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Lord Barnett: My Lords, I have generally indicated my great concern about the costs of this project, and those concerns remain. I apologise to the noble Lord, Lord Rees-Mogg, as I would have preferred to speak about what he wrote about today in the Times, but we are obliged under our rules to talk about costs today. So I cannot refer to the great quote of Rousseau's to which he referred:
That is a slight exaggeration in relation to this Bill, as even the noble Lord might agree; but we are concerned with costs. I am very much concerned although, as I have said, in principle I do not oppose the idea of an identity card.
I regret one or two remarks of the noble Lord, Lord Phillips, and the noble Baroness, who seemed to be more concerned with party politics than they were about the detail of the cost problem, although the noble Lord certainly went into that problem. But to hear the noble Baroness refer to my noble friend the Minister, as I believe she did, as a control freak, or anyway to refer to somebody as a control freak—
Baroness Noakes: My Lords, I do not think that anything that I said could possibly have led anyone to believe that I described the noble Baroness, Lady Scotland, as a control freak. What I did say was that I thought she was working to a very restrictive brief. That is all that I said.
Lord Barnett: My Lords, of course—but the whole impression that I got from the noble Baroness's speech was that she was not listening to her new leader, who was concerned not to be as provocative as she was, and concentrate on costs. But I may be mistaken on that, too, and I apologise to the noble Baroness in advance if I am.
Let me return to the whole question of costs. The fact is that the amendment, which I do not particularly like, although I shall support it, has a lot of faults, because it talks not about facts but about estimates. We can dispute whether the LSE's assumptions and
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estimates are right or whether the Government's are right. I am bound to say that looking at estimates is generally not done well by the Comptroller and Auditor General. I speak from a modest four years as chairman of the Public Accounts Committee. My noble friend Lord Sheldon could do better—he served as chairman for three parliamentary terms. The plain fact is that the Comptroller and Auditor General prefers to look at facts and then compare them with estimates previously made by any government. As the House will know, the Public Accounts Committee and the C&AG do not generally concern themselves with party politics, only with facts. The amendment asks the Comptroller and Auditor General to give a report on estimates, but I think he would find that rather difficult.
We have now had a reply, in a letter from my noble friend Lady Scotland to the noble Baroness, Lady Anelay, dated 11 January, which was somehow copied to me, and I am grateful to her. Her answers on costs did not convince me. If she were really to tell us the truth of this, she would tell us that the Government do not know what the costs will be. That must be the case, and it would have been better if she had said so. They cannot know. I do not know if the LSE is right, or whether the Government are. Assumptions are bound to have been made, and we will only know later if they were right. That is one reason why I am not happy with the amendment, but I will come back to that.
The Government seem to accept that there are problems with the estimates. The Minister's replies in the debates we have had here and in the letter I have quoted emphasise the fact that they are concerned about costs. If so, I would have thought they would have no serious problem in accepting this amendment, because it only asks for a government report on estimates. The amendment rightly does not seek to define "estimates" in too much detail. It would be extremely difficult to provide any definition. Any government report of the kind addressed by this amendment would be easy for the Government to accept. They would get this report about estimates, which would be no better than all the information we have had already, and which would then go back to the House of Commons for consideration. One of the reasons I support this amendment, as, I think, the noble Baroness, Lady Noakes, said, is that it would give the other place a chance to rethink, which is what this House is all about. I believe that this House holds the Government more to account than the other place, but that is another matter. I am no longer in the other place. It might have been better then, but I am too modest to say so.
I do not intend to say too much about the detail of the amendment, because it would be wrong to do so in this debate. The letter my noble friend sent to the noble Baroness, Lady Anelay, and copied to a number of us—perhaps it is in the Library; I do not know—refers to KPMG, which the noble Baroness,
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Lady Noakes, will know very well. I gather she was a major, serious and senior part of that organisation. The letter says:
but it does not stop there; it says:
Of course, at this stage it is impossible to do better than that. That is why it is important for the Government to have an opportunity to rethink, although, as I say, I am not happy with the idea of relying on the Comptroller and Auditor General. Not that I do not have the highest possible regard for the C&AG; I do. My experience of the Comptroller and Auditor General has always been that we have been very fortunate, as has the other place, to have such high quality people in charge. They have presented excellent reports to the Public Accounts Committee, which have usually been dealt with very well by that all-party committee. However, this is not the occasion for the C&AG; it is more an occasion for the other place to have an opportunity to rethink. That is why, given my concern about costs, I very strongly support the amendment.
Lord Wright of Richmond: My Lords, I note that the noble Baroness, Lady Noakes, said that past IT failures were no part of her case. However, perhaps I may briefly tell the House that I still bear the scars of a failing Foreign Office IT communications project at the end of the 1980s when the noble Lord, Lord Sheldon, quite justifiably gave me an extremely uncomfortable time in trying to defend a project which turned out to be about twice as expensive as we had estimated and it did not work. So I shall vote for the amendment.
Lord Crickhowell: My Lords, in a moment I shall take up the point made by the noble Lord, Lord Barnett, about the costs not being known. He clearly did not listen over the weekend to the leader of my party on the subject of identity cards. It was perfectly clear that he entirely agrees with the views of my noble friend who moved the amendment.
I take up the arguments advanced by the noble Baroness, Lady Scotland, on the sixth day in Committee when we last debated the issue. First, I pointed out to her that it was not a universal practice of government departments to withhold estimates and that the noble and learned Lord the Lord Chancellor had given us an estimate of the cost of the Supreme Court, to which she said:
"The issues that arise from which building to buy for the Supreme Court are different from the issues we now have to deal with, for this reason: the provision of secure facilities and managed IT data centres is a highly competitive market".
Presumably the noble Baroness was arguing at that point that the construction industry was not a highly competitive market. If that is so, it really is the reverse of truth to say that there is no case for not giving the estimate. Clearly, if there is not a competitive market, it may be true that the market will bid something like the estimate given by the Government. However, she
- went on to say that it would be quite wrong to publish detailed costings now of the IT arrangements. She said:
"If, for example, I were to say how much of the £584 million annual running costs is expected to be spent on running the national identity register, or the estimated cost of printing plastic ID cards, companies specialising in this sort of work would tailor their bids, to the estimates we suggest, as I have just indicated. In plain terms, there would be no chance of finding a cheaper option as no one would dream of bidding lower than our forecast costs, even if that could be done".—[Official Report, 19/12/05; col. 1563.]
She was saying that this was a highly competitive market. I can understand that there may be officials in the Home Office with no commercial experience who would write that kind of argument. What I find surprising is that the noble Baroness, who is normally so very acute, could have brought herself to read it out. If she had been in court and it had been an argument advanced on the other side, I can imagine how she would have demolished it. The noble Baroness had been handling three major Bills over previous weeks. This was the sixth day. I suspect that she was tired and bored with the subject and it was easier to read out the answer.
But this is a highly competitive market. It is a highly important contract. It is the kind of contract that companies in the field will want to win. They are major companies. Many are international companies. They will work out as best they can the costs of the project—what they think they can do the project at—and add a suitable margin to cover risks and profit margins.
They will do something else as well—they will work on the assumption that the costs will escalate, because they know that the Government will change their requirements frequently, and that there will be changing security requirements over the years. In their contracts, they will have careful clauses to ensure that, if those things happen, they can produce additional charges. But their object will be to win the contract. They know that the Government will select the most competitive bid placed, assuming that the company has been accepted as a reputable company that can do the work. The idea that the companies will all bid the same—what the Government say is the estimate—is so fantastic that I simply find it incomprehensible that it could have been seriously advanced from the Benches opposite.
3.45 pm
I turn to the second argument that has been repeatedly put, which is that the Government cannot give us the costs of the non-Home Office expenses, because the other departments have not really got round to working out whether they will need or use the thing yet. That is self-evidently nonsense as well. For example, we know that the Foreign Office, about which we have heard already, issues passports at its embassies and consular posts abroad. I have a passport issued by the Foreign Office at its embassy in Caracas, after an unfortunate loss on a beach somewhere in Venezuela. To issue a passport in those circumstances, the Foreign Office will need the apparatus that makes it possible for it to give the
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biometric information. I pointed that out repeatedly in Committee, and entirely failed to get an answer out of the Government.
Let us take a look at the noble Baroness's arguments about Home Office benefits. We had an intervention earlier from the noble Lord, Lord Campbell-Savours, asking about the benefits, and we had some benefits spelt out in detail by the noble Baroness on the first day in Committee. She said that the benefits accruing to what she called the Home Office area of responsibilities amounted to between, depending on whether you took the lower or the higher figure, £600 million or just over £1 billion. But, to get those benefits, the police would have to have the equipment, as would Her Majesty's Customs and Excise and the Department for Work and Pensions. You do not get the benefits unless they come into the scheme. If the Home Office claims that it will benefit in that way, it cannot say that the costs are only those that relate to passports and an identity card directly related to passports. I am perfectly prepared, in broad terms, to accept that the Government may not be wildly out over the costs of issuing passports and identity cards relating to passports, because they are already planning for it. No doubt they have some detailed information that is more reliable than in other cases. However, they cannot claim all the other benefits without knowing what the other departments are doing.
Incidentally, one other area has suddenly come into the equation. According to at least the press on the weekend before last, the noble and learned Lord the Lord Chancellor, in his ministerial role, issued a consultation document that said that local government would be involved and would have to compare the entries on this register with those on the electoral register. Apparently—it is a horrifying thought—they will then act as a sort of policing body to ensure that the information is accurate. If it is not, substantial penalties can of course be imposed. I do not like the idea of the local authorities acting in that role at all, but that is a separate subject that we need to return to.
I finish with a slightly different point. A few days ago, the noble Earl, Lord Erroll, and I attended a meeting where we were briefed by many of the potential providers of the technology. Basically, they were there to answer questions on whether the technical problems could be overcome. I was struck by one overwhelming fact: they kept saying that, at present, they did not exactly know the Government's requirements; they did not know what the tender requirements would be. Indeed, in some cases they will not know until we have the orders and the detail later. I wrote down one comment: "We would welcome a much more in-depth engagement with industry". One thing that is quite certain is that if the industry does not yet know what the technical solutions are because they have not yet had the brief that enables them to give the technical answers, they certainly do not know what the costs are.
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That is why I agree with the noble Lord, Lord Barnett. If the Government were being honest about this, they would say, "The real reason why we are not giving you any of that information is that we haven't the faintest idea what the costs of this great project will be". They may be enormous. My conclusion is that there are two certainties: whatever estimates are now made, they will grow and grow and will be exceeded; and the final total cost will be far in excess of anything that is presented to us by anyone at present. It seems absolutely extraordinary that the Government should ask Parliament to proceed with this vast scheme on that foundation. Therefore, I strongly support the amendment tabled by my noble friend and I hope that the House will vote for it tonight.
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