Photo of The Earl of Northesk

The Earl of Northesk (Conservative)

My Lords, my name is attached to this amendment, moved so ably by my noble friend. Needless to say, therefore, I support it. My noble friend is quite right to draw our attention to the decision of the Comptroller and Auditor General not to endorse the Home Office's accounts. As he said, this demonstrates how little faith we can have in its ability to deliver the ID card project, either technologically or within budget. The case that he made is deeply persuasive, and I need not embellish his remarks. Rather, I shall add some further insights about this matter which have surfaced during the past few days.

First, as my noble friend Lady Anelay pointed out earlier, the Home Office released with great fanfare last week its updated figure for the cost to the country of identity fraud, totalling £1.7 billion. Supposedly, the report builds on the previous study from 2002, which claimed that identity theft was then costing some £1.3 billion a year. In light of the report, the Home Office Minister, Andy Burnham, made the bold claim:

"One way we can reduce the potential for identity fraud is to introduce a national identity card, backed by a National Identity Register".

It is all the more unfortunate, therefore, that the figures are pure bunkum.

The report is riddled with inconsistencies and flawed methodology. For example, it includes the sum of £62.8 million, attributable to the cost of administering security and ID checks and combating fraud in passport applications by the UK Passport Service. Do we therefore assume that the sum of £584 million that is so often quoted by the Government as the annual running cost of the identity register and ID cards should be viewed as a legitimate "cost" of identity fraud? But perhaps most telling is the claim, already cited by my noble friend Lady Anelay, that £504.8 million arises from identity fraud-related abuse of credit cards. Clearly, this figure has been sourced from APACS, the card payments body, but as its spokesman, Mark Bowerman, has subsequently revealed, the ID fraud element of the total amounted to just £36.9 million in 2004 and, during the first six months of 2005, it dropped by 16 per cent, principally as a result of the introduction of chip and PIN. Indeed, when all the non-ID fraud figures are taken out of the calculations, the total annual cost of ID fraud is £494 million, although a further £372 million of that is an undefined sum attributed to losses across the telecoms industry. One wonders therefore whether KPMG would be quite so willing to describe the cost assumptions and methodology as "robust".

That said, while resentful of this misleading attempt to prey on people's fears, I can accept that ID fraud is a growing menace. Nevertheless, and notwithstanding the Minister's earlier comments, we need to recognise—and this simple fact is generally accepted within the industry—that of themselves, ID cards cannot and will not have any significant beneficial effect in countering credit card fraud, not least because it will not be compulsory to carry them. Indeed, the widely respected LSE report and other commentators within the industry have accurately pointed out that ID cards could exacerbate the problem.

In that context, news also surfaced at the weekend that Simon Davies, who the Government have consistently and repeatedly vilified for his involvement with the LSE Identity Project, has written to the Prime Minister indicating his possible intention to pursue the matter in the courts should such defamation be repeated. As his letter states, the fact is that:

"More than sixty academics and a further forty external experts have contributed to the LSE work".

That being so, is the Minister prepared to take this opportunity on behalf of the Government to retract the outrageous slurs perpetrated against Mr Davies and offer an apology?

All in all, these matters are of a piece with the relentless litany of spin born of a misguided sense of political expediency, and are unsubstantiated by the available evidence that has spewed out of the Home Office over the past few years in respect of ID cards. I am sure that throughout our scrutiny of the Bill, all of us have had but one wish—namely, that the Government publish their own detailed—I stress, detailed—system architecture, cost-benefit analyses, project risk assumptions and so on. After all, to quote a phrase, "if they have nothing to hide then they have nothing to fear".

I support the amendment.

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