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Andy Burnham: As I said a moment ago, it is a decision for those Departments how and when they engage with the creation of the national identity register. It is up to each Department to make its own business case about whether the investment that it would need to make is justified. At the point at which it makes that decision, it is a matter for it as to whether it puts that information into the public domain. I am saying to my hon. Friend that that is not a crucial element on which our costings rest. We believe that we are delivering something of public benefit that people will want to use, but such information is not a crucial plank on which the costings that we have put before the House are based.
Mr. Garnier: Will the Minister give way?
Andy Burnham: I will now make some more progress.
In order to provide even further reassurance, we commissioned KPMG and its report recognised the high quality of the outline business case and confirmed that the majority of cost assumptions were based on appropriate benchmarks and analysis from the public sector and suppliers.
Lynne Jones: Will my hon. Friend give way?
Andy Burnham: I will make progress now, but I hope to give way before I end my remarks.
The Home Office benefits will, of course, play a significant part in realising the strategic benefits of the overall scheme, including protecting identity for the citizen, helping to reduce crime, protecting our national security, reducing the problems of illegal immigration and illegal working and enabling more efficient and effective delivery of public services. The running costs of the identity cards scheme will be funded from fees charged to passport and ID card applicants or to users of the identity verification service or from within existing departmental budgets. The fact that the bulk of the costs will be covered from fees means that, as I explained to Opposition Members earlier, without these fees, there is simply not a pot of money that could be diverted to other uses—whether it is more police officers or more immigration officers.
The published unit cost of the joint passport and identity card package is £93 for both documents—a passport and ID card. The Home Secretary has also announced that it would be affordable to issue a stand-alone identity card for a fee of about £30, or £3 a year over 10 years. The Home Office agency that will be established to issue identity cards and incorporate the existing UK Passport Service will publish corporate business plans, as well as annual accounts. The full business case will be subject to extensive review—both internal and Treasury review—and challenge prior to the signing of contracts on identity cards.
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My hon. Friend the Member for Walthamstow (Mr. Gerrard) urged me to comment on the detail of the Lords amendments. We cannot accept that there should be such an unprecedented review of the estimated costs of the identity card scheme, which would cover 10 years and the consequential costs that could fall on other Departments, before the Bill can come into effect. Such
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a review would not be necessary. It would be unprecedented that a Bill to fulfil a centrepiece manifesto commitment could be implemented only after a report on cost estimates had been completed, which would be the effect of Lords amendment No. 70. The logic behind the amendment is fundamentally flawed. It would appear to have been motivated by a desire to keep costs down, but, in practice, it would limit our ability to do precisely that.
I am pleased to say that we are persuaded that we should include a commitment in the Bill to publish regularly—at six-monthly intervals—reports to be laid before Parliament, as is proposed in the new clause tabled by my right hon. Friend the Member for Holborn and St. Pancras. The measure is sensible, balanced and would not put value for money at risk. As I mentioned, subsection (4) of the new clause would allow the Home Secretary to decide to withhold information that might prejudice the procurement process.
Lynne Jones: Is it not true that the KPMG report examined cost centres that amounted to only 60 per cent. of the operating costs? Did that not leave a big hole in the assessment? If we are to have such six-monthly reports, by what mechanism may we take the decision that the costs are out of control and thus stop the scheme from going ahead?
Andy Burnham: I make it clear to my hon. Friend that KPMG had access to the scheme's full business case and that its report went into considerable detail about the scheme. It concluded that the £584 million running costs that we had published were "robust and appropriate".
Lynne Jones: KPMG actually said that the methodology for determining those costs was accurate, but did not put a figure on them.
Andy Burnham: My hon. Friend has examined the information that the Home Office has put out assiduously. KPMG examined the methodology behind the entire business case in considerable detail. She is right that it considered 60 per cent. of the assumptions underlying the scheme, but it gave the figures to show that the identity cards team produced a clean bill of health.
We are giving a commitment today on the six-monthly reports in response to the amendment tabled by my right hon. Friend the Member for Holborn and St. Pancras precisely because we want to be as open as possible and to allow people to get up-to-date information about how the scheme is progressing. Indeed, the reports could be a helpful focus for the Home Office when it ensures that the costs are kept under control. If the costs change in the way in which my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones) suggests, a public debate on those costs will follow. As I said to my hon. Friend the Member for South Derbyshire (Mr. Todd), she can be confident that we want to put as much information in the public domain as possible, while respecting the wish to get the best possible deal for the taxpayer.
I hope that the House will disagree to Lords amendments Nos. 1, 68, 69 and 70. As I indicated, we will support the much more sensible and workable amendment that has been tabled by my right hon. Friend the Member for Holborn and St. Pancras.
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Mr. Garnier: There is a growing air of scepticism in the Chamber, and the longer the Minister spoke, the more the scepticism became apparent. He said that there would not be a special pot of money to prevent Home Office funds for the police and other necessary forms of security from being spent. However, one is of course always reminded of the Prime Minister's remarks in 1995 when he criticised the then Home Secretary, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), by saying:
"Instead of wasting hundreds of millions of pounds on compulsory ID cards as the Tory Right demands, let that money provide thousands more police officers on the beat in our local communities."
What goes around turns around.
The longer the Minister spoke, the more it became abundantly clear not only that members of the public do not read party political manifestos, but that Ministers do not read their own manifestos. No sensible person who read the Government's manifesto could have reached any conclusion about the natural and ordinary meaning of the words other than that the scheme would not be anything other than entirely voluntary. The likely costs of the scheme reinforce the Government's wisdom of writing such words into their manifesto.
Mr. Garnier: I give way to the hon. Gentleman, whose copy I used to save from libel writs when he was writing for "The Grauniad".
Martin Linton: The hon. and learned Gentleman might remember that when he was night lawyer on The Guardian and I was night news editor, a quote passed over his desk that read:
Does he need to be prompted to recall that those were the words of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) at the Conservative party conference?
Mr. Garnier: I was paid to prevent libels, not to read the newspaper—[Laughter.]
Madam Deputy Speaker (Sylvia Heal): Order. Perhaps we can get back to the Lords amendment under discussion.
Mr. Garnier:
The Minister is keen for us to be assured that we will be able to trust entirely the figures that his Department will come up with if the amendment tabled by the right hon. Member for Holborn and St. Pancras (Frank Dobson) is accepted. However, we must see the situation in the context of a report by the Comptroller and Auditor General. He had to report to the Home Office and the public at large that the Home Office had fallen down on its 2004–05 resource accounts. Let me pick out one or two paragraphs of the report so that hon. Members can get an idea of the context of our debate. The report also addresses the concern expressed by the hon. Member for South Derbyshire (Mr. Todd) about the absence of proper accounting assumptions in several of the Minister's assertions.
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Paragraph 10 of the report said that the Home Office accounts for last year
"contained numerous errors and internal inconsistencies. In particular, amounts relating to cash, Exchequer funding and non retainable income due to the Consolidated Fund were contradictory and did not reconcile between the different places in which they appeared in the accounts. There were also material omissions and misstatements".
"Difficulties were encountered in the transfer and cleansing of data, and staff were not trained to use the new system on a timely basis. These problems and delays, together with a lack of understanding of the new accounting system, meant that the Home Office could not use data from its new accounting system effectively to produce a cogent set of accounts to the required faster closing and statutory timetables."
"control weaknesses within key Information Technology applications including access to the system, inadequate segregation of duties, the creation of standing data and the ability to interrogate and monitor changes made."
"These weaknesses made access to the database by unauthorised staff possible, representing a risk to the integrity of Adelphi data and exposing the Home Office to a greater risk of fraud and error."
Let us go back to paragraph 11, which refers to the second draft accounts, which, unlike the first draft accounts—which were delivered rather late—were delivered only two days late. It states:
"The amounts in the revised accounts had changed significantly from the first draft. In particular nearly every major balance was markedly different. To illustrate the scale of the movements: the amount owed to the Exchequer by the Home Office of £68 million in the September draft accounts became an amount owed by the Exchequer to the Home Office of £112 million in the December draft accounts. This swing is due to major changes elsewhere in the accounts resulting in a change to the cash required by the Home Office."
The Comptroller and Auditor General went on to say that because the Home Office was incapable of implementing its new accounting system, it had been
"Bank reconciliations are one of the most fundamental of all accounting controls as they enable payments, receipts and cash balances to be validated to an external source and provide assurance about debtor and creditor balances. They are also a key control for the prevention and detection of fraud."
Other references in the Comptroller and Auditor General's report were equally impolite. In paragraphs 21 and 22 he criticised
"Poor controls and weaknesses in the audit trails maintained over the assignment of access rights; Absence of checks made against Human Resources records to ensure that new users are authorised, and leavers are removed promptly; Absence of controls to detect unauthorised access to the database"
"Over reliance on the Home Office contractor to undertake security checks, and a lack of effective processes to address the risks this exposes the Department to".
If that is what the Comptroller and Auditor General says about the Home Office's accounts, it is perhaps not in the least bit surprising that other Departments have not found it convenient to hand over to the Home Office
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their assessments of the costs, workings, assumptions and accounting practices of their work in preparing for the great day on which the ID cards system is introduced and the national identity register comes on stream. In autumn, just before Christmas, I took the trouble to table written parliamentary questions to all the spending Departments, including the Home Office, to ask what work they had done to prepare for the national identity register and what cost estimates they had made. Even the Treasury said that it had done nothing to prepare for the great event. I suspect that it had done nothing because it did not want to become embroiled in an unquantified, unquantifiable and hugely expensive financial disaster, which the project seems likely to become.
The least that we can expect from the Government is openness and transparency, but so far no credible reason has been advanced in this House or in the other place—I have not heard one this evening either—for preventing the House of Commons from having a right of scrutiny in respect of the huge sums of public money that the Government intend to spend on the ID cards system and the national identity register scheme. Whether we spend £5.84 billion over 10 years, as the Government suggest, or the £19 billion to £24 billion that the London School of Economics report suggests, makes no difference to the principle. The House must know what it is giving the Government permission to spend.
There has been no willingness to be candid about the start-up costs, the capital costs, the transaction costs, the volumes or a host of other necessary details. I am driven to the conclusion that the Minister is not quite clear on what those concepts are. That puzzles and worries me.
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