Potter Speaks Out On U.K. Technology Strategy

The Standard Europe

 (February 19, 2001)  

Our man at the ministry?

Britain's first e-envoy was given a hard task – to turn the country into the world's centre for Internet commerce. He lasted nine months. Is his successor any more likely to succeed? By Lisa Naylor     

The best way to sell something in 1998 – no matter what – was to slap the letter "e" in front of it. Even the British government caught the buzzword bug when, in November that year, it advertised the position of e-envoy, hoping to hire someone who could make the UK "the best environment worldwide in which to trade electronically". The successful candidate would report to the minister for trade and industry and the prime minister.Nearly a year later, in September 1999, the appointee was announced – a man better known for his Web directory of Grateful Dead lyrics than his experience in the Internet sector. Alex Allan had been the British High Commissioner to Australia, his homeland, and private secretary to the former British prime minister, John Major. The combination of diplomatic skills and a love of IT were seen as ideal for the post. However, a link to his wife's art-dealing site from the official e-envoy Web site eventually brought embarrassment. He was in the position for only nine months before resigning for personal reasons. The original mission of the £127,000-a-year (€198,000) position was threefold. First, to ensure that all government services could be delivered online by 2005. Second, to realise Tony Blair's dream that the UK would become the best place in the world to do e-business. Third, to act as an ambassador for UK e-commerce, spreading the word of the government's commitment to the Internet economy. But as the position evolved, and government departments encountered difficulty in implementing technology plans, the mission expanded to include managing governmental IT projects.The creation of the office was controversial from the outset. Most observers agreed with the concept but not the execution. "It was a good idea, although a cabinet-level e-secretary of state with a new department would have been better," says Caspar Bowden, director of the independent, London-based Foundation for Information Policy Research. Others are more critical. Alan Duncan, the shadow minister for trade and industry, says: "It's very gimmicky to label a civil servant this way. There should either be a minister who is accountable to parliament or a civil servant with a job. It should not be an agency; it should be a Whitehall post. "During Allan's short reign, he used his considerable charisma to raise the profile of the office and get a number of important projects off the ground. In an ambitious expansion of his original mandate, he vowed to "drag the senior civil service – squarely into the 21st century". He took charge of the launch of the government portal UK Online, announced the formation of Trust UK, a scheme to boost consumer confidence in Internet transactions, and visited counterparts in Norway and the U.S. Jim Norton – head of e-business policy at the Institute of Directors – had been asked by ministers to look into e-government and he produced a paper that led to the creation of the e-envoy. However, he says the office developed differently from the way he had envisaged. "I imagined something much smaller that didn't run projects itself but acted as a gamekeeper," he says. "But the office is now a poacher as well. It's seen in Whitehall as a rival [to other government departments]. I'd prefer to see an e-envoy who has a lower profile and whose job it is to make the e-minister a roaring success. "Andrew Pinder stood in as temporary envoy when Allan left, and he won the job permanently in January. He has spoken out to justify Allan's high profile. "The stage of the project has changed," he says. "[Allan's] main task was to get both the existence of the role and mission of the role out there, so he made a lot of speeches and did a lot of consciousness-raising. "Pinder brings a mix of private and public-sector experience to the job. He was an IT director at the Inland Revenue and has held senior posts at Prudential and Citibank. But he has inherited a nest of half-incubated eggs. According to the less-than-speedy e-envoy site, www.e-envoy.gov.uk, the amount of official business that can be carried out online is limited. UK citizens can fill in a tax return, order a passport and check travel information. Pinder says about 40 per cent of services are online, but adds: "Services can be defined in many ways. People go to government Web sites to look at information, to download data, to download forms, to carry out some simple transactions. The things that are in short supply are transactions."Last July, Allan announced the launch of eStatMap on the e-envoy site. This service is supposed to provide high-quality statistics on the progress of e-commerce in the UK. While there are plenty of figures for individuals and businesses – all out of date – most of the statistics for the government have not yet been collected. Pinder admits that it is not a priority and that "we haven't put a particular amount of effort into that".As for being the best place in the world to do e-business, official figures show that only 27 per cent of British companies are using the Net for either business-to-customer or business-to-business transactions. Figures for Sweden and Germany are 85 and 47 per cent respectively. And, according to a recent survey, Net users pay more for high-speed access in the UK than in any other leading industrialised country. But the government is certainly trying. It invested £25 million (€39 million) in the launch of UK Online Citizen Portal – an initiative which aims to help people and small to medium businesses make better use of new technologies. Heavily discounted computing courses are available in new centres across Britain, and advice lines are open for smaller businesses wanting to improve their use of technology. However, some people still think that the government is focusing on the wrong things. Duncan says: "E-commerce needs almost no official interference, and e-government is still not working. Every [government] computer system designed so far has failed dismally and we do not need the government claiming credit for things that companies are already achieving themselves. "Norton agrees that "e-business is not doing badly – so less input is needed". But he adds: "E-government needs the input. "As for the future of the office, Pinder says: "In the longer term, I hope that what we will succeed in doing is embedding this agenda so thoroughly – in both the public's mind and out there in the private sector and also in government – that there won't need to be another e-envoy. I think that I should be the last one."    

UK Online: Is Labour Working?

Michael Potter director of VC firm Paradigm Ventures

Cathy Bryan commercial director of uploaded.com, the online version of Loaded magazine

David Cleevely managing director of Analysys, a communications and new media consultancy

Malcolm Davies head of fraud and security at Telewest

Martina King managing director of Yahoo UK and Ireland

Q1. Do you think that this government has achieved anything for the Internet Economy?

Michael Potter

The real question is: "Where has the government gone wrong?" Tony Blair's rhetoric is generally pro-UK, taking a leading role in the global Net economy. But the political and governmental machine below him continually takes action that frustrates his vision. Blame falls directly on the shoulders of the DTI and Oftel.

First it is important to realise that the European Union has initiated infringement proceedings against the UK for its failure to comply with European telecommunications laws.

Telecoms – and particularly the penetration of low-cost broadband technology – is one of the most important indicators of how well the UK will be positioned to compete in the global information economy. Germany, for instance, which is largely compliant with European law, is two years ahead of the UK in broadband.

Cathy Bryan

Nothing tangible to the business community. I have a commercial [business] and I need people to be online and to transact. I do not see that confidence growing. [The Net] is not accessible to very young people and people who do not have credit cards. There has been a lot of talk of digital wallets to get over this, but nothing has taken off.

David Cleevely

Yes, by raising the profile and getting people talking – even if some of the discussion has been cynical.

Malcolm Davies

It is making efforts. From what I know, the government has a policy to bring about change, but I have yet to see any evidence. I have a general awareness that while the government welcomes e-commerce, it is generated more by companies themselves. Labour is certainly dragging its feet with regard to a decision on acceptable levels of encryption.

Martina King

The appointment of an e-envoy opened new channels of communication for the e-commerce community. Oftel's overhauling of BT's price controls and local-loop unbundling reduced the cost of accessing the Web and encouraged greater competitiveness. The UK leads Europe in broadband.

Q2. Do you think the Internet Economy would benefit from a change of government?

Michael Potter

The Internet Economy would greatly benefit from very radical changes to this government. Because radical change is unlikely, the country would be better served by a new government altogether.

Cathy Bryan

No. If anything, the situation would deteriorate. In general, policy-makers have a low degree of technical literacy and their involvement in the sector is very poor.

David Cleevely

It's unlikely. The government has been prudent and has some leeway on spending. With the US going into recession, cuts in expenditure could have bad effects. An anti-Europe stance could accentuate this. The Tories have never shown much interest in the new economy. John Redwood as Secretary of State for Wales supposedly cut the computer budget after saying people didn't need computers on their desks. There is a great need for innovation, especially in the civil service. The government is at least trying to do something about it.

Malcolm Davies

A change within government would be better.

Martina King

No government of any hue can afford to ignore the challenges inherent in the global digital economy. Obtaining and maintaining a leading share of the world's e-commerce markets remains a constant. Therefore dialogue with key industry players is fundamental to meet our shared objectives, and I have no doubt that it would continue with any change in government.

Q3. What change in the law would most benefit you in your area of business?

Michael Potter

The critical issue is to ensure that BT complies with basic competition law and basic European telecoms law, including compensation for previous and ongoing anti-competitive behaviour. For instance, Oftel has recently concluded that BT is overcharging for leased lines. This has been a violation of European law since the beginning of 1994. However, Oftel is not interested in BT compensating consumers for these violations. Oftel is simply trying to lower the rates for some time in the future.

Cathy Bryan

It would be great if schools or publicly funded organisations were required to provide access to the Net for those who wouldn't otherwise get it.

David Cleevely

I could think of some taxation issues, especially National Insurance on options, but not much on the law.

Malcolm Davies

I would benefit from two changes. First, to the Copyright, Designs and Patents Act. At the moment, we are targeting people who make and supply illicit devices which allow all-channel viewing for free. It is a summary offence which carries a two-year sentence. That is too restrictive; it needs to be made into an arrestable offence. Secondly, we should have an act on fraud. There is currently no statutory definition of fraud in criminal law, and people are using technology to facilitate crime.

Martina King

Clarification of the liability of content aggregators, ISPs or forum providers for third-party content.

Q4. Do you know what the e-envoy does?

Michael Potter

The e-envoy is for politicians to point to a sexy title and proclaim that they are tackling very difficult issues, when in fact the e-envoy is just part of the problem of helping to rearrange the deck-chairs on the Titanic.

Cathy Bryan

Kind of. The person responsible for overseeing Internet issues within the government, pulling together government departments.

David Cleevely

Promoting awareness of the e-economy.

Malcolm Davies

I don't know what his objectives are.

Martina King

To motivate UK business in acknowledging the essential role e-commerce plays in competitiveness and to tackle the challenges this entails. To assist the policy that all government services to the citizen and business should be available online by 2005.

Q5. Would you lobby the e-envoy on issues concerning the Internet Economy?

Michael Potter

The e-envoy is not responsible for compliance with European law. The e-envoy is not responsible for ensuring that BT complies with competition law. The e-envoy is not responsible for ensuring that small and medium-sized enterprises are competitive in the global economy. If the e-envoy were to embrace these burdens and responsibilities, then I would take time out of my schedule to discuss these profound issues.

Cathy Bryan

I am not confident that that is the best use of my time or if that person has enough clout. If the e-envoy were a cabinet minister, then possibly.

David Cleevely

Probably. It is likely that I'll get to talk to him fairly soon anyway.

Malcolm Davies

If he wasn't doing what I thought he should be, then yes.

Martina King

Yes. It is vital that high priority is given to ensuring UK businesses succeed online. The government's provision of support, advice, and considerable resources will only achieve its aim if direct communication is maintained with the person providing strategic input into the development of e-government.