BRIEFING PAPER Number CBP 7699, 9 September 2016
Digital Economy Bill By Lorna Booth and
[Bill No 45 of 2016-17] Daniel Rathbone
Contents: 1. Digital Access and Infrastructure 2. Online pornography 3. Intellectual property 4. Digital government and data sharing 5. The BBC 6. Direct marketing code
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Contents
Summary 4 1. Digital Access and Infrastructure 5 1.1 Broadband: Universal Service Obligation 5 Background 5 The Bill 6 Comment on Broadband Obligations 6 1.2 Switching and Compensation 8 Background: The current marketplace 8 The Bill 9 1.3 Reform of the Electronic Communications Code 10 Background: Improving the mobile network 10 The Bill 12 Response to Proposals 16 1.4 Planning for Infrastructure 17 The Bill 18 1.5 Ofcom Appeals 18 1.6 Spectrum Management 19 What is Spectrum Management? 19 Dynamic spectrum access 20 Government strategic priorities for spectrum management 20 Financial penalties for breach of spectrum licences 20 1.7 Other Ofcom changes 21 2. Online pornography 22 2.1 Consultation on age verification for online pornography 22 2.2 Government response 24 2.3 The Bill 24 2.4 Comment 25 3. Intellectual property 26 3.1 The changes to intellectual property law under consideration 26 Online copyright 26 Webmarking 26 TV retransmission 27 3.2 The Bill 27 3.3 Comment 28 4. Digital government and data sharing 30 4.1 Consultation 30 4.2 Existing protection for personal data 31 4.3 Reviews of data sharing 33 When are people content for their data to be shared? 34 4.4 Public service delivery: data sharing 36 General powers 36 Fuel poverty 37 Protections 37 The Bill 37 Comment 38 4.5 Civil registration: data sharing 39 Why is data on civil registration useful? 39 The Bill 41 Comment on civil registration data 42 3 Commons Library Briefing, 9 September 2016
4.6 Debt owed to the public sector: data sharing 43 Why share data on debt? 43 The Bill 44 Comment on sharing public debt data 46 4.7 Fraud against the public sector: data sharing 47 How can data sharing reduce fraud? 47 The Bill 48 Comment on data sharing and fraud 49 4.8 Research purposes: data sharing 49 Data sharing for research 49 The Bill 51 Comment on data sharing for research 52 4.9 HMRC: data sharing 53 Why share HMRC data? 53 The Bill 54 4.10 Official statistics: data sharing 54 Sharing more data to support official statistics 54 The Bill 58 Comment 59 5. The BBC 60 5.1 Background to proposed changes 60 Ofcom’s role 60 Over-75s 60 5.2 The Bill 61 5.3 Comment 61 6. Direct marketing code 63
Contributing Authors: Antony Seely, Lorraine Conway, Catherine Fairbairn, Sally Lipscombe, Ed Potton, Antony Seely, Philip Ward, John Woodhouse
Cover page image copyright: Superfast Cymru Cab5 by btphotosbduk. Licensed under CC BY 2.0 / image cropped
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Summary
The Digital Economy Bill 2016-17 [Bill no. 45] was published on 6 July 2016 and its First Reading in the House of Commons took place that day. Its Second Reading is scheduled for Tuesday 13 September 2016. The Bill, and its explanatory notes, are available on the Parliamentary website. Factsheets and impact assessments are available from the .Gov website. The Bill would implement a number of Government policies, broadly related to the digital economy. It: • covers the provision of fast broadband services through a new ‘Universal Broadband Obligation’ entitling consumers to a minimum speed, enhances switching and compensation for communication services, and a new Electronic Communications Code to deal with phone and internet infrastructure, making the roll-out of new infrastructure cheaper and subject to simplified regulation; • provides for greater data sharing between public bodies for certain purposes and in certain circumstances. Datasets may be shared to support public service delivery and in relation to public sector debt and fraud, and to produce research and official statistics. There are also specific provisions for sharing data related to civil registration; • updates intellectual property rules for digital industries; • introduces age verification for online pornography with penalties for non- compliance; • introduces a new statutory code for direct marketing to strengthen enforcement action; • updates the regulation of the BBC by making OFCOM responsible for the regulation of all BBC activities; the Bill also transfers to the BBC from the Secretary of State the ability to make concessions on TV licences relating to age (following the transfer of the cost of free over-75 licences). Following the publication of the Bill the then Minister for the Digital Economy, Ed Vaizey, said: We want the UK to be a place where technology ceaselessly transforms the economy, society and government. The UK has always been at the forefront of technological change, and the measures in the Digital Economy Bill provide the necessary framework to make sure we remain world leaders. A Commons Library Briefing Paper provides a general overview of the digital economy and related statistics (Digital economy: statistics and policy). The Business, Innovation and Skills Committee reported on the digital economy in July 2016 (on the industry generally rather than the provisions of this Bill). The Government have said they expect the Bill to be considered in the Commons and Lords in the last part of 2016. The Bill extends to the whole of the UK with two exceptions: sharing data in relation to civil registration does not apply in Scotland and Northern Ireland, while the provisions for sharing energy supplier data do not apply in Northern Ireland.
5 Commons Library Briefing, 9 September 2016
1. Digital Access and Infrastructure
1.1 Broadband: Universal Service Obligation Background The Government has stated that fast broadband connections are now an essential service for households and businesses across the UK: Fast broadband connectivity is now seen as a key service, essential not only for busy families but also for businesses and entrepreneurs across the UK. The latest data from Ofcom confirms 10 Mbps is the speed needed to meet the demands of today’s typical family and many small business.1 Superfast broadband has been rolled out to much of the country on commercial terms, principally by BT Openreach. The Government’s policy is to provide funding to support the roll-out of superfast broadband to those areas of the UK where commercial roll-out is not economically viable. This is mostly, but not entirely, in rural areas. The Government defines superfast as speeds greater than 24Mbps. This roll- out has provided superfast broadband to 90% of UK premises as at the end of March 2016 and is on course to meet a target of 95% of premises by the end of 2017.2 Improving the speed and availability was a manifesto commitment of the Conservatives in 2015.3 The remaining unserved premises (estimated at 1.5 million), the “final 5%”, are geographically dispersed across the UK. In order to ensure the final 5% have access to fast broadband connections the Government has stated that it will introduce a broadband Universal Service Obligation (USO) to act as a “safety net” allowing those with poor connections the legal right to request a fast connection.4 The connection speed for the USO will be specified in secondary legislation and is currently expected to be 10Mbps. The Government intends for the USO to be in place by 2020 at the latest.5 Ofcom has stated that the USO will ensure that the households living in areas with poor connection speeds are not excluded from the benefits of a digital society: Despite both commercial and publicly funded efforts to improve superfast broadband coverage, some people remain stuck on slow speeds. Many of these are in rural areas but others are located in cities. The broadband USO is intended as a safety net to ensure that these households are not excluded from the benefits of living
1 DCMS, ‘Government plans to make sure no-one is left behind on broadband access’, 7 November 2015 2 ‘UK hits the 90% superfast broadband coverage target’, thinkbroadband, 8 April 2016 [accessed on 7 June 2016] 3 Conservative Party Manifesto 2015, p15 4 DCMS, ‘Government plans to make sure no-one is left behind on broadband access’, 7 November 2015 5 DCMS, Digital Economy Bill Factsheet – Broadband Universal Service Obligation [accessed on 6 July 2016] 6 Digital Economy bill
in a digital society. It aims to ensure that a minimum level of broadband is available to everyone at a fixed location, on reasonable request, and at an affordable price, irrespective of where people live. A USO connection is demand-led, meaning it is provided on request rather than pre-emptively (e.g. through a publicly funded roll-out programme).6 The Government has commissioned Ofcom to provide technical analysis and recommendations about the design of the USO including costs, technologies and funding.7 Ofcom intends to produce a report by the end of 2016, after which the Government has stated it plans to publish draft secondary legislation, implementing the USO, for consultation.8 The Government expects the USO to work in a similar way to the telephony USO. BT, the designated provider under the telephony USO, provide a telephone line connection on request at a standard charge if the total cost is below £3,400. If the costs are going to be above this threshold the customer has the option of meeting the additional cost.9 For more information on broadband policy see the Library briefing: Superfast broadband coverage in the UK (CBP-06643, 18 August 2016).
The Bill The Communications Act 2003 s.65 requires the Secretary of State to set out by order (“universal service order”) what communications services must be made available or supplied throughout the UK (“universal service obligation”), in compliance with EU obligations. The Bill makes the necessary changes to make clear that the universal service order can include requirements for the supply of broadband services. Clause 1 amends s.65 allowing the Secretary of State to include broadband in the universal service order. The universal service order may also contain guidance about the speed or characteristics of broadband connections that must be provided. Clause 1(7) inserts a new s.72A into the 2003 Act that allows the Secretary of State to direct Ofcom to review the broadband universal service obligation. These clauses extend to the whole of the UK. Comment on Broadband Obligations In its report Establishing world-class connectivity throughout the UK, published on 19 July 2016, the Culture, Media and Sport Committee stated that there is a “compelling case” for a broadband USO: We believe that there is a compelling case for expanding the current USO for telephony and dial-up internet to cover broadband, given the vital role it plays in people’s lives through facilitating interactions with friends and family, and commercial and public services. A USO should allow all to have access to
6 Ofcom, ‘Designing the broadband universal service obligation – summary of responses to call for inputs’, 16 August 2016 7 DCMS, Letter to the Chief Executive of Ofcom, 22 March 2016 8 DCMS, ‘New Broadband Universal Service Obligation consultation Summary of responses and Government response’, 17 May 2016 9 Digital Economy Bill Explanatory Notes 7 Commons Library Briefing, 9 September 2016
decent and reliable broadband services wherever they live. The design of a new USO should be in line with the Government’s and Ofcom’s aspiration for competition in broadband delivery, both at the service and infrastructure level. Ideally, the USO must be designed so as not to impose too great a burden on industry: to incentivise investment, without creating consumer detriment or overly inhibiting take-up.10 The plan for a USO has been welcomed by a number of organisations including the Confederation of British Industry (CBI), techUK, the technology trade association, and the Country Land and Business Association (CLA).11 However, a 10Mbps USO has been criticised by the Institute of Directors for not being ambitious enough.12 The Shadow Minister for the Digital Economy, Chi Onwurah MP, has also criticised the proposal as “entirely unfunded”.13 It has also been previously stated by techUK that the USO should be seen as one of a range solutions for the final 5% and not the only solution.14 The broadband USO has been welcomed by the Countryside Alliance. The Countryside Alliance head of policy, Sarah Lee, stated: We hope that the commitment in the Digital Economy Bill to deliver a Universal Service Obligation (USO) of 10Mbit/s will ensure that much needed digital connectivity is achieved in rural areas. Continued poor connectivity in the countryside represents a huge missed opportunity for economic development and must be addressed as a priority. We now look forward to working with the government to ensure this much promised connectivity is delivered.15 As part of the work to produce recommendations for the Government on the design of the universal service obligation, due to be completed by the end of 2016, Ofcom issued a call for inputs (CFI) from stakeholders. It published a summary of responses to the CFI in August 2016. Ofcom divided the responses they received into two broad categories: those which backed a highly specified universal service, with cost a secondary consideration, and those that backed a safety net to complement existing public and private investment. The responses in the first category came mostly from public sector and consumer groups, while those in the second category came mostly from industry.16 Concerns about Market Distortion In response to the CFI many industry groups and communication providers supported a USO in principle. However, they raised concerns that it could lead to market distortion, raising prices for all consumers or
10 Culture Media and Sport Committee, Establishing world-class connectivity throughout the UK, 19 July 2016, HC147 2016-17, para 116 11 ‘Government Unveil 10Mbps Broadband Universal Service Obligation’, ISPreview 7 November 2015 [accessed on 9 June 2016] 12 ‘Government broadband and mobile improvement plans are 'not ambitious enough'’, The Telegraph, 18 May 2016 13 HC Deb 9 March 2016, c137WH 14 ‘Government Unveil 10Mbps Broadband Universal Service Obligation’, ISPreview, 7 November 2015 [accessed on 9 June 2016] 15 Countryside Alliance, ‘Countryside Alliance welcomes Digital Economy Bill as a step closer for broadband connectivity in the countryside’ [accessed on 12 July 2016] 16 Ofcom, ‘Designing the broadband universal service obligation – summary of responses to call for inputs’, 16 August 2016 8 Digital Economy bill
undermining commercial investment in broadband networks, particularly if it was funded through an industry levy. It noted that industry respondents: …emphasised the need for the USO to put measures in place to prevent network overbuild that might be funded through the USO. Some suggested the USO might discourage future commercial investment by encouraging the universal service provider(s) to seek funding for roll out that could be commercially viable. […] The [Broadband Stakeholder Group]17 questioned if a USO was the correct intervention at the scale and time currently being considered. It felt a USO risked undermining commercial investment, and any industry funding scheme risked higher retail prices.18
1.2 Switching and Compensation Background: The current marketplace Telecommunications is a competitive market with a number of different providers offering services including mobile phone contracts, fixed line voice services and broadband. Many consumers now receive these services in ‘double-play’ or ‘triple-play’ bundles, which include, for example, fixed line voice and broadband or mobile, broadband and pay TV. Ofcom is responsible for regulating the telecoms market. The Government and Ofcom have both stated that competition is the best way to ensure good outcomes for consumers.19 However, in its strategic review of digital communications, Ofcom identified a number of barriers preventing customers from making informed choices in order to benefit from competition in the market. These include the availability of information about service quality, for example, mobile coverage and broadband speeds, and the difficulty of switching providers. In the year to September 2015, 8% (excl. home moves) of broadband consumers, 10% of mobile consumers and 5% of Pay TV consumers switched providers.20 Pricing trends show that inactive consumers, who are not engaged with the market, are likely to pay higher prices, with the gap between promotional prices and ‘list’ prices for landline and broadband packages increasing from 5% in 2012 to 20% in 2015.21 Ofcom’s strategic review goes on to set out plans to “empower consumers to make informed choices” and overcome barriers to market participation.22 These include
17 The Broadband Stakeholder Group is the UK Government’s advisory body on broadband. It includes telecoms operators, manufacturers, ISPs, mobile network operators, broadcasters, content producers and rights holders, as well as central and local government, devolved administrations, Ofcom and others. 18 Ofcom, ‘Designing the broadband universal service obligation – summary of responses to call for inputs’, 16 August 2016 19 Ofcom, ‘Making communications work for everyone – Initial conclusions from the Strategic review of digital communications’, 25 February 2016 20 ibid. 21 ibid. 22 Ofcom, ‘Making communications work for everyone’, 25 February 2016 9 Commons Library Briefing, 9 September 2016
plans to make switching easier and publishing more detailed information on service quality and availability. The Government has stated that the changes proposed in the Bill should allow Ofcom to take its plans for switching forward.23 These include a move to gaining provider led (GPL) switching. This type of switching, which was introduced in June 2015 for broadband services that use the Openreach network, means a consumer only needs to contact the provider they are switching to and not their existing provider.
The Bill Under the Communications Act 2003 Ofcom sets a number of General Conditions that must be met by communication providers when providing services to consumers. The Bill ensures that Ofcom can require communications providers to comply with specific switching conditions, including GPL switching. The Government believes that consumers should be compensated automatically if communication services are interrupted.24 This model already exists in the energy sector where consumers may be entitled to payment if service levels are not met. The Bill makes explicit that Ofcom has the powers to implement conditions that require communication providers to pay automatic compensation. These clauses extend to the whole of the UK. Clause 2 of the Bill inserts a new subsection in s.51 of the 2003 Act that allows Ofcom to set General Conditions that require communication providers to adhere to processes set out by Ofcom for consumer switching. Clause 3 inserts a new subsection in s.51 of the 2003 Act that allows Ofcom to set General Conditions that require communication providers to pay compensation to consumers if they fail to meet specified standards or obligations. The Bill also gives Ofcom powers to obtain and publish more information from communication providers, such as address-level broadband speeds and mobile coverage, which may help consumers make more informed decisions when choosing a provider. Ofcom will also be able to collect and publish data on consumer experience, including number of complaints and time taken to resolve them. The Government believes making this data available will bring “transparency, accountability and innovation”.25 Clauses 69-73 of Part 6 of the Bill (Ofcom and other regulation) make the necessary changes to the Communications Act 2003 to give Ofcom these powers.
23 DCMS, Digital Economy Bill Factsheet - supporting consumers [accessed on 12 July 2016] 24 ibid. 25 ibid. 10 Digital Economy bill
Clause 71 makes minor changes to the conditions Ofcom can make about the allocation of phone numbers.
1.3 Reform of the Electronic Communications Code
Box 1: The Electronic Communications Code The Electronic Communications Code facilitates the installation and maintenance of electronic communications networks, (including mobile and fixed line telephone and broadband networks). It does so by giving network operators certain rights. Under the Code, telecommunication operators are permitted to construct infrastructure on public land (e.g. streets) and have rights to install equipment on private land. With regards to private land, the Code requires that operators contact the land owner before installing equipment but also provides that when permission is not given by the land owner an operator can apply to the County Court (or the Sheriff in Scotland) to allow them to undertake the work. The idea behind these powers is that communications networks can be constructed without landowners being able to demand unreasonable sums from communications operators for allowing telephone wires to cross their land or allowing apparatus to be placed on it. Rights under the Code are far reaching, and it underpins the physical networks of apparatus that support and provide electronic communications across the UK.26 The Code was initially enacted in 1984 to regulate landline telephone provision.27 The term Electronic Communications Code comes from the Communications Act 2003 Section 106 (previously it was termed the telecommunications code), which amended Schedule 2 of the Telecommunications Act 1984 to reflect the changes in technology and the need to support the infrastructure networks which support broadband, mobile internet, landlines and cable television.
Background: Improving the mobile network On 18 December 2014, the Government announced a new voluntary binding agreement with the four major UK mobile operators to improve mobile coverage across the UK.28 Under the agreement all four of the mobile networks collectively agreed to: a guaranteed £5bn investment programme to improve mobile infrastructure by 2017; guaranteed voice and text coverage from each operator across 90 per cent of the UK geographic area by 2017, halving the areas currently blighted by patchy coverage as a result of partial ‘not- spots’; full coverage from all four mobile operators will increase from 69 per cent to 85 per cent of geographic areas by 2017; provide reliable signal strength for voice for each type of mobile service (whether 2G/3G/4G) – currently many consumers frequently lose signal or cannot get signal long enough to make a call; and make the deal legally binding by accepting amended licence conditions to reflect the agreement – it will be enforceable by Ofcom.29
26 The Law Commission, ‘The Electronic Communications Code’, 27 February 2013, p1 27 ibid. p69 28 DCMS, ‘Government secures landmark deal for UK mobile phone users’, 18 December 2014 29 ibid. 11 Commons Library Briefing, 9 September 2016
As part of the Agreement the Government committed to reform of the Electronic Communications Code at the earliest possible opportunity in order to make it easier “for the whole communications sector to rollout out new mobile and broadband services”.30 The Electronic Communications Code (see Box 1) is currently set out in Schedule 2 to the Telecommunications Act 1984 as amended by Schedule 3 to the Communications Act 2003. The Code has long been considered overly complicated and in need of reform. In the words of Mr Justice Lewison in Geo Networks Ltd v The Bridgewater Canal Company Ltd: The Code is not one of Parliament’s better drafting efforts. In my view it must rank as one of the least coherent and thought- through pieces of legislation on the statute book.31 The Law Commission carried out a review of the Electronic Communications Code between 2011 and 2013, following a request from the Department for Culture, Media and Sport. The Law Commission noted from the outset that the Code (as amended in 2003) was in need of reform for three reasons. 1 It is “complex and extremely difficult to understand”. 2 They considered it out dated, and based on several nineteenth and early twentieth century statutes dealing with telephone wayleaves (a licence, or permission, to do something or keep something on land). 3 The Commission felt that there was evidence suggesting that the Code is actually making the rollout of electronic communications more difficult. They argued that: The 2003 Code seeks to regulate the effects of agreements to confer specified rights, and to back this up with a system for compulsion where agreements cannot be reached. Yet it lacks clarity on several important matters, such as who is bound by rights conferred on Code Operators, how to assess the level of payments for the grant of rights, and how the termination of those rights is to be enforced. This, together with the absence of efficient dispute resolution, considerably hampers its usefulness to both Code Operators and landowners. In addition, it is not clear that it strikes the right balance between those parties.32 The Coalition Government launched a consultation on reforming the code on 26 February 2015, which ran for 9 weeks, and closed on 30 April 2015. Submissions were invited on all areas of the Code. On 17 May 2016 the Government published its response to the consultation33 setting out the proposals for reform of the Code it intends to take forward. The new Code proposed by the Government implements most of the recommendations of the Law Commission’s review of the Code, while
30 ibid. 31 Geo Networks Ltd v The Bridgewater Canal Company Ltd [2010] EWHC 548 (Ch), [2010] 1 WLR 2576 at [7]. 32 The Law Commission, ‘The Electronic Communications Code’, 27 February 2013, pp3-4 33 DCMS, ‘A New Electronic Communications Code’, 17 May 2016 12 Digital Economy bill
some of the proposed reforms go further than the recommendations. The then Minister of State for Culture and the Digital Economy, Ed Vaizey, stated that the new Code will improve on the existing Code and help deliver mobile coverage in hard to reach areas: The new Code will vastly improve on the existing Code. It will make major reforms to the rights that communications providers have to access land – moving to a “no scheme” basis of valuation regime. This will ensure property owners will be fairly compensated for use of their land, but also explicitly acknowledge the economic value for all of society created from investment in digital infrastructure. In this respect, it will put digital communications infrastructure on a similar regime to utilities like electricity and water. This will help deliver the coverage that is needed, even in hard to reach areas.34 However, the new Code has been criticised by the Country Land and Business Association (CLA), which represents landowners, as giving too much power to network operators.35 The new code is designed to underpin consensual agreements between network operators and landowners, but it provides provision for the courts (or tribunals) to impose an agreement where one cannot be reached. More background on efforts to reform the electronic communications code can be found in the Library briefing paper: Reforming the Electronic Communications Code (CBP-7203, 1 June 2016). The Bill These parts of the Bill (relevant to the new code) apply to the whole of the UK. Clause 4 repeals the existing Electronic Communications Code and inserts the new Code (Schedule 1) as a Schedule to the Communications Act 2003. Schedule 3 of the Bill makes consequential amendments to the repeal of the existing Code. Clause 5 gives the Secretary of State the power to make transitional provisions for the coming in to force of the new Code and to make changes to Schedule 2 of the Bill, which contains the arrangements for the transfer of agreements made under the existing Code to the new Code. Clause 6 gives the Secretary of State the power to make consequential provision in connection with the new Code. Schedule 1 – the New Code Schedule 1 sets out the new Code. Part 1 contains some of the key concepts of the Code, including the Code rights, which are:
34 DCMS, ‘A New Electronic Communications Code’, 17 May 2016, p4 35 CLA, ‘Chaotic regulation changes put mobile coverage at risk', 17 May 2016 13 Commons Library Briefing, 9 September 2016
(a) to install and keep electronic communications apparatus on, under or over the land, (b) to inspect, maintain, adjust, alter, repair, upgrade or operate electronic communications apparatus which is on, under or over the land, (c) to carry out any works on the land for or in connection with the installation, maintenance, adjustment, alteration, repair, upgrading or operation of electronic communications apparatus, (d) to enter the land to inspect, maintain, adjust, alter, repair, upgrade or operate any electronic communications apparatus which is on, under or over the land or elsewhere, (e) to connect to a power supply, (f) to interfere with or obstruct a means of access to or from the land (whether or not any electronic communications apparatus is on, under or over the land), or (g) to lop or cut back, or require another person to lop or cut back, any tree or other vegetation that interferes or will or may interfere with electronic communications apparatus. Part 2 makes provision about who can exercise the code rights above and who is bound by them, i.e. who has to let the code operator exercise the rights on their land. Upgrading and sharing infrastructure Under the existing code if a network operator wants to upgrade the apparatus at a site, for example to replace 3G equipment with 4G equipment, this can require the agreement of the landowner. In order to obtain agreement the operator may have to pay a higher rent for use of the site, even if the new equipment is similar to the old equipment and there is minimal visual change. The need to renegotiate agreements can make rolling out new technology that could improve mobile coverage expensive. The Law Commission recommended that there should be an automatic right to upgrade apparatus, or share it with another operator, where there is minimal adverse visual impact. Part 3 of the new Code provides an automatic right for network operators to upgrade and share apparatus. The Government states that this will allow operators to quickly update their networks when new technology becomes available.36 Part 3 also allows operators to assign code rights to another operator, if, for example, there was a takeover of one operator by another. This would allow the transfer of an agreement between an operator and a landowner to a new operator without renegotiation of the agreement. Dispute Resolution Part 4 of the new code contains the powers of the court to impose an agreement between an operator and a landowner in the case of a dispute.
36 DCMS, ‘A New Electronic Communications Code’, May 2016, p17 14 Digital Economy bill
The Law Commission recommended that the forum for Code disputes should be the Lands Chamber of the Upper Tribunal, rather than the County Court (or Sheriff Court in Scotland), because it has the necessary expertise to ensure effective dispute resolution. Part 16 of the new code defines the court in Part 4 as the County Court (England and Wales, Northern Ireland) or the Sheriff Court (Scotland). However, Part 16 also allows the Secretary of State to provide by regulations that the powers be exercised by: (a) in relation to England and Wales, the First-tier Tribunal; (b) in relation to England and Wales, the Upper Tribunal; (c) in relation to Scotland, the Lands Tribunal for Scotland; (d) in relation to Northern Ireland, the Lands Tribunal for Northern Ireland. The Government has not yet said when or whether such regulations will be introduced. However, in the impact assessment for the new Code the Government makes clear that it intends for the Tribunal to be responsible for dispute settlement.37 Part 4 sets out the conditions that have to be met in order for a court to impose an agreement (paragraph 20). Part 4 also allows for interim and temporary code rights. Interim code rights allow the court to grant an operator code rights (i.e. the right to access land and install equipment) pending a voluntary or court imposed agreement. This is a new right. Temporary code rights allow for the granting of access by the court to apparatus that already exists. Wayleave valuations A wayleave is an agreement whereby a landowner grants a communications provider a licence to access and maintain equipment on private land. This is generally in return for a rental payment. Part 4 changes the valuation of this rent by the court (when imposing an agreement) to a system based on compulsory purchase principles (“no-scheme”) as it is for other utilities such as Electricity. This means the value of the land will be assessed based on its value to the landowner, not on its value to the network operator as it is under the current code. While most agreements will be consensual between operators and landowners, rather than ones imposed by the court, this change in valuation should strengthen the negotiating position of operators and thus lead to reduced rents even in consensual agreements. An independent analysis commissioned by DCMS concluded that this would result in a reduction of wayleave costs for network operators of 40%.38 This proposal was initially suggested by the Law Commission but after a consultation it proposed only minor changes to the valuation regime to prevent excessive “ransom rents”:
37 DCMS, ‘Impact Assessment – Electronic communications code’, 12 May 2016 38 Nordicity, ‘Modelling the Economic Impacts of Alternative Wayleave Regimes’, October 2013 15 Commons Library Briefing, 9 September 2016
The Law Commission’s focus is solely on the need for a revised Code that will function as an effective legal tool, facilitating electronic communications networks while striking a fair balance between the interests of landowners, service providers and the public. […] [O]ur consultation has not produced evidence that could justify our recommending a “no-scheme” pricing basis in the public interest. Even if we could be sure that that change would not have the adverse effects for which consultees argue, it would be risky to recommend a “no-scheme” basis merely in the hope that it would speed up deals or would result in lower prices or better investment in electronic communications. Change is likely to be costly in itself and the market would take some time to settle; there would inevitably be some disputes even if consultees proved to be wrong in their prediction of widespread unwillingness to reach agreements. But as it is, the evidence with which we have been presented is such that we take consultees’ concerns very seriously. We conclude that the risks of economic damage, to individuals, businesses, the public purse and the electronic communications industry itself far outweighs the potential benefit to that industry, on the basis of the evidence we have.39 The Government has decided to go ahead with the “no-scheme” valuation and states that, while landowners should receive fair payment for the use of their land, this should not include a share of the economic value created by the demand for services provided by network operators: We consider that it is right that site providers should continue to receive fair payment for the use of their land and that this should be in addition to simple compensation for any damage or loss of value to the land. However, the nature of digital communications has changed significantly since the Code was established as part of the Telecommunications Act 1984. Given the priority that this Government attaches to digital communications and long-term investment in UK infrastructure, and the ever more vital role that digital communications play in economic growth, productivity gains, and social interaction, we consider that reform must now go further. It is quite clear that the cost for “rents” in the telecommunications industry are significantly higher than those enjoyed by utilities and providers of essential services. Government is also clear that site providers should get fair value for the use of their land, but considers that this should not, as a matter of principle, include a share of the economic value created by very high public demand for services that the operator provides. The Government is therefore proposing that the revised code should limit the value of consideration by changing the basis of valuation to a “no scheme” rule that reflects the underlying value of the land. This is a rate that is more relevant to the nature of modern digital communications infrastructure rollout, and will work to encourage greater investment and improved network coverage.40
39 The Law Commission, ‘The Electronic Communications Code’, 27 February 2013 40 ibid. 16 Digital Economy bill
Terminating and modifying agreements Part 5 includes provision for the termination and modification of agreements between landowners and operators. This includes the provision that an agreement continues as a matter of statue after it has expired. The remainder of the Schedule set out further rights and provisions including: • provisions on rights to require the removal of equipment, • certain rights in relation to transport land or streets and roads that can be exercised without agreement or court order, • the right of people who are affected by the installation of communications apparatus (but whose agreement is not needed to install it) to object to the installation, • rights to lop trees, • provisions for the awarding of compensation by court order for reasonable legal and valuation costs or diminution in value of land. Transitional Provisions The new Code will only apply to new agreements between operators and landowners. As agreements are often for as long as 20 years the changes and any associated cost saving for network operators are likely to take place gradually as agreements are renewed over the next 10-20 years. Schedule 2 of the Bill contains transitional provisions, setting out how existing agreements come under the new code, without the new provisions in the code applying retrospectively. In particular, Schedule 2 makes explicit that the assignment of code rights and upgrading and sharing provisions of the new Code do not apply to existing agreements. However, Part 5 of the new Code, which relates to the termination or end of agreements, will apply to agreements under the existing code. Response to Proposals The Government’s proposals for reform have been welcomed by communication providers Virgin Media, O2 and Vodafone.41 Lawyer Alicia Foo, who specialises in electronic communication property disputes, has stated that the new proposals could have a positive effect on rural connectivity: [The proposals] recognise that the provision of electronic communications is as important to that of utilities such as water or gas. No doubt there will be some disgruntled landowners across the UK who will see existing profitable income sources significantly reduced by these measures. However, as we strive to adapt to an era in which connectivity is deemed a critical aspect of day-to-day
41 Mobile Today, ‘Networks react to mobile mast reforms’, 18 May 2016 17 Commons Library Briefing, 9 September 2016
life the revamped code could hopefully be transformational for those living in remote parts of the UK.42 The President of the Country Land and Business Association (CLA), a membership organisation for rural landowners, has criticised the Government’s proposals, in particular those relating to the “no- scheme” system of valuation, stating that they are poorly thought through and have been brought in at the last minute: Ministers have announced a massive concession to mobile industry dressed up as a measure necessary for consumers. Reform of the Electronic Communications Code is needed, but these last minute changes are poorly thought through, against Law Commission recommendations, and remove fairness from the system. These major concessions, valued by the Government’s own economic analysis at more than a £1 billion in benefit to the mobile operators, come with not one single additional commitment to actually deliver for consumers.43 In evidence to the Culture, Media and Sport Committee the Wireless Infrastructure Group stated that it was important the voluntary support of the land sector for the new Code was retained as there is likely to be continued network expansion over the next number of years: In many ways, like other utilities—[communication providers’] services are as important as water and power—but we are not like other utilities in terms of the job that is ahead of us. We have years and years of network building ahead of us, and the voluntary support of the land sector is absolutely crucial to that. If we lose that, we might as well all go home for the next four or five years …44
1.4 Planning for Infrastructure Changes to planning rules in 2013 in England made it easier to use permitted development rights to erect broadband infrastructure on certain types of land.45 A process of having to apply for “prior approval” to the local planning authority in relation to the siting and appearance of infrastructure was removed in relation to national parks, areas of outstanding natural beauty, and conservation areas. The Secretary of State can make regulations setting out conditions for the application of the electronic communications code under s.109 of the Communications Act 2003. When making any regulations the Secretary of State must consider the protection of the environment. Amendments to s.109 by the Growth and Infrastructure Act 2013 mean that by complying with the need to consider the environment the Secretary of State also complies with environmental duties under other legislation (as listed in s.109 (2B) of the 2003 Act).46 These changes were made in parallel to the planning changes and apply for a
42 Out-law.com, ‘New Electronic Communications Code can transform rural connectivity, says expert’ [accessed on 24 May 2016] 43 CLA, ‘Chaotic regulation changes put mobile coverage at risk’, 17 May 2016 44 Culture, Media and Sport Committee, Establishing world-class connectivity throughout the UK, 19 July 2016, HC147 2016-17, para 55 45 The Town and Country Planning (General Permitted Development) (Amendment) (England) Order 2013 (No.1101) 46 Digital Economy Bill Explanatory Notes 18 Digital Economy bill
temporary period, as set by a sunset clause in the Growth and Infrastructure Act 2013, which expires in April 2018. In part to help mitigate environmental concerns, a Cabinet Siting and Pole siting Code of Practice was published in June 2013 as a joint initiative by Government, planning professional, environmental bodies and broadband industry representatives. The Bill Clause 7 of the Bill removes the sunset clause from s.109 of the Communications Act 2003. This means that the changes described above will be made permanent.
1.5 Ofcom Appeals The Communications Act 2003 sets out the rights of appeal against Ofcom’s decisions regarding the regulation of electronic communications networks, services and spectrum. Appeals are often made by communication providers, for example BT or mobile operator Three. Appeals are heard by the Competition Appeal Tribunal (CAT) on “on the merits” grounds. On the merits means a complete review of the decision based on the evidence provided to the tribunal. The Government believes that this standard of review is overly burdensome and the delays caused by continuing litigation can hinder effective regulation.47 The outgoing Chief Executive of Ofcom, Ed Richards, stated in evidence to the House of Lords Communications Committee on 18 November 2014 that he believed that it is too easy to appeal Ofcom’s decisions and that at any one time Ofcom is litigating between 3 and 10 decisions: I think the ability and the freedom with which you can appeal Ofcom’s decisions is too easy and the threshold for it and the nature of the appeal are too wide. Let me explain what I mean. You could say that is restricted but let me explain more clearly. We have a unique threshold. It is unlike any other regulator. We are subject to appeal on what is called “the merits”. […] We are typically in court defending our decisions. We typically have anywhere between three and 10 of our decisions in court being litigated— […] —all the time, every day of every week every year.48 The law firm Towerhouse LLP, who have acted in Ofcom appeals and other regulatory cases, published a report on the Ofcom appeals process in December 2010. It concluded that the current appeals process is popular and that the current standard of review reflects a balance between principle and practicality.49 It also concluded that any change to the process could result in significant confusion:
47 Digital Economy Bill Explanatory Notes 48 Select Committee on Communications, One-off evidence session with Ed Richards, outgoing chief executive of Ofcom, 18 November 2014 49 Towerhouse LLP, ‘Appeals from Ofcom Decisions - Time for Reform?’, 2 December 2010 19 Commons Library Briefing, 9 September 2016
So any fundamental revision of the appeals standard would be likely to generate significant confusion. It would throw away the clarification work of the last seven years. This would almost inevitably manifest itself in protracted legal battles about the meaning of the new standard. The potential rejection of this mature regime for something new was a major concern for stakeholders in our research exercise.50 However, the Government states in the Impact Assessment that the changes will lead to a reduction in the length and cost of appeals that will enable Ofcom to focus resources on other projects.51 Clause 74 of the Bill amends the Communications Act 2003 so that a judicial review standard will apply for appeals of Ofcom decisions instead of the existing ‘on the merits’ standard. The Government states that the change will ensure that Ofcom’s decision can still be challenged but that complete reappraisal of Ofcom’s decisions will not be possible.52 Regulation of the telecommunications sector must comply with the EU framework directive (2002/21/EC), which requires “the merits of the case are duly taken into account and that there is an effective appeal mechanism”.53 The Government believes that the current standard for appeals goes beyond what is required by the directive and that a judicial review standard would still meet the directive’s requirements.54 A report in the Telegraph suggests that these changes go against the EU regulatory framework directive.55 The Coalition Government carried out a consultation on these reforms in 2013. As part of this consultation, in July and August 2013, the Government held consultation workshops on regulatory and competition appeals. In the summary of stakeholder views from the consultation workshops some stakeholders criticised the proposed changes stating that they could create more uncertainty rather than the Government’s stated aim of speeding up the appeals process. Some stakeholders also stated that, compared to some international courts, the CAT is relatively quick.56
1.6 Spectrum Management What is Spectrum Management? Spectrum is the term given to the electromagnetic frequency range 3kHz-300GHz that can be used for wireless communication. Spectrum is a national asset owned by the Government, which is then licensed by Ofcom for various civil uses, for example, TV and radio and mobile
50 Towerhouse LLP, ‘Appeals from Ofcom Decisions - Time for Reform?’, 2 December 2010 51 DCMS, ‘Impact Assessment – Ofcom Appeals’, 12 May 2016 52 Digital Economy Bill Explanatory Notes 53 Official Journal L 108, 24 April 2002 54 Digital Economy Bill Explanatory Notes 55 ‘Now is the time for Britain to build an ultra-fast broadband network’, The Telegraph, 9 July 2016 56 BIS, ‘Streamlining regulatory and competition appeals consultation on options for reform - Summary of stakeholder views from consultation workshops’, 6 September 2013 20 Digital Economy bill
phone networks. It is a limited but very useful resource, therefore its careful management is important. Dynamic spectrum access White space is spectrum that is allocated but sometimes unused. These white space frequencies are not always used at a specific time or location and are a consequence of the way spectrum is allocated. New technology is able to make use of these white spaces and this is called dynamic spectrum access. Devices that use dynamic spectrum access are connected to geolocation databases that identify when and where spectrum is available. However, because this is a new technology these databases are not currently regulated. Clause 8 of the Bill amends the Wireless Telegraphy Act 2006 to allow Ofcom to register and regulate databases for dynamic spectrum access. The Explanatory Notes to the Bill state that this will allow Ofcom to better perform its spectrum management role, prevent interference and facilitate dynamic spectrum access.57 Furthermore, providing regulatory certainty will allow businesses to develop new applications for this technology, making better use of spectrum that is currently unused. Government strategic priorities for spectrum management Clause 9 of the Bill inserts new sections into the Wireless Telegraphy Act 2006 that set out that Ofcom must “have regard” to a statement of the Government’s strategic priorities when carrying its spectrum management duties. This brings Ofcom in line with related regulators Ofgem (energy) and Ofwat (water). Financial penalties for breach of spectrum licences On 18 December 2014, the Government announced a new voluntary binding agreement with the four major UK mobile operators to improve mobile coverage across the UK.58 Under the agreement all four of the mobile networks collectively agreed to requirements for 90% coverage of the UK by 2017, to be made binding by variations in the spectrum licences granted by Ofcom. The licence variations required to make the coverage targets binding on mobile operators were agreed between the operators and Ofcom in February 2015.59 However, if the licence conditions are not met the only sanction currently available to Ofcom is to revoke the licence. Clause 10 amends the Wireless Telegraphy Act 2006 to allow Ofcom to impose financial penalties for contravention of the terms of a spectrum licence, allowing Ofcom to issue financial penalties if the 90% coverage requirements are not met, if Ofcom feels it is necessary. The Explanatory Notes to the Bill state that the Government’s view is that the current powers available to Ofcom are not sufficiently flexible in all cases.60 The
57 ibid. 58 DCMS, ‘Government secures landmark deal for UK mobile phone users’, 18 December 2014 59 Ofcom, ‘Ofcom varies mobile operators’ licences to improve coverage’, 2 February 2015 [accessed on 11 August 2016] 60 Digital Economy Bill Explanatory Notes 21 Commons Library Briefing, 9 September 2016
financial penalties should not exceed 10% of relevant gross revenue as defined in s.44 of the Wireless Telegraphy Act 2006. Clauses 11-14 make various clarifying and minor amendments to the Wireless Telegraphy Act 2006.
1.7 Other Ofcom changes The Bill makes a number of further amendments to existing legislation in relation to Ofcom. Clause 78 allows the Minister for the Economy in Northern Ireland to appoint a member to the Ofcom board. This reflects equivalent provisions in the Scotland Act 2016 and the Wales Bill 2016-17. Clause 79 allows Ofcom to retain fees and penalties paid under the Wireless Telegraphy Act 2006. These fees and penalties currently go directly to the Treasury. Clause 80 allows Ofcom to charge fees to satellite operators for international registration services it provides. Currently the cost of providing these services is covered by public funds because Ofcom’s existing powers to charge fees does not allow them to be recovered. Ofcom estimates that the cost of the filings was £1.22m in 2013-14. The Impact Assessment estimates that there will be an administrative cost to business of £1,130 annually in addition to the fees.61
61 DCMS, Impact assessment – satellite filings, 19 October 2015 22 Digital Economy bill
2. Online pornography 2.1 Consultation on age verification for online pornography The 2015 Conservative Party Manifesto included a commitment to require age verification for access to online pornography.62 In February 2016, the Department for Culture, Media and Sport (DCMS) published a consultation on how to implement age verification.63 The document said this was another “strand” of the Government’s approach to protect children from “distressing or unrealistic images of sex” which may harm their ability to “develop healthy personal relationships based on respect and consent”.64 Annex 2 of the consultation document gives an overview of research on the possible harms caused by children viewing pornography. A DCMS commissioned report on how children view pornography was published alongside the consultation.65 The consultation closed on 12 April 2016. How many children view pornography? According to the consultation document, there is no “clear consensus” on how many children view pornography.66 However, a DCMS analysis of May 2015 statistics from comScore indicated that 1.4 million unique visitors aged under-18 accessed pornographic content from their desktop.67 What content will be covered by age verification? The Government’s intention is to prevent underage access to pornographic content that is legal for adults to view - i.e. material rated 18 or R18 by the British Board of Film Classification (BBFC).68 The BBFC classifies films and video works before release and awards age ratings according to its guidelines. There are two categories of pornography or “sex works”: • 18-rated pornography – suitable only for adults – may contain strong and detailed portrayals of sex including full nudity • R18-rated pornography – explicit works containing clear images of real sex, strong fetish material, sexually explicit animated images, or other very strong sexual material involving adults
62 Conservative Party Manifesto 2015, p35 63 DCMS, ‘Child safety online: age verification for pornography - consultation’, February 2016 64 ibid, p4 65 Victoria Nash et al, ‘Identifying the Routes by which Children View Pornography Online: Implications for Future Policy-makers Seeking to Limit Viewing Report of Expert Panel for DCMS’, November 2015 66 DCMS, ‘Child safety online: age verification for pornography - consultation’, p13 67 ibid, p14 68 ibid, p18 23 Commons Library Briefing, 9 September 2016
Age verification The consultation sought views on the following methods: • confirmation of credit card ownership or other form of payment where mandatory proof that the holder is 18 or over is required prior to issue; • a reputable personal digital identity management service that uses checks on an independent and reliable database - e.g. the electoral roll; • other comparable proof of account ownership that effectively verifies age - e.g. possession and ownership of an effectively age-verified mobile phone; • an alternative approach to those above. Annex 1 of the consultation document looked at how age verification is currently defined and implemented. Regulatory framework A regulatory framework would be established to monitor commercial pornography providers’ compliance with the new law. The work of the regulator would include: • identifying sites in breach of the age verification requirement, giving them notice of this and a period of time within which to comply; • enabling those supporting commercial pornography providers (e.g. payment systems, advertisers and web-hosting companies) to withdraw their services from non-compliant providers so that their income streams/profits would be disrupted; • imposing sanctions, including financial penalties, where breaches have been identified and providers remain non- compliant.69 Civil sanctions The Government said that it favoured a civil enforcement regime for non-compliant commercial pornography providers. This would be broadly consistent with the existing Ofcom-led and BBFC-supported civil enforcement regime that underpins the provision of hardcore, R18 rated pornographic content via UK video-on-demand providers: Civil sanctions already exist in this context: Ofcom can issue enforcement notices to cease or restrict access to content and/or impose financial penalties on providers who provide such content without ensuring that under-18s will not normally see or hear it. These are enforceable through the civil (rather than criminal) courts. Non-compliance can ultimately lead to the suspension or restriction of services, enforceable through criminal sanctions...70 Section 3.6 of the consultation gives details of the regulatory context and relevant bodies.
69 ibid, p26-7 70 ibid, p25 24 Digital Economy bill
2.2 Government response The Government’s analysis of responses to the consultation was published in July 2016. This found that 44% of respondents supported age verification, 48% did not. Responses from individuals made up the vast majority of those submitted via an online questionnaire (94%).71 The analysis also reported that: • many of the key organisations in the child protection sphere - children’s charities, support and advice groups, the BBFC, ISPs, and payment service firms and credit card companies - supported the Government’s proposals; • pornography providers who responded supported the protection of children online, and (with caveats) the introduction of age verification controls; • over a quarter (26%) of the individuals who responded indicated that they were parents or carers, and 23% of individuals said they worked with children (in the education and health sectors, working in or with churches, in voluntary roles, mentoring, and as researchers). In both groups, a majority supported the Government’s approach. Some respondents raised concerns in the following areas: • the difficulties of enforcement, particularly taking action against nonUK companies; • the potential for determined customers young or old to circumnavigate any controls put in place; • freedom of speech arguments over denying or restricting access to pornographic content which is legal for adults to view.72 However, given the increasing amount of time spent online by children, the Government said that doing nothing was not an option. Age verification, while “not a panacea”, would be introduced through the Digital Economy Bill.73
2.3 The Bill The provisions of the Bill relating to online pornography extend to the United Kingdom. Clause 15 would require a person to have age verification controls in place if they wish to make online pornography available to users in the United Kingdom on a commercial basis. The clause also provides for guidance to be issued by the age verification regulator on the verification arrangements that should be in place. The Bill does not specifically set these arrangements.
71 DCMS, ‘Child safety online: age verification for pornography – consultation response’, July 2016, p4 72 ibid, p4 73 ibid, p6 25 Commons Library Briefing, 9 September 2016
Clause 16 defines “pornographic material” – material that would be classified as 18 or R18 by the BBFC. Clause 17 would give the Secretary of State the power to designate a person (or persons) as the age verification regulator. Clause 19 would give the regulator the power to request information from a person operating a commercial internet service to enable the regulator to carry out its functions. Clause 20 sets out when the regulator would be able to impose a financial penalty or enforcement notice on persons who do not have age verification controls in place or have not complied with an information request. Clause 21 states that a financial penalty must not exceed whichever is greater: £250,000 or 5% of a person’s qualifying turnover. Clause 22 would enable the regulator to notify payment service providers and ancillary services of persons who do not have age verification controls in place or who are making prohibited material available on the internet.
2.4 Comment The Open Rights Group has said that the Bill’s proposals on pornography raise “very serious privacy and security issues…the potential data breach of British citizens' porn preferences and credit card details, is a blackmailer's paradise”.74 In his response to the DCMS’ February 2016 consultation, the Information Commissioner said that any system of age verification must appropriately respect individuals’ privacy.75 The Commissioner also raised concerns about the potential misuse of information – e.g. on passports and driving licences – that might be collected as part of an age verification system. Some commentators have said that age verification, at best, makes it “inconvenient” for young people to access pornography. They have also raised concerns about some adults being unable to access legal pornography if they are unable to prove their age.76
74 Javier Ruiz, ‘Overview of the Digital Economy Bill 2016’, Open Rights Group, 8 July 2016; The Open Rights Group describes itself as “the UK's only digital campaigning organisation working to protect the rights to privacy and free speech online” 75 Information Commissioner’s Office, ‘Response to the Department for Culture, Media and Sport (DCMS)’s consultation on child safety online: age verification for pornography’, April 2016 76 Andy Phippen, “Age verification and online pornography – an effective safeguarding option?”, Entertainment Law Review, 2016 (5), pp167-71 26 Digital Economy bill
3. Intellectual property 3.1 The changes to intellectual property law under consideration The Bill would make changes in three separate areas of intellectual property (IP) law: online copyright infringement, webmarking of designs and copyright in the retransmission of TV broadcasts. Online copyright According to the Impact Assessment published to accompany the Bill, the creative industries contribute over £84 billion to the UK economy and the UK's investment in intangible assets protected by IP rights has been estimated at more than £60 billion. Currently online copyright infringement, where it falls within the scope of the criminal law, carries a maximum sentence of two years’ imprisonment.77 By comparison, the maximum sentence for criminal infringement in respect of physical goods is ten years. The discrepancy arises because the online provision was introduced using secondary legislation in 2003 in the course of implementing the Information Society Directive.78 In March 2015 the Coalition Government published Penalty Fair?, a study of the criminal sanctions for copyright infringement available under the 1988 Act.79 This recommended increasing the maximum penalty for the online offence so that it was the same as that for physical copyright infringement. The present Government followed this up in July 2015 with a consultation on changes to the penalties for online copyright infringement.80 In April 2016 the Government published a response to the consultation, announcing its intention to legislate to increase the maximum sentence for online copyright infringement to ten years, achieving parity with the physical offence, and also to re‐draft the offence to address wider concerns about the offence provisions themselves.81 Webmarking In proceedings for registered design infringement, damages cannot be awarded against an innocent infringer who proves that he or she was unaware that the registered design existed. Currently, registered design owners can stamp or label their products with the word “registered” and the relevant registered design numbers in order to ensure that anyone who infringes the design cannot later claim they were unaware of the registration, and so be excused from paying damages to the
77 Copyright, Designs and Patents Act 1988 ss107 and 198 78 2001/29/EC 79 Intellectual Property Office, ‘Penalty Fair? Study of criminal sanctions for copyright infringement available under CDPA 1988’, March 2015 80 Intellectual Property Office, ‘The Copyright, Designs and Patents Act 1988 (as amended): a consultation on changes to the penalties for offences under sections 107(2A) and 198(1A) of the Copyright, Designs and Patents Act 1988 (Penalties for Online Copyright Infringement)’, July 2015 81 Intellectual Property Office, ‘Criminal sanctions for online copyright infringement: Government consultation response’, April 2016 27 Commons Library Briefing, 9 September 2016
owner. Rights may change over the lifetime of the product, so these details need to be kept up-to-date as it is an offence to make a false claim that a design is registered. Multiple rights may exist in a single product. In the light of these difficulties, in July 2015 the Government published a Call for Evidence on a proposal to introduce an option for design owners to mark their products with a relevant website address as a way of providing public notice of their intellectual property rights.82 The Government response appeared shortly afterwards, concluding that since all respondents were supportive of the proposal presented, the Government would bring forward changes to the relevant UK design legislation.83 TV retransmission The current regulations that govern the relationship between public service broadcasters and distribution platforms like Virgin Media and Sky are complex, and successive governments have been keen to safeguard easy access to content for the consumer and simplify transaction costs. A strategy paper in July 2013 set out the previous Government’s ambition for “zero net fees”.84 At present, cable TV platforms, such as Virgin Media, are exempt from paying copyright licence fees when they retransmit the core public service broadcaster channels (i.e. the BBC, ITV1, Channel 4, Channel 5 and S4C).85 This exemption was originally created to support the specific policy objective of supporting the development of cable television infrastructure in the 1980s and 1990s. The Impact Assessment for the Bill observes that “with over 4.5 million cable subscribers across the country, many of whom use the service for far more than just television, the objective of developing cable infrastructure is now met through other legislative measures such as reform of the Electronic Communications Code”. In March 2015 the previous Government launched a consultation proposing that the exemption was no longer relevant with the development of multi‐channel and digital TV on satellite, terrestrial and increasingly internet-based platforms.86 The present Government published a response in July 2016, indicating widespread (but by no means universal) support for the proposed change.87
3.2 The Bill Clause 26 would amend the maximum sentence for online copyright infringement. It would also amend the offence provisions to introduce
82 Intellectual Property Office, ‘Call for Evidence on proposed changes to the Registered Designs Act 1949’, July 2015 83 Intellectual Property Office, ‘Proposed changes to the Registered Designs Act 1949: Government response to the call for evidence’, August 2015 84 DCMS, ‘Connectivity, content and consumers: Britain’s digital platform for growth’, July 2013, p26 85 Copyright, Designs and Patents Act 1988 s73 86 DCMS, ‘The balance of payments between television platforms and public service broadcasters: options for deregulation: consultation paper’, March 2015 87 DCMS, ‘The balance of payments between television platforms and public service broadcasters consultation report: Government response’, July 2016 28 Digital Economy bill
an additional “mens rea”,88 so that a person must either intend to make a monetary gain for himself or another, or know or have reason to believe that his actions will cause loss to the owner of the right or expose the owner to a risk of loss. Clause 27 would amend the Registered Design Act 1949 to give registered design proprietors the ability to mark their products with either the specific registered design number or the web address of a webpage which clearly associates the product with the relevant registration number. Clause 28 would repeal s73 of the Copyright, Designs and Patents Act 1988. The result would be that cable providers would no longer be exempt from paying copyright fees when they retransmit the core public service broadcaster channels.
3.3 Comment All three measures have been the subject of pre-legislative consultation exercises. The published summaries of responses are therefore the best indicators thus far of how the proposals are likely to be received outside Parliament. The consultation on online infringement attracted 1,032 responses. This suggested considerable opposition to the change.89 However, the majority of responses (91% of the total) were initiated by a single organisation, the Open Rights Group.90 This group remains opposed to the measure, as evidenced by their press release issued after First Reading.91 In the webmarking consultation, all respondents (10 in all) expressed support for the proposal; some very strongly. A minority stressed the urgency of getting this change made quickly to maximise the ease and cost-saving benefits of the measure, asking for it “ASAP” or commenting that it was “overdue”.92 The consultation on TV retransmission attracted 39 responses. The majority – public service broadcasters, stakeholder groups representing underlying rights-holders (e.g. PRS for Music) and consumer groups (e.g. Voice of the Listener and Viewer) – were in favour of repeal. Dissent came from the distribution platforms, particularly Virgin Media, who were “of the view that the policy rationale behind section 73 is still relevant today”.93 According to a newspaper report, once the law is
88 “Mens rea” = The intention or knowledge of wrongdoing that constitutes part of a crime, as opposed to the action or conduct of the accused 89 Intellectual Property Office, ‘Summary of responses: Consultation on changes to the penalties for offences under sections 107(2A) and 198(1A) of the Copyright, Designs and Patents Act 1988 (Penalties for Online Copyright Infringement)’, 2016 90 The Open Rights Group describes itself as “the UK's only digital campaigning organisation working to protect the rights to privacy and free speech online”. 91 Open Rights Group, ‘Response to Digital Economy Bill’, 6 July 2016 92 Intellectual Property Office, ‘Proposed changes to the Registered Designs Act 1949: Government response to the call for evidence’, August 2015, p5 93 DCMS, ‘The balance of payments between television platforms and public service broadcasters consultation report: Government response’, July 2016, p11 29 Commons Library Briefing, 9 September 2016
changed, “ITV intends to demand negotiations with Virgin with a view to extracting a fee for its main channel”.94
94 “ITV could force Virgin Media to pay for content after law change,” Daily Telegraph, 6 July 2016 30 Digital Economy bill
4. Digital government and data sharing
Part 5 of the bill deals with data sharing in, by, and with the public sector, for a variety of purposes, such as improving research and statistics, preventing fraud and helping people who are in fuel poverty.
4.1 Consultation This part of the bill was largely developed through an open policy making process, followed by a formal consultation. Open policy making process From April 2014, civil society organisations, privacy groups, officials from a number of government departments, academics and representatives from parts of the wider public sector explored the suitability of data sharing, in an open policy making process. This process involved discussions, the development of proposals and reviews. It was coordinated by Involve, a civil society organisation, and the Cabinet Office data sharing policy team.95 In a first stage, between April 2014 and March 2015, the process looked at the data sharing for three purposes: 1.enhancing the availability of high quality research and statistics from administrative data; 2.preventing fraud and helping citizens manage the debt they have with government; and 3.ensuring the right services are offered to the right person at the right time. 96 A policy paper, Conclusions of civil society and public sector policy discussions on data use in government, sets out the areas of agreement and disagreement from this stage. The process was reconvened between December 2015 and February 2016 to review and to look at three further areas: 1.data sharing to support better management of debt owed to government 2.data sharing to assist citizens who are living in fuel poverty 3.sharing civil registration information to assist public bodies to fulfill their functions97 Notes of discussions on these topics are available, along with other material on the whole process, on datasharing.org.uk
95 For a list of bodies who took part see Data Sharing, Workshop registrations [website, accessed 12 July 2016] 96 Data Sharing, About [website, accessed 12 July 2016] 97 Data Sharing, About [website, accessed 12 July 2016] 31 Commons Library Briefing, 9 September 2016
Formal consultation Building on the open policy making process, the Cabinet Office ran a formal consultation process on Better use of data in government for eight weeks between February and April 2016. They published impact assessments and illustrative clauses alongside the consultation. The consultation covered all of the specific data sharing proposals in this part of the bill aside from the HMRC powers in Clause 64, which were subject to an earlier consultation (discussed in Section 4.9 below). Like the open policy making process before it, the data sharing proposals in the consultation were placed in the context of a set of “protective principles”: no building of new, large, and permanent databases, or collecting more data on citizens; no indiscriminate sharing of data within Government; no amending or weakening of the Data Protection Act; and safeguards that apply to a public authority’s data (such as HMRC) apply to the data once it is disclosed to another public authority (i.e. restrictions on further disclosure and sanctions for unlawful disclosure).98 The consultation received 282 responses. The majority were supportive of the proposals and the needs for “appropriate safeguards, accountability and transparency […] to build trust with citizens on the usage of their data”. The Cabinet Office published a summary of responses and their final position in June. 99 Key points relating to the particular types of data sharing are discussed in the relevant sections below.
4.2 Existing protection for personal data Protection is already in place for personal data in the UK. The overarching legislation governing the handling of personal data in the UK is the Data Protection Act 1998 (DPA), which implements the EU Data Protection Directive 95/46/EC. The Act regulates the “processing” of personal data through restrictions on how such data – including social media data – can be recorded, stored, altered, used or disclosed. Under the DPA, “personal data” means data related to a living individual who can be identified, either directly or indirectly, from the data, or from other information held by the same organisation. The relevant “data controller” has to adhere to the data protection principles that form the backbone of the Act. These data protection principles are: 1 Personal data shall be processed fairly and lawfully and, in particular, shall not be processed unless— (a) at least one of the conditions in Schedule 2 is met, and
98 Cabinet Office, ‘Better use of Data in Government: Consultation’, February 2016 99 Cabinet Office, ‘Better Use of Data in Government: Consultation - A Government Summary of Responses’, June 2016 32 Digital Economy bill
(b) in the case of sensitive personal data, at least one of the conditions in Schedule 3 is also met. 2 Personal data shall be obtained only for one or more specified and lawful purposes, and shall not be further processed in any manner incompatible with that purpose or those purposes. 3 Personal data shall be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed. 4 Personal data shall be accurate and, where necessary, kept up to date. 5 Personal data processed for any purpose or purposes shall not be kept for longer than is necessary for that purpose or those purposes. 6 Personal data shall be processed in accordance with the rights of data subjects under this Act. 7 Appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data. 8 Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data subjects in relation to the processing of personal data. 100 Individuals have a variety of rights under the Act, including the right to access personal data held on them and to request that it should not be processed if it would cause unwarranted damage or distress. They also have a right to have data corrected – in line with the fourth data protection principle. The data subject can also complain to the Information Commissioner’s Office (ICO). The Privacy and Electronic Communications Regulations sit alongside (and supplement) the DPA. They give people specific privacy rights in relation to electronic communications. There are specific rules on:
• marketing calls, emails, texts and faxes; • cookies (and similar technologies);
• keeping communications services secure; and
• customer privacy as regards traffic and location data, itemised billing, line identification, and directory listings. Regulation 4 explicitly states that “nothing in these Regulations shall relieve a person of his obligations under the Data Protection Act in relation to the processing of personal data.” The Information Commissioner has issued a statutory Code of Practice on Data Sharing.101 This code is the ICO’s interpretation of what the DPA requires when sharing personal data. It gives advice on good practice, but compliance with its recommendations is not mandatory
100 Data Protection Act 1998, Schedule 1 101 Under Data Protection Act 1998 s52 33 Commons Library Briefing, 9 September 2016
where they go beyond the strict requirements of the Act. The code itself does not have the force of law, as it is the DPA that places legally enforceable obligations on organisations. However, the code can be used in evidence in any legal proceedings, not just proceedings under the DPA.102 The Regulation of Investigatory Powers Act 2000 (RIPA) is also of relevance to data handling. Part 1 of RIPA provides that it is an offence for anyone involved in issuing or implementing an interception warrant to disclose its existence and contents; details relating to its implementation; and any intercepted material including related communications data. Alongside the consultation on Better Use of Data in Government (discussed above) illustrative clauses on data sharing in different policy areas were published. The document commented that “data legislation has grown piecemeal over time to respond to specific policy needs” (para 16). However, it went on to emphasise that “a key guiding principle of the open policy-making process was that the powers of the Data Protection Act 1998 should not be weakened” (para 17). This emphasis is preserved in the current Bill. The explanatory notes state: 38. The digital government measures in the Bill are aligned to the "Data Protection Principles" set out in Schedule 1 to the Data Protection Act 1998, in particular that the sharing or linking of data should be proportionate, (i.e. that the minimum amount and type of data necessary is used), and purposive - that the powers are constrained so that there are specific purposes for which data can be disclosed…103 Several clauses in the Bill explicitly provide that information cannot be disclosed under the powers granted if this would contravene the DPA or is prohibited by Part 1 of RIPA.104
4.3 Reviews of data sharing There have been numerous reports, reviews and initiatives looking at data sharing over the past decades.105 Some have been specific – looking at particular sectors, types of data or purposes – and others have been more general. Some have looked at processes for data sharing and/or safeguards. The Law Commission’s Data Sharing between Public Bodies: A Scoping Report (July 2014) discusses the issues. The report contains further material that may be of interest to those examining these proposals, for example on the legal regimes that constrain data sharing, on cultural bars and a glossary of key terms. The authors came to the conclusion that “there are both unnecessary obstacles to useful and legitimate data
102 Information Commissioner’s Office, ‘Data Sharing Code of Practice’, May 2011, p7-8 103 Digital Economy Bill - Explanatory Notes 104 Clauses 32, 41, 49, 57, 66, 67 and 68 105 Annex C of Law Commission, ‘Data Sharing between Public Bodies: A Scoping Report’ (July 2014) has a useful list.
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sharing and a lack of a clear and principled approach to proper safeguards for privacy. There is also a lack of transparency. Some of the obstacles stem from the law, and some from other sources, such as institutional attitudes, and incentives or disincentives to share.” Sharing of sensitive personal data has been studied and debated in particular depth in relation to health. Dame Fiona Caldicott, now National Data Guardian for Health and Care, carried out three reviews of personal information in health and care. The first two reviews, in 1996-7 and 2013, led to a set of seven Caldicott principles: Principle 1: Justify the purpose(s) Principle 2: Don’t use personal confidential data unless it is absolutely necessary Principle 3: Use the minimum necessary personal confidential data Principle 4: Access to personal confidential data should be on a strict need-to-know basis Principle 5: Everyone with access to personal confidential data should be aware of their responsibilities Principle 6: Comply with the law Principle 7: The duty to share information can be as important as the duty to protect patient confidentiality106 In her most recent Review of data security, consent and opt-outs (published on 6 July 2016) she proposed a model whereby patients would have the right to opt out of their personal confidential information being used for purposes beyond direct care, but this opt out would not apply to anonymised information, information flowing to the Office of National Statistics, or exceptional circumstances (such as the investigation of fraud or an overriding public interest). The Government recently consulted on her proposals (until 7 September) and is now analysing the feedback it received. When are people content for their data to be shared? Research indicates that there is broader public support for data sharing (and data linking) where it is done with (a) a clear social purpose and (b) strong safeguards. 107 The charts below draw on survey data. The first chart, for example, shows how public support depends on the use to which people’s data is being put – while most would support the creation of a DNA database to develop more effective treatments for cancer, most would oppose the use of their online browsing history to create personalised adverts. The second chart explores the reasons for people’s opposition (where they did oppose a particular type of data use). The most common
106 National Data Guardian for Health and Care,’Review of data security, consent and opt-outs’, 6 July 2016 107 See Economic and Social Research Council, Public dialogues on using administrative data [online, accessed 13 July 2016] and Administrative Data Taskforce, ‘The UK Administrative Data Research Network: Improving Access for Research and Policy’, December 2012 35 Commons Library Briefing, 9 September 2016
reason was ‘abuse of personal information (such as bank details) / identity theft’.
To what extent do you support or oppose each of the following specific uses of people’s data?
Offering discounted mobile phone calls and texts, funded by personalised adverts based on the content Support of people’s text messages Oppose Websites using people’s online browsing histories to create personalised adverts for products that people are more likely to be interested in
Using data from shop loyalty cards to target products at people who are more likely to want them
Combining the data held in multiple government departments and using them to better tailor public services to individuals
Using police and crime data to predict and plan for crimes that might take place in the future
Using data from electronic travel cards (such as Oyster cards) to improve the scheduling of buses or trains for passengers
Creating a DNA database of cancer patients, in order to help develop more effective treatments for cancer Ipsos Mori, 2014
0% 20% 40% 60% 80% 100%
You said you oppose people’s data being used in some of these ways. What makes you oppose these uses?
Abuse of personal information (such as bank details)/ identity theft
People have a right to privacy
Being sent spam/ junk mail
I don’t trust private companies/ don’t want them to profit
Haven’t got people’s consent
I don’t know what the information is used for
Hackers/ other people getting hold of data
I don’t want people/ organisations to know that much about me
I can’t see what information is held on me
Depends on what information they want
I don’t trust the Government
I don’t trust the police
Nothing in particular/ that’s my view
Don't know Ipsos Mori, 2014
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Views on data sharing vary depending on factors such as the characteristics of the people you ask, the terms used to describe data sharing, and reported breaches of data security: Studies of attitudes towards privacy show differences of attitude related to “culture, age, gender, and other demographic factors”. Reported levels of trust vary depending on whether an individual is asked whether public bodies should “collect and use” personal information or whether they should “share” personal information. Use of the term “data sharing” appears itself to reduce public trust and confidence. Trust is fragile and easily undermined by 36 Digital Economy bill
breaches of data security. Trust and confidence are also undermined where there is a perception that information is supplied for profit, even if the benefit goes to public services.108
Box 2: General approach to data sharing in the Bill While there are some differences in individual sections of the Bill, the structure created around data sharing is common. Many of the individual details can be set or amended by regulation: • The Bill sets out that an authorised person or public authority must be identified; • The type of data is identified; • An objective for data sharing is set out in the bill or regulations; • Where regulations are required, those who should be consulted are set out in the bill; • Details of the data sharing can be set or amended by regulation; • A code of practice will be published by an appropriate authority for use of the data; • Sanctions are in place for misuse.
4.4 Public service delivery: data sharing Chapter 1 of Part 5 of the bill deals with data sharing between public authorities to improve the welfare of individuals, and sharing information with gas and electricity suppliers to support people in fuel poverty. General powers Public authorities generally need legal powers to share information with other public authorities; these are often in the form of explicit legal gateways. The Government believes that that current legal landscape for data sharing is inconsistent and overly complex, and that this hinders public authorities’ ability to intervene or respond in a timely way to a changing environment.109 The bill would allow regulations to be made that would allow data sharing for specific purposes (set out in the regulations) to specific public authorities (or those providing services to them – as set out in the regulations). The data sharing must aim to improve the welfare of individuals. The regulations must be approved by both Houses, under the affirmative procedure. The Government have published draft regulations to demonstrate how this power would be used. The draft regulations would allow data sharing to, for example: • Identify and support individuals or households who face multiple disadvantage, in the context of the Department for Communities and Local Government Troubled Families Programme 110 • Identify and contact (vulnerable) individuals or households to help them re-tune their televisions following a change to allocate a certain part of the spectrum to mobile data rather than digital television.
108 Based on various studies – summarised in Law Commission, ‘Data Sharing between Public Bodies: A Scoping Report’, July 2014 109 Digital Economy Bill Explanatory Notes 110 Data sharing around the Troubled Families Programme was a case study in Law Commission, ‘Data Sharing between Public Bodies: A Scoping Report’, July 2014 37 Commons Library Briefing, 9 September 2016
The draft regulations are described in Annex B to the Explanatory Notes. Fuel poverty The provisions in the Bill allow information to be shared between gas and electricity suppliers and public authorities in relation to customers who are living in fuel poverty. The intention is that public sector datasets can be used to help people access the Warm Home Discount and Energy Company Obligation; equally the Bill allows supplier information to be shared with a public authority in relation to the fuel poverty support scheme. The overall intention is to be able to provide automatic support for those eligible under fuel poverty schemes.111 Protections As well as allowing data to be shared, this part of the Bill also includes protection for the data that has been shared, including through: • restricting the use of personal information shared under these powers, • the creation of a Code of Practice for the disclosure and use of information, and • by creating an offence of passing on personal information gained under these powers. The Bill Clause 29 of the bill would allow national authorities to make regulations, under the affirmative procedure, to permit data to be shared between public authorities (or those providing services to them). The broad purpose of the data sharing must be to improve the wellbeing of individuals or households, with specific objectives set out in the regulations. The authorities sharing the data must also be set out in regulations. Before making the regulations the national authority must consider the systems and processes the public authority has to keep data secure. Clause 30 would allow public authorities (as specified in regulations) to share data with licenced gas or electricity suppliers, to assist people living in fuel poverty by reducing their energy costs, by making their use of energy more efficient or by improving their health or financial wellbeing. The clause sets out the schemes and legal obligations that this can apply to. This power can be amended by regulations, to change who the information can be shared with, and the schemes and obligations that it relates to. Clause 31 would allow licenced gas or electricity suppliers to share information with public authorities (as specified in regulations made under Clause 33), again to assist people living fuel poverty. Clause 32 sets out that personal information shared under the previous clauses can only be used for the purpose for which it was provided, unless one of a list of specified circumstances applies (such as with the consent of the person to which it relates).
111 Digital Economy Bill Explanatory Notes, p26 and p66-7 38 Digital Economy bill
Clause 33 makes passing on personal information shared under the previous clauses an offence, except in certain specified circumstances. People guilty of the offence are liable to imprisonment or a fine. Clause 34 is similar but applies to information disclosed by HMRC. Clause 35 requires that a Code of Practice be issued, covering the disclosure and use of information shared under these clauses. Clause 36 would require that the Information Commissioner and others be consulted before regulations are made. Extent In general these powers extend and apply across the UK and will require legislative consent. Clauses 30 and 31 – on sharing with gas and electricity suppliers – do not extend and apply to Northern Ireland. Clause 34, on sharing by HMRC, does not require legislative consent. Comment General power In its response to the Better Use of Data in Government consultation, the Government said that the majority of those responding to the consultation supported the proposal to introduce a new legal gateway to share data for the purpose of supporting the delivery of public services. Representatives from local authorities and other bodies who deliver front-line services tended to feel that the proposed power would “simplify the legal landscape and allow more coordinated interventions to support vulnerable people”. Some from civil society thought that people should control their own data and that the power was too broad: A number of responses from civil society questioned the creation of a new gateway on the basis that citizens should have explicit control of the sharing of their data. Many of these respondents also felt that the potential purposes for which data could be shared was too broad. Furthermore, some respondents felt there was insufficient clarity on key definitions and details of how data- sharing would operate under the proposals. A number of respondents raised the issue of alignment with the General Data Protection Regulations (GDPR), which are due to come into force across the European Union in 2018. Many people thought that safeguards, transparency and accountability were important: Many respondents expressed support for robust safeguards for ensuring data under the proposed power is accessed and used appropriately. Transparency was a key recurring theme raised by citizens and representatives from across the range of sectors. The view expressed was that trust could be built by ensuring that citizens could understand what data was being accessed, how it was being used and for what purposes. Respondents also raised the importance of ensuring there was clear accountability in those bodies participating in a data share. This was seen as a way of 39 Commons Library Briefing, 9 September 2016
ensuring data is handled securely and allowed for sanctions to be applied where bodies had acted unlawfully. 112 Fuel poverty Most people responding to the consultation supported the proposal to allow data to be shared to help people in fuel poverty: The majority of responses were supportive of the proposal to introduce a new gateway to provide assistance to citizens living in fuel poverty. A few respondents welcomed this proposal as an example of constrained power for limited defined purposes. Respondents also raised the importance of ensuring appropriate safeguards are in place to ensure that data that is shared is used only for specified purposes and not for any other purposes, for example targeting marketing. 113
4.5 Civil registration: data sharing Clauses 38 and 39 of Part 5 of the Bill would create new data sharing powers to enable civil registration officials to share data with other registration officials or specified public authorities. There would be a requirement that, when sharing information, civil registration officials must have regard to a new Code of Practice to be issued by the Registrar General. Why is data on civil registration useful? Civil registration is the system by which the Government records all births, stillbirths, adoptions, marriages, civil partnerships and deaths. In England and Wales, the Registrar General is responsible for delivery of the system, which is administered through the General Register Office working with local authorities. The current legal framework for civil registration is set out at Annex A to the Explanatory Notes that accompany the Bill. Most transactions to prove eligibility for public services still rely on individuals providing paper birth, marriage, civil partnership and death certificates as evidence. However, there are some specific legislative provisions which already provide some data sharing powers in limited circumstances, including: • the Identity Documents Act 2010 allows HM Passport Office to verify birth and death information with the Registrar General at the General Register Office when processing passport applications; • the Immigration Act 2014 allows registration officers and the Registrar General to share or verify registration information for immigration purposes and allows for registration information to be verified or shared with other government departments in certain circumstances on a case by case basis;
112 Cabinet Office, ‘Better use of data in Government: consultation – A government summary of responses’, June 2016 113 Cabinet Office, ‘Better use of data in Government: consultation – A government summary of responses’, June 2016 40 Digital Economy bill
• The Police and Justice Act 2006 makes provision for the disclosure of death registration information (DDRI) scheme which allows the Registrar General for England and Wales (Scotland and Northern Ireland have similar provisions) to disclose death registration information to assist in the prevention, detection, investigation or prosecution of offences.114 The Government considers that the provisions in the Bill, which would allow for electronic verification, and remove reliance on paper certificates, would reduce the risk of fraud in relation to forged or altered certificates.115 In addition, the Government sees the potential for public authorities to use the death information for “list cleaning” to prevent mail being sent to a deceased person causing unnecessary distress to relatives.116 The Bill Impact Assessment, published by the Department for Culture Media and Sport (DCMS), outlined the rationale for the sharing of civil registration data as follows: Current legislation around the sharing of registration data (e.g. records of births and deaths), is restrictive and information from those records can only be shared where there is a specific legal gateway which doesn’t meet all current/future requirements. Data sharing can only take place with organisations specifically named in legislation and the scope cannot be widened without an appropriate legislative gateway. The sharing of civil registration records would provide benefits for citizens including the removal of barriers when accessing government/public services, safeguarding of vulnerable children and adults, creating greater efficiencies and therefore enhancing public access to services. The Bill will implement enhanced data sharing powers, removing current restrictions and allow for registration data to be verified or shared with other government departments to confirm information or that the event took place.117 In effect, the Government considers that access to this data should enable specified public authorities to update their lists and potentially identify fraudulent activity, such as Blue Badge fraud.118 As referenced in the Impact Assessment, the National Fraud Authority has estimated that around half a million Blue Badges are misused every year at a cost to local authorities of around £46m each year – around £96 for each badge issued. The Impact Assessment states that the sharing of death data by Registration Officials with local authorities would help reduce this level of fraud by preventing an individual using the identity of a deceased person. 119
114 Further information about these provisions is provided in Digital Economy Bill - Home Office Data Sharing Impact Assessment, 1 February 2016, pp3-4 115 DCMS, ‘Digital Economy Bill Factsheet: Digital Government: Better Public Services’, 5 July 2016, p2 116 DCMS, ‘Digital Economy Bill: Impact Assessment’, 29 June 2016, p20 117 ibid, p 8-9 118 The Blue Badge scheme helps a person park closer to their destination if they are disabled 119 DCMS, ‘Digital Economy Bill: Impact Assessment’, 29 June 2016, p20 41 Commons Library Briefing, 9 September 2016
The Government intends that fees in respect of the disclosure of the information would be set out in in regulations and would be set on a cost recovery basis.120 The Bill Clause 38 would insert new sections 19AA, 19AB and 19AC, concerning the disclosure of information by civil registration officials, into the Registration Service Act 1953. New section 19AA would allow a civil registration official121 to disclose any information held in connection with any of the official’s functions to any other civil registration official or to a “specified public authority”, if they were satisfied that the information was required by the recipient to exercise one or more of their functions. Civil registration officials would remain subject to express restrictions in other legislation preventing disclosure of data. New section 19AB specifies the various public authorities with which a registration official would be able to share data. The Secretary of State would have power to make regulations to add, modify or remove public authorities from the list, under the affirmative procedure. Finally, under new section 19AC, the Registrar General would be required to issue a Code of Practice about the disclosure of information under new section 19AA. A civil registration official would be required to have regard to the Code when considering the disclosure of information under section 19AA. The Code of Practice would have to be developed in consultation with the Minister, the Information Commissioner, and such other persons as the Registrar General thinks fit. The Registrar General would be required to arrange for the Code of Practice to be laid before Parliament at the point of issue and at any time the Code was revised and reissued. The Government has said that the proposed Code of Practice would set out principles and processes to ensure that information is only shared on a discretionary basis and with robust safeguards in place to prevent any misuse of data. The Government added that there would be strict adherence to the Data Protection Act 1998 and the principles contained within the Act when considering requests to use information. The Government intends that the Code will be reviewed on an annual basis to ensure it is kept up to date.122 Clause 39 is a consequential provision that would enable the Secretary of State to make regulations to amend, repeal or revoke any provision in any Act, which was passed before or in the same session as this Act as a consequence of the provisions set out in clause 38.123
120 Better Use of Data -Consultation Paper, paragraph 59 121 As defined by new clause 19AA(6) 122 Cabinet Office, ‘Better Use of Data in Government: Consultation—A Government Summary of Responses’, June 2016, paragraph 56 123 Regulations made under this clause, which amend or repeal an Act, would be subject to the affirmative resolution procedure that requires the regulations to be approved 42 Digital Economy bill
Extent Clause 38 extends and applies to England and Wales.124 Clause 39 extends and applies across the UK. Neither require legislative consent. The legal framework for civil registration in Scotland and in Northern Ireland is separate. The Scottish Parliament and the Northern Ireland Assembly have legislative competence in respect of civil registration.125 Civil registration is not a reserved or excepted matter under the Scotland Act 1998 or the Northern Ireland Act 1998. Comment on civil registration data In its response to the Better Use of Data in Government consultation, the Government said that views were mixed on its proposals on civil registration: Representatives from bodies delivering public services were broadly supportive of the proposals on the basis that improved access by public authorities to civil registration data could enable the delivery of better public services that are more seamless and convenient for citizens. Conversely, a large number of individual respondents and representatives from civil society stated strong opposition to the proposed power providing the ability for the bulk sharing of data, believing that the power would effectively create an identity database and enable personal data to be shared between public authorities even where there is no public benefit to do so. Representatives from civil society involved in the open policy making process felt that the proposals did not align with the key principle that proposals would not allow for indiscriminate sharing of data within Government.126 In addition, the document noted that “some respondents also suggested that whilst the focus of the power appeared to be on the bulk sharing of data, other methods may be more efficient and secure”, and that a number of respondents had commented on the proposed Code of Practice which would set out the details of how public bodies would use the power. Many of these responses were reported to be favourable, whilst including recommendations such as requiring the Code to be prepared in consultation with the Information Commissioner’s Office.127 Whilst recognising there were diverging views on sharing bulk information, the Government said that it supported proposals to share this data where, “there is a clear and compelling need to do so, such as using birth registration data to reduce the gap in Child Reference
by both Houses of Parliament. Any other regulations under this section would be subject to the negative resolution procedure. 124 A power to enable consequential amendments extends to the whole of the UK – this is explained in paragraph 66 of the Explanatory Notes to the Bill. 125 Local Electoral Administration and Registration Services (Scotland) Act 2006, section 56, allows the Registrar General for Scotland to provide registration information to public bodies and office-holders. ‘Scotland's Population 2008: The Registrar General's Annual Review of Demographic Trends: 154th Edition’, Chapter 9 - Improving choice in the registration system, provides further information about this section and provision of registration information in Scotland more generally 126 Cabinet Office, ‘Better Use of Data in Government: Consultation—A Government Summary of Responses’, June 2016, pp 12-13 127 ibid. 43 Commons Library Briefing, 9 September 2016
Numbers (which eventually become National Insurance Numbers) caused by the introduction of the income threshold for Child Benefit entitlement.”128 On the issue of privacy, the Government said that it would ensure that a framework is put in place with appropriate safeguards: This will ensure that information is only used for the purpose for which it has been provided and only retained for as long as is necessary. There are no intentions to share data with the private sector or for data to be used for any commercial purposes. A statutory Code of Practice will be introduced which will ensure that security arrangements, rights of recourse for citizens, data standards and transparency requirements are fully covered. Furthermore, the Code will place explicit restrictions on any linking of registration information to prevent the creation of any identity databases.129 The Government does not intend to abolish paper certificates and has confirmed that existing methods for applying for paper certificates will remain in place130
4.6 Debt owed to the public sector: data sharing Why share data on debt? The National Audit Office (NAO) estimates that £22bn of debt was owed to Central Government in 2013,131 the government estimates that this rose to around £24bn by March 2015.132 Public debt originates from a range of sources, including overdue tax liabilities, benefit or tax credit overpayments, loans, outstanding fines and penalties, and court confiscation orders. Currently, there is no integrated approach for managing debt across government.133 According to NAO estimates, £6 billion of debt was written off in 2012-13 as irrecoverable or remitted on the basis that it was not a good use of scarce resources to pursue it.134 In its 2014 report, Managing Debt Owed to Central Government, the NAO recommended that the Government should adopt a “single debtor view” to assist with better debt management.135 This approach would involve debts owed to public authorities being treated as being owed to a single body.136
128 Cabinet Office, Better Use of Data in Government: Consultation—A Government Summary of Responses, June 2016, pp 13-15 129 ibid. 130 DCMS, Digital Economy Bill Factsheet: Digital Government: Better Public Services, 5 July 2016, p3 131 National Audit Office, ‘Managing debt owed to central government’, 14 February 2014, HC: 967, 2013-2014 132 DCMS, ‘Digital Economy Bill – Overarching Impact Assessment- Final', 29 June 2016, [assessed 11 July 2016] 133 DCMS, 'Digital Economy Bill Factsheet – Digital Government: Fraud and Debt (clauses 40-55)', [accessed 11 July 2016] 134 National Audit Office, 'Managing debt owed to central government', 14 February 2014, HC: 967, 2013-2014 [accessed 12 July 2014] 135 ibid. 136 Ibid. 44 Digital Economy bill
The Bill (Clause 40 of Part 5) would create a single legal gateway that would allow specified public authorities (and private bodies who fulfil a public function on behalf of a public authority) to share identified data in order to: “create a more efficient and effective cross-government debt management process.”137 Since people who are in debt may also be vulnerable, clauses 41 to 45 of the Bill put in place safeguards. Specifically, public authorities must have regard to a Code of Practice and to the Data Protection Act 1998 (DPA 1998) when disclosing and using data. Work on debt gateway measures will take the form of a three-year pilot, after which time the scheme will be assessed. It follows from this that the scheme could be modified or even closed down if it is not working. The Bill Clause 40 creates a “data sharing power” that enables specified persons (to be defined in regulations) to share data with other specified persons for the purposes of taking action in connection with a debt owed to a specified person or to the Crown.138 The power to make regulations is conferred on the appropriate national authority.139 In deciding whether to make regulations under clause 40(4), the appropriate national authority is obliged to consider, in particular, the provision the person(s) in question have in place to ensure secure handling of shared information.140 It is clear from subsection (5) that ‘specified persons’ allowed to share data must be either a public authority or a person providing services to a public authority. Only debts that are legally collectable and enforceable (i.e. all appeals processes and disputes have been concluded) would be in scope of the proposed power.141 In the main, we are talking about ‘overdue debts’. The new power created by clause 40 would not allow public authorities to share data on individuals who do not owe debts to public authorities, but would provide the opportunity for public authorities to identify if the debtor has multiple or overlapping debts with public authorities. Private bodies, working on behalf of a public authority, would be able to use and receive information for very specific purposes under the powers, but would not be permitted to sell personal data.142 For the purposes of the Bill, information is “personal” if the identity of that person –
137 DCMS, 'Digital Economy Bill Factsheet – Digital Government: Fraud and Debt (clauses 40-55)', [accessed 11 July 2016] 138 Digital Economy Bill Explanatory Notes 139 Clause 40(8). Pursuant to clause 46 of the Bill, regulations under this Chapter are to be made by statutory instrument, or, in the case of regulations made by the Department of Finance in Northern Ireland, by statutory rules. Regulations made under this Chapter will be subject to the affirmative resolution procedure. 140 Clause 40(7)(a) 141 Cabinet Office, ‘Better use of data – consultation document’, 29 February 2016, paragraph 86 [accessed 12 July 2016] 142 Clause 40(6) 45 Commons Library Briefing, 9 September 2016
a) is specified in the information, b) can be deduced from the information, or c) can be deduced from the information taken together with any other information143 Under clause 43(3), criminal sanctions would apply for any unlawful disclosure of information. Clauses 41 to 43 introduce safeguards to ensure shared data is accessed and used appropriately. Specifically, nothing in clause 40 authorises the making of a disclosure which contravenes the DPA 1998 or is prohibited by Part 1 of the Regulation of Investigatory Powers Act 2000.144 During the public consultation, a common view was that trust could be built by ensuring that citizens understood what data was being accessed, how it was being used and for what purposes.145 Clause 41(1) makes it clear that information disclosed under clause 40 may only be used by the person to whom it is disclosed for the purposes for which it was disclosed, unless one of a limited number of exceptions applies, namely: (a) if the information has already lawfully been made available to the public, (b) if the person to whom the information relates consents to its use for another purpose, (c) for the purposes of a criminal investigation (whether or not in the UK), (d) for the purposes of legal proceedings (whether civil or criminal and whether or not in the UK), (e) for the purposes of safeguarding vulnerable adults or children, or (f) for the purposes of protecting national security
Exceptions (a) and (b) are consistent with conditions for the processing of sensitive personal data set out in the DPA 1998. It is important to note that the exceptions do not apply to information disclosed to a person under clause 40 by HMRC, but such information may only be used by that person for purposes other than those for which it was disclosed with the general or specific consent of the Commissioners for HMRC.146 It was important to respondents to the public consultation that data should be handled securely and sanctions should be applied where bodies have acted unlawfully.147 In other words, bodies participating in a data share should be clearly accountable. Clause 42 deals with this issue of confidentiality. It provides safeguards to ensure personal information is only disclosed to appropriate persons. However, clause 42 does not apply to personal information disclosed by HMRC under the
143 Clause 41(4) and (5) 144 Clause 41(7) 145 Cabinet Office, ‘Better use of data in Government: consultation – A government summary of responses”, June 2016 [accessed 12 July 2016] 146 Clause 41(3) 147 Cabinet Office, ‘Better use of data in Government: consultation – A government summary of responses”, June 2016 [accessed 12 July 2016] 46 Digital Economy bill
power at clause 40. Instead, specific conditions that relate to information disclosed by HMRC are set out separately in Clause 43. The Bill creates a new criminal offence for unlawful disclosure of information that was received for the purpose of managing debt.148 The offence carries a penalty of imprisonment for a term not exceeding two years, a fine or both.149 However, there is a statutory defence if it can be shown that the person reasonably believed that the disclosure was lawful.150 Importantly, under clause 44, the Minister (the Secretary of State or the Minister for the Cabinet Office) must issue a Code of Practice about the disclosure of information under clause 40 and the use of information disclosed under the power. All specified persons disclosing or using information under the power must have regard to the Code of Practice.151 Where a vulnerable debtor is identified, they should be given appropriate support and advice, which may include signposting to non-fee paying debt advice agencies.152 As a further safeguard, three years after coming into force, the relevant Minister must, as soon as is reasonably practicable, carry out a review of the operation of the power to determine whether it should be amended or repealed. Clause 45 provides an order-making power for the Minister to amend or repeal this Chapter as a result of the review.153 Extent These powers extend and apply across the UK. They require legislative consent, aside from the powers for HMRC to share data. Comment on sharing public debt data A number of responses to the public consultation, Better Use of Data in Government, were supportive of the proposal on the basis that greater information sharing could help maximise collection of debt as well as support citizens in hardship and crisis.154 Others took the view that a data sharing power would be reasonable provided this power: was proportionate; took affordability and fairness into consideration; and included sufficient safeguards, especially for vulnerable customers.155 However, there were also calls from individuals and civil society organisations to drop the proposals due to concerns about the privacy
148 Clause 42(3) 149 This penalty is consistent with existing sanctions in the Commissioners for Revenue and Customs Act 2005 and the Statistics and Registration Act 2007 150 Clause 42(4) 151 Clause 44(3) permits the relevant Minister to revise and re-issue the Code of Practice, before he does so, the Minister must consult: the Information Commissioner; relevant Ministers from the devolved administrations; the Commissioners for HMRC; and other appropriate bodies and people as the Minister sees fit. 152 Department for Culture Media & Sport, 'Digital Economy Bill Factsheet – Digital Government: Fraud and Debt (clauses 40-55)' [accessed 11 July 2016] 153 Where regulations to amend or repeal could affect the disclosure of information by HMRC, the consent of HM Treasury must be obtained first 154 Cabinet Office, ‘Better use of data in Government: consultation – A government summary of responses”, June 2016, para 69 155 ibid. 47 Commons Library Briefing, 9 September 2016
implications for vulnerable people facing hardship.156 Furthermore, a number of respondents felt that the data-sharing power could result in unfair treatment of those affected.157 A number of respondents questioned how the proposal would add any value to addressing the problem of public debt. Some suggested that this power should link to a broader debt management strategy.158 The Government said it would work with a range of organisations to ascertain the factors that lead to individuals owing multiple debts. The aim being to inform the development of the ‘fairness criteria’ to be included in the Code of Practice.159 According to the Government, the majority of respondents supported a period of three years for the gateway to be operational before it is reviewed.160 However, some respondents asked for the use of the gateway and pilots to be monitored and reviewed on a more regular basis, with some suggesting that reviews or monitoring be carried out on a biannual or ongoing basis due to the potential high negative impact on affected citizens.161 A number of respondents to the consultation document asked for a ‘sunset clause’ to be included within the proposed power (contained in Clause 40), instead of the Government’s favoured approach to carry out a Ministerial review and include provisions to repeal the legislation if necessary.162 In its published response, the Government said that it recognised the concerns about the lack of parliamentary scrutiny of the final review and would, “consider further how external independent assessment of the power can be factored into the decision-making process in an open and transparent way that builds public confidence.”163
4.7 Fraud against the public sector: data sharing How can data sharing reduce fraud? The Bill would introduce a new general data-sharing power (clause 48) between specified persons for the purposes of “the taking of action in connection with fraud against a public authority”. “Taking action” involves preventing, detecting, investigating, bringing civil proceedings and taking administrative action. “Fraud against a public authority” is defined as an offence under section 1 of the Fraud Act 2006 (or, in Scotland, an offence of fraud) which involves loss to a public authority, or the exposure of a public authority to a risk of loss. Fraud under the 2006 Act essentially involves a person using dishonest conduct to obtain a gain for himself or
156 ibid, para 70 157 ibid. 158 ibid. 159 ibid, para 72 160 Ibid, para 78 161 ibid, para 76 162 Ibid, para 77 163 ibid, para 78 48 Digital Economy bill
another, or to cause loss to another or to expose another to a risk of loss. The gain or loss must relate to money or other property. A February 2016 report by the National Audit Office gave an indication of the level of fraud against the public sector: Detected fraud across government was equivalent to only 0.02% of total expenditure (excluding tax credit and benefit fraud). In 2014-15, detected fraud across government ranged from £27.6 million to £72.9 million, depending on the source, from a total expenditure of £306 billion.164 It cautioned, however, that the exact scale of public sector fraud is unknown, largely due to the variable quality and completeness of fraud data. In its data-sharing consultation, the Government set out its view that the general nature of the proposed new power would prove more flexible than existing powers: At present there are numerous express gateways which allow specific public authorities to share types of data for the purposes of combating different types of fraud, including fraud against government. However, departments have designed them to be specific to ensure a smooth passage through parliament and as a result they lack the flexibility to adapt to changing circumstances. Establishing new powers can lead to lengthy delays and frustrate the ability to respond to emerging fraudulent practices or trial new multi-agency approaches to established problems. The proposed new power will enable better sharing of information to combat fraud against government. It is anticipated that wider use of data sharing could improve the prevention, detection and investigation of fraud by: a. aiding better targeting and threat-profiling of potentially fraudulent individuals b. saving taxpayers’ money by streamlining processes; and c. increasing the ability for Government to act more quickly on fraud and simplifying the legislative landscape.165 The Bill Clause 48 of the bill would allow a ‘specified person’ to share information with another specified person to take action in connection with fraud against a public authority. A ‘specified person’ is a public authority (or person providing services to a public authority in relation to those functions) that has been set out in regulations, made under the affirmative procedure. Ahead of making the regulations, the Information Commissioner and others must be consulted. Clause 49 sets out that if personal information that identifies a person is shared under the previous section, it may only be used for the purposes for which it was shared (aside from in a number of specific circumstances, such as for the purposes of a criminal investigation).
164 National Audit Office, ‘Fraud Landscape Review’, February 2016, para 10 165 Cabinet Office, ‘Better Use of Data -Consultation Paper’, February 2016, paras 68- 69 49 Commons Library Briefing, 9 September 2016
Clause 50 requires that personal information received under Clause 48 not be shared (aside from in a number of specific circumstances, such as with consent). Contravening this is an offence, subject to a fine or imprisonment. Clause 51 is similar and relates to information shared by HMRC. Clause 52 states that a relevant Minister must issue a Code of Practice about the disclosure and use of information under Clause 48. A specified person must have regard to the Code. The Code must be laid before Parliament and the devolved legislatures. Clause 53 requires that this Chapter be reviewed after three years. After consulting, publishing a report on the review and laying the report before Parliament and the devolved legislatures, this Chapter may be amended or repealed, through regulations under the affirmative procedure. Extent These powers extend and apply across the UK. They require legislative consent, aside from the powers for HMRC to share data. Comment on data sharing and fraud The majority of consultation responses were supportive of the proposal. Some respondents expressed concern about the lack of a sunset clause, but the government responded that sunsetting the power after a defined period of time would result in delays and potential difficulties in reintroducing powers if the powers proved to be effective in combatting fraud. Some people responding to the consultation were concerned about the lack of parliamentary scrutiny for the review that the Bill would require to take place after three years. The government said that it recognised concerns about parliamentary scrutiny for the review and would consider further how external independent assessment of the power could be factored into the decision-making process in an open and transparent way that builds public confidence.166
4.8 Research purposes: data sharing Data sharing for research At present researchers sometimes find it difficult to access public sector data – public authorities are uncertain about what they can disclose under current legislation and decisions on lawfulness of data sharing can take a long time or be inconsistent. This can cause delays to research or can stop it taking place.167 Such research could cover a wide range of areas – one report identified the following examples: • addressing social mobility – by linking data on education, training, employment, unemployment, incomes and benefits;
166 Cabinet Office, ‘Better Use of Data in Government: Consultation – A Government Summary of Responses’, June 2016, paras 61-62 167 Cabinet Office, ‘Better use of Data in Government: Consultation’, February 2016 50 Digital Economy bill
• researching causal pathways over the life course – linking data on education, health, employment, incomes and wealth; • comparative analysis of access to and the provision of social care support for the elderly; • informing policies designed to tackle poverty – linking data on housing conditions, health incomes and benefits; • constructing indicators of parental employment, social background, childcare and relating these to the provision of social care for children; • linking data on (re)offending behaviour, incomes, benefits and health – exploring the role of poor mental health.168 A number of reviews and reports over previous years have recommended opening up government data. Some relate to Open Data in general169 – proving access to datasets that anyone can access and use – but there are also calls for researchers to be able to access more sensitive datasets: • The Administrative Data Taskforce170 said that there needed to be improvements to procedures for researchers to access and link data, including new legislation: The UK has the opportunity to be a world leader in research using de-identified administrative data, routinely collected by government departments, agencies and other statutory bodies. Such data, made accessible for research in ways that prevent the identification of individuals, will provide a robust UK-wide evidence base to inform research, thereby guiding the development, implementation and evaluation of policy. Meeting this aim requires improvements in procedures for access to and linking between such data. This entails not just the development of safe, secure and efficient systems for linking, managing and analysing administrative data, founded on secure technologies, but on further building of trust between data providers, researchers and all other interested parties. The new system must adopt the highest international standards of governance, professional practice and public engagement. New legislation needs to be introduced to enable efficient data linkage, and government and the relevant funding agencies need to resource the new system to ensure its integrity, sustainability and utility.171 • The Shakespeare Review of public sector information suggested approaches to increase the availability of data while at the same time protecting it: We should have a clear pragmatic policy on privacy and confidentiality that increases protections for citizens while also
168 Administrative Data Taskforce, ‘The UK Administrative Data Research Network: Improving Access for Research and Policy’, December 2012 169 See for example the Open Government White Paper (June 2012), which set out the aim of putting data and transparency at the heart of government. 170 The Administrative Data Taskforce was formed in December 2011 by the Economic and Social Research Council (ESRC), the Medical Research Council (MRC) and Wellcome Trust. It was set up to “propose new mechanisms and collaborative agreements to enable and promote the wider use of administrative data for research and policy purposes”. 171 Administrative Data Taskforce, ‘The UK Administrative Data Research Network: Improving Access for Research and Policy’, December 2012. See also ‘Improving Access for Research and Policy: The Government Response to the Report of the Administrative Data Taskforce’, June 2013 51 Commons Library Briefing, 9 September 2016
increasing the availability of data to external users. We can do this by using the developing ‘sandbox’ technologies, or ‘safe havens’ as they are referred to by the Administrative Data Taskforce and the Data Sharing Review, that allow work on data without allowing it to be taken from a secure area. Along with appropriate anonymisation, putting in place guidelines for publication that more obviously pushes responsibility for (mis)use on the end (mis)user, and greatly strengthens application of punitive consequences, is critical. Especially sensitive datasets should be accessible only to those who can demonstrate sufficient expertise in the area and whose activity with the data is traceable. But that accreditation process should then be broad and simple, as the sandbox technology means we can trace activity and hold individuals responsible for misuse.172 The Administrative Data Taskforce noted that some other countries offer more access to researchers than the UK: The United Kingdom is lagging behind some other countries in these respects. The Scandinavian countries and the Netherlands have made use of their extensive population registration statistics and other administrative data to facilitate important research in an efficient manner. The United States Census Bureau has established a network of Research Data Centres which provide secure access to restricted census and survey microdata.173 This part of the bill would permit the sharing of information for research purposes. Personal information must be stripped of information that would allow a person’s identity to be deduced. It also allows for processing of personal information by a ‘trusted third party’, included so that data from more than one source can be linked together. This must be done in a way that would mean that the researcher ultimately receiving the information cannot see personally identifiable information. There will be a code of practice for sharing, processing and use of data under these powers, drawn up by the UK Statistics Authority (called the Statistics Board in law). The UK Statistics Authority will also accredit research, researchers and those processing personal data under these powers. These powers do not apply to public authorities providing health or adult social care services. The Bill Clause 56 of the bill would allow public authorities to share information for the purpose of research – this could be personal information or other information. It would also allow data from two authorities to be linked together in a secure environment. Researchers may not have access to information that would allowing individuals to be identified (with a reasonable likelihood).
172 Shakespeare Review, ‘An independent Review of Public Sector Information’, May 2013 173 Administrative Data Taskforce, ‘The UK Administrative Data Research Network: Improving Access for Research and Policy’, December 2012 52 Digital Economy bill
Clause 58 limits the sharing of personal information gained in this way, creating a criminal offence for unlawful disclosure. Clause 59 is similar but relates to HMRC information in particular. Clause 60 requires that the UK Statistics Authority produce a code of practice for sharing, use and processing of information under these powers. Public authorities, those processing data and researchers receiving data must have regard to the code. Clause 61 gives the UK Statistics Authority the power to accredit research, researchers and those processing personal information. To gain accreditation the proposed research must be in the public interest and those processing data must be “fit and proper” for the purpose. If someone fails to have regard to the code of practice their accreditation can be taken away. Clause 63 sets out that these powers do not apply to public authorities providing health or adult social care services. Extent These powers extend and apply across the UK. They require legislative consent, aside from the powers for HMRC to share data. Comment on data sharing for research In its response to the Better Use of Data in Government consultation, the Government said that the majority of comments were supportive of the proposals in principle. Alongside the consultation, the Government had published draft data sharing clauses to show how these powers might work. A number of responses suggested that the way that those clauses were drafted was “too restrictive and may unintentionally exclude linking data through other secure process models”. The Government then revised the approach taken in the clauses for the bill. Some people responding to the consultation said that the powers should be extended to make it more likely that data be shared: A number of responses, particularly from the research community, expressed the view that the proposals should go further than the permissive power as currently drafted. These respondents felt that there should be greater incentives for public authorities to share data in order to provide greater assurance that a greater number of administrative datasets would be made available for research purposes. 174 Others thought that these powers should be extended to cover health and social care data (public authorities providing health or adult care are explicitly excluded from the data sharing powers). In the consultation document, the Government noted that health and care data is particularly sensitive and suggested that it needs additional protections. It said that safeguards should be in line with those recommended in Dame Fiona Caldicott’s (then) forthcoming review.175 The Caldicott
174 Cabinet Office, ‘Better Use of Data in Government: Consultation – A Government Summary of Responses’, June 2016 175 Cabinet Office, ‘Better use of Data in Government: Consultation’, February 2016 53 Commons Library Briefing, 9 September 2016
Review of data security, consent and opt-outs was published on 6 July – the Government has since consulted on her proposals (until 7 September) and is analysing the responses it received.
4.9 HMRC: data sharing Why share HMRC data? HM Revenue & Customs may only disclose the information they hold on taxpayers under certain limited circumstances – for example, to comply with a court order, or if the person to whom the information relates has given their assent. It is a criminal offence for HMRC officers to deliberately disclose information without lawful authority.176 In July 2013 HMRC launched a consultation on making some of the data it holds more widely available, following a review of public sector information;177 this set out three options: • wider sharing of aggregated and anonymised tax data, for example, for the purposes of research or policy development; • release of basic non-financial VAT registration data as public data; and, • sharing more detailed VAT registration data on a restricted and controlled basis for specific purposes, such as credit referencing.178 In December 2013 the Government announced that it would proceed with the first of these options, though in the light of concerns about taxpayer privacy, HMRC would ensure that any changes would not compromise taxpayers’ confidentiality.179 In April 2014 there was some press coverage of this issue, though some of the reporting implied, erroneously, that the consultation had proposed the sale of personal financial data.180 As noted in Section 4.1 of this paper, work on datasharing.org.uk project – which foreshadowed this part of the Digital Economy Bill – began in 2013, and this proposal for sharing anonymised tax data “was referenced in discussions throughout the process to ensure participants understood the full suite of reform measures and their dependencies.” The Cabinet Office’s 2016 consultation, Better Use of Data, noted that, “any package of legislation taken forward as a result of this
176 Under s18 & s19 of the Commissioners for Revenue & Customs Act (CRCA) 2005. The department’s Manual on Information Disclosure sets out these provisions in detail; see from para IDG4000 onwards. See also, HC Deb 10 July 2014 cc389-90W. 177 HMG, ‘The Government Response to Shakespeare Review of Public Sector Information’, June 2013 p4 178 HMRC, ‘Sharing and publishing data for public benefit’, 17 July 2013 p4. Gov.uk has further details. 179 HMRC, ‘Sharing and publishing data for public benefit – summary of responses’, December 2013 p11, p13-14. 180 “HMRC to sell taxpayers' financial data”, Guardian, 18 April 2014. See also, “HMRC 'plans to share tax data with private firms'”, BBC News online, 19 April 2014 54 Digital Economy bill
consultation will include these specific HMRC measures, which were consulted upon and agreed as government policy.”181 Respondents to HMRC’s consultation in 2013 were much more divided over the case for sharing VAT registration data, and the Government stated that it would carefully consider these responses “in the context of further research and work being undertaken to understand the impact of different options.”182 Budget 2014 confirmed the Government would “legislate to provide for a controlled release of non- financial VAT registration data for specific purposes (principally credit scoring) and to a small number of qualified parties (like credit reference agencies) and will continue to explore options for the public release of a limited subset of VAT registration data as open data.”183 Provision for this was included in the Small Business, Enterprise and Employment Act 2015 (specifically ss8-9 of the Act).184 The Bill Clause 64 of the Bill would allow HMRC officials to disclose “non- identifying information”, provided that, in their view, the disclosure was in the public interest. In this context “identifying information” relates to a person whose identity is either specified in that information, can be deduced from it or, “can be deduced from the information taken together with any other information.” In one of its factsheets on the Bill, the Department underlines that “any information disclosed through this new gateway will be subject to strict tailored safeguards”: Alongside the existing criminal sanction protecting against the unlawful disclosure of identifying information in s.19 Commissioners for Revenue and Customs Act 2005, HMRC will only disclose information that is relevant, necessary and proportionate to what the disclosure is intended to achieve.185 Extent These powers extend and apply across the UK. They do not require legislative consent.
4.10 Official statistics: data sharing Sharing more data to support official statistics Official statistics are a key part of the evidence base for policy decisions and scrutiny, as well as helping people understand society and the economy. The powers in this bill would give the UK Statistics Authority – and in particular its statistics producing arm, the Office for National Statistics
181 Cabinet Office, ‘Better Use of Data – consultation paper’, February 2016 p6 (para 15) 182 HMRC, ‘Sharing and publishing data for public benefit’, December 2013 p34 183 Budget 2014, HC 1104, March 2014 para 2.210 184 For further background see the Parliament Bill page for this legislation. When debated there was broad agreement on these changes (see, Public Bill Committee, 21 October 2014 c203). 185 DCMS, Digital Economy Bill Factsheet – Digital Government: Research and Statistics (clauses 56-68), 5 July 2016 55 Commons Library Briefing, 9 September 2016
(ONS) – easier access to data. They would give clear authority for public authorities to share data with the Statistics Authority and would give the Statistics Authority the power to require that public authorities and businesses provide them with data.
Box 3: Key people and organisations in official statistics The UK Statistics Authority – legally known as the Statistics Board – is an independent body operating at arm’s length from government as a non-ministerial department. The Public Administration and Constitutional Affairs select committee has oversight of its work. The Authority’s statutory objective is to promote and safeguard the production and publication of official statistics that serve the public good. It has three main functions: 1. oversight of the UK official statistics system, which includes around 30 central government departments and the devolved administrations, and the promotion, safeguarding and monitoring of quality, comprehensiveness and good practice in relation to all official statistics, wherever produced; 2. assessment of key official statistics against a code of practice for statistics; and 3. governance of the Office for National Statistics (ONS) – legally a part of the Authority (its executive office) – the largest producer of official statistics.186 The National Statistician, John Pullinger, is Chief Executive of the Authority.
The proposals are strongly championed by the Statistics Authority. For example, John Pullinger, the National Statistician, argues that these powers offer a great opportunity to improve statistics, potentially saving money and reducing the burden on survey respondents: If the UK is to succeed in the competitive global marketplace, and if our governments are to make informed choices affecting all our lives, they need the best possible statistics. Access to timely and rich existing data sources from the public and private sectors can transform the quality of official statistics, and reduce our dependence on surveys which are costly to administer, and time-consuming and burdensome for respondents. The opportunities are huge. The UK has the potential to be a global leader in data science. But we can only be successful if we maintain the trust and confidence of the citizens and businesses that provide their data. It will be necessary to provide reassurance that ONS will keep data safe and secure, and that we will use data for one purpose only, to produce aggregate official statistics and research that support better decision-making for the public good.187 The Statistics Authority has published a short paper with background to the proposals for better access to data and examples, Delivering better statistics for better decisions: Why we need new legislation for better access to data (March 2016). Previous reports on the use of statistics have also argued that the ONS need better access to data:
186 UK Statistics Authority, About the Authority [online, accessed 26 July 2016] 187 UK Statistics Authority, ‘Why we need new data access legislation’ [press release], 1 March 2016 56 Digital Economy bill
• In his Independent Review of UK Economic Statistics (March 2016), Professor Sir Charles Bean recommended greater access for ONS to information: Recommended Action 10: Remove obstacles to the greater use of public sector administrative data for statistical purposes, including through changes to the associated legal framework, while ensuring appropriate ethical safeguards are in place and privacy is protected. Recommended Action 11: Exploit new methods for collecting data and explore the scope for using information gathered by private sector entities in the production of economic statistics, nowcasting and one-off studies of emerging measurement issues.188 • In A review of the operation of the Statistics and Registration Service Act 2007 (February 2013), the Public Administration Select Committee argued that barriers should be minimised: While confidentiality must be properly maintained, we consider it is important that barriers to effective data access and sharing both for external users and within Government are reduced to the minimum. In developing its strategy, the Statistics Authority should consider with the Government what steps it can take to break down such barriers where they exist; encourage a data sharing culture within Government departments; and speed up access to data for external users. The Authority should take its own legal advice on a case-by-case basis where departments may be acting on unreasonably risk-adverse legal advice.189 • The Science and Technology Select Committee also supported data sharing with ONS, in their report The big data dilemma (February 2016): There are enormous benefits in prospect for the economy and for people’s lives from making the nation’s core data infrastructure ‘open’. The Government’s work in this area has put the UK in a world-leading position. But there is more to do to breakdown departmental data silos, to bring data together in order to further improve public services, as well as to improve data quality […]. The Government should set out how it can build capacity to deliver more datasets, increasingly in real-time, both to decision- makers in Government and to external users and, in particular, should work to establish a right of access to data for the Office for National Statistics.190 • A Peer Review Report (2015) by European peers on the UK statistical system recommended new legislation: The United Kingdom Statistics Authority and the Office for National Statistics should continue to seek agreements on new legislation which would authorise, encourage and facilitate the use of administrative data for statistical purposes, subject to proper governance and confidentiality arrangements.191
188 Professor Sir Charles Bean, ‘Independent Review of UK Economic Statistics’, March 2016 189 Public Administration Select Committee, A review of the operation of the Statistics and Registration Service Act 2007, HC 406, 25 February 2013 190 Science and Technology Select Committee, The big data dilemma, HC 468, 12 February 2016 191 Eurostat, ‘Peer review report on compliance with the Code of Practice and the coordination role of the National Statistical Institute’, March 2015 57 Commons Library Briefing, 9 September 2016
Current and proposed powers These powers would extend those that the Government and the Statistics Authority already have to allow or require data sharing with the Statistics Authority. The Statistics and Registration Service Act 2007 allows certain gateways to be created for information to be passed to the Statistics Authority, through secondary legislation – but the Statistics Authority argues that this mechanism is inflexible, cumbersome and slow. The Statistics of Trade Act 1947 gives the Statistics Authority the power to require that businesses provide it with certain information – this tends to be information about businesses themselves (for example employment or output). The Authority say that the Statistics of Trade Act “does not have the flexibility to tailor the public good need for access to statistics with efficient, effective and proportionate mechanisms expected by businesses”.192 The powers in this bill would allow Statistics Authority to, for example: • Collect ‘point of sale’ information on prices from major retailers – potentially improving the quality and timeliness of price statistics, while reducing the need for ONS to collect information on the prices of individual items in locations across the UK. • Use data from the Home Office, HMRC and DWP to better understand what happens to international students after their studies. • Use new sources of data about businesses to reduce the burden on them from having to fill out surveys.193 The ONS are also investigating the feasibility of moving to a census based on administrative data after 2021.194 Existing protections As well as requirements under general legislation such as the Data Protection Act, the Statistics Authority has a particular obligation to keep personal information secure – Section 39 of the Statistics and Registration Service Act requires that personal information that could identify someone not be disclosed. A breach of this confidentiality obligation can be an offence, leading to a fine or imprisonment if someone is found guilty. The Statistics and Registration Service Act also gives the Statistics Authority the objective of promoting and safeguarding the production and publication of official statistics that serve the public good when carrying out most of its functions.
192 UK Statistics Authority, ‘Delivering better statistics for better decisions: Why we need new legislation for better access to data’, March 2016 193 ibid. 194 Office for National Statistics, Administrative Data Census Project [online, accessed 29 July 2016] 58 Digital Economy bill
The Bill The clauses in this chapter of the bill would modify the Statistics and Registration Service Act 2007, to permit or compel data sharing. Clause 65 would allow HMRC to share personal information with the Statistics Authority (including ONS) – beyond information on imports and exports, which it may already share – and to share information for ONS’s statistical services with the permission of the HMRC Commissioners. Clause 66 would allow public authorities to share information with Statistics Authority for the purpose of its functions, by adding a new section 45A to the Statistics and Registration Service Act 2007 (referred to as “the Statistics Act” below). The Statistics Authority could only use the information for its statistical services or share the information with an “approved researcher” with the consent of the public authority it comes from. This general power would replace certain powers in the Statistics and Registration Service Act 2007 to create specific gateways through secondary legislation. Clause 67 would: • give the Statistics Authority a right of access to information from Crown bodies and the Bank of England, by adding a new section 45B to the Statistics Act. If they do not comply, the request and any response may be laid before Parliament (and the devolved legislatures). • give the Statistics Authority the right to information from public authorities that are not Crown bodies, by adding a new section 45C to the Statistics Act – the public authority must comply with the request. • give the Statistics Authority the power to require information from undertakings (but not small or micro sized businesses, or public authorities), by adding a new section 45D to the Statistics Act. • require that Statistics Authority only use the information gained for its functions (and only use it to provide statistical services with permission of the person who provided the data), by adding a new section 45E to the Statistics Act. The Statistics Authority must also publish a statement of principles and procedures. • create a new offence for undertakings and non-Crown public authorities that do not provide the information requested, by adding a new section 45F to the Statistics Act. Someone who is guilty is liable to a fine. • require that the Statistics Authority publish a code of practice for public authorities making changes in its collection, organisation, storage or retrieval of their information, and for any processes for supplying information to the Authority, by adding a new section 45G to the Statistics Act. Clause 68 would permit the Statistics Authority to share information with a devolved authority for its statistical functions, in response to a request. 59 Commons Library Briefing, 9 September 2016
Extent These powers extend and apply across the UK. They require legislative consent, aside from the powers for HMRC to share data. Comment In its response to the Better Use of Data in Government consultation, the Government said that most of the people responding supported the proposals, if the right safeguards were in place and the sharing was being done for clear reasons: A significant majority of respondents supported the proposals on the basis they represented appropriate and necessary updating of legislation so long as appropriate safeguards are in place to ensure data is handled securely and for clear purposes. A small number of respondents emphasised that legislative change was required to support future plans for the Census and support the greater reuse of Government data. Among the supportive comments received was the view that accurate and up-to-date statistics are important to better understand the modern economy and the proposed power was required to ensure the UK does not fall behind other nations in terms of timely access to administrative data for the purposes of producing economic statistics. The original data sharing powers in the consultation omitted Crown bodies – this was challenged by people responding to the consultation and the Government then added a way for the Statistics Authority to request that such data be shared: The view was also expressed that the proposals should go further and include a right of access to data held by Crown bodies to support these objectives. The Government recognises the importance of UKSA being able to obtain information from a range of bodies, including Crown bodies, when meeting its statutory objectives to produce national and official statistics, and statistical research for public good. In relation to Crown bodies, the Government proposes the appropriate mechanism would be a clear presumption of engagement by Crown bodies together with a requirement on that body to explain any non compliance by formal letter, underpinned by a statement of principles and procedures. UKSA may then at its discretion lay that letter before Parliament which will ensure transparency.195
195 Cabinet Office, ‘Better Use of Data in Government: Consultation – A Government Summary of Responses’, June 2016 60 Digital Economy bill
5. The BBC 5.1 Background to proposed changes The Bill would introduce two changes affecting the BBC. The first concerns the role of Ofcom, the second the TV licence concession for over-75s. The context for both is the current review of the BBC’s Royal Charter. The present Charter expires on 31 December 2016 and negotiations are proceeding between BBC and Government to have a new Charter and associated Framework Agreement in place by that date.196 Ofcom’s role Under the current arrangements, governance and regulation of the BBC are somewhat blurred responsibilities. Both the BBC Executive and BBC Trust have a role in governance; both Ofcom and the Trust have a role in regulation. Thus Ofcom is responsible for the regulation of BBC programming standards, with a notable exception of impartiality and accuracy of programmes, which is the responsibility of the Trust. The Clementi Review of BBC governance and regulation, which reported in March 2016, recommended that regulatory oversight of the BBC should pass wholly to Ofcom and the BBC should have a unitary Board, with a majority of non-executive directors.197 The Clementi review reiterated what many had said before, that there existed a muddying of responsibilities in governance issues. The BBC Trust has all too often been seen as conflicted, struggling to combine the roles of regulator and “cheerleader”.198 In May 2016, the Government published a White Paper on the BBC’s future.199 The White Paper endorsed Clementi’s proposals on BBC governance. Ofcom, which already has some powers in relation to the BBC, would become the Corporation’s sole external regulator. Ofcom would issue licences, regulate editorial standards, arbitrate complaints, regulate commercial activity, regulate market impact, and monitor and review performance.200 The current legislation provides that regulation of the BBC is a function of Ofcom, to the extent set out in the Charter and Framework Agreement. The “BBC’s services”, as presently defined, do not cover all of the activities of the BBC, in particular, the BBC’s commercial services, the World Service and all online activities.201 Over-75s At present those over 75 are entitled to free TV licences. This is a scheme funded by the Department for Work and Pensions. In July 2015,
196 See Commons Library Briefing Paper 3416, BBC Charter renewal 197 DCMS, A Review of the Governance and Regulation of the BBC, Cm 9209, March 2016 198 E.g. “BBC Trust: a regulator – and a cheerleader”, Guardian, 11 September 2013 199 DCMS, A BBC for the future: a broadcaster of distinction, Cm 9242, May 2016 200 See Commons Library Briefing Paper 5332, ‘BBC governance and financial accountability’ 201 Communications Act 2003 s198 61 Commons Library Briefing, 9 September 2016
the then Culture Secretary, John Whittingdale, made a Statement to the Commons confirming details of a funding agreement reached between Government and the BBC, details of which had already found their way into the press. One of the elements was that, in future, the BBC would take on the cost and policy responsibility for this concession in a phased switchover. The BBC would take on £200m of the annual cost from 2018-19 and assume the full bill (currently estimated at £745m a year) from 2020-21.202 Under current legislation the Secretary of State can make provision for concessions in relation to the payment of the licence fee, which may take the form of exemptions from payment or of reduced rate payments. The Secretary of State exercises the function of conferring concessions by making regulations.203
5.2 The Bill Clause 75 would amend the Communications Act 2003, allowing provision to be made in the new BBC Charter and Framework Agreement so that Ofcom can regulate all of the BBC’s activities, in its new role as the external regulator. Clause 76 would insert a new section into the Communications Act 2003. The new section would transfer to the BBC the function of making provision for a TV licence fee concession by reference to age. The concession would be determined independently by the BBC following consultation. The Corporation would have the power to make changes to the concession, including changing the eligibility criteria, level of concession and qualifying age (although not to offer it to anyone younger than 65) or to end the concession altogether. The Secretary of State would retain the power to make provision for all other concessions.
5.3 Comment The White Paper was preceded by a public consultation exercise on the basis of a Green Paper.204 Although the paper attracted 190,000 responses, questions on BBC governance did not loom large. Around 85 per cent did not express a view on how current models of governance and regulation for the BBC should be reformed. Just over 5 per cent indicated that a standalone regulator was the most popular option, with Ofcom the second most popular. Ofcom was the preferred choice of many organisations for this role.205 In its official response to the White Paper, the BBC described the new governance arrangements with an enhanced role for Ofcom as “the most significant reform in the BBC’s history” and “the right thing to do”.206
202 HC Deb 6 July 2015 c25 203 Communications Act 2003 s365 204 DCMS, BBC Charter review: public consultation, Cm 9116, July 2015 205 DCMS, BBC Charter Review public consultation: summary of responses, March 2016, p4 206 BBC Media Centre, ‘BBC response to the Government White Paper’, 12 May 2016 62 Digital Economy bill
The inquiry into the Future of Public Service Television, established under Lord Puttnam, which reported in June 2016, sounded a note of caution: While [Ofcom] has a profound knowledge of the overall media landscape, it may be the case that its natural inclination – unless specifically tasked not to do so – will be to evaluate BBC content and services in relation to the interests of its commercial competitors as opposed to those of the public. Is it best qualified to adjudicate on whether new BBC services are in the public interest, for instance? How would it balance its regulation of the BBC with that of the commercial sector at times when those interests might not be aligned?207 The BBC was generally accepting of the funding deal agreed in summer 2015. At the time of the announcement the BBC said it was the "right deal... in difficult economic circumstances". In return, the Government agreed that the Corporation could ask for voluntary payments from those who currently receive free licences.208 It is not yet clear whether people over 75 might be asked to give up their free TV licence or make a voluntary contribution to it, under plans being considered by the BBC.209
207 ‘A Future for Public Service Television: content and platforms in a digital world’, June 2016, p65 208 Letter from George Osborne and John Whittingdale to Lord Hall, headed “Arrangements for over-75s TV licence concession from 2017/18”, 3 July 2015 209 ‘BBC may ask over-75s to give up free TV licence’, BBC News, 25 January 2016 63 Commons Library Briefing, 9 September 2016
6. Direct marketing code
In 2015 the ICO received a total of 166,665 concerns about nuisance calls and texts, a fall of 5% from 2014.210 This small fall from 2014 might be attributable to enforcement action by the ICO, Ofcom and the Claims Management Regulator and the widespread media coverage of nuisance calls in 2015. However, the BBC recently reported that Which? research shows just 2% of people who receive unwanted calls report them.211 The ICO enforces any breaches of the Privacy and Electronic Communications Regulations 2003 (which set out rules relating to unsolicited electronic marketing messages sent by telephone, fax, email or text) and the Data Protection Act 1998 which may be relevant when a person’s name and number are used or shared by a company. Direct marketing without consent from targeted consumers is an offence under the 2003 Regulations. The ICO produces Direct Marketing Guidance (updated May 2016) for organisations, which provides them with guidance on the direct marketing rules under the Act and the Regulations. However, the legislation does not currently impose an obligation on organisations to have regard to the guidance, or establish any consequences on an organisation or individual who fails to comply with the guidance. Clause 77 would place this guidance on a statutory footing by amending the Data Protection Act 1998. A new section would be inserted into the Act placing the Information Commissioner under a duty to publish and keep under review a direct marketing code of practice. In the Government’s view, this would make it easier for the Information Commissioner to take enforcement action against those organisations in breach.212 The Impact Assessment for the Bill anticipates that putting the guidance on a statutory footing would improve standards among direct marketers, particularly as "improved enforcement powers create a disincentive to follow a lower standard". The likely result would be an increase in the number of firms prosecuted for failing to comply with (what would now be) statutory guidance.213
210 ICO, Nuisance calls and messages [accessed 9 September 2016] 211 See Commons Library Briefing Paper 6033, ‘Nuisance calls: unsolicited sales and marketing, and silent calls’ 212 Explanatory Notes, para 49 213 DCMS, ‘Direct Marketing Code of Practice: impact assessment’, 21 April 2016, p5
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