April 6, 2014 8:24 pm

Davis calls for action on tech sector

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Technology companies could be driven out of Britain by the government surveillance activities exposed by Edward Snowden, according to a senior Tory backbencher.

Former minister David Davis called for a “re-evaluation of our intelligence collection methods” similar to the US, which has set up a panel to investigate the extent of the surveillance and promised to end bulk collection of phone data.

“If we fail to act then we risk driving one of our most promising sectors into the arms of our competitors,” Mr Davis says in an article in the Financial Times.

Mr Davis resigned his seat as an MP to fight a by-election on civil liberties issues in 2008 and has become the most potent critic of David Cameron’s government on matters such as state surveillance.

His intervention will be embarrassing for the prime minister, who has been vocal in supporting the technology industry, backing clusters of smaller start-ups in east London and cities such as Cambridge to compete with US internet giants.

The UK is in particular becoming a home for “fintech” groups that offer technology platforms for financial services.

However, Mr Davis said that the “UK’s technology industry has been left seriously exposed” by the actions of GCHQ, the national security signals intelligence bureau that has worked with the NSA on intercepting and analysing communications.

“Britain’s intelligence agencies are damaging our country’s economic prospects,” he said. “Their activities have resulted in a dramatic loss of trust in Britain as a place to do business. The government shows no sign of absorbing this sobering conclusion.”

Government officials said GCHQ was working closely with industry to defend national infrastructure and the public from attack and that they were not aware of any concerns in the technology sector.

“Our intelligence services play a vital role keeping us safe and they deserve our support,” the cabinet office said. “They operate at all times under a robust legal framework and system of oversight which is one of the strongest in the world.”

The Intelligence and Security Committee, made up of senior MPs and peers, is reviewing the laws which govern the intelligence agencies’ ability to intercept private communications and the appropriate balance between privacy and collective security.

Meanwhile Sir Mike Rake, the chairman of BT, said GCHQ was a “highly professional and respected organisation” which was working with the private sector to protect individuals and crucial networks against cyber attack.

Asked whether he had seen any evidence that companies might leave Britain because of GCHQ’s surveillance operations, Sir Mike said: “Not at all.”

But Mr Davis accused the government of burying “its head in the sand” and avoiding any move to stop data collection programmes, saying that the failure to create the right environment for technology groups would mean “they can easily relocate to countries such as Germany, where the privacy of their citizens and companies is guaranteed by the constitution”.

Technology and telecoms groups have already begun to reveal more about the extent of government requests for their data and some have taken steps to make surveillance harder in future.

On Thursday, Yahoo said that it would tighten the encryption of customer data, including a more secure version of the Yahoo Messenger service that was tapped by GCHQ for users’ webcam images. Google has already moved to encrypt its Gmail service, while countries such as Germany have explored the separation of a national or regional internet service that could not be exploited by overseas security forces.

Vodafone, the British telecoms group, has written to governments where it operates, including in the UK, to request the ability to disclose the number of requests to share customer data.

No large technology firm has threatened to leave the US or the UK owing to the activities, although studies suggest there is unease in the sector. A study by NTT Communications of 1,000 IT decision makers in large companies in France, Germany, Hong Kong, the USA and UK found clear changes in behaviour as a direct result of the scandal.

The report found that three in four people responsible for making IT decisions would take another look at their data storage and cloud contracts to ensure data protection.

However, there was also a preference for keeping data within easy reach, with more than 90 per cent of respondents from Europe and the US saying they would prefer to buy cloud services from their own continent.

UK companies were found to be more complacent than their European counterparts about shifting data after Snowden. About 40 per cent of decision makers in France and Germany said they would move their data to where they knew it would be safe, but only 18 per cent said the same in the UK.

More than 80 per cent agreed with proposals by Angela Merkel, Germany’s chancellor, to create a separate system for European data providers to keep them distinct from the US in response to the NSA revelations.

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