Companies (Millennium Computer Compliance) (Hansard, 29 July 1997)

§ Mr. David Atkinson (Bournemouth, East)

I beg to move,

That leave be given to bring in a Bill to require companies to conduct an assessment of the capability of their computer systems to deal with calender dates after 31st December 1999; and to report both on those assessments and on the actions their directors propose to take in consequence. This is my second attempt to introduce such a Bill. The first, which the House gave me leave to introduce last December, was given an unopposed Second Reading, was amended in Committee, but had not completed its Report stage when Parliament was dissolved for the general election.

The Bill's aim is to avoid much of the widespread chaos and confusion that are being increasingly predicted to occur throughout the world at the turn of the century—in just over 29 months' time. I am grateful to those hon. Members from all parties who have again been so willing to sponsor the Bill.

The cause of the doomsday predictions is the inability of the majority of computer systems to recognise the year 2000. They use, as we all do, two digits for the year of the date instead of four. Thus, today's date is written 29/07/97 rather than 29/07/1997. Unless they are properly reprogrammed, computer systems will recognise the year 2000 as 1900, or simply reset to some other date. That will mean that they will no longer deliver what they are programmed to deliver. Because so much of Government business and daily life has come to rely on information systems, the result will be, to use a tabloid word, "catastrophe", which must be a matter of urgent concern to the House.

When the matter was first raised on the Floor of the House in my oral question to the then Prime Minister in December 1995, it was greeted with expressions of ridicule and disbelief from all sides. I suggest—or at least I hope—that most, if not all, hon. Members are now aware of the issue and realise that there is a serious problem which must be addressed. That is referred to in the updated Parliamentary Office of Science and Technology note No. 98, "The Millennium Threat—an Update", which was issued last month. It is in the Library, and I recommend it as essential background reading.

The briefing note forecasts the dangers of failure to ensure that computer systems are millennium-compliant. They include payroll systems collapsing so that workers cannot be paid; financial records losing track of investments; invoicing systems failing to generate bills or charging 100 years of interest; telecommunication networks failing; the halting of the supply of utilities such as gas and electricity; the unpredictable behaviour of embedded microchip systems in items such as elevators, bank vaults or medical equipment; and the disruption of Government systems such as those responsible for benefit payments, criminal records, medical records and revenue collection. All that has been confirmed in the report to the Cabinet by the National Audit Office, entitled "Managing the Millennium Threat", which was published in May.

In response to my Adjournment debate on the issue in June last year, the then Minister for Science and Technology, my hon. Friend the Member for Esher 148 and Walton (Mr. Taylor), referred to the action that his Government were taking on the computer systems for which they were responsible in the public sector. He announced the establishment of TaskForce 2000, involving the private sector in raising awareness of the problem in industry and commerce, and he warned that failure to deal with it could lead to commercial collapse—a warning which I believe his successor has repeated, as has the President of the Board of Trade.

My Bill is designed to avoid such commercial collapse in the private sector of British business. It will give the owners of British companies—the shareholders—the information to which they are entitled about the security of their investment at the turn of the century. It requires companies to conduct an assessment of the capability of their computer systems to deal with calendar dates after 31 December 1999 and, in the annual report to shareholders, to report on that assessment and on the actions that their directors propose to take as a consequence.

It has been suggested that my Bill would impose new and unnecessary regulation and red tape on business, which, to their credit, the Government, like the previous one, have said they are determined to avoid. Not only is that response misleading, but it seeks to avoid the unique nature of the issue. Far from imposing new burdens on business, the Bill merely clarifies for company directors and their auditors an existing duty to give shareholders a true and fair assessment of the company as a going concern in the foreseeable future.

The Bill will help to protect the businesses of those who have acted responsibly from those who would not otherwise have acted without pressure from their shareholders, because computer systems that are millennium compliant will also fail if they are linked to those that are not.

Critics of my Bill have complained that the action that it requires businesses to take will be too costly for them to bear. My Bill imposes no such costly action; it merely obliges directors to report on their action—or inaction, as the case may be. Of course, in many cases, the cost of inaction will be the biggest burden of all—bankruptcy.

If I needed any further justification for the Bill, it came from the press conference held by TaskForce 2000 at the Department of Trade and Industry in February 1997. It was to report the outcome of a second survey, eight months after the first, to find out how British business is responding to this millennium time bomb. The very same companies that were approached the first time were approached again and asked the same question. The answers are revealing and worrying.

Whereas only 15 per cent. of senior mangers were aware of the problem last year, today 28 per cent. are. But whereas 8 per cent. of companies had completed an assessment last year, that figure has gone up to only 9 per cent. That is not a rate of progress which can or should satisfy anyone. It confirms my view that there is now no alternative but to legislate.

The Bill has received encouraging and widespread support from the top 100 companies that I consulted and whose amendments are now incorporated in it. I hope that the Government will recognise the Bill for what it seeks to achieve and that it will be given a swift enactment. If so, it might be sufficient, together with a fully supported TaskForce 2000 and other initiatives by the 149 computer industry itself, to avoid for Britain much of the incalculable chaos and catastrophe that are being predicted if not enough is done.

Nevertheless, it remains a race against time. Only 630 days remain in which to take action. This is one of the greatest challenges facing British business today. Like the change in the millennium itself, it cannot be postponed. That is why I hope that the House will give me leave to introduce the Bill today.

Question put and agreed to.

Bill ordered to be brought in by Mr. David Atkinson, Mr. David Amess, Mr. Frank Cook, Mr. Tam Dalyell, Dr. Lynne Jones, Mr. Nigel Jones, Mr. Charles Kennedy, Mr. Robert Sheldon, Rev. Martin Smyth, Mr. Stephen Timms, Mr. John Townend and Mr. Dafydd Wigley.