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How the Data Protection Act's death will punish the UK economy

If the UK hands over data protection duties to the EU, it will scare off future foreign investment, says Tom Brewster.

Companies who want to make exciting products quickly, who subscribe to Facebook's 'Move Fast and Break Things' mentality, will only be put off by such stifling legislation. Why not just look elsewhere, Asia for instance, where regulators won't be breathing down their necks at each stage of a product's lifecycle? It wouldn't make business sense for them to stay in the UK or anywhere else in Europe. Put simply, the stakes are very high here.

Although the UK's data protection laws could do with tightening up, and the Information Commissioner's Office could show its teeth more when dealing with private companies, the European Commission is going too far with its plans. If the UK does let the Data Protection Act rot, it will put up another barrier for entry.

The EU's draconian plans will take us back to the dark ages where companies are choked by excessive regulation.

"Businesses like Ireland because of its tax laws and they like the UK because of its liberal data protection laws," said Stewart Room, partner at Field Fisher Waterhouse.

There are already a host of reasons why businesses don't want to settle over here. Capital gains tax is one, which effectively punishes those who take risks and win big, when they should instead be rewarded. Then there's the hefty income tax on the wealthy. The cap on immigration is another, potentially preventing talented techies from moving to the UK.

If the Government relinquishes control over data protection too, it won't just create a business environment as inviting and comfortable as a bed of nails; the EU's draconian plans will take us back to the dark ages where companies are strangled with red tape.

But does Room think the Coalition will keep the DPA alive? "They've already given it up," he said. Ah time to batten down the hatches then.

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