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15 Sep 2010 : Column 903

Financial Services (Regulation of Deposits and Lending)

Motion for leave to bring in a Bill (Standing Order No. 23 )

1.33 pm

Mr Douglas Carswell (Clacton) (Con): I beg to move,

Who owns the money in your bank account? That small question has profound implications. According to a survey by Ipsos MORI, more than 70% of people in the UK believe that when they deposit money with the bank, it is theirs-but it is not. Money deposited in a bank account is, as established under case law going back more than 200 years, legally the property of the bank, rather than the account holder. Were any hon. Members to deposit £100 at their bank this afternoon or, rather improbably, if the Independent Parliamentary Standards Authority was to manage to do so on any Member's behalf, the bank would then be free to lend on approximately £97 of it. Even under the new capital ratio requirements, the bank could lend on more than 90% of what one deposited. Indeed, bank A could then lend on £97 of the initial £100 deposit to another bank-bank B-which could then lend on 97% of the value. The lending would go round and round until, as we saw at the height of the credit boom, for every £1 deposited banks would have piled up more than £40 of accumulated credit of one form or another.

Banks enjoy a form of legal privilege extended to no other area of business that I am aware of-it is a form of legal privilege. I am sure that some hon. Members, in full compliance with IPSA rules, have rented a flat, and they do not need me, or indeed IPSA, to explain that having done so they are, in general, not allowed to sub-let it to someone else. Anyone who tried to do that would find that their landlord would most likely eject them. So why are banks allowed to sub-let people's money many times over without their consent?

My Bill would give account holders legal ownership of their deposits, unless they indicated otherwise when opening the account. In other words, there would henceforth be two categories of bank account: deposit-taking accounts for investment purposes, and deposit-taking accounts for storage purposes. Banks would remain at liberty to lend on money deposited in the investment accounts, but not on money deposited in the storage accounts. As such, the idea is not a million miles away from the idea of 100% gilt-backed storage accounts proposed by other hon. Members and the Governor of the Bank of England.

My Bill is not just a consumer-protection measure; it also aims to remove a curious legal exemption for banks that has profound implications on the whole economy. Precisely because they are able to treat one's deposit as an investment in a giant credit pyramid, banks are able to conjure up credit. In most industries, when demand rises businesses produce more in response. The legal privilege extended to banks prevents that basic market mechanism from working, with disastrous consequences.

As I shall explain, if the market mechanism worked as it should, once demand for credit started to increase in an economy, banks would raise the price of credit-
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interest rates-in order to encourage more savings. More folk would save as a result, as rates rose. That would allow banks to extend credit in proportion to savings. Were banks like any other business, they would find that when demand for what they supply lets rip, they would be constrained in their ability to supply credit by the pricing mechanism. That is, alas, not the case with our system of fractional reserve banking. Able to treat people's money as their own, banks can carry on lending against it, without necessarily raising the price of credit. The pricing mechanism does not rein in the growth in credit as it should. Unrestrained by the pricing mechanism, we therefore get credit bubbles. To satisfy runaway demand for credit, banks produce great candy-floss piles of the stuff. The sugar rush feels great for a while, but that sugar-rush credit creates an expansion in capacity in the economy that is not backed by real savings. It is not justified in terms of someone else's deferred consumption, so the credit boom creates unsustainable over-consumption.

Policy makers, not least in this Chamber, regardless of who has been in office, have had to face the unenviable choice between letting the edifice of crony capitalism come crashing down, with calamitous consequences for the rest of us, or printing more real money to shore up this Ponzi scheme-and the people who built it-and in doing so devalue our currency to keep the pyramid afloat.

Since the credit crunch hit us, an endless succession of economists, most of whom did not see it coming, have popped up on our TV screens to explain its causes with great authority. Most have tended to see the lack of credit as the problem, rather than as a symptom. Perhaps we should instead begin to listen to those economists who saw the credit glut that preceded the crash as the problem. The Cobden Centre, the Ludwig von Mises Institute and Huerta de Soto all grasped that the overproduction of bogus candy-floss credit before the crunch gave rise to it. It is time to take seriously their ideas on honest money and sound banking.

The Keynesian-monetarist economists might recoil in horror at the idea, because their orthodoxy holds that without these legal privileges for banks, there would be insufficient credit. They say that the oil that keeps the engine of capitalism working would dry up and the machine would grind to a halt, but that is not so. Under my Bill, credit would still exist but it would be credit backed by savings. In other words, it would be credit that could fuel an expansion in economic capacity that was commensurate with savings or deferred consumption. It would be, to use the cliché of our day, sustainable.

Ministers have spoken of their lofty ambition to rebalance the economy from one based on consumption to one founded on producing things. A good place to begin might be to allow a law that permits storage bank accounts that do not permit banks to mass-produce phoney credit in a way that ultimately favours consumers and debtors over those who create wealth. With honest money, instead of being the nation of indebted consumers that we have become, Britons might become again the producers and savers we once were.

With a choice between the new storage accounts and investment accounts, no longer would private individuals find themselves co-opted as unwilling-and indeed
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unaware-investors in madcap deals through credit instruments that few even of the banks' own boards seem to understand.

Question put and agreed to.


That Mr Douglas Carswell and Steve Baker present the Bill.

Mr Douglas Carswell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 19 November and to be printed (Bill 71).

Business without Debate

Electoral Commission

[Relevant document: The First Report from the Speaker's Committee on the Electoral Commission, Appointment of nominated Commissioners to the Electoral Commission, HC 320.]

Motion made, and Question put forthwith (Standing Order No. 118(6) and Order, 19 July),

Question accordingly agreed to.

15 Sep 2010 : Column 906

Ways and Means

Amendment of the Law

1.42 pm

The Exchequer Secretary to the Treasury (Mr David Gauke): I beg to move,

The resolution and the others on the Order Paper enable the House to embark on its third Finance Bill of the calendar year. As Members will be aware, the general election and the need for an emergency Budget meant constrained timetables in legislating for tax measures this year. We have the opportunity in this Bill to examine the technical measures that will benefit from the intense debates Upstairs that I know so many of my colleagues enjoy. I will look forward to seeing many of them on the Benches with me.

The first Finance Bill introduced by this Government legislated for the key measures in our emergency Budget. The Government needed to take quick and decisive action to reassure the country and the markets that we would not allow debt to spiral out of control. However, there remain a number of minor and technical measures that we inherited from the previous Government, which must be legislated for before 2011. The resolutions before us today form the foundation for such a Bill.

It is perhaps worth pointing out that, alongside the Budget, I set out a proposed new approach to tax policy making that we have been discussing with interested parties over the summer. As part of this new approach to making tax policy, the Government are committed to being more transparent and to improving the scrutiny of tax legislation. As a first step towards that, we published all the legislation that will be included in the Bill in draft for consultation on 12 July. Representative bodies described that as a "welcome move" and the consultation has received more than 40 comments, leading to a number of technical changes to the legislation. That approach provides additional scrutiny, which we believe is essential in demonstrating that the Government are genuinely listening to how the tax system can be improved.

Detailed examination of the Bill is for another day, but I want briefly to explain some of what is before us. The Bill will provide for improved treatment of company distributions and ease restrictions on research and development tax credits. It will relieve carers of unnecessary tax and assist trusts to help victims of asbestos exposure. Although small in nature, the Bill will introduce important measures to ensure better compliance with a better tax system.

15 Sep 2010 : Column 907

In conclusion, the Bill on which the resolutions are based will take forward many necessary changes in the tax system that make a difference to the broader public. The Government are making these changes responsibly, having consulted on all the legislation. I hope it will find support among Members on both sides of the House.

1.44 pm

Stephen Timms (East Ham) (Lab): I am grateful to the Minister for his explanation and I agree with the welcome, to which he drew attention, for the consultation on and publication online of the proposed measures before the summer break.

There is still no good reason for this year's post-election finance legislation being split into two Bills other than the Government's wanting to get key measures on to the statute book before all the Government Members realised fully what was going on-before, for example, they had the change to read the Institute for Fiscal Studies' Budget assessment, published last month, which stated that the Budget was "clearly regressive", or the analysis published by the TUC just a few days ago, which underlined the same point.

We are committed in the debates that will follow to holding the Government to account on fairness and to scrutinising closely the quality of the legislation that the Government propose, which I hope will reflect the benefit of the consultation to which the Minister referred. The Opposition will be busy once the Bill is in front of us, both on the Floor of the House and in Committee, but we have no reason to oppose the resolutions and we are happy for them to proceed.

1.46 pm

Stewart Hosie (Dundee East) (SNP): Let me go back over the last three Finance Bills that have become Acts. In 2009, we had 127 clauses and 61 schedules-the normal Finance Bill that we have all spent many pleasurable months Upstairs considering. The first Finance Act of 2010 had 70 clauses and 20 schedules, and then we had the very brief Finance (No. 2) Act 2010, which had 11 clauses and five schedules. The Minister tells us today that there is a requirement for a third Finance Bill this year to cover 18 areas-he described them as minor technical measures. It might well be that they are measures that are time-limited to some extent and must be considered. However, my difficulty is that there will be two full years between 2009 and 2011 before we get a full Finance Bill. That Bill is important in terms of scrutiny because it consolidates and brings together all the tax and duty measures in a single Bill and gives Parliament the opportunity to consider in the round the comprehensive impact of all these measures together rather than doing so piecemeal, which is what is being done here, notwithstanding the technical reasons behind that.

I have no particular problem with the measures that are to be debated-I think that some of them will be sensible-but I am looking for some confirmation before I make a final determination on this measure that when we get to 2011 there will again be a full, comprehensive Finance Bill so that we can see all the tax, duty and other financial measures in a single Bill for proper detailed consideration Upstairs over the months it normally takes. I hope that the Minister can give us some assurance that once we have got past this limited No. 3 Finance
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Bill, future Finance Bills will not be delivered in this way and will once again be full and comprehensive.

1.48 pm

Chris Leslie (Nottingham East) (Lab/Co-op): I want to make a couple of specific points about the motion. Although I accept that the Minister has said that the Finance Bill will be quite narrow in scope, there are a couple of provisions in the motion that suggest that there could be an opportunity for the Treasury to introduce a series of other measures. The Minister, as is the practice now, tried to set out the context in which the Finance Bill would be set, and obviously the Opposition completely disagree with the Government's approach.

It is quite clear that a strong dollop of dogma has been introduced into the Government's financial strategies. Rather than sensibly and prudently address the deficit, the Government are going far further, far faster than is necessary, which is having a dilatory impact on the economy at large. However, that is a debate for another day.

The specific element of the motion that I want to address is item No. 6, the "Collection of income tax on payments". Senior officials from the Minister's Department have been giving evidence to the Treasury Committee this morning about the significant concern that has been expressed by many of our constituents about problems with the pay-as-you-earn system in collecting income tax that is owed, perhaps when miscalculations were made. Some reports suggest that 1.4 million people owe about £2 billion, which is an average of £1,400 each.

There is significant concern across the country and I am glad that the permanent secretary and his colleagues have given a concession today about the interest elements being waived, in part, when sums above £2,000 are owed. That prompted me to look carefully at some of the regulations that the Minister has introduced, and I noticed that he laid statutory instrument No. 1879-the Taxes and Duties (Interest Rate) Regulations 2010-which sets out that an individual who owes money to Revenue and Customs has to pay interest on it at 3.5%, but if HMRC owes money to an individual it will pay only the absolute, basic minimum, which I think is 0.5%. That disparity is controversial and many people find it difficult to understand why, in all fairness, there is not a two-way street. I wanted to use this opportunity to highlight this issue; I have prayed against that statutory instrument and I hope that we will find time to debate it.

In general, will the Minister iterate an apology from his Department about what has been happening with the PAYE arrangements? Will he also undertake that concessions will be given on the interest owed on any sums to try to make it a little easier for those who face an unexpected bill to bear that cost?

1.52 pm

Mr Gauke: With the leave of the House, let me respond briefly to the points that have been made. First, the hon. Member for Dundee East (Stewart Hosie) asked whether this Bill sets a precedent for future Finance Bills. The intention is to return to the usual one annual Finance Bill; that is probably enough for most Members of the House-even him. As I outlined earlier, the Bill is needed because of the general election and to take decisive action on the deficit.

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In response to the comments of the shadow Minister, I should say that it was important that the Government took decisive action and implemented the measures. Indeed, one reason for the fall in long-term interest rates in recent months might be that the Government have been determined to take decisive action and have demonstrated that by passing legislation to enable us to do so. It is right that we should take further time this year to go through some of the technical measures, and that is exactly what we will do with the Bill.

The hon. Member for Nottingham East (Chris Leslie) asked about the interest regime, the provisions for HMRC in relation to the late payment of tax due and the interest that applies when HMRC owes money. He will know that the provisions in the resolutions and in the Finance Bill are intended very much to tidy up and bring consistency to some areas. The overall interest structure and a unified interest rate was introduced in the Finance Act 2009, which the right hon. Member for East Ham (Stephen Timms) might have taken us through, and we are not departing from what was in that.

The hon. Gentleman is right about the comments of senior HMRC officials at the Treasury Committee this morning regarding the regime for those who have underpaid tax of more than £2,000. HMRC has said throughout that a sympathetic approach would be taken in matters of hardship, but what has been announced today is the intention to make sure that everyone has an opportunity to pay off the underpaid amount without interest or penalties being applied. I am sure that will be welcomed by Members on both sides of the House.

Having responded to the specific points that have been raised in this very short debate, I am grateful that the motions have the support of the House.

Question put and agreed to.

The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).



3. Venture Capital Schemes


4. Enterprise Management Incentives


5. Settlors' Excess REpayments


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6. Collection of income tax on payments


7. Company Distributions


8. Real Estate Investment trusts


9. Financing Costs and income of group Companies


10. Consortium claims for group relief


11. Value Added tax (supplies relating to non-business use of business assets)


12. value added tax (gas, heat and cooling)


13. Value added tax (aircraft)


14. Value added tax (Postal Services and transport of passengers)


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15. tobacco products duty (long Cigarettes)


16. landfill tax (Lower Rate Materials)


17. Recovery of overpaid tax


18. Relief from tax (incidental and consequential Charges)


Procedure (future taxation)



That a Bill be brought in upon the said Resolutions;

That the Chairman of Ways and Means, the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Secretary Vince Cable, Secretary Iain Duncan Smith, Secretary Chris Huhne, Danny Alexander, Mr Mark Hoban, Justine Greening and Mr David Gauke present the Bill.

Finance (No. 2) Bill

Presentation and First Reading

Mr David Gauke accordingly presented a Bill to grant certain duties to alter other duties and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 72) with explanatory notes (Bill 72 -EN).

15 Sep 2010 : Column 912

Identity Documents Bill (Programme) (No. 2)

1.57 pm

The Minister for Immigration (Damian Green): I beg to move,

1. Paragraphs 4 and 5 of the Order shall be omitted.

2. Proceedings on consideration and Third Reading shall (so far as not previously concluded) be brought to a conclusion at this day's sitting at 7.00 pm, or three hours after the commencement of proceedings on the Motion for this Order, whichever is the later.

In the interests of allowing the House full debate, as the Government intend to do, we tabled this programme motion as a precautionary measure in case the previous business took us close to 7 o'clock. Looking at the clock, I suspect that this motion could best be described as otiose, but nevertheless it behoves me to move it.

1.58 pm

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): We have absolutely no problem with the programme motion.

Question put and agreed to.

15 Sep 2010 : Column 913

Identity Documents Bill

Consideration of Bill, not amended in the Public Bill Committee

New Clause 1

Identity documents for transgendered persons

(1) This section applies to a person who-

(a) is a transgendered person,

(b) has not been issued with a gender recognition certificate, and

(c) is living in both the birth gender and the acquired gender.

(2) The Secretary of State must make arrangements for the issue to any person falling within subsection (1), on the application of that person, of two copies of a passport or some other form of identity document of comparable standing, one in the birth gender of the person and the other in the acquired gender.

(3) The form of the document referred to in subsection (2) shall be prescribed in regulations made by the Secretary of State by statutory instrument, which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4) Any ID card issued to a person falling within subsection (1) shall (notwithstanding section 2(2)) remain valid until it expires, or until the requirement in subsection (2) is satisfied, whichever is the earlier, and section 2(3) shall not apply in relation to any cardholder who is a person falling within subsection (1).'.- (Julie Hilling.)

Brought up, and read the First time.

1.59 pm

Julie Hilling (Bolton West) (Lab): I beg to move, That the clause be read a Second time.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to discuss amendment 7, in clause 2, page 2, line 12, at end insert-

'(7) This section is subject to section [ Identity documents for transgendered persons].'.

Julie Hilling: It is a privilege to move a new clause to a Bill in the House for the first time.

New clause 1 relates to a group of people who are often forgotten-in fact, they seem to have been forgotten by the Government because they were not covered by the equality impact assessment on the Bill-and for whom the identity card was a valued asset because they were able to have one card in their birth gender and another in their acquired gender.

Changing gender is not something that happens overnight; people have to go on a journey that might take several years. For the vast majority of people, it takes at least two years until they reach the position of saying that they wish to live as another person and are able to undergo gender reassignment surgery. However, many trans people choose not to undergo surgery, either because it can be dangerous, painful or unsuccessful, or for other reasons.

Gender identity is extremely complex and there is a broad spectrum of trans individuals. At one end of the spectrum are trans individuals who commit to living in another gender and undertake gender reassignment processes to help them to achieve that, while at the other end are individuals who feel trans, but continue to live in their birth gender, even though they feel trapped in that gender. In between those two ends of the spectrum
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are trans individuals who feel genderless and prefer to remain gender-neutral, as well as trans individuals who genuinely identify with both genders. There are also people who identify with their non-birth gender, but need to continue to live in their birth gender in certain situations.

In Committee, I talked about my friend who I will call Jane. Jane is still working as John in a very male-dominated industry. She is usually Jane at home, although she is not yet Jane with some of her family, especially her elderly parents, who she does not wish to upset. Jane is on a journey, but at the moment she has to live her life in two genders. It is hard to imagine the problems that arise in her life. What does she do when she wants to book a hotel room or a flight? The ability to have two identity cards has allowed her to go on holiday as Jane, but to continue to live her work life as John. Identity cards were not a full solution to the problem faced by dual-gendered people such as Jane, however. Although the scheme allowed individuals to hold cards in both genders, only one card was valid for overseas travel.

Another trans person-I shall call her T-has contacted me to tell me about her experiences. After feeling transgendered from a young age, T has just started to take active steps to make herself physically more feminine. Of course, it takes time for the physical aspects of gender to change, so T is not yet ready to start living as a woman all the time. Anyone who has had any contact with the transgender community will know the importance of people being able to pass as the opposite gender from their birth gender.

T is a professional working for a very conservative firm. She is only too aware of the difficulties she would face if she started to dress as a woman before she was physically able to pass. Although there is legislation to protect such people against discrimination in the workplace, she knows that she would face great difficulty in her field of work and that, if she was sacked, she would be unlikely to get another firm to take her on. She has therefore decided that she will not start living as a woman in the workplace until she is physically and mentally ready to do so.

T is a trans person with a life away from the workplace, however. She lives as a woman at home and goes out as a woman. It is when T travels abroad as a woman that she feels most liberated with her gender identity.

T has travelled abroad as a woman on a male passport, but that was never easy, even when travelling to relatively trans-friendly countries. Problems arose because when she presented her passport to immigration officials, not only did she look different from her passport photo, but the document stated that she was male, not female. That typically led to delays involving prolonged questioning and embarrassment, but on a few occasions the situation was more severe. In one country, she was taken for further questioning into a side room in which she was mocked and ridiculed by several male immigration officials. They refused to allow her to be frisked by a female immigration official and she was inappropriately molested by a male immigration official-one can only imagine the humiliation.

After that incident, T decided to apply for a passport in the female gender and adopted a female name. That has had a remarkable effect on her life because she no longer faces delays and prolonged questioning. There is no more embarrassment because there is no discrepancy
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between the person presenting themselves to immigration officials and their passport. When travelling in certain countries, she is confident of joining queues to be frisked by women, not men. Fortunately, she has not experienced any negative issues when travelling as a female on a female passport, and she is grateful for the protection that that female passport has brought.

The problem has not been solved completely, however, because there are still instances when T is required to travel as a man. She has not disclosed her trans status to her employer, so she has had to refuse all international travel at work because any flights and hotels would be booked by her secretary and, of course, bookings have to mirror the name and gender on a passport. Her continued refusal of international travel is likely to have an adverse effect on her career.

The right to travel is an important aspect of the fundamental right to liberty, and T feels it is important that she travel as a woman in her early stage of transition. However, although she is dual-gendered, there will be instances when she is required to travel as a male. She is therefore in an impossible situation because how does she choose the gender for her passport? The most logical solution to the problem, as set out in the new clause, is that dual-gendered people should be allowed to be issued with two passports. Of course, some single gender people are issued with two passports, particularly when they want to travel to countries in which it is inappropriate to have the passport stamp of certain other countries, so there is a means by which two passports may be issued.

A small number of people make up the trans community. ID cards were not a perfect solution, but they gave those people some liberation. I suggest that people should be allowed to keep their identity cards as a valid means of travel until the Government bring forward an alternative solution.

The Government indicated in Committee that an alternative proposal would be put forward to solve the problem, but unfortunately it has not yet been presented to Labour Members. I hope that the Minister will be able to reassure us by telling us how the Government will resolve the problem experienced by a small group of people who benefited from identity cards, but will face difficulty due to the cards' removal.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): I echo the comments made by my hon. Friend the Member for Bolton West (Julie Hilling).

In Committee and through subsequent correspondence, I have pressed the Under-Secretary of State for the Home Department, the hon. Member for Hornsey and Wood Green (Lynne Featherstone), on the consultation that she and her Department undertook when putting the Bill together. However, I have received no answer, so I hope she will tell the House the groups that she consulted, given that the issue did not even feature in the Government's impact assessment. This House is a tolerant House, and I know that the hon. Lady is a relatively new Minister, but if a mistake has been made, I hope she will have the decency at least to acknowledge that in the House and to apologise to the people affected, who have very little voice. However, there is a vocal group in her Department who have been influential in shaping policy across Whitehall and beyond.

15 Sep 2010 : Column 916

We recognise that the problem is not easy to solve-either here and now on the Floor of the House or more generally-but a small but nevertheless important provision of the Identity Cards Act 2006 was introduced to bring about the existing benefit. We do not necessarily expect a detailed answer from the Minister today, but she has not reassured me, either through correspondence or in Committee, that serious action is under way in government to address the situation. The matter is not so much one for the equalities unit, which she indicated in her last letter was examining the situation, but one for the Identity and Passport Service, which deals with identity issues for the Government as a whole.

We want a real commitment to action today, but all I have heard from the hon. Lady-perhaps she will expand on this during the debate-is the suggestion that the Government are looking to work with international partners to remove gender markers from passports entirely. That proposal could be subject to a huge debate, and I am not sure that we would want that to happen-I think that Government Back Benchers agree. The approach would seem to be a sledgehammer to crack a nut. It would also confuse a lot of people, but even if it was an answer that could be agreed as a way forward, such international negotiations would take a long time, meaning that the proposal is a long-grass solution. We are looking to see a timetable for action and a commitment to action. I once again remind the hon. Lady that she is now a Minister. Whatever her previous record, words are easy. Action may be harder, but action from the Minister is what we are after today.

The Minister for Equalities (Lynne Featherstone): As Members know from my comments on a similar amendment in Committee, I very much support initiatives that will advance the rights of transgendered people. In Committee I acknowledged the role of the hon. Member for Hackney South and Shoreditch (Meg Hillier) in providing a measure in the Identity Cards Act that enabled a transgender person to be issued with two identity cards, one in the gender of birth and another in the gender of their choice.

As hon. Members know, only one of those cards is available for use for travel in Europe. The second card issued in the second identity is available only for use in the UK for identification purposes. The person was required to choose which identity applied to which card at the time of application.

The hon. Member for Bolton West (Julie Hilling) described to us in detail some of the complex and difficult issues faced by transgender people-I should say people with gender identity issues, because they can be anywhere on the spectrum. It is not simply a case of being one gender or the other. As the hon. Member for Hackney South and Shoreditch said, the transgendered community can at times be marginalised, difficult to communicate with and difficult to gather together. Her Government's approach to transgendered people and identity cards did not, however, extend to passports, which it could have done. There was ample opportunity both before and since the identity cards legislation was passed in 2006 for the previous Government to apply the same provisions to passports, but they chose not to do so. There are good reasons for that.

In speaking to the amendment, Opposition Members did not explain why passports did not benefit from the same provisions. I intend to set out briefly some of the
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issues involved and what we will be doing to seek a consolidated solution on identity and for transgendered people. I will deal in due course with the points raised by the hon. Ladies.

Current passport policy enables a passport to be issued in a person's acquired gender without a gender recognition certificate, on production of medical evidence indicating that they experience gender dysphoria, or a report to some such effect. A passport in the acquired gender can be a key facilitator in gaining evidence to put before the gender recognition panel to show that a person is living their life in the acquired gender, thus allowing them to get the certificate.

The passport is, of course, an international travel document. It is a good argument that one can get two passports if there is a difficulty with the stamp of a particular country, but there are identity issues associated with passports that are more complex than the same physical image and the same or a similar name appearing. A passport is issued on the basis of nationality and citizenship. It is a secure document that meets strict international standards and enjoys a high international reputation. The standards are agreed and set by the International Civil Aviation Organisation.

We are not aware of any member state that issues two passports on the basis of transgender, and there are a number of reasons why we do not currently envisage the issuing of two passports-I made some inquiries about that possibility-to the same person but in different identities and with different facial images. There are fairly obvious security and immigration control issues arising from a person travelling to a country in one identity and perhaps leaving in another identity. There is also the personal situation for a transgendered person.

I do not know whether hon. Members are aware that following the Committee sitting I wrote about it on my blog. It was clear- [Interruption.] That is often a good way of communicating with the transgendered community.

Meg Hillier: I am amazed that the Minister tells us that she wrote on her blog about the issue, as though that is a formal Government process. I have asked her repeatedly what formal Government consultation took place and her answer is her personal blog. Is this the way the Government intend to continue?

2.15 pm

Lynne Featherstone: The hon. Lady is pushing it. That was not an answer to the formal question. I mentioned my blog to illustrate the point that security issues in relation to travel are not the only consideration. There is also the personal situation of a transgendered person. The responses to that blog post indicated, as my hon. Friend the Member for Cambridge (Dr Huppert) identified in Committee, that-

Catherine McKinnell (Newcastle upon Tyne North) (Lab): Will the Minister give way?

Lynne Featherstone: No, I will not give way at the moment. I will finish the point I am making. The responses to the blog indicated that transgender people felt that would make them stand out-it would out them.

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Steve McCabe (Birmingham, Selly Oak) (Lab): On a point of order, Mr. Deputy Speaker. If the contents of the hon. Lady's blog are germane to the debate, is it not a requirement that the House should have access to it?

Mr Deputy Speaker (Mr Lindsay Hoyle): Unfortunately, the blog is not a document, so that is not the case.

Lynne Featherstone: Thank you, Mr Deputy Speaker. I will answer the formal question from the hon. Member for Hackney South and Shoreditch about consultation. The scrapping of ID cards formed part of the manifesto for the 2010 general election for both the Liberal Democrats and the Conservatives. The policy received considerable media coverage and our opposition to ID cards has been in the public domain from the outset. The coalition agreement clearly sets out our aim to scrap ID cards and to destroy the national identity register. Therefore, although a formal consultation was not undertaken, we have been open and transparent in what we intended to do and what we are doing.

It is clear from the messages-Opposition Members may think a website is not a formal place-from the community that transgendered people do not welcome the state emphasising their individual circumstances. That is why we will be engaging with the transgendered community and others to determine what they consider is the best approach and how we can best achieve a suitable outcome to the issue raised by Opposition Members, which I agree is extremely important-how to deal with the state of not quite being one gender or the other, or in process between the two.

Bridget Phillipson (Houghton and Sunderland South) (Lab): So what the Minister is telling us is that the Government did not carry out an equality impact assessment, and that the substitute for that is correspondence with individuals on her blog. That takes the place of an impact assessment, which is a legal requirement.

Lynne Featherstone: No, that is not exactly what I said. The impact assessment for the Bill was published on 4 June 2010 and is available on the website of the Identity and Passport Service. The impact assessment indicates that the policy of scrapping ID cards does not have an impact on statutory equality duties.

As the Minister for Immigration indicated in his letter of 19 July to the Chairs of the Committee considering the Bill, the ID card is just one form of identity and although the policy in respect of issuing two cards to a transgendered person may be considered as innovative, scrapping ID cards would not impact on their ability to access services or to travel in their chosen gender. It ill behoves the Opposition to make light of the transgender community communicating through whichever means it wishes.

We need to be careful that in seeking to extend the rights of the transgendered person when travelling, we do not create the potential for additional difficulties. That is why we intend to work with the transgendered community and others on determining what they consider is the best approach and, in conjunction with the Government Equalities Office, consider how we can move this important issue forward. It is important that we listen to those who are most affected. As my hon.
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Friend the Member for Cambridge mentioned in Committee, a number of his constituents who would be affected and with whom he has had discussions do not favour the approach suggested by the amendment.

At the same time, through the International Civil Aviation Organisation, we will discuss with our international partners the issue of gender recognition in passports. It is possible for a passport to be issued with an X instead of an M for male and F for female. However, we anticipate that the use of an X may raise more questions than answers. Instead, we will consider other options, including whether it might be possible to remove gender identifiers from passports, and look at any potential consequential security implications of this. We aim to consult groups in the UK this autumn and with the ICAO and others over the coming months.

Meg Hillier: I am puzzled that that proposal has come out of leftfield one might say-but perhaps with this coalition, out of rightfield-as a solution. It seems like a sledgehammer to crack a nut, and it is a very big proposal to suggest that "male" and "female" be removed from a document that 80% of the British public use.

To return to an earlier point, however, the Minister's ego is quite extraordinary. Her blog and no official consultation seem to be her answer to things, and I worry about the civil service. There are some excellent civil servants in her Department, as I well know, and they have to act on the basis of two political manifestos and a personal, political blog. Within government, there are statutory and other requirements for consultation, but the Minister has come to the Dispatch Box to explain that this Government do not take them seriously. They prefer party political routes, with all their imperfections, to what one might reasonably expect, which are proper Government routes.

Lynne Featherstone: As I have already explained to the hon. Lady, we are taking formal Government routes, too. Indeed, we will proceed with more formal routes and properly consult a wide range of transgender groups.

The new clause is impractical and fails to recognise its impact on transgendered people. It asks that ID cards that have been issued to transgendered people remain valid until expiry or until another system is in place, but in practice that would mean that only transgendered people would have ID cards. Apart from the huge cost of maintaining the ID infrastructure, whenever that card were used the gender background of the cardholder would be immediately identifiable. Rather than enabling transgendered people to get on with their lives without interference, the proposal would bring them unnecessary and potentially harming attention and focus, and the same problems would arise if transgendered people were issued with a bespoke identification document other than a passport.

This Government are producing the first action plan on transgender equality ever produced by an Administration. Perhaps Opposition Members did not realise the unintended consequences of their new clause, but I recommend that it be withdrawn.

Julie Hilling: I am a new Member, and this is the first time that I have been through this process. However, a Bill has been introduced to get rid of previously enacted legislation that served some members of our community
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well-a small proportion, but it served them well-and I am deeply shocked that, without any formal consultation or proper discussion with that community, we are now saying that we will get rid of it.

Lynne Featherstone: We have agreed that it is an important issue and I understand that there was only one case of dual issuing-of issuing two identity cards.

Julie Hilling: I was not a Minister and cannot answer that point, but I thought that we were supposed to have impact assessments before we made legislation. The Government are making legislation without them, and I am deeply shocked.

I wish that I were reassured, but I am not sure that I am. I listened to what the Minister said about the need to go forward on the issue and the transgender community being consulted on the solution. I hope that she will undertake that consultation.

Believe me, I recognise that the situation is difficult to resolve. I understand the difficulty of saying, "Let's not have a gender in the passport" because that would not be a solution; and I understand the difficulty of issuing people two passports. The House should not misunderstand me; I understand that difficulty. However, it is so important for that small group of people that we do not allow our citizens to be humiliated as they go through passport control or people to lose their careers because of the difficulties that they face. On the basis of the Government's guarantees that they will take the issue forward, take it seriously and work on it, I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 2

Passport fees for holders of ID cards

(1) This section applies to a person ("P") who-

(a) held a valid ID card on the day on which this Act was passed, and

(b) paid a fee for the card.

(2) On the first occasion after the passing of this Act on which P applies for a passport, the fee charged for the passport shall be reduced by £30.'.- (Meg Hillier.)

Brought up, and read the First time.

Meg Hillier: I beg to move, That the clause be read a Second time.

Mr Deputy Speaker (Mr Lindsay Hoyle): With this it will be convenient to discuss the following:

New clause 4- Transfer of information from National Identity Register to Identity and Passport Service

'The Secretary of State must ensure that any information recorded in the National Identity Register which-

(a) relates to a person ("P") who has indicated that P wishes to retain P's identity card until its expiry date, and

(b) is relevant to an application by P for a passport,

is transferred to the Identity and Passport Service.'.

Amendment 5, page 1, line 16, in clause 2, leave out from 'day' to end of line 10 on page 3 and insert

Amendment 6, page 2, line 13, leave out clause 3.

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Amendment 8, page 2, line 16, in clause 3, at end insert-

'(2) The Secretary of State must, before the end of the period of four months beginning with the day on which this Act is passed, present to Parliament a report identifying the information destroyed in accordance with subsection (1).'.

Meg Hillier: I shall not rehearse all the arguments that were made in Committee, but the Opposition are concerned about the mean-spirited nature of the Bill. Some 14,000 people took up ID cards, most of which were paid for, and those individuals thought that the cards would be valid for 10 years. It was a simple transaction not just with a commercial body, but with Her Majesty's Government and, indeed, the Identity and Passport Service, one of the most trusted public bodies in this country, as research shows. Yet if the Bill goes the way the Government wish and, similarly, through the Lords, one month after Royal Assent those individuals will lose the ability to use the card that they had thought would be valid for 10 years. We have tabled some new proposals and given the Government a choice about how to deal with the matter. There is still an opportunity for the Minister for Immigration to recognise that, in his haste to get rid of identity cards, which for him is a big ideological issue, he does not need also to be unfair to those who in good faith paid their £30.

The new clause and amendments detail two proposals. There is no money resolution attached to the Bill, so we cannot press for a refund. However, we propose that the fee that people paid be added as a credit to the passport database. The data-matching would be relatively straightforward, given that everybody who holds an identity card, including myself, has, or has recently had, a passport. Of course, there are data protection rules, and we would have to gain permission from those individuals, but I would happily give permission for my data to be transferred.

In the process, we would lose the fingerprint, because it cannot be stored- [ Interruption. ] I am glad to see that the Minister is listening. It cannot be stored on the passport database- [ Interruption. ] I am being ironic: the Minister will, I hope, be listening in a moment. It cannot be stored, because the Government, in their desire to get rid of it so quickly- [ Interruption. ] In their reckless desire to get rid of it quickly, I repeat for the Minister, the Government do not plan to introduce passports with fingerprints. However, that credit would give some comfort to those who paid £30, and it would represent basic fairness.

The Government make great play of fairness-they often point to their coalition agreement, which makes much of it-and, as we seem to be quoting manifestos today, each individual party spoke about fairness in its manifesto, so we ask that the proposal be considered. It would be a relatively straightforward transaction, and with another amendment we will probe the Minister on a further issue. If the Government are planning to destroy the data, they will have to handle the information and do something with it, so they might as well pass it over to the passport database.

Guy Opperman (Hexham) (Con): Does the hon. Lady expect the repayment to be made to those persons who received that particular facility for free?

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Meg Hillier: If the hon. Gentleman had had the courtesy to listen, he would have heard me deal with that point at the beginning of my comments.

We also suggest an alternative, so the Government have a choice. The Minister has two options in order to be fair to those members of the British public who bought a card in good faith. The alternative is to allow cards to continue for 10 years and, again, with the permission of the individual cardholder, for data to be migrated to the passport database, which is not a terribly difficult transaction, so that ID cards can continue as passports. We recognise that that is not a perfect solution, because with few cards already out there and, given all the points that we rehearsed in Committee about someone's ability to recognise the document, there might still be issues. However, that would represent a choice for the individual who had paid their £30 to have the card.

Mr Aidan Burley (Cannock Chase) (Con): We learned in Committee that of the 14,670 ID cards that were issued, almost 3,000 were given free of charge, so only 11,000 cards were paid for. Are the Opposition, in the second of their two options, suggesting that we maintain the card infrastructure for the next 10 years just for those 11,000 people, at a cost of £50 million to £60 million for 16 people per constituency?

2.30 pm

Meg Hillier: That is not what we are suggesting, as the hon. Gentleman would see if he read the new clause. As I said, we are suggesting that the information be migrated to the passport database.

We recognise that this is a rare area of unity for both Government parties, which is perhaps why it is being rushed through. The Government clearly want to get rid of the national identity register. However, it would not be difficult to migrate data to the passport database, especially given that everybody who currently holds a card has recently held, or currently holds, a passport. Of the 11,000 people affected, many may choose not to take up migration of the card. If there were to be the option of a credit on their passport database, some may not choose to take that up either. However, it would give them the option. I believe that it can be done relatively cheaply, and that it is fair.

This is being done with the ideologically driven haste of the Minister. We have debated this previously and I know that he is passionate about getting rid of ID cards, but basic fairness is involved. Frankly, those who bought in good faith from the trusted Identity and Passport Service have been diddled by this Government. If the Minister gets up and talks about what his manifesto said, we will be driven to despair. We discussed this in Committee. When somebody buys a passport or an identity card, or has any other transaction with Government, they will not necessarily take into account something that has been said in a political manifesto. Government has some degree of continuity and when an individual has bought something in good faith, there needs to be some recompense for them.

We recognise, reluctantly, that both parties in this Government had a mandate to get rid of identity cards; as I said, it is one area of unanimity within the coalition. Therefore, whatever our position on that general issue, we will not press the matter to a vote. However, the issue
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of compensation is very important, and we will seek to divide the House on the new clause unless the Minister can give us some reassurances.

Pete Wishart (Perth and North Perthshire) (SNP): I rise to oppose vigorously the new clause.

We have to be absolutely and abundantly clear about the fact that identity cards are exclusively and solely a new Labour creation. Every single other party in this House made it absolutely clear that we would have nothing whatsoever to do with them and that if we had even the remotest opportunity to get rid of these useless and intrusive lumps of plastic, we would do so immediately. We actively encouraged people not to take out ID cards. For those who did so, under new Labour encouragement, that was their free and fair choice: tough luck to them. We are now enacting exactly what we told them. The new coalition Government are absolutely right to try to get rid of ID cards. They said they would do it in 100 days. I am disappointed that it will take a little bit longer than that, but thank goodness we are getting rid of this hated, obtrusive and ridiculous scheme.

We refer to these as ID cards, but let us give them their proper name. They are not ID cards, but NLID cards-new Labour identity cards. They are a monumental folly that symbolises new Labour's attempt to create the anti-civil libertarian state, and thank goodness they did not get away with it. Instead of droning on about compensating the poor mugs they encouraged to take out ID cards, why do not Labour Members get on board and join us in celebrating the removal of these things? Nobody wants them.

Catherine McKinnell: I appreciate the very strong feelings that the hon. Gentleman is conveying, but I want to draw out his views not on whether ID cards should be abolished but on whether individuals who paid for them honestly and in good faith should be recompensed, as suggested in the new clause.

Pete Wishart: I am grateful for the hon. Lady's intervention. We told people who were thinking about taking out an ID card, "Don't do it-we're going to abolish this scheme." In fact, if someone took out an ID card in Scotland, they would not require compensation but having their head looked at. The Scottish Government made it clear that people would not be able to use an ID card to access public services in Scotland. We did everything we could as a Government and as a party to discourage people in Scotland from taking out ID cards-and thank goodness they listened to us. I think that perhaps one in 10 of the people involved took out an ID card in Scotland. Anyone who did so would have to be the biggest new Labour cheerleader waving in and celebrating the arrival of the anti-civil libertarian state in Scotland. They would need to have had "Kirkcaldy and Cowdenbeath's Finest" tattooed on their chest to have taken out an ID card in Scotland: that is how ridiculous a proposition it would have been.

Robert Halfon (Harlow) (Con): I thank the hon. Gentleman for giving way in the course of such an impassioned speech. Does he agree that not all Labour Members take the same view? In fact, the Labour party leadership candidate, the right hon. Member for Doncaster North (Edward Miliband), has said that ID cards were a great mistake and that the party should show some humility and admit that it got it wrong.

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Pete Wishart: I am grateful to the hon. Gentleman, because I have that quote from the right hon. Member for Doncaster North (Edward Miliband), who said:

Come on, the rest of you-catch up! He might be your leader, because according to the opinion polls he is ahead. You are way behind current thinking on this. Labour had a good record on civil liberties until new Labour came along-please get back in touch with your civil libertarian roots.

Meg Hillier: I am interested to hear the Scottish National party's position. In fact, people could not easily apply for ID cards in Scotland, and that is why very few did so. They were not formally launched there at the point at which the Government changed, but they would have been coming and I am sure that there are many people in Scotland who would have liked one.

Leaving that aside, it would be interesting to know what the SNP's position is on fingerprints in passports, which is something that Members from many parties in this House, both Government and Opposition, have indicated is very important, and something that my right hon. Friend the Member for Doncaster North has not ruled out.

Pete Wishart: If you will allow me, Mr Deputy Speaker, because we are straying somewhat from the terms of the debate, I would say to the hon. Lady that I am very pleased that the coalition Government are picking up the Scottish example as regards databases. They have seen the good sense of the SNP Government in their approach to these issues, and I congratulate them on following and copying their model.

Given that it was Labour Members alone and exclusively who encouraged people to take out ID cards, why are they asking the taxpayer to help with compensation? It should be the Labour party that compensates the poor souls who took them out. It has all these trade union funds-what is it going to do with them? If you want compensation to be paid to these people, pay it yourself.

I have one bit of comfort for all those who have taken out ID cards in the course of the past year: they are becoming a collector's item. This is really intriguing and interesting. Forget about compensation-all they need to do is get one of the great Labour champions of the anti-civil libertarian state to sign their card. If anyone watching this has an ID card, they should get Mr Clarke, Mr Reid or Jacqui Smith to sign it, and that will increase its collectability. They might get more than the £30 that they want the Government to pay them back. Here is a good idea: they should get the absolute champion of ID cards, the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), to sign it; they would probably turn a profit given the collectability that that would have in the future. The collectability of ID cards makes them almost like little bits of the Berlin wall, appropriately, and that is how they are likely to remain.

I make a plea to the Labour party: get on board with this. Get in touch with your civil libertarian roots, find a new agenda, listen to what is happening in your leadership
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contest, and forget about droning on about compensation and trying to get this scheme to go on. It is done, finished-move on. I am with the Government on this one. We should reject this new clause, make sure that nobody gets compensation, and end the scheme tomorrow if we can.

Mr Robert Buckland (South Swindon) (Con): It is a real pleasure to follow the hon. Member for Perth and North Perthshire (Pete Wishart), who, with Celtic chutzpah, put the damning case against identity cards and the national identity register extremely well and with great wit and humour. I pay tribute to him.

I am sure that the hon. Member for Hackney South and Shoreditch (Meg Hillier) will forgive me for saying that the fortitude with which she moved the new clause characterised her approach throughout the long march of ID cards up to the top of the hill and now, happily, down again. She reminds me of Queen Victoria during the Boer war. When it was put to her in the early stages that there was a possibility of defeat, she memorably said, "I do not accept the possibility of defeat. It does not exist." The attitude of the hon. Lady and the former Government to ID cards is encapsulated in that memorable quotation. There has been a state of denial and an almost fanatical refusal of the reality of how the debate on ID cards has shifted since the early days, when I concede opinion polls were somewhat against those who opposed the cards.

There is no doubt that there has been a sea change in public opinion in recent years, encouraged not only by parties in the House but by a genuine campaign across the country against the menace of ID cards and the national identity register. Yet the former Government did not listen to that campaign or to members of my party, the Liberal Democrats or the nationalist parties. There was a grand coalition against the proposals, but still they pressed ahead. Worse than that, to use another military metaphor, they laid booby trap after booby trap to make it as difficult as possible for people to withdraw from the scheme. That is where the new clause fails the test that we should set it.

Although I appreciate the spirit behind the proposal, there is no doubt that members of the public who chose to buy an identity card would, by definition, have been aware of the raging debate about that contentious issue. I have to say to them, caveat emptor-let the buyer beware. When buying the card, they knew that it was my party's stated intention to take immediate steps to end the scheme, and that other parties were saying exactly the same thing. The message was loud and clear.

The situation is rather like the one 13 years ago, when the Labour Government came to office. They made their position clear about certain policies-for example, promising an end to tax credits for people on private health schemes. We are not here to debate that now, but it is a parallel point. Labour was elected to office overwhelmingly and carried out its policy, as it was entitled to do. The electorate were given a clear message, and the late Government did not renege upon their promise. They pressed ahead based upon the mandate that they had received. Although we can debate the merits of that decision, it was their prerogative. Now, 13 years later, we are in a similar position. We have a
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Government consisting of two parties that made their position crystal clear before the election, yet if we accept the amendment, we will be applying a different rule.

Politics is a tough occupation-I am sure we all have direct experience of that. We win some, we lose some. Labour comprehensively lost the argument on identity cards and the national register, and I submit that in those circumstances, the best thing for it to do is accept defeat gracefully and not press the new clause.

Mr Denis MacShane (Rotherham) (Lab): The hon. Member for South Swindon (Mr Buckland) was eloquent and I agree with much of what he said, above all about the centrality of the manifesto on which a party is elected. The Conservative party was elected on a very clear manifesto against the alternative vote, and of course Conservative Members are now marching into the Lobby to vote for a referendum on it. However, he will have to learn a lesson about politics that I have had to learn for much of my life, which is the pleasure of swallowing one's previous pledges and standing on one's head. On AV, which is far more important than this minor Bill, the Conservative party is doing both. The nation will duly take note.

2.45 pm

The hon. Member for Perth and North Perthshire (Pete Wishart) was wondrous in his eloquence. His speech was clearly a bid to join the coalition, and I would have thought that he should get a ministerial job. The Government are short of Scottish talent. Actually, they are short of talent, and he is both Scottish and talented. He should certainly be sitting on the Treasury Bench. He represents the nationalistic passions of Scotland, the country where I was born and where an awful lot of my family still live.

I wish that new Labour had been the inspiration for ID cards, but it was not. The Netherlands, Germany, Spain and France all have them. ID cards are a European idea, but in today's evolving political landscape it is always important to hear the nationalist rant against European practice. That is another reason why the hon. Gentleman may find himself much happier sitting on the Government Benches.

I turn to the new clause itself, which is not about the origins and use of ID cards, or about whether they were in the manifesto that the British people supported, just as they handsomely supported the party opposed to AV and defeated the one in favour of it. It is simply about whether the state can confiscate money. The hon. Gentleman is wrong; it was not taxpayers' money that paid for my ID card but a £30 cheque or credit card payment from my miserable pre-Independent Parliamentary Standards Authority salary. I am not sure whether it is a claimable expense. As euro-waffler-in-chief, I do an awful lot of travel in Europe, but I am not sure whether I could put in a claim for an ID card.

The Minister for Immigration (Damian Green): Don't even think about it.

Mr MacShane: The Minister is quite right. However, it was my money that paid for my ID card, and the state has no right to confiscate my money. If it took a house or land from me by compulsory purchase, it would have to pay the due sum.

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Mr Burley: Is the right hon. Gentleman aware that his decision to buy an ID card, whether or not he intended to claim the money back, was entirely a free choice? He had a choice whether to buy one, and he chose to do so. These are the consequences.

Mr MacShane: I am terribly sorry, but I obtained my ID card and paid my £30. The new Government are rightly seeking to confiscate it, but they owe me modest compensation for doing so. I would never be allowed, under your stern tutelage, Mr Deputy Speaker, to accuse the Ministers of misleading the House or not being straight with us, but may I say that they are being a right pair of tea leaves at the moment? They are going to steal my money and not hand it back. [Interruption.] I mean that they are fond of tea and coffee. A very sound principle of British law is that if the state changes regulations and confiscates an individual's property that was bought in good faith, forms of compensation are normally paid.

That is not just my view but that of a distinguished Conservative adviser, Lord Levene, who I believe the Prime Minister has hired to advise him on reducing defence expenditure, or perhaps more accurately to achieve smarter procurement in defence, which is his speciality. He wrote a very cross letter to The Times, about which we later had a very nice telephone conversation, in which he said that it was quite preposterous that having bought his identity card in good faith, he should now have it confiscated without any compensation. I bow to Lord Levene as a banker, a man of affairs, a business leader and a distinguished Government adviser, and shelter behind his outrage. Frankly, it does not matter if we are talking about one person or 14 million people. I put it to the hon. Member for Perth and North Perthshire that the Government could do themselves no end of good by accepting the new clause, because 14,000 or 15,000 people, in good faith, took out ID cards- [ Interruption. ] Sorry, 11,000 people paid money for cards and others got them free. They have used the cards for three months, so compensation could be made pro rata. It would do the Government no harm-they have sent letters to Lord Levene and me, but they will be sending more-to put a little cheque in the post for those people.

Damian Green: The right hon. Gentleman was in danger of coming close to a serious point, and I thought it deserved to be dealt with. I am sure he has read the Bill and the Identity Cards Act 2006 carefully, so he will be aware that the Government of whom he was such a distinguished and eloquent supporter for so many years wrote the legislation so that the ID card, which he says is to be confiscated, is not his property. The ID card has always been the property of the state, so he cannot run the argument that his property will be confiscated.

Mr MacShane: I am grateful for that hair-splitting point. My passport remains the property of the state, but the plain fact is that I and 11,000 others paid £30. That is not a lot of money, but it was paid in good faith. New clause 2, gently and in a friendly way-there will be other opportunities to make similar points-says that there should be polite compensation. That is a long-established principle of British democratic practice. We are talking peanuts, so the Government would do themselves no harm at all if they erred gently on the side of generosity.

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Guy Opperman: I shall not detain the House long, but the Bill has rightly been described as a long march. The previous Government's policy began years ago as a proposal for a compulsory scheme, forcing ID cards on individuals. As a result, there was tremendous opposition. It is surely a rare day when the Conservative and Liberal coalition is supported by Justice and other individuals and organisations that promote civil liberties.

The Government, having decided that the scheme would be compulsory, indicated in the previous Parliament that the scheme would be voluntary. I confess that my vast research was not into answering the question whether schemes in other parts of Europe are compulsory rather than voluntary, which the right hon. Member for Rotherham (Mr MacShane) raised. However, the UK scheme was voluntary and people signed up it.

The 2006 Act wound its way tortuously through the House, slowly but surely, faltering at every step, like some relic of yesteryear, as the previous Government attempted to demonstrate tremendous moral fibre in some shape or form. They were in the position of having to carry the measure, and the scheme eventually became voluntary. As soon as the scheme became voluntary, the argument in favour of repayment fell away. People were not obliged to sign up for an ID card, and could instead rely on their passports, driving licences or alternative documentation.

The reality is that people voluntarily signed up to pay for an ID card. They were not forced to sign up, so the Government's approach must be dramatically different. The decision to sign up is for the individual, and the legislation states that if they do not want to sign up, they do not have to do so. It is not incumbent on the state, at this or at any other stage, to pay compensation.

Mr MacShane: Let me ask the hon. Gentleman a question so I can get this clear: if he voluntarily buys a house and the council comes along and takes it off him, is he saying that the council does not have to pay compensation?

Guy Opperman: A variety of things could happen in that situation, not least suing the council. I can assure the right hon. Gentleman that various people who gave evidence to the Public Bill Committee indicated that they might contemplate suing the Government. People could sue the council if they were put in that position.

Pete Wishart: That is not so much the key point as the context of such decisions. When lots of people are saying, "Do not buy this because we are going scrap it," people are making an informed decision. If they choose to buy voluntarily an ID card, that is surely up to them.

Guy Opperman rose-

Michael Ellis (Northampton North) (Con): Will my hon. Friend give way?

Guy Opperman: Of course.

Michael Ellis: To continue the example of the house sale, an individual buying a house despite knowing that there is something wrong with it, such as subsidence, is the same as the right hon. Member for Rotherham (Mr MacShane) in respect of his ID card.

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Guy Opperman: The position has been explained and I am sure that it is fully comprehended. We should not detain ourselves on the £30 any further in the House. Liberty and Justice support our point of view.

Meg Hillier: Liberty is also in favour of removing ID cards for foreign nationals, or biometric identity documents, or whatever people wish to call them. Does the hon. Gentleman agree with Liberty? Is he aware that surveys revealed that the Identity and Passport Service is one of the most trusted public bodies in the country? That trust is being breached by the Government's decision. All we are saying to the Government is, "Be fair to those who bought an ID card." Frankly, the idea that everybody read all the manifestos, as some hon. Members are saying, rather overrates their importance, and suggests that hon. Members are not in touch with the many people who do not follow politics and daily read manifestos .

Guy Opperman rose-

Mr Deputy Speaker: Order. May I remind the hon. Gentleman that the debate is quite tight and that he should speak to the new clause? He should not draw Members into other areas.

Guy Opperman: I apologise, Mr Deputy Speaker, if I have in any way drawn Members into other areas.

The short answer to the hon. Lady is to ask her this question: if the ID cards satisfaction survey showed that they were so popular, why did so few people sign up? Fewer than 15,000 signed up, and several thousand did not have to pay.

Damian Green: The hon. Member for Hackney South and Shoreditch (Meg Hillier) inadvertently misled the House by saying that Liberty is against biometric residence permits. I have Liberty's briefing for today's debate. It states that-

Mr Deputy Speaker: Order. I do not think that the permits are part of the debate, and we are being drawn into other areas. I am sure that Mr Opperman would like to continue his speech.

Guy Opperman: I do not intend to go any further on that point. My final point is that we should not sign up to proposed new clause 2.

Steve McCabe: I, too, do not want to take too long on new clause 2 and in speaking to amendment 8. I enjoyed the contribution of the hon. Member for Perth and North Perthshire (Pete Wishart). I am going to try to find out who the 10 people in Scotland who want to join his fan club are, and I will do anything I can to put them in contact with him.

I want to acknowledge that there is one area of agreement. The Lib Dem and Conservative parties both went into the election on a promise to abolish identity cards, and we cannot really find fault with that. Of course, the Lib Dems also promised thousands of extra policemen, and I do not know where that figures in the current arrangements. However, if people are going to pray in aid that their manifesto commitment is the great justification, we need a total explanation. As far the Lib Dems are concerned, their justifications amount to nothing.

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3 pm

This is a relatively small issue, and we could go too far on it, but the people who bought ID cards did so in good faith-

Mr MacShane: It is a narrow point, but it is an important point. Since 1945, there have been many elections-although perhaps not recently-in which a party has said that if elected it would nationalise a private industry. The owners of the shares in that industry-even if the shares amounted to £20 and were bought on the day of the election-always received due compensation. We do not confiscate without some compensation. That is a very important point of British democracy.

Steve McCabe: There is a principle here, and that is my point. People bought these cards in good faith. It is all very well for other hon. Members to say that it was clear that if the election results went a certain way they would be abolished, but everyone-including the hon. Members for Hexham (Guy Opperman), for South Swindon (Mr Buckland) and indeed for Perth and North Perthshire (Pete Wishart)-must remember that no one won the last election. The Conservatives did not convince the electorate of the merits of their manifesto, nor did the coalition partners. That is why we have a coalition. The election result was not clear cut and no single party succeeded in convincing the electorate that they had a right to govern by itself. In that context, it would be reasonable to show a bit of humility in the proposals the Government make.

I have no objection to the Government choosing to abolish ID cards, but I do object to them seeking to penalise and punish those who bought cards in good faith. The electorate will remember all these grand speeches saying that those people do not count for anything and the derogatory remarks-although I am sure that they were made in jest-of the hon. Member for Perth and North Perthshire. Hon. Members should recognise that those people acted in good faith and it is not appropriate to penalise them.

We do not want to make a massive deal of this, but the Minister has had quite a lot of time to think about it. We are talking about a relatively modest amount of money, but the precedent it would set is very important. If the precedent is set that people will be punished if, after having acted in good faith by doing something that the Government of the day encouraged, it will cause paralysis in many other areas.

Mr Burley: The hon. Gentleman said that this proposal would cost a relatively modest amount, but does he have any idea how much it would be? The current cost of maintaining the present system, as we know from Committee, would be £50 million to £60 million over 10 years. Other hon. Members have suggested migrating the data to the Passport Service, but I have no idea what that alternative proposal would cost. Does the hon. Gentleman know what the cost of maintaining the system for 11,000 people would be?

Steve McCabe: Fortunately, I do not suffer from the voodoo economics of Conservative Members, so I do not have a clue where the hon. Gentleman gets the figure of £50 million or £60 million. We are saying that
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there should be a £30 discount when the person who currently holds a card next applies for a passport. Under whichever education system hon. Members operate, they should be able to work the figure out for themselves.

I like and respect the Minister and I trust what he says, but clause 3 states that the information on the national identity register will be destroyed. It is fair to say that when this was discussed in Committee his knowledge of the technical detail of the register was almost as good as mine, and neither of us is likely to get a job with Bill Gates any time soon. We know from the information that was presented to the Committee that there is some doubt in Government and in Government organisations about what is meant by the national identity register. We cannot pass legislation in good faith and then discover that it cannot be implemented because the Minister has been asked to do something that he is not technically capable of doing.

I make this point for two reasons. First, since the election, my colleagues and I have listened to the grandstanding from the Government Benches about their civil libertarian credentials. That will work in the early months of government, when it is easy to run around saying that they are against speed cameras or DNA testing, but it will not work when they face constituents who have suffered and want to know why the Government are not on their side- [ Interruption. ] If the hon. Member for Perth and North Perthshire wants to come to the defence of his new-found friends again, I will give way.

Pete Wishart: I just wanted to give the hon. Gentleman an opportunity to say whether he is in line with the thinking of the right hon. Member for Doncaster North (Edward Miliband), who has said that the previous Government were too draconian on civil liberties. Is that an admission that the hon. Gentleman recognises?

Steve McCabe: Let me be blunt. I may find myself loyally serving my right hon. Friend the Member for Doncaster North (Edward Miliband)-who knows-but I am not against ID cards. Nor would I say that the previous Government, in the circumstances with which we had to deal, were draconian. We took the difficult decisions that were necessary, and there will come a time when Ministers in this Government have to come to the House to tell us what they are having to do to protect the public because of a deterioration in our security situation. It is easy to grandstand now, but tomorrow always comes-and what is said now may come back to haunt you.

It is all very well painting a bleak picture of the previous Government, but can the Minister tell us today how the information contained on the national identity register will be destroyed? He will know that in the evidence given to the Committee the chief executive of the UK Border Agency was not entirely clear what the national identity register was. Some people thought that it was to do with facial geometry, some thought it was not. Some people thought that it was to do with a Sagem algorithm, whatever that is, and others thought that it was to do with the Cogent algorithm. One person thought that it was "co-ordinated" and another said that it is not a box with everyone's name in it-I think we know that much.

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I do not want to push the new clause to a vote, but is the Minister able to tell us today how he will comply with the requirements of clause 3? If not, will he agree to come back to the Chamber and report what has happened? The last thing that I want to do is be back here at some point in the future accusing Ministers of failing to comply with their own legislation.

Nigel Mills (Amber Valley) (Con): It is a pleasure, as always, to follow the hon. Member for Birmingham, Selly Oak (Steve McCabe). I have done it so often he might want a restraining order at some stage.

I understand the argument for why the people who foolishly bought an ID card should get some compensation- [Interruption.] I am not saying I support that argument, but I can see its logic. However, I struggle to see the logic behind the arguments for new clauses 2 and 4, one of which would, if I am right, see the existing cards be valid for nearly another 10 years. The other would provide for a discount, at some point during those 10 years, if someone applied for a new passport. I struggle to see, however, how having ID cards that are still valid in nine years and nine months would give those holding them the advantages they sought when they paid for them. Where would those ID cards be accepted as a proven form of identity? What is the risk that people could forge them? Would people struggle to tell the difference, if they did? Would people be able to travel around the EU using an ID card instead of a passport? I struggle to see how that would happen, and it would open up the door to a manner of identity fraud different from what we already have, so I cannot vote to keep it in place for the next 10 years.

The idea of credit against a passport is a better one, but again we would have the problem of having to keep the data for all that period. We would also have the problem of how to process that data. I presume that the easiest way would be that, when a person applied for a passport, they would have to send in their ID card to prove that they actually had one in the first place. Again, however, how would we deal with people who had changed their names, lost their ID card or found it useless for eight years until their passport renewal came round and had to dig it out from the bottom of a drawer somewhere? There would also be the risk that people might try to create fraudulent cards, meaning that someone would have to go back to the original list of people with ID cards for proof. And how would we handle the fact that not everyone actually had paid for their card? I accept that the proposal provides for that, but it means that someone would need a record of who had paid for their card and who had got theirs free.

With respect, therefore, I cannot see how we can vote for either of the two solutions. There is no way I can vote for either. Given some of the concerns raised by Opposition Members about the legal issues involved in scrapping ID cards without compensation, I would be grateful if the Minister could repeat the assurance he gave us in Committee that the Government had received solid legal advice that it is legal and will not be overturned at huge cost to the taxpayer resulting from the court proceedings subsequent to this process.

Julie Hilling: Hon. Members on both sides have been extremely rude to constituents of mine who have written to me about how they bought an ID card in good faith.
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I assume that a lot of Members in the Chamber today were not part of the pilot programme in which constituents were able to buy ID cards. Had they been, perhaps they would also be speaking up on behalf of those constituents who bought ID cards but will not now get a refund. Those who have written to me are mainly pensioners and on a low income. They decided that they were only going to be travelling as far as Europe and that therefore an ID card was a good value alternative to paying the full amount for a full passport. These people are taxpayers.

Michael Ellis: May I ask how many of her constituents wrote to her about this?

Steve McCabe: Every vote counts!

Julie Hilling: Especially in a marginal.

I have received letters from about a dozen people in my constituency, and as I say, they are on low incomes and are taxpayers. Each of them entered into a contract with their Government saying, "I will purchase an ID card, and for that I will have the benefit of travel within Europe and other benefits, such as proof of identity, for 10 years." It is not unreasonable for those constituents to expect either to get their money back or to receive credit for it.

Nigel Mills: Will the hon. Lady confirm my understanding that those constituents will already have had a passport that they can use to travel to the same places?

3.15 pm

Julie Hilling: I will happily answer that question. The only people who prior to the election could get an ID card were those whose passport had recently expired. They were mainly elderly people who made a decision not to travel further than Europe, and they were mainly people who could not afford, or found it difficult to afford, the full cost of a passport.

Several Members have talked about how the message was loud and clear that the ID cards would disappear. My constituents are not fortune-tellers and could not say what the outcome of the election would be. In actual fact, they made their views clear by returning a Labour MP, so it is insulting to them to say that they should have expected the ID cards to disappear.

Mr Stewart Jackson (Peterborough) (Con): In all fairness, the hon. Lady should concede that it was almost unprecedented in all the polices taken through by the Labour Government for a break clause to be flagged up by the then shadow Home Secretary and others. That sent a very strong signal to commercial organisations that the current Government would not continue with the ID cards programme. I am not saying that all her constituents will be reading the trade press, or even the quality press, but it was clear that both the Liberal Democrats and the Conservative party had made manifesto commitments to abolish ID cards.

Julie Hilling: My constituents could not have foreseen at that point that there would be a Con-Dem coalition. How could they have known what would be in the coalition agreement, especially given that it does not bear much resemblance to the manifestos?

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Catherine McKinnell: Does my hon. Friend agree that many of the constituents who have written to us and who we deal with, and who are concerned about not receiving any compensation, do not follow avidly the words of a shadow ministerial team? Largely, they are probably not interested in the pronunciations of a shadow ministerial team, but are busy trying to survive day to day on a state pension, to make ends meet, to get their shopping and to look after their grandchildren. They are not avidly following the intricacies of the position of the shadow ministerial team.

Julie Hilling: I thank my hon. Friend for making that point, because I agree with her absolutely.

If someone buys a service from the Government, of whatever colour, they would expect their Government to continue to provide that service, and if they did not continue to do so, they would expect to be compensated. That is the major point.

Ms Louise Bagshawe (Corby) (Con): I thank the hon. Lady for being so generous in giving way. I put it to her that her constituents ought to be complaining to the Labour party, which was in government at the time, because it was made clear to them that we would not be continuing with this scheme. The fault for the costs that her constituents have borne should rightly be laid with Labour Members and the Labour Front-Bench team. Is that not true?

Julie Hilling: The hon. Lady does not quite understand that my party, the loyal Opposition, does not have the power to make payments. If only we did. If only we had the power to say to those who bought identity cards, "We will reimburse this money."

Mr MacShane: Can we nail this extraordinary new constitutional doctrine that because a party thinks it is going to win an election, everything should come to a dead halt before the people have voted? I saw the shadow Home Secretary at the Great Eastern Tandoori restaurant in Pimlico the day after the election, except he was not to become the Home Secretary. Should he receive compensation? We really have to stop this nonsense. Power might have changed hands, but we should still accept responsibility and pay the compensation.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Members are getting carried away with interventions, and we ought to stick to the point. Mr MacShane should know better.

Julie Hilling: I remain absolutely convinced that my constituents deserve fair treatment. They deserve either to have the money refunded-sadly, this mean-spirited Bill does not allow that to happen-or for their identity cards to continue, although I accept that this might be difficult. The easiest thing would be to allow them £30 credit towards a passport.

People have talked about alternative means of identification, but I wonder whether those hon. Members who are present know how much they cost. All those alternative means of identification cost more than the identity card. Those who are disabled-for instance, those with a visual disability or other conditions-cannot get a driving licence; and indeed, if someone was never
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going to drive, why would they apply for one? However, a driving licence is one of the few photographic means of identification that we have in this country. The identity card was therefore valuable as a tool with which people could prove their identity, which is becoming increasingly important and difficult to do nowadays.

Let me finish by saying that I believe that the Bill is mean-spirited. The Government should give £30 credit to those affected, and I very much hope that hon. Members will vote for that later.

Keith Vaz (Leicester East) (Lab): I have known you long enough to know that when you frown in the way that you have, Mr Deputy Speaker, you wish and expect short speeches from hon. Members. I therefore intend to be brief.

I came into the Chamber mindful of the Opposition amendment and with a view to supporting the proposal to pay compensation to those who have taken out voluntary cards. However, I have listened to what hon. Members have said, including the thoughtful speech by the hon. Member for Hexham (Guy Opperman). It is probably right that people should have been cautious in taking out a voluntary card, knowing that the policy was not carried in all parts of the House. However, it would have been better for the Government to pay the money back as a good-will gesture than for us to be fighting about £30 multiplied by 11,000 on the Floor of the House. I understand that the principle is important, and I say to my hon. Friend the Member for Bolton West (Julie Hilling) that the 12 constituents and others who may have written to her are obviously deeply concerned. Perhaps £30 is not a lot to some people, but it is certainly a great deal to the constituents whom she mentioned.

Catherine McKinnell: Just to clarify whether £30 is a significant amount, in fact, we are not talking about £30; we are talking about the additional £50 that will be required to get another valid form of identification. An extra £50, making £80 in total, is a lot of money for some people, and particularly for pensioners, who have to save for some time to afford it.

Keith Vaz: I agree with my hon. Friend: it is a lot of money for some people, but it is not clear whether there is a huge point of principle, based as it is on the fact that people were clear that identity cards were an absolutely partisan policy on the part of the previous Government. Only my hon. Friend the Member for Walsall South-

Mr David Winnick (Walsall North) (Lab): Walsall North-the hon. Member for Walsall South (Valerie Vaz) is your sister.

Keith Vaz: I thank my hon. Friend for reminding me-I think I just about know the difference between my sister and my hon. Friend, who was so often the conscience of the Select Committee on Home Affairs when it considered the issue in the previous Parliament. We accepted that the previous Government had an absolute right to put through their legislation on ID cards. It was only my hon. Friend who reminded the Committee on so many occasions that he thought that the policy was wrong.

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Mr Winnick: As for the previous Government, obviously there was controversy among Labour Members on the subject-it would have been odd if that were not so-but does my right hon. Friend not agree that the original idea for identity cards came from Michael Howard, when he was the Home Secretary in, of course, a Conservative Administration?

Keith Vaz: I cannot say for certain, but my hon. Friend is wiser and has been in this House for longer than me, so if he quotes Michael Howard from a few years ago, I accept what he says.

Mr Jim Cunningham (Coventry South) (Lab): I certainly agree with my hon. Friend the Member for Walsall North (Mr Winnick): Michael Howard had a proposal for something called the smart card. He tried to get it through this House, but he could not do so.

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. Let me remind hon. Members that we are discussing new clause 2. These points are not relevant. I am sure that you will wish to return to the new clause, Mr Vaz.

Keith Vaz: Unfortunately I did not know about those points until they were made. Had I known that they would be raised, I would not have given way. However, as you say, Mr Deputy Speaker, this is not a debate about Lord Howard; it is a debate about new clause 2.

Although I came into the Chamber wanting to support those on my Front Bench-and I still want to, because I have great respect for my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), who was a superb Minister, appearing many times before the Home Affairs Committee on identity issues, including the cost of identity cards and their implementation-I am probably minded to abstain if there is a vote.

I understand that the Minister has written to- [ Interruption. ] Let me say to my right hon. Friend the Member for Rotherham (Mr MacShane), for whom I have enormous respect and affection, that I do not think that what is proposed is the equivalent of the nationalisation of British Steel, with the Government moving in to take away somebody else's property, including his own. As the Minister said, the card that my right hon. Friend is waving before me is the property of the Government. However, that is a side issue. I understand that when he makes his point, he comes from the steel capital of Britain, but we are not talking about the nationalisation of British Steel.

Mr MacShane: I am grateful to my right hon. Friend-for whom I worked as a Parliamentary Private Secretary for many happy years-for giving way. I would be quite happy to concede the financial point if the Government were prepared to cut a deal and let me keep the card until it expired. That seems quite reasonable, because it is a European card. Every time I have used it to go through airports in the past three months, people have said, "Ooh, that's a good idea! The Brits are becoming like us." Well, thanks to the coalition, now we are not.

Keith Vaz: Let me say to my right hon. Friend, the former Minister for Europe-

Chris Bryant (Rhondda) (Lab): We have a set of former Ministers for Europe in the Chamber.

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Keith Vaz: Indeed. Let me say to my right hon. Friend the Member for Rotherham (Mr MacShane) that he is the last person who needs an identity card to get into France. He is probably the only former Minister for Europe to be fluent in half a dozen European languages. His very face is sufficient to get him into the European Union.

Mr MacShane: But we are in the European Union.

Keith Vaz: I meant the mainland European Union.

Anyway, before this becomes a debate about the European Union, let me say that I shall abstain on new clause 2. However, I am attracted to amendment 8, which stands in the name of my hon. Friends the Members for Birmingham, Selly Oak (Steve McCabe) and for Houghton and Sunderland South (Bridget Phillipson), and not just because they are distinguished members of the Home Affairs Committee, as the hon. Member for Cannock Chase (Mr Burley) is, but because there is a lot of merit in what they say. The Minister should take amendment 8 seriously. I do not know whether my hon. Friends will push it to a vote, but the destruction of the data is an important issue.

When I raised this matter on the Floor of the House, following the Home Secretary's announcement that ID cards were to be abolished, either she or the Minister-I cannot be sure which-said that there would be a huge event in which all the data would be destroyed. I think that it was said, perhaps playfully, that there would be a big bonfire, and that Members of the House would be invited to attend such an event. I know that that was meant in jest, but this is a serious point.

I support what the Government are doing to remove the names of innocent people from the database. That is absolutely a move in the right direction. The hon. Member for Perth and North Perthshire (Pete Wishart) asked whether the previous Government had lost their way on civil liberties issues, and I would say that we did a little, partly because of a lack of scrutiny by this House, rather than through any intent on the part of the Government. We should have been better at scrutinising legislation.

I hope that, when the Minister responds, he will give us a clear statement on how the data are to be destroyed. My hon. Friends who have tabled amendment 8 have proposed a time limit of four months, within which a statement must be made to the House. I do not believe for one moment that that is an unreasonable request. I hope that the Minister will give my hon. Friends the assurances that they seek. This is not a huge issue, but it goes to the heart of what the coalition Government say that they are going to do with these data. We must not keep the data unless it is absolutely necessary to do so, and I hope that he will give some comfort to my hon. Friends, and an assurance that the data will be destroyed within four months.

3.30 pm

Mr Stewart Jackson: It is always a pleasure to follow the right hon. Member for Leicester East (Keith Vaz), although he lapsed from his usual urbanity and eloquence when he did not recognise the difference between his charming sister and the hon. Member for Walsall North (Mr Winnick)-

Mr Winnick: Who is also quite charming.

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Mr Jackson: That goes without saying.

I am quite fond of the hon. Member for Birmingham, Selly Oak (Steve McCabe), but he rather over-egged the pudding. Let us remember that it was his Government who gave us 90-day detention without trial. In 2005, they told us that it was imperative that we force through that measure, disregarding hundreds of years of close attention to civil liberty and due process. They were then humiliated in an unprecedented vote-given that they had a 66-seat majority-and the proposal went down to 42 days.

Mr Winnick: The hon. Gentleman is wrong. The previous Government did not give us 90 days. That proposal was defeated by the House of Commons.

Mr Jackson: It was indeed defeated, by one vote, because of the good sense of many of the hon. Gentleman's colleagues on the then Government's side who saw that it would not be sensible to traduce the British traditions of liberty and fairness on the back of a scare campaign from some people who were taking an authoritarian, draconian approach. To be fair and open-minded, as I aspire to be, I should say that the debate went on in my own party as well. Some Conservatives took the view that we should be tough on law and order, and that we should do the right thing and support the then Prime Minister. A small number of my colleagues voted for that proposal. I must not perambulate too far from the new clause that we are debating, but we must bear in mind that context as we listen to Labour Members' arguments about civil liberties today. The hon. Member for Perth and North Perthshire (Pete Wishart) was absolutely right to say that, until that point, there had been a fine tradition in the Labour party of support for civil liberties.

Steve McCabe: I want to ask the hon. Gentleman, whom I respect, whether the best symbol of a Government's faith in civil liberties is their support for a phone hacker in No. 10 and a Minister who spies on his own colleagues and friends-

Mr Deputy Speaker (Mr Lindsay Hoyle): Order. The hon. Member for Peterborough (Mr Jackson) should carry on with the debate on the new clause.

Mr Jackson: I shall defer to the good sense of the Deputy Speaker and pass over those issues. I am mindful, of course, that the hon. Member for Birmingham, Selly Oak has worked in the Whips Office, and that Whips are a bit more bare-knuckled in debates than some others. I shall move swiftly on.

I want to talk about authority and establishing one's policies before an election. I made the point to the hon. Member for Bolton West (Julie Hilling) that-

Mr Deputy Speaker: Order. We are discussing new clause 2, and the hon. Gentleman must speak to that.

Mr Jackson: By a circuitous route, Mr Deputy Speaker, I shall speak to that new clause-

Mr Deputy Speaker: Order. It might be helpful to the hon. Gentleman to know that he can talk about these matters on Third Reading, if that is the route that he wishes to take. If he could just speak to new clause 2 now, that would be much better.

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Mr Jackson: I shall speak specifically to the proposal about compensation, Mr Deputy Speaker. Please forgive me if I meandered somewhat.

There is, of course, precedent for a party being elected, putting a programme forward and sticking to its manifesto commitments without paying compensation, even at a modest level. For instance, one has to think only of the assisted places scheme, a windfall tax on utilities or the national minimum wage-they all had fiscal ramifications, but the Conservative party in opposition did not insist that there was any necessity to make specific compensation to specific groups.

Steve McCabe: On a minor point, this new clause is not asking for compensation per se; it asks for a reimbursement of £30 only for those who subsequently apply for a passport. It is designed to right a wrong; it is not a general request for compensation.

Mr Jackson: The substantive general point, which the hon. Gentleman does not want to concede, is that what is happening is a direct result of a new Government who with their coalition partner have a mandate to take a decision that has fiscal ramifications through new legislation. My point is that the precedent has been set in the past for new legislation having financial ramifications; it will inevitably affect some groups of taxpayers and voters, but the Government will not see fit to compensate them in a particular way, even on a modest scale.

Of course it is regrettable that some of the constituents of the hon. Member for Bolton West will be in a difficult position as a result of the decisions made, but I come back to the point that the two parties that form this Government won 60% of the vote on an unequivocal commitment to abolish identity cards, whereas the party that was unequivocally in favour of them comprehensively lost the election on 6 May. Although only a modest amount of money is involved, the amendment is inappropriate, particularly during a time of less than benign financial circumstances when we need to reduce the deficit.

Grahame M. Morris (Easington) (Lab): Thank you, Mr Deputy Speaker, for allowing me to contribute to the debate.

Labour Members fully understand that repealing the Identity Cards Act 2006 and scrapping ID cards was a manifesto pledge of both the Conservative and the Liberal Democrat parties and that they are fulfilling a pledge to the electorate on this issue. In fact, I think this is one of the few actions taken by the coalition Government that can claim at least some sort of mandate from the public. I add, however, that Labour was elected in 2005 with a manifesto pledge that stated:

That was the manifesto basis on which the decisions were made.

The current Government have taken the scheme in its infancy and killed it off before it has even had a chance to prove itself-in terms of finance, security, issues of identity theft, protection and, indeed, popularity, or any other measure of its worth. As we learned in Committee, the Government have their arguments, but in my view their reasons for revoking ID cards are
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weak, mean and, most important of all, costly to the taxpayer. In Committee, the Minister for Immigration stated that he was committed to abolishing identity cards

That assertion is, I contend, completely wrong and misguided. The ID card scheme will become more expensive as soon as the Bill is enacted because the expenditure has already been incurred in setting up the scheme-on infrastructure, computer software and so forth. Furthermore, recovering that money relies on allowing the ID card scheme to continue. Conservative Members should remember that the expenditure was incurred subsequent to a manifesto commitment by the previous Labour Government.

I do not want to dwell on the motives behind the Bill, and I suspect that the motives of Liberal Democrats are completely different from those of Conservative supporters. It is clear, however, that Conservative Members base their opposition to the ID card proposals on a false premise.

Heather Wheeler (South Derbyshire) (Con): I assure the hon. Gentleman that those who write to me in my constituency are asking me to scrap the ID legislation as quickly as possible, purely on the grounds of civil liberties. I find it astonishing that there can be any debate about this for much longer. Indeed, a number of people have suggested that we should wind up the debate immediately, although obviously a good many Members want to continue it. I have not received a single letter asking me-

Mr Deputy Speaker (Mr Nigel Evans): Order. The hon. Lady's intervention is far too wide of what we are discussing at the moment.

Grahame M. Morris: I do not think that the Government's arguments have been effective. Aspects of the scheme deserve to be retained, and they are embodied in the new clauses and amendments. Clause 2 states:

In Committee, the Minister stated proudly that this was the Government's first Bill. I am astonished that he can be pleased with himself, given that this first Bill from the new Government breaks a contract that was established between citizen and state. As was pointed out by my hon. Friend the Member for Bolton West (Julie Hilling), people put their faith in the Government and bought ID cards. They entered into that contract on a voluntary basis-there was no element of compulsion-and I believe that they have been let down sorely and spitefully by the Bill and the Government. The Government's behaviour is illogical, unfair and frankly unnecessary.

Hon. Members have suggested various reasons why people may have decided to invest in ID cards. The need to protect their identities must have been a major concern, as identity theft is a huge problem that costs the economy billions of pounds and causes individuals untold stress and suffering. They may simply have wanted a more versatile method of identification-Labour Members
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have given some excellent examples of that-or even a proof of age. Whatever their reasons, they entered into a contract, and that contract should be honoured, but the coalition Government are tearing it up, and people who acted in good faith can justifiably feel let down.

Members on the Government Benches have argued that it might have been reasonable for people to expect ID cards to be scrapped if the Tories won power. That applies to the Liberal Democrats as well, as it was in their manifesto. But should we really be sending the public the message that they should not take too much notice of what the current Government say, because the next Government may say something different? That is a dangerous message to send.

Pete Wishart: I know that the hon. Gentleman is already a very assiduous constituency Member of Parliament. When constituents asked me about ID cards before the last election, I gave them clear advice: I advised them not to obtain ID cards, because they were too controversial and might be rescinded. What would the hon. Gentleman have said if a constituent had asked his advice about ID cards, given that they were so contentious?

Grahame M. Morris: That is dangerous territory, which we explored earlier today and in Committee. If that principle is to be applied to what a Government may do, should it be applied to nationalisation without compensation? Is that the logic of the argument?

The decision to terminate existing and operational ID cards one month after Royal Assent-I assume that the Bill will be passed today-with no compensation for those who have purchased cards is not only shameful, but a travesty. I mentioned that Labour had made a manifesto pledge to the public, and that the public had returned Labour to government in 2005. We implemented a scheme allowing a citizen to receive, for a £30 fee, a card that would expire in 10 years. For the current Government to come to office and turn that system on its head without consideration for those who participated in the scheme on a voluntary basis, and had handed over their money in good faith, strikes me as a complete dereliction of duty that sets a dangerous precedent for the future.

3.45 pm

Guy Opperman: The hon. Gentleman talks about this being a dereliction of duty, but this is a scheme costing billions of pounds for barely 12,000 people that was trotted out in circumstances where there was no prospect of it being taken up.

Grahame M. Morris: The scheme is in its infancy and, essentially, it was marketed in only two areas-Manchester and London. It would have been rolled out further and then, presumably, have had much greater appeal. There is an interesting contradiction: the big corporate interests who were involved in this scheme were paid compensation, but no recompense is to be made to ordinary citizens who paid £30 for a card.

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