With promises to place start ups at the heart of their new agenda the majority of the UK tech community rejoiced last week as the Conservatives returned to Government. Yet in order to placate the right wing of the party, there are some policy concerns – particularly when it comes to surveillance – which may hinder early business.
The previous Coalition government presided over a UK tech revolution, due in no small part to some of the most startup friendly policies in decades. The introduction of the Seed Enterprise Investment Scheme, Entrepreneurs Visas, Enterprise Allowance and many other policies have persuaded an epic proportion of tech entrepreneurs and investors to choose the UK. Oxford Economics expects London’s growing tech sector to create a bumper 46,000 new jobs in the next 10 years alone and add £12bn to the UK economy.
Yet this carefully nurtured achievement may be in danger of being undone by a raft of plans announced just days after election victory. The scrapping of the Human Rights Act and Draft Communications Data Bill are just two early examples of the potential of Conservative policy to unintentionally squeeze business growth whilst pursuing increased surveillance power. The Bill, derided by its opponents as the Snoopers’ Charter, is back on the agenda of Home Secretary, Theresa May. If it returns, it could force British internet service providers to keep large amounts of data on their customers including online conversations, social media activity, calls and text messages, and to make that information available to the government and security services. The Lib Dems previously blocked the passage of the Bill, but this time round numbers in the House dictate that the Conservatives’ erstwhile coalition partners will be unable to repeat their performance.
It has been noted that Theresa May has already expanded data retention powers through the Counter Terrorism and Security Act, which requires ISPs and mobile phone providers to retain more data than they previously were (to allow for IP matching), and supply it to authorities upon request. But the Conservatives have been accused by some of going further. In their manifesto, rather than just reviving the original terms of the Communications Data Bill, they state: “We will keep up to date the ability of the police and security services to intercept communications data. Our new communications data legislation will strengthen our ability to disrupt terrorist plots, criminal networks and organised child grooming gangs, even as technology develops”. Securocrats will be reassured by the inclusion of those final words, as commentators have suggested that the Government will seek to frame the legislation broadly enough to satisfy later advances in communication without the need for further law. Observers, however, suggest that the civil libertarian wing of the party, led by former leadership contender David Davis (who backed Nick Clegg’s opposition to the original Bill), may still be minded to block this legislation once again.
Unsurprisingly, industry has responded forcefully, claiming that such measures would present a significant operational burden for new businesses; requiring them to alter their technical structures and create systems to collect, standardise and store significant amounts of data. They argue that additional compliance costs could be crippling, especially since any system will have to comply with Home Office specifications. Industry is concerned that although the Home Office previously indicated that ‘small’ businesses may be exempt, no qualifying definition was provided. Such uncertainty could be problematic, especially for tech businesses that frequently have a handful of employees yet thousands of users.
Of greater concern to industry, is that the Bill places UK business in the unsatisfactory position of needing to comply with much stricter sanctions for data protection breaches which are coming out the EU; whilst also forcing business to collect data which they never wanted or needed to in the first place – thereby increasing their liability for loss with no obvious business advantage.
But the damage could go further than simple liability or compliance costs, which may or may not be reimbursed. The very anatomy of digital business is based on the mechanisms by which they handle their data. Some have argued that for tech businesses, standardisation always comes at the cost of innovation and more importantly, competitive advantage. The Tory manifesto’s commitment to backing the ‘technology revolution’ and making Britain the ‘technology centre of Europe’ is commendable but potentially incompatible with the burdens which increased data surveillance entails. But this isn’t an argument against the surveillance – the aims of the scheme of laudable. Indeed, who could argue against keeping the public safe? But industry argues that any regime needs to be workable, proportionate and balance the requirements of law enforcement against the cost and burden placed upon industry.
Deciding to start a business means taking a risk and making a decision to invest a significant amount of time and resource in order to develop a unique offering. The Conservatives have always understood this and championed those who take that risk, and develop the next new product or expand their client base. The impetus is, therefore, on UK tech to not only ensure that this remains at the heart of the Conservative agenda; but to explain to Government what digital business do and how they actually operate – only then can Government deliver workable and proportionate legislation. The Government has done a great deal to build up the UK’s reputation as a great place to start a tech business, but such proposals may risk strong-arming UK startups into considering other rapidly developing clusters across Europe and the US. Not only taking their talent, innovation, resource and revenues with them but also undoing a five year growth record of which the Conservatives are so proud.