116. Until recently, the Government intended to use legislation to control cryptography rather than to encourage the development of electronic commerce. The key escrow proposals advanced by the previous Administration, and carried forward in modified form by this Government, would have hindered the development of electronic commerce in the UK and harmed the competitiveness of the UK economy, in return for an, at best, unproven enhancement to the capabilities of law enforcement agencies to deal with criminal use of encryption. UK electronic commerce policy was for so long entrapped in the blind alley of key escrow that fears have been expressed that UK's reputation as a competitive environment for electronic commerce is now severely damaged.[384] It is unfortunate that legislation to deal with the recognition of electronic signatures in law, and related measures, should have become entangled with the requirements of law enforcement agencies to tackle criminals' use of encryption. The former is vital for UK competitiveness and could have been proceeded with by DTI at a much quicker pace than has been the case to date.

117. Now that key escrow has been dropped by the Government, the rationale for an electronic commerce bill is open to question. The March 1999 consultation document envisaged the forthcoming bill consisting of:

• powers to create a voluntary licensing scheme for TSPs which few in the industry welcome and which we suggest should at best be held in reserve for use in the event of the failure of a non-statutory accreditation scheme
• powers to alter the meaning of words such as "writing" and "signature" in law to take account of new information and communication technologies, and to clarify the situation regarding the admissibility of electronic signatures as evidence in court, both of which we support
• the creation of a "rebuttable presumption" of validity for certain electronic signatures, which has attracted considerable critical comment, which we are not persuaded by and which we think requires further justification
• a power to permit law enforcement agencies to demand decryption of data in certain circumstances, and related measures which, subject to further clarification, we think will be a useful addition to the armoury of the law enforcement agencies.

Although removing statutory and other legal barriers to the use of electronic means, particularly electronic signatures, would unambiguously help the Government achieve its target of making the UK the best environment for electronic trading by 2002, the other measures proposed to be included in the bill would not appear to contribute to that objective. We recommend that the Government think twice about the content of its forthcoming Electronic Commerce Bill and only include in the Bill measures which will promote electronic commerce, rather than measures discarded from the previous key escrow policy which are concerned with controlling, not facilitating, electronic commerce.