Information Technology

Part of the debate – in the House of Commons at 1:45 pm on 27 February 1987.

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Photo of Dr Jeremy Bray Dr Jeremy Bray , Motherwell South 1:45, 27 February 1987

The House will want to congratulate the hon. Member for Arundel (Mr. Marshall) on the choice of subject and on the terms of his motion, which draws attention to an important area of activity and rapid technological development. I welcome the Under-Secretary of State to the world of information technology. I understand that his colleagues who usually deal with the subject are engaged elsewhere. I am sure that he will find the debate of value, particularly as it applies to company law and company accounts.

Almost all of what I plan to say is a reply to and further development of the points made by the hon. Member for Arundel. We are in a surprising position. There is an appreciation on both sides of the House of the importance of information technology and, more generally, of science and technology which is not reflected in the Government's actions and policies. It is extraordinary that that should happen here when a country with a Government of a similar ideology—the United States—has put vastly greater resources, and a faster rate of increase in resources, into these important matters.

The simplest measure of the role, importance and declining fortunes of information technology in the United Kingdom is the balance of trade in information technology goods. They have been widely reported for years but the attention of the House has not been drawn to the most recent development. The closest measure is the standard international trade classification of electrical machinery—SITC 716. It seems that we have shifted from a trade balance of zero in 1979 to a deficit in 1986 of about £3 billion. The balance showed a deficit of £10 million in 1979, it improved to a surplus of £311 million in 1980 and deteriorated to a deficit of £2,855 million in 1986. The deterioration rapidly accelerated in the second half of 1986. It was running at £577 million in the first quarter of 1986; at £541 million in the second quarter; it jumped to £852 million in the third quarter and higher still to £885 million—an annual rate of about £3,500 million—by the fourth quarter. These are dramatic and extremely serious figures which highlight the increasing crisis.

It is not only in the balance of trade that we find a measure of the failure of Government policies. There is a sell-out in a number of important areas of data base applications. Access to legal data bases, not only statute law but case law, is monopolised by the United States. It is impossible to access British statutes or case law on a computer run in Britain. Lexis was allowed to take over and close Eurolex, the only British-owned legal data base.

Only last month, the British Library was forced to sell the compact disc rights to its catalogue to a United States firm simply to pay for the cost of digitising it in time to have the catalogue accessible by computer when the new British Library is opened. We have heard much about the crisis in the arts budget, the practical effect of which is that the British Library has been forced to sell our main national bibliographical source to an American firm for the next 10 years.

There is a degeneration of the Government's own management information system, which is their statistical service. We hear constant complaints in the House about the so-called adjustments of the unemployment figures, but in basic industrial statistics there has been a sharp deterioration in quality, coverage, timeliness and accuracy. There is such a wide gap between the practice of Government and what is technically possible that even the consortium of the Treasury, the Bank of England and the Economic and Social Research Council has invited tenders for the development of a modelling system which will link company models to national economy models so that the effects of changes in corporation tax, intensity of research and development or any other general measure of policy can be traced through to the response of individual companies and back again in to the design and adjustment of policies. There is no chance of the research that is under way at the London Business School achieving practical applications with the present degeneration in the Government's statistical service.

The Government have abdicated the development of an information technology strategy to the IT86 committee, which seems to have sprung from the brow of industry without any official brief or commission from the Department of Trade and Industry. I suspect that that is because the Department could not obtain Treasury approval for a departmental committee that would be likely to recommend the increase in expenditure needed in information technology today.

In Europe, the Government are obstructing the renewal of essential European Community research programmes. The Framework programme is being blocked specifically by the British Government, with the result that essential programmes in information technology, including ESPRIT and RACE, have not had their funding renewed.

The overall lack of strategy is reflected in those piecemeal failures and in the collapse of our overseas trade in information technology goods.

We should consider the wider strategic questions that affect the development of uses in the United Kingdom. How can British Telecom plan the research and development, capital investment and training needed when it does not know whether it will be allowed to transmit television programmes to consumers over its cable network? How can the cable operators know where to invest when they do not know whether they can offer telephone services over the cable systems that they will have installed?

I do not wish to waste time on an indictment of the Government's failure and neglect of information technology, because I am anxious to return to the tone of the hon. Gentleman's speech and suggestions about what should be done in the future. Those who place a high value on the role of information technology in our national life should realise that it must be seen only as part of science and technology policy as a whole. If information technology is pressed at the expense of the science budget and general funding for research and development, there will be a backlash from scientists, engineers and industry who will state that information technology does not cover all their research and business activities.

Let us consider the overall position of science and technology. We are aware of the acute plight of the research councils reflected from the advice given by the Advisory Board for the Research Councils to the Secretary of State regarding the science budget and by the statement made by the Parliamentary Under-Secretary on 13 February with regard to the science budget allocations. Since the advisory hoard formulated its advice to the Government the depreciation in the pound has led to a reduction of about £20·5 million in the real spending power of the science budget. The rise in pay, not covered by the 3 per cent. allowance made when drafting the estimate last year, will erode a further £9 million off the budget. and that represents a total reduction in the budget of £29·5 million. On 6 November the Department of Education and Science announced the new money available for the science budget—£26 million. That left a shortfall of £3·5 million on the inadequate level that had been previously recommended.

It is no coincidence that the AIDS research budget increase—the announcements on 6 November represented an increase of £1 million, and the further announcement on Wednesday 25 February represented an increase of £2·5 million, a total of £3·5 million — has come out of the science budget as previously announced. It is not a question of the research money being deducted in the future as it has already been deducted from the Government's spending on the science base.

The science base is essential for the future development of information technology. It is also essential for the possibility of finding an AIDS vaccine. The Government are in danger of destroying, in one decade, the scientific tradition of this country that has been built up over the centuries.

The Advisory Board for the Research Councils is in such a state that it is having to consider serious cuts in the whole structure of the science base in Britain. I shall quote from its most recent advice; It would appear that the Government have set aside these arguments"— the arguments for maintaining and increasing the science budget.

The Government's declared policy, nonetheless, is to maintain and enhance the strength and quality of the science base. Our advice has to be that this policy and the cumulative tenor of the Government's financial decisions can be reconciled only by reducing significantly the scale of the science base in terms of the numbers of fields in which world class effort is maintained; the numbers of researchers employed and the numbers of laboratories. This kind of contraction will require substantial restructuring funds. We shall be addressing the implications of a major contraction in the strategy paper which we hope to have ready as a basis for consultation in the first quarter of next year. But our strategy paper will also restate our firm view that it cannot be sensible to reduce (whether by default or by overt policy) the research capability of an advanced industrial economy at a time of rapid scientific and technological development.

The acute problem that is faced in science arid technology is shared by the crisis in industry. In industry there is a need to build up civil research and development particularly with regard to information technology. So I shall devote the remainder of my speech to information technology.

In a very fast moving area such as information technology, the failure of one partner to make the necessary moves and adjustments handicaps the whole effort. The Government's failure lies in training, in the public sector application of information technology, and in the failure to launch the initiatives that can come only from Government. The Government'is strategy, broadly, seems to be to wait until a particular technology has broken through to a popular price level and then to complain, first, that the equipment embodying that technology is made abroad, secondly, that the users in this country are slow to make use of the new possibilities, thirdly, that the software does not exist for the applications now possible, and, fourthly, that it is just as well that the software is not available because people have not been trained to use it.

I have no objection, and I do not think that my colleagues have, to the announcements by the Department of Trade and Industry during the past week on value added services. The liberal regime in which value added services should develop is entirely consistent with a planned development of an information technology strategy overall and of the information technology infrastructure, but in no way can that liberal regime be said to amount to a policy. It is generally agreed that wide-band telecommunications services are likely to be the major technology push in information technology over the next decade. Direct broadcasting by satellite is a justifiable development in the short-term for the transmission of more television channels and, in the longer term, for broadcasting to mobile persons and vehicles. However, the capacity of fibre optic cables is so vast and the installation cost per household and workplace is so low that there is no doubt that fibre optic cable will be the dominant mode of telecommunication in the future.

The Government's present strategy, by piecemeal development of local cable systems licensed by the Cable Authority, has failed. It is not leading to the pace of development that was originally anticipated, and there is no chance of it producing a coherent national fibre optic network going into every home and workplace in Britain. There is no chance of it developing the coherence in the information technology infrastructure by which the value added networks are properly integrated with the engineering design of the system.

When people talk about future cable developments, in which I know the hon. Member for Arundel is much interested, the suggestion is still made that cable applications will develop on the back of the entertainment market. At present there is not the programme material to create an attractive market for new cable installers, and there is not the number of people offering cable services that justifies the emergence of programme providers. However, we might have it the wrong way round—it is not the wider applications that should ride on the back of entertainment, but entertainment should ride on the back of the necessary educational and training applications mentioned by the hon. Member for Arundel. The present cable policy is a strategy for the continued collapse of information technology in Britain. It lacks a coherent common carrier infrastructure, needing to be linked to value added services. It will generate a flood of imports, initially of consumer equipment, but later of capital equipment, leaving the United Kingdom unable to compete anywhere. It will lead to the further falling behind of application as well as manufacture of information technology goods and services in this country.

We can learn lessons from the unprecedented growth of the personal computer market in this country and, indeed, worldwide. Parents observed small boys playing computer games. They got hold of the idea that maybe the kids should know about this technology for their future education. A lobby built up for the installation of personal computers in schools, and then parents got hold of the idea that maybe little Johnny should have a machine at home. The hon. Member for Arundel and other Conservative Members, to their credit, put some effort into launching the educational applications. The fact that they were not carried through far enough, did not have adequate software and so on is a matter of history.

In the new field of interactive video, might not the educational applications be properly provided with properly developed, curricular support material available for each year in primary and secondary schools and in further and higher education, professional training, and in industrial training? If BT was asked to see that a fibre optic cable network was installed into every educational establishment and was able to support that volume of activity, the very commitment to provide that volume of application, just as in the case of personal computers, could stimulate such a volume of development of entertainment services, value added services of all kinds, business applications, and so on, that, by the time the system was in operation, there would be an entirely economic market for entertainment and value added services which would justify the installation of the system into every home and work place in Britain. That is to put the other way around the programme that people have outlined before. It requires a bold initiative from the Government, but I see no signs of any such initiative emerging today.

If the Under-Secretary of State wishes to get some feel for the pace of development in this subject, I recommend that he reads the February issue of the American computer magazine, "Byte", which is a special issue on educational developments in the United States. He will see not only the volume of activity there, which is huge, but the diversity of it, with which we, with our much more limited resources, must somehow catch up.

If, today, the cost of a compact disc player linked to a micro-computer and a high definition colour television screen costs, say, £2,000, within five or 10 years at most it will cost about £200. There is an opportunity to develop not only the cable system but the manufacturing industry, which could give information technology a new launch. Without such initiative and commitment on the part of the Government, and without a concerted effort by BT, equipment manufacturers, the BBC, the IBA, the Cable Authority and the education system, we shall see the continuing collapse of information technology to the lasting damage of the country.