Mr. Todd: 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
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wrong. The Government need to consider the matter carefully. If they listen to the comments that have been made today, they will do that.
Lynne Jones: 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 biometricsall 10 fingerprints, plus iris recognition and the facial biometricand 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.
Andy Burnham: 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
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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 schemeand therefore the cost to the individualare 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 the Member for Southampton, Itchen (Mr. Denham) about the cost of the scheme overall.
Amendments Nos. 7 and 19 raise a point of principleinterestingly, it was raised by Members on the Conservative Front Benchabout 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 the Member for Sunderland, North (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 taxationI 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 amendmentor 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.
That is precisely the basis on which the scheme has been developedthat the costs of running the scheme will be recovered through charges to the individuals and organisations who use the service.
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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.
Mr. Ellwood: 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.
Andy Burnham: 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.
Andy Burnham: 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.