Clause 1 - Trade functions: disclosure of information by HMRC

Trade (Disclosure of Information) Bill – in the House of Commons at 3:39 pm on 16 December 2020.

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Question proposed, That the clause stand part of the Bill.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

With this it will be convenient to discuss the following:

Amendment 1, in clause 2, page 3, line 3, leave out subsection (7).

Clause 2 stand part.

Clauses 3 to 6 stand part.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade 3:49, 16 December 2020

Thank you, Dame Rosie, if I have the nomenclature correct. As we come to the end of the transition period, it is important that the Government make the best use of the information that they already hold to minimise any disruption that may result from the new border requirements that will apply irrespective of the nature of our trading relationship with the EU. More specifically, it is important that the Government use that information to develop a detailed picture of the flow of goods and people at key locations at the border. That will inform decision making right across Government, leading to better outcomes for businesses and citizens.

As Members will be aware, the clauses in the Bill have been scrutinised previously by the House during the passage of the Trade Bill. Members may recall that a key source of information within Government relating to both trade and border management is HMRC, which has significant responsibilities in relation to the movement of goods across the border. HMRC has specific statutory restrictions in relation to the sharing of information that it holds and, in the absence of an express legal gateway to permit sharing, the Government cannot make use of this data effectively.

The clause has therefore been introduced to allow HMRC to share the data that it holds with any other public or private body that carries out a public function related to trade for the purposes of that function. This power enables HMRC and bodies working with or on behalf of HMRC to share data with Departments, including, for example, the Cabinet Office, which, through the border and protocol delivery group, is leading Government preparedness for border readiness at the end of the transition period.

BPDG has established a border operations centre to monitor and manage flow at the end of the transition period and to support relevant authorities to better manage border controls and ensure that frictions to the flow of trade are minimised and negative impacts are mitigated. The border operations centre will use data provided by HMRC, alongside other Departments and public bodies, so that it can analyse and promote efficiencies in the flow of traffic in goods and services in and out of the United Kingdom. Access to HMRC data is crucial to developing this detailed commodity-level view of the flow of goods at the border.

Additionally, the clause will facilitate the sharing of information with other organisations, such as the World Trade Organisation and the World Customs Organisation, both of which the UK will be obligated to share data with as part of our international obligations for the purposes of trade. This is a necessary clause to ensure continuity as we come to the end of the transition period, as it will enable the efficient use of HMRC data to support the Cabinet Office’s role in minimising temporary disruption at the border that may result from our new trading relationship with the EU and enable the sharing of data with international organisations where necessary.

Measures have been included in the Bill to ensure the proper handling of the data and to safeguard and protect its use, with penalties for unauthorised disclosure, onward sharing or use. Moreover, Departments will comply with requirements of data protection legislation, including the general data protection regulation, when handling any personal data shared under this gateway, where it is deemed proportionate and necessary to do so. This clause is essential for the Cabinet Office and other bodies to ensure the continued smooth flow of goods.

Moving on to clause 2, alongside HMRC, to which clause 1 applies, more than 20 Departments and public bodies have either operational or policy responsibilities relating to the border, using over 100 IT systems between them. These Departments and public bodies collect and hold numerous types of information related to trade. However, as with HMRC, this information could typically be used only for very specific purposes, with statutory restrictions on the sharing of information with other Departments. These restrictions inhibit the Government identifying and utilising the full potential of their information to support trade policy and the flow of goods and services through the border. The restrictions also lead to inefficiencies, including duplicative requests to industry to share data.

The clause fixes that problem and will allow specified public bodies and Departments to share data where it supports the exercise of a Minister of the Crown’s functions relating to trade. By combining and analysing specific border data, the Government and the Cabinet Office, in particular, will be able to develop insights and analysis to support the Government as a whole to deliver better services. This will ensure that goods and trade to continue to flow when the UK becomes an independent trading nation at the end of the transition period. As with clause 1, this clause does not, however, grant any additional data collection powers to the Government. Instead, it seeks to create a discretionary gateway to enable more effective sharing of data that Departments and public bodies already hold.

Moving to clause 3, the Government rightly take the safeguarding of information and personally identifiable information, in particular, very seriously. As I hope I made clear in introducing clauses 1 and 2, the ability to share data under both gateways is discretionary. Individual Departments and public authorities providing data will need to be satisfied that data sharing is necessary to support functions relating to trade prior to sharing the data. Furthermore, as I mentioned when introducing clauses 1 and 2, any data shared by the data-sharing gateway that is being established will have to comply with data protection legislation, including the general data protection regulation and its principles, covering necessity, proportionality and minimisation to protect the rights of individuals.

Clause 3 provides an additional safeguard on top of all the others by creating a criminal offence if information relating to a person’s identity, or information from which a person’s identity might be deduced, is shared in contravention of clause 2. I hope that will provide further assurance, if it is required, that the data shared through the gateway will be handled appropriately.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

I am interested in clause 3. To whom are the Government concerned that the information might be shared inappropriately? Who would be the recipients of that information?

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

I think the hon. Gentleman’s question was about what kind of people would be inappropriate; it would be people to whom the legislation will not apply. We are talking about a discretionary power to share data to assist a Minister in functions relating to trade. In addition, the criminal power, as I understand it, is in the Bill specifically to prevent any individual person’s identity from becoming either known directly or deduced through the data that has been produced. Clause 3 puts in place an additional power to prevent that data from becoming known. I do not really want to speculate, Dame Rosie, but I can imagine a whole series of people and bodies that might have inappropriate access to an individual’s data as they pass through a border. I think we can all imagine the sort of people who may not have either your, mine or the Government’s best interests, or the interests of international trade, at heart.

Clause 4 contains the sunset elements of this Bill. As the House will be aware, the Trade Bill is currently passing through the other place and is now unlikely to receive Royal Assent before the end of the transition period. As I hope I made clear in introducing clauses 1 and 2, it is essential that we are able to provide a gateway to enable the sharing of trade-related data that the Cabinet Office requires before the end of this period as it takes on border-monitoring functions. To ensure that we can do that in time, the Bill replicates clauses 8 to 10 of the Trade Bill, which has been referred to at least twice so far. Clause 4 is therefore required to facilitate the expiry of clauses 1 to 3 of this Bill if similar clauses are passed in the Trade Bill, and will thereby ensure that the UK statute book is kept in good working order.

Clause 5 sets out the interpretation of key terms for the purposes of the Bill. Specifically, it provides interpretation of the terms “the data protection legislation”, “enactment”, “the investigatory powers legislation” and “Minister of the Crown”. The interpretations are intended to ensure that the reader of the Bill has clarity in respect of and understands the use of those terms in the Bill.

Finally, Clause 6 sets out the territorial extent of the legislation, when it will come into force and its short title. Subsection (1) sets out the territorial extent of the provisions:

“This Act extends to England and Wales, Scotland and Northern Ireland.”

This is a standard clause in any Bill to specify the extent of the its measures.

I note that the Government have worked closely with the devolved Administrations on these provisions as part of work on the Trade Bill, to ensure that the data- sharing gateways can also assist them with their devolved functions—I have already mentioned traffic management around ports as a classic case of where a devolved Administration have a legitimate and correct interest in ensuring that data will flow and therefore that trade flows. In that spirit of working closely together, the Government made two commitments to the devolved Administrations in relation to data sharing under clause 9 of the Trade Bill when it was in Committee in the Lords, and I will repeat them today. First, the data shared under clause 9 of that Bill will be used by the border operations centre and the Cabinet Office to develop strategic insights. The Cabinet Office is committed to sharing strategic analysis related to the flow of data where it will support the more effective management of flow through the border. Cabinet Office officials will continue to work closely with counterparts in the devolved Administrations to ensure that relevant analysis and information can be shared to support devolved functions relating to trade and management of the border. Secondly, the UK Government commit to consulting the devolved Administrations before any devolved authorities are added to or removed from the list of specified authorities that can share data under clause 9 of the Trade Bill.

I turn to the remaining subsections of clause 6. Clause 6(2) of the Trade (Disclosure of Information) Bill provides for the Bill to come into force on the day of Royal Assent. Clause 6(3) simply provides that the Bill, once enacted, will be cited as the Trade (Disclosure of Information) Act 2020. I hope that the House agrees that clause 6, and therefore all six clauses, should stand part of the Bill.

Photo of Paul Blomfield Paul Blomfield Shadow Minister (International Trade) (Brexit and EU Negotiations), Shadow Minister (Cabinet Office) (Brexit and EU Negotiations) 4:00, 16 December 2020

We recognise that at present there are limited circumstances in which Her Majesty’s Revenue and Customs can disclose information, such as when consent has been given by a taxpayer or when compelled to do so to comply with a court order. The Bill clearly continues that tight framing over the protection of information.

I have a few questions for the Minister, but I shall first comment on amendment 1. Although it is clear that amendment 1 aims to make watertight clause 2(8)—and I do understand the concerns behind that—Labour is satisfied that subsection (8) offers sufficient protection. However, I hope that the Minister can expand on that and explain what kind of instances subsection (7) might cover so that we can be fully assured on that point.

As we said earlier, this Bill is very much a lift of clauses 8 to 10 of the Trade Bill, although it diverges slightly by widening the protections in clause 2(8), ensuring that no disclosures made under this Act would

“contravene the data protection legislation, or…be prohibited by the investigatory powers legislation”,

rather than including specific references to the parts of the Investigatory Powers Act 2016 and the Data Protection Act 2018, as we saw previously. Will the Minister give us a reason for that change and let the House know what is now in scope that was not previously?

The Bill gives new powers to HMRC to share information with international bodies, local bodies, devolved Administrations and others for analysis and monitoring. Will the Minister elaborate on the purposes for which that might be done, more specifically? Perhaps he could also explain the way in which the border operations centre will use that data to support local authorities, local resilience forums and other key public services, such as hospitals and clinical commissioning groups, when transporting key medicines or vaccines during the pandemic.

A little more broadly, I wonder whether the Minister could give other details about the border operations centre and the Government’s preparations for the end of the transition period. For instance, after the awarding of the port infrastructure fund yesterday, what assessment has he made of the number of ports that consider their allocation of the fund adequate to cover the necessary infrastructure changes required by the border operating model? As that fund was so significantly over-subscribed, what discussions is the Minister having with the Cabinet Office to ensure that our borders are fully operational by 1 January?

There is another point on which many of my colleagues and I have pressed Ministers. I do not think that we have had the opportunity to press this Minister on it, though, so I will give him a chance to answer. Can he tell us how many customs agents of the 50,000 recommended by the Government have now been trained and recruited? Will he also give us an update on the IT systems required to process customs and support our borders after the transition? Data sharing under the powers of the Bill is clearly welcome, but we also need the systems that sit alongside it to enable us to minimise disruption.

The Bill is needed to allow public bodies to access information about their areas and to prevent disruption. It also contains useful protections regarding data sharing, but it is a drop in the ocean when it comes to preparedness for the end of the transition period, so I hope that the Minister can answer some of those additional questions and give not simply this House, but business, the reassurance that it needs.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

I wish to speak to amendment 1, tabled in my name, and to some of the other clauses.

During the passage of the incomplete Trade Bill there were, as the Minister will have seared into his soul, a number of debates and amendments—I think amendments 33 and 34—relating to the requirement to collect data by Her Majesty’s Revenue and Customs, specifically with regard to the exclusion of protection of legal professional privilege, which in many other circumstances would have applied. The same issue to some extent arises, in terms of the disclosure of information, in clause 2(7) of the Bill. It states:

“A disclosure under this section does not breach— (a) any obligation of confidence owed by the person disclosing the information, or (b) any other restriction on the disclosure of information (however imposed).”

The explanatory notes make it very clear that

“Certain information held by specific public authorities are subject to constraints on disclosure. To enable sharing of this information, clause 2(7) provides a general disapplication of these restrictions.”

If I may, I will just remind the Minister what was said in previous debates on this matter. Legal professional privilege and confidentiality are essential to safeguard the rule of law and the administration of justice. They permit information to be communicated between a lawyer and client without the fear of it going to a third party without the clear permission of the client. In normal circumstances, that includes HMRC. Many UK statutes already give express protection of legal privilege and it is vigorously protected by the courts.

We are in a rather odd position where data can be collected and is required to be collected, and where legal professional privilege has been disregarded entirely. We are now in a position where clause 2(7) disregards legal privilege in terms of the disclosing or sharing of that information. The Minister may well pray in aid some of the limited protections that are offered in clause 2, but if I run through them I suspect we might conclude they are not quite as strong as the Minister might like to think they are. The explanatory notes state:

“Clause 2(8) confirms that nothing in this section authorises the disclosure of information which would contravene data protection legislation or which is prohibited under the Investigatory Powers Act 2016.”

So far, so good—that is helpful, but very, very narrow. Others may say that it is only specified public authorities who can disclose or share information. They are specified in clause 2(3) as: the Secretary of State, the Minister for the Cabinet Office, a strategic highways company, or a port health authority constituted in a particular way. However, clause 2(9) states:

“A Minister of the Crown may by regulations made by statutory instrument amend this section for the purpose of specifying a public authority in, or removing a public authority from, subsection (3).”

Therefore, any number of other bodies could be added to that list. The other protection one could point to would be to say, “Ah, but they can be added if they are dealing with functions relating to trade.” They include:

“the analysis of the flow of traffic, goods and services...the analysis of the impact, or likely impact, of measures or practices…the design, implementation and operation of such measures”,

and so on. Those three specifics, however, are prefaced by:

“Those functions include, among other things, functions relating to”.

That allows it to be completely open-ended. It is not a comprehensive or complete list. As anyone watching will know, trade is no longer simply about traffic flows, the number of containers, quota and tariffs. It is about a whole range of things: all sorts of regulations, security, immigration and goodness knows what.

The provision is vague and ill-defined. It strikes me as being subject to scope creep by regulation. Fundamentally, it includes clause 2(7)(a) and (b), which is a get out of jail free card insofar as it disapplies the normal protections of information being disclosed, which would be subject in many other circumstances, including in statute, to legal professional privilege. That is actually a problem in the long run, but not necessarily in the short run as it allows us to get over an immediate hurdle where data must be shared. I appreciate that but, in the long run, how on earth can we say that we are a law-abiding country and that we want to adhere to the international legal system—the rule of law internationally—when we have here the disapplication of fundamental rights and protections for people not to have their information, normally subject to legal protection, shared, collected, distributed and disseminated. When Richard Fuller asked whether a private body could act as a public authority, the answer seemed to be that, yes, it could. That means that we could have a private body—a private company of indeterminate origin and a very small book value—doing something on behalf of the public, acting as a public authority, where the normal protection of data, which it may be provided with to fulfil its role, has the normal protections of legal privilege disapplied in statute.

Time is short. I know that this is urgent, I am not stupid, but this is actually serious. We cannot have a Government riding roughshod over legal protection, legal privilege, in this way over such a short period of time just because they have failed to get their ducks in a row and a proper functioning Trade Bill through where everything joins up.

It is not my intention, Dame Rosie, to press amendment 1 to a vote, but I do hope that the Minister takes seriously what I have just said and understands the possible consequences, particularly if it is private bodies acting as public authorities which have disapplied from them everything in terms of protection other than data protection and whether it would breach one other piece of named legislation. That is a serious and bad place to be.

Photo of Christine Jardine Christine Jardine Liberal Democrat Spokesperson (International Trade), Liberal Democrat Spokesperson (Exiting the European Union), Liberal Democrat Spokesperson (Treasury)

I will not take the House’s attention for long. Again, I find myself in agreement. The Liberal Democrats have serious reservations about the original Trade Bill, but we recognise that, through no fault of this House, the Bill has to be expedited. We need some form of data protection and for our authorities be able to use the data effectively, so we are prepared not to go along with this Bill, but to accept that we need it and that we need it by 1 January. We are in this situation simply because the negotiations with the European Union have not gone in the way that the Government had assured us they would and because the situation has not been handled by the UK Government as expertly as we might have hoped.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

I will, if I may, respond to those points. I thank Members for making them and for participating in this Committee debate.

Taking the points in turn, Paul Blomfield asked about instances covered by clause 2(7). As he noted, reference to investigatory powers legislation is absent from the Trade Bill. That is a minor drafting error. I should have made that clear. An equivalent change will be made to the Trade Bill in due course during its passage.

The hon. Gentleman asked a series of more general questions about borders and ports and I will try to answer those as best I can, recognising that almost all of his questions are within the remit of other Departments, rather than the Department for International Trade.

The hon. Gentleman asked how the border operations centre will assist the movement of medicines and vaccines. That will be a key part of the priorities that we have set for the border after 1 January, to ensure that vital goods continue to flow quickly and efficiently. I will give an example of the sort of data that would be within scope for the border operations centre, assuming that the Bill becomes law. The ability to analyse customs declarations, transit declarations, export declarations, safety and security declarations and things such as highways data would, I think, allow medicines and vaccines to be moved more quickly and more efficiently than would otherwise be the case without the data.

The hon. Gentleman asked about the Department for Transport’s new ports fund, and he commented on how popular it had been; I welcome his welcome of the popularity of that fund. In response to his question, I am not aware of any specific ports, but ports are not within the remit of the Department for International Trade directly, so I will pass on his questions to the Department for Transport. We have cross-governmental discussions on ports readiness all the time, in particular between the border and protocol delivery group, the Department for Transport and the Cabinet Office. I can reassure him that those discussions are very frequent. In terms of the number of customs agents recruited, I will have to refer him to the Financial Secretary to the Treasury, in charge of HMRC, to answer his specific point.

I turn to amendment 1, in the name of Stewart Hosie. I would like to briefly set out why clause 2(7) is required and aim to alleviate any concerns he may have. As he rightly said, subsection (7) provides for a general disapplication of existing restrictions on the disclosure of information and applies only to Government Departments and public bodies listed in clause 2; I do not think he doubts for a moment that that is the case. It provides that restrictions on the disclosure of information will not apply when information is disclosed under clause 2(1).

Certain information held by the public authority specified in clause 2 has been identified for building up critical data from which insights may be derived regarding the flow of traffic, goods and services in and out of the United Kingdom. It is anticipated, however, that those insights are, in themselves, likely to highlight other areas where information is needed in order to provide as complete a picture as possible of border flows and activity relating to trade. As Members will be aware, further public bodies may therefore be added to the gateway through the delegated power in clause 2(9). It is not possible at this stage to anticipate what specific restrictions may apply to those additional public bodies, and therefore a general disapplication of restrictions is appropriate, bearing in mind all the other protections on the face of the Bill.

Removing subsection (7) would limit the information capable of being disclosed to the Cabinet Office and would ultimately impact the Government’s ability to mitigate disruption to the flow of traffic, goods and services at the border. I should stress that the Government take the protection of data held by Departments, public bodies and private companies acting on their behalf extremely seriously. As I have said, the gateway is permissive. It does not mandate that bodies listed in clause 2 must share information. Individual Departments and public bodies will need to be satisfied that data sharing is necessary to support functions relating to trade.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade) 4:15, 16 December 2020

If the Minister is right that removing the disapplication would restrict the Government’s ability to collect the data they need, will he tell the Committee what data that is currently protected the Government wish to access or have a hold of that they would not otherwise be able to get?

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

That is a very reasonable question, but I will stress what I said earlier: it is not possible at this stage to anticipate what specific restrictions may apply to the additional public bodies, otherwise we would have put on the face of the Bill which other public bodies could be added in due course. We have not put those on the face of the Bill, but we have said that it is perfectly possible that, during the conduct of these operations, it will become clear that there is other data out there that would assist the Government in ensuring that trade flows well at the border. We want to ensure that those other bodies could quickly come within scope, through the delegated procedures that we have laid out in legislation, and therefore it would not be appropriate to put a general restriction on those bodies. It is best to rely on the overall restrictions in the legislation to ensure that we have robust data protection.

Photo of Richard Fuller Richard Fuller Conservative, North East Bedfordshire

Stewart Hosie has raised an issue that would become more relevant if the sunsetting of this legislation does not take hold. If this legislation sunsets, most of us will be fairly comfortable with it. However, there is an opening here, with the combination of subsections (7) and (11) of clause 2, and subsection (1)—that sets out the purpose—which is that it would be right for Parliament to have some review of the application of this in practice. Can my right hon. Friend give an assurance, if there is no sunset within six months, that he will come back to the House to reassure us that those potential areas of concern have not been breached?

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade

My hon. Friend makes a very good point. I must say that if the Trade Bill has not received Royal Assent within six months, I will certainly be under scrutiny in this House, for a piece of legislation that has now been with us for three and a half years. I can give him that assurance. Obviously, the intention is that this will sunset when the Trade Bill receives Royal Assent. We do think that the overall restrictions on the use of the data, and the discretionary nature of the power, are appropriate in this place. But it is also quite right for the Government to make allowance for the fact that it may come to light that extra data will be needed, and we do not want to have what might be viewed as unnecessary restrictions on the use of that data being added now as it becomes useful to us during the course of January. Our intention, however, is that the legislation should sunset as early as possible, with the Trade Bill receiving Royal Assent.

Clause 2(8) makes explicit the requirement for any data sharing conducted under the proposed gateway to comply with data protection legislation, including GDPR. Government Departments sharing data under this gateway will also be expected to comply with robust data governance practices, including completing data protection impact assessments and ensuring that data sharing agreements are in place. Furthermore, clause 3 creates an offence for the disclosure of any information in contravention of clause 2 where a person’s identity is specified in the disclosure or can be deduced from it—the point raised by my hon. Friend Richard Fuller.

I hope my remarks have reassured the hon. Member for Dundee East on both the importance of clause 2(7) and the steps that the Government have taken to ensure the safeguards are in place where data is shared under this gateway. I hope that his intention is not to press his amendment. I urge the Committee to support clauses 1 to 6.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 6 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

Motion made, and Question proposed, That the Bill be now read the Third time.—(Greg Hands.)

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade) 4:24, 16 December 2020

I would be delighted to take this opportunity to make the briefest of Third Reading speeches and to return to a theme that has typified this entire debate. Notwithstanding the need to be able to share data or to have the legal basis on which to do so, it is completely wrong to rush this through with potentially hours, or possibly a day or so, before the House rises for recess and barely a fortnight before the full horrors of Brexit come on to the British people and business in this country.

This is a lesson for us all in the future: there must be a better way of dealing with technical matters, even ones that come up urgently, than today’s very short and expedited debate. I hope that, as the Minister said in Committee, the Trade Bill gets its Royal Assent soon enough that the dangers implicit in this—temporary, I hope—legislation with a long sunset clause do not come to fruition.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Photo of Christine Jardine Christine Jardine Liberal Democrat Spokesperson (International Trade), Liberal Democrat Spokesperson (Exiting the European Union), Liberal Democrat Spokesperson (Treasury)

On a point of order, Madam Deputy Speaker, I thank you for your indulgence and your patience, and I ask your advice on a matter that has come to my attention today that is of great importance not only to my constituent, Murray Gray, but to a number of constituents, mostly children, who are currently in receipt of private prescriptions for medicinal cannabis. I have had confirmation today that the Department of Health and Social Care says that those prescriptions will not be permissible after 1 January, so a number of patients will find themselves without medication. I wondered whether there is some way that could be raised as an urgent matter to be discussed by the House, and that we could hear from the Department, before the House rises for recess.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

I thank the hon. Lady for that point of order. It is not really a matter for the Chair, but she is a very experienced Member of the House and I am sure she will talk to the Table Office about the different ways she might raise this matter, perhaps through written questions or directly with Ministers. Obviously, the Treasury Bench has heard what she has to say, so I trust that she will do that as quickly as she can. It is also business questions tomorrow, and she may wish to raise it there.

I will now suspend the House for three minutes in order to allow the safe entry and exit of right hon. and hon. Members.

Sitting suspended.