COMMONS AMENDMENT (Hansard, 10 July 1998)

§ Lord Falconer of Thoroton
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7. I shall speak also to the other amendments in this group. One of the purposes of the 1482 Bill is to consolidate into the general data protection regime the special arrangements which apply to personal data held by credit reference agencies under the Consumer Credit Act 1974. This was dealt with in Clauses 7(7) and 59 of the Bill as it left this House. But those provisions did not completely achieve the desired effect. The purpose of this set of amendments is to bring the arrangements in the Bill more closely into line with the current arrangements under the 1974 Act.
The key provision is the new clause added by Amendment No. 18. Subsection (1) provides that the subject access under Clause 7 has effect subject to the new clause when the data controller is a credit reference agency. The 1974 Act gives individuals a subject access right to credit reference agency information. The permitted turn-round time is quicker and the fee is cheaper than those under data protection legislation. Given the large number of subject access requests to credit reference agencies—there are about one million a year—we think the revised approach is better. Subsection (2) of the new clause provides for subject access requests to credit reference agencies to be dealt with on this "quick and cheap" basis unless the data subject request indicates otherwise. Clause 7(7) as it left this House would have had the opposite effect.
Subsection (3) of the new clause preserves the duty on controllers under the 1974 Act to inform the data subjects of their rights under Section 159 and allows for the addition by order of a duty on controllers also to give information about rights under the Bill. The remaining amendments in the group make the necessary consequential amendments required by the addition of the new clause and make transitional arrangements. The purpose is effectively to maintain the position as it now is under the Consumer Credit Act 1974 until 24th October 2007 when the Bill's regime must apply in full.

Viscount Astor
My Lords, in another place there was significant debate on these issues. There is concern in the credit industry that this requirement will have a detrimental effect on small businesses or individuals trading as partnership or sole traders. There is a need to ensure that credit reference agencies have correct information, but as the Bill is drafted a credit agency may ask for a reference from a bank, insurance company or anybody who trades with that individual and the response may be that the business is not worth the candle and it should not be lent any money. If the credit agency turns down the applicant, the latter has the right to see the information that is available. As a result no one will want to provide what they consider to be accurate information because of the risk of being sued if it turns out to be wrong. In effect people will say that they simply cannot comment and it will restrict the flow of information.
The Minister in another place said that the Government would keep this under review and consult the credit industry and small businesses. This is an important issue. I accept that the Government have 1483 tabled this amendment for the very best of motives. However, it may operate in entirely the wrong way. Can the Minister go a little further than his colleague in another place and provide the House with some reassurance that the Government will, on a regular basis, meet the industry and will be prepared to return to Parliament to make changes if it is found that the provision is not working?

§ Lord Falconer of Thoroton
My Lords, I am grateful for the points raised by the noble Viscount. The Government are aware of the concerns expressed by the credit industry on this issue and the fact that the identity of companies who have given references in certain circumstances may not be protected from identification by the data subject. As the noble Viscount said, undertakings were given in another place that the matter would be kept under review. I repeat that the Government will keep the matter under review and look at it again in about three years in consultation with the credit reference industry and small businesses generally. I very much hope that that goes a little further as the noble Viscount requested.

Viscount Astor
My Lords, I am grateful to the Minister.