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Clause 5, page 3, line 37, at end insert--

'(1A) A data controller falling within subsection (1)(b) must nominate for the purposes of this Act a representative established in the United Kingdom.'.

Page 3, line 38, leave out 'subsection (1)' and insert 'subsections (1) and (1A)'.

Lord Williams of Mostyn: My Lords, I beg to move that this House do agree with the Commons in their Amendments Nos. 5 and 6. I have already spoken to these amendments.

Moved, That the House do agree with the Commons in their Amendments Nos. 5 and 6.--(Lord Williams of Mostyn.)

On Question, Motion agreed to.



Clause 7, page 4, line 41, leave out 'section 8' and insert 'sections 8 and (Application of section 7 where data controller is credit reference agency)'.

Lord Falconer of Thoroton: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7. I shall speak also to the other amendments in this group. One of the purposes of the

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Bill is to consolidate into the general data protection regime the special arrangements which apply to personal data held by credit reference agencies under the Consumer Credit Act 1974. This was dealt with in Clauses 7(7) and 59 of the Bill as it left this House. But those provisions did not completely achieve the desired effect. The purpose of this set of amendments is to bring the arrangements in the Bill more closely into line with the current arrangements under the 1974 Act.

The key provision is the new clause added by Amendment No. 18. Subsection (1) provides that the subject access under Clause 7 has effect subject to the new clause when the data controller is a credit reference agency. The 1974 Act gives individuals a subject access right to credit reference agency information. The permitted turn-round time is quicker and the fee is cheaper than those under data protection legislation. Given the large number of subject access requests to credit reference agencies--there are about one million a year--we think the revised approach is better. Subsection (2) of the new clause provides for subject access requests to credit reference agencies to be dealt with on this "quick and cheap" basis unless the data subject request indicates otherwise. Clause 7(7) as it left this House would have had the opposite effect.

Subsection (3) of the new clause preserves the duty on controllers under the 1974 Act to inform the data subjects of their rights under Section 159 and allows for the addition by order of a duty on controllers also to give information about rights under the Bill. The remaining amendments in the group make the necessary consequential amendments required by the addition of the new clause and make transitional arrangements. The purpose is effectively to maintain the position as it now is under the Consumer Credit Act 1974 until 24th October 2007 when the Bill's regime must apply in full.

Moved, That the House do agree with the Commons in their Amendment No. 7.--(Lord Falconer of Thoroton.)

Viscount Astor: My Lords, in another place there was significant debate on these issues. There is concern in the credit industry that this requirement will have a detrimental effect on small businesses or individuals trading as partnership or sole traders. There is a need to ensure that credit reference agencies have correct information, but as the Bill is drafted a credit agency may ask for a reference from a bank, insurance company or anybody who trades with that individual and the response may be that the business is not worth the candle and it should not be lent any money. If the credit agency turns down the applicant, the latter has the right to see the information that is available. As a result no one will want to provide what they consider to be accurate information because of the risk of being sued if it turns out to be wrong. In effect people will say that they simply cannot comment and it will restrict the flow of information.

The Minister in another place said that the Government would keep this under review and consult the credit industry and small businesses. This is an important issue. I accept that the Government have

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tabled this amendment for the very best of motives. However, it may operate in entirely the wrong way. Can the Minister go a little further than his colleague in another place and provide the House with some reassurance that the Government will, on a regular basis, meet the industry and will be prepared to return to Parliament to make changes if it is found that the provision is not working?

Lord Falconer of Thoroton: My Lords, I am grateful for the points raised by the noble Viscount. The Government are aware of the concerns expressed by the credit industry on this issue and the fact that the identity of companies who have given references in certain circumstances may not be protected from identification by the data subject. As the noble Viscount said, undertakings were given in another place that the matter would be kept under review. I repeat that the Government will keep the matter under review and look at it again in about three years in consultation with the credit reference industry and small businesses generally. I very much hope that that goes a little further as the noble Viscount requested.

Viscount Astor: My Lords, I am grateful to the Minister.

On Question, Motion agreed to.



Clause 7, page 5, line 15, after 'subject' insert 'for the purpose of evaluating matters relating to him such as, for example, his performance at work, his creditworthiness, his reliability or his conduct,'.

Lord Williams of Mostyn: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 8. I shall speak also to the other numerous amendments in the group. This Bill is technical in nature and inter-related in structure. We have introduced a number of relatively minor amendments with the aim of making sure that the technical effect of the Bill is as intended. That is the nature of the amendments in this group. Individually they do not make changes of any great substance.

Amendment No. 104 is part of the Gaskin grouping, which we have already discussed, but it covers a non-Gaskin point. The amendment adds three new provisions to those listed in Clause 69(2) of the Bill which will come into force on Royal Assent. Two of those provisions, new paragraphs (ef) and (eg), relate to the Gaskin group. New paragraph (ee) relates to the commissioner's powers. It is required to ensure, for example, that the registrar can exercise the commissioner's functions in relation to notification regulations in advance of Clause 6(1) coming into force. The preparation of those regulations will be an important part of the next phase of this legislation if, as it is hoped, the Bill progresses shortly to its enactment.

The Bill provides for a large amount of subordinate legislation--altogether some 40 instruments. Much of this will need to be in place before we can implement the regime required by the data protection directive. Work has begun on subordinate legislation but a good

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deal remains to be done including in some cases consultation with interested parties. We do not want to rush through the work to an over-tight schedule. Reluctantly, we have decided to accept that 24th October 1998 is no longer a realistic target date for implementation of the new regime. My honourable friend Mr. Howarth indicated as much recently in another place.

I cannot give the House a firm indication today of a revised implementation date. We intend to make all good speed. We want to bring the Bill into force at the earliest realistic opportunity. We shall indicate a date as soon as we can. I do not expect it to be before the end of this calendar year, but I hope it will not be long after that. I beg to move.

Moved, That the House do agree with the Commons in their Amendment No. 8.--(Lord Williams of Mostyn.)

Viscount Astor: My Lords, I should like to put to the Minister a question relating to Clause 8(5) which deals with trade secrets. This matter was debated in your Lordships' House. The industry and the CBI were, and are still, concerned about the Government's view of what constitutes a trade secret. Can the Minister deal with that so that we have on the record of this House the view of the Government which will make it easier for industry when considering these issues?

Lord Williams of Mostyn: My Lords, I am grateful for the noble Viscount's question and his wholly co-operative attitude throughout all stages of the Bill. It has been very important to discuss these matters as fully as we can particularly with those organisations with legitimate trade and business concerns.

In Clause 8(5) "trade secret" carries its ordinary meaning. Whether particular material used in automated decision making--which I believe to be the purpose of this question--is covered depends on the circumstances of the particular case. Material that is commercially available and is used by more than one organisation is unlikely to be covered by the provision. It is probably wide enough to cover material prepared in confidence by a commercial organisation for the purpose of its business which is not in the public domain and which could, if disclosed, prejudice the organisation's business.

There was a particular concern which I know was expressed about algorithms which some organisations use to determine whether to meet individual's requests for a service of some kind; for instance, a credit scoring system used to determine whether or not to give people credit. The concern expressed--the noble Lord is right--is that if the detail of factors used to make those decisions were to be disclosed those seeking credit would be able to massage the information they provide and undermine the system. That is a legitimate concern in the Government's view. Therefore on 3rd June this year Home Office and DTI officials met CBI representatives to discuss that concern. Officials explained that reference to "trade secret" was wide enough to meet those concerns. I believe that the CBI

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accepted that, but indicated at that stage that it would like the Government's view put on public record, which is what I am happy to do.

11.30 a.m.

Lord Renton: My Lords, I feel obliged to draw attention to another drafting point. It is on Amendment No. 8 which amends Clause 7(1)(d) which is a fairly long subsection. Paragraph (d) runs to more than four lines. Another three lines will be inserted in it. When one reads the paragraph, as amended, it is not easy to follow, and it becomes, I am sorry to have to say, a clumsy piece of drafting. At this stage, of course, with so many Commons amendments being considered, I realise there is nothing that the Government can do about this problem. If we find that there is an awkward piece of drafting, we should draw attention to it just to alert the parliamentary counsel to the fact that that sort of thing should be avoided in the future. This is a clumsy piece of drafting.

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