What’s HMRC’s purpose in tax data sale?

The UK government has managed to wave another red rag to privacy bulls with the acknowledgement that it’s looking at plans to sell aggregated and anonymised tax data to the private sector. This would have stirred up protests by itself, but after the recent Care.data controversy over health records it has activists worried that the government has forgotten the sensitivities over personal data that it trumpeted in the run-up to the 2010 election.

There has been a long running argument over whether measures to anonymise data can be 100% effective, and the risk judgement is going to be determined by how much damage can be done by the data getting into the wrong hands against the potential good in making it available. Which prompts the thought, against my ususal instincts, that it could be more dubious to sell off data on tax affairs than healthcare.

Even if you’re militant about privacy, it’s hard to deny that there is a potential good in allowing researchers access to data sets. It gives them more information, a clearer view of the patterns in health issues and a better chance of finding solutions to problems in public healthcare. It’s a big positive to place against any risk that some of the data could be de-anonymised and misused.

Are there similar benefits in placing tax data up for sale? I’m sure that some private companies would find it valuable, but where’s the public good? So far the Treasury has been vague about what any research and analysis could achieve, and it leaves the thought that the idea is being floated mainly to raise revenue.

That might win over some bean counters in Whitehall, but it will make it harder sell outside; a little more money in the public coffers is a short term gain that doesn’t justify the privacy risk as convincingly as long term improvements in healthcare.

This may come to nothing – governments often let a proposal leak out to test reactions then quietly drop the idea – but it suggests there’s an increasing sentiment in Whitehall towards making more anonymised data available to third parties. And as the private sector shows more of what it can achieve with big data, ministers will be tempted to go along with the sentiment. That should keep the privacy activists busy for years to come.

Mark Say is a UK based writer who covers the role of information management and technology in business. See www.marksay.co.uk. He is the author of  a paper on Privacy v Intelligence for the Chartered Institute for IT, available through BCS Enterprise.