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E-commerce minister Patricia Hewitt announced last week that the Government had exceeded its target of getting 1.5 million SMEs online by 2002. This is the key finding from the DTI's latest Internet Benchmarking report.

Industry, however, sees it the other way round: businesses are getting online despite this Government, not because of it.

The IR 35 tax law is forcing the best net technicians offshore; US tax breaks for net retail are not mirrored in the UK, forcing many to locate web servers offshore; Oftel (aided by the DTI) is doing an appalling job of forcing BT to throw open the doors to cheap, universal, high-quality access for business and consumers. ADSL has been a failure so far, with the roll-out promised last March having started in earnest only in October.

Based on my experience with ADSL, I advise others to wait before switching from ISDN. This is exactly what BT was hoping, since it enables it to wring more profit out of the outdated ISDN technology.

The Government's own progress in the online world is limited. Nobody has benefited yet from the rebate offered for paying tax online, although many have tried. I recently asked the UK consulate in Palma di Mallorca to email me, but it has not yet been given email by the Foreign Office.

Digital certificates are not yet in use either within government departments or between HMG and other governments.

Other key findings of the report include: 81 per cent of UK business are now online, up from 63 per cent in 1999 - this compares to 83 per cent in the US and 80 per cent in Germany; 55 per cent of businesses with less than 10 employees are online, up from to 15 per cent last year - this compares to 61 per cent in the US and 65 per cent in Germany; and 450,000 SMEs are now trading online.



Nick Rosen is a director of The Online Research Agency. email: nick@online-agency. com or tel: 0797 1543703.