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David Davis: About £20 billion.

Mr. Todd: Whatever the figure is. The right hon. Gentleman has not been present for this debate, but he will know that I have cast doubt on all the estimates that have been made. That is one of them.

People in the industry are keen, but I think that they share my concern at the rather muddled presentation and the possibility that it will lead to a complex and poor quality specification that will not necessarily get the buy-in of all the critical players. That is at the root of failed IT projects. I shall not go down the route taken by my right hon. Friend the Member for Holborn and St. Pancras, who chose to cast a great deal of blame on IT companies. Of course, they fail and do things wrong. However, the critical thing that normally goes wrong in such projects happens right at the start. It is necessary to get the specification of what is being done absolutely straight before driving the project through with narrow-minded rigour. A critical test is thus the quality of project management, which would indicate whether costs could be managed effectively. However, although I have met one or two of the people involved in the project, I have seen no evidence to date of the rigorous project management disciplines that would be required to deliver a project that was a tenth as difficult as the identity card scheme will be.

For the reasons that I have outlined, I take no great comfort from the debate. I have given all these pieces of advice in private, so it is a little sad to find that little progress appears to have been made. I am surprised that the Government have chosen to support the amendment tabled by my right hon. Friend the Member for Holborn and St. Pancras because while I accept the caveats that have been cited about the possibility of evading various responsibilities due to the amendment, the provision will give rise to a process of terrible Chinese water torture because some poor Minister will have to produce a report every six months. The Minister might well say, "I can't reveal them this and can't tell them that," but the reports will prompt ongoing repetitive debate on the merits and purpose of the scheme. I am not worried about that, but I am puzzled by the Government's insistence on taking that route to reassure people about the project, rather than the route that I would have commended, which would be a more rigorous attempt to nail things down right at the start. That remains my preferred strategy, so I still hope that the Government will adopt it. I am sad that I will not be able to give the Government my support on these matters tonight.

Stewart Hosie: I want to take the Minister back to his opening remarks when he mentioned fraud worth £1.7 billion. Such fraud is central to the debate because it determines whether the Bill is a proportionate response to the problem. I have no doubt that the figure
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of £1.7 billion was put in the public domain to give the impression that when the ID card system was fully deployed in the public and private sectors, a problem of such magnitude could be resolved, but I question that assertion. I also wish to focus on the fraud because it is the only argument in favour of the identity card scheme that the Government have consistently used from the outset—they abandoned all their other justifications at various points along the way.

There are many components to the £1.7 billion figure. Although I will not bore the House by going through them all, I shall outline several because it is genuinely important that I make this case. The Association of British Insurers says that the estimate of financial loss due to identity fraud is £22 million. If the biometric system and ID cards are to tackle such fraud in the insurance system, every insurance policy will have to be linked to a biometric card and its holder. Every time an assessor checks water or fire damage against a policy, the holder's biometric card will have to be verified so that there is a link between the person, the card and the policy. That is the only way in which the scheme could help to tackle fraud in the insurance system, but the process would be expensive, and no doubt the full cost of it would be passed on from the insurers to the citizen.

The Association for Payment Clearing Services says that £504.8 million is lost due to plastic cards being used by criminals who are not their rightful owners. It has been said several times that the cost of fraud due to payments made when a card is not present is £150 million. If a person buys a plane or cinema ticket with a plastic card, both that card and the ID card could be presented at the aircraft or cinema for checking to prove that the person had made the purchase. However, if people buy goods by mail order that are simply delivered by a man with a white van, the scheme will provide no assistance whatsoever because goods can be delivered when people are not at home and the man is not going to have a biometric scanner in the cab of his van. That part of the £1.7 billion figure cannot be dealt with by the biometric register or the identity card.

According to the Building Societies Association, £3.1 million is lost to identity fraud, but the same applies to building societies as it does to insurers. Every building society account would have to be linked to a person with a biometric profile and every time a transaction on that account took place, fraudulent or otherwise, the person involved would have to verify their card against the central database and the central database against their account. That is the only way in which the proposed system could prevent fraud in the building societies sector, but it would be disproportionate and highly expensive, and the full costs would be passed on to the citizen and the customer.

CIFAS, the UK's fraud prevention service, says that the cost of identity fraud to the retail sector is £2.3 million. Much of that involves stolen cards being used in corner shops or supermarkets. It is inconceivable that there would be a biometric scanner at every till in Sainsbury's or Tesco's or—even worse—at the till in every corner shop. It is unlikely that the biometric register and the ID card could tackle that type of retail without placing a massive cost burden on the consumer and the citizen.
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The Driver and Vehicle Licensing Agency and the Driving Standards Agency say that the cost of preventing identity fraud—not of fraud itself—in their sectors would £2.5 million and £1.2 million.

Mr. McNulty indicated dissent.

Stewart Hosie: Well, perhaps the Minister can intervene and tell me by how much that cost of prevention will be reduced and what savings the consumer and the citizen will gain if the new system is introduced. I have paused, but the Minister is staying shtum—that is okay.

The list goes on. The Finance and Leasing Association estimates that

costs £14 million. Does the Minister seriously expect an identity card system to stop that sort of fraud? Does he expect every second-hand car dealer that pulls out a set of financial agreements to be signed in a portakabin somewhere to use a biometric scanner before allocating them to the person who has come in to purchase a car? That would be the only way in which the ID system and the biometric register could solve that problem.

It is highly unlikely that anything approaching £1.7 billion will be saved. Earlier, the Minister suggested a lower annual saving. He suggested a range, but even the low end of his forecast would be achieved only if all the measures that I have described were implemented. Such savings could not be achieved within the set-up costs and the ongoing running costs of the system covering passports and ID cards alone that the Secretary of State spoke about earlier.

It is certain that the real cost to the citizen will be far higher than the costs that the Government have already specified—the running costs and the set-up costs, which are still unclear. Those costs will be higher than has been suggested, because if identity cards and the central biometric database are to solve problems of fraud, scanners linked to the database will be required in every shop, supermarket and filling station, and in every bank, building society and insurance broker. The police will need portable scanners in their police cars, and insurance assessors likewise. The costs of all that would be fully passed on to the consumer.

It is incumbent on the Government to tell us not their set-up costs and the Home Office running costs, but the real and full costs of the measure, including a best-guess estimate of the costs to the private sector. It is incumbent on Ministers to tell us whether businesses will be expected to bear the costs or whether they can pass them on wholly to the citizen, or by how much the Government will have to increase taxes to pay for the scheme if they believe that ending some of these fraudulent measures would be worth while and cost effective. Either way, with a project of such a scale and complexity, we cannot be expected to buy a pig in a poke.

9.45 pm

I want to support a robust announcement of the costs—the detailed development and running costs, including those in the private sector—but that is not an option in either amendment. However, Lords
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amendment No. 70 is more robust, not least because amendment (a) in lieu has the 10-year rule, which would allow large hikes in capital expenditure or early revenue to be averaged out and hidden over the 10 years for which the figures are reported. If we vote on that—it is not yet clear that we will—the Scottish National party will back the Lords amendment.

I hope that the Minister and others on the Labour Benches will take cognisance of the feeling on the subject. We need genuine detailed information up front. We need no obfuscation. We need to be clear of the set-up costs, not just for the Home Office, but for the whole scheme, and of the running costs not just for the Home Office, but for every Department. In the private sector, we need best guesstimates so that we understand exactly what the cost to the citizen and consumer will be if the identity fraud played up by the Government is genuinely to be tackled.

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