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Ms Hewitt: The hon. Gentleman makes an important point about the need for consistent and open standards across government and the Cabinet Office will certainly continue in that co-ordinating role. The Inland Revenue and Customs and Excise have already taken the power in the Finance Act 1999 to conduct their own modernisation of their relevant statute book. I am delighted that the Inland Revenue will shortly offer on-line tax filing for businesses and individuals as will Customs and Excise for VAT filing.

The Department of Trade and Industry will use the power that we shall obtain under the Bill to amend company law, so that companies can communicate electronically with shareholders and so that shareholders can lodge proxies, including voting instructions, on-line. Such measures will save the companies and shareholders that take advantage of them significant sums of money. I therefore propose to publish a draft order for consultation early in the new year, so that it can be introduced and take effect as soon as the Bill receives Royal Assent. I shall announce other plans to make use of clause 8 powers during the Bill's parliamentary passage.

Part III modernises the out-dated system for modifying telecommunications licences. There is widespread agreement in the industry that a more flexible and responsive approach to licence modification is essential. I have to say, however, that the industry was unhappy with our proposed mechanism, particularly the proposal that the Director General of Oftel should be able to make modifications without a reference to the Competition Commission, despite objections, provided that those objections did not constitute a significant minority. Following our discussions with the industry, we have considered that proposal further and decided not to proceed with the "significant minority" concept.

We are continuing to discuss possible alternatives with the industry. As I informed Opposition Front-Bench Members earlier this afternoon, I should like to make it clear that I will table amendments in Committee to simplify our proposals and ensure that they command wider support.

We have to get right our own legal framework, and we are doing so, but we also have to get right the European and global frameworks, and we are working to do that too. There is a very big prize to be won in the European Union--a single market for electronic commerce. Tomorrow, at the European Union Telecommunications Council, we shall adopt the electronic signatures directive. That sets out a legal framework for EU-wide recognition of electronic signatures, the establishment of approval schemes for service providers and the liability of providers. We are anticipating the directive in the Bill, and I am surprised that the official Opposition have not congratulated us for doing so, instead of carping in their amendment.

The next priority is to complete the electronic commerce directive. As drafted, the directive enshrines the principle of the trader's country of origin. In other words, a British company complying with British

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regulation should be able to sell on-line to consumers in any other member state. We believe that that is the right way to legislate for electronic commerce.

Over the past year, the Brussels convention has been under review. As hon. Members will know, that convention governs the issue of which court can hear a private law dispute between residents of different member states, including disputes about certain consumer contracts. The European Commission has now prepared a proposal to convert it, with amendments, into a community regulation.

The Brussels convention has existed for 31 years and, in that time, almost no consumer has used it to sue for breach of contract. None the less, the Commission sought to extend its provisions to electronic commerce by providing in a draft recital that any website that could be accessed from another member state would thereby qualify as advertising directed at consumers in that member state and could activate the convention's provisions. That, of course, misses the point that, on the internet, any website is, by definition, accessible from anywhere else. I am pleased to be able to tell the House that there is growing agreement among member states with our view that the new recital should be dropped.

We anticipate review next year of the Rome convention, which deals with the issue of which jurisdiction takes effect in private international law. We shall play a full part in those discussions, but we cannot possibly wait until they are resolved to introduce the electronic commerce directive or the Bill. Instead, we need to put forward our own proposals to ensure effective protection of consumers in the world of e-commerce.

It is consumers, above all, who stand to benefit from e-commerce. Price transparency will be a boon to consumers throughout the European Union and beyond. I welcome the fact that at least one leading car manufacturer has already announced that it will sell its own models on the internet throughout the European Union, and I know that others are planning to follow suit.

Mr. Derek Wyatt (Sittingbourne and Sheppey): This is a terribly interesting issue. Where will European, American and Japanese car manufacturers pay corporation tax and VAT? Is there a European understanding of how that will work with sales on the internet?

Ms Hewitt: My hon. Friend raises an extremely interesting point. I refer him to an excellent discussion paper on that subject, which was published by the Inland Revenue last Friday. In any case, there is a clear set of EU rules governing VAT liability. Those have not given rise to problems as they have been translated into the sphere of electronic commerce.

We have to ensure that consumers are protected from unfair dealing on the internet; they need to know which suppliers they can trust. That is why we are working with consumer groups to develop TrustUK as a hallmark, to ensure that consumers are given clear and fair contracts, truthful advertisements and clear and accurate information about what they are buying, prices, delivery costs, the returns policy, and so on. We can now work with our

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European partners to create a TrustEurope equivalent, building on the provisions of the new distance selling directive.

Dr. Palmer: Will the kitemark be available to companies based elsewhere that want to operate within the European Union, or will it be restricted to companies based within the EU, initially within the UK?

Ms Hewitt: We envisage that the TrustUK mark will be available to companies that sign up to approved codes of practice that provide both proper consumer protection and effective alternative means of dispute resolution. The issue is not where the company is based, but whether it offers proper consumer protection through an effective code of practice and effective dispute resolution mechanisms.

The Bill will be Britain's first 21st century law. It was the first Bill referred to in the Queen's Speech; it was the first to be introduced; and, tonight, it will become the first to receive Second Reading. It will bring our statute book into the 21st century, provide a sound legal basis for electronic commerce and electronic government, and help to build consumer and business confidence in trading on the internet.

The Conservatives' opposition to the Bill provides further evidence of how out of touch and out of date they are. While they remain stuck in sleaze, we shall legislate in the interests of the country as a whole. While they are stuck in the past, we shall legislate for the future. I commend the Bill to the House.

5.12 pm

Mr. Alan Duncan (Rutland and Melton): I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:


I should do the House the courtesy of drawing its attention to my interest, which is fully registered in the Register of Members' Interests.

We are dealing not with some sort of techno-fad but with an important matter that increasingly affects the lives of millions. We are in the middle of a fantastic technological revolution and the Opposition accept the need for an element of legislation to facilitate that revolution's advance. Britain has a golden opportunity to put itself well ahead of the game, but the Government's slow handling of the issue risks relegating us from the premier league to the second or third division. There is a strange division between those who, faced with that revolution, champ at the bit and those who remain completely bamboozled. The revolution offers information, communication and trading networks, but the Bill is primarily concerned with the third category--electronic commerce.

E-commerce is a much misunderstood term. Despite forest-loads of hype, many outside the world of information technology retain a vague notion that e-commerce has something to do with selling books and CDs over the

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internet and with dull brochures and junk mail served up on screen instead of posted through the letter box. The commercial internet is still in its infancy, but it is growing prodigiously. Only six years ago, Europe was considered an internet backwater, with a mere 200,000 computers connected to it; now, 50 million Europeans are believed to be connected. The "Computer Industry Almanac" predicts that, by the end of 2000, 327 million people around the world will have internet access. It is forecast that that dramatic increase in the number of people on-line will lead to an explosion in global e-commerce revenues: one report estimates 183 million on-line buyers spending more than $1 trillion by 2003.

Impressive as those figures are, I would argue that they partly miss the point about what e-commerce is. It is not only about massive numbers or about who is or who is not making a profit on-line. It is about how this fledgling technology can transform entire industries and enable companies to reach markets that were previously unattainable. It is also about saving money by moving core business processes on-line, such as customer service, shareholder communication, procurement and supply- chain management. Above all, it is about creating and experimenting with new business models such as Priceline, which lets consumers suggest their own price for everything from new cars to holidays and mortgages, or about computer companies that allow customers to configure their own personal computers on-line and use sites that offer direct access to the travel industry's computer database.

E-commerce is also about the way in which companies re-engineer their businesses. Encyclopaedia Britannica International Ltd. no longer employs salesmen to lug heavy tomes from door to door. Instead, it sells student subscriptions to its multimedia website to colleges and universities around the world.

Britain can and must be the nerve centre of the worldwide business revolution. This is a world in which there is a mini revolution every week. British businesses will not forgive us if we do not act fast and with a clear head. [Interruption.] In one respect the Government seem to support the same objective--they talk as though they share that objective. As in so many other areas of policy, they have adopted convincing language. In his speech at Cambridge, the Prime Minister said that


Some might think that he has been quite busy off his feet recently. However, the Government have not been quick off their feet because the Bill has been a very long time coming. Anyone who has paid any attention to the progress of the Bill knows that it has been the product of a messy turf war between the Department of Trade and Industry and the Home Office, which have been squabbling for more than two years. The Bill was promised last year but it never came.


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