Internet Trading (Hansard, 24 November 1999)

§ The Earl of Courtown
asked Her Majesty's Government:
Whether they have plans to establish safety and security regimes for purchasing via the Internet.

§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, the Government are working with the Alliance for Electronic Business and the Consumers' Association, in consultation with the OFT, to develop a new body called Trust UK to accredit e-commerce codes and a "hallmark" that accredited codes may use on their websites. Trust UK will be operational by early next year.
The Electronic Communications Bill, which was introduced in another place on 18th November, includes measures to recognise explicitly electronic signatures in law and remove other legal barriers to doing business electronically. The Bill's promotion of high quality cryptography services will allow people to have more confidence about who they are dealing with on the Internet and to protect the confidentiality of data; for example, payment details. The Government welcome the proposals by the Alliance for Electronic Business to meet the objectives of Part I of the Bill and ensure appropriate standards for such services through accreditation under its T-scheme.

§ The Earl of Courtown
My Lords, I thank the Minister for that Answer. No doubt the Minister will be aware of the special "Money Programme" report over the weekend concerning Internet fraud. The programme implied that public confidence in e-commerce will not be achieved until the issue of fraud has been properly addressed. Can the noble Lord explain why the Electronic Communications Bill legislates for registration of cryptography service providers, while the Government continue to maintain that the industry should regulate itself in the area of cryptology? However, there is nothing on the face of the Bill that addresses the issue of Internet fraud.

§ Lord Sainsbury of Turville
My Lords, existing consumer legislation applies online just as it does offline. However, we are checking the existing legislation to ensure that this principle applies across the board. I am sure that the noble Earl will appreciate that we have had to work hard to achieve the kind of Bill that is needed. It will apply a light-touch regulatory system, for which this House constantly presses, but at the same time it will give consumers confidence. The measures that I have outlined, which will result both from the existing consumer legislation and the new Bill we have introduced, will cover this area.

§ Lord St John of Bletso
My Lords, while I appreciate that there is a need for a form of legislation to protect the consumer for electronic commerce, does the Minister agree that the Government should be promoting the Internet as a servant of the consumer rather than as a monster from which the consumer should be protected?

§ Lord Sainsbury of Turville
My Lords, I believe that everyone would agree that this Government are hugely enthusiastic proponents of e-commerce in all its forms and its promotion is absolutely central to government policy. However, we must provide a minimal amount of necessary regulation to give consumers confidence. If we do not do that the possibility of fraud will be considerable, as was shown on the "Money Programme". That in itself will damage the growth of e-commerce.

§ Lord Avebury
My Lords, does the Minister agree that the vast majority of sites offering goods and services on the Internet originate in the United States? For that reason, can the Government suggest to the European Union that discussions should be opened with the United States so that a harmonised regime of regulation can be adopted on both sides of the Atlantic? Does the Minister further agree that the best and wisest choice for consumers is to buy only from reputable organisations such as Amazon or Dell?

§ Lord Sainsbury of Turville
My Lords, I agree with the noble Lord that in these circumstances the question of confidence in organisations is clearly extremely important. However, once we have put in place the "hallmark" system, that will go a long way to 452 giving people confidence that the codes of conduct of organisations are in line with best practice. In regard to discussions with the Americans, I believe that the first step should be to make clear the European position. Once that has been done, negotiations with the US could be opened.

§ Lord Mackay of Ardbrecknish
My Lords, does the Minister recall that on the last occasion we discussed these issues I suggested that this is not only a matter for Europe, but that this is a worldwide matter? I believe that the programme shown last Sunday made it abundantly clear just how worldwide it is. We might—and I emphasise the word "might"—be able to put secure systems into place in Europe, but they will not be of much value for Internet trading that will take place all around the world, including the United States and the Far East. Can the Government ensure that we consider this matter from a worldwide point of view? That is exactly what Internet trading and Internet commerce will bring about.

§ Lord Sainsbury of Turville
My Lords, as I have pointed out, consumer legislation is already in place. Here we are considering two matters that relate closely to the situation in this country. Other countries also have consumer laws and those must be taken into account in international trading.