Non-Environmental Cost-Benefit News

The estimated runningcost of a new national identity card scheme has risenagain to £5.8bn over10 years-a 5.5 per cent increase since the previous cost-benefit analysis by the Home Office six months ago.

The increase means that the estimated unit cost of each card has risen from £88 to £93, although the fee charged to the public has not yet been decided. It is likely to be lower for some less well-off groups.

On top of the running costs, there will be an additional bill for setting up the scheme, which the Home Office has refused to estimate on grounds of "commercial sensitivity".

In November the department estimated that the scheme - including new passports with biometric identifiers that will be required for travel to the US - would cost £5.5bn over 10 years. The government's original estimate, made in late 2002, was £3bn.

Results from a government-sponsored trial of biometrics, also released yesterday, showed that iris scan technology was generally effective, but less successful with black people and those aged over 59.

The findings raised fresh questions about the cost-effectiveness of the controversial plan, as ministers launched a new offensive to get the identity card bill through parliament following its defeat before the general election.

The Conservatives said last night they intended to vote against the bill, a move that makes the legislation the first clear test of Tony Blair's authority in the new parliament.

Because of Labour's much-reduced majority, the Tory opposition means that the prime minister will need to work hard to get the bill through the Commons.

Nineteen Labour MPs rebelled over ID cards in the last parliament and it would now take only 15 more votes against to derail the legislation.

Ministers hope the prospect of discounted charges for lower-income groups such as pensioners will help garner support. They also argue that 70 per cent of the cost of the project will have to be spent anyway, to meet the demands of the US and other countries for biometric identities on passports.

Yesterday, the government argued that ID cards were needed to stop the soaring cost of identity theft, playing down previous issues such as counter-terrorism, which have raised concerns among trade union, human rights and Muslim groups.

The Home Office referred to the results of a survey published earlier this week showing that five out of 10 people backed ID cards as the best way to combat identity fraud.

John Cridland, deputy director-general of the CBI business group, said ID cards could be a positive step towards tackling the growing cost to companies and consumers of identity theft, estimated at £1.3bn a year.

The introduction of ID cards is also expected to boost the biometric industry, with the biometrics used in the cards likely to become an industry standard.

By Jimmy Burns and Christopher Adams
Financial Times http://news.ft.com
http://news.ft.com/cms/s/c6ab4960-cd81-11d9-aa26-00000e2511c8.html