The bill, unveiled in yesterday's Queen's Speech, will allow customers to give their approval to transactions with an electronic signature. This removes the requirement that documents be signed by hand for them to have legal authority.
The bill will also introduce a voluntary system of licensing the encryption standards used in electronic commerce in an attempt to reassure customers that they are dealing with a reputable company. It is also expected to sweep away a clutch of outdated laws which currently act as an impediment to the growth of electronic commerce.
A consultation document on the subject will be published by the Government next month, while a final bill is likely to be published in the spring. The law should come into force by the year 2000 at the latest.
The bill, which is being drawn up by the Department of Trade and Industry, reflects the Government's interest in creating a framework where electronic commerce can flourish in the UK. Although the United States has taken an early lead in trading over the Internet through companies such as Amazon, the online bookseller, electronic commerce is set to explode in Europe in the next few years.
A recent survey by KPMG, the management consultancy, found that European companies expect total Internet sales to reach $2,000bn by 2001. Companies are also expected to improve their own efficiency with the use of internal intranets.
The bill met with a positive response from the computer and telecoms industries. "These measures are the key enablers of electronic commerce and we believe the Government has got it right," said Paul Mountford, UK vice-president of Cisco Systems, the US networking giant.
Dick Emery, group electronic commerce manager at ICL, the computer giant, said: "What the Government has decided so far, they've decided correctly. But there are still some details to work out."
The bill is likely to be accompanied by a campaign to raise awareness of electronic commerce among British companies.
However, the Government is likely to face resistance from the banking industry on the issue of encryption.
According to a report in the current issue of Computing, the trade magazine, Britain's high street banks believe their customers will be discouraged from conducting electronic commerce if the police can subsequently call up all the details of their transactions.
However, supporters of the bill pointed out that it calls for a voluntary system of licencing encryption standards, where users of electronic commerce have the choice whether to register encryption details.
David Cherrill, a security expert at Logica, the computer group, defended the move: "It is important to be able to trust the framework. If there is a weak link in the chain confidence could be knocked back."Reuse content