On 25th May 2005, Part I of the Electronic Communications Act 2000 will be torn out of the statute book and shredded, finally removing the risk of the UK Government taking powers to seize encryption keys.
In its dying days, John Major's Conservative Government proposed draconian controls in the UK too. Any provider of encryption services would have to be licensed and encryption keys would have to be placed in escrow just in case the Government wanted to read your email. New Labour opposed crypto controls in opposition, which got them a lot of support from the IT and civil liberties communities. They changed their minds, though, after they came to power in May 1997 and the US government lobbied them.
However, encryption was rapidly becoming an important technology for commercial use of the Internet - and the new industry was deeply opposed to any bureaucracy which prevented them from innovating and imposed unnecessary costs. So was the banking industry, which worried about threats to payment systems from corrupt officials. In 1998, the Foundation for Information Policy Research was established by cryptographers, lawyers, academics and civil liberty groups, with industry support, and helped campaign for digital freedoms.
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