E-Europe 2005 Action Plan

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Rev. Martin Smyth (Belfast, South) (UUP): Will the Minister give us some understanding of our role in the European market? The latest document states that three European countries regularly come in the first five. Where does the UK stand and where is the need overall in Europe to improve our competitiveness in this realm?

Mr. O'Brien: There are 95,000 software and computer service companies operating in the UK, representing 3 per cent. of UK GDP at £32.9 billion in 2003. It is the largest market in Europe. The software sector was worth £7.3 billion in 2003 and it includes companies that produce generic software for the business and domestic market, as well as bespoke software, and that install systems software for commercial and public sector clients. In the market, there are a large number of big multinational companies, including several British firms in the top 20. UK computer service providers include BT, Capita, ComputerCentre, Xansa and LogicaCMG, all of which have a significant market share.

We are seeking to ensure that the European Commission, through its plan to develop e-commerce, is responding to our need to achieve much more open markets and to be able to access European markets that in some cases have quite a lot
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of regulation that we do not, as well as to see whether we can obtain standardisation of the processes—particularly some technical ones—so that there can be an interchange in respect of information and how people communicate with each other.

The UK is third according to recent global benchmarking and we are leading in Europe in ICT. We are very close to Sweden, which is just ahead of us; Ireland, which is pretty much equal to us and doing remarkably well; and Canada, which is, sadly, just ahead of the European countries and doing particularly well. Interestingly, I have also spoken to South Koreans, who are doing well in this sector. We need to be well aware that countries in south-east Asia, and Asia generally, are developing their strength in ICT at a remarkable speed.

Jim Dobbin (Heywood and Middleton) (Lab/Co-op): The issue of security is absolutely essential here. Is the Minister convinced that enough is being done to protect the security of the information networks, particularly with reference to information that might be used for terrorism?

Mr. O'Brien: Much is being done, although I do not think I would be complacent enough to say that enough has been done. We face, particularly on the issue of terrorism, people who will seek to undermine our security and who are constantly trying to find vulnerabilities in our protective mechanisms, in our ICT and in other ways. As well as being a direct threat to us, they are trying to use our systems to produce funding, obtain information and mislead us.

There are a number of areas where we must develop significant protection. More can always be done, but we are active in a number of international forums such as the Organisation for Economic Co-operation and Development. We must also ensure—this is important but, as politicians, we often forget to do it—that users of data are warned that their data are not always secure and that they know how to use the internet. They must have protection and security against criminal fraud as well as against terrorism.

We are working with the Confederation of British Industry to develop awareness among small businesses of the fact that they may be subject to people trying to defraud them through the internet. Only a month ago, I launched an initiative with Digby Jones in Birmingham to try to deal with that. All that work is enormously important, because security needs to be constantly improved. There are people out there—not just terrorists, but criminals and others—who will constantly seek to find new ways to use the new technology to make money fraudulently or criminally. We need to be constantly in that battle, and just ahead of them.

Mr. Hugo Swire (East Devon) (Con): Is the Minister satisfied that enough has been done to help e-commerce with the hazard faced by many businesses of pop-ups and constant invitations to take delivery of pills to enhance flagging abilities in some areas—[Interruption.] Some may need those, some may not. I
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would not dream of second-guessing anyone in this Committee, Mr. Chidgey, nor would you expect me to.

To some extent, the pop-ups have replaced the blight of unsolicited faxes, which were quite costly to a number of businesses. What discussions has the Minister had with his colleagues about those unsolicited advertisements and unsolicited invitations to part with what little money some people have so as to invest in Nigerian gold bullion and other such matters?

Finally, what discussions has the Minister had with his European colleagues about the enforcement of deals done on the internet? Specifically, there was some reporting over Christmas of a lot of undelivered goods that had been ordered over the internet. Should there be an obligation on companies to adhere to promises made on the internet, as there is if one buys goods in any high street?

Mr. O'Brien: The hon. Gentleman raises two separate but important issues. He asks whether I have had discussions with Ministers in other Governments, and the answer is yes. In particular, we are working up some initiatives with the US and Japanese Governments. I met the Japanese Minister a couple of months ago to plan further meetings to develop international understandings on how to address some problems related to spam and various fraudulent schemes.

The difficulty is that some traditional methods that we have used to deal with the darker side of the internet will not function. Passing a law is fine for the UK and will deal with some problems in the UK, but much of the stuff—in fact, most of it—comes from abroad, and some of it comes from countries with law enforcement systems that are relatively less efficient than ours.

We are seeking initially to develop understandings between Canada, the US, Japan and ourselves, and also to involve the European Union. We hope to reach agreement on getting some fraudsters dealt with in those countries so that, for example, if we flag up a problem, those other Governments will be able to address it and deal with it fairly quickly under their own domestic legislation, although they would do so under an international agreement.

The difficulty arises when we are dealing with countries that are less sophisticated in their law enforcement systems—some countries in Africa or Asia, perhaps—and where it is sometimes difficult to find out exactly who is producing some of that stuff. We will therefore have to develop a new method of dealing internationally with the issue in the coming years, because we cannot just rely on the old system of negotiating an international treaty over a number of years. Such matters will need to be dealt with much more effectively and quickly than that.

We are, therefore, trying to talk through with the Americans, the Japanese and other colleagues the development of understandings between Governments on how to deal with things quickly and how to respond to the changes in technology, which can come into effect very quickly indeed. It will take some time to
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finish those discussions, but we are very much aware of the issues.

We have a similar problem in enforcing deals on Christmas presents. We can use the domestic sale of goods legislation in respect of UK companies, but not internationally. Of course, contract law applies in the UK and internationally. Trading standards will take an interest in all this, but the difficulty is that if someone buys something in another country, they are subject to the laws of that country. Certain things may be able to be enforced here, but it will be difficult. In the end, the person will probably have to look to the courts in another country for enforcement.

Richard Younger-Ross: To return to the questions that the Minister may put to the Commission, could he enlighten us as to whether he has had discussions, or what questions he has put, as regards strengthening the Commission on competitiveness, particularly with regard to American anti-competitive practice? The Commission spent quite a long time dealing with one company, which seemed to tie up most of its resources, but I am aware of constituents and others who wanted to press complaints regarding other EU companies that were basically, in their words, ''stealing patents''. Can the Minister enlighten us as to what he is doing to push the EU to do even more?

Mr. O'Brien: It is extremely important that we ensure that patent agreements that have been arrived at over time between countries are enforced in the normal way. The difficulty is with getting international agreements on some digital information, for example. Particularly in the area of ICT, we are developing a number of products that are just different, and the language by which we describe some of those products is not well developed. Negotiating agreements, particularly on how to protect digital information by patenting or copyrighting it, is not easy. We have had some negotiations recently through the European Union. Those negotiations are embedded in a certain amount of complexity, which is basically about identifying agreed concepts and wording, but they are ongoing. I hope that we can improve the way in which we build those agreements, but there is still work to be done.

On an electronic signatures directive, we support authentication in that respect and the new interoperable solutions and technologies, but there is much work to be done.

Mr. Iain Luke (Dundee, East) (Lab): Before I became a Member of the House of Commons, I was involved, as a senior lecturer in further education, in the early developments of HNC and HND courses in e-commerce and e-business. The updated action plan, dated 17 May 2004, talks about

    ''The establishment by the end of 2005, of a database of SME best practices with regard to e-business.''

It talks later, on page 70, about the various instruments that can support that good practice, which is ''to promote mutual learning'' through

    ''the e-Business Support Network (eBSN) and European Schoolnet in the area of e-learning.''

Will my hon. Friend the Minister accept that further education courses throughout the United
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Kingdom have a role to play in building skills and the transfer of best practice? It would also be advantageous if the Commission, through its various funds, could promote such learning in objective 1 areas throughout the UK, which obviously suffer from downturns in trade, poor employment rates and poor small business start-up rates. That may be a way of encouraging such economic activity.

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Prepared 13 January 2005