The British government says it aims to make the UK the best place in the world to trade online through its Electronic Commerce Bill, announced in the Queen's speech.

Technology affects almost all areas of policy

The Trade and Industry Secretary Peter Mandelson told the Labour Party's annual conference in September that the country could become a new industrial and commercial power in the 21st century if it grasped the potential of the Information Age.

"We need to make sure that all our laws and rules are e-commerce friendly," he said.

"I'm determined that our new forthcoming legislation will give Britain the best environment worldwide for Britain to trade electronically."

Controversial encryption proposals

But the legislation promises to be controversial, with Internet civil liberties groups concerned at plans to allow the police access to private electronic communications if they suspect criminal activity.

Barbara Roche: Proposals for encryption

The framework of the bill was outlined in a statement by Trade Minister Barbara Roche in April. She proposed to make the Internet more secure and trusted by its users with legislation on digital signatures and encryption.

"Whether we are concerned with the integrity of information (ensuring its content has not been altered) or its confidentiality (keeping it secret), the appropriate use of cryptography can be of major benefit to all IT users," she said.

Sixty-nine per cent of companies questioned in a Department of Trade and Industry (DTI) survey cited security as a major inhibitor to purchasing over the Internet.

Trusted Third Parties to be licensed

An Electronic Commerce Act would license bodies offering cryptography services, known generally as Trusted Third Parties (TTPs). These would include Certification Authorities that would mainly issue certificates for electronic signatures, confirming people are who they say they are, and Key Recovery Agents that would help to recover encrypted data.

Licensing will be voluntary, but the Campaign Against Censorship of the Internet in Britain (CACIB) says digital signatures that do not have a licence could be challenged in court with the effect that businesses will feel pressured to use licensed services to avoid expensive legal cases.

"We need to make sure that all our laws and rules are e-commerce friendly" - Mandelson

The legislation will enable law enforcement agencies to obtain a warrant for access to encryption keys, but not those used only for the purpose of digital signatures. Critics say attempts to legislate on this are pointless and would only infringe on the privacy rights of innocent individuals: criminals would be hardly likely to leave the keys to their encrypted data with a licensed body and cracking strong encryption without a key can be nigh on impossible.

Law by Summer '99?

Now the Queen's speech has placed the e-commerce Bill in the government's legislative programme, it is expected to be debated in the Spring and could become law by the Summer.

More immediately, a consultation paper detailing the proposals could appear by the end of the month. A Competitiveness White Paper is also expected in early December. Six working parties were created last November to look at Britain's economic competitiveness. The input of the Information Age working party into the White Paper will deal mainly with e-commerce.

In October, the government published Net Benefit, an agenda for electronic commerce. It gave a checklist of issues to be tackled: consumer protection, data protection, intellectual property rights, taxation, potentially objectionable material and the problems of encryption and authentication through electronic signatures.