Millennium Conformity (Hansard, 31 March 1998)

§ Mr. David Atkinson (Bournemouth, East)

I beg to move, That leave be given to bring in a Bill to make provision with respect to the capability of computer systems and other goods and related services to deal with calendar dates after 31st December 1999; to require certain invoices to be paid promptly; to make 31st December 1999 a bank holiday; and for connected purposes.

The sinking of the Titanic was a disaster that was not foreseen. Indeed, it is not often that we can see a crisis coming with sufficient time to avoid it. This, however, has been the case with the crisis that now faces the United Kingdom and every country in which the daily lives of its citizens rely on the efficient functioning of computer systems. This crisis will arise in 640 days' time because most computer systems will not recognise the year 2000. Unless they have been retimed, reprogrammed or replaced, they will quite simply no longer perform as they have been programmed to do.

As the Prime Minister told a conference of business men yesterday, the resultant chaos and confusion will affect the work of Governments, the conduct of business and the welfare of entire societies, and it will be global. No advanced country can isolate itself unless effective action has been taken. Nevertheless, there is much that individual countries can and should be doing to protect their own public services and the private sector. It is this that the Bill is all about.

Until 27 November 1997, when the Chancellor of the Duchy of Lancaster made his statement about the millennium compliancy of computer systems in central Government, I had been the only Member to have raised the issue. The first time was in an oral question to the then Prime Minister in December 1995. I raised the issue again in an Adjournment debate in June 1996. Later that year the House allowed me to introduce my first Bill on the matter—the Companies (Millennium Computer Compliance) Bill—which had reached consideration on Report by the time of the general election last year. I reintroduced it to the present Parliament last July. It remains on the Order Paper for Second Reading, but I must reluctantly accept that time is running out for it to be effective.

Of course I regret that this Government, like the previous one, are failing to appreciate the simple solution to the unique issue which my Bill proposes, requiring, as it does, company directors to conduct an assessment of the ability of their computer systems to recognise the year 2000 and to report on the outcome of that assessment to their shareholders in the annual report. Instead, as the Prime Minister confirmed yesterday, the Government are relying on voluntary persuasion for it to be recognised that there is a need to be aware of the problem, and to take the necessary action in response.

Today, in the light of the evidence, I urge the House to accept that the situation is too serious to rely on voluntary persuasion, and that there is now no alternative but to require action to be taken by law if we are to avoid problems, many of which are not yet foreseen, which undoubtedly would put many businesses and many people at risk.

What is the evidence to support the need for my proposed legislation? Unfortunately, there does not exist in this or any other country any clear measure of progress 1050 on compliance and readiness in the private sector. There is no quarterly report, such as the Chancellor of the Duchy of Lancaster has introduced relating to the situation in central Government. Nor is there any clear measure to quantify progress in the provision of public services outside central Government, such as the national health service and local government. My Bill would address that.

All that exists today are various surveys, all of which come to much the same conclusion: that less than 10 per cent. of businesses have carried out a full system audit; that less than one fifth of business managers consider the problem to be critical; and that about half the businesses in the country have taken no action at all in response to the problem.

As the Confederation of British Industry told the Select Committee on Science and Technology, which reports on this issue next week: There remains a disturbingly large number who have not recognised that the millennium date change may have a drastic effect on their businesses.

Cap Gemini, which is Europe's largest computer services company, told us: one in six UK organisations will fail to meet the deadline, and therefore 38 per cent. of GDP will be at risk. Yet these surveys almost certainly give a false, and probably over-optimistic, picture, because many companies will be reluctant to admit to being unaware; that they have yet to take action; that they are being advised by their lawyers not to say anything for fear of possible legal action, or of giving information away to their competitors.

The truth is that we have no means of knowing the state of millennium readiness of this country. As a result, companies will be—and are being—panicked into replacing whole systems unnecessarily and at enormous cost, and both private and public sectors will put into place contingency plans, which may not be necessary, to avoid the breakdown of services that is predicted.

My Bill can avoid this nightmare scenario. It would require any company or person who manufactures, produces or sells any computer system or provides any related service to ensure that these recognise 1 January 2000 and beyond, as defined by the British Standards Institute code of millennium conformity. They will be required to indicate conformity on their goods and services, and will be breaking the law if they say that they are compliant when they are not.

The legal requirement to label will be similar to the way in which drugs are required to be labelled and dated to protect the consumer. That is why, in my view, it is essential. Companies will be required to make a declaration of conformity. Indeed, every company will be required by the appropriate Secretary of State to provide such a written declaration no later than 1 October 1999. That will enable the Government to establish, as they cannot do at present, the country's state of readiness, and to respond accordingly.

As one of the major problems concerns embedded chips—for example, those in production lines, security systems and telephone exchanges—the Bill will require companies using such systems to label them accordingly.

I emphasise just how valuable the requirement to disclose will be to force those responsible to take the action that is not being taken. The Bill will also provide 1051 for all invoices for payment earlier than 1 December 1999 to be paid and cleared no later than 10 December 1999 to ensure cash flow, just in case it becomes impossible to do so after the new century has begun.

Finally, the Bill proposes that Friday 31 December 1999 should be designated a national bank holiday to allow key staff to come in and make final checks of the readiness of compliance, and of contingency plans, in time for midnight of the millennium.

I recognise that the Bill is regulatory, in obliging businesses and the providers of public services to satisfy statutory requirements, but, as I have argued, that is now necessary. It does not matter whether most of the public sector and most of the private sector invest in millennium compliance. As Cap Gemini warned the Select Committee, if even a tiny number of key organisations, such as utilities, banks or central Government Departments, miss the deadline, the knock-on effects will cause severe economic disruption. Only the Government can take responsibility for ensuring that that does not happen.

The Bill provides the Government with the means to avert that disruption. It complements what the Prime Minister announced yesterday, by making Britain one of the world's best-prepared countries. That is why I hope that the House will give me leave to introduce the Bill today.