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10 pm

Mr. David Atkinson (Bournemouth, East): This is my second attempt to raise a matter that should concern everyone who has or uses a computer. Thus it is one that will concern most businesses and all Government Departments, not just in this country but throughout the world. It is the effect that the change of date at the turn of the century, from 1999 to 2000, will have on computers. Quite simply, if they are not prepared, they will fail.

Articles in computer magazines and, more recently, in the national press have sensationally described the situation in terms such as "Millennium Meltdown", "Catastrophic Computer Crash" and "Doomsday 2000", and I have been prompted to pursue the matter in the House. I asked a question of my right hon. Friend the Prime Minister last December; I have sent a series of written questions to every Government Department--most recently, to my hon. Friend the Minister for Science and Technology; and I have corresponded with my right hon. Friend the Prime Minister. It appears that I am the only hon. Member to pursue the matter thus far, and the publicity that I have provoked has produced expressions of relief that, at last, someone is doing something.

I am pleased to have the opportunity tonight to enlarge on the problems, and I am sure that I am not the only one to look forward to the Minister's reply. I fully confess to being computer illiterate, a fact which may become even clearer during my speech, although I value the immense advantages that computers provide, and over the years I have been blessed with staff who have been fully educated to take advantage of them.

Computerisation of our parliamentary offices has enabled us, as Members of Parliament, to increase our throughput a hundredfold and has improved our ability to communicate with and respond to our constituents efficiently and effectively. No doubt those improvements will be as nothing compared to the promised revolution to come, when we are linked up to the Internet and the World Wide Web.

A constituent came to see me at my surgery last autumn to share his concern that neither business nor Government appeared to be aware of, let alone ready for, the century date change. Even I was able to grasp the potential seriousness of the problem, and my initial inquiries confirmed that my constituent's fears were far from groundless.

All but the most recent computers have been programmed to recognise a shorthand standard date format--dd/mm/yy--with two figures for the day, the month and the year. For example, my hon. Friend the Minister's date of birth would be given as 18/04/45.

Because memory is or was very expensive, programmers economised by cutting out the first two digits of the year--19--to save money and memory. Thus two-digit year dates exist on millions of data files used as input to millions of applications. Therein lies the problem. Those computers will recognise the double zero digits of

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2000 as 1900. As a result, all calculations, logic and date-driven processes will fail to function properly at midnight on 1 January 2000. If my hon. Friend's computer does not recognise the century date change, it will show his age to be not 55, but minus 45 in the year 2000. I would not want that prospect for my hon. Friend.

All of us with personal computers can apply a simple test to see whether they will fail at the end of the century. We can set the date to 31 December 1999 and set the time at 23.58. We can switch off the computer and, after a few minutes, switch it back on to check the date. It should say 1 January 2000, but my computer said 4 January 1980. Some 95 per cent. of all personal computers fail that test.

The vast majority of our information systems are based on the original, faulty standard date format, which will cost billions of pounds to reprogramme. One estimate of the cost is put at £400 billion worldwide and £20 billion for this country alone; the cost to the United States Government will be $30 billion. Those costs are rising daily, as the shortage of skills available to undertake the necessary reprogramming and recoding is realised.

There can be no doubt that, unless organisations are prepared and have taken the necessary action, they will face catastrophic consequences, including a disastrous loss of trade and revenue--it is no exaggeration to say that some of them may go out of business very early in the new century. Many of them will have experienced a minuscule taste of what is to come on 29 February this year, as some computers did not recognise the extra leap year date. A piece of medical equipment in a hospital failed to work on that day.

I shall give a few everyday examples to help to explain the wide-ranging consequences of what might happen. The competitive position of many exporting companies will be severely threatened unless they have anticipated the problem in time. Any timetable for a 1999 single European currency will require new computer systems to be in place. Supermarket computers will fail to replenish stocks and will throw out existing stocks, calculating that everything will have gone mouldy on the shelves after more than 99 years. The time locks of buildings will be unable to recognise the correct date, so staff will be locked out and vaults will be open. Trains will not run because their control systems will be unable to say what else is on the track that day. Flights will be cancelled as computers in airport maintenance will have grounded all aircraft because they are 99 years overdue for overhaul.

The turn of the century will have similar consequences for the computers of Government Departments and agencies unless they have been properly prepared--the most obvious being the automatic payment of benefits systems and the pay-as-you-earn system that generates millions of tax returns.

Such a computer failure would affect our system of court orders, the child support maintenance system and car licence expiry dates. Traffic lights and school bells will operate their weekday schedules. Libraries will send out notices of fines for some seriously overdue books, and any programme that prints a date on a cheque or invoice will stop working properly.

The potential for disaster lies most in the financial sector. The interdependency of computers and the complex computer systems used in all financial transactions will create huge problems for City institutions. Even if their own systems have been

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reprogrammed and are working correctly, other firms with which they are dealing may not have had the same foresight.

A firm may be awaiting the processing of a derivatives contract in Singapore which, if not correctly processed, may undermine that firm's short-term liquidity. The huge sums that are transferred every day in settlement of bond, equity, trade or foreign exchange flows bring the danger of a systemic breakdown of the banking settlements system, which could lead to temporary liquidity crises, and perhaps bank failures.

London, as we know, is the centre of the global financial services industry, so it is vital that the UK takes a lead on this issue. Most major financial institutions will, I hope, have their systems in order on time, but interrelation of the industry means that all firms will have to be made aware of the seriousness of the problem. What assurances or policy proposals has my hon. Friend received from the Bank of England, the London stock exchange, city regulators and the European central bank to prepare the markets for 2000?

Last month, I tabled written questions to every Government Department to find out how they are responding to the problem. I was encouraged to learn that most Departments seem to be aware of it, but not all are treating it with the seriousness that it deserves. Many of the replies I received showed undue complacency.

I hope that their confidence is justified and that, with the advice of the Central Computer and Telecommunications Agency--CCTA--and computer suppliers, they will be prepared for the century date change. However, because public sector systems are in general larger and older than those in the private sector, I should like to know my hon. Friend's understanding of the percentage and the number of Government computers that will need to be reprogrammed or replaced, and his estimate of the cost involved.

As my hon. Friend knows, I also tabled a question on his Department's recent survey of the problem in this country and the action that it will take to alert and help businesses to respond to it. In his reply, he said that the survey revealed

How does that square with newspaper reports that only 8 per cent. of businesses have conducted an audit to assess the extent of the risk, and that more than 90 per cent. are failing to deal with it?

A recent survey of IT directors of major UK firms undertaken by the magazine Computer Weekly shows that most large firms are aware of the problem, but most are still undecided what to do about it. I look forward to learning from my hon. Friend precisely how the Government are alerting business to the problem and precisely what help and advice will be available, especially to small businesses, which I imagine will find responding to the problem much more difficult than larger corporations.

As one of the essential messages seems to be that the chain is only as strong as its weakest link, and most computers are dependent on others, it is not enough to adjust one's own computer and rely on others to do the same. Inevitably, there will be those who will not respond.

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Is the problem not serious enough to contemplate, as the Singapore Government are doing, the introduction of statutory guidelines for businesses to follow? Perhaps we should consider following the example of the United States, which recently held congressional hearings on the problem. I urge my hon. Friend to read the testimony from that hearing, as it makes very interesting reading as well as being alarming.

Fortunately for us, it appears that, because ours is a more sophisticated information technology market, European companies are in a worse position than ours in planning for 2000, so I put it to my hon. Friend: is this not an opportunity for British skills to be exported abroad and to establish a crash course for those prepared to offer those skills?

It would appear that much has happened since I drew the Prime Minister's attention to the problem in the House last December; that the Government are taking appropriate action regarding the computer systems for which they are responsible, and are now alerting others of the need to do the same. I welcome that.

The century date change should be treated as the most devastating virus ever to affect our information technology system. The message from the debate must be clear. This is urgent. The majority of computer systems will fail if action is not taken, and the majority of companies are not aware of the problems they face. There are fewer than 850 working days left in which to take action. If action is not taken, companies will face enormous difficulties. This is one of the greatest challenges facing business management today. I look forward to my hon. Friend's response to a crisis that will face our national daily life in less than four years' time.

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