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Friday, September 24, 1999 Published at 00:27 GMT 01:27 UK


UK e-minister fights for Net trade

By Internet Correspondent Chris Nuttall

The UK's first "e-minister" has promised to fight for a proper legal framework for electronic commerce and reduced Internet access costs for the consumer.

Patricia Hewitt was defending the government's efforts to boost e-commerce at the fourth Scrambling for Safety conference on cryptography policy, online trade and Internet surveillance, held at the London School of Economics on Thursday.

"We have got to get the costs down. I will be pushing this forward with Oftel [the telecom regulator], but it's at least as important that we get the legal framework right," she said.

[ image: Hewitt: Cutting the cost vital]
Hewitt: Cutting the cost vital
The minister, from the Department of Trade and Industry, was referring to its draft Electronic Communications Bill published in July and open to comment until October 8.

But her words were undermined by an announcement from the Paymaster General on changes to the tax regime that could drive thousands of IT workers abroad.

Opposition wants truncated bill

Earlier at the conference, her opposition counterpart, Alan Duncan, had said the four-part bill needed to be cut down.

Section One, allowing for the possibility of a voluntary licensing scheme for e-commerce in the event that industry was unable to regulate itself properly, was ill-conceived and a drag on the Internet revolution, he said.

He also criticised Section Three, designed to help law enforcement demand the keys to scrambled data when it suspected a criminal offence. Mr Duncan said it would make it possible in theory for someone with a grudge against him to send him child pornography as encrypted data and then tip off the police that he was a paedophile.

"The next thing I know I'm in prison for something I've never done. I'm thinking of sending quite a lot of these e-mails to Downing Street addresses," he joked.

A "short-step" bill was what was needed to ensure the continuation of an e-commerce revolution, he added.

"It didn't need government to get it started, it doesn't need government to keep it going, it could take government to foul it up. We want the minimum interference. We would be happy to support this bill in parliament if it was a quarter to a fifth in size."

CBI says industry unhappy

Chris Sundt of the Confederation of British Industry agreed that Section One of the bill was not needed and Section Three should also be removed and placed in a review taking place of the Interception of Communications Act (IOCA).

He welcomed Section Two of the bill, which would recognise the validity of electronic signatures in statute. But he said it was badly worded and did little for UK competitiveness in the field.

Tim Pearson of the Internet Service Providers Association said the Electronic Communications Bill was "de facto about law enforcement and does not help the UK Internet business".

He also criticised IOCA, where ISPs would have to install equipment to allow monitoring of data by police and the security services. "My guess is that the costs to industry are going to be high," he said.

Whitfield Diffie, the inventor of "public key" cryptography in 1975, a concept that had been a central preoccupation of the bill, told the conference that the need for new investigation methods for the police was questionable.

"We have experienced an utter explosion in investigative techniques," Mr Diffie said. "Walk the streets, look at the cameras! They are now recognising people automatically from photos, we have DNA fingerprinting, infrascan photos that can identify you from the veins in your face.

"People are leaving trails everywhere they go, automated web crawlers tell you an awful lot about their social activities. The flow of information in fundamentally unobtrusive ways into social control organisations has risen dramatically."

IR35 and all that

The government was later under fire again from the IT industry on Thursday with contractors up in arms over its announcment revising its proposals for the IR35 rules, aimed at preventing tax avoidance by those providing "personal services".

Those representing freelancers said the government had made minimal concessions on its proposals in the budget last March despite a strong lobby against them.

Mike Cullen, chair of the British Computer Society's contractor group, told Computing magazine the announcement was "a great day for Holland". He said UK firms would be better off siting projects in the Netherlands, then shipping in UK contractors.

A study in August had suggested that more than 50% of IT contractors would leave the UK if the IR35 proposals became law in April 2000. It also reported that 45% would seek permanent work while 84% said they would increase their rates to cover the added cost of PAYE and national insurance.

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