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House of Commons

Monday 13 February 2006

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Identity Cards

1. Martin Linton (Battersea) (Lab): What his most recent estimate is of the annual cost to public funds of a stand-alone identity card. [50390]

The Secretary of State for the Home Department (Mr.   Charles Clarke): Our estimate of the average annual operating costs of issuing passports and ID cards to British citizens was published last year and at present is unchanged at £584 million. As is the case with passports, those costs will be met in the main by fees rather than by a call on public funds. I have said that within our current estimates it will be affordable to set a charge of £30 for a stand-alone identity card issued to British citizens.

Martin Linton: If the cost is £30 for 10 years—in other words, £3 per person per year—and the benefits, according to figures agreed by the Home Office and the banks, are more than £20 per person per year, can my right hon. Friend see any rational reason why the House of Lords would have voted against the proposal on cost and benefit grounds?

Mr. Clarke: I always hesitate to ascribe rationality to the House of Lords in its decisions, but it is legitimate to address the costs issues, as Members of both Houses have concerns about them. We have worked them through carefully. My hon. Friend is right to say that for a stand-alone card £3 a year is the figure that we have in mind, and the benefits of the reform would be massive for the whole country.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): For the 38 million people who are likely to have to register for an ID card—those over 16 and those who have been here for more than three months—can the Home Secretary tell us what the cost will be of the combined passport and ID card? If the estimate of £5 billion over 10 years is correct, it is on my calculation likely to be in excess of £120.

Mr. Clarke: The hon. Gentleman is wrong. As I have indicated before, the average annual cost of passports
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and ID cards is unchanged at about £584 million a year. We estimate that the cost per joint passport and card would be some £93. The fees have not yet been set: they can be set only if the legislation is passed by a vote of Parliament on the precise fee regime, but £93 is our combined estimate.

Paul Flynn (Newport, West) (Lab): Can we define the difference between Bill Gates's suggestion for the near future and what the Government suggest? Bill Gates's suggestion is for a link between the biometric information and one single card, which is a relatively simple matter. However, the Government suggest that there should be a differentiation between the information on one biometric identifier and many millions of others. The process that has been suggested by the Government is many millions of times more complicated and more expensive than what Bill Gates suggests. Can my right hon. Friend give us some information on that?

Mr. Clarke: My hon. Friend makes an interesting comparison. I have not studied Bill Gates's proposal in detail, but I understand that he argues that the national identity register, which we are introducing, with its 13 biometric identifiers, would give the assurance that at some point in the future the biometric identifier itself, rather than the card, could provide the identity security that is required. Obviously, my hon. Friend is right to say that it would be simpler if we had one identity system for the whole country for every time that identity needs to be checked, but many arguments have been made in this House and elsewhere about the disadvantages of having one database for everything. Instead, we have one narrow database that enables everybody to secure their own identity, which we think is a major step forward.

Mr. Peter Bone (Wellingborough) (Con): The Home Secretary has told us that his estimate is £584 million per year, which is a lot of money. However, some hon. Members will be a little sceptical of Government estimates, because in the past they have been woefully out. Would the Home Secretary stake any money on the £584 million being reasonably accurate, or does he think that the figure might go up?

Mr. Clarke: Actually, I think that it is accurate and likely to go down, rather than up. The nearest major IT project in the area was for the passports agency, which was widely criticised five or six years ago. Its IT programme now handles some 40 million to 44 million database files and had the most efficient public service in the country, beating major private sector providers from the consumer point of view, such as Amazon, eBay and Virgin, as the result of a major effective public sector IT investment, changing the quality of life for everyone.

Lynne Jones (Birmingham, Selly Oak) (Lab): According to parliamentary answers I have received, the cost of operating and maintaining the verification services is not included in the £93 charge to applicants. What is the Government's estimate of that particular cost? How much will be met by the public sector, how much is to be met by charges and what are my right hon. Friend's assumptions about the number of people who
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will want to use the verification services and the charge that they will be asked to bear? I understand that when potential users were offered a charge of 57p, not many were keen.

Mr. Clarke: I have just published overall figures for verification and all the other services, but three sources of income will deal with the charges. The first is the fees themselves, which is why I said that fees would make up the giant's share, rather than a call on public funds. The second is a small contribution from public funds, which is the only amount that could be spent on other things—as is widely alleged—and the third is income that could be derived from contracts with organisations that use the database. Those are important factors, which is why I was able to tell the hon. Member for Wellingborough (Mr. Bone) a moment ago that I think the figure will end up being less than £584 million, although I think that is a firm and strong estimate.

Mr. Alistair Carmichael (Orkney and Shetland) (LD): Why does not the Home Secretary demonstrate the courage of his convictions by allowing the Lords amendments on costs to stand? Surely, if his scheme is costed and affordable he should have no problem in demonstrating that before bringing it to the House for implementation?

Mr. Clarke: We have no problem in demonstrating that and have done so, but the amendment tabled by my right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson) is of a rather more profound nature. It states that there should be a regular report to the House setting out the full cost situation so that the House can debate and consider it as it wishes. That is a rather superior way of doing what the House of Lords was edging towards. The amendment also reflects concerns expressed, fairly, on both sides of the House about whether the cost system is under control. A system of six-monthly reports is a good way of dealing with that.

David Davis (Haltemprice and Howden) (Con): The Liberal Democrat spokesman made a good point: few people really believe the Home Office numbers and the House of Lords is trying to find a way of establishing a reliable figure. Let us take things out of arcana such as the billions and House of Commons procedure. If the Home Secretary was trying to pay for a capital project, such as a house extension, and the contractor came to him and said, "I know I've overrun before on money and time. I'm not going to give an estimate because that upsets my subcontractors, but I'll let you know every six months how much I've overrun", would the right hon. Gentleman accept that contract? The answer of course is no, so why should the House of Commons accept that from him?

Mr. Clarke: I must say that I think that the right hon. Gentleman has put it completely the wrong way round. If I indeed wanted work done on my house, as he suggests, I should first make a clear estimate of what I was ready to spend and on what; secondly, I would not tell the bidders how much money was available for them and, thirdly, I would establish a contract to be tendered for on a competitive basis. That is precisely the right way to give us value for money.
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David Davis: Let us test the process against some real figures. The right hon. Gentleman cited the passport agency, which nobody in their right mind would hold up as a serious project, so let us try some others. In the green book, his right hon. Friend the Chancellor pointed out that 54 per cent. of Government IT projects fail. Since 2001, four major projects in four Departments have gone seriously wrong; their collective budget was about £9 billion and they overran by £33.9 billion—nearly £34 billion. Can the Home Secretary name one IT project costing more than £1 billion that was on time and on cost and delivered what it was supposed to?

Mr. Clarke: The right hon. Gentleman mentioned the passport agency, which has done precisely that. It is a ridiculous state of affairs for the right hon. Gentleman to assert that no Government can ever organise an IT project in the interests of the country. I am perfectly well aware that there are major issues in both the public and private sectors about major IT projects. As somebody originally from the private sector, the right hon. Gentleman will know that that is the case and he is right to say, in terms of his first question, that we should have a proper contractually based tendering process, which is precisely what we have.

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