The Government is ploughing ahead with its new Data Protection and Digital Information Bill. It claims the changes will unlock £4.7bn over the next 10 years. However, the home delivery expert ParcelHero fears it could actually lose the economy billions, if the EU decides the UK no longer meets its data protection standards.
The e-commerce home delivery expert ParcelHero says that the Government’s go-it-alone Data Protection and Digital Information Bill may not be the Brexit win that the Government claims. It fears that, despite Government predictions that it will unlock £4.7bn in savings for the UK economy over the next decade, we will pay a hefty price in terms of new costs and lost EU sales in services and goods.
ParcelHero warns that the EU may decide that the UK’s new data regulations, if they are approved by Parliament, may no longer adequately mirror the terms of Europe’s GDPR (General Data Protection Regulation) legislation. That could cost UK companies billions in terms of lost sales and contracts, or increased compliance costs in attempting to meet two separate data regulation regimes.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘The Government claims that the UK’s proposed, so-called “common sense” version of the EU’s GDPR regulations will save the economy £4.7bn over ten years. However, if the EU decides that Britain’s new data protection rules diverge so far from its own that they are no longer adequate, it’s likely that British businesses would lose billions instead.
‘The Government’s own figures reveal that the UK’s digitally delivered services make up 73.2% of all services exported to EU countries. The latest ONS report on Digital Trade shows that the UK’s digital financial services to the EU were worth £21bn in 2020. Likewise, our digital consulting services to the EU were worth £18.3bn and our digital telecoms & information services to the EU were worth £10.6bn. Remember, those figures refer to just one year – 2020.
‘Many of these services may involve sharing individuals’ data for monitoring, analysis, marketing or to improve customer experiences, providing this meets the GDPR’s legitimate interest criteria. Should the UK’s data protection regulations no longer be deemed adequate by the EU, the cost of losing access to the EU services market is almost unthinkable.
‘Similarly, Cross-Border Commerce Europe, the platform that stimulates international e-commerce in Europe, states that the UK’s online trade with its EU neighbours was worth €29bn (around £25bn) in 2021. That’s despite a 12% fall in turnover compared to 2019, following Brexit. Currently, to provide goods or services, a UK company can legally receive customer information, such as names and addresses, from an EU company. This is providing all GDPR regulations have been met. If the UK’s legislation is no longer deemed adequate, the EU-based company would no longer be able to share this information, potentially disrupting UK sellers’ access to EU marketplaces.
‘When she launched the bill in March, the Science, Innovation and Technology Secretary, Michelle Donelan, said: “Our system will be easier to understand, easier to comply with, and take advantage of the many opportunities of post-Brexit Britain. No longer will our businesses and citizens have to tangle themselves around the barrier-based European GDPR.”
‘Despite this claim, the Government also stated its new bill will “ensure our new regime maintains data adequacy with the EU”. However, even the UK Information Commissioner’s office, which currently oversees these regulations, admits the decision about whether the new rules meet EU standards is not for the UK Government to decide. It acknowledges: “The EU Commission must monitor developments in the UK on an ongoing basis to ensure that the UK continues to provide an ‘essentially equivalent’ level of data protection. The Commission can amend, suspend, or repeal the decisions if issues cannot be resolved.”
‘That could be expensive. As the international legal expert HCR Law states: “If the European Commission makes any negative decision regarding the adequacy of the UK’s reformed standards, the flow of personal data between the two jurisdictions is like to face obstructions, which would be especially costly for businesses to overcome.”
‘Just how costly? Back in 2020, a report by the New Economics Foundation found that, should the UK fall outside the adequacy agreement with the European Commission, it would cost British businesses between £1bn and £1.6bn, purely in terms of compliance.
‘The report said: ‘This extra cost stems from the additional compliance obligations – such as setting up standard contractual clauses (SCCs) – on companies that want to continue transferring data from the EU to the UK. We believe our modelling is a relatively conservative estimate as it is underpinned by moderate assumptions about the firm-level cost and number of companies affected.”
‘Remember, that’s just the cost of extra compliance, and doesn’t reflect lost contracts and sales because of the upheaval.
‘The UK’s e-commerce exporters are also facing numerous further hurdles, beyond compliance regulations. For example, exporters using too much packaging when shipping to the EU and beyond could be running up unnecessary charges. That’s because international carriers use a measurement called “volumetric weight” to calculate the size of a package. To cut through this confusion, ParcelHero’s new volumetric tool not only calculates the typical volumetric weight but, if you enter the specific carrier and service you are thinking of booking, it will calculate the exact volumetric weight you will be billed for. To check the new, easy-to-use tool, see https://www.parcelhero.com/en-gb/support/volumetric-weight-calculator