According to a former UK Government press officer, New Labour's technique for getting ideas into UK citizens' heads is to repeat its slogans again, and again, and again.

On the subject of IT, ministers parrot their aspiration for the UK to become "the best place in the world to do ecommerce by 2002". But is this realistic - and is the Government helping or hindering this proposal?

There are currently two main battlefields involved in making the dream a reality: legislation and tax. Labour has launched IT policies concerning both with much fanfare - and on both, it has received much criticism.

Legislation: E-commerce and beyond
Perhaps the most praised part of the Government's IT programme so far has been its action over the Electronic Commerce Bill - legislation it inherited from John Major's Conservative administration.

When published in draft form, the Bill was criticised for mixing up clauses that would make digital signatures legally credible with those demanding access to encrypted data, a policy known as key escrow.

In response, Labour created two new bills. The Electronic Communications Bill enabled digital signatures to be used, but dropped key escrow, while web-tapping was pushed into the Regulation of Investigatory Powers (RIP) Bill, which is currently going through Parliament.

Richard Sullivan, policy manager at the Computing Software and Services Association (CSSA), said: "We were impressed by how the Electronic Commerce Bill was split as we asked. That was the Government listening to industry."

But the Tories are also trying to take credit for the move: "The Electronic Communications bill is nothing like as bad as it could have been, thanks to work from Alan Duncan," said Stephen Brine, ecommerce researcher for the Tories.

The Bill did see a fair degree of cross-party support because it was seen to sort out a technically complex subject, and ecommerce minister Patricia Hewitt and her shadow Duncan spent much of the time dedicated to its final reading arguing good-naturedly over who had contributed the most.

But many of the old Electronic Commerce Bill's more contentious elements have now resurfaced in the RIP Bill, allowing Hewitt, who seems destined for a Cabinet post, to wash her hands of them and instead front a multi-billion pound mobile phone licence auction.

Caspar Bowden, director of the Foundation for Information Policy Research (FIPR) think-tank, believes that RIP will present the Government with the biggest problems in trying to fulfil its ecommerce dream.

"There is this vision of the future of endless flexibility, where any device can buy from any provider in the world," he said. "For that, you need strong encryption, and the RIP Bill builds in a disincentive for vendors to provide that, because if they screw up, they may go to prison for two years."

The Bill, as currently drafted, requires anyone using encryption keys to retain them in case the UK authorities wants to view an email. If they do not, offenders are considered guilty until proven innocent.

As a result, Oliver Heald, shadow home affairs spokesman, told the House of Commons last week: "It is repugnant at law to require someone to prove his innocence. It goes against the golden thread that runs through English justice."

The Tories, along with FIPR, also claim the Bill contravenes civil liberties because it enables the security services to install bugging switches at ISP's sites, although it is still not clear whether the Government or the providers will pay for this.

Taxing questions
Elsewhere, in both the 1999 and 2000 Budgets, Chancellor Gordon Brown made a great play of the Government's measures to boost the UK's IT industry. And this year, he announced a range of tax breaks for IT entrepreneurs, including lower capital gains tax for investors, a quick-tax write off for companies investing in IT, a loosening of visa regulations for IT-skilled immigrants and broadened share-ownership schemes.

But share ownership has now become one of the two biggest beefs that the IT industry has about Government tax policy. As a result, industry bodies such as the CSSA have been hoping to see changes in the detail of share ownership schemes and national insurance contributions.

The fuss about share ownership is over an apparently obscure measure in the Government's 1999 Budget, which saw the Chancellor decide to make employers pay national insurance contributions on employee stock options. For non-approved schemes, this amounted to an extra 12.2 per cent charge should the value of the shares increase.

This means that if the value of the shares was to rise by 10 per cent, then employers would need to pay the Government 12.2 per cent of that 10 per cent.

Financial analysts PricewaterhouseCoopers said in March that the tax meant several UK IT companies were technically insolvent.

Barbara Walker, head of information society policy for the Confederation of British Industry, said: "There is widespread concern about the national insurance charge on employees' share options. We have been hotly discussing this with the Government over the last few weeks."

The Government has hinted it will find a solution, perhaps by transferring the liability to employees, although this too could affect UK companies' ability to recruit.

An equally contentious change to the IR35 tax on contractors, which took place at the same time, is likely to remain unchanged, however.

This attempts to cancel out the tax advantages that freelancers gain from billing their customers through a single-person company they have set up, but it has met with bitter resistance from IT contractors, many of whom have threatened to go abroad.

As a result, opposition leader William Hague attacked Tony Blair about the issue at Prime Minister's Question Time last November, dubbing it a "stealth tax". He also returned to the subject in March. "IR35 could cause a brain drain not seen here since the 1970s. It is exactly the wrong approach to the new economy," he said.

A spokeswoman for the Professional Contractors' Group (PCG), which was set up to fight the IR35 change, agreed: "12 months ago, the UK was very well-placed to lead the world in ecommerce and IT skills. However, despite the fine words from the Government about its support for ecommerce, its actions, particularly on IR35, show that they have no real interest in developing the sector."

Of course, the PCG has an axe to grind, but it is not alone. FIPR's Bowden, said: "IR35 certainly isn't helping to produce a climate of skilled, flexible labour. And the tax breaks in the Budget were fairly modest, and were countered by the enormous boo-boo on share-options."

But what do captains of IT industry think? Interviewed after last month's budget, Steve Bennett, the boss of web retailer Jungle.com, claimed the 2002 target was a credible one.

"The Government is doing a lot of stuff in the right direction," he said, although he added that one problem is the UK's sky-high rents for retail space, which he claims pushes companies onto the web more quickly than elsewhere.

But Mike Lynch, the UK's first IT billionaire and chief executive of Autonomy, laughs at the idea that the UK will be the best place to do ecommerce by 2002, saying: "It's a great spin line."