Collection of exporter information by HMRC

Trade Bill – in a Public Bill Committee am 3:15 pm ar 25 Mehefin 2020.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade) 3:15, 25 Mehefin 2020

I beg to move amendment 32, page 5, line 4, after “may”, insert

“, following consultation with relevant stakeholders,”

Photo of Graham Brady Graham Brady Chair, Conservative Party 1922 Committee

With this it will be convenient to discuss the following:

Amendment 33, page 5, line 17, at end insert—

“(7) Nothing in any regulations made under subsection (3) may require the disclosure of information or the production of documents which are subject to legal professional privilege.”

Amendment 34, in clause 8, page 5, line 45, at end insert—

“(5A) Nothing in this section authorises the disclosure of information or the production of documents which are subject to legal professional privilege.”

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

The amendment stands in my name and that of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey. It would impose a duty on the Treasury to consult relevant stakeholders when making regulations as specified. Those regulations are about the type of information that may be requested by HMRC and how the request is to be made. The reason for this consultation is that it provides an additional layer of scrutiny by stakeholders.

In imposing a duty on the Treasury to consult, we will ensure that any draft statutory instrument is exposed to critical comment from stakeholders in advance, which may improve an instrument and help to avoid future issues when it is going through Parliament. I think this is important, and I am sure that the Minister will recall him and his colleagues serving on many interminable Finance Bills in the days of the last Labour Government, when many people rightly criticised the additional burdens being put on businesses, particularly by the Revenue, to provide information.

If we are going to request information from businesses, trade groups or anyone else, let us ensure that we consult the relevant stakeholders first, to make sure that we are not requesting information that is not held, that we are requesting it in a way in which it is currently collected and that we are not adding an additional layer or an additional burden for business when it is, in some cases perhaps, simply unnecessary.

Amendment 33 is about protecting legal professional privilege. We are concerned that clause 7(1) grants HMRC a very wide discretion indeed to require information. The scope of this provision should be far more clearly defined, to give greater certainty about the extent of information, the anticipated frequency with which it may be requested and the method of data collection. Legal professional privilege and confidentiality are essential in order to safeguard the rule of law and the administration of justice. They permit information that may be communicated between a lawyer and a client without fear of it becoming known to a third party without the clear permission of that client. Many UK statutes already give express protection to legal professional privilege and it is vigorously protected by the courts.

It is also worth pointing out—I am sure the Minister knows this—that the iniquity exception alleviates concerns that legal professional privilege may be used to protect communications between a lawyer and client that have been used for a criminal purpose. Such a purpose removes the protection from communications, allowing them to be targeted using existing powers but not breaching legal professional privilege.

Amendment 34 is similar to amendment 33 but deals specifically with the power to collect data by Her Majesty’s Revenue and Customs. The amendment would insert at the end of clause 8:

“Nothing in this section authorises the disclosure of information or the production of documents which are subject to legal professional privilege.”

Its effect is the same—to protect LPP. We seek to insert the amendment into this part of the Bill because we are deeply concerned that clause 8 grants are very wide discretion to the Revenue to require information. As with the argument for amendment 33, the scope of that provision should be far more clearly defined to give greater certainty as to the extent of the information they anticipate, the frequency of collection and the method of data collection from it, but the safeguard that ensures that the information that is sought to progress a criminal charge cannot be hidden behind legal professional privilege. I commend the amendment to the Committee.

Photo of Greg Hands Greg Hands The Minister of State, Department for International Trade 3:30, 25 Mehefin 2020

It is important, as we turn to the data-sharing powers of the Bill, that the Government have a more comprehensive understanding of UK exporters so that our work to build and grow UK export capability is properly targeted at and tailored to those businesses where it will deliver the maximum benefit.

Clause 7 sets out the powers needed for the Government to collect data to establish the number and identity of UK businesses exporting goods and services, particularly smaller businesses and sole traders, who may not be readily identifiable from existing data, but who may need a helping hand from the Government to develop their export potential reaching into existing and new markets. The clause provides the ability for HMRC to collect relevant data by tick boxes on existing tax returns.

Amendment 32 would restrict the Government’s ability to implement new questions to gather data on exporters at speed, by requiring Treasury Ministers to seek further consultations with stakeholders after any necessary engagement has already concluded—it would be, if you like, an additional round of consultation, which we do not think is necessary. Such an amendment would duplicate the administrative burden on stakeholders and, more importantly, delay the availability of data and, by extension, the benefits to businesses.

Amendments 33 and 34 are closely related and concern legal professional privilege, which the hon. Member for Dundee East will know is a long-standing principle that protects the confidentiality of communications between lawyers and their lay clients, and vice versa. It enables lawyers to consult and advise their clients without clients fearing that their information will later have to be disclosed. Indeed, it is a matter of general interest that any person who wishes to consult a lawyer must be free to do so under conditions that ensure uninhibited discussion. That principle is recognised and protected under article 8 of the European convention on human rights.

I can provide an absolute assurance to the Committee that the Government have no intention, either now or in the future, of using these powers to seek or share information that is protected by legal professional privilege. For clause 7, the information that has been requested from exporters is for trade statistics purposes and will be provided voluntarily. The fact that the information is being provided voluntarily is perhaps an indication of the Government’s position in respect of minimising burdens and therefore not requiring privileged information to be disclosed.

Clause 8 allows for the sharing of data that is already held by HMRC for its administrative functions. We are talking about data to be shared that has already been collected. Such information cannot therefore be subject to legal professional privilege, as it has already been provided to HMRC.

I will take this opportunity to remind hon. Members that the clauses also provide significant assurances on the collection, handling and processing of information collected under the powers. The data-sharing powers in the Bill are permissive, so all instances of data sharing must be approved by HMRC, which acts as guardian of the data. There are criminal penalties for any unauthorised sharing of data under the existing Commissioners for Revenue and Customs Act 2005, which apply in respect to the data shared under clause 8. Nothing in the clause permits the disclosure of information that is not otherwise permitted in data protection laws, including the Data Protection Act 2018 and the Investigatory Powers Act 2016.

I hope the clarification and assurances given provide the hon. Gentleman with the reassurance he is seeking in respect of legal professional privilege. On that basis, I ask him to withdraw his amendment.

Photo of Stewart Hosie Stewart Hosie Shadow SNP Spokesperson (Trade)

I thank the Minister for his commitment in relation to legal professional privilege, confirming that information can be shared between a client and a lawyer and, unless in the course of a criminal investigation, is completely protected. That is a good commitment to receive.

I also understand what the Minister said about information being collected to provide trade statistics on a voluntary basis. That is helpful, but I was slightly concerned at the beginning when he spoke about trying to identify the number and identity of exporters—one would have thought that the Government already knew that, and it is slightly concerning if they do not. It might be useful to understand what gaps there are in the Government’s understanding of what organisations export, what they export and to whom, but that is for another day. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

Clauses 8 to 12 ordered to stand part of the Bill.

Photo of Graham Brady Graham Brady Chair, Conservative Party 1922 Committee

We now come to the new clauses. New clauses 1 to 8, tabled by the official Opposition, have been debated but not moved.