My Lords, we announced at Second Reading our intention to introduce into the Bill a new provision on Midata. There are three elements to this new provision. The first relates to the supply of customer data, the second relates to the enforcement regime for the supply of customer data and the third is supplemental and explains how regulations would be introduced. I will explain each of these in more detail, but let me first say a little about what we are seeking to achieve by these amendments.
Midata is currently a voluntary programme led by an independent chair, Professor Nigel Shadbolt. Its aim is to encourage suppliers of goods and services to provide to their customers, upon request, their personal historic transaction and/or consumption data in an electronic machine-readable format. The provision we are seeking to introduce into this Bill is a power to impose a duty on business to supply certain data upon request from a consumer. Let me be clear that business already holds this information electronically and is simply being asked to give it back to consumers.
Let me reassure the Committee that the Government remain keen to see businesses continue to engage with the voluntary programme so that quick progress can be made without the need to resort to regulation. What we want, however, is flexibility to give the Midata programme legislative backing, if it is appropriate to do so, for the benefit of consumers and business in this area of increasing economic potential for the UK.
Midata gives consumers more control and access to their personal and transaction data, and UK businesses will be able to take advantage of new opportunities as potential developments in the data market continue to emerge. There are two main benefits from Midata. First, services which analyse and make sense of consumers’ transaction data will emerge and will help people to manage their spending much more effectively, putting them in a stronger position and better able to deal with the increased cost of living.
How valuable could that be? The company, billmonitor, estimates that 74% of UK mobile users with a contract spend an average of £171 more each than they need to every year, equating to almost £6 billion per year in unnecessary costs. A better alignment between consumer need and purchasing will enhance competition and this in turn will reward firms offering the best value products in particular markets, allowing them to win more customers, make profits and better utilise resources.
Secondly, Midata will act as a platform for innovation and will help to strengthen the competitive digital economy in the UK. It will lead to the creation of new businesses which will help people to manage, interpret and interact with their consumption data in many innovative ways. So what might people do? Services such as Money Dashboard or lovemoney already provide people with an instant, true view of their finances in one place, which helps individuals aggregate information about their money from multiple different financial services providers to gain a rounded picture of their financial affairs but are hampered by constraints in
accessing the data. At present, consumers cannot always receive this information through existing mechanisms, or they may struggle to find it in a format that can be easily reused.
Giving consumers the right to obtain their own transaction and consumption data in portable electronic format will make it easier for them to use tools such as those I have described. They would simply be able to plug their past transaction or consumption data in at the press of a button. Automating the provision of data will also make such services cheaper to provide while making it easier for companies to provide innovative new services which can make use of the data. In this way, Midata can help turn a niche market for sophisticated money management tools into a mass market.
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Let me give noble Lords another example. Green Button in the USA is providing approximately 11 million households with secure access to their energy data with an online green button, with 25 million more to have access in the near future. The VELObill service helps consumers set energy consumption targets and make the changes they need to their properties or to their own behaviour to achieve these targets.
By linking this kind of service to money management services such as Money Dashboard, consumers could make more informed decisions. This is where Midata could be really powerful in providing consumers with genuinely useful insights into their consumption and spending behaviour. The UK needs to make sure that it is competing in services such as this. Big brands are beginning to see the value of releasing data back to their customers.
In response to the Midata programme, all the big energy providers are also making their data downloadable. Some of the bigger banks also provide this facility already. The O2 mobile phone company will launch a service later this year to allow its customers access to data about their mobile phone usage. Tesco has recently announced Clubcard Play, which will allow customers to view their shopping habits and make the Clubcard scheme more transparent.
On Amendment 58C, consultation over the summer demonstrated widespread support for the aims of Midata. Responses from individuals and consumer groups were particularly positive about creating a new right to receive data electronically. Turning to the detail, Subsection 2 of the proposed new clause focuses on certain core sectors—energy, mobile phones, current accounts and credit cards—expressly identifying these sectors as being potentially subject to future regulations. These sectors have been identified through the consultation process as holding data of the most value to consumers. For example, businesses in these sectors will often hold information about a stream of ongoing transactions that will be particularly valuable to consumers but for which price comparison is relatively complex. The power would allow other sectors to be covered by the regulations, if appropriate.
I reassure noble Lords that micro-businesses—that is, businesses with fewer than 10 employees—will be exempted from any duty to provide electronic data on request. There will also be flexibility to allow less
stringent compliance requirements for businesses and sectors that might otherwise struggle to comply with a data request. This is in keeping with the Government’s general approach to regulation. We do, however, want to keep open the possibility that micro-businesses will be given the right to request their transaction or consumption data in a portable electronic format in addition to individual consumers having this right.
Amendment 58D provides a power to introduce enforcement provisions, including on designation of enforcers, sanctions for non-compliance and powers on enforcers, such as information gathering powers, to enable them to perform their functions effectively. The intention is that the Information Commissioner would be designated as the lead enforcer, given the commissioner’s role as guardian of data access issues generally. Businesses and consumers are used to dealing with that office on matters relating to personal data and this was the preferred approach for most respondents to the consultation. However, there would also be flexibility so that alternative arrangements could be made where appropriate: for example, giving an enhanced role to sector regulators. Regulations could also give consumers the right to go to court themselves.
Amendment 58E specifies that any regulations which cover only the energy, mobile phones, current accounts and credit cards sectors will be subject to the negative resolution procedure while any regulations which extend beyond those sectors will be subject to the enhanced scrutiny of the affirmative resolution procedure. I beg to move Amendment 58C.