Thursday 06 October 2022

Delay to data reform bill brings uncertainty

Michelle Donelan (photo)One of the aims of Liz Truss and her Government is to increase the UK’s productivity. One of the ways they intend to enable business growth is to reduce regulatory burdens. It sees the UK’s exit from the EU as an opportunity to move away from red tape generated by EU legislation. One of those pieces of legislation is the General Data Protection Regime (GDPR).

In seeking to replace GDPR, it has drafted a new data reform bill. However, yesterday, the new Secretary of State for Digital, Michelle Donelan (pictured), confirmed that Liz Truss’ cabinet is putting the bill on hold while it undertakes a reassessment of the proposed legislation.

The Government had claimed that by largely basing the draft bill on the European Framework (GDPR), and making several small changes, it would save businesses over £1bn over ten years. Changes related to things like public sector data use and sharing, regulation for small businesses, and data processing in scientific research.

There is now no indication of what the latest ‘reassessment’ is likely to bring. Truss states that the intention is to collaborate closely with business to ensure that any new legislation is fit for purpose. However, in delaying the bill, the risk is that there will be a negative impact on business growth and productivity in the short-to-medium term. Businesses are now left with uncertainty, not just in terms of what the bill will contain, but in terms of when new legislation will be passed. With a General Election likely in 2024, there is no guarantee that a lengthy consultation process will result in legislation being passed before we, potentially, have a new Government with an entirely different stance. Uncertainty is never a positive for business.

Moreover, if the outcome is a further shift away from GDPR, with more widespread change, the risk is that the EU revokes the UK’s ‘adequacy’ status. The result will be that companies that operate in the EU, and handle EU citizen’s data, will be faced with a very complex, and very costly, operating environment. Foreign companies looking to locate in the UK might also think twice.

One of the big issues with the new Government appears to be that they are so headstrong in their commitment to certain principles that good sense is taking a back seat. In this case, the determination to prove that Brexit has its benefits in terms of freeing us from unnecessary regulatory burden, is taking priority. It was a similar story when getting rid of the 45p higher rate tax band. Unintended consequences are more likely when decisions are taken with blinkers on. While ideological consistency is often something to be applauded, I was reading an iNews article that described Truss as displaying “blind rigidity”; that seems to perfectly sum up her approach. That article was written at the beginning of September; a month on and we are seeing more examples that back up the view. 

Posted by Georgina O'Toole at '09:28' - Tagged: publicsector   government   regulation   data   legislation