Amendment of Principal Act

Companies (Millennium Computer Compliance) Bill – in the House of Commons at 2:21 pm on 28 February 1997.

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Photo of Mr Tim Smith Mr Tim Smith , Beaconsfield 2:21, 28 February 1997

I beg to move amendment No. 1, in page 1, line 11, after 'company', insert 'other than small and medium-sized companies as defined in section 247'.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

With this it will be convenient to discuss amendment No. 4, in page 2, line 8, after 'company', insert 'other than a small or medium-sized company as defined in section 247'.

Photo of Mr Tim Smith Mr Tim Smith , Beaconsfield

I congratulate my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) on his foresight in introducing the Bill. There is no doubt that British industry and the public sector face a major problem, a problem that may seem to some people to be some way off, since the millennium is nearly three years away. However, anyone who takes the trouble to study that problem will find that the solution may take longer than three years.

My hon. Friend, almost single-handedly in the House, has made a huge effort to draw the scale of the problem to the attention of industry, commerce and the Government. As a result, the United Kingdom is now rather better prepared than some other European countries; it is perhaps more on a par with the United States, which is certainly taking the problem seriously.

I entirely understand why my hon. Friend introduced the Bill. He wants every company in the country to take the problem seriously, and he wants it to be considered at the top level. He wants company directors to consider the scale of the problem, to produce an assessment and then to produce some kind of strategic solution. I endorse that approach. Every organisation that depends to any extent on information technology for the operation of its business has a great deal at stake—perhaps more than many people appreciate. It is not just the relevant business that might be at risk; business A could be brought to its knees by the failure of business B, its supplier, to tackle the problem effectively.

I was impressed by the note on the subject produced by the Parliamentary Office of Science and Technology in December. It listed some examples of what could happen. I will not trouble the House with all of them, but the document stated: In 1992, Mary Bendar of Winona … USA was invited to join a kindergarten class because she was born in '88 (she was 104 years old). when she received that invitation. That is just one example of what can happen, but there are many more. The problem will affect every business and everyone who has a personal computer, because a great deal of that software is already out of date.

I accept the premise on which the Bill is based; therefore, it is a matter of regret that I must tell my hon. Friend that, although I understand that he has introduced the Bill to give more prominence yet to the extent of the problem, I cannot support the Bill. I am not happy about placing more burdens on companies, as the Bill proposes. The amendments go some way towards meeting that difficulty by excluding small and medium companies from the Bill's ambit. My hon. Friend may say that that would exclude the vast majority of companies—I recognise that, but I am concerned about placing extra burdens on business. My hon. Friend wants to place a formal requirement on companies to undertake a formal assessment and publish the details in their directors' report.

Photo of Mr David Atkinson Mr David Atkinson , Bournemouth East

My hon. Friend seeks to exclude the small and medium businesses from the scope of the Bill. He has made the point that it is important that those businesses that are connected to larger businesses through their computer systems should also be millennium-compliant. In doing so, he has already responded to the point that he now makes in order to try to convince the House to support his amendment. It is necessary to include in the Bill all businesses with computer systems that will be subject to problems at the millennium. To exclude the vast majority of them would negate the Bill's purpose.

Photo of Mr Tim Smith Mr Tim Smith , Beaconsfield

I said that I was not very enthusiastic about the whole Bill, but if we are to impose extra regulations on business, those best placed to cope with them will be large organisations. I believe that large companies are starting to take the problem seriously and, if they were required to comply with the terms of my hon. Friend's Bill, there would be a trickle-down effect. They would place in their contracts with suppliers—large, medium and small—conditions requiring them to be millennium-compliant.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Why did the hon. Gentleman not join us in Committee on Wednesday morning when he would have heard the Minister warn us against being stuck in an aeroplane or on the 20th floor of a building on new year's morning in 2000? There is a powerful argument for the Bill.

Photo of Mr Tim Smith Mr Tim Smith , Beaconsfield

I fully understand that. I also understand that a car might not start on the morning of 1 January 2000. But I am not happy about using the law to impose a solution on business. I have already said that I fully understand and support my hon. Friend's objectives, but I am not convinced that the Bill is the right way to go about achieving them. That is why I tabled my amendment.

Photo of Ian Taylor Ian Taylor , Esher

I should like to add to the praise that my hon. Friend the Member for Beaconsfield (Mr. Smith) gave my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) for his work. He has focused the minds of the public and the professionals on the problem.

In a nutshell, the problem is that a computer system that has built into its programme the use of only two digits for the year—this year would be 97—may fail to recognise what is happening when the two digits are double O. At that time, the computer may think through the date as 1900 or it may decide to pick any date at random—perhaps the date when the software programme was first applied—or it may shut down. As there is more than one solution, the difficulty is that the company with the computing system may not know what the reaction will be and it will need to go through each of its computing systems, line by line, to eradicate the problem. In addition, the company may have to work with every other company with which it trades around the world to ensure that they have carried out the same exercise.

This is what we call the millennium meltdown. My hon. Friend the Member for Bournemouth, East raised the subject in the House and discussed it with me about 18 months ago—he and I have often been lone voices in the House. Much as I accept the motives of my hon. Friend the Member for Beaconsfield, the amendment, which would exclude small companies, is a difficult one to accept.

As I said in Committee, the difficulty with the legislation is that I do not want now—with only a short time to go until 2000—to focus people's minds on legalities, the accounting profession and attempts to follow set procedures. The attention of those people, from the chief executive down, should be focused on sorting out the problem.

Different companies will have different problems. A company that uses its computers merely for word processing can correct the problem as it emerges, but a company that has hugely complex systems, such as those used for trading, will have great difficulty. Morgan Stanley has told me that it has earmarked $55 million and taken on 200 staff to deal with this issue. The difficulty will get worse as we get closer to 2000, for the simple reason that more companies will refuse to trade with companies that cannot guarantee that their own systems are millennium-compliant. The Government have said that their systems will be millennium-compliant by December 1998, and that will clearly have implications for trading and exchanging information with non-compliant systems thereafter.

The difficulties will apply equally to embedded systems, such as those in lifts, aircraft, safety control devices—

It being half-past Two o'clock, the debate stood adjourned.

Debate to be resumed on Monday 10 March.