– in the Scottish Parliament at 9:30 am on 24th February 2000.

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Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament 9:30 am, 24th February 2000

The first item of business this morning is motion S1M-575, in the name of Henry McLeish, on e-commerce, and an amendment to that motion.

Photo of Henry McLeish Henry McLeish Labour 9:31 am, 24th February 2000

Presiding Officer, I want to thank you for coming to swell the numbers, given the lack of a charged environment this morning.

Photo of Henry McLeish Henry McLeish Labour

"Not yet" is the usual battle cry of the nationalists.

I am sure that there will be unity of purpose in this debate, as it concerns an important issue for business in Scotland. In previous debates on the knowledge economy, tourism and manufacturing, we may have expressed differences of opinion on the margins, but a consensus is emerging in Scotland about the importance of the economy. A new and worthwhile model is being developed between the Parliament, the Executive and the business community. Nothing is more important to Scots, no matter where they live in Scotland, than jobs, prosperity and equality of lifestyle. It is in that context that I want to highlight the issue of e-commerce.

Today, we can send a message from the Parliament that is supported by all sides—that e-commerce is vital to the future of the Scottish economy. Currently, 7 per cent of businesses are trading online: that is more than in some countries, but the figure is not as great as it might be. The defining point of today's debate is the fact that we need to work around a set of ideas and steps forward that will dramatically increase that percentage and ensure that business does not lose out at a time when e-commerce, or e-business, is an opportunity. If we do not take the opportunities that exist now, we will face a threat in two or three years' time.

Large companies in Scotland rank alongside their counterparts worldwide, but smaller companies are lagging behind, in terms not only of e-commerce, but of a range of information and communication technologies—clearly, the two are interlinked. Our task is to try to provide the necessary catching-up, to build confidence, to remove doubts and to explain the real benefits that will flow from business that is wired up.

A great deal is happening. Earlier this week, we launched the Scottish Enterprise report, "Connecting Scotland", which proposes some positive steps forward. It is important to note that, psychologically, when the prefix "e" or the word electronic is highlighted, there is apprehension not only in the business community, but among other members of society. We are developing a knowledge economy, a knowledge society and knowledge workers. This Parliament can make a huge contribution to changing the culture of Scotland in that respect, as I hope the flavour of today's debate will show.

At the UK level, much is being done to provide an environment in which e-commerce can flourish. As we move from the industrial age to the information age, it is widely acknowledged that a partnership must be developed between the United Kingdom Government, the Scottish Executive and the Scottish Parliament. We hope that the Electronic Communications Bill will go some way to allaying the fears of the business community, especially in relation to the important matter of security. Several UK reports have been written, which cover Scotland. We believe that we have a vested interest in supporting what is happening throughout the United Kingdom.

At a Scottish level, a great deal is being done by the Executive, the Parliament and, in particular, Scottish Enterprise to address some of the issues. We are investing £62 million in high-quality educational material for the national grid for learning, which will be available on the internet for schools, colleges, teachers, lecturers, pupils, students and other learners.

We have a programme for delivering the infrastructure for cable networks, hardware, services and the training that is required to establish modern and comprehensive IT systems in our schools, colleges and libraries.

The targets that we are to reach by 2002 are to connect to the internet all Scottish schools and libraries, to provide individual e-mail addresses for all Scottish teachers and pupils and to double the number of modern computers in Scottish schools. Those parts of the foundation for the e-commerce revolution are already in place.

In relation to Jack McConnell's modernising government programme, the Executive has nearly £500 million a year to spend on a wide range of goods and services. It is Jack McConnell's intention, supported by the Executive and, I hope, by this Parliament, to put those goods and services online. That would show the Executive putting its money where its mouth is in providing leadership to the wider community.

Earlier this week, Scottish Enterprise launched a step-by-step programme to engage the business community in a variety of ways and to ensure that, as well as getting involved online, the business community understands the true benefits that such an approach can bring. At both the UK level and at the Scottish level, a number of significant steps are being taken.

We do not have time today to discuss three significant aspects of e-commerce, but it is important to flag them up. The e-commerce revolution requires us to examine access, costs and infrastructure. I wish to be identified—as I hope the Parliament would wish to be—with the Chancellor of the Exchequer's comments acknowledging that the cost of internet access is a major determinant of how quickly we are moving. Like the chancellor, I believe that the costs are too high not only in this country, but worldwide. The telecommunications industry should listen to that point, as it has a vital role to play in allowing businesses to see the opportunities that exist, while the Parliament, the Executive and the UK Government seek to remove or reduce many of the constraints on business.

Infrastructure and access are crucial, as they are the building blocks on which a successful nation can develop, in terms of the e-revolution and knowledge economy. Those are important matters and, although they are difficult to develop in such a short debate, I am sure that we will return to them during the debate.

The Scottish Enterprise strategy "Connecting Scotland", which was published earlier this week, was the first wave of an action plan. It seeks to encourage the take-up of e-commerce by small business and those who supply business. The second phase will move on to consider skills development, which is absolutely crucial, and the creation of the required supportive environment.

A number of aspects of the action plan are worth mentioning today. The action plan provides a step-by-step approach to the national promotion campaign, which will be rolled out over the next few months. In addition to that, I am delighted that Scottish Enterprise is to create an e-director post, a decision that has much to do with the enthusiasm and commitment of Scottish Enterprise's new chief executive, Robert Crawford. I am also delighted with the launch of the initiative earlier this week—I believe that Robert Crawford is embracing the future, as he is willing to put a key member of staff at the disposal of the nation in order to secure the success of the action plan.

Photo of David Mundell David Mundell Conservative

What relationship will exist between Scottish Enterprise's e-director and the UK e-envoy, Mr Alex Allan, who was appointed by the Prime Minister and whose task is to make the UK the best place in which to do e-commerce?

Photo of Henry McLeish Henry McLeish Labour

That is a fair question. As the Scottish Enterprise post has been created, we want to ensure that it is filled as quickly as possible. We will then have a proper basis for communication between the Scottish Executive, Scottish Enterprise and London. Excellent systems exist at present, but I believe that the e-director will be a champion within Scottish Enterprise; the e-director will be able to formulate a new way forward and provide us with a better information service. I look forward to that appointment and underline my willingness to work with all members to make the information available.

Photo of John Swinney John Swinney Scottish National Party

Will the minister set out how the e-commerce director of Scottish Enterprise will link into other Government initiatives in Scotland, such as the digital Scotland task force and the knowledge economy task force?

Photo of Henry McLeish Henry McLeish Labour

We already have the knowledge economy task force, the digital Scotland task force and a science strategy review, and we are driving ahead on the e-commerce front. When the e-commerce director is in post, I intend to have further discussions with my department and Scottish Enterprise to ensure that we have the best system for passing information to the Parliament and the Executive. It is equally important that we ensure that all the initiatives are facing in the right direction and are contributing to our wider goals for the Scottish economy.

There is activity at UK level and activity in Scotland, including significant developments within Scottish Enterprise, but we need to re-emphasise how important e-commerce is to Scotland. I want to identify three or four initiatives in which this Parliament and the Executive could become involved.

First, despite the fact that there are 45 colleges and 16 higher education institutions in Scotland, they are not yet working as a single higher and further education resource. We need to consider whether we can develop the concept of an e-institute—a virtual-reality institution that would build on the excellent work that is being done in many universities and colleges. At the moment that is an idea in embryo, but I am sure that members from all parties will want to discuss it.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Mr Swinney, the minister is in his last minute, but you may carry on.

Photo of John Swinney John Swinney Scottish National Party

The minister makes an interesting point, which raises the issue of where the overview of educational provision in the higher and further education sector is coming from, and whether by creating a virtual community or some other mechanism we can improve the strategic planning of educational provision in Scotland. That would ensure that we could provide access to the range of educational opportunities that are required to meet the challenges that we face. Will the minister comment on that?

Photo of Henry McLeish Henry McLeish Labour

For all the qualities that I thought John Swinney had, I did not think that he could read minds. I believe that there is wide support for the establishment of an e-institute as a way of taking us forward on a strategic level. We may have a chance to say more about that on another occasion.

Secondly, I am keen for us to consider the experiences of other countries. Elsewhere, David Mundell has mentioned Finland, which is a connected nation and a superb example of where we want Scotland to be. I would like the Enterprise and Lifelong Learning Committee and the Parliament to investigate what lessons we can learn from other countries, because time is not on our side. There is an urgent requirement for us to move forward.

Thirdly, we intend to set up a working group with the trade unions and the Scottish Trades Union Congress. We can talk about a knowledge economy, but crucial to the whole project is the knowledge worker. I believe that the unions have a vital role to play in the advocacy of the issues that we are debating today.

Finally, I want to bring to the attention of the chamber an article that appeared in Business Week International on what the giant Ford company is doing in relation to e-commerce. Under the banner "At Ford, e-commerce is job 1", the article states that the company has set out a net strategy for the future. That is interesting, because although we are making progress and want to become the e-commerce hub of Europe, we need to think ahead.

Ford talks about "wired workers", and as part of its new strategy it is

"Offering all 350,000 employees a computer, a printer and Net access for $5 a month".

Despite the fluctuations in the exchange rate, that is about £3.

Ford's goal is to make

"the workforce Web-savvy so it will quickly adopt the Internet initiatives, while enabling the CEO to send weekly e-mails to employees."

If there is an initiative in Scotland that is doing something similar, I encourage it to come forward. That is the kind of thinking and vision that this Parliament should have.

I hope that this debate will confirm that there is unity of purpose and that it will deliver a powerful message to the 93 per cent of businesses in Scotland that are not online. We will do our bit, but ultimately this is a matter for the marketplace and for business. I hope that they will respond to the challenges that we issue today.

I move,

That the Parliament notes the Scottish Executive's commitment to helping Scottish business take advantage of the revolution in information technology; supports the publication by Scottish Enterprise of an action plan to accelerate the take-up of e-commerce by business and develop supplier industries, and welcomes all actions by the public and private sectors which will contribute to Scotland becoming the e-commerce hub of Europe.

Photo of Lord David Steel Lord David Steel Presiding Officer, Scottish Parliament

Before I call Mr Mundell, I inform the chamber that I hope to say something about the Holyrood project at the end of this morning's business.

Photo of David Mundell David Mundell Conservative 9:45 am, 24th February 2000

I declare my registered interest in British Telecommunications.

I am disappointed that there are so few members in the chamber for this debate on one of the most important issues facing Scotland. This Parliament has to move on and focus its attention on fundamental issues such as this, rather than on those in which we seem to get bogged down.

There are many quotations about e-commerce. As I know Margo MacDonald likes quotations, I will read my favourite one, which appeared in last week's edition of Salon cyber-magazine.

Photo of Margo MacDonald Margo MacDonald Independent

Wait for it; this will be good.

Photo of David Mundell David Mundell Conservative

It declared:

"It is still springtime in Netland."

Let us hope that that is the case, so that Scotland can take advantage of the incredible opportunities that e-commerce offers to Scottish business.

Many members of the public may think that there is e-everything nowadays and wonder what it is all about. I believe that e-commerce is about businesses doing everything that they have ever done, but at the speed of light and at the click of a mouse. It is about customers who never sleep and transactions that never end, in a marketplace that is the world. I do not believe that the importance of e-business to Scotland can be overstated. Therefore, I have no difficulty in supporting Mr McLeish's motion and almost everything that he has said this morning.

It is difficult to cover all the important e-commerce issues in such a short debate—the UK Government identifies 60 such issues. Nor is there time to rehearse the millions of statistics about e-everything. We had the chance to air many of the issues in the recent knowledge economy debate, so I will not repeat them now, although I will reiterate my concern that the Scottish Executive does not yet seem to have achieved two of the immediate impact objectives that are set out in the Cabinet Office document "uk".

The first of those objectives was to galvanise and co-ordinate government. I acknowledge what the minister has said, but from the outside there appears to be a lack of cohesion between the modernising government initiative, digital Scotland, and the knowledge economy task force.

Secondly, although I try my best to inject some excitement into these matters, I do not think that the Executive is succeeding in generating the buzz that is required. We need that buzz and momentum. This is an exciting topic. It is not for nerds. It is important for everyone in Scotland, and we have to move the debate forward.

I want to concentrate on the relationships between Scotland and the UK, as that is the matter about which there is least clarity. Ministers have been helpful recently in answering a number of questions that I raised about the role of the UK e-envoy, Alex Allan—who is tasked with making the UK the best place in the world in which to do e-business—and the UK Minister for Small Business and E-Commerce, Patricia Hewitt. It is vital that we understand the relationship between Scotland and the UK initiatives and understand who has responsibility for what.

The least satisfactory answer that I had from the Minister for Enterprise and Lifelong Learning to one of those questions on division of responsibilities was when he said that the e-minister was responsible for reserved matters and the Scottish Executive was responsible for devolved matters. I do not think that that answer was worth £100. I do not intend to ask 60 questions about who is doing what based on each of the commitments set out in the "" report, but we need to understand the division of responsibilities.

Photo of Henry McLeish Henry McLeish Labour

I take David Mundell's point. So that he does not have to lodge any more questions, we might have a face-to-face meeting at which we could have a more constructive dialogue.

Photo of David Mundell David Mundell Conservative

I accept that offer.

I visited the.uk site. It makes a useful start and provides the opportunity to download several action shots of the minister and Mr Robert Crawford. It does not offer the same detail on how the action plan will be implemented, as Mr Alex Allan does at www., nor does it set out in detail how Scotland is to achieve the laudably bold objective of becoming the European hub for e-commerce.

On the site, Mr Allan sets out the monthly report that he and Patricia Hewitt provide to the Prime Minister on progress in making the UK the best place in which to do e-business. The most recent report covers 36 points, which range from progress on electronic signatures to the latest discussions on access to telecommunications networks and training initiatives. We need something like that in Scotland. Rather than leaving today's debate thinking that we have dealt with e-commerce, we must have continuing discussion based on factual reports. A regular and overarching report could act as a catalyst to galvanise and co-ordinate Government action.

For once I am in complete agreement with Tony Blair, who told businesses that if they did not see the internet as an opportunity, it would be a threat, and that if they did not take that opportunity within two years, they might be out of business. We cannot afford to let that happen in Scotland.

I move amendment S1M-575.1, to insert at end:

"and calls upon the Scottish Executive to report to the Parliament on progress in achieving this aim on a quarterly basis."

Photo of John Swinney John Swinney Scottish National Party 9:53 am, 24th February 2000

One of my privileges as an MSP has been to be present at many sparsely attended debates on important issues. Another debate that left me with similar feelings was the one a few months ago about the year 2000. Thinking of that debate reminds me where we are at this stage of the discussion on e-commerce. Five years ago, when I worked in the private sector before entering politics full time, the year 2000 conversion for most companies could have been as close as the 22 nd century. Probably with the change of Government in 1997, the focus on the need to prepare for the year 2000 was sharpened, with a successful outcome.

Page 9 of "Connecting Scotland"—the Scottish Enterprise strategy on e-commerce, which was announced on Monday—says:

"Scottish Enterprise has been promoting the use of the Internet and the tangible benefits it can deliver, especially to SMEs, since 1994".

The previous page contains a range of statistics showing that Scotland was seventh out of 10 countries in the level of website, external e-mail and electronic data interchange. The statistics also show that 40 per cent of Canadian companies use websites, as opposed to 22 per cent in Scotland, and that 7 per cent of companies in Scotland—as measured by the proportion of the work force employed—are selling online, as opposed to 16 per cent in Canada. I am left with the sense that we must give impetus to advancing awareness about e-commerce in the same way as an impetus had to be given to preparations for 2000 in recent years. Today's debate is a serious one about a change to our entire business practice; we must be equipped for that change.

Last Friday, I was struck by a contribution to the Enterprise and Lifelong Learning Committee's debate for business people. I quote from column 33 of the business in the chamber report. Mr Ian Ritchie, who is now a board director of Scottish Enterprise and who will, I suspect, transform a great deal of the organisation's thinking, said:

"We are in the middle of an industrial revolution. However, we are not at the heart of it, as we were of the previous industrial revolution 200 years ago, which involved people such as Watt. We are not capitalising on it or driving forward with companies that could exploit it."

He raised a number of interesting points that flow through into some of the issues raised by the Scottish Enterprise strategy, of which we must be fully aware.

Before I comment on the challenges of e-commerce to the Scottish economy, let me conclude my remarks on how the Government is preparing for it. As the minister said, we have had a number of debates on the knowledge economy, digital Scotland and other relevant issues. One of the persistent concerns that I have expressed in all those debates—and I make no apology for returning to old ground—is the need for coherent preparation.

The Government's preparations for 2000 were coherent and focused. However, the launch on Monday of the Scottish Enterprise strategy created a new connecting Scotland steering group. I was concerned to read in this month's Scottish Business Insider some comments by Gordon McKenzie, the director of Microsoft Scotland, who said:

"When Henry McLeish said that this country was falling behind in the adoption of e-commerce, he was right. But it's hardly surprising. There are so many committees and task forces at national, regional and local level in Scotland alone that there's no clarity about the strategy and no sense of leadership coming from government or the bigger businesses."

I hope that we are at the defining moment at which the minister can tell us that such comments will become redundant and that we can move forward with a coherent strategy that engages the business community in Scotland and allows it to take part in the process of change and industrial revolution that Mr Ian Ritchie mentioned last Friday.

E-commerce could pose many threats, and the Scottish Enterprise report describes a number of those threats to the Scottish economy. However, it also creates a number of opportunities; I will concentrate on what I think will provide opportunities for significant economic development in Scotland.

The first opportunity is in the financial services sector. Because of the advantages of the European Union's regulatory regime on the promotion and development of life and pension products, those financial products—the areas in which the Scottish financial services sector has expertise—can be offered on an almost no-boundary basis through an electronic trading environment. That is the theory. Among all that, there are many regulatory obstacles that must be overcome in a multinational European environment. On the basis of quality of product and service, however, we have an opportunity to break through using electronic trading as a means of promoting that activity.

We also have the opportunity to develop the quality of service that characterises many of the key service sectors of the Scottish economy that make Scotland such an attractive location for inward investment projects. We must not only look at physical location, but trade in the e-commerce environment on the basis of the quality of service that we can offer from Scotland.

We have the opportunity to utilise electronic trading and electronic commerce to tackle what has been a significant disadvantage to the Scottish economy over many years—issues of peripherality. We have the opportunity to leap over the obstacles that location puts in the way of the Scottish economy, which will allow us to trade on a level playing field with our competitors.

Those are just a few of the opportunities that the Scottish Enterprise strategy captures, but at the heart of this issue is how we prepare and equip ourselves to meet the challenges. We will not meet them if our strategy lacks coherence. We need a strategy that allows Scottish companies to compete in an international marketplace. The strategy should not only address the needs of the large-company sector—which is giving commitments that it will move into electronic trading and e-commerce as its mode of operation, as Scottish Enterprise has committed itself to do—but engage small and medium enterprises, which we all agree are the engine of the economy in all parts of Scotland, whether in the centre of Edinburgh or in the most peripheral part of the western isles or Shetland.

We must tackle the issues of inclusion and exclusion by examining whether our strategy touches all communities in Scotland and gives people who live in disadvantaged environments the opportunity to be part of this industrial revolution—a revolution that is affecting those of us who have the privilege to debate these issues in this Parliament.

The $64 million question is how we deliver the spark to create the businesses in the Scottish economy that will be able to relate to this new business environment. Some of those companies already exist—representatives from some of them were in the chamber on Friday, delivering stimulating contributions to the debate that we had. I encourage the minister to read the report of that debate. We have to create the conditions in which the sparkle can come to the surface. Instead of following the process of technological change, Scotland can move into a position of decisive leadership, which would bring benefits to the Scottish economy. Fundamental to all that is guaranteeing that we have the infrastructure to deliver in that environment. My colleague Alasdair Morgan will talk about that.

We need a strategic vision of where we are going. I say in good faith that I hope that the Government is now recognising the concerns that have been expressed by the Opposition and by members of the business community about the need for coherence. Without an effective strategy in place, we will not be able to seize the opportunities that are there to be seized and we will not withstand the threats to the Scottish economy that could arise.

Photo of George Lyon George Lyon Liberal Democrat 10:03 am, 24th February 2000

On behalf of the Scottish Liberal Democrats, I welcome the new initiatives in the Scottish Enterprise strategy document "Connecting Scotland", which offers a number of dedicated and cohesive programmes to create a competitive advantage for Scottish e-commerce.

An expanded programme of e-commerce research will ensure that we keep up to date with the rapidly changing technology and ensure that the latest developments in m-commerce—the next technology coming down the road, which is based on mobile phones—do not pass us by. Scotland is uniquely placed to take advantage of the digital mobile telecommunications-based internet and m-commerce activities, with recent industry surveys showing that we are at least two years ahead of the United States in the application of mobile technology.

Best practice and benchmarking are of key importance. In setting our goals to be the best in the world, it is vital that we compare ourselves with countries such as Finland and Canada, which have shown a lead in applying the new technology. If we intend to become the European hub for e-commerce—as the minister states—we must gauge our progress against our competitors.

One of our main competitors is Ireland. It has already clearly stated that its intention is to be the primary European platform for e-commerce and internet technology. Indeed, when I spent some time over there, that was clearly one of its key goals. Ireland is currently investing in transatlantic broadband fibre-optic cabling, which will ensure that Ireland is the bridgehead for American companies that want to access the European market.

Ireland intends to be the European platform for the rapid transmission of data. I ask Henry McLeish for an assurance that Ireland's investment in infrastructure is being matched in Scotland. If we want to be the European hub for e-commerce, we must ensure that the infrastructure is in place to allow American companies to use Scotland as the bridgehead into the European market. We have many advantages. For example, we are English speaking and have access to the European market. It is vital that investment in infrastructure takes place.

Another aspect of public sector investment in Ireland has been heavy investment in the skills base in computer science and software programming, to ensure that companies who want to use Ireland as their European platform can.

I ask Henry McLeish to ensure that we do everything possible to ensure that computer scientists and software engineers are available to companies who want to use Scotland as a base. I suggest that the recently announced student deal will go a long way to help make progress on that.

Ireland has set out its stall to compete with Scotland to become the European leader and European hub of e-commerce. It is vital that Ireland is included in our benchmarking programme, to ensure that we are best placed to meet that challenge.

As one or two members have said, e-commerce is not only about business—it is also about consumers. In the UK, 200,000 customers now purchase their weekly groceries via the internet. That is an astonishing figure. Ten per cent of internet users now operate online bank accounts and a week can hardly go by without another bank or insurance company announcing new discounts, cheaper mortgages and loans through access to their websites.

Although a third of adults in the UK have access to the internet—be it at home, at work or elsewhere—far too many people are still excluded from the new technology. Wendy Alexander recently stated that 96 per cent of families in council houses do not have access to the internet at home. Many Scots do not have access to credit cards, which are a prerequisite to purchasing online.

We must ensure that the large number of people in Scotland who are unable to access the internet are not punished as a result. Those who can least afford to access the internet and those who are the least likely to own a credit card are the people who can least afford to miss out on the benefits, the discounts and the competitive pricing that is increasingly restricted to the information rich. The Scottish Executive and Scottish Parliament must address that.

I recognise that positive action is being taken. I welcome the fact that the new opportunities fund is allocating £23 million towards computers and training across Scotland. Community cyber cafés in cities and rural community centres will—I hope—open up access to the many.

We welcome the Royal Bank of Scotland and Scottish Council for Voluntary Organisations programmes, which are designed to place hundreds of internet PCs in community facilities around the country. One of my local communities, Easdale Island, which is off the west coast of Scotland, wrote last week to tell me that they were having a computer placed in their local village hall. That shows that the programme is starting to deliver access to communities—even in the remotest areas.

One step can increase public access to the internet threefold. A recent study by Durlacher Research Ltd revealed that if internet and local phone calls were available unmetered to the general public—on a flat fee basis—as they are in the USA, internet usage in the UK would treble almost overnight. That will require deregulation of BT's local loops—its last remaining monopoly of telecoms supply—which is not due to take place until July 2001.

I welcome what the chancellor said last week about the deadline being brought forward. This one move—more than any other—would make accessing the internet and e-commerce more affordable to millions of households and thousands of businesses across the UK. It would go a long way towards addressing social inclusion in this sector.

We must not neglect the importance of e-commerce to our rural communities. Robert Crawford of Scottish Enterprise is right to say that

"e-commerce removes the barriers of geographical disadvantage and opens the door on a whole new world of trading opportunities" to businesses and to people who live in rural Scotland. At long last, e-commerce gives us equality of opportunity.

I look forward to the day when Argyll and the isles—and all of rural Scotland—are able to take on and beat Edinburgh, Glasgow and, for that matter, London and New York. Rural Scotland can take advantage of a weightless, knowledge-based, e-commerce economy.

Photo of Allan Wilson Allan Wilson Labour 10:10 am, 24th February 2000

Uniquely, I entirely agree with everything John Swinney said. Do not quote me on that, John. I am pleased that he ignored David Mundell's strictures on quoting statistics. It is important for parliamentarians and the Parliament to inform the debate and not simply to leave it up to the Executive.

I recognised the Canadian statistics John Swinney quoted; they might just as easily have been lifted from new Labour research as from that of his party. I would like to add a couple of statistics of my own. There are about 180 million internet users worldwide. Their number is forecast to reach 320 million by 2002—only two years hence. It is estimated that, in less than two years' time, the value of that business will be $3.2 trillion—a thousand billion—or 10 per cent of the total world economy.

Another statistic that is commonly bandied about—members will be familiar with it—is that radio reached 50 million listeners in North America over a period of 30 years, but the internet has reached twice that number in less than five years. That demonstrates the pace of the technological revolution to which John Swinney referred.

What does it mean for Scotland? If we are not in the park, we cannot win the match. Is that widely understood? Arguably, it is not. What, then, is the purpose of an e-commerce strategy? I argue that it is primarily to get us into our strips, on the park and ready for action, and not left in the clubhouse waiting for a call that never comes.

Scotland can become one of the leading players in electronic trade. Our place on the periphery, which has been referred to as the sidelines of Europe, can be superseded by our new place in European trade. That is the option that envisages the creation of new, innovative companies and the stimulation of emerging firms, capable of grasping new markets—

Photo of Margo MacDonald Margo MacDonald Independent

Will the member give a red card to the Government, since, according to The Scotsman ,

"it has failed to harness the full potential of the internet"?

Photo of Allan Wilson Allan Wilson Labour

No, I would never give a red card to the Government; a yellow card, maybe. I take the spirit in which Margo's comment was offered. We can and we should be doing more; we are here to promote the internet more generally, on a cross-party basis.

John Swinney's points about the financial community were well made. We can and should increase the size of our financial community on the strength of our decreasing peripherality. We can challenge the market, which is dominated by the golden triangle of London, Paris and Frankfurt. Given our higher education institutions, we can compete both within and beyond these shores. We can tackle the social exclusion to which John and others have referred.

Paradoxically, those same opportunities also present themselves to our competitors. Direct sourcing and unequal competitive pressures from a foreign competitive base that is better placed to exploit these opportunities when they arise pose a palpable threat. That threat is exacerbated by the associated threat to high street shopping by home shopping and our inability, more generally, to adapt quickly enough. I think that that was Margo's point.

That latter point remains extant, Margo; I do not disagree. If the internet is a global shop—I believe that it is—and we are to compete in that market, Scotland's goods have to be in the shop window. What does that mean? As the minister said, at a national level, the priority is to create a climate that will allow e-commerce to grow. That means raising awareness of the importance of e-commerce in those who have yet to be convinced. A range of services must be delivered to raise that awareness in small and medium enterprises. We must create access to affordable, effective and relevant lifelong learning facilities at the workplace and in our higher and further education institutions if we are to make that crucial transition.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party 10:15 am, 24th February 2000

I worked in information technology for many years—since the time of punch cards and paper tape—so I am very glad to speak about modern developments in the subject.

I would like to talk about the potential of e-commerce for rural areas, a subject that was touched on by John Swinney and George Lyon. There are many clear advantages for e-commerce and general computing firms that want to set up in rural areas. The quality of life in rural areas attracts staff—we must recognise that many people who live and work in towns do not do so through choice. Many fixed costs—accommodation in particular—will be much lower in rural areas. Such firms are often associated with low or no bulk in terms of goods produced and therefore transport costs—which is often a negative factor in rural areas—no longer come into play. The relocation of e-commerce firms means that rural areas retain high-quality, highly paid jobs and there are often spin-off jobs, particularly if a firm sells goods directly.

E-commerce has the potential to become a great leveller between rural and urban areas; rural areas will no longer be at a disadvantage. E-commerce will never be the main employer in rural areas, but it might be a significant one, particularly if we tap the niche e-commerce and software development markets. At last, we might get a level playing field.

If we want our rural areas to compete successfully, a quality telecommunications infrastructure must be available at a reasonable cost. At the moment, that is not the case, particularly for rural areas on the periphery. At the moment, companies in rural areas cannot get the large bandwidth they require, or at least not at reasonable cost.

Two cases in my constituency have come to my attention in the past couple of weeks. The first involves a one-woman company specialising in software development. She is located some distance from the local exchange and cannot get the integrated services digital network line she requires to communicate fast enough and with sufficient quality. The second is a larger business which, because of poor quality, high cost and continuing breakdowns in service, has just moved its servers down to Leeds, because that is where it can get the quality of infrastructure it requires. Some jobs will immediately follow that move and the danger is that the whole operation will relocate to Leeds.

We need to invest in the telecommunications infrastructure in rural areas. We can do that by putting some kind of universal service obligation on our telecommunications providers or by subsidising provision through EU funding or some other means. I am asked the question: if the Government is prepared to provide the road infrastructure in rural areas, why will it not contribute to the telecommunications infrastructure?

The information highway is the highway of the 21st century. We are not talking about huge costs; the marginal extra cost of letting someone who is five or 10 miles from the nearest exchange get a proper fibre optic ISDN line rather than the twisted copper pair, will not be excessive. We are talking about a small number of people. BT and the other firms must be either encouraged or compelled to provide the communications infrastructure that we need.

In the last century, the Post Office had a universal service obligation to deliver letters at the same cost throughout the United Kingdom. We need a 21st century equivalent of the letter. I look forward to the minister's response to that.

I would like to bring up a point that George Lyon alluded to, that the chancellor has mentioned, and that the House of Commons Trade and Industry Select Committee on which I serve has also mentioned—the provision of unlimited local call access for a fixed fee. That is one area in which the Yanks are wiping us off the map. Their companies can get that kind of access to the internet, and in areas such as software development, for which they have to be online for a long time, they play us off the park.

E-commerce is a very important issue for the whole nation; it has great potential, and we must ensure that everyone in Scotland can realise that potential.

Photo of Irene Oldfather Irene Oldfather Labour 10:21 am, 24th February 2000

I have removed, I think, all the statistics from my speech, because everybody else has already used them; and I will not use any football analogies. The last time I did that—at a Burns supper—Henry McLeish heckled me, so I will not get into that ball game.

I want to concentrate on the substantial challenges that face us in Scotland. Along with the economic growth of e-commerce will come things such as cross-border competition, increased efficiency and the transformation of businesses across the globe. The huge United States retailer Wal-Mart now offers 10 times more products on the web than it offers in its largest US store. That is indicative of the scale of the challenges that we face.

Macro-economic research in the US indicates that industries that are associated with e-commerce bring with them a downward pressure on inflation and an increase in economic growth and productivity. E-commerce will also, of course, bring job opportunities in new industries and in areas that are secondary to electronic purchasing.

Scotland must be ready to reap those benefits.

Through e-commerce, we have the opportunity to remove historic barriers to market entry, such as peripherality. John Swinney has rather stolen my thunder on that, but it is a topic that I have spoken about in mainland Europe as well. When I do that, people sometimes say that, in terms of peripherality, Glasgow is no further from Brussels—the perceived centre of the market—than, for example, Bordeaux, and is closer than Rome. However, Scotland faces the problem not only of peripherality, but of maritime peripherality. In our traditional export sectors, that affects journey time and cost. E-commerce allows us to remove that substantial disadvantage and to build on the other advantages that we have over our competitors.

I will mention one point that has not been mentioned so far. Many north American companies have invested in Scotland as the gateway to Europe, as that enables them to do business in English, but we must always be ahead of the competition. English is an advantage for north American companies, but in a European internal market to which the enlargement that is on the horizon will bring 100 million additional potential consumers and result in fewer and fewer barriers, there is no doubt that language skills could be decisive and enhance our ability to engage in e-commerce. That is why I especially welcome the proposed school of excellence in foreign language teaching that is to be set up in Scotland. I hope that that will make a contribution to the e-commerce debate as well as to the knowledge economy debate.

E-commerce represents a huge opportunity for Scottish industry; but the dangers are just as great. Some business commentators warn that companies that do not take up e-commerce opportunities could be out of business in five to 10 years' time. Although medium and large enterprises are holding their own in e-commerce, our small companies, as we have heard, are failing, and our micro-companies with fewer than nine employees are joint bottom of the e-commerce league of major European economies. That worries me, because my area already has an underdeveloped small business sector, and I do not want to contemplate the prospect of falling further behind.

Although "Connecting Scotland: The First Wave" should be commended for its emphasis on encouraging the take-up of e-commerce by smaller industries, it must take special account of areas such as my constituency, where the business birth rate is some way behind the rest of Scotland and where chronic structural uncertainties work against start-up in these innovative markets.

George Lyon alluded to the fact that 1 million adults throughout Britain do not have access to conventional banking services and thus cannot participate in e-commerce. That disadvantage will be multiplied if high street retailers contract because of the competition encouraged by e-commerce. Strategies must be developed to ensure that they are not disfranchised by those sweeping economic changes.

New technologies offer new opportunities for communities which, until now, have been excluded because of geography, poverty or both. As the new electronic media render distance irrelevant as never before, and offer communities access to resources of a scale that would have been unthinkable in the past, the problem can be part of the solution.

It is vital for Scottish industry to embrace the take-up of e-commerce, and that the Executive does everything in its power to make Scotland a world leader.

Photo of Margo MacDonald Margo MacDonald Independent 10:26 am, 24th February 2000

I want to pick up where Irene Oldfather left off, which is something I do quite frequently. There is a downside to e-commerce. Before I become the voice of doom and get everyone upset, I want to make David Mundell a happy man and quote from an article in The Guardian with the headline:

"Universities forge alliance for global teaching on net".

I am sure that that is getting everyone excited. The article says:

"Four universities—Leeds, Sheffield, Southampton and York—are linking up with four research-led institutions—the university of California at San Diego, Pennsylvania state university, the university of Washington and the university of Wisconsin-Madison".

I mention the article because Allan Wilson picked up the catchphrase "lifelong learning" and put it in its correct context. The article highlights the current meaning of "lifelong learning".

I want to make a sensible suggestion, which Henry McLeish might decide to take on board. Why not use £1 million or £2 million from the new opportunities fund—or, mentioning no names, from the cancellation of a major capital project—to allow Scottish further education colleges to run a series of one-day or half-day courses on e-commerce for small and medium enterprises. The minister knows better than I do that such businesses are currently up against it. To stay in business, those businesspeople need to take some time off, go to college and learn how to get wired-up.

I want to make another wee sensible suggestion that Alasdair Morgan mentioned. It is no use being in the first wave of e-commerce if there is no proper telephone system. More fibre-optic cables need to be laid. Moreover, communication means both computer software and the hardware of roads and rail—there is no difference between them. I should apologise: I did not mean to ask for more money to be spent.

As members know, there are plans to dig up Princes Street. We know that another useless big hole is already being dug in Edinburgh, so why are we doing the same thing to Princes Street to build yet more shops? Although e-commerce means that there will certainly be a growth in business and trading, traders will need warehousing more than the plethora of shops that have already been built outside the town and that are planned for beneath towns. Apart from that, traders will need only a portal on the internet and a nice wee shopfront to advertise the fact that customers can try there and will be posted their goods. That is the future of trading. So, the implications for planners and for—

Photo of Margo MacDonald Margo MacDonald Independent

Another quotation from David? Yes please.

Photo of David Mundell David Mundell Conservative

I wanted to advise Margo that the approach that she advocates has been categorised as "clicks and mortar", meaning the combination of some sort of shop with some sort of electronic business.

Photo of Margo MacDonald Margo MacDonald Independent

Some of my colleagues thought that this would be an uninteresting debate. I wish they were here—we would not be able to contain them.

I have one serious, final point on a potential downside to how we use the technology. A couple of days ago, when I was in West Lothian—where the council and the community have attacked this subject in a very impressive way—an example was proposed of how council services could be better delivered to the people who receive them. The imagination was going into overload.

The example concerned the telephone and the social worker—or community worker, or occupational therapist, or whoever—who was visiting the person in their home. At present, the worker might take that person out for a wee dauner, or take them for their shopping, or something like that; instead, it was proposed, they could click up the shopping. That would mean that the person receiving the services would not be socialised.

The important part of all the technology is that we must not allow it to make us Philistines. We must not forget about learning for the sake of learning. We must not apply our knowledge just to commerce. We must also ensure that we build humanity into it. That is my concern.

Photo of Elaine Thomson Elaine Thomson Labour 10:31 am, 24th February 2000

Last autumn, with others, I was invited to a seminar to speak to members of Scotland's business and academic community on the new landscape that is being created by e-commerce. At that seminar, it came across clearly that the opportunities for Scotland, in e-commerce and the technological revolution, are real and need to be grasped quickly. A key request from that seminar was that the Scottish Executive should give a lead to the Scottish business community and develop a clear strategy for e-commerce.

Today, we have a welcome answer in "Connecting Scotland: The First Wave". It deals clearly with Government's major role in relation to e-commerce, which is to raise awareness across Scotland—in particular in the business community, and especially the SMEs—so that the challenges and opportunities in the effective exploitation of e-commerce are made clear. At the seminar, people were also clear about the Government's other major role: to develop the highly skilled, well-educated work force that will be required increasingly for the new knowledge economy. In all sectors—oil and gas, hydroelectricity, tourism, retail, law, finance, electronics or engineering—it is perfectly clear that the work force that is required to develop e-commerce and to work with the new technologies will consist of knowledge workers who are IT literate, creative, forward looking and risk taking.

E-commerce and now m-commerce, to which George Lyon referred, have endless possibilities. Just imagine that someone is sitting on a bus with their wireless application protocol—or WAP—enabled mobile phone and they want to know the connection time for the train that they hope to catch, so they look it up on the new national timetable, which is coming soon. They want to book a ticket at their local theatre, so they go ahead and do so; then they might think that they do not have the money to pay for the ticket, so they look up the balance of their bank account. They want to know what their MSP said last week about the national health service, so they look it up, then send an e-mail to complain, or not. Finally, they remember that they have two hungry cats and no cat food, so they place their order with their local supermarket and get the food delivered.

Margo MacDonald is quite right—retailing will be reinvented over the next decade—but most impact will be made in business-to-business communication. Increasingly, companies want the efficiencies and extra competitive edge that can be achieved by improving the supply chain and making use of e-commerce. If small producers or manufacturers do not have a shop window to the world on the web, they cannot be contacted by e-mail and cannot place an order, check on availability, confirm prices, expedite deliveries or settle invoices by using the business-to-business software that is increasingly being implemented by many organisations in the UK and globally. Such small producers or manufacturers have immediately disadvantaged themselves in today's global economic market. Many commentators think that such companies will be out of business in five to 10 years.

Effective use of e-commerce should be of immense benefit to Scotland, raising our growth rate. In the US, it is estimated that 35 per cent of real growth over the past few years has come from new technology companies or companies that utilise new technology effectively. The Scotsman reported last week that Durlacher, a stockbroker turned internet stock trader—it has already been mentioned—had achieved a 6,211 per cent increase in its share price in one year. Therefore, if someone had invested £1,000 a year ago, they would now have more than £6 million.

There are great opportunities. One example from close to home is the oil and gas industry. The North sea is now a mature province. In Aberdeen, the north-east and Scotland as a whole, we can continue to exploit many of the benefits of the oil and gas industry for many years to come, by making good use of the new technologies and e-commerce. Many of the operations that once upon a time would have required someone to be on the spot can now be done remotely. Even when some of the major exploration and production activity is going on in Kazakhstan or west Africa, much of the activity can still take place in Scotland, making use of the skills and expertise here.

I want to mention briefly the digital divide, which was mentioned earlier. The divide is real and we must pay attention to it. In Aberdeen, the family learning and learning houses projects demonstrate innovative ways of bringing learning and connection to the new technologies to communities that do not always have access.

The strategy is to be welcomed, and the two major priorities that have been highlighted are the right ones.

Photo of Jamie Stone Jamie Stone Liberal Democrat 10:37 am, 24th February 2000

Given what I am about to say, I must mention my brother's small cheese-making business. That is my usual declaration of interest out of the way.

We have heard many good words about how e-commerce will revolutionise everything. The point made about supermarkets was interesting. It is simple; supermarket shelf space will become redundant, because everything will be on the web. Little firms that battle to get listed by Safeway or Tesco will have it a lot easier in the future, which is worth remembering.

The situation in the Highlands is in slight contrast to that described by Alasdair Morgan, in that there has been considerable investment in the communications infrastructure. We should pay tribute to the previous Government and to the present Government for that. Mr McLeish will know that that has done a great deal for the north.

I want to concentrate on the rural dimension. Things are changing rapidly. The chairman of the Highlands of Scotland Tourist Board, Mr Norman Lauritsen, put his hotel, which is in a remote part of the Highlands, on the net and managed to fill it over the millennium simply by using that tool. He is leading by example. There has also been investment in Ossian, the new computer facility for the north.

In contrast to what Alasdair Morgan said, I believe that things must be joined up. There are problems in the Highlands. Mrs Angela Mackay's Kyle of Tongue Oysters, in Tongue on the north coast, is a great wee firm that sells oysters to the London market. However, it would be a real problem if Red Star parcels were to change the rules on door-to-door delivery. That was what John Farquhar Munro was referring to in his question to the minister at question time last week.

The minister will also be aware of the problem of the Heathrow slots. If we cannot match the technology with physical delivery of services, we have a problem. Tourism businesses may offer fine products on the net, but unless they can get the tourists in at times that suit them, there is a problem. That is linked to roads.

We must drive ahead with getting businesses on e-mail. It is dead easy: goodness me, if I can work e-mail, frankly, anybody in this country can.

It is also important for firms to have on-going business advice. It is all very well for them to be linked up, but they need to be guided for the initial period—a nursing aspect is involved.

Another point was made strongly last night, at a briefing from Scottish tourism industry representatives. I can illustrate that point this way: I met representatives of BT before Christmas to twist their arm, as it were, to set up call centres in the north of Scotland. They are keen to do that, but pointed out the fear that they and the tourism industry have of a lack of co-ordination among public agencies—among local enterprise companies, councils and so on.

E-commerce is worth while; we Liberal Democrats totally support what is being said today, but to make e-commerce work, and to reap the maximum advantage, we must ensure that we deliver on other fronts, such as transport, tourism and public agencies. If we fail on one of those fronts, that lets down all the people who so boldly and courageously worked to put in the infrastructure that we have in the Highlands, and which Alasdair Morgan is calling for in the south-west.

I will look at Mr Mundell when I say this: the point about e-commerce is that it involves an international market. I would have thought that what we are seeing develop before our very eyes is the reason why, I am afraid, the thoughts of Mr Mundell's pal, wee Willie Hague, on the single currency will become increasingly redundant, and something belonging to the past. I hope that David will forgive me that slight swipe.

Photo of Pauline McNeill Pauline McNeill Labour 10:41 am, 24th February 2000

I welcome the Scottish Executive's launching of the first part of the Scottish e-commerce strategy. It has come to that part of the debate when all the key points have probably been made, but I want to emphasise some of the matters that I think are most important to the strategy.

I am with David Mundell on this: such a debate is often characterised as being full of techno-wizards and anoraks. We are beginning to leave that image behind, particularly as Margo MacDonald is taking part in the debate, although she has left the chamber.

We ought to be saying that this is the place to be for real modernisers. That is the image we should portray, to get more people involved.

Photo of David Davidson David Davidson Conservative

In the light of that last comment, why do Pauline McNeill's colleagues seem to be singularly absent?

Photo of Duncan McNeil Duncan McNeil Labour

He should look behind him.

Photo of Pauline McNeill Pauline McNeill Labour

E-commerce has become a buzzword, like e-procurement, e-shopping and e-everything. The important message to get across, however, is that this is about what we have in store for the consumer—one of the key things about online shopping is that it is meant to be cheaper.

I have also recently learned the new phrase of the century, "clicks and bricks". Last week, I had the opportunity to open the new Dixons phenomenon, the @jakarta chain, which sells games and software for those who are interested in that sort of thing. People are not comfortable with buying on the internet, particularly if something goes wrong. There is quite a cute strategy at Dixons: if something goes wrong, the customer can go into the shop and get it sorted out, but it is substantially cheaper to go online, and that is the important thing for the consumer.

We need to capitalise on the fact that so many people are now conversant with how to go online. We know from experience that the younger generation is probably better at it than most. Many organisations, particularly campaigning organisations, have taken advantage of going online, which has made a tremendous difference to them.

Internet cafés have been mentioned. There has been some expansion in that sector, but they are seen as a largely middle-class phenomenon. We must do something about making them more accessible.

George Lyon's speech encapsulated many of the things that we must get across to people about e-commerce. It is no use our talking about getting online and about the development of e-commerce if it is not accessible to the whole population.

I also agree with Alasdair Morgan's comments. Like everyone in today's debate, including John Swinney, I had the same statistics. We must do something about the extent to which Scotland is not online. Cost is important and I agree with Alasdair Morgan that we should think about regulating the telecommunications companies. There is too much disparity between those companies in terms of cost and the speed of connection that they offer.

If the strategy is not inclusive, it is meaningless. As George Lyon said, there is no point in businesses being online if consumers are not. To buy products online, people need a computer and a credit card. However, only one family in five has a computer and fewer families than that have a credit card.

I support what Scottish Enterprise is doing, but "Connecting Scotland" should not just be a sharp title; it should mean something. I accept the point about the possibility of there being too many task forces and groups. We have to create a strong national profile to allow e-commerce to grow; we need a friendly legislative environment that builds on consumer confidence; and we need to think about how e-commerce will affect the jobs market. We will lose jobs in the sector, but we can create higher-quality jobs if we are in a position to do so.

Although the debate has been poorly attended, I welcome the opportunity to speak on this crucial subject.

Photo of David Davidson David Davidson Conservative 10:47 am, 24th February 2000

I am pleased at the tone that has been adopted today. All the speeches have been positive, apart from Jamie Stone's accusation that our banking services are incapable of doing transactions from one currency to another.

Like my colleague David "click" Mundell—he has a new name now, obviously—I should like to declare an interest. My interest is that I want to ensure that Scotland, led by the Scottish Parliament, catches up in the race to play a part in an exciting new world.

I was surprised that nobody mentioned the setting up of the new cross-party group, the Scottish Parliament information, knowledge and enlightenment group, known as SPIKE. It is important that e-commerce is seen as more than just a business tool; we will have a new style of life. Last night, I spoke to some lawyers who were interested in using e-technology to do business. They have discovered that legislation must be written using the technology, not simply transferred across.

We must reinforce our commercial position and our employment prospects in what has become a global market. Many members have talked about peripherality and geographic obstacles. Elaine Thomson mentioned the fact that the oil industry in Aberdeen, using e-technology, has become one of the world centres of excellence.

Obviously, not all is doom and gloom, but we must adapt to and adopt several issues in the short term. Our small and medium companies are not adopting the technology at the speed of their competitors. We must ask why. Is it because of insecurity? Is it that they do not recognise the threat or the opportunity? The Parliament must ensure that that insecurity is addressed and that the message of survival or expansion through involvement is delivered.

David Mundell said that there is a buzz about the subject, as do ministers in Whitehall, but we must not be left with only the "zz" at the end of the word as we fall asleep talking about numbers. Many members wanted to quote statistics at each other today, but we must do more than that.

We must increase the motivation of SMEs to buy into e-commerce and we must give them the confidence to do that. The best way to do that would be to use the example of the Government itself. I was heartened by what the minister had to say, but I would like to see him roll out the e-commerce initiative further. It should be used not only for procurement—welcome as £500 million for that is—but for VAT recovery, Inland Revenue transactions, council and business tax collection and communication between local agencies. Scottish Enterprise reckons that it will not be able to deal with all its clients via the internet until around 2003—that is quite a long way off.

There has been talk of initiatives; many members have said that there are too many of them. I am a little concerned about the e-institute that Mr McLeish mentioned, and I would like to hear more at a later date about how that would interface with other activities. I do not want to see such an institute become a competitor with our further education colleges, which might have to drop out because they are unable to compete.

Which tools will be needed? Small and medium enterprises will need quality advice on purchasing the appropriate systems and, particularly, on the training that is required in the workplace—comments about staff training were made by Margo MacDonald and others. Fraser Morrison of Highlands and Islands Enterprise made an interesting comment at the Enterprise and Lifelong Learning Committee yesterday. He has examined the poor take-up by SMEs of the opportunity to attain Investors in People status and suggests that a compulsory condition of e-commerce grant applications by SMEs should be that they must try to attain IIP status. If small companies want economic development help to buy into e-commerce, we must tell them that we will give them advice on IIP.

On confidence, we must create a legal framework for e-commerce that is compatible with Scots law, so that there will be trust in e-commerce on the part of both businesses and consumers. That must be backed by supportive and effective enforcement. Three enforcement options are being examined in Europe: laissez-faire, total regulation and the middle way that is preferred by industry, which is to use a light touch. We must use that light touch. The bill that is passing through the House of Commons must not hang over businesses like a sword of Damocles.

The Parliament has a responsibility to provide cross-party leadership and confidence, so that Scotland does not miss out on the e-commerce revolution. In supporting the amendment of my colleague David Mundell, I ask the minister to accept it in the spirit in which it is offered. We have said often enough in Parliament that, in e-terms, the world is moving on quickly. We must understand and be in touch with the Government's programme. Confidence and enthusiasm are of the essence.

Photo of John Swinney John Swinney Scottish National Party 10:52 am, 24th February 2000

I am not sure whether it is only the anoraks who are here for the debate, or whether the members who are here are interested in pursuing consensus on such major issues of public policy. I wonder about the members who are not here. It might be that the members who are here are those who are interested in pursuing joined-up government.

The debate comes on a day when the Minister for Health and Community Care has advised us to eat healthily and John Home Robertson has encouraged us to eat deep-fried fish. Interesting perspectives are raised about the policy challenges that we face, and the debate has been helpful in that respect. I hope that Mr McLeish will support the Conservative amendment. I hope that he will also give Parliament the opportunity regularly to hear a ministerial statement—although not necessarily to hold a three-hour debate—about the implementation of e-commerce initiatives. That will allow us to see the progress that is being made.

I would like to comment on a number of the important points that have been made. First, Margo MacDonald—and she might fall off her seat as I say what I am about to say—made a number of helpful and practical suggestions. We need practical suggestions on how to engage SMEs in the process; there are a number of such suggestions in "Connecting Scotland: The First Wave". Margo's suggestions were a helpful addition to that. She can feel much happier now that I have said those nice things about her and her ideas.

Irene Oldfather made important points about the intensification of cross-border competition. That will be seen as either an opportunity or a threat, depending on which end of the telescope one is looking through. It is essential that there is coherence in our preparation for such issues—that will guarantee that the situation is seen as an opportunity and that it is used to our maximum advantage.

Jamie Stone made an important point, for which I have much sympathy, on the tourism sector and the approach that has been taken by the Scottish tourism industry. Ossian is an exciting technological development that can transform the way in which businesses approach the competitive process of attracting visitors. However, it will be useful only if many people take part in it and utilise it. It is incumbent on all our development agencies to ensure that they play a part in encouraging businesses to take the practical steps of buying a computer, finding out how to log on and use the system, and determining how that can have an impact on their business.

Photo of Margo MacDonald Margo MacDonald Independent

I have another suggestion for Mr Swinney to make to the minister. Last night, at the briefing by the Confederation of British Industry on tourism in Scotland, we heard that the Malin Court hotel, in Ayrshire, has a website that received 2,000 hits in the past month. The Government could save businesses a lot of money on advertising and marketing if it got that man on screen to tell other small businessmen about it.

Photo of John Swinney John Swinney Scottish National Party

I am certain that that is the case. I do not want to take the wind out of Margo's sails, but I am sure that many small businesswomen would be interested as well. However, she makes an important point. Such ideas improve the competitiveness of individual businesses by saving the money that many businesses feel obliged to spend on advertising, which they could spend in other ways.

This has been a helpful debate, but we must ensure that we translate the genuine spirit of the debate into practical actions and consequences, to guarantee that businesses and communities in Scotland will sense that we are moving coherently in the right direction. I hope that the minister has something positive to say about the integration of Government initiatives. I keep harping on about that. I am pleased that Mr Peacock is now in the chamber, as he is the custodian of one such Government initiative—I cannot understand why. The minister might be able to give us some comfort, by setting out the way in which the Government will respond to the issues that have been raised in a productive and positive way in this morning's debate.

Photo of Henry McLeish Henry McLeish Labour 10:57 am, 24th February 2000

We have heard 13 speeches this morning, in a good debate. It is not always easy to say that with a clear conscience. The debate has been focused, and has captured some of the important issues that surround the revolution that is taking place. There is a danger of too much unity and consensus breaking out, but on issues that matter to Scottish people and Scottish business, it is vital that we have the consensus that gives them the confidence to progress and allows us to build up a relationship with them.

We have heard many good comments. David Davidson made a point about modernising government, to which there is a huge commitment. We have done a lot in eight months, but realise that there is much more to do. Pauline McNeill made an excellent comment on the fact that this nation has been scarred, for many decades, by disadvantage and deprivation. We do not want an electronic divide to be created: we do not want an information-rich/information-poor society. Many members made that point, and I share their view.

Jamie Stone commented on the rural aspects of the policy. The great thing about the new technologies is that they do not respect geographical boundaries. The opportunities are there to be taken, and that is encouraging for Scotland, a country with large rural areas that are important to the people who live there. Elaine Thomson made a valid point about the speed of change, and about the need for the knowledge worker to be given the appropriate skills to cope with that change.

Margo MacDonald managed to move from Princes Street to disintermediation in a single breath. I admire her total grasp of what is happening. I shall not rise to Margo's comments about the Parliament: I shall leave that for other people to deal with. However, I want to reply to her on two ideas. The first concerns telephone communications. The Chancellor of the Exchequer agrees that, if we are to encourage people to gain access to the internet, costs must keep falling. The idea of the BT local loop has been raised by several people, and the chancellor has said that he wants that scheme to be accelerated. That is good news not only for the chamber, but for Margo MacDonald.

The second idea concerns college involvement. There is enormous college course provision so that people can get wired up and acquire the basic skills to get online. Nevertheless, in Scotland more colleges must be involved in more activities. Lifelong learning is crucial to that. Every workplace should become a learning centre. We should not look just to colleges and universities to provide those services—that is part of the revolution.

Photo of Henry McLeish Henry McLeish Labour

With the greatest respect to John Swinney, I am trying to make two or three important points quickly. I regret that I cannot take his intervention, as I like to give way.

Irene Oldfather made a point about languages, which are crucial to the knowledge economy. Substantial investment in that area is required in Scotland—we are moving forward, but not as quickly as I would like.

Alasdair Morgan referred to rural areas; I agreed with many of the points that he made. He also raised the question of basic infrastructure—if we are moving from the industrial age to the information age, perhaps the Government should examine different kinds of infrastructure and the possible role of public provision. He raised an important issue that we will certainly return to in future debates.

Allan Wilson made a perfect football analogy.

Photo of Henry McLeish Henry McLeish Labour

I am slightly biased on the subject of football.

Allan Wilson's analogy was good—we are ready to compete and we want to win. I have no doubt in saying that, apart from being the e-commerce hub of Europe, we also want to be the best place to do business in Europe and to become the education capital of the world. Those are huge aspirations, but we should not set our sights any lower.

George Lyon gave a thoughtful speech in which he covered a large number of areas, such as competition and comparison with Ireland. We can beat Ireland in much of our work, but we should also learn from other countries that are doing well in certain niche areas of the information age. There is £250 billion-worth of managed funds in Edinburgh, so we outreach the Irish on that score. We are also doing particularly well in higher education. However, we are part of the council of the isles and of a kind of Celtic crescent—we want to learn from our competitors, but they should be in no doubt that we want to win in the areas in which we are involved.

George Lyon raised a vital point about telecommunications, mentioning BT local loops and the chancellor's comments on his wish to see costs coming down. George also raised the question of international telecommunications connectivity. Scottish Enterprise is addressing that point. George was right to say that our main link goes through London and, in terms of infrastructure, we want to consider how best to improve that.

As usual, John Swinney made a number of constructive points. Ian Ritchie is a member of Scottish Enterprise because he is a person with ideas. He also contributed to the business in the chamber event, which was an excellent innovation. I agree with John Swinney that we need coherence. It is important to note that, in the past eight months, we have set up a large number of task groups and have identified many new priorities. It would be easy to propose a super- committee that could deal with all those priorities, but it would not be practical—nor would it be business politics. However, I agree with the message given in a number of speeches that we should ensure that the Government is coherent on modernisation, so that we have a joined-up, consensual approach by the Government, in relation to what we are seeking to achieve. We should also send a powerful and coherent message to the outside community.

John Swinney made that point—his analogy with Y2K was vital, and links into the Conservative amendment. I have no problem whatever in accepting the spirit of what is suggested in that amendment. My only difficulty in accepting it as a technical amendment is that I would have to discuss its proposals with those who run parliamentary business. I agree that we should elevate the e-commerce revolution to a position where we will report on it, but we should work out whether a committee, an all-party group or the Executive should report back and whether we can link in with debates, statements or parliamentary questions.

I appreciate that David Mundell has wide experience in this area. I was interested in his comments on Finland, which we should explore further. I accept the need for coherence in government, which we are trying to provide. However, I believe that, most of all, we need total consensus—not on the margins, as we will always have different views. Politics is about differences, passion and ensuring that issues are raised on behalf of different people. However, we could have a core of consensus on some of these important points.

This has been a good debate. Scotland is a nation on the move. We have huge ambitions, and the revolution that is taking place in telecommunications provides us with staggering potential to progress in education, enterprise and prosperity.

I have no doubt that in the future we will look back on these debates, which give Scotland a chance for the first time to tackle peripherality, to help emerging firms and to ensure that the Scottish financial community continues to blossom. This is about using the internet for the delivery of learning and about ensuring that inclusion of disadvantaged communities is part of the process. The debate reinforces once again the fact that the Parliament is doing well and is about new politics. The people of Scotland can be rightly proud that we are taking this subject seriously, not for our benefit but for theirs.