This simple amendment provides that an identity card issued to an individual must be free of charge. Ministers will not be surprised by the amendment, because we have already debated the point in Committee and will no doubt talk further about it tonight. The cost of the card is one of the most crucial elements of our debate. If we believe that the card is right and will, in due course, have to be possessed, if not carried, by everybody in the country, how on earth can we make the sort of charges for it that we have heard about in the past few months?
The identity card will come in a package with the passport. I shall come to the combined cost of the card and passport in a moment, but we have heard already that some 20 per cent. of the population never need to have a passport. How much does the Minister propose to charge those who do not want passports, only cards? It is the nation's job to support its citizens' travel abroad, but why should a fee be charged for ID cards?
The possible costs cited vary. "The Identity Project" states:
"The Government originally asserted that the cost of the passport/ID card package, that is valid for 10 years, would be £85, but six months later this increased to £93."
In Committee, the Minister was chary of allocating a cost to the card. He skirted around questions about how much the card alone would be and whether it would be possible to issue a card without a passport. He gave us the tantalising figure for the cost of the passport of some £63. By a simple process of subtraction, the card would therefore cost about £30, but the Minister was hesitant about agreeing to that sum. However, now we hear from the Government that the figure is about right. I would be grateful if the Minister explained why he was so reluctant to talk about the cost of the card alone.
The costs of the card alone will not be confined to compiling the register and then issuing the cards, with all the associated equipment necessary. Some reference has already been made to the article in The Scotsman, which claims that ID cards will lead to massive fraud. It states:
"Jerry Fishenden, the national technology officer for Microsoft, says the proposal to place 'biometrics'—or personal identifiers such as fingerprints—on a central database could perpetuate the 'very problem the system was intended to prevent'. He says Ministers 'should not be building systems that allow hackers to mine information so easily'."
As we asked about an earlier amendment, if rubbish is put in, what rubbish will come out? If the scheme will be wide open to fraud, as the article suggests, how will we offset the costs? Will a margin be included in the charge for ID cards and passports?
As always, I am grateful to my fellow Nottinghamshire Member of Parliament for his observations. If he will allow me to develop my argument, I am sure that he will receive full satisfaction—[Interruption.] Yes, for less than £30, I expect.
I would be interested in the Minister's view on how fraud will be offset in the charge for issuing cards. "The Identity Project" goes on at length about the cost projections for the card—what it will cost individuals, and what it will cost the nation. It talks of the costs of issuing cards over a 10-year period, based on passport service figures; of card readers for the public sector, as envisaged in the Bill; of the national identity register; of the total cost of the national identity register infrastructure; of managing the national identity system; and of specific other staff costs over a 10-year period. The lowest estimate in the report is more than £10 billion. I shall not exacerbate the situation by mentioning the higher costs, because they are difficult to quantify, but £10 billion is already a massive sum. How can the Minister expect the nation, and the individual, to foot the cost for the register and the card?
The hon. Gentleman is talking about future, projected costs, but I wonder how much the Government have already spent on this project.
As usual, the hon. Gentleman makes a useful and helpful intervention. Perhaps the Minister would be kind enough to outline exactly how much this scheme has already cost us, even before it has been approved by Parliament. How much of the national treasure has been invested in something that will— I hope—lead nowhere?
What will be the cost to the individual? If the Minister tells us that the package comes to just under £100, will everyone have to pay that? Are those who are on benefits likely to be asked for the same sum? If so, where will that money come from? How will they pay? Is it more likely, as I suspect, that those who are better off will end up being asked to subsidise those who cannot afford either passport or card? I should be very grateful to the Minister if he made it clear to me how that lies.
I appreciate the point made by Dr. Palmer, but I cannot close on the amendment without mentioning opportunity cost. In my view, even I were persuaded of the need for both a register and an identity card, I would question very carefully whether we are putting those massive sums—most modestly assessed at £10 billion and probably much more—into the correct place if we want to stop the sort of ills that we have heard about, not least of which is terrorism, a subject in which I clearly have a great interest. Is the money being spent in the most efficacious fashion? Is it likely that a register and a card will have the effect that we hope to achieve? I suggest that the opportunity cost of the register and the card is absolutely out of proportion to the perceived benefits that either or both might deliver.
The hon. Gentleman will not be surprised to hear that I am very keen to know what the amendment would cost. He suggests that the Government will charge £30, but has he calculated what the cost would be if the card were given free to whoever wanted it? What does he imagine the overall cost would be?
I am sure that the hon. Gentleman will not surprised if I say that I have done no such calculation. As far as I am concerned, the scheme is not a starter. I have moved the amendment simply to challenge the Government and to make them explain how they can request such sums. I believe that if these cards are issued—if we ever get to that dreadful and parlous state—they should be free to those who will be forced, first, to hide them in the bottom drawer of their wardrobes and, in due course, to carry them.
I have not spoken in the debates so far today, and this seems the most appropriate debate in which to make a few comments about the costs of the scheme and its procurement because those factors directly reflect the issue raised by Patrick Mercer. I strongly support ID cards—my Select Committee produced a report on them a year ago—but believe that costs must be contained as much as possible and that we must procure effectively.
On the issue discussed in the amendment, the Government's approach is okay. In practice, despite the blood-curdling rhetoric of an earlier debate in which reference was made to the prospect of people being frog-marched 80 miles to have their heads measured and then charged 100 quid for the privilege, a certain amount of sheer politics rather determines that that is not likely to take place. So making provision for a charge is reasonable, but it is important that the overall cost of the scheme is contained. I have concerns about some elements of the approach that the Government are taking to the procurement of the scheme. Those issues were raised by the Home Affairs Committee well over a year ago, and I must tell my hon. Friend the Minister that progress has been a little disappointing until now. I should like to reinforce a few of those points.
First, there are some elements in the design of the scheme that I suspect will not turn out to be cost-effective. Some of those elements were referred to earlier. In particular, the cost benefit of including addresses in the scheme may well turn out not to be that good. It is an irony that one of the advantages of moving to a biometric national identity register is that someone's address becomes a less important part of their identity than in the current system, where their address is an important statement about who they are and how to prove who they are. The ability to strip out of the system the cost of constant re-registration in cities such as mine where 25 per cent. of the population move every year would be of enormous benefit. The Minister will need to return to that issue in practice. That does not necessarily affect the detail of the legislation, but it is an important issue.
The second issue relates to procurement. Biometrics were discussed earlier this evening. One of the recommendations made by the Home Affairs Committee more than a year ago was that Sir David King, the chief scientific officer, should be invited to oversee and judge the preparedness of biometrics. I was pleased that that recommendation was accepted by the Government a year ago. However, a year later, the committee that Sir David was to be invited to lead has not yet met. Some of the problems that the Government are having with the debate about systems—those that suggest that wrinkled, bald-headed men have their faces on upside down and all the other issues that we have heard about today—would be put on one side if we had the simple assurance that the chief scientific officer was going to do what the Select Committee recommended a year ago and give the green light, or the red light, to the preparedness of the technology. That would be an enormously important step. The Government agreed to it in principle more than a year ago, but no action has yet been taken. That is a shame.
The right hon. Gentleman may be further concerned to hear that, before we broke for the recess in July, I tabled 10 or 12 written parliamentary questions to a number of Departments of State to find out what steps they had taken to prepare for the national register and the identity card system. Not one of them, not even the Home Office, was able to say that it had done anything meaningful to prepare for the scheme. The Treasury, the Department of Health, the Department for Work and Pensions, the Ministry of Defence, the Northern Ireland Office—none of them had done anything sensible to meet the right hon. Gentleman's Committee's concerns.
That is an interesting point. Although the Select Committee supported the ID card scheme, one of its recommendations was that it felt to us a year and a half ago as though this was a Home Office scheme that the rest of Government was watching—those were not our exact words, but that was the sense of them—rather than a cross-Government scheme to which the whole of the Government were committed. I fear that what the hon. and learned Gentleman recounts rather supports that view. Those are not reasons to vote against the Bill—we need the scheme—but it is right to put down warnings that, unless those issues are addressed, the scheme may well not be successful.
Does my right hon. Friend agree that a cultural barrier lies in front of the scheme, to which he has just alluded? All Departments must be involved in delivering savings and process changes to make the collection of national identities work for them. Yet they must also step back in the management of the project and allow someone to deliver it without their direct control. That presents a management conundrum, which I admit, as someone who has had to manage projects, would be scary in the extreme.
Order. Before the right hon. Gentleman responds to that intervention, I remind him and the House that these amendments relate to what the public must pay for the cards. The cost of producing them is therefore irrelevant, so a wide-ranging debate on that aspect is not acceptable. The debate is specifically about what people must pay for the cards.
I am grateful to you, Mr. Deputy Speaker, for your advice and tolerance up to this point. However, the point I wish to make about procurement is now directly related to the cost of the overall scheme and therefore the cost that the public are likely to have to bear, be it for a free-standing card or for a passport-plus in the form that 80 per cent. or so of the population will have.
There seems to be a lack of willingness in the Home Office at the moment to adopt what is generally called an open process to procurement. That does not involve openness about whether we are advertising according to the normal European procurement processes and so on. There are essentially two approaches to procurement that will have a big effect on the design and cost of the scheme. The first is one where, having defined the broad outcomes and objectives of the scheme, the Government tender for one or more suppliers to provide a black box—computer software or a certain type of card—that will deliver what they want. The second approach is one where all the major issues about the design of the software, the structure of the identity register, the choice of card and the choice of different types of chip on the card are made publicly available and there is the widest technical and scientific scrutiny.
Traditional Government procurement has taken the view that the savings in cost achieved by the black-box type of procurement outweigh the advantages of a wider scrutiny of the proposals. Having looked at procurement around the world, the Select Committee came to the opposite view: the most open technical procurement, with the best scrutiny, was most likely to deliver systems that worked at the lowest possible cost.
Does my right hon. Friend agree that the Government should not go ahead with procuring the system without having conducted, or having had conducted, an independent large-scale study to ensure that the necessary error rates can be achieved on a population of 60 million people?
Order. That is off-beam again. The right hon. Gentleman must address his remarks to the amendments before the House and that intervention was not in order.
The Government have commissioned a study by KPMG, which looks at the risks to the system and, I understand, includes costs. However, they have said that due to commercial confidentiality they can release only part of that information. Is my right hon. Friend, like me, somewhat concerned about that, and is not it important that we be as open as possible about the system if we are to achieve the ends that he wants?
I have much sympathy for what my hon. Friend says. It seems to me that we are locking commercial confidentiality into the procurement process far too early, when many of the major technical design issues have not been solved. The likelihood, therefore, is that we shall end up paying more than we need to for the final product because we have not had appropriate scrutiny of what is being purchased. That, I can reassure you, Mr. Deputy Speaker, will impact directly on the cost that the public may have to pay for the card.
It is a pleasure to follow Mr. Denham. He may have pushed the boundaries of what was in order, but he made a highly significant contribution, bringing as he did an almost unique insight into Home Office procurement processes. That is indicative of the sort of debate that we need in the House in relation to identity cards, but are unfortunately denied due to the nature of the Bill, which, as has already been observed, is an enabling measure.
The right hon. Gentleman prefaced his remarks by saying that he was a supporter of identity cards. I wonder what someone reading his contribution would think that the opponents were saying if that was a Government supporter's analysis of the case. If there was a flaw in his argument, it was that his message seemed to be that we should identify all the difficulties but pass the Bill anyway. That is entirely the wrong way of going about things. The right hon. Gentleman is inviting us to give a blank cheque, which will ultimately be substantial, for something whose efficacy is by no means guaranteed.
I want to say a few words about the amendments. This is one of the occasions when I feel that I may have fallen through the looking-glass. I find myself supporting a Conservative amendment that proposes a free universal provision, in the teeth of opposition from a Labour Government. However there is some merit in the Conservative proposal, as there is too in amendment No.19, which John McDonnell has yet to move. There will be a cost to us all, whether from those who have to get the card at a flat rate or through general taxation, which is a burden that falls on us all. Both the Conservatives and Government Back Benchers are offering the Government a way out.
The Government are stumbling towards a new plasticised poll tax. It is worth recalling why the poll tax was unpopular. It was a flat-rate tax, which bore no relation to ability to pay. In that sense, it was regressive. What the Government are suggesting is, at the very least, a similar flat-rate levy. Much of the opposition to the poll tax was not from principle, although that was at the root of it; the serious opposition, at least in Scotland, arose from the recovery process. We saw local authority-instructed sheriff officers carrying out poindings and warrant sales for the recovery of a civil penalty, the poll tax. The Bill suggests that failure to pay the fee for an identity card will incur a civil penalty. We are presented with the spectacle that a Labour Government will be sending out sheriff officers to carry out poindings and warrant sales for the recovery of a civil penalty—[Interruption.] The Minister for Immigration, Citizenship and Nationality says from a sedentary position that that is not true. Perhaps he can tell me on which point I am wrong. He is not going to do so.
On the point about a regressive charge, does the hon. Gentleman agree that it is likely to fall most heavily on some of the most disadvantaged and vulnerable members of the public? In my constituency, we have a large proportion of pensioners, who are often on fixed incomes. Many of them will find it extremely hard to pay that additional tax, struggling as they are already with a number of other cost increases.
That certainly appears to be the case. As with everything else to do with this cursed Bill, we do not know, because we do not yet have the detail of what the Government are proposing.
The Bill will impose a penalty, which if it is to be meaningful must be recoverable and that can be done only by means of civil penalties.
After making a sedentary intervention, the Minister has disappeared from the Treasury Bench. He should not do so. What is his disagreement with the logic of Mr. Carmichael? Is it that people would not receive a card if they did not pay? If they do not pay, presumably the Government have some means of recovering the charge. The hon. Gentleman should pursue that point; he may have touched on a Government soft nerve.
The Minister should have no need of advice as I have already raised the point with him in Committee. Members from Scotland in particular will have memories of the political capital that they made in the 1980s and early 1990s from the poll tax and the poindings and warrant sales, which should give them pause to reflect before they go into the Lobby tonight, or on any other occasion.
As someone who once had the sheriff's officers at his door, I can well remember that time. Furthermore, as someone who, albeit somewhat reluctantly, has supported the Government on some issues tonight, I will not be supporting them on payments for individuals. We should keep separate the arguments. I would accept the argument on cost, although we must challenge what the cost would be, taking on board the comments of the Select Committee mentioned by my right hon. Friend Mr. Denham, but what I will not accept—nor will a number of people—is that the costs should be transferred to individuals who cannot pay them. If they are on income support or are among the millions of our low-paid workers, they should not have to pay under that system.
I am grateful to the hon. Gentleman for that point. I would have expected him to take that position because I know his views on a range of similar issues. However, I fear that he may prove to be the exception rather the rule among his fellow Scottish Labour Members, but we shall see.
I would not want the hon. Gentleman to think that Labour Members are not concerned about costs, especially costs to the individual, because we want them to be as low as possible. The Secretary of State has given us assurances that every effort will be made to keep the costs reasonable.
I do not doubt for a second that hon. Members on both sides of the House are worried about costs. I am worried that Labour Members' concern does not seem to extend to providing meaningful protection for those who simply will not be in a position to pay and will thus be heavily penalised due to the scheme.
I am aware that time is short and that other hon. Members wish to speak. I thank the Conservatives and the hon. Member for Hayes and Harlington, who is yet to speak, for giving us the opportunity to discuss the matter on the Floor of the House. We have had a useful debate and if the hon. Member for Hayes and Harlington is minded to press amendment No. 19 to a Division, I assure him that the Liberal Democrats will support him in the Lobby.
I come to the debate, as always, as a humble seeker of the truth. I am doing everything that I possibly can to ensure the swift and speedy passage of Government legislation, and I am supporting them by trying to ensure that whatever legislation is passed can be properly implemented.
The problem on which hon. Members on both sides of the House are currently stumbling is that the Government clearly and correctly said from the beginning that they wanted to ensure that they budgeted for the scheme appropriately and set aside the required sums to introduce such a new mechanism for identifying individuals. They said that those sums should properly cover the costs and be effectively and efficiently spent, which I wholeheartedly support. When there was discussion and consultation on charges for ID cards themselves, the Government honestly said that they wanted to keep any charge to a minimum, yet ensure that it would cover the costs of implementing the scheme. That was why we reached the point in June during which it seemed almost as though negotiations were going on in the Chamber between Labour Back Benchers and Front Benchers about the breakdown of charges between the passport and ID-card elements of the scheme. We were told at that stage that the Home Secretary was looking at trying to keep the charge of the card down to £30.
A £30 charge on top of the charge for a passport—that takes the charge to £93—might well be reasonable for some people, but the figure is based on the Government's estimate of the costs of the scheme. The charge is designed to cover the costs, but what will happen if the costs have been underestimated? The Government estimated that the passport and ID scheme would cost £5.8 billion over 10 years, which was the basis on which we calculated a charge of £93. I must say that I could spend £5.8 billion on many more productive things than an ID card scheme, but let us put that principled argument on one side.
The London School of Economics report that analysed the scheme, which has already been cited, gave its lowest estimate of the cost of the scheme as £10.6 billion. The median estimate was £14.5 billion and the highest estimate was £19.2 billion. If the Government wish to cover the cost of the scheme through charging, a cost that is anywhere near the LSE's predictions will mean that the charge for a card and passport will eventually rise to something like £200 to £300.
I share my hon. Friend's concern. Is he aware that the increase to the charge for a passport between this year and next will be £15.57, which will be set to take account of only minor changes: the facial biometric and the system of interviews? However, it is estimated that the charge will increase between 2006–07 and the full implementation of the scheme by only £5.07, although fingerprint and iris biometrics will be introduced and the changing database will be set up during that time. The Government's figures are intuitively unreliable—compare £5 for a massive change with £15 for a minor change.
My hon. Friend's point, which was perfectly made, reinforces our worry about what the Government will do if the charge is to cover the cost and yet the cost escalates.
The Home Secretary and the Government have quite properly given assurances that they will try to keep costs down, but I have sat in the Chamber listening to assurances before. When we considered the Bill that became the Terrorism Act 2000, the Home Secretary—he was then a junior Home Office Minister—assured us that the measure would not be used against people who were peacefully picketing and demonstrating, but within three months it was. I have thus sat through debates when assurances have been made by Government Ministers that have then not been realised.
I am worried about what will happen if there is a cost overrun after we have inflicted a mandatory charge on the general public. Who will cover the cost if the system does not work? What will happen if not only the initial procurement estimates are wrong, but the cost of the contract starts to overrun in the early stages? Will we give more assurances to the public that the charge will not rise and, if so, will the cost fall on general taxation? Alternatively, will a one-off levy be put on businesses or others?
According to the press release that was released yesterday to indicate that the charge of a card to those who do not take a passport will be £30, the Home Office can absorb any costs entailed in the scheme. If costs go up, they will thus lie with the Home Office and the only way in which it will be able to recoup the money will be by increasing the charge for the identity card.
That is one option. However, we are all aware of the stringency of the Treasury's activities across Government Departments, so the other option would be that the Home Office would have to swallow its own smoke by using its budget, which would lead to cuts in other services, such as probation, prisons and policing. If costs escalate, the options are to increase the charge for the cards, or to cut services in the Home Secretary's remit.
It is argued that risks will be reduced because the scheme will be rolled out in phases, but that does not reassure me. It is estimated that the scheme will involve the biggest computer contract in western Europe for the past 20 years. A project on such a scale has great potential for problems and cost overruns. Reports by the Public Accounts Committee tell us time and again that 50 per cent. of the Government's computer projects have failed, experienced serious developmental and operational problems, or overrun on time scales, thus overrunning on costs. None of us will be reassured about the implementation of the programme through such a massive contract.
I do not know whether my hon. Friend read the answer that I received last week to a parliamentary question. It said there are currently 300,000 cases of passport theft a year. We did not touch on this matter in Committee, so will the Minister tell us who will pay if people lose their ID cards, or their ID cards and their passports?
If the Government maintain that the costs of the scheme must be covered by charges, the general public will pay. Patrick Mercer raised the issue of fraud. If it is as rampant in the use of ID cards as some people have suggested the public will be charged so that additional anti-fraud measures can be introduced. One criticism in the LSE report concerns the Government's inadequate attention to the danger of fraud deep within the system. In future, the Public Accounts Committee will have a field day with the scheme overall and specifically the massive computer project. The exercise will become part of the pantheon that includes the Millennium dome, the Dangerous Dogs Act and rail privatisation.
Indeed. At the end of the day, they probably did not impose such a heavy charge on our constituents. Because the technology has not been tested the charges will go up. I am surprised that we have not built into the legislation further controls to prevent such increases.
I shall focus on the KPMG report, which has not been fully disclosed but makes reference to a weakness in sensitivity analysis on costs in the project. While giving a generally supportive nod towards the methodology used for producing the Government's estimated costs it refers to the huge unknowns that drive many costs on a project of this scale and length. Does my hon. Friend accept that that is a concern?
The KPMG report is concerned that the project is an enormous leap in the dark. There are worries about implementation, technology and staff capability in the different Departments that must handle ID cards and the passport system together.
We are forcing the scheme on people, contrary to the Prime Minister's choice agenda. Many people will not wish to participate in it, and there will be refuseniks. If we hound them down resentments will build up. By introducing a charge rather than paying for the scheme through general taxation the burden will fall, as has been said, on those least able to pay. I have not heard any ministerial assurances about whether or not we will accommodate pensioners or people on benefits by ensuring that they will not have to pay. Perhaps there will be an additional one-off allowance for pensioners along with their Christmas bonus so that they can go and get their ID cards. However, there does not seem to have been any consideration of the cost burden that will fall on people who are least able to afford it.
If I understand the Bill correctly there is an assumption that take-up will not be 100 per cent., so the Minister will have the discretion to write off charges for citizens who, for one reason or another, fail to take up the card. Does that not suggest a major weakness? If that is known beforehand, people who do not wish to take part in the project can opt out knowing that they do not have to pay.
My hon. Friend has spotted an incentive in the Bill for people to go into hiding and to refuse to pay. I am more concerned, however, about people who will struggle to pay the initial charge. If the project goes wrong and costs increase the charge imposed will have to go up. As a result, those people will not be able to bear that burden. I agree that resentment will build up. This debate mirrors debates about the poll tax in that it has been said that the present proposed charge is much fairer as it is a one-off cost that people will not mind paying. I think that they will. What happens if they refuse to pay? Do we really wish to go through the experience that we are now having with council tax of imprisoning vicars? Will bailiffs turn up at people's doors to take them to court or take away their goods because they cannot pay or refuse to do so?
The Government are digging themselves into a hole, so I shall offer them some friendly, comradely and constructive advice. To ease the passage of the Bill and make the process fairer it would be better to ensure that implementation costs are borne through progressive taxation. As a result, costs would not bear too heavily on those least able to afford them. That would prevent resentment at a one-off charge, especially if it increased beyond the £30 estimate as is inevitable if the cost of implementing the system rises. I urge the Government to reconsider their position. If they do not do so I wish to press my amendment to a vote. I repeat, however, that Ministers will live to regret association with the legislation. Apart from all the complications and the attack on civil liberties, what will stick in the public's mind is being forced to pay for something that they never chose to have.
We should be grateful to Mr. Denham for giving a speech in favour of identity cards, as it has reinforced many Members' opposition to them. We should also be grateful to him for reminding us of cost implications in the key recommendations from the Select Committee that he ably chairs. He gave three examples of things with cost implications: first, frequent changes of address, which was one of the issues that felled the poll tax; secondly, to use shorthand, the lack of technology proofing, despite the Select Committee's recommendations; and, thirdly, procurement and its bearing on costs. I thank him for one of the most succinct and lucid examinations of procurement problems that we have heard.
Given that the Select Committee identified three things that bear heavily on costs, I cannot believe that more than a year later, none of those things has been examined or dealt with properly. I have great regard and respect for the right hon. Gentleman, but his conclusion that the House of Commons should blunder on regardless, ignoring all the things that have not been done, the assurances that have not been given and the examination that has not been completed, is remarkable. Should we just cross our fingers and hope for the best?
The vast majority of people who oppose the Bill would do so whether or not there were issues of cost. The House would make an historic mistake if it did not proceed with legislation that enables ID cards to come into force, because there is a compelling case for such cards. It is perfectly reasonable to pass the legislation, but it is also important that we make it clear to Ministers that there are concerns about procurement, which must be set right in the following months.
Someone with substantial parliamentary experience knows that the best way to ensure that such things are dealt with is to fire a shot, not just across the bows but below the water line, in the amendments. That would ensure that these matters would not be ignored, as has been the case in the past year. However, the House is being asked to vote for a pig in a poke and accept something that cannot possibly be quantified. The three issues that the right hon. Gentleman identified make it impossible to give any valid estimate of the costs of the ID card scheme.
In an intervention from elsewhere on the Labour Benches, we were told—I paraphrase—that the Minister had assured us that the cost would be kept as low as possible. Those of us who remember the poll tax debates in the House know that no Minister said, "We're going to make the poll tax as high as possible"—on the contrary, the Government said it would be 50 quid or 100 quid and would be kept as low as possible. They said it would transform local government finance, but of course they could not estimate the cost of the poll tax because they could not estimate the cost of enforcement. In the famous phrase of Michael Heseltine, it was unenforceable—unworkable. That is exactly what we are facing once again. The three issues that the right hon. Member for Southampton, Itchen so ably identified in his speech in favour of the Bill should reinforce substantially the opposition to it and our doubts about it.
There are two other cost issues that we must bear in mind. The first was raised in an earlier debate, when we heard a quote from Mr. Jerry Fishenden, the national technology officer for Microsoft, from The Scotsman this morning. As a high ranking official of Microsoft, he is presumably in a reasonable position to estimate the damage that the Bill could cause if it were not correctly handled. He said that it would lead to a massive fraud
"on a scale as yet unseen."
If that comes about, it will be a cost on general business and on security, and measures will have to be introduced to counteract the massive fraud
"on a scale as yet unseen"— again, totally unquantifiable by the Government.
Lastly, there is the question of opportunity cost—of what we might be doing with the billions if we were not pursuing this pig in a poke or buying these unfinished goods, this spatchcock legislation. I suppose the Government might fight another war. That would be another £5 billion—
Order. I am sure that the hon. Gentleman will be the first to recognise that he is straying well away from the amendments, which are about what people will have to pay for the cards. We are not dealing with the Iraq war at this stage in the proceedings.
As always, Mr. Deputy Speaker, I accept your advice, but the question of opportunity cost bears on what people will have to pay. In the absence of an answer from the Government to any of the substantive questions that have been raised, they cannot give us a realistic estimate of costs. The LSE estimates that have been quoted—the £10 billion to £19.2 billion, which would result in a cost for the individual of £170 to £230—are the best and most reasonable estimate available.
If those are the real costs—the best that can reasonably be estimated from the Government's lack of preparedness and in the absence of information from them—it is legitimate to ask how those substantial charges will be extracted from members of the public. At the time of the poll tax, one of the jokes was that people would next be taxed for breathing. The way that the Government formulate identity cards makes them virtually a tax on existence. In the absence of any assurance, quantification or solidity underpinning the Government's position, it is entirely legitimate to ask how the charges will be extracted from the population. When Mr. Carmichael asks about poinding and warrant sales, those are legitimate questions. It will require more than a little additional advice from the Treasury Bench to answer them—perhaps not in relation to the result of the votes tonight, but certainly when there is a general debate and the effects of such a disastrous Bill are felt among the general public.
I congratulate Patrick Mercer on his honesty. He clearly said that he had moved the amendment to try to wreck the Bill. That is admirable. I want it to be understood that, for precisely the opposite reasons to those that he advanced, some of us support the proposition that there should be no individual payment to obtain what is compulsory.
My hon. Friend John McDonnell opposes identity cards, but I am not against the concept. I have reservations—for example, I do not believe that ID cards will be a panacea or solve all the problems that we are led to believe they will solve, but they can improve the situation. ID cards are an erosion of civil liberties, but on balance, I can live with that. Although in this case the erosion of civil liberties may not appear too severe, that must be taken in conjunction with the various other erosions of civil liberties that have occurred since we took power in 1997. The erosion of civil liberties is becoming increasingly worrying, and I look forward to the day when a Labour Minister stands at the Dispatch Box and announces an increase in civil liberties, rather than their curtailment. That is the history of our party, and it causes some of us considerable concern.
There can be significant advantages to the use of identity cards or smart cards, whichever they are called. I believe that the matter is being properly addressed, but there is one thing that I cannot come to terms with. Various comparisons have been made by Ministers. We hear about driving licences and passports, and the fact that people have to pay for those. But with very few exceptions, nobody is obliged to purchase a passport, because very few people are obliged to go abroad. They go abroad because they choose to. The same can be said about obtaining a driving licence. Very few people are obliged to drive a motor car, so they are not obliged to purchase a driving licence.
When the Government decide that for the benefit of society as a whole some measure needs to be introduced, society as a whole, not the individual, should pay for it. We have all heard about the old age pensioner couple who might see their winter fuel allowance wiped out because eventually it will be compulsory for them to obtain identity cards, whereas if it cost £100, £200 or £300 to obtain an identity card, it would not have any great effect on people like us. That principle is wrong. Although we do not hear so much about it now, I rather like the concept of socialism and progressive taxation. It is an admirable concept that those who take most out of society should put most back in, for the benefit of us all.
It is unfair that if something is compulsory, people should be obliged to pay for it. Initially, ID cards will be voluntary. Does anybody believe that people will shell out money for something that is voluntary, if they do not need to? When the voluntary card becomes compulsory, which will eventually happen—it has considerable merit—it will be so much more difficult if few people have taken up the voluntary option. Even at this late stage I ask the Government to think again. I have not mentioned costs or the merit of costs, because I do not want to stray into those matters. Any Member or Minister who is concerned about the cost should bear in mind that there will be a far greater incentive to keep the cost down if the Treasury must bear the cost than if it falls on the individual.
This debate is not simply about ID cards: it is about the relationship between the citizen and the state and the borderline between what civil liberties we are willing to concede in order to live in a fairer, safe and secure world.
The Bill's aims are commendable—they include tackling ID fraud, benefit fraud, illegal immigration and terrorism—but as we learn more about the detail of the costs, the British nation is becoming increasingly sceptical. I wonder whether we would be having this debate if the Government were a little more transparent about some of the costs that are likely to be incurred. My hon. Friend Patrick Mercer quoted the report from the London School of Economics. Other estimates of the total cost of the project range from £3 billion all the way up to £10 billion.
I wonder whether we will get value for money if we spend that much. It has been said that the police support the project. If they knew that they had £10 billion to spend on helping with matters to do with security and benefit fraud, would they spend it in this fashion? For example, Bournemouth is crying out for an improved CCTV system. We could easily spend that money on projects that are worth while and beneficial to the nation instead of a system which has no exact final cost. In America, where they do not have ID cards yet, extra money after 9/11 has been invested in homeland security and strengthening its borders.
The costs of current database systems have spiralled. The NHS database went from £6.2 billion up to £20 billion. The probation service database went from £85 million to £120 million, and was then scrapped. The air traffic control system went from £350 million to £630 million. Why would the database for ID cards be any different? What guarantees can the Government give that they are not going to repeat those mistakes?
Another issue is that of the performance of the IT. The Passport Agency, the Child Support Agency and the Criminal Records Bureau have all had IT problems with their databases. Again, why should the ID cards database be any different?
Lots of questions have been asked today about the cost. How much would it cost to replace the card? How much has already been spent on the project to date? I asked those questions of the Minister in Committee. Is there an upper limit to how much the Government are willing to spend before they say that the costs have spiralled out of control, as in the case of previous databases? In order to prevent a terrorist from using a stolen ID card, or a thief from making a false benefit claim, some form of verification process—a contraption such as an iris scanner—will be required to determine that the person holding the card is the person they say they are. We will then get that apparatus right across Britain, including at all our airports. Who will meet the cost for those additional bits of equipment?
Having debated this on Second Reading, in Committee and today, I believe that the Bill is flawed. It is open-ended and dangerous in that it does not have a clear timetable, it is based on technology that does not work and uses questionable or unknown costings, and it is increasingly without the support of the people.
I did not intend to speak in the debate but as there is some time I should like to make a couple of brief points. The first concerns spiralling costs. At the beginning of the project, the cost of identity cards was meant to be £15. It then went up to £35 and was linked to the passport and went up to £77. The latest estimate is £93. It takes a great deal of trust and confidence to think that it will not continue to rise.
We all know that there are significant risks to the costs involved in the project. That is one reason why many people, even those who support the scheme, are suggesting that there needs to be greater transparency. In my constituency, the turnover of people is in the region of 20 to 30 per cent. annually. The electoral register cannot keep up because of that movement. If addresses are to be included, as was suggested earlier, the costs will spiral, especially in urban areas such as Greater London.
So far we have not mentioned inaccuracy, but there will be substantial inaccuracies—there are in every computer system that we have. Sorting them out will undoubtedly lead to major increases in cost. There will also be great public concern about security. Making the system even more secure will cost money.
There has been much talk about the location of the centres for biometric identification. We can be sure that, whatever number the Government come up with, we will need to double it to satisfy the public. The time taken to go through the identification process will be much greater than estimated. If we add function creep and the inflation of the amount of information that is kept in the system—all are consequences of a mandatory scheme—one can envisage costs spiralling out of control.
How can we make the scheme proportionate to the likely limited benefits that it can deliver? That cost-benefit analysis has not been done. We have talked a lot about the financial cost but there are also related social costs. One of the great disappointments of the Home Affairs Committee report was that it steered clear of that argument. It behoves the Chamber to discuss those costs. Let us consider the 51 pieces of information that will be held on an individual. They require 13 different biometric tests. If that is not information overkill, I do not know what is. That is not proportionate to the likely benefits. I hope that, if nothing else, the Government will at least listen to the anxieties that are being expressed; otherwise, first the Home Office and then the Government will be shafted.
One of my concerns is that the Government have not shared their business case with us even in edited form. It would give us substantial information about the assumptions and benefits to which my hon. Friend referred. As I understand it, the business case will have attempted to produce a net present value of the project to demonstrate that it will have a return over time. I would expect that to be marginal on the basis of the Government's costs. If one then applied the sensitivities that we have discussed such as possible overruns, which my hon. Friend mentioned, the project is likely to cost us a great deal more than has been estimated up to now.
I concur. I served on the Public Accounts Committee for some time and we considered many such reports. Of course, the assumptions that one includes in a net present value calculation are critical. In the sensitivity analysis, if one does not make proper assumptions about the likely outcome, one will get it wrong. The Government need to consider the matter carefully. If they listen to the comments that have been made today, they will do that.
I share the concerns about the cost of identity cards and the charges that will ultimately be levied for them. The Government have given us no indication of the way in which their estimate of £580 million or so a year for the cost of the scheme is broken down between what is necessary to comply with international requirements for passports and what is needed to create their comprehensive identity scheme, which is about not only identity cards but the national identity register.
The Government claim that international requirements account for 70 per cent. of the cost of the scheme. However, let us consider the figures that we have. The current cost of our passport is £42.36. Next year, that will increase by the substantial amount of £15.57 to £57.93. I asked the Government for the reason for the increase and they replied that it was largely due to the delivery of several key counter-fraud initiatives, notably interviews for all first-time applicants, links with other public sector databases and the full implementation of facial biometric passports. That is just for the facial biometric, not for the other biometrics that will be required. Yet the cost of the full implementation of the scheme will be £93, to include £30 for the ID card. The passport, without the ID card, will cost £63. That is an increase of only £5.07, which implies only an additional 10 per cent. cost for the minimal requirement of the facial biometric.
These figures beggar belief. How are we going to achieve all the additional biometrics—all 10 fingerprints, plus iris recognition and the facial biometric—and the implementation of the national identity register with all the continual changes involved, for that amount? This is not comparable with the present UK passport database, which is a static database. Between 2006 and 2007, we shall move over to the full implementation of the scheme, with its constantly changing database, yet we are told that it is going to cost only an extra 10 per cent. Even the cost of the whole package, at £93, still represents a fairly modest increase for such a huge change in the scheme.
The Government are giving us assurances about keeping the costs down, but perhaps the best way for them to achieve that would be to abandon this scheme and do what the Americans, the Germans and all the other European countries are doing, which is to have an ID card or passport that has just a few simple biometrics and no central database.
Over the past hour or so, the debate has arrived at the point of concern for most people in the country, namely, the cost of the scheme to individuals and its cost more generally. I do not believe that many people will be persuaded by the great perorations on liberty that we have heard tonight. They can see the purpose and the benefits of the identity card scheme and they want to know whether it will be affordable. That is the bottom line.
Many good points have been raised on both sides of the House tonight, in what has become a more reasoned debate since about 7 o'clock. There has also been hyperbole on both sides, and the poll tax has been mentioned on a number of occasions. There is quite a difference between a proposal for people to pay between £800 and £1,000 a year, and one for an identity card that will cost £30 for 10 years. They are not directly comparable, and it did the debate no good to make that comparison.
There is however some common ground between us. We all have a vested interest in ensuring that the overall costs of the scheme—and therefore the cost to the individual—are as low as possible. I shall address the two matters separately: the cost to the individual, and the related point that was so eloquently raised by my right hon. Friend Mr. Denham about the cost of the scheme overall.
Amendments Nos. 7 and 19 raise a point of principle—interestingly, it was raised by Members on the Conservative Front Bench—about making the cards free of charge. While we agree that the charges should be kept as affordable as possible, there is clearly an issue involved in whether there should be any charge at all. My hon. Friend Bill Etherington put forward his argument on that point very clearly.
We believe that the card will bring a range of benefits to the individual, in terms of everyday convenience, and of enhancing their ability to protect their own identity data against misuse. Individuals will also benefit from being able to use the card as a travel document within the European Union. That, of course, is a benefit to the individual, and is consistent with the charge that is levied for a passport at the moment. The question raised by the amendments is whether the cost of the scheme should be met entirely from general taxation—I believe that that was the thrust of the contributions of my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Sunderland, North and of the Conservative amendment—or whether it is right to set a charge that reflects the benefits to the individual while also ensuring that it is affordable.
I want to take head-on the point raised repeatedly in the debate about the opportunity cost. During the general election campaign, I lost count of the number of times that the Liberal Democrats said that they would use the money from the national identity card scheme to put more police on the street. That was an entirely spurious argument, as there is not a great big pot of money that can then be allocated to pay for more police on the beat. Our proposal is for a scheme based on recovery of charges from individuals. The argument that there is a big amount of money to be allocated either to ID cards or some other public purpose, such as CCTV in Bournemouth, is not therefore correct.
Is the Minister therefore saying that the entire cost of ID cards will be borne by citizens paying up front for the card, and not by the taxpayer?
That is precisely the basis on which the scheme has been developed—that the costs of running the scheme will be recovered through charges to the individuals and organisations who use the service. The idea that the money could be diverted to a wish list of other things, whether CCTV in Bournemouth or more police on the beat, simply does not stack up.
The Minister makes an important point, but does he not agree that we would have a much more transparent, useful and interesting debate if we had the costs in front of us today? People have been stabbing in the dark using independent reports, whereas if the Government had done their homework before coming to the House, we would be able to have a proper debate, and the nation would be in a better position to judge whether the scheme is worth it or whether we should spend the money elsewhere.
I am surprised that the hon. Gentleman, who was a member of the Standing Committee, should make that comment at this point. Detail has been laid before the House on the annual costs of the scheme, and he had access to documentation during Committee showing the cost as £584 million a year. He will also know that information about the benefits of the scheme, in terms of value realised per annum, which has been raised on many occasions today, has been made available. Some detailed work has been done on that, and it has been quantified at £650 million to £1.1 billion per annum. The scheme therefore has a considerable net present value.
Can the Minister confirm that one of these sources of income will be other Departments? That being the case, can he tell me where those other Departments are getting their money from?
I am not sure whether the hon. Gentleman is referring to other Departments making a contribution to the scheme, or whether he thinks that they will pay an annual charge. My point is that the costs of the scheme have been developed according to costs paid by individuals to be enrolled and issued with a passport and identity card, and costs paid by organisations that use the scheme.
How is it possible for the House to place any credibility on the Government's estimates when they have palpably not answered the questions posed by the Select Committee, which one of the friends of the Bill posed to the Minister earlier this evening? If those have not been examined properly, which is the word of the Select Committee Chairman, how can any credibility be placed on the Government's costings?
I shall talk about the issues raised by the Chairman of the Select Committee now. I listened carefully to what he had to say. As always, he made a number of extremely valuable points—and I hasten to remind him that he prefaced his remarks with the comment that he was a supporter of the scheme. I think he said that the case was compelling. Does the hon. Gentleman recall that?
I do as well. I welcomed the Chairman's observations: he made a number of sensible points, and it behoves one in my position to note them carefully and respond to them properly. One of them related to addresses—
My hon. Friend touched on the net present value of the project. Will he place in the Library a calculation of its value, and its exposure to sensitivities? That would be useful to us during the remainder of the Bill's passage.
My hon. Friend referred to other stakeholders. I assume that he was thinking of the private sector and the contributions that it might have to make. Can he give us any idea of the basis on which we can place any reliance on what those concerned have said so far? In fact, they seem to have been silent on the subject.
My hon. Friend mentioned the KPMG report earlier. We have said that a summary of the report will be published shortly. I shall be happy to make it available to any Member who would like to read it.
My hon. Friend's second point was—
My first point was about net present value, which was not precisely what the KPMG report addressed. It was addressed more in the Office of Government Commerce analysis. My second point related to the assumptions made about private sector contributions to the success of the project, and the extent to which we could rely on those involved in view of their relative silence to date.
As the scheme progresses, we shall seek to share more information. The Chairman of the Select Committee made the valuable point that being open about the procurement process could strengthen the scheme.
My right hon. Friend also mentioned the possible cost of constant re-registration by people moving house. As he will know, addresses are currently printed on the front of driving licences. I do not think it would be sensible to require people to obtain a new identity card every time they moved house. We want a system enabling people easily to communicate a change of address to those who run the scheme, but I take his point. He also mentioned the chief scientific adviser, Sir David King, and the recommendation that a group should be established to consider the efficacy of biometrics. I can tell him that a biometrics assurance group, a Government group, is being set up under Sir David's chairmanship.
The issues are coming into sharper focus now that we have reached a point at which rigorous testing is necessary. Regular meetings have already been scheduled for the next 12 months, and the Home Office has recently appointed a senior biometrics adviser from the private sector.
May I bring this particular issue into even sharper focus? The Minister has said, a year after the Select Committee's report, that the Government are taking on board the point about addresses, and that it will be easy for people to notify the authorities about a change of address. What will happen if they do not do that?
If the hon. Gentleman has read the Bill, he will know that people are required to notify the authorities of a change of address. I want to ensure that they can do that easily and quickly.
My right hon. Friend asked whether this was just a Home Office scheme that would be examined by the rest of Government, or a cross-Government scheme. He may know that a cross-departmental group of Ministers from the main Departments with an interest in the scheme, chaired by my hon. Friend the Minister of State, is looking in detail at all the issues that he mentioned. It is looking at how Departments can plan now to build the national identity register into their work, so that we can get maximum benefit at the earliest possible stage. However, my right hon. Friend's point was well made.
On consulting other Departments and the costs that have yet to be built in, does the Minister recall his answer to me in Committee? He said that members of staff operating and administering the scheme would be deemed to be in positions of trust. Has he established how much it will cost to ensure that that vast army of people are security cleared and police checked, and has he consulted the trade unions?
I remember saying that to the hon. Gentleman, and I will of course take on board those issues as we move forward.
Let me deal directly with the cost to the individual—the issue that those listening to this debate want most reassurance on. As the House knows, on Second Reading my right hon. Friend the Home Secretary gave a commitment that he would seek to introduce an ID card cost that we believe is affordable and fair to the majority of the public. Patrick Mercer said that we danced round this issue in Committee, and I am happy to tell him this evening that the Home Secretary has confirmed that a £30 fee for a stand-alone ID card would be a fair price to pay. We believe that, crucially, it is affordable—
I shall endeavour to give the hon. Gentleman the reply that he asked for. We have been able to set this fee, but the one qualification is that before we enter the procurement stage, it is of course difficult to be hard and fast about the fees that could be charged. But we think it right at this stage to give those listening to this debate an idea of the cost of the stand-alone card. We believe that doing so will build confidence in the scheme.
I am grateful to my hon. Friend for giving way. Will he clarify what will happen in the case of a lost, and particularly a stolen, card? Will the assumption be that the person in question has to pay for full cost recovery, or will tolerance be shown, so that the poorest, who may prove most subject to theft, are not asked to make the greatest contribution?
My hon. Friend makes a fair point, and we are looking at whether a replacement fee can be introduced. In cases where people lose their card, it should not be necessary for them to go through the whole process again and to pay the full price of a card. Such issues will be clarified as we get into the next stage of the scheme. My hon. Friend may find more reassurance in clause 37, which sets out the wide range of powers to set fees and allows for the payment of fees in instalments. As I pointed out, my right hon. Friend the Home Secretary, in setting the £30 stand-alone fee, said that we believe such a fee to be fair. It also means that not everybody will have to pay for the cost of an identity card and passport. The stand-alone fee deals with one of the issues raised by the hon. Member for Newark, in that it gives people a choice. They can choose whether to purchase an ID card, at a cost of £30, that will enable them to travel within the European Union, or to purchase the two documents—the passport and the ID card—the current combined unit cost of which is £93. However, the £30 card will not be a cut-price or inferior card, as has been suggested in some parts of the media.
Amendment No. 19 seeks to exclude from clause 37 the power to charge for ID cards. We believe that that is not the correct thing to do at this stage. We of course want people to register with the scheme, but a charge of £30 is affordable, particularly if they can pay in instalments. By way of comparison, several other EU countries charge for ID cards. France, where the ID card has traditionally been free of charge, is now looking to charge for the new biometric card, which will be introduced there soon. What we are proposing, Madam Deputy Speaker, is consistent with practice in other parts of the EU, particularly France—