Second Standing Committee on Delegated Legislation

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Second Standing Committee on Delegated Legislation

The Committee consisted of the following Members:

Chairman:

Mrs. Janet Dean

†Brown, Mr. Nicholas (Newcastle upon Tyne, East and Wallsend) (Lab)
†Browne, Mr. Jeremy (Taunton) (LD)
Burgon, Colin (Elmet) (Lab)
†Burnham, Andy (Parliamentary Under-Secretary of State for the Home Department)
Clappison, Mr. James (Hertsmere) (Con)
†Coffey, Ann (Stockport) (Lab)
†Grieve, Mr. Dominic (Beaconsfield) (Con)
†Harper, Mr. Mark (Forest of Dean) (Con)
Herbert, Nick (Arundel and South Downs) (Con)
Howarth, Mr. George (Knowsley, North and Sefton, East) (Lab)
†Mahmood, Mr. Khalid (Birmingham, Perry Barr) (Lab)
Oaten, Mr. Mark (Winchester) (LD)
†Prisk, Mr. Mark (Hertford and Stortford) (Con)
†Stewart, Ian (Eccles) (Lab)
†Tami, Mark (Alyn and Deeside) (Lab)
†Watson, Mr. Tom (Lord Commissioner of Her Majesty’s Treasury)
Mark Etherton, Committee Clerk
† attended the Committee

 
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Monday 31 October 2005

[Mrs. Janet Dean in the Chair]

Draft Consular Fees Act 1980 (Fees) (No. 2) Order 2005

4.30 pm

The Parliamentary Under-Secretary of State for the Home Department (Andy Burnham): I beg to move,

That the Committee has considered the draft Consular Fees Act 1980 (Fees) (No. 2) Order 2005.

It is a great pleasure, Mrs. Dean, to serve under your chairmanship. This is one of the first times that I have attended such a Committee as Minister, and it must be one of your first appearances as Chairman. I hope that we can work together.

The order allows for the introduction of biometric passports, and further improvements to the quality and integrity of the British passport. I shall say a little about the improvements made by the UK Passport Service in recent years, which has come a long way from the well-documented difficulties of 1999.

Last year, the Passport Service was the only UK organisation nominated for a prestigious international award for public sector efficiency; and it became one of the few organisations to win a fifth charter mark. This year, for the second year running, the service also took top place in the Comparisat customer satisfaction benchmarking exercise, beating public and private sector organisations such as Asda, Tesco, the Driver and Vehicle Licensing Agency, Amazon and eBay.

About 45 million British passports are currently in circulation, and 80 per cent. of the population holds a passport; that is a massive increase from the 24 per cent. who held a passport in 1984. The Passport Service faces unprecedented demand, with applications expected to rise to about 7 million this year. Apart from the United States of America, which issues 8 million passports a year, we issue more passports than any other country. Despite that recent success story, we must not be complacent. There is a continuing need to ensure that the quality, security and integrity of the British passport remain of the highest international standard.

For the UK to remain within the US visa waiver programme, we must produce biometric-enabled passports by October 2006 to the standards of the International Civil Aviation Organisation. In addition, Europe Union regulations on standards for security features in passports issued by member states were adopted in December last year. They make mandatory the inclusion of digital facial images on chips in passports by August 2006. They will also make fingerprints mandatory on passport chips, but at a later date.

 
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We must ensure that UK passports meet EU security standards; we have no intention of allowing the UK passport to become a second-class document, as it would cause problems for British people at border controls throughout the world. Such technological advances are being adopted throughout the world to improve the security of travel documents and border controls, and more than 40 countries are introducing e-passports. There are no international agreements on passport-issuing procedures, but personal attendance forms a standard part of procedure throughout Europe and in north America, Australia and Japan.

The order facilitates three requirements for passport fees in the United Kingdom. First, fees will be set to reflect the cost of conducting interviews for all first-time adult applicants; there will be no difference between the adult first-time fee and the adult renewal fee. Secondly, fees will reflect the cost of issuing biometric passports, which will be phased in over six months starting from early 2006; those fees will be paid by all passport applicants during that time. Thirdly, the fees set in 2005 will reflect costs to be incurred in 2006 in order to spread the significant increase in cost associated with the introduction of interviews for first-time applicants and biometric passports over two financial years.

I have a biometric passport with me, Mrs. Dean, and members of the Committee may find it useful to look at it. As they know, the Home Office and I recently issued new guidance on photographic standards, including no smiling. They will see from the passport document that I took my own words very much to heart. The document contains a chip, which will become standard in the British passport from next year. I thought it useful to show the document to members of the Committee if they want to see it.

The order is needed because Treasury fees and charges guidance requires fees to be set to recover annually the cost of each separate service, and because we propose to incorporate costs associated with first-time adult interviews into all adult fees and to incorporate biometric costs for the roll-out period into all passport applicant fees over a two-year period.

The United Kingdom is almost alone among major passport-issuing countries in western Europe, north America, Japan and Australia in not requiring some degree of personal attendance by passport applicants. Introducing mandatory identity authentication interviews will close a known loophole in the current passport application process—the ability to obtain a fraudulent passport with minimal risk of arrest.

Extensive research has established for the first time that the adult applicant group accounts for about three quarters of attempted fraudulent applications. There are about 600,000 adult applications a year, and requiring those applicants to attend an interview in person will deprive fraudsters of an opportunity.

To facilitate the new process, UKPS will set up approximately 70 new offices throughout the country to conduct interviews that will take the form of applicants being asked questions about themselves and their countersignatory. Questions will be drawn from data taken from public and private sector
 
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databases with the intention of confirming the identity of the person presenting themselves for interview. The implementation of the application by interview is planned for October 2006. The fee for the first-time adult application will remain the same as the fee for adult renewal applications.

The events of 11 September 2001 and 7 July 2005 and other terrorist incidents, as well as the significant increase in identity fraud, have shown us that there is a need to tighten up passport security. As a result of international dialogue and co-operation through the ICAO to increase document security and to minimise the risk of identity fraud, biometric identifiers will be incorporated into passports, regardless of any decision on the Identity Cards Bill.

In order to ensure the smooth roll-out of the biometric passport and to build up confidence in the new technology, UKPS will have to manage carefully the volume of biometric passports issued during the anticipated six-month roll-out period. Biometric and digital passports will be identically priced during that period, but that will cease when biometric passports are fully rolled out and digital passport production in turn ceases.

If biometric passports were priced in order to recover the costs incurred during the roll-out phase, their price would be significantly higher than that of digital passports, which would create a real risk of take-up not being as high as we want it to be. That, in turn, would seriously jeopardise the effective roll-out of the biometric passport over a six-month period, so applicants will have no choice as to whether they receive a biometric or digital passport during that time. It is anticipated that roll-out will begin in early 2006.

Introducing two key initiatives aimed at countering fraud in the same financial year will lead to a significant increase in passport production costs in 2006-07. If the increase in costs were borne in-year, adult applicants would, from autumn 2006, have to pay a fee that was far in excess of previous increases. There would then be a real risk of a surge in demand ahead of implementation, which would result in UKPS being unable to cope operationally.

Fee increases must be implemented in the autumn—a quieter period for the UKPS—to minimise the disruption to operations caused by fee increases. The severe operational disruption forecast would also result in fees being too high in 2007-08, which would require a fee reduction. To avoid that see-saw effect, and taking into account that all passport fee applicants will benefit equally from counter-fraud initiatives, fees will be set to recover the estimated cost forecasts for issuing passports during 2005-06 and 2006-07. That means that UKPS will set fees to recover more than full cost in 2005-06 and less than full cost in 2006-07, achieving break-even by March 2007. It is not anticipated that a fee increase will be required in 2007-08.

The rationale behind the order is to allow a carefully planned implementation of two measures that we believe will greatly enhance the integrity and quality of the British passport. It is crucial that UKPS is able to
 
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plan carefully for these changes and thereby avoid some of the problems that it had in 1999. In learning from that experience, it has planned a careful adoption of the measures, and I urge members of the Committee to approve the order.

4.41 pm

Mr. Dominic Grieve (Beaconsfield) (Con): I reassure the Minister that I do not intend to vote against the order. It is clear that we must move to new forms of biometric passports. I believe that that is accepted on both sides of the House of Commons. Therefore, an order that facilitates such a move will not attract opposition. However, I seek clarification from the Minister on several issues that arise in respect of the order.

First, the Minister said much in abstract terms about passing an order to facilitate a new pricing structure, but he has not told us anything about the pricing structure itself. Could he take this opportunity to explain to the Committee what the prices will be—there have been rumours about what they may be—and could he give us a little more detail, even if he cannot come out with gospel statements today? The fact that he did not give any figures makes me think that there must still be a degree of uncertainty about them. It would be helpful to hear about that.

Secondly, could the Minister give an assurance that no part of the pricing that he refers to in the abstract without descending to the particular has been or will be influenced by the Government’s policy on identity cards? There has been a great deal of discussion in the course of the passage of the Identity Cards Bill through the House of Commons to an uncertain phase in the House of Lords about the extent to which the costs would be largely absorbed by or reflected in the need to introduce biometric passports. Therefore, an assurance from the Minister that his approach does not in any way depend on or involve the passage of the Identity Cards Bill would be welcome.

Thirdly, I use this opportunity to raise with the Minister a peripheral matter that has only recently been brought to my attention. Constituents have noted that UKPS is exercising the right to retain rather than return old passports after cancellation. From my inquiries, I understand that there may soon be a change in policy in that respect. Could the Minister tell us anything about the Government’s thinking on returning passports after cancellation? He is aware that many people wish to retain their old passports for what are, in essence, sentimental reasons. They need the visas as reminders when they come to write their memoirs, and passports may be part of family or historical archives. It would be helpful if the Minister would indicate the Government’s thinking on whether there will be a change in policy whereby old passports are immediately taken for destruction.

Subject to those comments, I look forward to the Minister’s response on what I think are important issues. It is right that the better quality of the passport that will develop should be reflected in higher cost, but
 
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until we know what that higher cost will be it is difficult to make a proper judgment on the Government’s policy.

4.45 pm

Mr. Jeremy Browne (Taunton) (LD): It is nice to be here, Mrs. Dean, under the chairmanship of a fellow member of the Home Affairs Committee.

I shall speak briefly, partly because some of the points that I have to make have already been rehearsed, and partly because I am a novice at such occasions and do not want to detain the Committee longer than is obligatory. I agree with the point that was made about general cross-party support for the principle of biometrics in passports. I am curious to hear the Minister’s response to the questions about costs; I appreciate that that is the principal reason for our being here in Committee, and I have a couple of supplementary questions to raise on the matter. Is the Minister entirely confident that the time scale of two months, up to 1 January, is achievable? I understand that the passports in question will be compulsory from the middle of the year, but will be brought in from the beginning of January, which strikes me as a very tight timetable. I should be interested to hear the Minister’s response to that.

I am interested in the point about identity cards. Does the Minister envisage any presentational difficulties or public relations difficulties with the initiative that might not have arisen if it were not for the close link, in the public mind, with identity cards, which are, after all, a far more controversial proposition than passports? I am curious also, on a general point, being the holder of a 10-year-passport that is less than a year old, about the fact that the slow and gradual roll-out of the programme means that in seven or eight years I will still not, as I understand matters, have one of the new passports that we have been shown. If they are as important as the Government seem to think them for satisfying our obligations and increasing our security I should be interested in the implications of that.

I understand that there will be 70 passport offices, in high streets around the country, for the interviewing of first-time passport owners. I am interested to know how the figure of 70—if that is correct—was reached, and what assessment has been made of demand in particular parts of the country. I represent a constituency with both the large county town of Taunton and a large surrounding rural area, whose inhabitants must travel 20 or 30 miles to reach a town of any size, and I wonder what account has been taken of the needs of people in more remote rural communities, or people who might have transport difficulties when trying to get to one of the 70 designated centres.

4.48 pm

Andy Burnham: I thank the hon. Members for Beaconsfield (Mr. Grieve) and for Taunton (Mr. Browne) for their constructive comments on the order.
 
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I appreciate their support. It is interesting that there are no political differences between us on the need for biometrics in passports. It is useful to know that there is clear agreement that biometrics will enhance the security of those documents and give individual citizens more security when they travel.

The hon. Member for Beaconsfield asked about the pricing structure, and the hon. Member for Taunton also raised that point. I agree that it is somewhat odd to lay the order without perhaps attending to the main question. The order is intended simply to pave the way in principle for the possibility of a cross-subsidy between the financial years 2005-06 and 2006-07 and between types of passport. Some people will be issued with a biometric passport at the beginning of next year, but, as I explained, some will still receive the digital passports. That will happen on a random basis, depending on batches that are delivered. There will be cross-subsidy in that respect, and for first-time applicants, who will have to attend an interview. The principle of the order is to create a financial structure for those cross-subsidies.

I am not avoiding the question of the hon. Member for Beaconsfield, but, as he will know, the fee regime for passports is approved by the Privy Council, and for the impending increase the fee level has not been set. No decision has yet been taken. It will be taken shortly and the fee increase is due to come into effect on 1 December. I assure the hon. Gentleman that when the decision is taken we shall announce it with immediate effect.

The hon. Gentleman invited me to speculate about exactly what the cost increase may amount to. I cannot give a definitive figure, but the increase will be a modest one, to reflect the security improvements that are being made. We all, as citizens of the country and people who travel, have a vested interest in the security of the British passport, regardless of whether we are issued with one of the new biometric passports. Around the world our passport is, I think, regarded as bearing a badge of high integrity, and we all want that to continue. The price will reflect some of the changes that are being made, and people will notice the increase, but we shall make it proportionate and fair.

Mr. Grieve: Can the Minister enlighten the Committee about the extent to which the biometric passport as opposed to the digital passport makes a financial difference?

Andy Burnham: The unit cost of issuing a passport increases. My reason for circulating the passport was that I wanted hon. Members to see that there is a different technical specification for the document. However, the move to application by interview will also add significantly to the unit cost. The combination of the two will have an effect; not just the biometric technology but also, and perhaps to a greater extent, the move to application by interview. That is common in other countries and we believe it will significantly enhance the security of the issuing process.

Mr. Mark Harper (Forest of Dean) (Con): Although the Minister said that he could not specify the exact increase in the price of the passport, the
 
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explanatory note states that the costs would be a certain amount if they were all imposed in one year, which must mean that the Department has calculated the total cost of biometric and digital passports and high street interviews. Given that it has made that calculation, will the Minister tell the Committee that total, even if he cannot be specific about the fees for passports?

Andy Burnham: I can tell the Committee the unit cost of producing the document. The average unit cost of producing a passport, including an element for the facial biometric, will be, in the financial year 2005-06, £42.36 and, in 2006-07, £57.93. Those figures are agreed with the Treasury. They are robust figures. However, as I was explaining, the purpose of the order is not necessarily to impose a jump increase, but rather to make a phased increase in passport fees, so as to avoid a see-sawing in demand during which people stop buying or a lot of people try to buy at one time. We are trying to ensure that the Passport Service can cope with the change in the best possible way. I hope that those figures provide the hon. Gentleman with an answer.

Mr. Harper: I was after the total cost of the projects. The Minister has given me a unit cost. In the explanatory notes, it clearly says:

“If the increase in costs were borne in year”,

there would be

“an average fee increase in the region of £30 from . . . 2006.”

To come up with that figure, a total cost must have been spread over the expected number of passports issued. The Department must know the total cost of introducing biometric passports and digital passports, and, similarly, the cost of rolling out the network of approximately 70 offices. The notes say:

“If these costs were passed on solely to first time adult applicants”,

there would be

“a fee increase . . . of over £100”.

To come up with that estimate somebody must have calculated the total cost of rolling out that network of high street offices. Will the Minister give us that total figure?

Andy Burnham: I am happy to provide the hon. Gentleman with the figures that we have available—the figures that the Passport Service has produced. There is an element of uncertainty about the planning, but I refer him to the service’s corporate and business plan, which for the financial year of 2006-07 anticipates running costs of £397 million. I refer him to that document, because he may find more of the detail that he is after. If I have not provided him with what he wants, I shall write to him in more detail. The figures are based on detailed business planning carried out by the service. They are solid, well researched and affordable.

The hon. Member for Beaconsfield also asked about the interrelation between these changes to the passport and the proposed Bill to introduce a national identity register and identity cards. The changes that we
 
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announce in this order are not dependent on the passing of the Identity Cards Bill; they would be made anyway.

The hon. Gentleman will know that the US has set a date of 26 October 2006 for the introduction of biometric passports for countries that wish to remain part of the visa waiver programme. That is the US deadline, and it means that countries that wish to remain part of the programme must be issuing the biometric passport by that time. In our plans, we expect to be issuing the first passports not in January but in February, and to be moving towards complete biometric passport issuing by August of next year—well within the deadline set by the United States. We are confident that we can meet it.

My answer to the hon. Member for Beaconsfield about ID cards is a straightforward no. We would make these changes to the Passport Service in any event, as they are about the security of the passport. The network of offices may ultimately provide the basis for enrolment into the national identity register and for the biometric identity card, but that is subject to the will of the House of Commons and of another place, and to the scheme moving forward following Royal Assent.

Mr. Browne: If the Identity Cards Bill is enacted, will the setting up of the offices effectively result in a cross-subsidy that massages down the overall cost of implementing identity cards?

Andy Burnham: No. These changes relate solely to the security of the passport. They are not made with an eye to the Identity Cards Bill. They will be made anyway, and on that basis we are taking them forward.

The hon. Member for Beaconsfield also raised the question about retention of old passports. I do not know how many Inter-Parliamentary Union trips or other such august bodies’ trips he has been on. We all like to look at the stamps in our passports. I know of many colleagues who have amassed a number of such stamps, but I know of no policy to retain old passports, although that might have emerged as a further counter-fraud measure, because there is an argument that the fewer passports there are in circulation the more secure the system is.

Mr. Grieve: I shall write to the Minister about the case, which arose only very recently. The constituent wanted to retain the passport for the very good reason that it contained his US multiple-access visa. He was told that he could not have it back, even though it had been cancelled, because it was damaged in some way. That surprised me a little because no one could stop me if I chose to damage to my heart’s content a passport that had been handed back me with cancelled marks on it.

When I spoke to UKPS, it was intimated to me that the office would not hand back the passport back because of the nature of the damage. It was also intimated that there might be a policy change in future. I heard that within the past seven days, so I thought that I would ask the Minister about it.

 
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Andy Burnham: That is a germane question, and I shall write to the hon. Gentleman with a response. The whole question of an old passport versus a damaged passport is a case in point. A damaged passport might still be up to date and would therefore be valid, whereas an old passport has obviously gone past its issue date. A damaged passport might therefore fall into a different category. The damage might suggest that it had been tampered with, and that it might be fraudulent.

Mr. Grieve: To make the position clear, the passport was being renewed not because it was damaged but because it had reached its expiry date. Notwithstanding the fact that its expiry date was coming up, UKPS refused to return it because it considered the passport to be so damaged that the person should not have it back. That was the issue.

Andy Burnham: I shall look into the issue and ascertain whether there is a change of policy. I shall then write to the hon. Gentleman.

I shall quickly address the points made by the hon. Member for Taunton. We are confident that the time scale is achievable. I brought a passport to the Committee today to show that the prototypes are being made and that the documents can already be issued. It is true that the first passports were due to be introduced in January, but for various reasons it has been thought prudent to put the introduction back to February. We are, however, absolutely on course to meet that deadline, and we expect that all passports issued by August 2006 will be biometric.

The timetable is tight, but we believe that it can be met. We are not moving to full implementation overnight, but are phasing in the passports for the reasons hinted at by the hon. Gentleman. We want to meet the deadline set by the US visa waiver programme quite comfortably.

The hon. Gentleman asked whether it was sensible to link the scheme to ID cards and whether that would bring its own public relations difficulties. I do not believe that ID cards are as controversial as the Liberal Democrats make out. About 75 per cent. of the public approve of the principle of a national identity card scheme. At the moment, many people wander about trying to open a bank account or to do various other things for which other people demand a passport. It is not sensible to expect citizens to go about their daily business carrying their passport with them everywhere. In its own simple way, that makes the case for a secure identity card system. I in no way accept that ID cards are as controversial as the hon. Gentleman says. We believe that ID cards will be of great benefit to each citizen.

The hon. Gentleman mentioned his own 10-year passport. I assure him that non-biometric passports issued up to the full roll-out of biometric passports will be valid for the period for which they are issued, so neither he nor his constituents, nor anyone else, need fear that a passport will not be valid.

The hon. Gentleman also asked about the 70 passport offices.

 
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Prepared 1 November 2005