Thank you for inviting me to this Interforum dinner, and thanks to the FT for hosting it. I am very pleased to be here and have the chance to speak with you about the government’s effort in making the UK the best place in the world for e-Commerce.

We are facing something inescapable. The economy is being transformed by information technology – and this affects both the public and private sectors. What is happening is an economic revolution, one that needs to have business and government constantly adapting to change, and working in partnership. We also need to be aware that the key to success is knowledge and hence the key to Government is investment - in education and skills.

We are prosperous. The economy is forecast to grow substantially this year, inflation is down to nearly 2%. In the past we consumed during periods of prosperity, rather than re-investing it like our competitors were doing. That led to economic decline.

We cannot afford to make that mistake again. We must take this opportunity offered by economic success and the Internet and turn it into long term economic success.

• Britain now has Europe’s largest e-commerce market – Our citizens spent £2 billion on-line last year, significantly narrowing the gap with the US. Relative to the size of our economy, e-commerce expenditure grew by 350% in UK last year, compared with 70% in the US, which is currently the world leader.

• 1.7 million businesses in the UK are already connected to the Internet. This is not enough.

• Nine in ten employees work in businesses that are connected to the Internet – on a par with the US.

• One third of the UK population is now online, further widening the UK’s lead over the other major European economies. This is not enough.

• More of us work in companies actually trading on-line than in the US, Sweden, Germany, France, Japan or Canada.

We are not resting on our laurels. There is still a lot to do. That is why we have established and developed UKonline.

We have set three main targets: Universal Internet access by 2005 for everyone who wants it; All government services online by 2005; and 1.5 million SMEs trading online.

An injection of £1 billion will help get all Government services online by 2005, establishing convenient 24-hours services at people’s fingertips.

We are also doing our bit for business, injecting an extra £25 million into the new UK online for business services over the next three years.

We are not overlooking small businesses either. Last year we completed a national network of 100 local advice centres to get small businesses online, accompanied by a new capital allowances allowing small firms to write off the full cost of investment in e-business equipment.

In addition, we are recognising their achievements

– Patricia Hewitt launched the new 'UK Online for
Business' and 'InterForum' E-Commerce Awards for small and medium sized firms (SME's) on the 29^th of January. The annual awards, which are sponsored by the Royal Bank of Scotland and Cisco Systems, and supported by the Daily Express, recognise and reward excellence in the use of electronic business amongst UK based SME's.

Over the last three years InterForum's participating members have contributed £1 million in sponsorship funds to the Awards. This
underlines InterForum's commitment to support the Government in getting the UK online, and I would like to take this opportunity to warmly congratulate you for such an achievement.

We are working hard to establish the right market framework to ensure that businesses can make the most of the knowledge economy.

We have passed the Electronic Communications Act, which gives legal weight to digital signatures. We are implementing the European e-commerce directive and are working with our international partners to ensure that we have a favourable international framework for e-commerce.

That said, our approach is to encourage industry led regulation. Because the world of IT is changing rapidly, the time it takes for Governments to legislate, means that by the time a law comes in to force, there is a good chance it could be obsolete. This is why we have encouraged industry led initiatives such as the Internet Watch Foundation and the Trust UK hallmark.

Last September, we also stated that the UK would get unmetered access to the Internet. We have done more than just achieve that:

According to OECD comparisons, we are now the best for off-peak rates IN THE WORLD. No other country, including the US, has cheaper off-peak access. Previously the OECD stated that we were only average.

Same for peak rate costs. We used to be only average, but thanks to peak prices dropping between 30-40%, we are shooting up the OECD league tables.

We are now entering a new level of Internet connection – broadband. It is early days, but OFTEL’s benchmarking suggests that we are up there with the leaders.

We intend to have the most extensive and competitive broadband market in the G7 by 2005, with significantly increased broadband connections to schools, libraries, further education colleges and universities.

We promised that we would help people get the skills needed to succeed in the knowledge economy, knowing that an educated population is the way forward for this country. In 1998, only 17% of primary schools were connected to the Internet. Now more than 86% are connected.

It will be 100% by end of 2002. All secondary schools are now wired up.

A successful e-economy does not just mean online businesses. Government needs to be there too. With that in mind, we are committed to getting all government services online by 2005. Those services will be accessible through a variety of devices, including personal computers, web-enabled call centre, Digital TVs, a new generation of mobile phones, public access points, and even the latest games consoles.

We have launched the UKonline portal, the new government portal that will get information to citizens and business easily.

It heralds a major step forward in co-ordination across government. Support for businesses, computer access and training opportunities for the public and transactional opportunities are all part of the government’s overall programme for UKonline and will become accessible in the coming weeks.

Our annual report examined electronic service delivery based on monitoring the number of services that are enabled for electronic transactions. It shows that for the whole of central Government, 42% of services are available online now, well in excess of the interim target of 25% of services should be online by 2002. The report also revealed that 73% of Government services are expected to be available online by 2002, and over 99% by 2005.

However, having all that information available is not useful if people cannot access it. We are committed to ensuring that everyone who wants it will have access to the Internet by 2005. An added benefit will be that the country’s citizens will also gain skill in using both the Internet and computers to their advantage.

I should also mention Digital TV. 1 in 5 British households now has digital television – the highest rate of penetration in the world. To compare the US – there only 1 in 6 households has digital TV. But we face serious challenges in the delivery of DTV, notably because of industry’s ‘walled garden’ approach.

Two companies currently hold nearly 75% of the market, but do not permit the user access to services beyond pre-defined boundaries. This does not further the Government’s aim of getting citizens online, citizens who need access to all Government services. We must look at these issues, and resolve them in partnership.

We must be proud of these achievements. It is important that we act as advocates for them, in both the public and private sectors. We must support innovation, and be ambassadors for our achievements. We must develop our capacity to act in partnership, and ensure a can do attitude. With an ambition for what we can achieve, and a clarity about objectives we will develop these new ways of working.

I want to conclude by outlining what I see as some of the main challenges: Access, Government online, skills shortages and leadership.

Overcoming the Digital divide will be crucial. The latest statistics from the Office for National Statistics show that of the bottom 10% of our population, only 7% have access to the Internet at home. Compare this with the top 10%, where 62% have access.

But income is only one aspect of the digital divide - age and geographical location are others.

This is why we are investing in a network of 6,000 UKonline centres in communities up and down the country. These centres will provide access to the Internet in the community. We have initiatives specifically targeted at the poorest communities. Computers within Reach aims to provide up to 100,000 low income families with low cost recycled computers.

The Wired up Communities scheme aims to improve Internet access in some of the poorest communities. The first is already up and running - Kensington in Liverpool became our first ‘Wired up Community’ with a pilot scheme launched in October.

Another major task is getting all Government services online. As mentioned we have made good progress so far, but we still have a long way to go.

But we have to ensure that services are designed around the needs of the user. We have to continue to work to break down the silos of government, at a national and local level. The Office of the E-envoy are currently working with departments on their e-business strategies, to ensure that they are fully integrated with business plans.

E-government has to be at the heart of government, not seen as a fashionable add-on.

We have to recognise that as we address change we do not have all the skills immediately in place and available in the quantity we need.

With the LearnDirect initiative we are giving people the means to acquire these skills, and then put those newly learned skills to use. Managers need to identify talent, to identify enthusiasm and ability and actually to use it on IT projects.

But we also have to ensure that we are ready to deliver culture change. It is not just systems that need radically altering, but also attitudes.

Both in the public and private sectors we face a real task to ensure that we have the right skills, and to put in place programmes of upskilling and reskilling where we do not.

Finally, none of this change will come without leadership. We recognise that much stronger leadership and co-ordination is needed.

Andrew Pinder as e-Envoy, is leading work on the Information Age agenda across Government.

We have also established a new network of Information Age Ministers from key departments - the first web-enabled Ministerial committee, supported by a new network of e-commerce co-ordinators within government departments.

Providing leadership is also my role within Government. To champion these issues and be their advocate. To provide the vision and drive to deliver the e-revolution, both for fellow politicians and public sector workers.

You too have a key role to play. We must improve the environment in which public service leaders operate; we must improve the way in which potential leaders are recruited and retained; and we must improve the way in which leadership is developed from within the public sector. The Performance and Innovation Unit in the Cabinet Office is currently preparing proposals on these issues.

So, we know that there is much work still to be done, but e-Government can tangibly improve the services we provide.

Thank you