E-commerce

HC Deb 04 November 1999 vol 337 cc463-5

3. Mr. Tony McWalter (Hemel Hempstead)

What steps he is taking to promote the expansion of e-commerce. [95824]

17. Mr. Denis MacShane (Rotherham)

What measures he is taking to encourage e-commerce. [95840]

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt)

The Government are determined to ensure that the United Kingdom is the best place in the world for electronic commerce. Our vision and strategy for achieving that was set out in the report "[e-mail]", which was launched by the Prime Minister in September.

Mr. McWalter

I welcome my hon. Friend to her new duties. She has the ability and energy to do this important job.

I understand why the Treasury felt it necessary to close a tax loophole with IR35, but yesterday alone I had seven green cards notifying me of contact about it from my high-tech constituency. Many people who act as consultants for the IT industry enjoy substantial remuneration, but they may be tempted to move to other countries. If the industry was subject to wholesale relocation there could be consequent damaging effects.

Although I welcome the changes that have been made to improve the IR35 regulations, will my hon. Friend tell us whether the Department of Trade and Industry will provide a scheme to ensure that the information technology knowledge base is kept in this country?

Ms Hewitt

I am grateful to my hon. Friend for his kind remarks, especially in view of his distinguished professional career in the IT industry. I welcome his recognition of the fact that the Government have listened carefully to the views of that industry and many others, and have responded to them in the revised proposals that my right hon. Friend the Chancellor of the Exchequer has published. The new proposals provide the flexibility that is needed in the fast-growing IT sector, and are welcomed by many of his constituents and many IT contractors.

It is essential that we close a crude tax loophole that I am sure neither my hon. Friend nor his constituents would defend. That loophole enables a subcontractor earning £1,800 a week to avoid paying any national insurance contributions, whereas nurses, teachers or IT employees earning significantly less pay their fair share.

I can confirm that Inland Revenue officials are already working with the IT industry, and with my officials, to ensure that full consultation with the industry takes place while the guidance on the application of IR35 is prepared. I urge my hon. Friend and his constituents to work with the Revenue as it develops those guidelines.

Mr. MacShane

I, too, congratulate my hon. Friend on her appointment as Europe's first E-Commerce Minister. It shows that we are not only in Europe, but running ahead of Europe.

May I suggest, before we are all invited to "get an e-life", that we dispense with the idea that putting "e" before everything solves all the problems? The Opposition Front Bench is clearly an e-rogenous zone, but that will not enable it to contribute to the debate on this subject.

As the IT revolution rolls out across the United Kingdom, there should be no red lining. As BT and other companies introduce ADSL and similar advanced e-commerce technology, that technology should be available throughout the UK, particularly in poorer areas such as South Yorkshire, and there should be no rich and poor IT or e-commerce Britain. Will the Minister ensure in her discussions with the telecommunications and IT companies that all British citizens have access to the e-commerce revolution?

Ms Hewitt

I am grateful to my hon. Friend for his kind remarks, and, indeed, for the kind remarks that he made on BBC Online about my appointment. He possibly meant to describe the Opposition Front Bench as an exogenous rather than an erogenous zone—but perhaps we should pass rapidly over that.

I entirely agree with what my hon. Friend said about the need to ensure that a digital divide does not open up between advantaged and disadvantaged areas. That is why, through our information society initiative, we have already established some 3,000 "IT for all" centres throughout the country, which anyone can use free of charge. It is also why my right hon. Friend the Secretary of State for Education and Employment recently announced the creation of nearly 1,000 ICT—information and communication technologies—learning centres in disadvantaged areas, so that everyone in every community can have full access to the benefits of the internet.

Mr. David Ruffley (Bury St. Edmunds)

Is the Minister aware that, following changes to the Brussels convention, the then Parliamentary Secretary to the Lord Chancellor's Department said on 19 September: the prospect of having to defend cases in a foreign court could deter some businesses from making the most of e-commerce. What did the Minister's Department do to stop those damaging changes?

Ms Hewitt

The hon. Gentleman ignores the fact that the Brussels convention has been in existence for 31 years. It governs private law disputes between, for instance, contracting parties, and simply provides that in a private law dispute between a consumer and a supplier the case may be heard in a court in the consumer's country. That is a clear and settled principle.

Of real importance to the development of electronic commerce is the e-commerce directive. The draft proposals provide—correctly, in my view—that, provided that a trader complies with the regulatory requirements of the country in which he is based, he can sell electronically to consumers in any other member state, and regulatory barriers cannot be put in his way according to the laws of the consumer's country. That proposal, which we strongly support, will ensure—provided that it is adopted; I hope that it will be adopted soon—that the European Union will indeed be a good place for electronic commerce.

Mr. Alan Duncan (Rutland and Melton)

The expansion of e-commerce requires a short and simple Bill. The published draft Bill is too long and too heavy-handed. Of its four parts, only part II is necessary—the part relating to electronic signature. Indeed, that is all that the industry wants. Part III on interception should not be in the Bill at all. If the Bill is to be acceptable, part III should be removed. That is what we demand, and I predict that that is what we shall succeed in getting. Will the Minister now make a commitment to the House that she will remove part III altogether, so that we can get on with the rapid expansion of e-commerce without this cumbersome dog's dinner of a Bill?

Ms Hewitt

The hon. Gentleman clearly belongs to the militant tendency of the Conservative party. I am not interested in listening to lectures or demands from a member of the party that wanted to impose mandatory key escrow on electronic commerce.

Perhaps I can reassure the House. Bill Gates and Microsoft have welcomed our draft electronic commerce Bill as a model for Europe. We shall introduce it shortly after the start of the new Session. We shall get it right and we shall get it soon. I shall reply, when I publish the Bill, to the extremely helpful responses that we have received during the consultation on the draft Bill.