Net laws could cost business

The UK Government says net surveillance fights crime

An independent study has found that controversial legislation aimed at monitoring the internet could prove extremely costly to the UK economy.

We want to have not only the best environment for e-commerce, but also the safest

Home Office spokesperson

The report, commissioned by the British Chambers of Commerce and edited at the London School of Economics and University College London, finds that the Regulation of Investigatory Powers (RIP) Bill could cost the economy £46bn over five years.

This would result from internet-related companies choosing to carry out their business elsewhere, scared away by the cost and potential lack of confidentiality the new laws could bring.

It is happening already, according to Karl Schneider, editor of Computer Weekly: "I have spoken to major UK companies, reluctant to go on the record, who told me they have already actively taken parts of their business out of the UK because they are worried about these proposals.

Catching criminals

However, the government rejects the report's calculation, with a Home Office spokesperson telling BBC News Online: "We have consulted, and continue to consult, throughout industry and not even our most hardened critic has mentioned a figure even approaching that of £46bn."

The Home Office believe the legislation might in fact benefit business, he said: "Trust in new technologies is vital for their effective use, Nobody, government or industry, wants to see the new e-commerce sector being abused by criminals against whom law enforcement agencies would find themselves effectively powerless.

"We want to have not only the best environment for e-commerce, but also the safest."

Browsing your e-mail

The RIP Bill has proved extremely controversial both with civil liberties groups and business because of the extensive powers it gives the authorities to monitor e-mail and web browsing.

Now an independent study has concluded that it is likely to damage confidence in electronic commerce and impose unacceptable costs on business.

The legislation gives the authorities powers to demand the keys to codes used by individuals and companies to make e-mail confidential. That process, encryption, is considered vital to the development of e-commerce.

The report's authors include academics and a former head of information technology at the Ministry of Defence. They warn that UK firms may react to the new laws by moving operations offshore.

The government insists it needs the new powers to fight crime over the internet. But mounting opposition both inside and outside the UK parliament could derail the Bill.

"Entirely inadequate"

The executive summary of the 40-page report includes the following excerpts:

"The RIP Bill as it stands is entirely inadequate as a mechanism to achieve efficient and reasonable interception and surveillance. Its effect is likely to be loss of confidence in e-commerce, unacceptable costs to business and to the UK economy . . . and an onerous imposition on the rights of individuals.

"The justification for the Bill has been established to a large extent on anecdote and rhetoric.

"The overall financial implication of RIP, in terms both of losses and leakage from the UK economy, and of cost of implementation, may be in the order of £46 billion in the first five years of operation."