Retaining EU Adequacy Crucial to UK Economy: Lawmaker

The U.K. government should work ahead of a June deadline to retain its status as a trusted host of European commercial and law enforcement data, urged the head of a parliamentary committee dedicated to of cross-channel oversight.

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The economic value of what the European Union dubs an “adequacy agreement” is “substantial,” wrote life peer Peter Ricketts, chair of the European Affairs Committee in the House of Lords.

Despite severing itself from the European Union in January 2020, the United Kingdom has held onto its ability to process European commercial and law enforcement data largely thanks to its wholesale adoption of the General Data Protection Regulation into domestic law.

Losing adequacy status would “impose significant extra costs and administrative burdens on businesses and public sector organizations,” Ricketts said. The British government in May calculated that data-enabled trade between Britain and European states amounted the 161 billion pounds during 2022. A British think tank told the committee that about 45% of all British information and communications technology exports go to trading bloc nations.

The European Union bestowed commercial and law enforcement data adequacy onto the U.K. in June 2021 for a four year period. Great Britain is one of 15 countries whose commercial data processors can legally handle European data without separate contractual process and one of three whose law enforcement agencies can easily process personal data for criminal investigations.

“Adequacy reduces administrative burdens and compliance costs, increases legal certainty, makes the U.K. a more attractive location for investment, and supports digital growth,” Ricketts said.

Ricketts wrote that the European Commission appears “highly likely to want to renew” UK adequacy status given the economic benefits but warned that a renewal decision could face a challenge before the European Court of Justice. “A successful challenge to the legality of commission decision before the CJEU is more likely than a commission decision not to renew the U.K.’s adequacy status.”

The previous, Conservative government that voters swept out of power in July began a legislative initiative to substitute the GDPR with a homegrown alternative it touted as less bureaucratic, sparking worries about whether Europe would renew adequacy status (see: UK Parliament Hears Assurances on GDPR Adequacy).

The Labour government has said it will introduce a different set of domestic GDPR reforms through a still-not-finalized Digital Information and Smart Data Bill. Among its major proposals is to establish a digital identity framework with the same trust as paper documents, a “smart data scheme” to allow for the sharing of customer data and easing the flow of personal data for law enforcement and national security purposes.