Select Committee on European Union Minutes of Evidence

Examination of Witness (Questions 1240 - 1248)



  1240. That is somewhat different from the practice in the United Kingdom and in Ireland.

  A. That is right. The smart card issue, I am afraid I cannot answer your question directly in terms of where we are going but one of the things we found, into which our Directorate responsible for financial services is looking, it relates to one difference between the Continent and the United Kingdom and Ireland. The use of credit cards for payment on the Internet is the key means at this stage. What is interesting is that in the United Kingdom, as with America, there is a charge back system which the cards do not offer on the Continent. Although we are looking into that, we actually think the charge back system is something which is far more confidence building than knowing that you have got a smart card which has a certain level of security on it. The reason for that is you can always check before you clear your balance whether in fact you did order or not the product which is not the case, for example, here in Belgium. I just get the bill and it is taken straight out of the bank.

Viscount Brookeborough

  1241. It is like a switch card?

  A. Yes.


  1242. It happens on the day.

  A. Yes, it happens on the day. That has been seen as a major inhibitor. I think Consumers International, which is a European consortium of consumer bodies, looked into this issue and found that if charge back were generalised across the Community that would probably be far more beneficial to consumers than talking about the smart card system. Smart cards, as you rightly said, are already here on the Continent and certainly are quite accessible. The issue about the information held in the card that could be used in a dangerous manner, more generally that issue comes up very much in the whole argument regarding encryption standards and dual-use controls etc. The Bill that I understand is going on in the United Kingdom at the moment—

  1243. RIP.

  A. Yes. One fully understands for reasons against terrorism or whatever, there needs to be a possibility to have access to encrypted data. However, the idea that you would be advised to give your private key for reasons of economic interest, that goes very, very far. Looking at it from the traders point of view, and looking again from this consumer confidence point of view, with no disrespect to the Government or whatever, some retailers were telling me this morning "we might as well establish in the Republic of Ireland because we could sell the idea that here your encryption is safe from", I would not use the word "spying" but you can see what I am getting at. I think that is where the problem lies more than maybe in the smart card issue. I do not think that is seen as an issue here.

  1244. Just for your own information, I do not know how close people are to the ministers who are piloting this through Parliament but some of us had meetings with ministers a couple of days ago and they said there are a fair number of other European countries who are watching with considerable interest what is happening in the United Kingdom. It is not quite along the lines of horror, it is that they have not come down on which side of the fence they are sitting.

  A. Absolutely. My comments were very much from the perspective of where I am coming from, which is that of our remit, if you like, which is to encourage trade. It is where you draw that grey line. Of course, there is obviously an element of trust in your own Government and I suppose I am still a United Kingdom citizen and I can understand the concern there. I am not surprised at Member States. Now talking as a Commission official I would be interested in looking at that. I think there is that thin line when you start saying on the one hand one wishes is to ensure criminal law enforcement and one can have access to information and the other thin line, coming back to the previous question about knowing what I am buying on the Internet from my tax returns. That is what I think from the citizen's point of view it is a real issue. One of the big problems when one looks at the Internet is there has been a tendency to suggest that of course it is a very useful, fast medium but the risks are far greater when you trade, for example, on the Internet than when you use your telephone. That is completely incorrect.

  1245. Rubbish.

  A. That is total rubbish.

  1246. The same with using your card in a restaurant.

  A. Absolutely, where you sign it. It is very interesting that at one time there was a claim that there was an enormous amount of credit card fraud on the Internet but, in fact, what people found out was that the fraud came from using the same cards they were using in the restaurant and that was where the copies had been made. One should not over-exaggerate the risk.

  1247. Following that through and picking up on Lord Brookeborough's point, as someone who has lived in the United Kingdom and now lives here and has to have an ID card, do you find this a great invasion of your personal liberty?

  A. No, I do not. I have other problems with the Belgian administration which I will be quite happy to go into later. No, I do not. I think in terms of privacy one always realises that there is certain information which will always be available to the authorities, that is absolutely normal. I am an ex United Kingdom civil servant as well, I signed the Act, so there is an element of realism. Personally I do not find that to be a problem. In the same way that I had a passport before, now I have an ID card. In fact, it costs me less with an ID card to cross the border than it does having a passport, although as a European official I do not need to worry about the cost within the Community.

  1248. This has been an excellent session. We are very, very grateful indeed.

  A. You are most welcome.

  Chairman: And for the work that you did before you came. Thank you.

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