Mandelson launches 'bold' e-commerce initiative

The government signalled its willingness to embrace e-commerce with open arms yesterday as Trade and Industry Secretary Peter Mandelson launched a Competitiveness White Paper, which he termed, 'bold, far reaching and absolutely necessary.'

As part of the push to get Britain's smaller businesses online, Mandelson announced a further £20m for the Information Society Initiative which has been criticised for not doing enough for smaller companies. Mandelson said: "To succeed in the next century, Britain must become a leading nation on the Internet which is now the fastest growing marketplace in the global economy." A national award will also be set up to recognise excellence in digital business.

An Electronic Commerce Bill to remove legal barriers to online trading was just one of the measures announced by Mandelson in the White Paper.

He promised that the government would reform telecommunication legislation and crack down on anti-competitive behaviour in order to create an open market for e-commerce trading -- The government intends to make Britain "the global hub for electronic commerce," Mandelson said.

Calling for an end to "red tape" on the Net, Mandelson said there should be no bit taxes, no customer charges for online products and no electronic import and export forms.

In a challenge to the business community Mandelson said: "It is not enough to create an Internet-friendly business environment. We need entrepreneurs who will seize and exploit the business opportunities which this opens up." To this end the government has pledged itself to triple the number of UK small businesses using the digital marketplace to 1 million by the year 2002.

The White Paper

Initial industry reactions to the White paper have been mixed. Hugo Patten, managing director of Unipower -- a provider of e-commerce applications -- sees the White paper as evidence the government is "committed to creating a more even playing field". He believes cross border tariffs and Internet charges are two key reasons for the slow uptake of Internet business.

But Jonathan Robinson, managing director of Blueberry Group -- another e-commerce provider -- believes the White Paper does not go far enough. The real obstacle to UK competitiveness according to Robinson, is the Telecommunications industry, which, he believes, should be forced to reduce local call costs. "With no competition and no effective pressure through the government using Oftel, call costs are too high," he said. Robinson also believes the government needs to do more to adopt higher bandwidth technology and introduce tax breaks within the e-commerce industry to encourage mass market uptake of digital business.