31 May 2018

Financial Times: Hammond says UK will have to stick with new EU privacy rules

Philip Hammond, the UK chancellor, says the country will have to stick with EU privacy rules even after Brexit, despite the US finding the new data protection regime “uncomfortable”.

Visiting technology companies in San Francisco, Mr Hammond responded to criticism from Wilbur Ross, the US commerce secretary, that the General Data Protection Regulation would force “big changes” in how US and European companies do business.

Mr Hammond said that after the UK leaves the EU it was going to have to remain “closely aligned” with the rules, which came into force last week, to ensure that companies can still use the UK as a “lily pad” to serve the European market and exchanging data freely with the EU.

“I’m not surprised that the US is finding some of this quite uncomfortable because this is the first time that the Europeans have sought to apply extraterritoriality in the way European law operates,” he told The Financial Times. “Ultimately one would like to hope that the world can evolve towards a universal standard for data protection that would clearly be in the interests of consumers and businesses everywhere.”

In an opinion piece for the FT this week, Mr Ross said GDPR could “disrupt transatlantic co-operation on financial regulation, medical research, emergency management co-ordination and important commerce”. Mr Hammond said if the European law does not work as intended, there would no doubt be attempts to amend it, to “get the balance right”.

Mr Hammond was in San Francisco and Silicon Valley to talk to companies about how to make the UK a more attractive destination for technology businesses. He said the number one concern of the tech companies he met with was to ensure that they would be able to use a UK base to serve both the domestic market and Europe.

“I can tell them that it’s my very clear objective that they should be able to. But of course until the negotiations are complete, I can’t sign in blood,” he said.

In his Spring Statement, Mr Hammond hinted the UK could impose a tax on digital businesses, focused on where they generate revenue rather than profit. He said on Wednesday that many people he met have a “perhaps surprising understanding” of why European countries perceive that tech companies are not getting taxed. Mr Hammond said it would now be a debate between the US and the Europeans about a “fair split of the tax on those businesses”.

He said London should be an attractive place to develop a large market in cryptocurrency assets, with “good regulation” and support for innovation. But he also warned that cryptocurrencies present a risk to individual consumers in a volatile market. [...]

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