The Government needs to prioritise the new Smart Data bill to boost small businesses - Kevin Hollinrake

The Conservative Government recognised the importance of a data economy to the UK’s growth and future prosperity. We set out these opportunities to deliver consumer empowerment and business cost savings in the Data Protection and Digital Information Bill, which did not make it on to the statute books at the end of the last Parliament.

Open banking is the cornerstone of smart data’s success. There are now more than 10 million businesses and consumers who use open banking apps and products to help them manage their money more effectively. For businesses this includes reducing the cost of certain card fees, and introducing new lenders to the market, offering an alternative way to borrow.

However, a new report, co-authored by the Centre for Financial Innovation and Technology (CFIT) and Open Banking Limited (OBL), has revealed that many businesses are not taking advantage of this lending.

The report, Smart Data: improving SME lending to drive economic growth, examined findings from an SME Finance Taskforce, and set out a seven point action plan to improve access to credit for SMEs. This could speed up access to finance for the UK’s 5.5 million SMEs, at a time when they face an estimated funding gap of more than £22bn.

The taskforce, drawn from an industry-wide coalition, believes that acting on these recommendations could help reverse the downward trend in lending to SMEs and give them access to the finance they need to grow. Opening up public data sets from HMRC and Companies House is just one way to support growth that could see more people employed by SMEs, rising SME GDP, and increased tax revenues from small and medium-sized businesses.

This is why smart data legislation is not just another item on the policy agenda – it is the cornerstone of the UK’s future economic success. As well as boosting SME lending, it will extend the benefits of open banking, creating interoperable smart data schemes in other sectors, such as energy, telecoms, finance, and retail, offer public sector cost savings, and unleash the export potential of the UK’s international open banking standards.

But to realise these benefits and cement the UK as a global leader we need to prioritise the next phase of open banking, moving from the current competition remedy to a Long-Term Regulatory Framework. That requires passing the DISD legislation as a matter of urgency.

The previous Government has done the hard work to get policy to where it is now, with buy-in across Parliament and key stakeholders – now Labour has to ensure the Bill does not languish on the order paper.

Kevin Hollinrake is the Shadow Secretary of State for Business and Trade.