Hands off e-commerce

The Government’s proposed e-commerce Bill threatens to stunt the growth of internet trade by imposing unnecessary regulations, argues shadow trade minister Alan Duncan

There has been much talk on both sides of the political divide about the Government’s proposed e-commerce legislation.

In its consultation paper on a draft electronic commerce Bill launched in July, the Government proposed measures to make electronic signatures legally admissible; to modernise the statute book to remove legal barriers to electronic alternatives to paper documents; to grant itself powers to set minimum standards for providers of electronic signatures and encryption services; and to enable law enforcement agencies to require the surrender of encryption keys.

Here I hope to explain why the opposition is not prepared to accept a dog’s dinner of legislation which could cause lasting damage to our future competitiveness.

The reason e-commerce is suddenly high up on the political agenda is because of the speed with which it has developed. This is exactly why the opposition cannot accept Government legislative proposals which are tied to technology as it stands now, and don’t allow for technological development. As the German Government found out to its cost when it legislated in 1994, legislation on e-commerce can be overtaken by technological advance almost before it has reached the statute book.

What is needed is a Bill with the lightest regulatory touch: one which facilitates e-commerce rather than restricts it. Confidence and trust are the important issues – individuals and companies thinking of electronic trading need to be reassured about the acceptance of electronic signatures, and about cross-border regulations.

A short Bill enshrining electronic signatures and associated issues, but doing little more, would be ideal. The industry could adapt to developments, regulate itself, perhaps with a voluntary approvals regime, and the Bill could be revisited in three years’ time to see whether there were any factors which necessitated further legislation.

The 1999 Australian draft Electronic Transactions Bill follows the line of minimum intervention, so why won’t the Government take a similar line in the UK? Why must it muddle up making trade easier with Home Office matters such as law enforcement?

This Government has failed to understand what is happening in the arena of e-commerce and IT policy. It risks shackling electronic enterprise in Britain to burdensome regulations rather than allowing the necessary freedom.

Industry, understandably, wants to know where it stands. However, this is not sufficient reason for the Opposition to give in to Labour intimidation and wave through any Bill. No Bill at all would be better than one which lumbers industry with something that puts it at a competitive disadvantage. To do otherwise would be to fail in our duty.

We are pleased that the Government has put its latest draft out to consultation over the summer and hope that they will fully take into account the responses from industry and adapt the Bill accordingly.

The principles guiding the Opposition’s attitude to the Bill are simple: we believe industry knows best what it needs – it should have the freedom to take advantage of the opportunities e-commerce offers, with the Government facilitating the industry, not holding it back.

We want this Bill to:

* be reduced in length, legally clarifying the status of electronic signatures but leaving as much to the industry as possible;

* leave law enforcement issues to the Interception of Communications Act review, which is already under way – internet crime is best dealt with by the Home Office;

* recognise that cryptography licensing is best done on a voluntary basis by the industry;

* contain a clause to allow revision of the Bill in three years’ time .

All responses to the March and summer consultations should be published in full, in view of the controversial nature of the Bill.

The Conservative Party attaches the highest importance to Britain being at the forefront of the IT revolution. This is why we feel that much is best left in the hands of those who truly know what is needed – those in the industry itself.

The internet didn’t need government to get it going, and it doesn’t need Government to slow it down.

Alan Duncan is shadow trade minister and MP for Rutland and Melton