Govt urged to pass data reforms 'for the sake of SMEs'

The DMA is calling on the Government to get the data protection reforms through Parliament “without hesitation”, citing a new study which shows the vast majority of SMEs want UK GDPR overhauled because it is stunting their marketing operations.

The report, “Data Horizons: How UK SMEs and Consumers View the Future of Privacy Regulation”, comes amid industry concerns that the future of the Data Protection & Digital Information Bill (No 2) is in the balance due to a looming election.

With the current Parliament now in its fourth year, the Government has until December 2024 to call a General Election. However, speculation is mounting that Prime Minister Rishi Sunak could go to the country as early as next May, although others suggest he might wait until November to see if the party recovers in the opinion polls.

The DMA, which originally opposed many elements of the Bill before it was asked to contribute to a revised version, maintains small business owners want and need regulation that is fit for purpose to help the digital economy grow and evolve.

The study reveals that two thirds of SMEs (66%) support updated and modernised data privacy regulation to address inherent challenges of GDPR.

In addition, most SMEs (74%) agree that the processing of personal data is vital to the growth and success of their business yet nearly half (48%) believe GDPR introduced unnecessary bureaucracy to businesses, and well over a third (37%) say it simply does not work for small businesses.

Meanwhile, just over two-fifths (43%) claim their business marketing operations have been stunted by GDPR and nearly a third (31%) claim GDPR has caused them to get rid of a lot of their customer database.

The DMA says one of the most significant reforms is the greater clarity offered on what constitutes the use of legitimate interest in marketing activity, a move that it claims will encourage more businesses to use it as a lawful basis for data processing where appropriate.

It believes many businesses did not have confidence they could rely on legitimate interest as the main legal basis for data collection for marketing – thereby reducing opportunities to attract new customers and to know their existing customers better.

DMA chief executive Chris Combemale said: “Most SMEs seek reforms to UK data privacy legislation that makes it easier to attract new customers and retain existing ones.

“This is key to unlocking business growth and realising the full potential of the UK digital economy; by using customer insights to simultaneously improve the productivity of businesses and save time for customers through personalised services.

“Reforms within the DPDI Bill will create a better balance between innovation and privacy, maintaining GDPR’s high levels of data protection while enabling scientific and technological innovation that will power the future economy.

“There is strong support for these opportunities across the UK’s SME community, so we would urge UK Parliament to complete passage without hesitation.”

Even so, critics refuse to be silenced, with the Open Rights Group recently stepping up its attack by claiming the DPDI favours big business as it erodes consumers’ rights to find out what data is held on them; others claim the reforms do not go far enough.

The Bill is currently at the report stage but the date for the all-important Third Reading in Parliament has not been set. If and when this is completed the Bill will pass to the Lords. Once both Houses of Parliament are agreed, the Bill receives Royal Assent and becomes law.