Part of the debate – in Westminster Hall at 5:15 pm on 16th January 2003.

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Photo of Douglas Alexander Douglas Alexander Minister of State (Cabinet Office) 5:15 pm, 16th January 2003

I concur with the opinions expressed on both sides of the Chamber. This has been an invigorating and interesting debate, which I will reflect on long after its conclusion.

There have been contributions from hon. Members on both sides of the House and I shall endeavour to reply to as many as I can in turn in the remaining time. However, first I want to pick up a point made by the Conservative spokesman, Mr. Knight in his concluding remarks. He began by suggesting that there is no divide between the parties in recognising that e-enablement is an actuality in public service delivery. I suggest, respectfully, that there is as great a divide as there has ever been between the parties on the issue. The Government are investing £6 billion in such projects; that stands somewhat askance from the position of a party that in recent weeks confirmed its intention to cut public expenditure not by 5, 10 or 15 per cent. but by 20 per cent. Crocodile tears about the need for more UK online centres are ill-judged against the financial background of a Shadow Treasury Bench committed to closing one in five.

In contrast, Sir George Young spoke with characteristic grace, and I am grateful to him for his kind remarks. As a fellow fisherman, I would not underestimate the significance of being able to find a fishing rod online; the problem for me after a day on the river is that there is all too rarely a fish on line.

The substance of the right hon. Gentleman's critique was that getting Government services online was not enough and in that respect we are also in agreement. I agree, too, with my right hon. Friend the Prime Minister in his speech in November, to which several hon. Members have referred. He said that in addition to the 2005 target—I will speak about that later—of getting Government services online, the Government were focusing on securing high levels of take-up on key e-services that had the capacity to add the most value in our drive to improve public services such as health and education. The right hon. Gentleman was less charitable, however, in his characterisation of progress on the issue of broadband, which we have debated for a number of years. On price, I can confirm that last year's wholesale DSL cuts put the UK third in the G8 for DSL prices, behind only Canada and Japan. Similarly, cable prices in the UK are now among the lowest in the Organisation for Economic Co-operation and Development. Given the right hon. Gentleman's constituency interests, there is a concern about levels of coverage, but I emphasise that 67 per cent. of the population of the United Kingdom has access to mainstream broadband services.

My hon. Friend David Cairns raised important points about the centrality of IT manufacturing to the local economy of his constituency with its historical connections with IBM, and the more general point about the experience of local government and the risk of automating the past, as he accurately put it. My local authority in Renfrewshire found challenges in coming to terms with receiving e-mailed requests for housing repairs 24/7. That has involved a number of changes to back-office functions. The opportunity he rightly identified for e-transformation is exactly the focus in the local government online strategy, which was published immediately after the Prime Minister's speech at the e-summit by the Deputy Prime Minister's office to provide the kind of sharing of best practice that my hon. Friend asked for. Of course he is right, as the strategy recognises, to argue for fundamental reform. He is equally correct to identify the need for sharing of best practice so that, where possible, unnecessary course duplication of diverse bespoke systems and the like can be avoided. He also brought a different dimension to the debate through his recognition of the central role of digital TV in this area of Government policy. It is less recognised than it should be that the United Kingdom has led the world in the level of digital television penetration.

As my hon. Friend accurately said, digital TV can play a critical role in making sure we address the equity as well as the efficiency issues. It is a commonplace that there are sectors of the community whose members may for whatever reason, as the Front-Bench spokesman acknowledged, have no wish for a computer in their home in the future, but who are relaxed about pressing the red button on the television and interacting directly through digital TV. That is why I am particularly glad of the work of the e-Envoy's office in ensuring services can be provided through digital TV, which has the capacity to reach sections of the community that might otherwise risk exclusion.

Perhaps more contentiously, as a friend I will accept my hon. Friend's proud and rather charitable interpretation of why Greenock and Inverclyde has the highest level of internet use per day in Scotland. I merely add for hon. Members' information that it tends to rain quite a lot in Greenock.

Mr. Allan echoed the comments of the right hon. Member for North-West Hampshire on the central charge that the Government need to focus more on getting services online. In this sense there is agreement across the House. He then made the case for further work to bridge the digital divide—another point on which we are in agreement. He identified Canada in particular as a leader in government services. It is fair to acknowledge that, not least on the basis of the benchmark work we have conducted, that is indeed the case. The hon. Gentleman recently travelled to Canada as representative to the e-Envoy's office to see some of the work there. I commend the Canadian Government's work in e-government services. Furthermore, when I spent time at the Department of Trade and Industry I found the development of the Canadian Government's broadband strategy highly instructive and useful in helping to frame the British Government's response to what are not altogether analogous but neither too dissimilar challenges.

The benchmarking exercise, which was published at the time of the e-summit, affirms our recognition that there are opportunities not only for local government but for central Government to learn from best practice elsewhere, partly because this is an innovative and new area of policy making. The e-Envoy's drawing together of strands of work from around the world has strengthened the case that Britain will be able to take forward this work effectively.

The hon. Gentleman was correct in paying tribute to Learndirect's work in Sheffield. It may not be known to hon. Members that in a previous life I was a speechwriter for the now Chancellor of the Exchequer, Mr. Brown. It was a matter of anxiety that year upon year in opposition we used to write into his conference speech the fact that we would establish a university for industry that would do for the modern era what the Open university achieved in the 1960s. Therefore it is a matter of particular pride to me not only that the university for industry has proved so popular, but that it has been so attuned to the needs of the time. We all have examples of constituents who have benefited from Learndirect. It is a good example of the current reach for services that otherwise might not be available.

The hon. Gentleman also made a point about banking services, from which an interesting analogy can be drawn with Government services. The number of people who no longer enter banks but instead either contact them by telephone or access them online is probably a good beacon of progress for us. Of course, there are particular security challenges in the banking sector, which in some ways replicate the challenges of e-government services. Where there are best practice examples we can learn from in the private sector we should undoubtedly do so.

The hon. Gentleman also referred to diversity of supply and avoiding proprietary lock-in. Government research and development and the use of open source are policy areas driven by the Department of Trade and Industry. Our policy on open source is a level playing field. We will consider open source solutions alongside proprietary ones in IT procurement and contracts will be awarded on a value-for-money basis, as Dr. Pugh argued. I was intrigued by his characterisation of public sector difference. Where value can be extracted from our intellectual property rights, of course we should look at that. An example of that is the Government gateway, where we own the intellectual property rights; we have licensed it to Microsoft, and potentially stand to get significant income streams from overseas sales of this world-leading infrastructure.

I turn to the contribution of my hon. Friend Mr. Wyatt. He offered a range of characteristically innovative propositions to which I will give thought not only in the debate but after it has ended. I received his e-mail this morning, when I was sitting at my desk preparing for the debate. However, as we are under time constraints, I will not address all of the points that he raised.

On my hon. Friend's initial point about being able to pay for the television licence, I am reliably informed by my outstanding officials that licences can be bought online. The only difficulty that I faced is that I could not read the website address that had been given to me, so I respectfully suggest that my hon. Friend might wish to punch into Google, "TV licensing." That might be a useful start in seeking to ensure that one is able to access that site. On the general issue of best practice websites for the public sector, I commend the govtalk site on the office of the e-Envoy's website.

I said that broadband policy is led by the Department of Trade and Industry, but my hon. Friend's suggestion that there should be a broadband hub is currently being tested in the broadband fund pilots. He might be especially interested in the developing work of the South West of England Regional Development Agency in advancing a broadband hub in that part of the country.

On the alteration of planning regulations for broadband, that immediately brought to mind the last report of the broadband stakeholders' group, and the Office of the Deputy Prime Minister is examining that issue through consultation, as was recommended by the group. That is also what my hon. Friend argued for.

My hon. Friend Mr. Mole brought the wealth of his experience from industry and local government to our deliberations. He made many points. One of them echoed the point of my hon. Friend the Member for Sittingbourne and Sheppey by acknowledging the vital work that UK online provides, particularly to socially excluded communities throughout the country. I agree with those sentiments and wish to reiterate how central those centres are to our vision of social inclusion. I would argue that an appropriate analogy is the work that the Victorians undertook in establishing public libraries. That is one of the best parallels that can be drawn with this quiet revolution that has been taking place. By the strength of our common endeavour we were able to provide the means by which individuals, even in deprived communities such as mining towns and inner cities, were able to realise their potential through reading and learning.

With regard to my constituency, I would argue that similar transformative capabilities are being offered by computer learning centres. A single illustration might be sufficient to make that point. I recently visited the South End action centre in Paisley, which has established a computer learning centre, and the first thing that struck me was the fact that a senior citizen was sitting next to a teenager. These days there cannot be many public spaces—or places that have been provided by public investment—where such a wide age range is represented within a single community facility.

However, I was even more struck by something else. I asked the senior citizen about the use that he made of the e-mail service. He lives in the high flats that are across the road from the centre and he explained that his brother had left for Canada more than 40 years ago and that, because of the cost of using the telephone and sending post by air mail, they had very rarely communicated with each other until he was able to use the computer learning centre's facilities. Now he communicates with his brother by writing lengthy paragraphs to him once or twice a day. He said that that had transformed family relations, because he was able to catch up with a relative with whom he had lost touch for many years. That is exciting: I never anticipated that an online centre would have been put to that sort of use.

Other people in the centre were engaged in a range of different activities, such as looking for work and filling out CVs. If one is searching for an example of where, by the strength of our common endeavour, we can implement genuinely radical transformation, one needs to look no further than the computer online centres in our constituencies.

The hon. Member for Southport raised the issue of Microsoft and the gateway. The UK Government gateway will communicate effectively with the products of companies other than Microsoft. We support open standards: the Government abide by strict rules to ensure fair competition for procurement and service provision, and across Departments we work with various private sector partners to deliver our e-government objectives. In the gateway project alone, we are working not only with Microsoft but with several other partners.

I turn to the specific issue of which browsers can be used on the gateway. The browsers that are currently available are Internet Explorer, Netscape, Mozilla and Opera, and we are committed to providing further access. The majority of personal computers run Windows with Netscape, and these were implemented first, followed by Macintosh, which is the second most popular. Testing browser and operating system combinations to ensure that they work successfully can be a lengthy process, and I hope that further browser and operating system combinations will be tested and released during the coming year.

I also affirm to the hon. Member for Southport that the Government have never worked to a policy in which Microsoft products and services were favoured above others, including open source software. Our policy is explicitly to have a level playing field in Government procurement, so that OSS products and services will be assessed alongside proprietary ones, and the solutions will be chosen on a case-by-case basis.


Julian Todd
Posted on 24 Nov 2006 10:01 am (Report this annotation)

"An example of that is the Government gateway, where we own the intellectual property rights; we have licensed it to Microsoft, and potentially stand to get significant income streams from overseas sales of this world-leading infrastructure."

The claim reiterates Andrew Pinder's claim to the Public Accounts Committee on 12 June 2001


where he said:

"We rather hope that it will give us quite a lot of money, yes. In this particular respect we wish Microsoft every good wish in their sales efforts."

It sounds pretty naive to me, but I could be proved wrong if any money has come back from Microsoft on the basis of this 22% gross license of something or other (the royal logo?).

Posted on 24 Nov 2006 11:56 am (Report this annotation)

The Government is not a business. When applied to government services, "Income streams" and "extracting value" have a more common name - they are taxes.

Mark Bestford
Posted on 24 Nov 2006 12:56 pm (Report this annotation)

No, there is more than one form of income where governments are concerned.

Firstly you have your standard taxes. Income tax, import duty etc.

Secondly you have royalty rights. This is like rent for resources. Not so prevalent in the UK but used extensively in the Middle East where governments sell the rights for drilling oil.

Thirdly you have direct income from business. By owning IP in technology you can sell the license to use that IP. It's a straight business deal, no different than an IP sharing deal between any 2 companies. Also you have income from directly owned businesses. In the old days British Gas and BT were government owned. Any profit made went straight into the Treasury. Privatisation could be argued to be better than public ownership in that there's more vested interest in creating a profit which can be taxed. Where you had a business like the Post Office that actually made a loss it actually makes more sense to privatise as you can collect taxes on the business even if it doesn't generate a profit without the capital outlay of running the business. However, where a business is profitable it makes more sense to leave it in public ownership as the profits are far greater than the taxes that can be generated.

Agreed though, the terminology is wrong. Management speak has another name within business, it's known as BS and is still just as much BS when employed by governments.

As for this particular scheme. I'd be most surprised if Microsoft has paid anything to the government. More likely is that any royalty payments have been offset by tax deductions elsewhere. That or increased sales of MS products have been agreed (pay us 2 million for the use of the IP and we'll buy 2 million worth of extra MS licenses). However, more likely is that the big gainer in this will be MS.

Posted on 27 Nov 2006 12:30 pm (Report this annotation)

Government may indeed raise income from business by selling royalty or other "intellectual property" rights. But the money doesn't appear out of thin air!

Businesses make money by selling goods and services to private individuals. If they are forced to pay the government, at monopoly prices, then they must in turn raise the prices to the consumer to cover the cost.

The cost to the consumer may be slight, even undetectable, but it's still there.

Even by your own example, the cost of petrol or fuel oil that you buy is higher because you are paying for the right to drill oil in the Middle East.

Mark Bestford
Posted on 27 Nov 2006 12:41 pm (Report this annotation)

Agreed, but it still isn't a tax. A tax is something you really have no control over. You could argue that drilling rights are a tax, but not the use of government IP. Microsoft does not have to use the IP from the government. They could just as easily use the IP from another 3rd party provider or even create their own. As such this means the use of government IP is straight forward business, it is a license that can be stopped at any moment in time by MS by a simple decision not to use it anymore. The cost for ALL business is eventually borne by the public and effectively ALL business is taxed, but the differences must be stated.

Posted on 28 Nov 2006 11:05 am (Report this annotation)

Microsoft could indeed buy their IP from another 3rd party provider, or create their own. But the presence of a government-owned product in the market place, which was created with taxpayers money and not subject to competitive forces, increases the cost of those 3rd party products too, because it is riskier for them to enter the market. The buyer still has no control over the extra cost.

As Milton Friedman so rightly put it, "there's no such thing as a free lunch."

Mark Bestford
Posted on 28 Nov 2006 12:07 pm (Report this annotation)

At the end of the day Microsoft will be paying money into the Treasury. Their revenue stream is not isolated to the UK so that money will in effect be coming from abroad resulting in a net lowering of the UK's tax burden. In a perfect world that should mean lower taxes for us, in the real world however that translates into more money for the government to waste.

Posted on 28 Nov 2006 12:26 pm (Report this annotation)

I wouldn't bet that too much of Microsoft's revenues will end up in the Treasury coffers considering that the UK Government is Microsoft's third largest customer (http://www.itworld.com/Tech/4535/050124msdedicate).

We'd save far more money by encouraging competition in the software business than by distorting the market with taxpayer-funded products.

Mark Bestford
Posted on 28 Nov 2006 12:33 pm (Report this annotation)

lol, yes, as I stated above, the chances are it's more like Microsoft will license the IP if UK Gov buys more MS software. It's similar to what they did with schools, they gave the schools millions of pounds worth of free software, but that then tied the schools into Windows so in the end MS came out the winners. Giving away software you wouldn't have sold anyway is no loss, but the gains from OS licensing will always put MS on top in any deal.