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9.26 pm

Mr. Nick Gibb (Bognor Regis and Littlehampton): We may start on a note of agreement. The debate has been excellent, with some high-quality and well informed speeches.

The development of e-commerce is crucial to the country's future wealth and prosperity. If we embrace, encourage and liberate e-commerce, enabling Britain to be seen as a haven for e-commerce entrepreneurs, there is the very real possibility that we shall deliver enormous opportunities for people in this country.

Throughout the debate, we have been told that there are 179 million on-line users, and that that figure is estimated to rise, next year, to 250 million and by 2005 to some 350 million. In cash terms, e-commerce was worth $12 billion in 1999. Its worth will grow to between $350 billion and $500 billion by 2002 and to a staggering $1,000 billion per annum by between 2003 and 2005.

Do we want Britain to be at the forefront of those developments or to be an also-ran? Do we, as a nation, want that prosperity or should we just see how it turns out? It is unfortunate for the future of e-commerce in Britain that, at this crucial time, we have a Labour Government. However new it claims to be, although new Labour speaks the rhetoric of enterprise and a free market and deregulation, using that language in its presentation, the reality is that of traditional Labour--suspicion of business, fear of the free market, and an instinct that is always to regulate.

Several hon. Members rose--

Mr. Gibb: I give way to the hon. Member for Ellesmere Port and Neston (Mr. Miller).

Mr. Miller: Perhaps the hon. Gentleman will explain why, if there is a huge divide between the Labour party

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and business, I was able to quote a long and reasonably impressive list of support from companies such as Dell and Microsoft. My hon. Friend the Member for Eccles (Mr. Stewart) mentioned IBM. Why is their support given to Labour, not the Tory party?

Mr. Gibb: Well, it is given to the Tory party on this issue. Those companies are expressing a sigh of relief that, thanks to the Conservative Opposition, who opposed the initial drafts of the Bill, they now have a Bill that they feel able to support.

We saw the regulatory tendency in the early drafts of the Bill. It is the Conservatives who really understand how entrepreneurs work and enterprise flourishes. It was the Conservatives--

Mr. White: Will the hon. Gentleman give way?

Mr. Gibb: Let me carry on; I shall give way to the hon. Gentleman later.

It is the Conservatives who understand enterprise, and it was Conservative shadow Ministers who insisted on the changes to the draft Bills that took out all the restrictions and burdens that would have killed a flourishing e-commerce sector stone dead.

In her press release, the Minister for Small Business and E-Commerce says:

"This historic Bill will help make the UK the best place in the world to do electronic business. Britain led the world in the first industrial revolution. Now we are determined to be winners in the new knowledge economy revolution."

Britain succeeded in the industrial revolution, however, precisely because we had a laissez-faire economy by the international standards of the time. If the Government had wanted an industrial revolution in e-commerce, they should not have put in place the whole paraphernalia of state control that could come into effect under part I.

Mr. Miller: Does the hon. Gentleman not recall that the hon. Member for Esher and Walton (Mr. Taylor), pointed out in his interesting contribution that the policy for mandatory key escrow came from the Conservative party?

Mr. Gibb: Yes, and during the consultation that was begun by my hon. Friend the Member for Esher and Walton, we would have come to the conclusions that we have come to today. What is wrong with the Government is that, even after consultation, they publish Bills containing such paraphernalia. This Bill still allows for the possibility of huge state regulation.

The Government's own consultation exercise revealed deep unease in industry about these provisions. They create enormous uncertainties, so industry has called for them to be dropped altogether. Perhaps the Minister for Competitiveness could add some certainty to the issue by answering the question that the Minister for Small Business and E-Commerce failed to answer properly in response to the speech by my hon. Friend the Member for Rutland and Melton (Mr. Duncan).

Paragraph 76 of the explanatory notes states:

"The Government will commence Part I and set up the statutory scheme, only if self-regulation does not work."

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The Minister has 20 minutes to reply, so will he tell us how the Government will judge whether self-regulation does or does not work? What will the criteria be? Part I contains clauses 1 to 9, which make up 60 per cent. of the Bill. Whether part I comes into effect will depend on the answer to those questions.

The Secretary of State can implement the new regulatory regime without even a debate in the House. It can be done without any parliamentary approval whatever. That is surprising given the Government's expressed view that they always take on board Select Committee recommendations. In its report on the draft Bill, the Select Committee on Trade and Industry said:

"We are particularly concerned at the proposal that the order necessary to bring in part I of the Bill . . . should not be subject to any parliamentary procedure. We recommend that . . . Parliament should have the opportunity to debate and vote on the issue."

Why will there be no vote?

Will the Minister explain what is meant in clause 15 by an

"order made by statutory instrument"?

Will that statutory instrument be introduced according to the negative or affirmative resolution procedure, or will it be one that can be implemented solely by order?

In her press release, the Minister for Small Business and E-Commerce said:

"We are determined to get e-commerce law right and get it in fast. That is why we are introducing this Bill in the same week as the Queen's Speech."

This Bill was introduced in last year's Queen's Speech, but it was not ready a year after that speech. Consequently, we have lost a year in the battle to make Britain a world haven for e-commerce. This Government, not the last one, are to blame for that.

One of the Government's defining features is their fear of confronting issues. That is why in almost all their Bills the meat of the legislation is not in the Bill, but in secondary legislation. Rarely, if ever, is that secondary legislation available before Second Reading. This 15-clause Bill contains regulatory powers in clause 2, which sets out the accreditation criteria, in clause 3, which is on the delegation of functions to an appointed individual, in clauses 5 and 8, which contain a host of regulatory powers to amend primary legislation, and in clause 10. Where are those regulations and why have the Government not published them in time for Second Reading? Will the Minister undertake that, apart from the host of regulations under clause 8, all the other regulations in the Bill will be ready by the time of the Committee stage?

We have had an interesting debate. The hon. Member for Ellesmere Port and Neston pointed out that no one in the House really knows the extent of the internet's growth. He called it an asymptotic curve. He went on to say that all good trade works on the basis of trust, and of course he is right, but that is why it is not necessary to establish this hugely cumbersome statutory framework.

Mr. Ian Stewart: Will the hon. Gentleman give way?

Mr. Gibb: No, because I am running out of time.

My hon. Friend the Member for Esher and Walton made an excellent, informed speech. I now know why his initials and his nickname are IT. He pointed out how long

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it has taken the Bill to gestate and said that it had made elephantine progress. He pointed out, with his usual insight, that Janet Street-Porter, who forecast no future for the internet, cannot count foresight among her many other undoubted qualities. My hon. Friend is right to point out that the uncertainty about whether internet service providers are mere carriers or are responsible for the content of the message is critical.

My hon. Friend gave us some EU intelligence from his friends at Directorate-General XV, which was very interesting, partly because we found out that he has friends at DG XV. He also urged the Government to show leadership and aim at higher targets than 50 per cent. of procurement by 2005. Why have the Government exempted Customs and Excise and the Revenue from the storage provisions in clause 8? Tax returns can be submitted by e-mail, but why cannot the measures in the Bill apply to record-keeping and deal with the requirement to keep books and records for six years?

The hon. Member for Milton Keynes, North-East (Mr. White) was right to point out the need for continual consultation on these issues. There may be many companies in the IT sector today which did not even exist when the consultation process took place in March. That was also the view of the Select Committee on Trade and Industry.

The hon. Gentleman also raised the important point about the fees that the statutory regulatory body can charge. There is nothing in the Bill that limits the level of those charges, and without such limits there is a risk that fees will become a form of taxation--or, as my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) called it, stealth taxation--which has not been approved annually by the House.

My hon. Friend the Member for Bury St. Edmunds demanded a timetable for amending the legislation for other Departments, as provided for in clause 8. It is a pity that none of those regulations has been published at the time of the Second Reading debate. He pointed out, in an excellent speech, that it has taken two and a half years for the Government to introduce the Bill. He agreed with many hon. Members and the Law Society that part I is unnecessary. Like many other hon. Members, he alerted the House to the murky fee issue.

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