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6.28 pm

Mr. Brian White (Milton Keynes, North-East): I had intended to start my contribution with an attack on Tory Front Benchers but, before I do so, I wish to exempt the hon. Member for Esher and Walton (Mr. Taylor). I agreed almost entirely with his comments, most of which were sensible and constructive.

Dr. Ladyman: That is why he is not on the Tory Front Bench.

Mr. White: There may be one or two reasons for that. It is interesting to contrast the consultation on this Bill with the record of the previous Government, because one or two points stand out. I remember working in the IT industry when the previous Government did not have an IT strategy. Their approach was very laissez-faire. I welcome this Government's IT strategy, which will build on what small businesses and the IT industry are doing and are good at.

The issue of key escrow has already been raised, so I shall not go into it. The hon. Member for Rutland and Melton (Mr. Duncan) mentioned IT failures, but I suggest that he considers the record of the previous Government and their decisions. The civil service used to be one of the best training grounds in the country for programmers and analysts. The previous Government's decision to bring in outside contractors and sell off parts of the civil service caused a lot of people to leave. We lost a whole generation of analysts and programmers in the mid-1980s; they went abroad because of the detrimental actions of the then Government. The Conservative party would do well to remember that many of the people who went abroad helped with the development of the internet in silicon valley.

The previous Government also created local monopolies with cable companies, which are causing some of the infrastructure problems. British Telecom used to be the cable company in Milton Keynes, which is a growing new city. BT laid the cable into the new parts of the city, but would not touch the older areas. Many households did not get cable because they were in the poorer, older areas. Because of its local monopoly, BT had no competition. The creation of local monopolies goes completely against the ethos of competition.

When BT was privatised, the Tory emphasis on ownership, rather than liberalisation, of the market--which is still apparent in some of the comments of

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Conservative Members tonight--distorted the argument. It should be about how to create a marketplace and the conditions for competition, not about who owns a business. However, the Tories have adopted that approach time and again, and they are making the same mistake tonight with this Bill.

Mr. Allan: Does the hon. Gentleman think that it would be helpful, in creating a better marketplace, for there to be competition over the single piece of copper that still goes into most households, by splitting off the local loop? Does he see that as the best way of generating unmetered calls and all the packages that we want?

Mr. White: It is not the only way, but I would not object to it.

I find it distressing that e-commerce is referred to as something new, which suddenly appeared out of a vacuum, with no history. Electronic commerce is not just the internet. Britain leads the world in electronic data interchange. We were responsible for a range of electronic innovations that are used when people make credit or debit card transactions over the phone. We must remember that, and learn from it. I ask the Minister to consider how the credit card industry started, and the ways in which credit cards have come to dominate the market. Although the industry's speed of change over the past 20 or 30 years is different from that of the net, there are similarities in market regulation and the way in which electronic communication has facilitated the interaction between shopkeepers and banks. The two industries are not exactly the same, but there are a number of similarities to build on.

The hon. Member for Esher and Walton raised an important point. The internet is not one thing, nor will it become one thing--it will be a range of technologies, linked to the web. Intranets and secure market places, to which the hon. Gentleman referred, will become increasingly important. They have different regulatory requirements from consumers interacting with an open system. There are very important considerations when it comes to secondary legislation.

The growth of call centres raises a number of issues. The Competition Commission is carrying out an investigation into the ice cream industry. Walls Direct is in my constituency, and I shall not use this debate to argue the rights and wrongs of such an investigation, but it has a direct effect on how e-commerce can develop or be retarded. It is important that regulatory bodies such asthe Office of Fair Trading and the Competition Commission--I am not including Oftel--recognise the impact that their decisions have on electronic commerce and on what we are doing in making Britain a leader in electronic commerce.

With electronic commerce, we are talking about a global economy, not simply about Britain and the European Union. Decisions made by regulatory bodies in France and other countries, particularly the United States, have an impact on us. It is critical that we get the international agreements right.

The Competition Commission needs to consider new entrants as well as existing players. One problem with electronic commerce is that many of the key players are new entrants to the market--they did not exist when consultation took place in March, and that illustrates the speed of change.

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My local newspaper runs a forum on its web page, to which anyone can contribute on the subject of their choice. I go through it regularly to respond to constituents on local issues. Somebody contributed an e-mail item about a court case and a paedophile. The item was withdrawn from the forum because it was considered libellous. A newspaper could have gone to its solicitors and published the article or not, depending on the solicitor's advice, but, because the item was transmitted instantaneously, with some people seeing it and responding, there was an argument about the legal definitions of when an internet service provider can withdraw such items. That example, although not about commerce, illustrates the change that has occurred, in that electronic commerce is instantaneous, and there is not necessarily time to obtain the legal advice, as there would traditionally have been.

This is a useful Bill, and I welcome it. Unlike the hon. Member for Esher and Walton, I think that part I is important, for one simple reason. Although I hope that it is not used, and agree that it should not be, its inclusion gives the industry the impetus to create a voluntary system. The hon. Gentleman talked about the internet watch foundation--an excellent example of what should have happened and will, I am sure, happen. I hope that, when five years are up, the sunset clause will be implemented.

One of my concerns about part I, however, relates to fees, whether charged on a voluntary or statutory basis. We must learn from our experience with the Food Standards Agency fees. One standard fee leads to problems for small businesses, while a sliding scale leads to questions of fairness. Why should larger companies pay massive sums to subsidise smaller ones? I do not have an answer, but we must get the issue right.

It is important to have a problem-solving mechanism in the voluntary system, as it evolves, so that the Government and the industry can resolve any concerns. One of the worst things that the Government could say is, "We have a problem. That is the end of the scheme, and we will implement part I." The Government should include problem resolution in their dialogue with the industry, and I am sure that they will.

Part I will have an impact on other consumer legislation. We must ensure that that legislation outlined in "Modern markets: confident consumers"--the Government's consumer White Paper--is compatible with part I and does not unintentionally implement it through the back door ahead of time or undermine what we are trying to do in agreements with the industry. Part I will give the industry a spur towards achieving a voluntary system, and allow it to do so in a flexible manner. What is right now may not be right in three or five years. The scheme must be allowed to evolve to accommodate changing technology.

It was interesting to compare part II with the Irish and Canadian examples. I think that the Government have got it about right. About five years ago, I wanted to introduce a scheme to replace all the mortgage deeds held by the company for which I worked, as they took up miles of corridor space. However, the lawyers told me that that was impossible, as each deed had to be written on a piece of paper bearing a seal. It is of critical importance to recognise that the problem goes beyond electronic signatures and includes the sealing of deeds. We must

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ensure that the electronic equivalents of deeds and seals are included in the provisions. I am therefore especially pleased with part II.

However, the Bill will permit individual Government Departments to operate at different speeds. I am worried that not every Minister will share my hon. Friend's enthusiasm for the Bill, and that some--especially if, God forbid, we get another Conservative Government--may not want to adopt its provisions. Therefore, I urge my hon. Friend to set a timetable and to encourage other Ministers to adhere to it.

When they were set, I considered that the targets for attaining electronic government were right. However, although it has been argued that key escrow was a valid consideration in 1996, we have now moved beyond that point. The time has come to review those targets and to consider whether they are still appropriate, given the changes in technology since they were adopted.

I congratulate the Government on the inclusion in the latest ministerial handbook of every Minister's e-mail address. I am delighted at that, as I hate writing letters and e-mails are much easier.

I am pleased that the old part III has been removed, and I welcome clause 13, which is excellent. I was worried that it applied only to part I, but I was reassured on that point--and delighted as a result--by what my hon. Friend the Minister said earlier.

When I intervened on my hon. Friend the Minister, I mentioned Oftel. The old saying is that anyone not part of the solution is part of the problem, and I continue to regard Oftel as part of the problem. Oftel will investigate complaints about any telecommunications company, but the process could take two to four internet years--about six to 12 months. Even when a solution is reached, it will not necessarily be implemented. The process takes far too long.

Oftel is also guilty of considering only the current state of the competitive market. It does not take into account the future and what we are trying to achieve. Do Oftel's decisions encourage or discourage e-commerce? I believe that it has a duty to encourage it.

Oftel says that it does not need more powers to encourage e-commerce. I disagree: however, if it really does not need new powers, it should make more use of the ones that it already has.

I understand that France Telecom in Paris has introduced an asynchronous digital subscriber loop system for £25 a month. That system is available now. BT has suggested that its system, which will be available at some unspecified future date, will cost about £60 a month. I am worried that we are slipping behind in that respect. The magazine CommunicationsWeek International stated:

Last week's decision by BT gets one cheer from me. Oftel must take seriously the question of the local loop, and offer proposals. BT staff say that they are happy to accommodate Oftel's decisions and to deliver on them, but Oftel must take the lead and take a long-term view about where the competitive market is headed. There is a temptation for BT to decide to delay the introduction of ADSL because the lease line system is very profitable. I hope that the company does not give in to that temptation, and that it introduces ADSL as soon as possible.

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The new part III requires a confident regulator with modern powers. Although the changes to part III are welcome and right, we need Oftel to go further.

The warning has been given before that e-commerce might create information haves and have-nots. Much talk has been devoted to ways in which that problem might be avoided or rectified, but the key lies in the interaction between Government and industry on the one hand,and voluntary groups and local communities--both geographical and in terms of shared interests--on the other.

Many information technology pilot schemes are under way around the country, and the one in Lewisham is the most famous example. However, they do not coverthe whole country. One of the biggest challenges facing the Government is to translate successful pilot schemes into schemes that offer something to everyone.

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