Select Committee on European Union Minutes of Evidence

Examination of Witnesses (Questions 240 - 259)



  240. One of the major problems that we found was their ability either to have time to study regulations or to understand them and to obtain the information on them from Government.
  (Ms Russell) Absolutely.

  241. I think you were in on Professor Norton's evidence. He said that he had 30 engagements in the next two months to explain to people and everybody really welcomed it. Is the answer, which would solve a lot of your problems, that there should be one minister with a lot of clout and there should be 100 Professor Nortons or people at a lower level that can go round and explain to people in simple language, through Chambers of Commerce, through Round Tables and so on what the regulations are, how they affect them and where they are going? It seems to me that there could be regulatory problems, but people have not even got as far as studying whether there should be or should not be. Quite simply, there should be forums set up throughout the country or visiting people who can do it in an evening and people would know where to go and how to get there.
  (Ms Russell) This is exactly the heart of the matter and the crux of the problem as far as I am concerned, which is that SMEs and larger businesses do not have the time, they do not necessarily have the resources to dedicate to this and when they do try they come up against brick walls and unhelpful responses. I put in my written evidence that there is a definite need for business advisers who are government and industry sponsored and who are independent of the vendor community, the Microsofts, the IBMs, the HPs and so on of this world who have practical experience and can give genuine practical advice on the issues involved in e-commerce and also any regulatory issues surrounding that. That is something which should be happening in the real world but also be translated into an on-line environment as well and to create an online environment which is properly promoted and easily available and accessible for businesses and consumers alike to exchange ideas of best practice, case studies and have forums where they can put questions to advisers and have them sensibly answered. The new breed of businesses which are being set up quite often by young entrepreneurial individuals cannot just be done through things like the Chambers of Commerce or the IOD because they are irrelevant organisations for us.

Viscount Brookeborough

  242. You have to find a way of disseminating this information, your businesses are vital to the future growth and yet by the nature of your business it is impossible for you to fully fathom out all of the regulations, it is not so much for you supplying the use of your system so much as they must have another forum from which they can go.
  (Ms Russell) It is about creating a community where people can exchange that. It needs to be advertised with a reasonable amount of money spent intelligently in order to promote that and not hidden away on some web site that nobody knows about.

Lord Cavendish of Furness

  243. Over the last weeks we have talked about the anxieties of e-commerce in terms of other things, drugs, illegal pharmaceutical products, pornography and the rest, imagine, if you will, indeed, if you can, that I am a pop singer—I cannot see why people are laughing—and I have produced a new album, which goes on the market in the normal way this afternoon and tomorrow I find that it is valueless because it has been stolen, as I am told is technically possible, and downloaded all over the world. What we have had from time to time is that this is an ordinary crime, this is stealing of copyright, it is not Internet specific, it is something to do with "globalisation makes it spread". Are we concentrating too much with all this regulation on trying to think that there is something special about the new world and really one ought to go back to basics and say, this is an ordinary crime. It should be possible, after all, to insert—without people noticing—into my music a signature which could be then traced or whatever. Deal with it as society dealing with a theft rather than some highly technical matter.
  (Ms Ussher) May I speak on this one? I would look at this completely the other way around. My starting point is that this would not be a crime. I do not want you to be put off at this point by thinking I am some sort of hippie in a basement.

  244. I am losing my money here.
  (Ms Ussher) When it comes to the music industry, that industry is based entirely on distribution. In the current distribution model there are shops on the high street where you buy your CD, and we are increasingly seeing popular consumer preference for a web site. This is the very, very beginning of a massive shake-up in distribution. If you think about it, that is what the Internet is all about. It is about the redistribution of information. If that information is music in a new format then so be it. With your example of the pop star, certainly the record companies would see it as a crime but, perhaps, it should be turned around and you should be asked, how are you going to handle this? What are your new distribution networks going to be? Yes, you could certainly have things like digital signatures, perhaps, so that once somebody has bought something on-line their ID can be impregnated into that code so if somebody else is using it then music companies know about it. On the other hand, perhaps, the recording industry should be working out how to distribute material on-line.

  245. Is it capable of being worked out?
  (Ms Russell) There are solutions available today.
  (Ms Ussher) As a starting point, judging it as a crime is the wrong way to go about it. You are going to get people's backs up.

Lord Faulkner of Worcester

  246. Can I ask about personalisation? What does it do, what are the benefits of it?
  (Ms Russell) In terms of how our web service works it is an on-line user information service. In order for it to be personalised the user has to give a certain amount of information to us. They are in control of giving us this information, we tell them what we want.

  247. It is bit like joining a club, an electronic club?
  (Ms Russell) Yes. They give their name, job and title. It is to do with their current professional status, job title, industry, science and then they can say, "I am interested in getting all the stories and information on e-commerce and some key vendors that they work with", so they might type in IBM, Microsoft, and so on, so when they come into the service those pieces of information are flagged up which are personalised to them. In terms of how our system works we can cut and dye whatever way we want, we can just have a section where they have their personalised in-box.

  248. What you are doing is selling their data to other people who want to sell to them? It is not intended to be an insulting question, I just wanted to be clear.
  (Ms Russell) That is one element of our business model from a user point of view. It means that rather than you buying all the newspapers it is you saying, I am interested in X, Y and Z and you get all of the clippings passed to you which are relevant. We do that electronically but it is a content which we have created ourselves about the IT, Internet and e-commerce industries. From a commercial point of view, for instance, if they said they do not mind their information being passed on to third parties we can provide that to our advertisers. The other way of looking at it is they are making an active response, they are responding to an advertisement on the site and they are choosing to do that. We have conducted huge amounts of qualitative and quantitative research on the benefit to users and what they do and do not like about it. Personalisation is their number one favourite because it saves them time and gives them information about what they need and the way they need it.


  249. Many years ago somebody who I knew used to collect press clippings on particular topics and I was interested in tax and I used to get great press clippings on anything that happened on tax. It is really that on-line.
  (Ms Russell) Yes. It is more than that, it learns what you do and learns what your habits are. Quite often what people say they want does not actually reflect what they do.

  250. Can I turn to the paper which came from Miss Ussher which, I must say, I found very interesting indeed. It is quite understandable, and one of the things that struck me when I was reading the papers is you are suggesting that we should do it in Europe and actually that we do not do it in the United Kingdom already or we do it rather badly. Often we find in Europe the way you get developments in Europe is not pitching. It is up there immediately, it is a brand new idea and you try to get some experience of working with it on a national level and then persuade others you have a good model and you should embrace this. I was wondering whether some of the topics that you have listed, whether you actually run them with the Government—it is a pity Professor Norton has departed because conceivably some of them could have been put to him, for example, on socially excluded people.

   (Ms Ussher) It is not something I have put to Government yet. I have been following business and government issues now for two or three years with regard to IT. These are not issues that have come up at all. I have not yet had a chance to meet with the e-Envoy, but I will be putting these views to him. Certainly in terms of the sort of material that Government has released over the last two or three years, these things are not taken into account. I hope to get the opportunity to raise them.

  251. My next question was following through on the issue of the socially excluded group. You were talking about them being disenfranchised in the sense of the way they handle cash compared with what an increasing number of people do, which is electronically and through the banks. Have you thought about social banking?
  (Ms Ussher) What do you mean by that?

  252. We have no specific banking system set up to provide for people who normally do not get the credit ratings which attract the big five, for example and there is an argument they run that perhaps we could have a new bank created which would be more open and more willing to embrace people who normally do not attract themselves to the big banks. Who would fund that is the big question.
  (Ms Ussher) Who would take on the risk is a massive question and is that risk going to be subsidised, is it going to be taken on by a commercial partner. There are business models emerging online to do with taking on risk. Equifax is getting involved in this. They are a credit rating service themselves. In November last year they launched a service whereby they could take on the risk of an online trader selling things which should only be sold to adults. Equifax was prepared to step in and say that they would take on all legal responsibility that the consumer was over eighteen. This is an emerging model. It is also a data protection issue. Equifax is saying that they will bounce any details of the transaction on to their site, check it against all their own records of the consumer and check if they are over eighteen. The taking on of risk would not necessarily mean that the social banking could not happen, it would just have to be thought out in greater detail.

  253. You said it does not seem quite fair that if your credit is not stable this will effectively prevent you from taking part in e-commerce. The question is how do you put that right and do you put it right within the context of the UK first or within a European context?
  (Ms Ussher) The easy way round that which avoids the entire issue is what is happening in Belgium at the moment, with their Proton scheme. They have public terminals where you can load electronic currency onto a card from cash and you do not need to have any sort of credit authorisation at all, which looks like quite a simple side step.

Baroness O'Cathain

  254. It is like Switch cards, you pay up front.
  (Ms Ussher) Yes.

Lord Cavendish of Furness

  255. I find your paragraph about the socially excluded very worrying and I am particularly worried that even people one knows of who are on the edge of not coping are going to get worse off and understand less and be more bemused by the world. Over the last week we have heard from the American contingent that the levels of growth there have cascaded for that and other reasons to a sharp reduction of the underclass. I put it to you that there may be a reversing in Europe with legal and illegal migration and with the really quite under-developed countries coming in or being neighbours in Europe. Might there be a really vast underclass developing without the growth that the United States currently has and looks like having for some years to come and really leading to some fairly dreadful social divisions which can be faced up to by nation states and the European Community, and could that be addressed through education which would then have to go through revolution where a life skill would be e-world generally rather than things which currently are not encrypted at the moment?
  (Ms Ussher) I am not up to speed on immigration but I take it that it will make the current problem worse. It is certainly my opinion given the way things are at the moment—with the commercial drivers within the IT sector—that the social divides will get much wider. Some of the reasons for this I outlined in my written submission, but there are many more. Already you can get cheaper prices for goods and services online. It is to do with access online, it is to do with IT literacy. It is due to a massive range of things which, if you want, I can keep you updated with, as the pamphlet develops. In terms of rectifying the situation, I think the problem of access will be sorted out partly through existing education targets such as e-Europe but also through the development of the mobile phone platform which is already a lot more socially diverse than PC penetration. I think it is in the commercial sector's interest to enable as much internet access as possible so to a large extent we can calm our fears, because companies will be addressing as many of them as possible, themselves. The problem that I am mainly concerned about is the content that socially isolated and poor people are going to find once they get online, because if it is all to do with sales and retail and things that already assume a fairly high standard of living, then what good is that to them? One of the main proposals I am going to put forward is that the EU takes on a new role in this and becomes an information supplier in itself; that its role is not limited to sharing best practice and putting forward Directives for implementation; that it supplies not only the content that people are going to need online but also the technical expertise, software and programs. I do not know how many of your Lordships are familiar with the open source movement?


  256. I was going to ask you a bit about that. Could you give us a bit more information?
  (Ms Ussher) Before big businesses moved onto the Internet, most of its development was done through the open source movement, which basically means that a technical developer will write a program, use the program and then post all the code for the program online so that other people can use it for their own purposes. This is why the whole Web phenomenon happened so fast, because it was all about the sharing of expertise. The open source movement is still going although it is more on the very technical side of operations. It has had some commercial success with an operating system called Linux, but it has pretty much been sidelined by the success of Microsoft and other corporations. Most of my research so far has been with charities and community groups and they are all crying out for very, very basic tools. They all want to be able to write a database to communicate with other people working in the sector—really simple sorts of things but things which require short scripting languages. It seems to me that the EU could be providing those resources in open source and if they did so then it would guarantee a basic level of IT literacy right across the region.

  257. We heard from the Americans earlier in the week about how the US government department had recently re-tooled and they had given away the whole of their IT kit which was now "redundant" to a charitable organisation. Does that happen here with government departments? Have you asked government departments to do that? Have the charities asked government departments to do that? It seems that Europe is a long way away from doing that when it might appear that we are not even doing it in our own backyard.
  (Ms Ussher) Are you referring to hardware equipment here?

  258. Yes.
  (Ms Ussher) As far as I know the Government is not involved in it, but there is a dynamic going on whereby more and more charities are starting up that recycle hardware, and more and more businesses are being alerted to the fact that rather than throwing away their old computers when they upgrade, they should pass them on to these charities, and that is happening. Although more and more computers are being donated, the training issue remains a problem in the UK.

  259. What about the UK open source access?
  (Ms Ussher) In the sense described above, it is absolutely non-existent. There are, however, some unpublicised web sites which act as a forum for open source developers.

  Baroness O'Cathain: Can I make an observation? I was driving home quite late last night passed an Easy Everything cafe or an Internet shop—it was on the Strand or somewhere—and it was choc-a-bloc. Every single one of those stations were being used by people, this was really quite late, about 11 o'clock last night, and I came passed again this morning, very early, and again a lot of people were there. It could well be this is an opportunity for business to use part of their community budget, which all charitable and community minded companies have, in this way. It is an idea because it would create access opportunity. It would help rectify the problem of creating the big social divide that you described. I can buy things on the Internet a lot cheaper, books, for example, than somebody who does not have access to a computer and does not know anything about the Internet. Generally speaking they are people who can ill afford to buy them at full price. I think you are absolutely right. On the subject of the training issue, maybe there is something that can be done, that if they can somehow marshal support—

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