Beat the Millennium Bug or everyone catches a cold

TICKING away inside many of our computers is a potential technical time bomb. From the computers and electronic systems which pay our wages to those which control our traffic lights, from the computers on which our children look up encyclopedia entries to the one on which I'm writing this, all the computers now vital to the way we live modern life must be adapted as we approach the year 2000.

The new millennium will be a clear cause for celebration - in Britain, and around the world. But in the run-up to the year 2000, what's known as the Millennium Bug is a big issue - and a big problem. The root cause of it sounds trivial: the failure of many operating systems, in PCs, mainframes or embedded chips, to distinguish between the year 2000 and the year 1900. I'm no information technology expert, but I know that, unless we act, the consequences of the Millennium Bug could be severe.

Many business leaders are warning that, unless the problem of the Millennium Bug is tackled as a priority, we could be facing a serious threat to our economic performance. Today, I shall be talking and listening to people from all over Britain who run small and medium-sized companies, making sure they understand the importance of being certain that their firms are ready.

Britain is leading the way in tackling the Bug. Just as we have taken action on education, health, crime and jobs to ensure that, step by step, Britain is getting better, we are taking action on the Millennium Bug. We have made it a priority at this year's G8 meeting of the world's richest countries, for our Presidency of the European Union and for the Europe- Asia Summit meeting in London this week.

Global awareness remains patchy. In a recent survey by the World Bank, only 37 out of 128 borrowing member countries said they were aware of it. Only six countries have set up nation awareness-raising campaigns like Action 2000 - our drive to help companies and people in Britain deal with the problem.

Developing countries, in particular, will need more help. That is why, today, I will announce that we are putting pounds 10m into a new World Bank Trust Fund to provide experts and training to developing countries. We hope that our G8 and EU partners will be able to follow suit.

At home, if we want to remain strong and competitive into the next millennium, we have to deal with this problem now. There is a risk that our growth prospects will be damaged as companies divert resources to cope with computer failures. Some might even go bust because they can't fix them.

The Action 2000 campaign is helping raise awareness in the private sector. Today, I will tell them that we are increasing their budget from pounds 1m to pounds 17m to help it do even more.

With a national publicity campaign backed up by a website and a hotline to direct small and medium businesses to where they can get help, Action 2000 is having an effect. Awareness in that sector is now at nearly 100 per cent. But 25 per cent of companies haven't started taking action yet and they need to do it now.

So, there has been progress, but not enough. Today, we are unveiling a new package of measures to help companies acquire the skills they need. Using pounds 70m announced in Gordon Brown's Budget, we will help small- and medium-sized companies develop IT skills to assess and fix systems which will be affected by the bug.

We will offer a pounds l,300 time-limited grant for people to train in how to look for and solve the Year 2000 problem. If we get the response from business we are looking for, there will be an army of 20,000 "bug busters" fully trained between now and next April. This is a perfect opportunity to train young people in IT skills or to bring older unemployed or retired people back into the workforce, launched on a new career in information technology.

Business will need to know that its efforts to tackle the bug are matched in the public sector. There's little point having sorted out your business if the Inland Revenue, the benefits system, hospitals and local authorities have failed to sort out theirs.

On coming to office, one of the first things we did was to ask for an update of the Government's Year 2000 plans. David Clark, the minister responsible for public services, is working to make sure that all parts of the public sector match the standards of the best. He's reporting to Parliament every three months on progress and has estimated that tackling the bug problem in central government will cost in the region of pounds 400m. The best estimate of the cost of dealing with it across the public sector is up to pounds 3bn. That figure might, of course, change. However, we are assured that money is being set aside from within existing budgets to cover it.

Margaret Beckett, President of the Board of Trade, chairs a Cabinet group to co-ordinate action on the bug across public and private sectors. And, today, I am setting up a new public/private sector team based in the Cabinet Office to ensure the delivery of that better co-ordination.

Within the public sector, the Health Service and local government have a special responsibility. Without careful preparation, there could be major disruption to essential services such as benefit payments or even to emergency services such as hospitals, the fire and the police.

Some problems can only be tackled locally because each area faces different risks. Today, John Prescott and Sir Jeremy Beecham, the chairman of the Local Government Association, are writing to every local authority leader and chief executive asking them to set up their own task forces to raise awareness in their local areas and to co-ordinate action between the private and public sector locally.

I know that many companies and organisations are well advanced in dealing with this problem. I know that others are working hard to overcome the difficulties they are facing. But I want to be sure that every company, every organisation and every computer-user in Britain is taking action to defuse this technical time bomb - so that Britain can enter the new millennium confident of being able to meet its challenges.