UK government warned to steer clear of key escrow

The UK's consultation paper on electronic commerce - due to be released tomorrow morning - will force London's information systems offshore if it supports key escrow. That is the warning from the Institute for the Management of Information Systems (IMIS) in a letter to UK Chancellor, Gordon Brown.

In the letter, Philip Virgo, strategic advisor to IMIS, recommends the Chancellor remove key escrow from the government's ecommerce strategy altogether. He warns that allowing law enforcers to access the decoding keys of encrypted transactions would damage London's reputation as a safe place to do business.

Virgo writes: "The movement off-shore of information processing operations (followed by those who need them), if those located in the UK are required to use second-best security routines, will blow an expensive hole in your tax forecasts, let alone cost tens of thousands jobs in London alone."

He told Silicon.com: "We're talking about thousands of job losses, unions up in arms, market panics, share prices plummeting and billions of lost tax revenue. Any decision by any one company has huge ramifications."

Virgo said his letter reflected widespread concerns in industry, and that the Corporation of London was looking for concrete evidence to persuade the government to drop the proposals.

There is still no sign from the UK government that tomorrow's ecommerce paper will follow IMIS' advice.