Intellect said it has no objection to the use of open-source licenses as such, but is strongly opposed to the use of the GPL. The group argued that the GPL's conditions would prevent the government from profiting from its software, and could estrange proprietary software companies.
"When the Government decides to develop software using a restrictive licensing base, such as the GNU GPL, (it) should be aware that this would prevent it from deriving commercial gain from any subsequent derivative programs and prevent or severely limit the opportunities to work with commercial companies on such projects," Intellect said in the response paper.
The report is full of FUD which is unsurprising as it's backed by companies (including Microsoft) who have a lot to lose if open source becomes the norm in UK Government work.
The paper in question is also online.