Monthly Reports

PRIME MINISTER

Report from the e-Minister and acting e-Envoy - 28 February 2000

On 14 January, we made our first report to you on progress towards the Government’s goal of developing the UK as the best place in the world for e-commerce. We set out the work in hand to deliver the modern markets, confident people and businesses, and leading edge government which the UK needs to succeed. This report gives an overview of developments since then. A more detailed report on progress against each of the 60 commitments in our e-commerce strategy, e-commerce@its.best.uk, is attached. Also attached are reports summarising how this agenda is being driven forward in Scotland,  Wales and Northern Ireland.

a) Modern markets : getting the market framework right

CommunicationsAs set out in our last report, we and OFTEL will continue to encourage competition in order to deliver a world-class broadband network. Over the last month we, and David Edmonds at OFTEL, have continued to press telecommunications operators to make greater tariff flexibility – including un-metered tariffs – available to UK Internet users. And on 16 February, Gordon Brown re-emphasised the challenge to which the UK telecom industry must rise if it is to bring down the cost of peak-time Internet access to US levels – an essential factor in enabling us to meet our goals for e-commerce (off-peak Internet costs in the UK are amongst the cheapest in the world already).

Industry is responding to this challenge: see, for example, BT’s proposal for an unmetered access product (‘Surftime’) and the announcement by TeleWest earlier this month of unlimited Internet access for a flat fee of £10 a month. OFTEL are ensuring that Surftime will be launched on a basis which enables others to provide competing retail products. In broadband services, BT will be competing against cable products from day one. Our plans to auction radio spectrum for third generation mobile telephony services and for broadband services will add to this competition, and Local Loop Unbundling, due by July 2001 at the latest, will add a further important source of competition.

We also need to ensure that regulation recognises the convergence of telecommunications and broadcasting technologies and markets. Stephen Byers and Chris Smith announced on 3 February that a White Paper will be published later this year setting out proposals for modernising broadcasting and telecommunications legislation to reflect this convergence. It is vital that we get this framework right to ensure that change in the industry is not held back by outdated regulation while also ensuring regulatory tools remain available to promote consumer interests and other important public policy objectives.

The legal and regulatory framework

In modernising markets, we also have to get the legal framework right and to ensure the building of trust in e-commerce for business and consumers supported by effective enforcement.  Here too we are making good progress.

The Electronic Communications Bill has continued its swift progress through Parliament and, with Lords Second Reading completed on 22 February 2000 and a favourable report from the Delegated Powers Committee, we are on target to achieve Royal Assent in April.

We are making a start on identifying candidates for modernising the statute book, by using the power that the Bill will give us to create electronic alternatives to existing paper-based requirements. DTI are consulting on what are likely to be the first orders under the Bill. It is probable that these will concern companies, enabling the following to be performed electronically: delivery of annual accounts and reports to shareholders; appointment of proxies for voting purposes; and incorporation at Companies House. Derry Irvine has announced that he will use the power to allow conveyancing to be done electronically and expects to publish draft orders for consultation later in the year. DTI is also consulting on proposed modifications to the Unsolicited Goods and Services Act 1971 to allow the electronic option for requirements relating to charging for entries in trade directories. CITU are working with departments to identify other early candidates.

Working in partnership with industry, we have also made significant progress in developing the robust mechanisms needed to build trust in e-commerce markets:

We have continued to work with the Alliance for Electronic Business to create a self-regulatory system of approved 'trust service providers' (the ‘T scheme’). On 25 January, the Internet Watch Foundation was relaunched.

This is the partnership between Internet Service Providers, police and children’s organisations which plays a vital role in combating criminal material on the Net and developing systems so that people can filter the material they or their children access.

16 February saw the launch to e-commerce businesses of Trust UK, a joint non-profit making venture between the Alliance for Electronic Business and the Consumers' Association, endorsed by UK Government. It seeks to foster consumer trust and confidence in Internet trading through the accreditation of on-line codes of practice. Launch of the Trust UK hallmark to consumers is planned for May.

The Regulation of Investigatory Powers Bill, published by the Home Secretary on 10 February, supports our programme to make the UK the best place in the world to conduct e-commerce by helping to make it the safest. The Bill's proposals for new decryption powers will assist law enforcement authorities in countering the threat posed by criminal use of encryption.

We are making significant progress on building a single electronic marketplace in Europe. Following our success in December in achieving political agreement in the Council of Ministers on the Electronic Commerce Directive based on the principle of the trader’s country of origin, the Commission has now announced its intention to fast-track the remaining pieces of e-commerce single market legislation by the end of this year. We are working with the Commission and other Member States to carry forward the e-Europe initiative at the Lisbon Summit.

On 21 February, Chris Smith announced the Government’s decisions on the future funding of the BBC. This included his assessment that the digital switchover could happen sooner than was envisaged by the Davies panel last summer. In this light, the decision not to introduce a special digital licence fee was based on the belief that digital television could bring benefits to all, and it was therefore wrong to signal that it was something special and only for the few.

b) Confident people and businesses

Building skills and access

Our last report set out the wide range of measures which DfEE and DCMS have in hand to spread access, raise skills and tackle the emerging ‘digital divide’. At the heart of this is the network of up to 1000 ICT learning centres being rolled out across the UK, using £470 million investment from the Capital Modernisation Fund. On 31 January, Michael Wills published the prospectus inviting bids for the main rollout of the ICT Learning Centres programme later this year. At the same time 13 Pathfinder projects were also announced. These projects will test a number of key issues prior to the main roll-out; including how to reach out to particular groups such as ethnic minorities, disabled people and women.

Connecting SMEs

DTI's network of 100 Information Society Initiative (ISI) advice centres provide plain-English advice on ICT to small businesses. In February DTI launched the latest phase of its £3 million marketing programme, using direct mailing to stimulate SMEs to use the service and help achieve our target of getting small and micro businesses to world-class standard. 300,000 businesses have been mailed in the latest phase, and 385,000 more will be mailed in March. The last phase of the campaign, which began in summer 1999, saw 47,000 responses, with a further 8,000 after a reminder mailing in the autumn. In total 1 million businesses will have been contacted over the past year, and activity at the call centre has increased by 800%.

On 25 January Patricia Hewitt launched the annual ISI/Interforum e-commerce awards. The Awards, to be presented in July, celebrate and reward UK small and medium sized companies which have been successful in doing business electronically. This year there will be a new category for Internet start-ups, aimed at new companies which from their start have based their business model on Internet technologies.

c) Leading edge government: exploiting ICT to transform public services Information Age Government In driving forward the strategy for information age government, Ian McCartney published the consultation document "e-citizen, e-business, e-government" on 14 February. Its focus is on building service delivery around the needs of citizens and businesses. A part of the strategy will be the introduction of the new government portal – working title ‘me.gov.uk’ – which will give personalised, one-stop access to such services. The Cabinet Office is currently assessing a range of bids from potential suppliers to build this portal, which will be launched in the summer.

On 15 February, HM Treasury announced £60 million to fund 104 successful projects from the second round of the Invest to Save Budget (ISB) bids. 70 of the 104 ISB winners use ICT and of those 40 use the Internet. Examples are:

A multi-media information and advice service for 14-25 year olds (run by 16-25 year olds) which is being developed by Worcestershire County Council. A DVLA database to track the movement of vehicles between motor dealers and notify dealers of scrapped vehicles.

A new Community Legal Service website being developed by the Lord Chancellor’s Department, offering legal information and advice in seven languages.

On 16 February, Gordon Brown announced that in future rounds of both the Invest to Save Budget and the Capital Modernisation Fund, monies would be ring-fenced specifically to form a new e-challenge fund, incentivising Government departments and agencies to identify e-commerce opportunities in their areas. He also announced that individuals and businesses who file tax returns over the Internet – which they will be able to do in the coming financial year – will receive the following discounts:

in April 2000-2001, £10 for each income tax self assessment return filed by taxpayers over the Internet.

in April 2001-02, £50 pounds for either PAYE or VAT returns filed by small businesses over the Internet - £100 pounds for both PAYE and VAT.

Electronic procurement

On 11 February, Andrew Smith announced the appointment of Peter Gershon as Chief Executive of the new Office of Government Commerce. The OGC will lead the drive towards our target of making 90% of routine Government procurement electronically by April 2001, and will initiate a government "electronic shopping mall" to enable the civil departments to conduct procurement of low value goods and services on-line. In a related development, the MOD announced on 8 February the setting up of its Defence Electronic Commerce Service (DECS). DECS will consist of electronic messaging systems, on-line catalogues of products and automatic transactions. The initial service is due to be introduced in the summer.

Exploiting Government’s knowledge assets

Good progress has been made in looking at how we can best work with the private sector to exploit the public sector’s intellectual assets, as well as its physical assets, for the wider benefit of the UK economy. The consultative groups which HMSO set up to take forward the recommendations in e-commerce@its.best.uk about class licensing for re-use of Government information, and ensuring a level playing field between public and private sector information providers, produced reports in February which have now been discussed with Carol Tullo, the Controller of HMSO. We have agreed that we should build this work into the cross-cutting review on the knowledge economy which you have asked Andrew Smith and Patricia Hewitt to lead as part of Spending Review 2000.

As an early step to make sure Government information is fully exploited, Gordon Brown announced on 16 February that a new National Statistics website is to be launched in April - offering an extended range of data from across Government free of charge, demonstrating our commitment to ensure that data is widely available and easy to access.

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E-commerce Report from the Scottish Executive - February 2000

A significant number of recommendations in e-commerce @its.best.uk relate to devolved matters for which the Scottish Executive is responsible for setting targets and for developing and implementing initiatives in Scotland. Examples are Information Age Government (relating to devolved services), promoting e-commerce with SMEs, education and training, social inclusion, electronic procurement, and justice. The Scottish Executive is committed to a co-ordinated approach to these issues since this will assist both the UK government and the Scottish Executive to maximise the potential benefits to be realised from all aspects of e-commerce.

A number of initiatives have been taken by the Scottish Executive to drive forward the broad e-commerce agenda in Scotland. Earlier this month Henry McLeish, Minister for Enterprise and Lifelong Learning, and Dr Robert Crawford, Chief Executive of Scottish Enterprise, launched "Connecting Scotland: The First Wave" - Scottish Enterprise’s action plan for helping Scottish business maximise its use of e-commerce. Scottish Enterprise’s actions will include:

• undertaking a national e-promotion campaign, aimed at raising understanding of the opportunities and benefits e-commerce can deliver and signpost businesses to sources of help and advice to get started.
• providing appropriate information and advice at each stage of a company’s development for a comprehensive implementation plan for e-commerce;
• creating a national portal for Scottish business on the web;
• creating centres for the development of e-commerce solutions.

The Scottish Executive has also launched Digital Scotland as a cross-cutting initiative which aims to ensure that Scotland obtains and retains maximum economic and social advantage from information and communication technologies. The work on Digital Scotland is one of the cross-cutting initiatives launched by the Executive when it took office last year, and which featured in the Programme for Government. The initiative is overseen by a Ministerial Committee chaired by Sam Galbraith, Minister for Children and Education. Ministers have also set up a Task Force of experts from outside the Executive to provide advice, chaired by Peter Peacock, Deputy Minister for Children and Education.

Henry McLeish has also set up the Developing the Knowledge Economy taskforce involving a cross section of business, academics and public sector representatives. Its remit is to ensure the development of the knowledge economy and review the progress being made in Scotland. In particular the taskforce will identify the key questions that need to be addressed by the Scottish Executive, with emphasis on personal knowledge, human skills, business management and innovation.

The Minister for Finance, Jack McConnell, launched a Modernising Government Fund on 23 February to help take forward the objectives of Modernising Government in Scotland. The fund will provide some £25 million over the next 2 years to innovative public sector projects which are aimed at improving the quality, effectiveness and efficiency of public services in Scotland. Projects making beneficial and innovative use of information and communications technologies will be encouraged.

As regards electronic procurement, Mr McConnell has established a Procurement Supervisory Board chaired by John F McClelland, Senior Vice President of 3Com. The board oversees procurement strategy across the Scottish Executive, advising Ministers how to make sure taxpayer’s money is spent to best effect. It will also ensure the Executive meets the challenges of new markets, techniques and technology by recommending to Ministers a date by when the bulk of the Executive’s procurement transactions will be handled electronically.

The Scottish Executive also continues to make progress on the objectives set in Scotland’s National Grid for Learning. Over £100 million is being spent on initiatives which will by 2002: connect all Scottish Schools and libraries to the internet; provide e-mail address for all Scottish teachers and pupils; double the number of the number of modern computers in Scottish schools; and increase ICT skill levels of both pupils and teachers.

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E-commerce Report from National Assembly for Wales - February 2000

As with other devolved administrations a significant number of the recommendations apply equally to Wales. We are committed to ensuring a co-ordinated approach to this within Wales, including those areas where responsibility for ICT is not devolved.

The Assembly is firmly committed to increasing the take up of ICT amongst businesses and is playing a full and active roll in helping to meet UK Government targets.

Earlier this month we published " Better Wales" which is the Assembly’s draft strategic plan setting out its long term vision for Wales and what it intends to do over the next 3 years to make progress towards achieving it. The plan is currently being consulted upon. It sets a target of increasing the number of companies engaging in e commerce to 50%.

Examples to of the activities undertaken to assist in meeting the targets include the development of the Wales Information Society Strategic Framework and Action Plan, the Welsh Development Agency’s ISIS project, Business Connect IT Support Centres and participation in the ISI/Interforum E Commerce awards. Wales is also a pilot area for Technology Means Business initiative.

In addition, the Single Programming document (SPD) for European Regional Development Fund Objective 1 status, recognises that access to modern information and telecommunications is vital to competitiveness and to improving the quality of life in Wales. The Assembly is keen to see full use of Objective 1 funding for a variety of projects which will lead to the growth in the Welsh economy. We are working with companies to help identify ICT projects that may be suitable for Objective 1 status.

Internally we have made a significant commitment to the use of ICT from day 1 of the Assembly. Our plenary sessions and committee meetings could not be managed without it, and all of the papers from these are available on our Internet site, the majority in advance of the meetings. This reinforces our commitment to openness with the general public. Our internal commitment has been further demonstrated by signing a revised contract with Siemens Business Services, our PFI partner, to extend and update our office services. This entails a cash investment of around £20 million.

Our procurement group are about to undertake a comprehensive review of procurement across Wales in the public sector, and one key element will be identifying existing and planned use of E Commerce as a starting point for future activities.

In Agriculture, JIGSAW (Joint Initiative for Government Services Across Wales) is a three year programme, part-funded by the Invest to Save budget which will improve the administration of CAP payments to farmers in Wales.

In conjunction with the Welsh Development Agency, we are taking forward the opportunities of a public sector network infrastructure for Wales under the aegis of the Wales Information Society Strategic Direction. Representatives from all major public sector areas will discuss proposals for this on 3^rd March.

In Education, we have already committed over £15million in the next two years to improve IT facilities, training, skills and resources and are planning to do more in this vital area.

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E-commerce report from Northern Ireland - February 2000 The Information Age Initiative class="OeE-Grey-body-text">Following a detailed review of economic development strategy in Northern Ireland the Department of Enterprise Trade and Investment (DETI) established the Information Age Initiative in September 1999. This advisory group, comprising industry, academic and Government representatives, was tasked with preparing a strategic framework and comprehensive action plan aimed at ensuring that Northern Ireland takes maximum advantage of the opportunities offered by information and communication technologies (ICTs).

The vision of the Information Age Initiative is to see "a highly attractive, successful, dynamic and supportive knowledge-based economy in Northern Ireland".

Key themes being pursued by the group are:-

• the use of new technologies such as email and the internet by businesses and organisations in Northern Ireland;
• the development of these new technologies in Northern Ireland within the context of a growing knowledge-based economy;
• the implications for education, training and telecoms infrastructure.

The Information Age Initiative will publish its Action Plan in March 2000. Feedback and project proposals will then be sought and a final report published in June 2000.

DETI and its agencies, working closely in support of the Information Age Initiative, is undertaking a range of activities to promote e-commerce in NI business.

The Department’s e-commerce strategy is:-

• to encourage Northern Ireland companies and organisations to exploit e-commerce opportunities and address the threats;
• to attract new, foreign-based, e-business investment to Northern Ireland;
• to become an e-business exemplar to other organisations in Northern Ireland.

Examples of the activities underway to encourage Northern Ireland companies and organisations to exploit e-commerce opportunities include:-

• a television promotional campaign to raise e-commerce awareness;
• an extensive training programme to introduce businesses to the new technology;
• the promotion of "NI for Business" (a virtual business park hosted by BT providing free web presence for NI companies).

With regard to education Northern Ireland has a number of programmes underway. Classroom 2000 is the largest ICT managed service initiative underway in the UK. The aim is for the managed service to design, develop, install and operate an integrated ICT infrastructure to meet the curricular, administrative and management information needs of more than 1,200 schools.

The Department works closely with the Office of the E-envoy and the Central Information Technology Unit which oversee national and regional co-ordination of Government activity on e-commerce and the information age.

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