of what certain things actually mean. There are various provisions of GDPR—for example, on genetic data and pseudonymisation—that are there in just one sentence. It is quite a complicated topic, so having clarification is thoroughly useful, and I do not think that that should have any impact on the adequacy side of it. I think it is a very important point.

Tom Schumacher: I agree that it is a critical point. I also feel as though the real value here is in clarifying what is already permitted in the European GDPR but doing it in a way that preserves adequacy, streamlines and makes it easier for all stakeholders to reach a quick and accurate decision. I think that adequacy will be critical. I just do not think that the language of the text today impacts the ability of it to be adequate.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Q I know that you are very supportive of the Bill, but I wonder whether you see risks to patients and service users from facilitating a greater sharing of health and care data. Could you each answer that question?

Jonathan Sellors: I think that data sharing, of one sort or another, absolutely underpins medical research. You need to be able to do it internationally as well; it is not purely a UK-centric activity. The key is in making sure that the data that you are using is properly de-identified, so that research can be conducted on patients, participants and resources in a way that does not then link back to their health data and other data.

[Chi Onwurah]

Q So it has to be de-identified. We will return to that. But you do not see any other risks?

Jonathan Sellors: Let me put it this way: poor-quality research, undertaken in an unfortunate way, is always going to be a problem, but good-quality research, which has proper ethical approval and which is done on data that is suitably managed and collated, is an essential thing to be able to do.

[Chi Onwurah]

Q I agree with you. Sorry, I did not quite hear what you said—approval by whom?

Jonathan Sellors: Approval by the relevant ethics committee.

[Chi Onwurah]

Q Right. Is it a requirement of the Bill that the research should have the approval of the relevant ethics committee?

Jonathan Sellors: I do not think that it is a requirement of this Bill, but it is a requirement of pretty much most research that takes place in the UK.

[Chi Onwurah]

Q But not all research, surely, because the definition of research is something that can

“reasonably be described as scientific”

research. You would see concerns, then, if data was to be shared for research that was carried out outside of ethics committee approvals. I do not want to put words into your mouth, but I am just trying to understand.

Jonathan Sellors: Sure. I think it depends on the nature of the data that you are trying to evaluate. In other words, if you are looking at aggregated or summary datasets, I do not think there is any particular issue, but when you are looking at individual-level data, that has to be suitably de-identified in order for research to be safely conducted.

[Chi Onwurah]

Q On the point of de-identifying or pseudonymisation, do you recognise that there have been examples of pseudonymised data that has been re-identified, and that, particularly given the rise of huge datasets, artificial intelligence and so on, there is a risk of un-de-identifying pseudonymised data?

Jonathan Sellors: There is always a risk, but I think the way it is expressed in the Bill is actually quite measured. In other words, it takes a reasonable approach to what steps can constitute re-identification. There are a certain police-related examples whereby samples are found on crime scenes. The individuals can be identified, certainly, if you are on the police database, but if they are not on a reference database, it is extremely difficult to re-identify them, other than with millions of pounds-worth of police work. For all practical purposes, it is actually de-identified. Saying something is completely de-identified is quite difficult.

[Chi Onwurah]

Q Yes, I certainly agree with that—it is almost impossible—but I do think it is possible to re-identify data without spending millions of pounds, especially when it is correlated with other large datasets. Would you recognise that?

Jonathan Sellors: I definitely recognise that. That is one of our principal bits of concern, but usually the identifiers are the relatively simple ones. In other words, you can re-identify me quite easily by my seven-digit postcode and my age and my gender. Obviously, when we release data, we make sure not to do that. Releasing quite a big bit of my genetic sequence does not make me re-identifiable.

[Chi Onwurah]

Currently.

Jonathan Sellors: Currently—I accept that.

Tom Schumacher: I would say a couple of things. It is important to know that the Bill preserves the full array of safeguards in the GDPR around data minimisation, access controls and making sure that you have de-identified the data as much as possible for the purpose you are going to use it for. The opportunity that our company is quite concerned about is that, without some elements of real-world data, we are not going to be able to eliminate the bias that we see in the system. We are not going to be able to personalise medicine, and we are not going to be able to get our products approved, because our regulating bodies are now looking at and mandating that the technology we use is tested in different attributes that are relevant for that technology.

As an example, there are very few data pieces that we need for our digital surgery business, but we might need gender, weight and age. The Bill will allow customisation to say, “Okay, what are you going to do to make sure that only two or three data scientists see that data? How are you going to house it in a secure, separate environment? How are you going to make sure that you have security controls around that?” I think the Bill allows that flexibility to try to create personalised medicine, but I do not believe that the Bill opens up a new area of risk for re-identification provided that the GDPR safeguards remain.

[Chi Onwurah]

Q Let me ask a follow-up question. I recognise that your intent in research is ethical—there are ethics committees involved. Given the definition of scientific research to be anything that can be reasonably described as scientific, what is to stop data being shared for the purposes of, for example, justifying anti-covid vaccination conspiracy theories? Do you recognise that there are purposes that could be described as research but which many people would not want their data to be used for?

Tom Schumacher: In isolation, that would be a risk, but in the full context of the interrelationship between the data owner and controller and the manufacturer, there would be a process by which you would define the legitimate use you are going to use that data for, and that would be something that you would document and would go on your system. I do not believe that using data for political purposes would constitute research in the way that you would think about it in this Bill. Certainly the UK ICO is well regarded for providing useful interpretation guidance. I think that that office would be able to issue appropriate guardrails to limit those sorts of abuses.

Jonathan Sellors: If you look at a scientific hypothesis, it might not be a scientific hypothesis that you like, but it is much better to have it out there in the public domain, where the data that underpins the research can be evaluated by everybody else to show that it is not sound and is not being conducted appropriately.

[Chi Onwurah]

Q Yes, but people might not want their data to be used for that. They would have no control over it in this case.

Jonathan Sellors: There has to be some element of scientific flexibility, but scientists themselves have to be able to make a decision about what they wish to investigate. The main thing to ensure is that it is transparent—in other words, somebody else can see what they have done and the way in which they have done it, so that if it does come up with a conclusion that is fundamentally flawed, that can be properly challenged.

[The Chair]

If there are no further questions, may I thank both of you gentlemen very much indeed for your time this afternoon and for giving us your evidence. It is hugely appreciated. We now move on to the sixth panel.

Examination of Witnesses

Harry Weber-Brown and Phillip Mind gave evidence.

14:23

[The Chair]

Welcome, gentlemen. We will now hear from Harry Weber-Brown, chief engagement officer at ZILO, and Phillip Mind, director of digital technology and innovation at UK Finance. We have until 2.50pm for this session. I now invite the witnesses to please introduce themselves to the Committee for the record, starting with Mr Weber-Brown.

Harry Weber-Brown: Thank you very much. My name is Harry Weber-Brown, chief engagement officer for ZILO Technology Ltd, which is a start-up based in London. I have previously worked for the Investing and Saving Alliance. I have much experience in both smart data, which is dealt with in part 3 of the Bill, and digital identity, which relates to digital verification services in part 2.

Phillip Mind: Good afternoon. I am Phillip Mind, director of digital technology and innovation at UK Finance, a trade body representing over 300 organisations in the bank and finance community. Like Harry, my expertise resides more in parts 2 and 3 of the Bill, although I have a few insights into part 1.

[Stephanie Peacock]

Q Good afternoon to both witnesses. I have a broad opening question. What are the main implications of the Bill’s provisions for the finance sector?

Phillip Mind: The banking community is supportive of the Bill, which is enabling of a digital economy. The data protection reforms reduce compliance burdens on business, which is very welcome. The provisions on digital identity are enabling, and we see digital identity as an essential utility for customers in the future. The provisions on smart data extend an open data regime to other sectors. We already have an open banking regime, and we are keen for that to extend to other sectors. It offers real opportunities in terms of innovative products and services, but we would caution the Committee that there is significant cost and complexity in those measures.

Harry Weber-Brown: The Bill is key to retaining the UK’s place as a hub for technical innovation, and in particular for investment in fintech. It is critical also to make sure the UK remains a global leader in data portability. Building on the work that Phillip just mentioned on open banking, which has over 7 million users among both consumers and small and medium-sized enterprises, it is critical that we make sure we are ahead of the competition.

For the financial services sector, the provisions on ID help to reduce costs for things like onboarding and reduce fraud for things like authorised push payments. It also delivers a better customer experience, so you do not have to rummage around to find your passport every time you want to set up a new account or need to verify yourself to a financial service firm.

Smart data is an opportunity for us to extend ourselves as the world leader in open finance, building on the work of not only open banking but the pensions dashboard, which is yet to be launched but is another open finance scheme. The opportunity to widen up and give consumers more control in their ability to share data is critical for the customer, the economy and the financial services industry.

[Stephanie Peacock]

Q That is great. You both mentioned smart data. For the benefit of the Committee, could you outline some of the progress that the banking and finance industries have made in developing smart data initiatives?

Phillip Mind: In the banking industry we have open banking, which allows customers to choose and consent to allow an authorised third party provider access to their account to provide products and services—access to see the data. It also allows—again, with customer choice and consent—customers to allow a third party provider to make payments on their behalf. That has been hugely enabling. It has enabled growth in all sorts of innovative products and services and growth in fintech in the UK. As Harry mentioned, there are over 7 million active customers at the moment, but it does come with a cost; it is not a free good. Making that service available has involved cost and complexity.

In extending the provisions to other sectors through secondary legislation, it is really important that we are cognisant of the impacts and the unintended consequences. Many sectors have pre-existing data-sharing arrangements, many of which are commercial, and it is important that we understand the relative costs and benefits and how they fall among different participants in the market. My caution to the Committee and to Government is to go into those smart data schemes with eyes open.

[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.

[Damian Collins]

Q Can you understand that there might also be concerns on the consumer side about data profiling consumers based on risk? That would make a lot of sense for financial services. You have described certain financial products, but equally there are people offering loans, mortgages, insurance and things like that who will be very keen to understand more about their customers before pricing their products accordingly.

Phillip Mind: A digital identity gives customers more control. One of the issues that we face at the moment when we present a passport or driving licence is that we cannot minimise the data there. There is a data minimisation opportunity and benefit.

For businesses and customers, too, identity is a key issue when we transact digitally. There are risks around profiling, but there are real opportunities around anti-fraud as well. Being absolutely clear about who we are transacting with and being able to prove incontrovertibly who we are through a safe and secure token will deliver huge benefits to the economy.

[Damian Collins]

We talked in the previous session about the undoubted benefits, which you have set out clearly. Equally, however, consumers will still want to know what sort of data about them is being used and who has access to it. For example, if a video games maker is profiling the attitudes of players to risk, in order to stimulate them with risk-and-reward opportunities within a game like Fortnite, consumers might understand how that makes their gameplay more interesting. They might consent to that, but they might not necessarily want a financial services provider to have access to that information, because it could create a picture of them that is not flattering.

Harry Weber-Brown: That is a perfectly good challenge. There is a spawning part of the industry around consent dashboards. The idea there is that we put much more control in the hands of the consumer, so that they can see where they have given consent to share data and what data has been shared, while also having the right of revocation and so on. There are technical workarounds to ensure that consumers are much more empowered to control their data. Certainly the legislation supports that, but there will be the technical implementation that sits behind it to ensure that the GDPR is abided by and that the smart data will facilitate better services to consumers. The technology is the answer, but the smart data will open up the opportunity to make sure that the consumer is protected, while with things like consent dashboards they can take better control of where their data is being shared.

Phillip Mind: The interesting thing about digital identity is that it creates a tether. In the future, you will be able to tether digitalised tokens such as securities or deeds to an identity in a safe way, but you could also tether consent to a digital identity, giving a customer or citizen a more holistic view of what they have consented to and where. As Harry says, for those who have real data literacy issues, we will see intermediaries offering services around consent. Those services exist in other jurisdictions.

[Damian Collins]

I think the Estonian digital ID model works in a very similar way.

[Chi Onwurah]

Q You have both spoken very passionately, if I may say so, about the importance of citizens being in control of their data, particularly with open banking. We all take very seriously our financial data and the importance of trust and empowerment in these services. Can you say how the Bill will improve trust and control for citizens, or how it should do so?

Harry Weber-Brown: Part 2 of the Bill sets out the trust framework, which was being developed by the then Department for Digital, Culture, Media and Sport and which now comes under the Department for Science, Innovation and Technology. It will give certainty to the marketplace that any firm that wishes to store data—what is commonly known as an identity provider—will have to go through a certification regime. It will have to be certified against a register, which means that as a consumer I will know that I can trust that organisation because it will be following the trust framework and the policies that sit within it. That is critical.

Similarly, if we are setting up schemes with smart data we will need to make sure that the consumer is protected. That will come through in secondary legislation and the devil will be in the detail of the policies underpinning it, in a similar way to open banking and the pensions dashboard.

Further to the previous session, the other thing I would say is that we are talking on behalf of financial services, but parts 2 and 3 of the Bill also refer to other sectors: they apply equally to health, education and so on. If as a consumer I want to take more control of my data, I will want to be able to use it across multiple services and get a much more holistic view not just of my finances, but of my health information and so on.

One area that is particularly developing at the moment is the concept of self-sovereign identity, which enables me as a consumer to control my identity and take the identity provider out of the equation. I do not want to get too technical, but it involves storing my information on a blockchain and sharing my data credentials only when I need to do so—obviously it follows data minimisation. There are evolving schemes that we need to ensure the Bill caters for.

[Chi Onwurah]

Q Thank you very much for those points.

You mentioned data verification services. Briefly, can you help the Committee to understand who would be providing those services and who would be paying for them? You gave the example of tethering my property or other ownership. Who would be paying in that case? Would I be paying for the rest of my life to keep that data where it is? How do you see it working?

Phillip Mind: Who will provide the services? There is already a growing list of verified providers. There is a current market in one-off digital identity services, and I think many of those providers would step in to the reusable digital identity market.

What is the commercial model? That is a really good question, and frankly at this point I do not have an answer. That will evolve, but within the frameworks that are set up—trust schemes, in the jargon—there will be those who provide digital identity services and those organisations that consume them, which could be retailers, financial services providers or banks. It is likely that the relying parties, the consumers, would pay the providers.

Harry Weber-Brown: But not the individual consumers. If you wanted to open a bank account, and the bank was relying on identity measures provided by fintech, the bank would pay the fintech to undertake those services.

[The Chair]

We have time for a very quick question from Rupa Huq, with very quick answers.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

Q UK Finance’s members are all the big banks—is that right?

Phillip Mind: We represent more than 300 organisations in the banking and finance community. Some are big banks and some are quite small fintechs, so there is quite a spectrum.

[Dr Huq]

Q Okay. The dealings that I have had with you have been about the bank card phenomenon. We know that there is public mistrust in the consumer banking sector about how our data is controlled. How will you ensure that the Bill does not leave behind those people who are not online? That is what the banking hubs are aimed at, is it not? There is a whole loneliness agenda, as well as issues relating to the elderly.

[The Chair]

You have 30 seconds to answer.

Phillip Mind: That is a big challenge. It is really important that people are not left behind and that they have the ability to create a kind of digital identity. As a society, we will have to work very hard to enable that. That is a responsibility that falls not on banks, but on other organisations that will help citizens to create these identities.

[The Chair]

Thank you very much indeed for your evidence this afternoon and for giving us the benefit of your time. We appreciate it.

Examination of Witness

Keith Rosser gave evidence.

14:50

[The Chair]

Welcome, Mr Rosser. We have just 15 minutes, until 3.05 pm, for this session. Would you kindly introduce yourself to the Committee for the record?

Keith Rosser: My name is Keith Rosser. I am the chair of the Better Hiring Institute.

[Stephanie Peacock]

Q Good afternoon. What are the main implications of the Bill for employers? Specifically, how will enabling greater use of a digital verification service help employers to make hiring decisions?

Keith Rosser: Employers have been making hiring decisions using digital identity since 1 October, so we are a live case study. The biggest impact so far has been on the speed at which employers are able to hire staff and on the disconnection between where people live and the location of their job. For example, people in a digital identity scheme could apply for work, get a job and validate who they are without ever necessarily having to go and meet the employer. It is really important across the regions, from St Austell to Glasgow, that we are opening up job opportunities across the UK, including in some of our urban areas—West Bromwich, Barnsley and others—where people get greater job opportunities from where they live because they are not tied to where the employer is. It has had a profound effect already.

We recently looked at a study of 70,000 hires or people going through a hiring process, and 83%—some 58,000—opted to take the digital identity route. They did it in an average time of three minutes and 30 seconds. If we compare that with having to meet an employer and go through a process to provide your physical documents, there is a saving of around a week. If we think about making UK hiring the fastest globally, which is our ambition, people can start work a week earlier and pay taxes earlier, and we are cutting waiting lists and workloads. There is a huge positive impact.

In terms of employers making those hiring decisions, technology is so much better than people at identifying whether a document is genuine and the person is who they say they are. In that case study, we found that 200 of the 70,000 people going through the process had fake documents or fraudulently obtained genuine documents. The question is, would the human eye have spotted that prior to the implementation of digital identity? I am certain that it would not have done. Digital identity is really driving the potential for UK hiring to be a shining example globally.

[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.

[Chi Onwurah]

Q Thank you very much for your evidence so far. It is going to be informative about the use of digital ID in recruitment. You said earlier that it helps to separate away from geography, which implied that the digital ID did not reference the location or the home address of the person who was being ID’d. What does the digital ID ID? Part of the reason behind that question is this: is it simply providing identification, or could it also be used as part of the triage process? Can that be done algorithmically, with some of the dangers that we see in algorithmic, automated decision making?

Keith Rosser: Those are several really good questions. I will use an example about location from the other perspective, first of all. At the moment, Home Office policy has not caught up with digital identity, and we are addressing that. There is a real opportunity to right that. It means that one in five work seekers right now cannot use digital identity to get a job, because they do not have an in-date British or Irish passport. If you have a visa or an in-date British or Irish passport, that is fine, but if you are among the one in five people in the country who do not have an in-date passport, you cannot. Those people have to visit the premises of the employer face to face to show their documents, or post their original documents across the UK.

This has really created a second-class work seeker. There are real dangers here, such as that an employer might decide to choose person one because they can hire them a week faster than person two. There is a real issue about this location problem. Digital identity could sever location to allow people more opportunities to work remotely across the UK.

There were really good questions about other information. The Bill has a provision for other data sharing. Again, there is the potential and the opportunity here to make UK hiring the fastest globally by linking other datasets such as HMRC payroll data. Rather than looking at a CV and wondering whether the person really worked in those places, the HMRC data could just confirm that they were employed by those companies.

There is a real opportunity to speed up the verification but, as I want to acknowledge and as you have referred to, there is certainly also a risk. Part of our mission is to make UK hiring fairer, not just faster and safer. I want to caution against going to a degree of artificial intelligence algorithmic-based hiring, where someone is not actually ever in front of a human, whether by Teams video or in person, and a robot is basically assessing their suitability for a job. We have those risks and would have them anyway without this Bill. It is really important as we go forward that we make sure we build in provisions somewhere to ensure that hiring remains a human-on-human activity in some respects, not a completely AI-based process.

[The Chair]

Mr Rosser, thank you very much indeed for your evidence this afternoon. We are grateful for your time, sir.

Examination of Witnesses

Helen Hitching and Aimee Reed gave evidence.

15:01

[The Chair]

Welcome, ladies. We have until 3.30 pm for this session. Will the witnesses please be kind enough to introduce themselves to the Committee for the record? Let us start with Helen Hitching.

Helen Hitching: Good afternoon. I am Helen Hitching, Chief Data Officer for the National Crime Agency, and this is my first time in front of a Committee.

[The Chair]

Welcome and thank you. Aimee Reed?

Aimee Reed: Hello, everybody. This is also my first appearance in front of a Bill Committee. I am the Director of Data at the Metropolitan Police Service. For my sins, I also volunteer to lead all 43 forces on data; I am chair of the national police data board. I am here today in that capacity as well.

[Stephanie Peacock]

Q You are both very welcome. My first question is to Aimee. Currently, police are required by section 62 of the Data Protection Act 2018 to log their justification for accessing specific data records; this Bill, of course, changes that. How time consuming is that requirement currently for officers?

Aimee Reed: It is a big requirement across all 43 forces, largely because, as I am sure you are aware, we are operating on various aged systems. Many of the technology systems across the policing sector do not have the capacity to log section 62 requirements, so police officers are having to record extra justification in spreadsheets alongside the searches and release of information that they deliver. So the requirement is a considerable burden across all the forces.

[Stephanie Peacock]

Q Helen, how, if at all, will listing as a recognised legitimate interest

“detecting, investigating or preventing crime”,

to quote the new definition, aid the tackling of serious crime in the UK?

Helen Hitching: Sorry—could you repeat that?

[Stephanie Peacock]

Sure. My understanding of the legislation in front of us is that if the Bill becomes law,

“detecting, investigating or preventing crime”

will be listed as a recognised legitimate interest and therefore be subject to separate, or slightly amended, data rules. How will that change help tackle serious crime in the UK?

Helen Hitching: I think it will bring a level of simplicity across the data protection environment and make sure that we can share data with our policing colleagues and other services in a more appropriate way. It will make the whole environment less complex.

[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.

[Damian Collins]

Q In terms of criminal investigations, practically how easy is it to get hold of data and information that you consider to be important, particularly if it is from private companies?

Aimee Reed: It is not as easy as we would like it to be, and provision is not made in the Bill to make that easier. There are some discussions about it going into the Online Safety Bill and other areas. It could be easier. We would push harder in the future, but at the moment, getting parity across the other areas and around national security is a focus that we welcome.

Helen Hitching: I want to pick up on the fact that safeguards are not reducing. It is key that the agency notes the point that our safeguards are not being lowered because of this.

[Mark Eastwood (Dewsbury) (Con)]

Q I have been on the parliamentary police and fire service scheme, so I have spent a lot of time with the police. One of the big frustrations from the police’s point of view is the lack of free flow of information, particularly when it concerns charging decisions, along with redaction, which potentially causes some antagonism between the two. I know this is not strictly covered in the Bill, but would it be beneficial to both parties if you were able to share unredacted information before a charging decision is made?

Aimee Reed: I will answer that in respect of where we are now in national policing. It would be of considerable benefit if the guidance was clearer that we could share information without having to redact it, certainly pre-charge, to enable better and easier charging decisions—to be honest—within the Crown Prosecution Service. It would also reduce the current burden on officers: you can think about the volume of data they have to hand over, and it can be video, audio, transcripts—it is not just witness statements, as it used to be 20 or 30 years ago. Reducing that burden would be significant for frontline officers and unleash them to be able to do other things.

[Mark Eastwood]

Q So it would be an advantage for the Government to look into including that.

Aimee Reed: It certainly would. It is not that we cannot do that now; I just think the guidance could be clearer. It would put it into sharper relief if we could release that burden from policing to the CPS and the CPS felt confident that that was within the rules.

Helen Hitching: The agency agrees with that—there would be the same impact.

[Chi Onwurah]

Q I think you implied that there was data that you would like to have access to but currently do not have access to. Can you elaborate on what data you do not have access to in terms of data sharing and the barriers? What would be helpful for investigations?

Aimee Reed: It is not so much about specific datasets; it is about synchronisation and the speed with which you can exchange data that enables you to make better decisions. Because the Data Protection Act is split into three parts, and law enforcement quite rightly has a section all of its own, you cannot utilise data analytics across each of the parts. Does that make sense? If we wanted to do something with Driver and Vehicle Licensing Agency data and automatic number plate recognition data, we could not join together those two large datasets to enable mass analysis because there would be privacy rights considerations. If want to search datasets from other parts of that Act, we have to do that in quite a convoluted administrative way that perhaps we can share within law enforcement. It is more about the speed of exchange.

[Chi Onwurah]

Q Is it about the speed of exchange with other Government agencies or with local government agencies?

Aimee Reed: It is more with our local partners. I am sure that our partners would say they are equally frustrated by the speed at which they can get data from the police in large datasets to enable them to make better decisions in their local authorities. That is just how that Act was constructed, and it will remain so. The recent ICO guidance on sharing has made that simpler, but this realm of the Bill will not make that synchronisation available to us.

[Chi Onwurah]

Q Do you think it should be available to you? Are there reasons why it is not available to you?

Aimee Reed: It is about getting right the balance between what we do with people’s personal data and how the public would perceive the use of that data. If we just had a huge pot where we put everybody’s data, there would be real concerns about that. I am not suggesting for a second that the police want a huge pot of everybody’s data, but that is where you have to get the balance right between knowing what you have and sharing it for the right purpose and for the reason you collected it in the first place.

[Chi Onwurah]

Q Just to follow up on the questions about the different types of regulation, do you feel that the balance has been struck appropriately when it comes to biometric data, particularly for facial recognition, for example?

Helen Hitching: Sorry—could you repeat that?

[Chi Onwurah]

Has the balance between sharing and the regulation of biometric data, particularly facial recognition data, been struck in the right way?

Helen Hitching: I do not think facial recognition data is captured.

Aimee Reed: On facial recognition, given that we have deployed it—very high profile—I think that the balance is right. We have learned a lot from the South Wales judgment and from our own technical deployments. The Bill will also highlight how other biometric data should be managed, creating parity and an environment where biometric data that we do not yet have access to or use of is future-proofed in the legislation. That is really welcome.

[Rebecca Long Bailey]

Q Helen, you mentioned that you are broadly supportive of the abolition of the Biometrics Commissioner and the Surveillance Camera Commissioner, but that that abolition will not reduce the existing level of oversight. Now seems to be the time to request additional resources if you did not feel that the new commissioners would be adequately resourced, so do you have confidence that the Investigatory Powers Commissioner has sufficient resources and expertise to take on the functions it has to? Similarly, does the Information Commissioner have sufficient resources and expertise to oversee regulation in this area?

Helen Hitching: It is difficult for the agency to comment on another organisation’s resources and capabilities. That question should probably be posed directly to them. The Information Commissioner’s Office already deploys resources on issues related to law enforcement data processing, including the publication of guidance. From a biometrics perspective, the casework is moving to the IPC, so from a resourcing perspective I think it would have adequate casework provision and expertise.

Aimee Reed: I echo the comments about expertise, particularly of the Investigatory Powers Commissioner. I think that the expertise exists but, like Helen, whether it has enough resources to cope with the casework I presume is a demand assessment that it will do in response to the Bill.

[Rebecca Long Bailey]

Q I have a final question for you, Aimee. There are concerns, particularly given that the Information Commissioner’s Office 2021 data protection audit report gave an assurance rating of “limited” to the Met’s policies on records management. How can you reassure the public, given that there will be such an expansion of powers in the area, that the Met will not receive a similar report over the next 12 months?

Aimee Reed: That is a very topical question today. The first thing to say is that I am not sure I agree that this is a large expansion of our access to personal data; I think it is a simplification of the understanding of what we can do as a law enforcement body. All the same safeguards and all the same clear water will be in place between the different parts of the Act.

We did indeed get a “limited” rating on records management, but as I am sure you are aware, we were assessed on three areas, and we got the second highest grading in the other two: the governance and accountability of our management data; and our information risk management. They came out higher.

What have we done since 2021? We have done quite a lot to improve the physical and digital records management, with greater focus on understanding what data we hold and whether we should still hold it, starting a review, retain and deletion regime. We now have an information asset register and a ROPA—record of processing activities. The previous commissioner, Cressida Dick, invested a significant amount in data management and a data office, the first in UK policing. The new commissioner, as I am sure you have seen, is very committed to putting data at the heart of his mission, too. We have already done quite a lot.

The Bill will simplify how we are able to talk to the public about what we are doing with their data, while also reassuring them about how we use it. We are in a very different place from where we were 12 months ago; in another 12 months, it will be even more significantly improved. We have just worked with the Open Data Institute to improve how open we will be with our data to the public and partners in future, giving more to enable them to hold us to account. I am already confident that we would not get a rating like that again in records management, just based on the year’s review we have had from the ICO about where we have got to.

[Rebecca Long Bailey]

Q Similarly, now that you have authority over all forces across the UK, I have the same question regarding each of them: are you content that they are equipped and resourced adequately to meet data protection requirements, given that there is such an expansion?

Aimee Reed: I wish I had authority across them. I represent—that is a better way of describing what I do. Am I confident that law enforcement in general has the right investment in this space, across all forces? No, I am not. That is what I am working hard to build with Chief Constable Jo Farrell, who leads in this area for all forces on the DDaT approach. Am I more confident that forces really getting investment in this space is necessary? Absolutely.

[Rebecca Long Bailey]

Q In terms of additional resources, are there any specific figures or requirements that you could point the Government towards at this stage?

Aimee Reed: In line with our own DDaT framework, we are working with the Home Office and other ministerial bodies on what good looks like and how much is enough. I am not sure that anybody has the answer to that question yet, but we are certainly working on it with the Home Office.

[The Chair]

Ladies, thank you very much indeed for your time this afternoon. We will let you get back to your crime fighting.

Examination of Witnesses

Andrew Pakes and Mary Towers gave evidence.

15:20

[The Chair]

We now come to our ninth panel. We welcome Andrew Pakes, who is director of communications and research at Prospect, and Mary Towers, who is the policy officer at the Trades Union Congress. We have until 3.55 for this session. I invite the witnesses to introduce themselves to the Committee for the record—ladies first.

Mary Towers: Hi, and thanks very much for inviting the TUC to give evidence today. My name is Mary Towers. I am an employment rights policy officer at the TUC, and I have been leading a project at the TUC looking at the use of AI in the employment relationship for the past couple of years.

Andrew Pakes: Hello, everyone. Thank you for inviting Prospect to give evidence today. My name is Andrew Pakes. I am one of the deputy general secretaries and the research lead for Prospect union, which represents scientific, technical and professional workers. I am also a member of the OECD’s AI expert panel, representing trade unions.

[Stephanie Peacock]

Q Good afternoon to you both; you are very welcome. My first question is to Andrew. Obviously, the nature of work has changed significantly over the past few decades, particularly in the last decade. What impact has technology, particularly the rise of automated decision making and automated performance management, had on the workplace?

Andrew Pakes: We were already seeing a huge change in the use of digital technology prior to the pandemic. The pandemic itself, not least through all the means that have kept many of us working from home, has transformed that. Our approach as a trade union is to embrace technology. We believe that our economy and the jobs our members do can be made better and more productive through the good deployment of technology to improve jobs.

We also think there is a downside to it all. Everything that needs to be risked and balanced is in that. Alongside the advance in innovation and technology that has brought benefits to the UK, we have seen a rise in the darker or less savoury side of that, which is namely the rise of surveillance software; the ability of software to follow us, including while working from home, and to micromanage us and track people; and the use of technology in performance management—the so-called people analytics or HR management, which is largely an unregulated area.

If you ask me which legislation this should sit in, I would probably say an employment-type Bill, but this is the legislation we have and the Government’s choice. We would definitely like to see checks and balances at least retained in the new legislation compared with GDPR, but maybe they should be enhanced to ensure that there is some form of social partnership and that working people have a say over how technology is introduced and implemented in their workspaces.

[Stephanie Peacock]

Q That makes sense. You mentioned the changes since the pandemic. How do you think those changes have impacted on the right to privacy and the right to a work-life balance? I presume that has shifted since the pandemic.

Andrew Pakes: There is increasing evidence that while technology has allowed many of us to remain connected to our workspaces—many of us can now take our work anywhere—the downside is that our work can follow us everywhere. It is about the balance of digital disconnection and the ability to switch off from work. I am probably preaching to the wrong crowd, because MPs are constantly on their phones and other technology, but many of us are able to put that away, or should do, because we are contracted workers and have a different relationship with our workplace in terms of how that balance is struck. We very much focus on wellbeing and on information and consultation, ensuring that people are aware of the information that is collected on us.

One of the troubling factors that we and the TUC have picked up is that consistently, in opinion polls and research that is done, working people do not have confidence or knowledge about what level of data is being collected and used on them. When we see the increasing power of technology through AI and automated decisions, anxiety in the workplace is best foiled by transparency, in the first place, and, we would obviously argue, a level of social partnership and negotiation over how technology is introduced.

[Stephanie Peacock]

Q What effect do you believe the new rules in the Bill on automated decision making will have on workers? I think you have alluded to this, but would you like to see greater protections in place?

Andrew Pakes: Absolutely. What strikes me about the legislation you are considering is that just about all our major competitors—who are more productive and more advanced, often in innovation, including the United States—are choosing a path of greater scrutiny and accountability for AI and automated decision making. There is a concern that in this legislation we are taking an alternative path that makes us stand out in the international economy, which is about diluting existing protections we have within GDPR to a lower level. That raises concerns.

We have particular concerns about automated technology, but also about the clauses on the reduction of powers around data protection impact assessments. We think the risk is that the legislation could open the back door to the increase in dodgy surveillance and other forms of software coming into the UK market. I am worried about that for two reasons: first, because of the impact it has on individual workers and what is happening there; and secondly, because most of this technology—we have been part of a project that has tracked over 500 different surveillance software products currently on the international market—is designed largely for a US or Chinese market, with little knowledge of how it is being done.

What we know through ensuring consultation on the existing DPIA arrangements is that there is a break in the current rules that enables or ensures that employers have a consultation and check where their products are taking their data from and what they have stored. Diluting that risks ensuring that we are not sure where that data is being used and we are not sure of the power of this technology, and working people then end up with a worse deal than they currently have.

[Stephanie Peacock]

Q I have a couple of questions for Mary Towers. Do you think that the changes in the Bill will do anything to improve the collective rights of workers? If not, what sort of mechanisms would you like to see in place to give workers a method of redress collectively?

Mary Towers: On the contrary, we would say that the Bill in fact reduces the collective rights of workers, particularly in relation to data protection impact assessments. As Andrew has mentioned, at the moment the right to a data protection impact assessment involves an obligation on an employer to consult with workers or their representatives. That is an absolutely key tool for trade unions to ensure that worker voice is represented in the path of the introduction of new technologies at work. Also, at the moment, missing from the Bill is the ability of trade unions to act as representatives for data subjects in a collective way. We say that that, too, is missing, could be added and would be an important role that unions could take on.

Another aspect missing from the Bill, which we say is a hugely missed opportunity, is a potential right that workers could have to have an equal right to their data that matches the right employers have over worker data. Once workers had that right, they could then collectivise their own data, which would enable them, for example, to pick up on any discriminatory patterns at work or pick up any problems with equal pay or the gender pay gap. We say that that right to collectivise data and redress the imbalance of power over data at work is really important.

The Bill misses entirely the opportunity to introduce those kinds of concepts, which are actually vital in the modern workplace, where data is everything. Data is about control; data is about influence; data is the route that workers have to establish fair conditions at work. Without that influence and control, there is a risk that only one set of interests is represented through the use of technology at work, and that technology at work, rather than being used to improve the world of work, is used to intensify work to an unsustainable level.

[Stephanie Peacock]

Q In that answer, you highlighted the imbalance between employers and workers. Correct me if I am wrong, but you said that data protection impact assessments are particularly valuable to both trade unions and the collective workforce. Do you have any specific examples of this consultation tool being used successfully?

Mary Towers: Yes. This is something that Andrew’s union, Prospect, has been really active in. It has produced some absolutely brilliant guidance that looks in detail at the importance of the process of data protection impact assessments and rolled out training for its trade union reps. Again, several of our other affiliates have undertaken that really important work, which is then being rolled out into the workplace to enable reps to make good use of that process.

I will, however, add the caveat that I understand from our affiliates that there is a very low level of awareness among employers about that obligation, about the importance of that process and about exactly what it involves. So a really important piece of awareness-raising work needs to be done there. We say it is vital to build on the existing rights in the UK GDPR, not dilute or remove them.

[Stephanie Peacock]

Q What impact would the Bill have on workers by taking away this tool or watering down the DPIAs into assessments of high risk, especially given that earlier today, before this Committee, the Information Commissioner himself raised concerns about the lack of clarity on what will count as high-risk processing? That question is to either of you, briefly. I have one more and then I will let someone else come in.

Andrew Pakes: We would assert that under the law of GDPR, high risk in the legislation is, I think, in recital 39. I will correct that if I picked the wrong one. It talks about high risk as being decisions that can make material or non-material impact on people. If we now have software and algorithms or automated decisions that can hire and fire us—we have examples of that—and can decide who deserves a promotion or who can be disciplined, if that information can now be used to track individuals and decide whether someone is a good or bad worker, we would assert that that is a high risk. Anything that can actually affect both your standing in your workspace or your contractual relationship, which is essentially what employment is, or which has an impact on the trust and confidence the employer has in you and, equally, your trust and confidence back in the employer, that is a very clear definition of high risk.

What is important about the existing UK GDPR is that it recognises the nature of high risk but, secondarily, it recognises that data subjects themselves must be consulted and involved either directly or, where that is not practicable, through their representatives. Our worry is that the legislation that is tabled now dilutes that and opens up risk to bad practice.

[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.

[Damian Collins]

Q So you do not have an in-principle objection to the use of technology to monitor the efficiency, output and performance of employees within a working environment, but you think it needs to be based on agreed criteria—that employers need to be transparent about how they are gathering data and what they are using it for.

Andrew Pakes: Absolutely. Let me give you a quick example of one piece of technology that we have negotiated in some areas: GPS tracking. It might be old technology, compared with many things that you are looking at. We represent frontline workers who often work alone, outside, or in spaces where their work could be risky. If those people cannot answer their radio or phone, it is in the legitimate interests of all of us to see where they are, in case they have had an accident or are in a dangerous situation. We can see a purpose to that technology. In negotiation with employers, we have often said, “This is good technology for keeping people safe, but we are not happy with it being used in performance reviews.” We are not happy with people saying, “I am sorry, Mr Collins, but you seem to spend a lot of time in the same café each lunch time.”

The issue is not the technology, but its application. Technology that is used to increase safety is very good, but the risk is that it will be used to performance-manage people; employers may say, “You are not doing enough visits,” “You aren’t working fast enough,” or, “You don’t drive fast enough between jobs.” We need balance and control, as opposed to ruling out technology that can keep people safe and well.

[Damian Collins]

Q For some people, their job is done through technology. Take a gig economy worker working for a delivery company. Do you have concerns about how app developers design their systems and their relationship to the worker? For example, you may work for a company that does not pay you for your waiting time. You are not working contracted hours; you are working in the gig economy, on a “turn up and get paid” basis. The system may have been designed to favour people who are always on the app and always ready for work, even if they are not being paid for that, over people who log on only at particular times. The app developer may not be very transparent about that, because they do not want to be named and shamed for treating their workers that way. Good and bad employers would say that there are people working to different standards, but do you feel that there is still a lack of transparency in the gig economy about how different apps process and use data, and the impact that has on the day-to-day working life of the people who use those apps?

Andrew Pakes: From my perspective, yes.

Mary Towers: The TUC has red lines relating to the use of these types of technologies. One is that we simply should not have technologies at work that are not transparent and that operate in a way that people do not understand. The principle of explainability is really important to us. People need to understand when the technologies are operating, and how they operate in relation to them. On top of that, it is absolutely vital that discriminatory data processing does not take place. The example that you gave from the gig economy is potentially of a discriminatory pay calculation—of an algorithm that might be calculating different rates of pay for individuals who are carrying out exactly the same work. The algorithm is potentially replicating existing inequalities in pay that are rooted in gender or race.

[Damian Collins]

Q The issue is not different rates of pay per task, but the amount of paid work that someone might get within a period.

Mary Towers: Yes. Drivers are a good example. People drive a certain distance to pick people up or deliver items. Even when the driving time is exactly the same, people may be paid different rates, because the algorithm will have worked out how long certain groups of people are likely to wait before they accept a gig, for example. I emphasise that, in our view, those sorts of issues are not restricted to the gig economy; they spread way beyond it, into what one might consider to be the far more traditional professions. That is where our red lines are. They relate to transparency, explainability, non-discrimination and, critically, worker and union involvement at each stage of the AI value chain, including in the development of that type of app—you mentioned development. Unless the worker voice is heard at development stage, the likelihood is that worker concerns, needs and interests will not be met by the technology. It is a vital principle to us that there be involvement of workers and unions at each stage of the AI value chain—in development, application and use.

[Chi Onwurah]

Q Welcome to both of you. Apologies for my misuse of my own technology earlier.

The Minister talked about the need for growth, which has been sadly lacking in our economy for the last 13 years. Obviously, technology can make huge improvements to productivity for those in the workforce. Mr Pakes, as someone whose members are involved in technology, scientific and IT organisations, I wonder whether you would agree with this, which comes from my experience in the diffusion of technology. Is it possible to get the best from technology in an organisation or company without the people who will be using it, or the people on whom it will be used, being an active part of that diffusion of technology, and understanding and participating in its use?

Andrew Pakes: Absolutely. That has always been how productivity has improved or changed, in effect, the shop floor. If you are asking, “What problems are you using technology to solve?”, it may well be a question better asked by the people delivering the product or service than necessarily the vendor selling the software, whether that is old or new technology. I encourage the Committee to look at the strong evidence among our competitors who rate higher, in terms of productivity and innovation, than the UK, where higher levels of automation in the economy are matched by higher levels of worker participation. Unions are the most common form, but often it can be works councils or small businesses in terms of co-design and collaboration. We see that social partnership model of the doers, who identify and solve problems, being the people who do that.

We have good examples. We represent members in the nuclear sector who are involved in fusion, small modular reactors or other technology, where the employer-union relationship is critical to the UK’s intellectual property and the drive to make those successful industries. In the motor industry and other places where the UK has been successful, we can see that that sense of social partnership has been there. We have examples around using AI or the monitoring of conversations or voices. Again, I mentioned GPS tracking, but in safety-critical environments, where our members want to be kept safe, they know that technology can help them. Having that conversation between the workforce and the employer can come up with a solution that is not only good for our members, because they stay safe and understand what the safety regime is, but good for the employer, because days are not lost through illness or accidents. For me, that sense of using legislation like this to underpin good work conversations in the data setting is what the mission of this Bill should be about.

[Chi Onwurah]

Q In terms of data sharing, should there be provisions in the Bill to ensure that workers can give free and informed consent to the sharing of their data, or will the asymmetry of the relationship in the employment contract make that challenging?

Andrew Pakes: We think there should be a higher bar, because of the contractual nature. Whether it is self-employed workers contracting for a piece of work or an employment relationship, there is a fundamental difference in our view between my individual choice to go online and enter my data into a shop, because I want to be kept appraised of when the latest product is coming out—it is my free choice to do that—and my being able to consent in an employment relationship about how my data is used. As Mary said, the foundation stone has to be transparency on information in the first place. Beyond that, there should be negotiation to understand how that data is used.

The critical point for us is that most companies in the UK are not of a size where they will be developing their own AI products—very few will be; we can probably name a couple of them. Most companies using automated decisions or AI will be purchasing that from a global marketplace. We hope many of them will be within certain settings, but we know that the leaders in this tend to be the Chinese market and the US market, where they have different standards and a range of other things. Ensuring that we have UK legislation that protects that level of consent and that redresses that power balance between workers and employers is a critical foundation to ensuring that we get this right at an enterprise level.

[Chi Onwurah]

Q Have you identified any provisions to achieve that in the Bill as it stands?

Andrew Pakes: We would like to see more. We are worried that the current legislation, because of things such as DPIAs, drops that level of standards, which means that the UK could end up trading on a lower standard than other countries, and that worries us.

Mary Towers: We are also concerned about the change to the test for international data transfers, which might make the requirements less restrictive. There is a change from adequacy to a more risk-based assessment process in terms of international data transfers. Again, we have very similar concerns to Andrew about the use of technologies rooted in international companies and the inevitable international transfers of data, and workers essentially losing control over and knowledge of what is happening with their data beyond the workplace.

In addition, I would also like to make a point about the importance of transparency of source code, and the importance of ensuring that international trade deals do not restrict that transparency, meaning that workers cannot access information about source code once data and AI-powered tools are rooted in other countries.

[Mark Eastwood]

Q I would like to declare, again, that I am a member of Prospect, and therefore I have a bit of skin in the game on this one. You mentioned GPS and surveillance technology. Very quickly, could you give me an idea of the current scale of that? Are the majority of employers going down this route? If this Bill is pushed through, could you give me an idea of how usage could increase or decrease, depending on how you see the outcome of the Bill?

Mary Towers: I will give my statistics very quickly. Our polling revealed that approximately 60% of workers perceived that some form of monitoring was taking place in their workplace. The CEO of IBM told Bloomberg last week that 30% of non-customer facing roles, including HR functions, could be replaced by AI and automation in the next five years.

A recent report from the European Commission’s Joint Research Centre—the “Science for Policy” report on the platformatisation of work—found that 20% of German people and 35% of Spanish people are subject to algorithmic management systems at the moment. Although that is obviously not UK-based, it gives you a very recent insight on the extent of algorithmic management across Europe.

Andrew Pakes: And that matches our data. Around a third of our members say that they are subject to some form of digital monitoring or tracking. That has grown, particularly with the rise of hybrid and flexible working, which we are in favour of. This is a problem we wish to solve, rather than something to stop, in terms of getting it right.

Over the past two years, we have increasingly seen people being performance managed or disciplined based on data collected from them, whether that is from checking in and out of buildings, their use of emails, or not being in the right place based on tracking software. None of the balances we want should restrict the legitimate right of managers to manage, but there needs to be a balance within that. We know that using this software incorrectly can micromanage people in a way that is bad for their wellbeing.

The big international example, which I will give very quickly, is that if you look at a product like Microsoft—a global product—employers will buy it. My work computer has Office 365 on it. Employers get it on day one. The trouble with these big products is that, over time, they add new products and services. There was an example where Microsoft did bring in a productivity score, which could tell managers how productive and busy their teams were. They rowed back on that, but we know that with these big, global software projects—this is the point of DPIAs—it is not just a matter of consultation on day one.

The importance of DPIAs is that they stipulate that there must be regular reviews, because we know that the power of this technology transforms quickly. The danger is that we make life miserable for people who are good, productive workers and cause more problems for employers. It would be better for all of us to solve it through good legislation than to arm up the lawyers and solve it through the courts.

[The Chair]

I am afraid that we are subject to chronological monitoring, so we must bring this session to an end. I thank our two representatives very much indeed for their evidence this afternoon; we are grateful for your time. We will now move on to our 10th panel.

Examination of Witnesses

Alexandra Sinclair, Ms Laura Irvine and Jacob Smith gave evidence.

15:54

[The Chair]

Welcome to the witnesses in our 10th panel. Thank you for your time this afternoon. We will hear from Alexandra Sinclair, a research fellow at the Public Law Project; Laura Irvine, via Zoom, the convener of the privacy law sub-committee at the Law Society of Scotland; and Jacob Smith, the UK accountability team leader at Rights and Security International. We have until 4.25 pm for this session. Would the witnesses please be kind enough to introduce themselves to the Committee for the record, starting with those in the room?

Alexandra Sinclair: Thank you to the Committee for inviting me. My name is Alexandra Sinclair and I am a research fellow at the Public Law Project. The Public Law Project is an access to justice charity. We help people to seek redress for unfair or unlawful decisions made by public authorities. I am also a doctoral researcher at the London School of Economics where my research focuses on automated decision making.

Jacob Smith: My name is Jacob Smith. I am the UK accountability team leader at Rights and Security International, a London-based charity aimed at the intersection between national security and human rights, which tries to ensure that when Governments take pledges in the name of national security, they comply with human rights. I am also an associate lecturer in international law, privacy and data governance at the University of Surrey.

Ms Irvine: I am Laura Irvine. I am the convener of the privacy law sub-committee at the Law Society of Scotland. My day job is head of regulatory law at Davidson Chalmers Stewart—a Scotland-based law firm. I have been working in the field of data protection law for the past 10 years, so pre-GDPR and obviously, more recently, in a post-GDPR world.

[The Chair]

Thank you. You are all very welcome.

[Stephanie Peacock]

Q My first question is to Alexandra. What would the benefit be to the general public of the Government being transparent about their use of algorithms?

Alexandra Sinclair: Thank you for the question. In order for the public to have trust and buy-in to these systems overall, so that they can benefit from them, they have to believe that their data is being used fairly and lawfully. That requires knowing which criteria are being used when making a decision, whether those criteria are relevant, and whether they are discriminatory or not. The first step to accountability is always transparency. You can know a decision is fair or lawful only if you know how the decision was made in the first place.

[Stephanie Peacock]

Q That is great. Could you tell us about your TAG transparency register and what it revealed about the level of transparency in Government algorithmic use?

Alexandra Sinclair: Currently the Government have their algorithmic reporting transparency standard—I think I have got that right; they keep changing the acronym. Currently on that system there are about six reports of the use of automated decision-making technology in government. The Public Law Project decided to create a parallel register of the evidence that we could find for automated decision making in government. Our register includes over 40 systems in use right now that involve partly automated decisions about people. It would be great if the Government themselves were providing that information.

[Stephanie Peacock]

Q In the consultation, the Government said:

“There are clear benefits to organisations, individuals and society in explaining algorithmic decision-making”

in the public sector. Do you think that measures in the Bill achieve that? Do they unlock benefits and explain the Government’s algorithmic decision making to the public?

Alexandra Sinclair: No, and I think they do not do that for three reasons, if I have the time to get into this. The changes to subject access requests, to data protection impact assessments and to the prohibition on article 22 are the key issues that we see. The reason why we are particularly worried about subject access requests and data protection impact assessments is that they are the transparency provisions. They are how you find out information about what is happening. A subject access request is how you realise any other right in the Bill. You can only figure out if an error has been made about your data, or object to your data, if you know how your data is being used in the first place.

What we are worried about with the Bill is that you currently have an almost presumptive right to your data under a subject access request, but the change in the Bill changes the standard from the current “manifestly unfounded or excessive” to “vexatious or excessive”. It also gives a whole load of factors that data controllers are now allowed to take into account when declining your request for your own data. Furthermore, under the proposal in the Bill they do not have to give you the reason why they declined your request for the data. We think that is really problematic for individuals. You have got this information asymmetry there, and it is going to be really difficult for you to prove that your request was not vexatious or excessive if you do not even know why it was denied in the first place.

If we think about some examples that we have been talking about in Committee today, in a lot of the Uber and Ola-led litigation, where individuals were able to show that their employment rights had been unfairly treated, they were able to find out about that through subject access requests. Another example is the London Met police’s gangs matrix. The Information Commissioner’s Office did a review of that matrix and found that the system did not even clearly distinguish between victims and perpetrators of crime, and the only way for individuals to access the matrix and check if the information held on them is accurate is through a subject access request. That is our first concern with the Bill.

Our second concern is the changes to data protection impact assessments. The first thing to note is that they already have to apply only in high-risk processing situations, so we do not think that they are an undue or onerous burden on data controllers because they are already confined in their scope. What a data protection impact assessment does—this is what we think is beneficial about it—is not to be a brake on processing, but to force data controllers to think though the consequences of processing operations. It asks data controllers to think, “Where is that data coming from? What is the data source? Where is that data being trained? For what purpose is that data being used?” The new proposal under the Bill for data protection impact assessments significantly waters down those obligations and means that, essentially, the only requirement is accounting for the purposes for the data. So instead of explaining how the data is being used, you are only requiring that purpose.

We think that has two problems. First, data controllers will not be thinking through all the harms and consequences before they deploy a system. Secondly, if individuals affected by those systems want to get information about how their data was processed and what happened, there will be a lot less information on that impact assessment for them to assess the lawfulness of that processing.

My final critique of the Bill is this. We would say that the UK is world-leading in terms of article 22—other states are certainly looking to the UK—and it is a strange time to be looking to roll back protections. I do not know if Committee members have heard about how Australia recently experienced the Robodebt scandal, on which there is a royal commission at the moment. In that case, the system was a solely automated debt discrepancy system that ended up making over 500,000 incorrect decisions, telling people that they had committed benefit fraud when they had not. Australia is having to pay millions of dollars in compensation to those individuals and to deal with the human cost of that decision. The conversation in Australia right now is, “Maybe we should have article 22. Maybe this wouldn’t have happened if we had had a prohibition on solely automated decision making.” When other states are looking to beef up their AI protections, we need to think carefully about looking to roll them back.

[Stephanie Peacock]

Q Thank you for that really comprehensive answer.

Jacob, what measures do you think should be in place to ensure that data protection legislation balances the need to protect national security with the need to uphold human rights? Does the Bill strike the right balance?

Jacob Smith: Thanks for the question. To take the second part first, we argue that the Bill does not strike the right balance between protecting national security and upholding data and privacy rights. We have three main concerns with how the Bill sets out that balance at the moment, and they come from clauses 24 to 26.

We have this altered regime of national security certificates for when law enforcement is taking measures in the name of national security, and we have this new regime of derogation notices. When law enforcement and the security services are collaborating, the notices allow the law enforcement body working in that collaboration to benefit from the more relaxed rules that are generally only for the intelligence services.

From our perspective, there are three main concerns. First, we are not quite sure why these amendments are necessary. Under human rights law, for an interference with somebody’s data or privacy rights to be lawful, it needs to be necessary, and that is quite a high standard. It is not something akin to it being more convenient for us to have access to this data, or more efficient for us to have access to this data; it has to meet a high standard of strict necessity. Looking through the Second Reading debate, the impact assessment and the European convention on human rights analysis, there is no reference to anything that would be akin to necessity. It is all, “It would be easier for law enforcement to have these extra powers. It would be easier if law enforcement were potentially able to use people’s personal data in more ways than they are at the moment.” But that is not the necessity standard.

The second concern is the lack of safeguards in the Bill. Another thing that human rights law—particularly article 8 of the ECHR—focuses on is the necessity of introducing additional safeguards to prevent the misuse of legislation that allows public bodies to interfere with people’s privacy rights. At the moment, as the Bill sets out, we have very weak safeguards when both national security certificates and designation notices are in place. At the moment, there is an opportunity, at least on the face of the Bill, for both those measures to be challenged before the courts. However, the issue here is that the Secretary of State has almost a monopoly over deciding whether those notices and certificates get published. So yes, although on the face of the Bill an individual may be able to challenge a national security certificate or a designation notice that has impacted them in some way, in practice they will not be able to do that if they do not know that it exists.

Finally, one encompassing issue is the expansive powers for the Secretary of State. One thing that we advocate is increased independent oversight. In the Bill, the Secretary of State has an extremely broad role in authorising law enforcement bodies to process personal data in a way that would otherwise be unlawful and go further than the existing regimes under the Data Protection Act 2018. Those are our three broad concerns in that regard. Ultimately, we do not see that the right balance has been made.

[Stephanie Peacock]

Q My final question is to all the witnesses. What are your views on the reforms to the ICO and their potential impact on its independence from Government?

Ms Irvine: We have concerns about the proposed changes and their potential impact on the independence of the Information Commissioner. I was able to listen to John Edwards speaking this morning, and I noted that he did not share those concerns, which I find surprising. The ICO is tasked with producing statutory codes of conduct, which are incredibly useful for my clients and for anyone working in this sector. The fact that the Secretary of State can, in effect, overrule these is concerning, and it must be seen as a limit on the Information Commissioner’s independence.

That leads to a concern that we have in relation to the adequacy decision that is in place between the EU and the United Kingdom. Article 52 of the GDPR states very clearly that a supervisory authority must have clear independence. The provisions relating to the independence of the Commission—the potential interference of the Secretary of State in law is enough to undermine independence—are therefore of concern to us.

Alexandra Sinclair: We would just say that it is not typical for an independent regulator to have its strategic objectives set by a Minister, and for a Minister to set those priorities without necessarily consulting. We consider that the ICO, as subject matter experts, are probably best placed to do that.

Jacob Smith: From our perspective, the only thing to add is that one way to improve the clauses on national security certificates and designation notices would be to give the ICO an increased role in oversight and monitoring, for instance. Obviously, if there are concerns about its independence, we would want to consider other mechanisms.

[Carol Monaghan (Glasgow North West) (SNP)]

Q Laura Irvine, in your briefing about the Bill you raised concerns about some of the language. We had some discussion this morning about the language and particular terms, such as what “vexatious” means, for example. Could you elaborate on your concerns?

Ms Irvine: Certainly. There are terms that have been used in data protection law since the 1984 Act. They were used again in the 1998 Act, echoed under the GDPR and included in all the guidance that has come from the Information Commissioner’s Office over the past number of years. In addition to that, there is case law that has interpreted many of those terms. Some of the proposed changes in the Bill introduce unexpected and unusual terms that will require interpretation. Even then, once we have guidance from the Information Commissioner, that guidance is sometimes not as helpful as interpretation by tribunals and courts, which is pretty sparse in this sector. The number of cases coming through the courts is limited—albeit that there is a lot more activity in the sector than there used to be. It simply presents a lot more questions and uncertainty in certain ways.

For my business clients, that is a great difficulty, and I certainly spend a lot of time advising clients on how I believe a matter—a phrase—will be interpreted, because I have knowledge of how data protection law works in general. That is based on my experience of the power of businesses and organisations, particularly in the third sector. Smaller bodies will often be challenged by a lack of knowledge and expertise, and that is a difficulty of introducing in legislation brand-new terms that are not familiar to practitioners, far less the organisations asked to implement the changes.

[Carol Monaghan]

Q You also raised concerns about automated decision making. Again, we have heard quite a lot about that today. You talked about a case on automated decision making, with regard to benefit awards being made by local authorities. Can you tell us a bit about that and where the danger might lie here?

Ms Irvine: I expect that you have heard a lot of warnings about safety. I echo what Alexandra said earlier about the removal of the right not to have automated decisions taken by organisations. That is something that we were concerned to see in a society where this is happening more and more. The particular example that we gave came from a study that had been carried out by the Equality and Human Rights Commission. That was looking particularly at decision making in local authorities; at how AI or algorithms were being used to take decisions without enough transparency; and at whether this gave the individuals the right to challenge those decisions, which stems from the transparency that is built in. The challenge for any organisation using any automated decision making—particularly in the public sector, I would submit, where the impact can be extremely significant, particularly if we are talking about benefits—is making sure these organisations understand what the technology is doing, explaining that to individuals and giving them the right to object.

The changes in the Bill relax the restrictions on automated decision making and allow that to happen almost as a default, with safeguards as an add-on, whereas article 22 as currently drafted provides a right not to have automated decisions taken about an individual unless certain circumstances apply. To echo what Alexandra said, when more and more decisions are being made automatically without a human intervening, and certainly without a human intervening at the appropriate stage to prevent damage or harm to individuals, it would absolutely seem like the wrong time to make these changes and relaxations to the regime.

[Carol Monaghan]

Thank you.

[The Chair]

You have all been superstars in our 10th panel. Thank you very much indeed for the evidence you have given this afternoon. We will now move on to the next panel.

Examination of Witness

Alex Lawrence-Archer gave evidence.

16:24

[The Chair]

We now come to our 11th and final panel. We are pleased to welcome Alex Lawrence-Archer, who is a solicitor for AWO. We have until 4.40 pm for this session. Alex, will you please introduce yourself to the Committee for the record?

Alex Lawrence-Archer: Hi, I am Alex Lawrence-Archer. I am a solicitor and I litigate data rights cases at AWO. We were also instructed by Reset to help it to formulate its written evidence to the Committee, which hopefully you have received in the last couple of days.

[The Chair]

Thank you and welcome.

[Stephanie Peacock]

Q What are the main implications of the Bill for people’s personal data rights?

Alex Lawrence-Archer: There is a group of changes in the Bill that, perhaps in ways that were unintended or at least not fully thought through, quite seriously undermine the protection of individuals’ privacy and data rights. A few of the most concerning ones are the change to the definition of personal data, recognising legitimate interests, purpose limitation, changes to the test for the exercise of data subject rights—I could go on. You will have heard about many of those today. It amounts to an undermining of data rights that seems not to be in proportion to the relatively modest gains in terms of reduction in bureaucracy on the part of data controllers.

[Stephanie Peacock]

Q Following on from that answer, what do you think the impact will be of the new definition of personal data as contained in the Bill?

Alex Lawrence-Archer: It is quite difficult to predict, because it is complicated, but it is foundational to the regime of data protection. One of the issues is that in seeking to relieve data controllers of certain bureaucratic requirements, we are tinkering with these really foundational concepts such as lawful basis and the definition of personal data.

Two things could happen, I think. Some quite bad-faith arguments could be run to take quite a lot of processing outside the scope of the data protection regime. Although I doubt that those arguments would succeed, there is an additional issue; it is quite complicated to explain, but I will try. If it is unlikely but possible that an individual might be re-identified from a pseudonymised dataset—it could happen if there were a hack, say, but it is unlikely—that processing under the new regime would not, as the Bill is drafted, benefit from the protection of the regime. It would not be considered personal data, as it would not be likely that the individual could be identified from that dataset. That is a real problem because pseudonymised datasets are very common with large datasets. There are real risks there that would not be dealt with.

[Stephanie Peacock]

Q On average, how long does it currently take for data subjects to resolve basic data rights breaches?

Alex Lawrence-Archer: Under the current regime, that is a bit like asking, “How long is a piece of string?” It can take quite a long time. There are certain practices that the ICO follows in terms of requiring individuals to complain to the controller first. Some controllers are good; some are quick, but some are not. You might have a lot of back and forth about data access at the beginning, but other controllers might hand over your data really quickly. However, you could be looking at anything up to, say, 10 to 12 months.

[Stephanie Peacock]

Q Do you think that any changes in the Bill, for example those surrounding subject access requests, would increase that time?

Alex Lawrence-Archer: Yes. You have heard from lots of people about the changes to the standard to be applied when any of the rights in chapter 3 are exercised by a data subject, and that includes the right of access. I think it is very likely that many more exercises of the right of access will be refused, at least initially. I think there will be many more complaints about the right of access and there is likely to be satellite litigation about those complaints as well, because you cannot proceed in finding out what has gone on with your data and rectify a problem unless you have access to the copies of it.

So, what you might find in many cases is a two-stage process whereby, first, you must resolve a complaint, maybe even a court case, about your right to access the data and then, and only then, can you figure out what has actually been going on with it and resolve the underlying unlawfulness in the processing. Effectively, therefore, it is a doubling of the process for the individual.

[Stephanie Peacock]

Q A final question: do you think that the definitions of “vexatious” and “excessive” are clear enough not to be abused by controllers who simply do not want to carry out subject access requests?

Alex Lawrence-Archer: The new definitions, particularly the list of factors to be taken into consideration in determining whether the test is met, provide a lot of breathing room for controllers, whether or not they have good intentions, to make arguments that they do not need to comply with the right of access. If you are looking not to comply or if you have an incentive not to, as many controllers do, that does not necessarily mean that you are acting in bad faith; you might just not want to hand over the data and think that you are entitled not to do so. If you are looking not to comply, you will look at the Act and see lots of hooks that you can hang arguments on. Ultimately, that will come back to individuals who are just trying to exercise their rights and who will be engaged in big arguments with big companies and their lawyers.

[Damian Collins]

Q The age-appropriate design code for children was mentioned in our session this morning. Do you have any thoughts on what the Bill could mean for the application of that design code, which was obviously prepared for an environment in which GDPR was enshrined in UK data law?

Alex Lawrence-Archer: The age-appropriate design code was a real success for the UK in terms of its regulation and its reputation internationally. It clarified the rights that children have in relation to the processing of their personal data. However, those rights are only helpful if you know what is happening to your personal data, and if and when you find out that you can exercise your rights in relation to that processing.

As I have said, what the Bill does—again, perhaps inadvertently—is undermine in a whole host of ways your ability to know what is happening with your personal data and to do something about it when you find out that things have gone wrong. It seems to me that on the back of a notable success in relation to the AADC, we are now, with this Bill, moving in rather a different direction in terms of that argument for protection of personal data.

Looking at the even longer term, there will be some slightly more nuanced changes if and when the AADC comes to be amended or redrafted, because of the role of the ICO and the factors that it has to take into account in its independence, which again you have already heard about. So you could, in the long term, see a new version of the AADC that is more business-friendly, potentially, because of this Bill.

[Damian Collins]

Q In terms of access to personal data, a lot of what we are talking about, certainly when we are talking about children, relates to what we generally call big-tech companies. A lot of the age-appropriate design code is focused on children’s interface with services like Instagram, YouTube, TikTok and so on, of which they are heavy users. Are you concerned that because data may be stored in such a way that it is difficult for an external person to locate to an individual user, companies may use that as an excuse to be much looser in their application of the protections for children?

Alex Lawrence-Archer: There are a bunch of different ways in which companies will take advantage of the new grey areas that the Bill opens up to carry out processing with less transparency and less respecting of the rights of the people whose data they are processing. If we take just the definition of research, for example, it will be much easier to carry out research for a large platform that already has lots of personal data. The GDPR already provides for a lot of exemptions when you are carrying out research; the Bill dramatically expands that definition. If you are a Google or a YouTube, then yes, you are much freer to carry out processing that you consider to be research without necessarily being transparent about it to the users affected, those whose data it concerns.

[Damian Collins]

Q The project that triggered the initial Cambridge Analytica scandal was in theory academic research on personality profiling, so there are lots of ways in which the definition can be stretched, for sure. Earlier, I asked the Information Commissioner about the definition of legitimate interests for companies. He seemed to think that if he thought that someone did not have a legitimate interest, he could still investigate it and therefore the Bill did not make much difference, but are you reassured by what he said?

Alex Lawrence-Archer: We need to distinguish between two things: one is the introduction of some examples of what may be legitimate interests, which is not a particular concern because they replicate what is already in a recital; and, separately and of much greater concern, the introduction of recognised legitimate interests. I think that that is quite a radical departure from legitimate interests under the current regime. The Bill possibly misguides people, because it uses the language of legitimate interests, but it works in a very different way.

If you have a legitimate interest under the current regime, you must balance your interests against those of data subjects, and that is not something that is required if you can rely on a recognised legitimate interest under the new regime. The recognised legitimate interests are very broad—prevention of crime, for example, does not mean that that has to be done by the police. That is about opening up such processing for any kind of controller, which could be your neighbour or local corner shop, who can rely on that recognised legitimate interest with no requirement to consider the data subject’s interest at all. That is a radical departure, because the concept of balancing the interests of the data subject and of the controller is absolutely fundamental to our current regime.

[Damian Collins]

Q In that case, on recognised legitimate interests, if someone says that their legitimate interest is the prevention of crime, they can define that in any way that they like in how they might seek to process or analyse behaviour patterns in their systems?

Alex Lawrence-Archer: I do not want to overstate the case. You must be able to demonstrate that the processing is necessary for a recognised legitimate interest; it has got to make sense—but you do not have to consider anyone else’s interests.

For example, in some recent cases, neighbours were operating CCTV that captured lots of the personal data of their neighbours. An important argument to show that that was unlawful was that yes, the processing was necessary for the detection of crime—that is what the CCTV was for—but the interests of the neighbours, views of whose gardens and front windows were being captured, overrode the legitimate interests of the controller. That is how it works under the current regime. Under the new regime, you would not have to consider the interests of the neighbours in the use of that CCTV system. You would be able to rely on the recognised legitimate interest.

[Damian Collins]

Q Effectively, you would not need to consider whether the use of that technology in that case was disproportionate to the risk.

Alex Lawrence-Archer: Yes.

[Chi Onwurah]

Q We heard from some witnesses today that greater ease of access to data will increase competition for those such as Google and Meta that have large amounts of data as it is. What do you think the impact of this Bill will be for big tech?

Alex Lawrence-Archer: I think the Bill is quite big tech-friendly, and the way that it deals with research is well illustrative of that. One of the objectives of the Bill is obviously to boost the use of personal data for academic research, which is a really laudable objective. However, the main change—in fact the only change I can think of off the top of my head—that it makes is to broaden the definition of academic research. That helps people who already have lots of personal data they might do research with; it does not help you if you do not have personal data. That is one of the major barriers for academics at the moment: they cannot get access to the data they need.

The Bill does nothing to incentivise or compel data controllers such as online platforms to actually share data and get it moving around the system for the purposes of academic research. This is in stark contrast to the approach being taken elsewhere. It is an issue the EU is starting to grapple with in a particular domain of research with article 40 of the Digital Services Act. There is a sense that we are falling behind a little bit on that key barrier to academic research with personal data.

[Chi Onwurah]

Q We also heard that existing cookie management and subject access requests and so on represent a real burden, particularly for smaller companies. Do you recognise that? Do you know why there is less support in technology to help small businesses deal with, if you like, the data management challenges? How is that to be traded off against the privacy rights of individuals?

Alex Lawrence-Archer: I certainly recognise that the requirements of GDPR place compliance burdens on businesses of all sizes. I am sceptical that the right balance is being struck in trying to ameliorate the burdens of the costs and challenges that ordinary people will face—in terms of knowing how they are being profiled and tracked by companies—and resolving things when they have gone wrong. I am sceptical as well that there will be major benefits to many businesses who will continue to need to do business in Europe. For that reason, we will need either to have dual compliance or simply to continue to comply with EU GDPR. You can see this benefiting the largest companies, which can start to segment their users. We have already seen that with Meta, which moved its users on to US controllership, for example. I would see that as more beneficial to those large companies, which can navigate that, rather than, say, SMEs.

[The Chair]

Mr Lawrence-Archer, thank you very much for your time this afternoon.

That brings us to the end of our 11th panel. As an impartial participant in these proceedings—we have had over four-and-a-half hours of evidence with 23 witnesses —I would say it has been an absolute masterclass in all the most topical issues in data protection and digital information. Members might not realise it, but that is what we have had today.

Ordered, That further consideration be now adjourned. —(Steve Double.)

16:33

Adjourned till Tuesday 16 May at twenty-five minutes past Nine o’clock.

Written evidence reported to the House

DPDIB01 Judith Ratcliffe, Privacy Professional

DPDIB02 Dr C N M Pounder, Amberhawk Training Limited

DPDIB03 Prighter Ltd

DPDIB04 Damien Welfare

DPDIB05 Data and Marketing Association (DMA)

DPDIB06 Open Rights Group

DPDIB07 Big Brother Watch

DPDIB08 TrueLayer

DPDIB09 Internet Advertising Bureau (IAB) UK