techUK warns regulatory divergence from the European Union on data protection would make it more difficult for Britain to lead Europe’s IT sector
The UK’s leading tech industry lobby group, techUK, has warned the government against seeking to do away with European Union data protection regulations after exit from the EU, saying British companies have already invested heavily in compliance.
The General Data Protection Regulation (GDPR) is set to come into force on 25 May, and a study last week found British companies have spent an average of £1.3 million on their preparations for it.
In an open letter to international trade secretary Liam Fox, techUK chief executive Julian David said some ministers were pushing for divergence from the EU’s data protection regime on the “misunderstanding” it would aid firms and start-ups in the UK’s IT sector by allowing for more flexible trade agreements.
“We would caution against the misunderstanding that adherence to the EU data protection regime is incompatible with securing high-quality trade agreements,” David wrote.
Tech leadership ‘opportunity’
On the contrary, regulatory differences would make it more difficult for the UK to continue to lead Europe’s IT economy, David said.
“Diverging from EU data protection rules in domestic law post-Brexit would undermine this opportunity,” he wrote.
techUK said members had made it clear they did not wish to diverge from the GDPR after exit from the EU, having already made significant preparations for compliance.
The letter was co-signed by Dean Garfield, chief executive of the techUK’s international affiliate, the ITI. techUK represents nearly 1,000 UK tech companies, including several in the FTSE 100.
In response, the Department for International Trade referred to remarks by Fox from last August in which he introduced a UK position paper that he said would give businesses “certainty” on data flows.
“Secure data flows between the UK and EU are crucial for our economic prosperity and these proposals give certainty to businesses and consumers that high protection standards will continue,” Fox said at the time.
The UK handles 11.5 percent of worldwide data flows, in part due to its geographic location between continental Europe and the US.
It leads Europe in digital start-ups, with 43 percent of all large EU digital companies having started in the UK, and has a £7bn financial tech industry that employs 60,000 people.
techUK said it welcomed comments by Brexit secretary David Davis, who on Tuesday morning told an audience of business leaders in Vienna he did not expect the UK to be “plunged into a Mad Max-style world borrowed from dystopian fiction” after Brexit.
UK firms prepare for GDPR
On the contrary, the UK would continue to support the EU’s regulatory environment, much of which it helped to design, Davis said, adding Britain is “a leading proponent of the rules-based international system”.
“We welcome David Davis’ commitment to maintaining high regulatory standards after the UK’s departure from the EU,” said deputy techUK chief executive Antony Walker in a statement. “However, delivery of his agenda will require realism on the practical compromises that will need to be struck with the EU.”
A study released last week found more than two-thirds of businesses worldwide, or 72 percent, felt they were prepared for GDPR.
The report, prepared by Coleman Parkes on behalf of EfficientIP, based on a survey of more than 1,000 companies worldwide, found companies had spent an average of £1,145,000 on GDPR compliance, with UK firms having invested above the average, at £1.3m.
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