§ 3.1 p.m.
§ Earl Ferrers rose to move, That the draft order laid before the House on 22nd June be approved [4th Report from the Joint Committee].
§ The noble Earl said: My Lords, the purpose of the Data Protection Act 1984 is to regulate how personal data which are held on computer are used. It sets out the principles of good data handling practice with which data users must comply. In particular, it gives people the right to find out if a data user holds any information about them and, if so, what.
§ The order restricts a person's right of access to data about him held by a new regulator—the Taurus operator. Taurus is the Stock Exchange's paperless share transfer system. It will do away with share certificates and with long delays in transferring stock from one person to another.
§ Many of your Lordships may remember the difficulties which were caused by backlogs of paperwork just before the stock market crash of 1987. Taurus is a computerised system, and it is one of the Stock Exchange's new innovations. The transfer of the ownership of shares will not now have to depend on the physical movement of stock transfer forms and of certificates. Electronic messages will replace both share certificates and transfer forms. There is to be a 377 Taurus operator. This will be the Stock Exchange. The operator will have the responsibility of vetting and admitting the participants in Taurus, which will be banks, brokers and other financial intermediaries.
§ The operator—the Stock Exchange—will have to keep data on those who apply to use Taurus, including information about their financial standing and technical competence and about whether their directors and employees are fit and proper people to use the system. The Stock Exchange will also have to continue to monitor those who use the system in order to ensure that they are continuing to abide by the regulations and the rules.
§ The order before your Lordships today prevents those who use the system from gaining access to some data about them which are held by the operator—the Stock Exchange. The data which are held by the Taurus operator may well include information about suspected dishonesty, incompetence or malpractice. If a person were to have access to this kind of data, it might allow him to cover his tracks or otherwise to thwart an investigation.
§ The Stock Exchange has already started consulta-tion on the draft rules which it will use to assess those who wish to use the system. Once the comments have been received and considered, the Stock Exchange will ask Treasury Ministers to approve the rules, as is required by the regulations.
§ The order is a small one but it is a necessary part of regulating the paperless share transfer system once it comes into operation. The Data Protection Registrar has been consulted, as is required by the Act, and he is content. I thought that noble Lords would not willingly wish to be wearied with technicalities from me on the last day of term and so be further delayed from attaching themselves to their buckets and spades. Therefore, with this more truncated exposition of the order than I would normally wish to give, and solely in deference to your Lordships' understandable intellectual preferences, I commend the order to the House.
§ Moved, That the draft order laid before the House on 22nd June be approved [4th Report from the Joint Committee].—(Earl Ferrers.)
§ Lord Carmichael of Kelvingrove
My Lords, I am most grateful to the Minister for his full explanation of the order. I think that the question of the buckets and spades is less important than finding where to use them nowadays along our coastline.
In general, we are broadly in favour of the order, although there are certain misgivings which were raised in another place; namely, that the freedom of the individual could be restricted because of the lack of staff and resources at the office of the Data Protection Register. Of course that office is supposed to act as consultant and investigator of complaints raised by the public.
In another place, the Minister, Mr. Peter Lloyd, said that it was thought that there were enough resources at the office for the task to be completed. Despite the Minister's statement, which was really hopeful rather than authoritative, I feel that we should have the assurance from the Government that they are aware that there could be a stage where a shortfall of 378 staff could cause problems and that the individual could then be restricted in his ability to find out exactly where he stood in particular instances. But I do not know whether the Minister can answer at this point. I do not really expect him to. However, it must be stressed again that because of the new system, staff shortages or lack of staff training, a hold-up could arise and people could be restricted in their inquiries. Having said that, in the knowledge that the Minister will certainly report back on the matter, we certainly give the draft order our approval.
My Lords, I am grateful to the noble Lord for saying that he is on the whole supportive of the order. Taurus will be operated by the Stock Exchange. Those who are participants in the process will actually he charged a fee and the fee will be governed by the number of people who are involved in operating the system. I have no reason to believe that there will not be sufficient people to do so; indeed, I have every confidence that there will be.
§ On Question, Motion agreed to.