Data Protection and Digital Information (No. 2) Bill (First sitting)
Wednesday 10th May 2023
(1 year ago)
Public Bill CommitteesRead Full debate Data Protection and Digital Information Bill 2022-23 View all Data Protection and Digital Information Bill 2022-23 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 10 May 2023 - (10 May 2023)
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 hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Date Time Witness Wednesday 10 May Until no later than 9.55 am Information Commissioner’s Office Wednesday 10 May Until no later than 10.25 am Hogan Lovells; London Stock Exchange Group; Centre for Information Policy Leadership Wednesday 10 May Until no later than 10.50 am techUK; Data & Marketing Association Wednesday 10 May Until no later than 11.25 am Connected by Data; Institute for the Future of Work; Ada Lovelace Institute Wednesday 10 May Until no later than 2.25 pm Medtronic; UK Biobank Wednesday 10 May Until no later than 2.50 pm ZILO; UK Finance Wednesday 10 May Until no later than 3.05 pm Better Hiring Institute Wednesday 10 May Until no later than 3.30 pm National Crime Agency; Metropolitan Police Wednesday 10 May Until no later than 3.55 pm Prospect; Trades Union Congress Wednesday 10 May Until no later than 4.25 pm Public Law Project; Law Society of Scotland; Rights and Security International Wednesday 10 May Until no later than 4.40 pm AWO
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:
3. proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 5; Schedule 1; Clause 6; Schedule 2; Clauses 7 to 11; Schedule 3; Clauses 12 to 20; Schedule 4; Clause 21; Schedules 5 to 7; Clauses 22 to 41; Schedule 8; Clauses 42 to 45; Schedule 9; Clauses 46 to 86; Schedule 10; Clauses 87 to 98; Schedule 11; Clause 99; Schedule 12; Clause 100; Schedule 13; Clauses 101 to 114; new Clauses; new Schedules; remaining proceedings on the Bill;
4. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 13 June.— (Sir John Whittingdale.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Sir John Whittingdale.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Sir John Whittingdale.)
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.
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
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
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
John Edwards: No, I do not.
Stephanie Peacock
Q
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
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
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
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.
Damian Collins
Q
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
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
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
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
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
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
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
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
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
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
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
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.
Dr Huq
Q
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.
The Chair
Q
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
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
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
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
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
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.
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
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
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
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
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
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
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
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
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
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.”
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
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.
The Chair
Q
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
“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
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
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
Neil Ross: No, not on that clause, but yes in relation to the rest of the legislation.
Stephanie Peacock
Q
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
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
Chris Combemale: It certainly would give even greater market control to those companies.
Stephanie Peacock
Q
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.
Sir John Whittingdale
Q
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
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
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
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
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
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 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
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
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
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
Neil Ross: I do not have one to hand, but we could certainly follow up.
Mike Amesbury
Q
Neil Ross: That is in relation to clause 85?
Mike Amesbury
Q
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
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.
Chi Onwurah
Q
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
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
The Chair
Q
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.
Stephanie Peacock
Q
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
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
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
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
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
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
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
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
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
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
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
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
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
Dr Tennison: I am not comfortable that they are directed to the right people.
Carol Monaghan
Q
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
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 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
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
Q
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.
Chi Onwurah
Q
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.)
Data Protection and Digital Information (No. 2) Bill (Second sitting)
Wednesday 10th May 2023
(1 year ago)
Public Bill CommitteesRead Full debate Data Protection and Digital Information Bill 2022-23 View all Data Protection and Digital Information Bill 2022-23 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 10 May 2023 - (10 May 2023)
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.
Stephanie Peacock (Barnsley East) (Lab)
Q
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
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
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
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
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
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
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
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
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
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
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
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
Jonathan Sellors: Approval by the relevant ethics committee.
Chi Onwurah
Q
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
“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
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
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
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
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.
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
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
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
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
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
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
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
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
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
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
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
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.
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
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
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
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
Keith Rosser: Yes. The requirement on DVSs to tackle fraud should be higher than it currently is.
Damian Collins
Q
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
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.
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
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
“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
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
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
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
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
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
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
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
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
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
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
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
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 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
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
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
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.
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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.
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.
Stephanie Peacock
Q
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
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
“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
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
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
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
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.
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.
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.
Stephanie Peacock
Q
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
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
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
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
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
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
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
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
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
Alex Lawrence-Archer: Yes.
Chi Onwurah
Q
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
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.)