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Ms Hewitt: In case anyone might be misled by what the hon. Gentleman is saying, let me make the position clear. I was criticising the policy of Ministers in the previous Government. As a Minister, I take responsibility for policy decisions. As the hon. Member for Esher and Walton (Mr. Taylor), a former Minister, said earlier, my officials have always done an excellent job and, I am certain, will continue to do so. I was complaining about the policy decisions of the previous Government.

Mr. St. Aubyn: The policy of the previous Government just before the election was to issue a document for consultation and to come back with legislation. The Minister's policy is to introduce the clauses before there is any need for them and before there can be meaningful consultation about the need for part I.

Ministers do sometimes make mistakes. Our Front- Bench team has been big enough to admit that our first thoughts on the subject two and a half years ago, when the development e-commerce was a small cloud on the horizon, may have been somewhat askew. We have learned the full lesson from that mistake. The Minister and her Department have only half learned it. If they had learned the full lesson, they would never have come before the House tonight with part I.

We know about the saga in the summer with the Lord Chancellor. He gave the green light to the Brussels convention that will kill much of e-commerce's potential in Europe. If, under the convention, a business here with a customer in another European Union state were subject to the law of that state when it struck a deal over the net, that would stop it doing business with large parts of Europe. Many businesses that are happy to receive customers from Italy, Greece and other countries would think twice if they thought that the terms of contract that they had agreed would ultimately be determined by a law in Italy or Greece, rather than by one in this country. That is not to be a little Englander, but to reflect on this country's immense reputation, to which the hon. Member

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for South Thanet (Dr. Ladyman) alluded, for having the highest possible integrity when it comes to our system of law.

Another reason why we could become a centre for e-commerce if there is a sane system of developing the law of contract in Europe is that when people around Europe decide that they want to enter an agreement, they will want to do it under English law because they know that it will be fair to all sides. That is a good reason why we stand an excellent chance of developing a centre for e-commerce.

That will not happen if ideas such as the Brussels convention come into force. The Lord Chancellor was perfectly happy for the convention to proceed. Such misjudgments suggest that part I might be allowed to proceed on the wrong grounds and with the wrong judgment through an agreement by the Minister or one of her colleagues in the near future.

Mr. Ruffley: Has my hon. Friend wondered, as I have, whether the Minister was even notified that the Lord Chancellor's Department was going to take such action?

Mr. St. Aubyn: My hon. Friend makes an excellent point. The Minister owes it to the House to answer it. In the so-called joined-up Government, was there anything joined-up about the decision making of the Lord Chancellor's Department? Did the Lord Chancellor consult with the Department of Trade and Industry beforehand? If he did, can the Minister confirm that she agreed to his decision? What does that tell us about her competence and that of her officials in managing these important matters?

Dr. Palmer: I do not necessarily disagree with the hon. Gentleman's view that the jurisdiction should be that of the vendor, but does he agree that there is a dilemma? It is conceivable that a medium-sized firm, a large firm or a member of an industry association would feel able to deal with customers with a reasonable familiarity of the law in other countries, but it is barely conceivable that the ordinary consumer will feel comfortable with operating under the law in other countries. The logic of the hon. Gentleman's argument is that, if somebody in Greece buys something from a British company or somebody in Britain buys something from a Greek company, they must in principle be willing to accept whatever rules prevail in the other country.

Mr. St. Aubyn: I do not have a crystal ball, but I believe that the trade between countries will be primarily between businesses. Consumers will look to firms in their own country, albeit on a website rather than in a high street shop. The hon. Gentleman's point may prove to be pretty arcane.

According to figures supplied by DHL, e-commerce was worth $45 billion in 1998 and the latest projections suggest that it will reach $1.3 trillion by 2003. That is five years ahead of the projections made by the DTI committee only a few months ago. The scene is changing very rapidly. The sector is dynamic and it has tremendous potential.

DHL also pointed out that the cachet of the "Made in Britain" label will be very strong. If the hon. Member for Broxtowe (Dr. Palmer) is right and people are hesitant

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about dealing outside their own jurisdiction, they might still be prepared to deal with products made in this country under contracts made in this country, because our legal system has such an excellent record of fairness to those who come to this country from outside.

Another factor is that we are very wired. The latest thorough survey shows that 40 per cent. of adults in the UK have access to the net. It is estimated that in the past month alone, 20 per cent. of all adults in this country used the net. The greatest usage is among two groups. Some 70 per cent. of 16 to 24-year-olds are on-line. The other day, I was visiting the Universities and Colleges Admissions Service headquarters in Cheltenham, where I was told that its reference bible for college courses will be a virtual manual from next year. There will not be a printed version. Everyone who wants to sign up for a college or university course will go through the net to UCAS. They will find an excellent site, where they can state their area of interest. The search engine will deliver to them all the colleges with the courses that they are looking for.

If they want to find out what sort of character is going to go to that university or college, they can call down from the database a map of Britain, showing the proportion of students coming from each part of the country. There is tremendous power in this new technology, and UCAS is at the forefront of it.

Some 70 per cent. of graduates are on-line. I am not asking the Labour party to buy the trickle-down theory, but these groups are the leaders and shakers in society and will be the spearheads of a much-wider usage. We do not need to have angst about how many people use the net today. Anyone can drop in to a net cafe in the high street and get access or an e-mail address for nothing from one of the providers. This is an accessible medium already.

As a country, we are good at taking on new technology. We have a great deal more success with mail order magazines selling new ideas than other countries in Europe. However, according to the last estimate, our consumers are two years behind those of the United States. I visited the US a month ago, and people can talk about nothing other than e-commerce; it gets a bit tiresome after a while. Nevertheless, one got the sense that consumers over there are getting plugged in. Although we are behind, it will be less than two years before this country reaches the stage that America is at today.

Britain has a golden opportunity. We have the will, the potential, the background, the reputation and the skills. We also have a driving need. The downside of e-commerce is that the world of financial services--which has brought so much prosperity to this country and this city--will be shrunk by e-commerce. Many of the services carried out today in the City of London will not exist in five years--certainly within ten years. There may be just one financial centre, if there is any need at all for a financial centre in the world. If so, it certainly would be New York.

We need something to replace the financial services economy that has motored our economy and made us all richer in the past two decades. We must not only aspire to become a centre of e-commerce. We must become a centre of e-commerce if we are to fulfil the potential of the economy. That potential was the golden legacy of the

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previous Government, and tonight, the Minister yet again is putting it under threat by her measures, which will impose regulation and restrictions on the power and dynamism of the British people.

8.53 pm

Dr. Nick Palmer (Broxtowe): I wish to declare a mini-interest. I am the keynote speaker at a number of conferences on electronic commerce and its regulation. It has not happened yet, but eventually I may be paid for one or two of them.

There is a huge world market to be facilitated by legislation such as this. I will not repeat the statistics given by other hon. Members, except to note that the total number of internet users expected next year is 250 million, which is larger than the population of the United States. If one considers the attraction to a business of marketing itself to the entire American population, and then considers that this market is a larger opportunity, one can see why any business must get into this area.

The industry has given a broad welcome to the salient points of the Bill, and we are all familiar with aspects of it that were not popular. It is generally accepted that reasonable compromises have been made, and there is little appetite for delay at this point. Opposition Members gave reasons for that, which sits oddly with the rather mysterious reasoned amendment, which appears to suggest that legislation should not proceed until we have had a chance to study the interaction with European directives that are not yet entirely clear. If we were to make the amendment, it would not be possible to proceed and we would have to delay, with all the adverse consequences mentioned by both Government and Opposition Members.

It is crucial for any business, political organisation or Government dealing with the internet not merely to recreate the existing ways of working but to adapt them to the new situation. Similarly, we need to adapt the legislation. It is a broadly accepted truism that legislation on-line should be the same in most situations as legislation off-line.

That was agreed by the G8 as one of the principles and has been quoted rather glibly in many contexts, but there will be situations in which it is profoundly difficult, because if we want diverse national legislation to coincide with the equivalent on-line legislation we will require that on-line legislation differs in different countries. One of the Government's objectives should be, and I think is, to achieve sufficient convergence within European consumer protection and contract legislation to narrow the discrepancy between what is accepted in each country and what is accepted across the countries.

The Gartner group and others have worked out that there are 40,000 mentions of the words "signature" and "writing" in British legislation, and some have suggested that the Government should impose a timetable for perusing and, if necessary, correcting all those mentions, although it has not been made clear whether we should simply hold up our hands and give up if that timetable is not met.

I want to draw on the suggestion made by my hon. Friend the Member for Sittingbourne and Sheppey (Mr. Wyatt) that we have quarterly reports from each Department on progress in implementing that mammoth

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task of legislative revision. It should not be left to individual Ministers to pursue it as and when time is available.

The location problem often comes up. Some groups say that the difficulty of identifying where the seller and the buyer reside makes it extremely difficult to have any rules for internet commerce based on national jurisdiction. It is not clear what jurisdiction would apply to a virtual vendor floating in cyberspace. That is a genuine problem but perhaps not so great a one as has been maintained.

An elderly couple in Beeston in my constituency called me to say that they frequently had calls requesting phone sex. A Californian company that specialised in a sex website was advertising the services of girls based in Guyana. To dial Guyana from California, one uses the dialling code 01159 and if one dials that code in Britain, one gets Beeston and my constituents. I wrote an e-mail to the company and said that it was unlikely that my constituents would send it royalties and that it was losing business. Overnight, the company changed the website to give the correct dialling code from Britain.

That example shows how international internet commerce can hit the vendor in a way he had not expected, how it can hit the buyer in a way he had not expected and how it can hit third parties, who might barely have heard of the internet. If we add to that the possibility that it is not clear whether the website operators are in California, Guyana or Britain, the problem of jurisdiction becomes clear. However, in any contract between two genuine parties, neither of whom seeks to defraud the other, it should be possible to establish the jurisdiction without great difficulty.

As a basic principle for what is unattractively called the TrustUK mark, which will become the TrustEurope mark, I suggest that people who wish to benefit from the mark should state where they are located for the purposes of jurisdiction. As the hon. Member for Guildford(Mr. St. Aubyn) suggested, people based in Germany, Honduras or Guyana might deem it desirable, for one reason or another, to base themselves in Britain for the purpose of jurisdiction--perhaps to appeal to British customers. That would be welcome.

If one of the parties seeks to defraud the other--for example, if the vendor is selling a product that does not exist or the buyer is seeking to get the product without paying for it--the indication of location may be false. That narrower problem can be specifically addressed by the police using credit companies to locate the true address of the person involved. Fraud is a specific case, and there is no need to wreck the whole principle of location and jurisdiction for that alone.

When we set the requirements for the TrustUK and TrustEurope kitemarks, I suggest that we say, first, that the location for which jurisdiction applies must be given; secondly, that if no location is given, the purchaser's location applies; and, thirdly, that it is an offence to give a false location.

I welcome the proposals and the industry as a whole, to take a realistic view of what has been said, is enthusiastic about part II. The industry is also willing to accept part I, because it recognises that it is a reasonable compromise and that the Government cannot altogether give up the possibility of legislation should self-regulation not be sufficient. I commend the Bill to the House and thank the Government for introducing it.

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