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Distributed Ledger Technologies

Volume 792: debated on Wednesday 18 July 2018


Asked by

To ask Her Majesty’s Government what action they are taking to co-ordinate the current uses, and potential future uses, of distributed ledger technologies across Whitehall.

My Lords, in asking the Question in my name on the Order Paper, I declare my interests, as set out in the register. Most importantly, I wish my noble friend the Minister a very happy birthday.

My Lords, the Government are committed to supporting the development and uptake of emerging digital technologies in the UK, including distributed ledger technology, or DLT. The Secretary of State, with the Minister for Digital, co-hosted a round table on Monday with companies and academics. The Government’s Chief Scientific Adviser met firms and cross-government leads last Friday. Several departments and public bodies have ongoing DLT proof-of-concept projects and there is a cross-government community of interest attended by officials.

My Lords, does my noble friend agree that although this question may appear somewhat niche, in simple terms, distributed ledger technologies could be as impactful as the internet? In fact, they may prove to be the internet of value, with a real opportunity for the United Kingdom to take a global lead, not least in implementation and standards. Does my noble friend also agree that there are a number of proofs of concept across Whitehall—in his own department, DCMS, the DWP and Defra, to name but three? What action is currently being undertaken to co-ordinate those proofs of concept, to take any to pilot, and to assess their potential?

My Lords, I thank my noble friend for his good wishes. May I return the compliment by wishing him well on his marriage next week?

My Lords, moving on to distributed ledger technology, which everyone wants to talk about, I agree with my noble friend that it has tremendous potential. The United Kingdom is well set up to be a global leader, as the APPG’s report released on Monday outlined. There is proof of concept going on in several government departments—for example, Defra, DfID, the NHS and, in my own department, the National Archives. The evaluations are not available yet, because this is at an early stage. As for co-ordination, the projects are in various departments. There is an officials group which meets to discuss these. We have participated in two round tables in the last few months and we are considering how best to co-ordinate the efforts across government.

My Lords, in the various discussions taking place, to what extent is the Home Office involved in these considerations? In particular, this is because distributed ledger technology could provide a means by which people would be able to verify their identity without the so-called concerns that people used to have about identity cards with a centrally maintained register held by the Government. A DLT-based technology would enable us to hold our own identity details in a way that would be verifiable across the world.

The noble Lord is absolutely right. That is a very good example of where this distributed technology could be used, and there are other, similar areas. One of the benefits of this technology, and the fact that it is distributed and everyone has the same copy of the database, is that it builds trust in data, and this is an important area across many departments. I do not know specifically what proofs of concept the Home Office is doing at the moment, but I will certainly take that back to my noble friend the Minister. As I said in my previous answer, there is a cross-governmental officials group and we are currently looking at how best to co-ordinate across government.

My Lords, to take the question from the noble Lord, Lord Harris, a stage further and add to the convivial atmosphere, has not the Government Digital Service fallen behind the times with the development of its Verify digital identity system? It is not regarded as fit for purpose by HMRC, for example. Should we not be creating a single online identity for citizens through distributed ledger technology?

The first question is whether we should be creating a single digital identity, and I defer to the Home Office on that. If that decision was made, whether distributed ledger technology is the right technology for it is, I think, a secondary question.

My Lords, blockchain is the technology behind bitcoin and the cryptocurrencies. Will the Government consider stepping in and regulating in this area or is it inherently uncontrollable?

The Cryptoassets Taskforce, which consists of the Treasury, the Bank of England and the Financial Conduct Authority, is considering exactly that question. It expects to deliver a report in late September 2018.

My Lords, does the Minister agree that if a blockchain platform were to be applied to our international aid programme, it could provide far more transparency and accountability?

As I said, the evaluations are at too early a stage to say. Projects are being undertaken, however, and the Department for International Development is one of those undertaking a proof of concept at the moment.

My Lords, we have heard that various studies and evaluations are taking place. It is an extraordinarily complex area but it seems to me, even as a lay person, that its outcomes will be amazingly innovative and helpful. I, of course, must leave the technology to others, but if any questions raised by these evaluations need a closer ethical and moral look, will somebody be monitoring the situation to make sure they are referred to the data ethics body we have talked about?

I agree with the noble Lord. Most technology has ethical concerns, particularly the internet and the fact that, by definition, it is cross-border. We not only have to get our own regulatory house in order, and think of these ethical considerations, but we have to work internationally to try to get consensus. The point about distributed ledger technologies is that they build trust without always having regulations because everyone has the same copy of the same data, which provides a great advantage.

My Lords, one issue blocking distributed ledger technologies internationally is the jurisdiction of data. What is the Government’s thinking and working on the jurisdiction of data for this type of technology?

The Law Commission is looking at some of the legal aspects of this technology. The noble Lord is right that the ownership of data is an issue that will have to be considered—we are aware of the problem. I cannot give him specifics at the moment but it is one of the things we are looking at and will have to consider if this technology is to be taken forward.