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The Earl of Erroll: My Lords, as it will not be compulsory to carry the card, I cannot see how it will be helpful in any of those circumstances. By the way, the DWP estimate of savings was £50 million only, which, set against £584 million costs, is not exactly very significant.

Baroness Henig: My Lords, I am giving my view that, if there is an identity card scheme, drivers will be much more careful about giving false names when stopped by the police. That is my view; noble Lords are entitled to challenge it, but I believe that it will be one of the benefits of the scheme. Processing criminals, especially in custody suites, will be much easier. Indeed, in my view policing will be much more effective and much time will be saved on routine business. That is important because it means that more time and officers will be available to focus on more serious crime, on level 2 crime and protective services. Surely, we all want to see that as a matter of course. So if I am right and that is one of the great benefits of the scheme, it will benefit not only policing but the man in the street and his security.

We need to look at costs and benefits in the round. If I did not believe that the benefits would outweigh the costs, I would not support this scheme—and I believe that noble Lords opposite are being extremely pessimistic and very narrow in their focus. The picture is much more positive than many noble Lords would have us believe.

Baroness Carnegy of Lour: My Lords, the noble Baroness has enthusiastically told us of some of the benefits, and I shall not argue about that. We are
 
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talking about whether or not the benefits outweigh the costs of the Bill. Parliament should know roughly what the cost will be before it accepts the scheme at all.

I do not know whether the noble Baroness was in local government, but when one is in local government, before one puts something out to tender, one decides whether the project is worth having. One asks for the broad costs, capital costs and revenue costs and one then decides whether it is worth doing. One certainly does not decide without knowing the total costs. In her extremely helpful letters to my noble friend about costs, the Minister answered a great many questions; but throughout she has said that because of commercial sensitivity it is not possible to tell Parliament broadly what the costs will be. She has said that to the London School of Economics and thus limited that body in what it can tell us.

All the amendment is doing is to say that before the Bill is implemented and the scheme begins, Parliament—and the Commons in particular, because it is the guardian of the budget—should know broadly what the cost is. Quite honestly, even to me, who comes from local government, it is rubbish to say that you cannot put something out to tender without first knowing broadly what the cost will be; of course you know that. If Parliament finds it impossible to discuss big sums in public for those reasons, perhaps there is an argument for a secret session—but I do not know about that because I do not know what the constitutional position would be.

The matter is quite simple. The amendment, whether or not its wording is correct, says that the House of Commons should know the total cost before it decides to put the scheme forward. I cannot see that there is an argument against that, whether or not one wants identity cards. So I hope that the whole House will support the amendment.

The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, I assure noble Lords that I have listened with great care and interest to all that has been said, and I hope that I shall be able to answer in a way that will give your Lordships a little more confidence. I take this opportunity to thank the noble Lords, Lord Peyton and Lord Steinberg, for giving me such unmerited and glorious praise; but we believe that on this occasion the Government have given me meat with which to work—it is not as empty as noble Lords fear. We should remind ourselves that this particular enterprise is going to be put into the hands of the Passport Office. Noble Lords should understand that it is because of the expertise and the level of acuity and care this office has demonstrated that we are minded so to do. The Passport Office has brought its enterprises in on time and on budget.

It is also right to remind ourselves of the context in which the changes for ID cards will be made. I say to the noble Lord, Lord Phillips, with regard to the comments made by my right honourable friend the Prime Minister when he was in opposition, that he was absolutely right about the increase in numbers of police officers. We have succeeded in doing that.
 
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We have an all-time record of roughly 140,000 officers. Anything we do in this sphere does not in any way jeopardise our total commitment in that regard.

Bearing in mind what we are intending to do, we need to look at what is already in place. The changes to ID cards, as I have said, are predicated on changes that are already on course. In February the first biometric passport will be introduced, which will include facial recognition. In October the first interviews—the extended background checks—will commence. The network, in terms of where those interviews will take place, has already been identified. The big change will be in enrolment and the process interview, but in time that too has to be introduced for our biometric data. We currently have a complex database that contains all the information on passports, and as we move to include biometrics from fingerprints and iris identification, those two will have to be incorporated into the Passport Service.

We have called the central new database "the register", but noble Lords will be familiar with the fact that the Passport Service currently has a database. When we include the biometric data that will come from facial recognition and fingerprints, that information will have to be contained on that database. As a result of the demands made on the service, we have now piloted passport validation, a commercial service that will come on stream in 2006. It is demand-led because, even under the current legislation, there has been a demand for that from the business community.

All of those items are coming anyway, and the Passport Service will have to provide for them. So if we look at the differences between the service that will be provided now and that which we anticipate will be necessary to be provided in the long term, the differences are not great. I will list them. A database of basic personal information and biometrics exists, and that will continue. An identity document that stores information, including biometrics, is already provided. The ability for banks and other organisations to validate identity documents with consent exists now in pilot form. Disclosure to the police and other agencies of data held on the passport database happens already, and this would include the equivalent audit usage data.

So what is new? The production of cards as well as passports is new. We do not currently record changes of address, but we propose to do so in the future. The IT infrastructure will be slightly bigger; and the scheme will be enforced; that is, civil penalties, mainly post-compulsion. What about the extra benefits? There will be broader coverage—that will be non-passport-holders and foreign nationals all using the same type of card; a scheme commissioner to oversee the exercise of all the powers; statutory rules for how the scheme would be used by the public and private services, and for how information would be provided without consent to the police and intelligence services; financial benefits that come with universal coverage—that is, the checking of unidentified fingerprints at
 
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scenes of crime; and an ability to set fees for identity verification services to meet the broader scheme's costs.

When we consider what we now have, and what we propose, we say that around 70 per cent of the costs we have quoted would be incurred anyway in the move to biometric passports. This expenditure would not be subject to the regime set out in the amendment but would be governed by the usual rules applying to government expenditure. We need to be clear about that. This is not something outwith our ken; something that we cannot estimate. That is why have put into the public domain the figures that we already spend. The United Kingdom Passport Service for 2006–07 is estimated at £397 million, a figure to which the noble Lord, Lord MacGregor, referred. That is already in the government expenditure plans. It will be incorporated in the estimated costs of issuing passports and ID cards of £584 million. That is published in a full, regulatory impact assessment. It is not a blank cheque. We know the basis upon which this has been cast.

If we then look at the future, it would be easy to say, "If we just put the Identity Cards Bill to one side these costs would not be expended". As I hope that I have just indicated, that is unlikely because if we consider the way in which biometric data are being used and will be used in the future—the Passport Service is having to provide ID verification more and more now because those demands are being made upon it—we can see that this development will be necessary. I must confess that I am surprised at the suggestion from Her Majesty's loyal Opposition that if they came into power they would wish to disregard the benefits which are clear and which my noble friends Lady Henig and Lord Campbell-Savours spoke about with such passion.

The noble Baroness, Lady Noakes, may recall that when the Bill was in another place my right honourable friend the Home Secretary gave a commitment that it would be affordable under current plans. My noble friend Lord Soley is right, therefore, about having to be practical and making sure that this is affordable because the public will demand that it is affordable; and if it is not affordable it will not retain public support.

As a number of noble Lords have mentioned, the current plans have been scrutinised and reviewed by the accountants, KPMG, to set the charge for a stand-alone identity card at £30. We believe that those costs are robust costs. The noble Lord, Lord MacGregor, asks how much is allowed for contingency. The published estimates include an allowance for contingencies in accordance with Treasury guidance. In addition, an allowance has been made for the optimism bias with which the noble Lord, Lord MacGregor, will be only too familiar, to offset any over-optimism in the costing assumptions. All those details have been reviewed by KPMG as well as the Treasury although it would be wrong to publish precise figures in advance of procurement. The noble Lord, Lord MacGregor, and my noble friend Lord Barnett, know how keenly the Treasury look at
 
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estimates made by departments and how jealously they guard public funds to make sure that the last possible benefit is squeezed out for the benefit of the citizens of our country. That scrutiny has continued. Perhaps I may reassure the noble Lord, Lord Wright, that we have learned a valuable lesson from his painful experience and from the approach of the noble Lord, Lord Sheldon, to ensure that we shall be able to meet these future costs in a way that is proper. We anticipate that scrutiny, and know that we will have to meet it.

5 pm

The difficulties with which we are faced are not as great as has been suggested. We have been asked, "Why not provide a breakdown of the costs in response to the LSE?" We have provided potential suppliers with the sorts of information that it would be possible for us to provide, but of course we come back to confidentiality. I shall come back to some of the more specific issues in a moment.

I cannot add anything to what I have said, save to remind the House that we have published the expected costs of issuing identity cards and the current best estimates, and believe that they are sound. That cost includes all the existing costs of issuing passports through the current United Kingdom passport office. I fully accept that this is the cost of issuing the passports and identity cards and running and compiling the national identity register. It does not include future costs that may be incurred by other government departments that may choose to use identity cards as a way of improving their services to the public, any more than it includes the costs to private sector companies such as banks or building societies that decide in the future to use identity cards as a way of verifying people's identity. It would be somewhat odd if it did.

The decisions on any future investment—for example, in IT systems that might be required to make the best use of identity cards—will be made in due course, but not now, by the organisation concerned on the basis of a cost-benefit analysis. We confidently expect that organisations, be they public or private, will decide to make such investment if it is worth their while—if the saving to them in identity fraud or the reduction in administrative costs, whatever it might be, makes the decision sensible. I was pleased that there seemed to be some agreement between the noble Lord, Lord MacGregor, and my noble friend Lord Campbell-Savours that the benefits are likely to be much wider than those that we have explored. There will be many net benefits to a wide range of organisations and, as your Lordships will no doubt be aware, the Government have already published a high-level summary of likely future benefits in the benefits overview paper, a copy of which is available in the Library. In the regulatory impact assessment published alongside the Bill, the Government stated that, in our view, the benefits of the scheme justify the costs. That has been confirmed by the Office of Government Commerce gateway reviews.
 
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It would be unprecedented for a piece of legislation such as this to be incapable of being implemented until a report on cost estimates was completed, as set out in Amendment No. 123. I agree with the criticism of the drafting made by my noble friends Lord Williams of Elvel, Lord Campbell-Savours and Lord Barnett, who was right in saying that the amendment was fundamentally flawed.

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