E-lection tactics

Do the parties really know how to foster a new economy? As the general election approaches, James Mortleman asks where they stand...

Do the parties really know how to foster a new economy? As the general election approaches, James Mortleman asks where they stand on the technology issues

Barely six years ago, many MPs still treated IT and the Internet as a joke, revelling proudly in their IT illiteracy. Nowadays, no politician worth his salt seems to make a speech without at least mentioning IT or e-commerce.

Just to prove they're taking it seriously, we now have an e-minister, an e-envoy (albeit, at the time of going to press, a 'caretaker' e-envoy) and a programme to promote e-government. Last year the Government also brought in the Electronic Communications Act, which updated the law to recognise digital signatures and to give electronic communications the same legal standing as paper messages. There has been a big focus on (and, more importantly, increased funding for) IT in education. And the Government has also made a move towards liberalising the telecoms market.

It hasn't been an easy ride. The Government's IT policies have come in for heavy criticism - most notably over its Regulation of Investigatory Powers (RIP) Act, which is seen as heavy-handed and a potential burden to businesses, and the IR35 tax changes which hit IT contractors hard at a time when the UK needs to attract skilled IT staff, not drive them away. Nor has the resignation of e-envoy Alex Allan for "personal reasons", just a week before the launch of the Government's UKOnline strategy, inspired confidence. The Government's willingness to listen to the IT supplier community but not to users (see 'user view' box) has also angered some.

Nevertheless, Labour is still ahead in the polls, and if the political pundits are right - and the Government steers clear of serious trouble over the next three months - the Prime Minister is likely to call a General Election this spring.

Few people cast their vote on the basis of a single issue, but for those working in IT the stance of the parties on IT, telecoms and e-business will be an important consideration. So what does Labour intend to do with a second term, and what are the policies of the opposition parties? None of the parties have finalised their election manifestos, and even when they do they are unlikely to be too specific, but B&T has tried to get a general feel for where each party would focus its efforts.

In many respects, there is hardly a hair's breadth between Labour, Conservative and Liberal Democrat. All three parties believe (or say they do) that regulation should be kept to a minimum. Consider the following three statements and see if you can guess which party made which:

1 "A market-led approach to electronic commerce is essential if innovation, creativity and entrepreneurship are not to be stifled."
2 "We are firmly on the side of avoiding burdensome regulations. Where competition works so powerfully and effectively there is less need for regulation."
3 "IT is largely a market-driven phenomenon. It's driven by entrepreneurs and technology, it hasn't happened because government created it."
For the record, the first is from a Labour policy document, the second is by Tory shadow technology minister Alan Duncan and the third is from aptly named Liberal Democrat technology spokesman Vince Cable.

Labour says that in a second term it will "provide a light-touch regulatory framework within which electronic markets can operate". But to many the promise rings hollow given Labour's RIP and IR35 legislation. "The key message for politicians is not to mess things up," says Cable. "LibDems will be continuing to fight for a more favourable tax regime, particularly making more allowances for training within the new IR35 regime. The Inland Revenue has got to adapt to the system in a more business-friendly manner, particularly by making more generous allowances. Now the RIP Act is on the statute book, the key point is to ensure business doesn't have to pay for carrying out surveillance operations on behalf of the Government."

Duncan agrees. He calls the IR35 proposals "misguided" and on RIP says: "We do need to give our security forces the means to fight organised crime on the Internet and for that reason have not opposed the RIP Bill root and branch. However, we are concerned about the costs and difficulties imposed on business and understand that other countries are not adopting the same policies - some quite the opposite. We need to review carefully how the legislation operates."

Despite Labour's denials, many people remain suspicious that the party's instinct is to over-regulate - a suspicion supported by the RIP and IR35 debacles. In the context of global e-business, this could prove damaging. Duncan believes the UK should ensure a level playing field "by staying out of the way of our business people".

He told B&T: "The new economy moves too fast for the Government to keep up - and in any case heavy-handed policies on a national scale are ineffective in a global context. If we get in the way we will only succeed in driving business away to other countries. Business has a great record of creativity and innovation and we have a huge natural advantage in the English language. There is no reason for us to fail - unless we create one."

One area identified as a key enabler for e-business to flourish in the UK is the widespread availability of low-cost, high-speed Internet access. Call costs have fallen significantly over the last four years, and once Oftel has completed the tortuous process of removing BT's monopoly of the local loop, they should fall even further.

In a speech last September, e-minister Patricia Hewitt said the next task was to try to spread the use of broadband. "ADSL is now being rolled out very fast in the UK. Then there's broadband, fixed-wireless access for which we've just announced a new auction. Radio spectrum will be hugely important in reaching parts of the country where ADSL is unlikely to be connected. And coming up behind that, third-generation mobile telephony will give us a huge leap forward."

Duncan criticises the Government's handling of the broadband licence auctions. "The auction of broadband fixed wireless licences has been a complete flop," he says. "Of the 42 licences on offer, 26 remain unsold. The auction raised £38m instead of the predicted £1bn, and rural areas in particular will continue to be an Internet black spot. It's clear that even if the Government can't effectively promote the growth of a high-speed Internet, it can certainly hinder it by incompetence in dealing with regulatory matters and that is what we're currently seeing."

The LibDems' Cable is less scathing, but he believes the Government has "fallen down a little bit" on the roll-out of high-speed and unmetered Internet access. "They've been very slow getting on to that, which has almost certainly inhibited the growth of Internet access in the UK. We've been very keen to on pushing ADSL much more aggressively to provide high-speed connections and link up communities that are going to be cut off from this system unless something is done actively. That would mean Government investment, obviously."

Indeed, it is in the area of Government investment where the differences between the parties become most obvious. Labour says it is firmly committed to ensuring universal access to the new technologies and investing in education and training to alleviate the IT skill shortage.

"Labour will not let a new digital divide open up, creating a new form of social exclusion for those who do not have access to the Internet. By 2005, we will ensure that everyone can have access to the Internet," says the party's National Policy Forum.

The party also pledges to expand the University for Industry through its high-street name, Learndirect: "Using information and communication technologies it will deliver learning via a range of providers - providing information and advice to 2.5 million people by 2002 and creating demand for up to a million courses and learning packages a year by 2004. Already, 68 Learndirect centres have opened in easy-access locations such as sports and shopping centres and community centres. We want the UFI to become a world leader in the provision of virtual learning."

In addition, Labour is wiring up schools, colleges and public libraries to create a National Grid for Learning. "Our vision is of a comprehensive strategy to help Britain's learners in schools, colleges, libraries, at home, at work and elsewhere to benefit from the information age," the party says.

The LibDems also believe increased public investment in education is crucial, and will fight this election as they did the last with a pledge to increase income tax by a penny in the pound to fund education. Although Cable concedes that "the Government has done quite a lot of the right things as far as training's concerned", he says handing out hardware to schools isn't enough. "Software upgrades and system maintenance are very expensive, preventing some schools from getting the necessary backup." The LibDems pledge a minimum of an hour a week's Internet access for every schoolchild in the country.

Cable says lifelong learning is another key concern. "I don't think you need to lay down exactly how it should be done, but at least make sure that all adults - particularly older adults - have access to minimal training so they can access the Internet," he says.

For the Conservatives, Duncan says: "We need to ensure we provide those who want to learn with the opportunity to do so." However, he doesn't advocate increasing taxes or public investment to do so. "To an extent the situation will improve as IT hardware becomes more ubiquitous," he says. "In IT, you learn by doing. As new developments like Web phones and digital television accelerate the convergence of existing technologies we should see much greater access to IT."

Beyond these issues, there are questions about the use of IT within Government itself. Tony Blair has made some ambitious pledges about e-government, but with a disturbing legacy of failed IT projects and administrative cock-ups, nobody envies the task of the e-envoy to wire up Whitehall.

Should the e-government programme go awry, whoever is in Opposition will naturally seek to make political capital from it. The real shock would be if the whole thing went through by the deadline without any hideous pratfalls. At least the project might give the politicians some respect for the work IT directors and CIOs do to keep technology running relatively smoothly in the UK's businesses.

Whichever party gets your vote, you can be sure of one thing: politicians' promises mean about as much as your IT suppliers' promises of bug-free, open systems delivered on time with no hidden costs.

Users? Losers!

David Roberts is chief executive of the Infrastructure Forum, an organisation representing corporate IT users. Membership includes over 1,100 senior IT directors and managers from 71 of Europe's largest organisations, representing a combined IT spend of over £18bn a year.

"The most significant concern for our members - particularly the larger ones - is the excessive domination of Government influence by IT suppliers," says Roberts. "It's a backdoor route for creating standards based on one or two suppliers' technologies. It is difficult for anybody to get the Government's attention unless they've got a well-funded lobby and that doesn't exist among the user community.

Roberts says that while governments are very keen on acknowledging people and business, they ignore the British IT user. He also lambasts the 20-25% premium paid for buying IT in the UK compared with the US, and says the Government should exercise its muscle if it finds suppliers are advantage-pricing in different markets.

"We also have issues regarding reskilling and cross-border e-commerce. But we're just not going to make a great deal of progress until the Government has a serious rethink about how to embody user IT views in its policymaking. A think-tank would be a great start."

The Suppliers' Side

Lindsey Armstrong is senior vice-president of Veritas Software. She has locked horns with Government ministers more than once in the past few months over their lack of an IT strategy for the UK.

"The country needs an IT strategy, but it needs an IT strategist first," she says. "'E-envoy' and 'e-minister' sound very bandwagon-like. It's kind of like painting your toenails before you decide what outfit you're going to wear. We need to look after a company from inception to flotation and beyond. We need to provide incentives to people to start businesses in the UK and to grow them into very large corporations. We also need to provide incentives for US IT organisations to make the UK their largest European base. I don't think we do either of those things very well."

Armstrong bangs the drum for better tax incentives, better business advice and for graduates to be given a more practical financial background. She also favours incentives for employee share options.

"I see some good suggestions coming from Government but they're uncoordinated. Some of the things Patricia Hewitt has done are very good, but it appears to me that the DTI and the Treasury don't work hand-in-hand a lot of the time. What the DTI gives with one hand, Gordon Brown takes away with the other and vice versa. There are things we don't have as much say over - like some of the creeping EU legislation - but there are a lot of areas which as a country we can influence and I don't think we do."

An IT Manifesto for Business

The Confederation of British Industry recently published its *Towards 2010* manifesto, laying down what it wanted the next Government to do and to avoid. As well as general policies such as keeping public spending below 40% of GDP, reducing business taxes and working towards a business-friendly European Union, the CBI gives the following advice specific to IT, telecoms and e-business:

  • Provide ICT skills in schools with a practical appreciation of e-business techniques
  • Take steps to ensure that businesses throughout the UK have access to cheap and competitive broadband telecoms
  • Extend the favourable tax regime for R&D to cover more SME spending on innovation
  • Help create a legal framework to allow the rapid development of e-commerce - for example, by bringing e-commerce transactions under the legal jurisdiction of their country of origin
  • Don't introduce different regulatory regimes for business conducted electronically and traditionally

    The full manifesto is available at the CBI's Web site at www.cbi.org.uk

    IR35 In a Nutshell

    The IR35 Act is the Government's attempt to clamp down on the avoidance of tax and national insurance payments through the use of intermediaries such as service companies and partnerships. Intermediaries have been used to provide single workers to clients who paid the intermediary without deducting tax and national insurance. The worker then got paid by the company in the form of dividends rather than a salary.

  • Read more on IT legislation and regulation