Data Protection Bill [HL]

Lord Paddick Excerpts

Committee: 5th sitting (Hansard): House of Lords
Monday 20th November 2017 Lords Chamber

Moved by

[Lord Paddick]

153: After Clause 114, insert the following new Clause—
“Function of the Commissioner to maintain a register of data controllers
(1) The Commissioner must maintain a register of all data controllers.(2) Subject to subsection (3), personal data must not be processed unless an entry in respect of the data controller is included in the register maintained by the Commissioner under subsection (1).(3) Subsections (1) and (2) do not apply in relation to any processing whose sole purpose is the maintenance of a public register.”

[Lord Paddick (LD)]

My Lords, I will speak to Amendment 153 in my name and that of my noble friend Lord Clement-Jones. Section 17(1) of the Data Protection Act 1998 states that personal data must not be processed unless an entry in respect of the data controller is included in the register maintained by the Information Commissioner. Effectively, processing personal data without registering and without paying a fee is, at the moment, a strict liability criminal offence. This ensures that all data controllers are aware of their most basic obligations and that a central register of who is processing personal data is maintained. It also provides a simple means of collecting notification fee income.

We have been made acutely aware during the debates on the passage of the Bill of the increased responsibilities that will be placed on the Information Commissioner and the need for her to have additional resources. This is one way of ensuring that she has those resources, provided she is able to keep the fees raised and does not have to hand over large amounts of those fees to the Treasury.

This is an important protection for data subjects, and the Government have asserted that they are strengthening the law to protect data subjects. If the requirement to register is removed, as will happen without this amendment, this will weaken those protections. In addition to protections provided by registration and the increased awareness of the other requirements around data protection as a result of registering, it allows for the Proceeds of Crime Act to be used to confiscate money generated by the unlawful processing of personal data by those who are not registered. This would be lost if this amendment is not adopted.

The amendment seeks to maintain the current position by requiring the Information Commissioner to register all data controllers. However, unlike the current requirement for more detailed information, the amendment requires that the data controller provides only the minimum of information—such as his name and address; if he has nominated a representative for the purposes of the Act, their name and address; and the principal activity or activities undertaken by the data controller.

The Minister may wish to pray in aid article 57(3) of the GDPR, which states:

“The performance of the tasks of each supervisory authority shall be free of charge for the data subject and, where applicable, for the data protection officer”.


We argue that this is a notification fee, not a task performed by the Information Commissioner, and a fee that would be levied on the data controller and not the data protection officer. I beg to move.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I shall speak to Amendment 153ZA in my name and that of my noble friend Lord Kennedy of Southwark. I support the amendment tabled by the noble Lords, Lord Clement-Jones and Lord Paddick, which is important. We look forward to hearing what the Minister says in response.

Our amendment is in two halves. The first probes the question of what happens in cases where the data controller relies on derogations or limitations provided for under the GDPR that have been brought, directly or indirectly, into UK law through the existence of the GDPR after 25 May 2018 or through secondary legislation, whichever is appropriate. It asks whether there is a need for a bit more guidance on the commissioner’s duties, in that she may wish to look at the proportionality of such reliance by the data controller—in other words, whether it is appropriate relative to the overall aims and objectives placed on the data by the data controller—and whether it is appropriate under the GDPR or its subsequent limitation or derogation. It also asks whether adequate systems are in place to make sure the rights of data subjects are safeguarded. This may seem to be gold-plating, but it is important to understand better how the mechanics of this works in practice. These are very important issues.

The second part returns to an issue we touched on earlier in Committee, but about which there is still concern. We have again had representations on this issue. The amendment is framed as a probing amendment, but it comes back to familiar territory: what will happen in later stages of the life of the Bill as we leave the EU and are required to make sure our own legislative arrangements are in place? At present, the GDPR has an extraterritorial application so that even when companies are not established in the EU they are bound by the GDPR where they offer goods or services to EU citizens or monitor their behaviour. As well as requiring that lawful processing of data is not excessive, data controllers are required to keep data secure.

So far, so good. The important point is that under the GDPR at present—there is no derogation on this—it is necessary for such companies to make sure they have what is called a representative in the EU. This would be a physical office or body, staffed so that where EU citizens wish to take up issues that affect them, such as whether the data is being properly controlled or whether it has been processed legally, contact can be made directly. But under the Bill as I understand it, and I would be grateful if the Minister could confirm what exactly the situation is, after the applied GDPR comes in the requirement for a company to make sure it has a representative in the UK—in the GDPR, it is for a company to have a representative in the EU—will be dropped. If that is right, even if the operating company is well-respected for its data protection laws or is in good standing as far as the EU is concerned, any individual based in the UK would obviously have much more difficulty if there is no representative, such as in a situation with different foreign laws, where an individual would probably rely on an intermediary who may not see non-nationals as a sufficiently high priority. If things do not work out, the individual may have to have recourse to law in a foreign court. This will make it very difficult to enforce new rights.

Is it right that the Government will not require foreign companies operating in the UK after Brexit to have a representative? If it is, how will they get round these problems? I look forward to hearing what the Minister says on these points.

--- Later in debate ---

[Lord Stevenson of Balmacara]

My Lords, I want to come back to an issue relating to the situation post Brexit: companies operating in the UK, for which a representative will not be required. I listened to the Minister very carefully and I understand what he is saying, but I take it that, post Brexit, he is basically relying on the force of the Information Commissioner’s personality and her ability to maintain her current relationships and build on them. As such, when taking issues abroad, individuals in the UK will not have any statutory provision, as they currently do, but will have to rely on the informal mechanisms the Minister mentioned and their own resources. He has failed to answer the question whether that is a good situation to be in as we progress through the Bill, but I will read what he said more carefully and come back to him later.

[Lord Paddick]

My Lords, I thank the noble Baroness, Lady O’Neill of Bengarve, for her contribution—we will look at that should we bring back the amendment on Report. I also thank the noble Lord, Lord Stevenson of Balmacara, for his support for the amendment.

The Minister said that provision in the 1998 Act requiring all data controllers to be registered was an important part of data protection, yet his argument for not continuing with that seemed to be that it would be difficult to maintain a register with the numbers now involved. Either the register is an important contribution to data protection or it is not. In any event, we should bear in mind that a charge could be levied. The Minister suggested that a register would not be a proportionate use of the Information Commissioner’s resources, but those resources could significantly increase. If the existing law were enforced, it is estimated that an additional £1 billion in income would be possible.

On a detailed central register, I said when introducing the amendment that the detail suggested would be far less than is currently the case. However, we will reflect on what the Minister said. For the moment, I beg leave to withdraw the amendment.

Amendment 153 withdrawn.

--- Later in debate ---

[Lord Ashton of Hyde]

My Lords, I thank the noble Lord for introducing his amendments, which touch on the fees that the Information Commissioner will be able to charge under the new regime. Noble Lords will recall that we discussed similar issues during the passage earlier this year of what became the Digital Economy Act. Perhaps I may start with some of the general points made by the noble Lord and then go on to address his specific amendments. I agree absolutely that this is a bigger issue than just the amendments; it is the question of how the Information Commissioner, to whom we have given these very important duties, will be able to sustain an effective service. I can assure the noble Lord that we are aware of and understand the specific problem he outlined about staff. In fact, I was present at a meeting three or four weeks ago at which we discussed that exact subject. Part of the issue to deal with that will, I hope, be addressed in the near future, in ways that I cannot talk about tonight.

On the noble Lord’s general question as to whether it is an adequate system, we believe that the suggested system is flexible enough to deal with the requirements of the Information Commissioner. We realise that increased burdens will be placed on her; at the moment, I believe that her office has not raised its fees for 18 years. Of course, the number of data controllers has risen, so the rate applies to a greater number of people. We will lay some statutory instruments that will deal with the fees for the Information Commissioner in the near future, so I am sure that we will come back to that.

On the specific amendments the noble Lord has tabled, Clause 129 permits the Information Commissioner to charge a “reasonable fee” when providing services to data controllers and other persons who are not data subjects or data protection officers. This is intended to cover, for example, the cost to the commissioner of providing bespoke training for a data controller. Amendment 161E would place a requirement on the commissioner to publish guidance on what constitutes a “reasonable fee” within three months of Royal Assent. We agree that data controllers and others should know what charges they should expect to pay before they incur them. However, the Government’s view is that this is already provided for through Clause 131, which requires that the commissioner produce and publish guidance about any fees that she proposes to charge for services under Clause 129. As there is already a requirement for the commissioner to publish guidance in advance of setting any fees, the Government do not consider a particular deadline necessary.

Amendment 161F would remove Clause 132(2) completely. I am concerned that the amendment would create ambiguity in an area where clarity is desirable. Clause 132 makes provision for a general charging regime in the absence of a compulsory notification regime like that provided in the 1998 Act. Clause 132(2) clarifies that the regime could require a data controller to pay a charge regardless of whether the Information Commissioner had provided, or would provide, a “service” to that controller. This maintains the approach that is currently in force under the 1998 Act—namely, that most data controllers are required to pay a fee to the commissioner whether or not a service is provided to them—and is intended to meet the costs of regulatory oversight.

The consultation on the new charging regime recently closed and the Government intend, as I said, to bring forward regulations setting out the proposed fees under the new regime early in the new year. No final decision has yet been taken in relation to those fees, but, as I committed to during the passage of what became the Digital Economy Act, charges will continue to be based on the principle of full cost recovery and, in line with the current model, fee levels will be determined by the size and turnover of an organisation but will also take account of the volume of personal data being processed by the organisation. That partly addresses the point made by the noble Lord.

Amendment 161G addresses a concern raised by the Delegated Powers and Regulatory Reform Committee that the fees regime established by Clause 132 should not raise excess funds beyond what is required to cover the costs of running the Information Commissioner’s Office. I must confess to a sense of déjà vu; we debated a very similar amendment in the Digital Economy Act. The Government are considering their response to the committee’s report, but they remain concerned that there should be sufficient flexibility within the new fees regime to cover the additional functions that the commissioner will be taking on under the new regime and any other changes that may be dictated by operational experience, once the new regime has bedded in. Indeed, if anything, the merit of having some limited flexibility in this regard is even clearer now than it was in March when we debated the Digital Economy Act.

I confirm once again that charges will be on the basis of full cost recovery. We take on board the point made by the noble Lord, Lord Stevenson, that the commissioner must be able to make sufficient charges to undertake and fulfil the requirements that we are asking of her.

Finally, on Amendment 161H, I can reassure the noble Lord that the Information Commissioner already prepares an annual financial statement, in accordance with paragraph 11 of Schedule 12 to the Bill, which is laid before Parliament. In addition, there may be occasions where the Secretary of State needs up-to-date information on the commissioner’s expenses mid-year—in order, for example, to set a fees regime that neither under-recovers nor over-recovers those costs. That is why Clause 132(5) is constructed as it is.

I hope that I have addressed the noble Lord’s concerns both in general and in particular and that he will feel able not to press his amendments.

[Lord Paddick]

My Lords, I do not know whether I am getting confused here. The Minister referred to Clause 132(2), about the power for the Information Commissioner to require data controllers to pay a charge regardless of whether the commissioner has provided, or proposes to provide, a service to the controller. How can that be done if there is to be no requirement for data controllers to register with her?

[Lord Ashton of Hyde]

There is a duty for data controllers to pay a charge to the Information Commissioner in the same way as there is a duty today for data controllers to register with the Information Commissioner. The duty applies in both circumstances. In some cases, some data controllers do not register with the Information Commissioner—they are wrong not to do so, but they do not. In the same way, it is possible that some data controllers may not pay the charge that they should. In both cases, in today’s regime and that proposed, there is a duty on data controllers to perform the correct function that they are meant to perform. Controllers do not all register with the Information Commissioner today, although they should, and may not pay their charges. Under the new regime, they should, and an enforcement penalty is able to be levied if they do not.