The proposed ID Cards Bill has been hailed by many as the answer to terrorism, benefit fraud and identity theft. The Government’s most recent research, retaken following the London bombings this summer, shows there is strong citizen support for the scheme with 73% in favour, 17% opposed and 10% neutral. However, ministers suffered their first major setback last night as peers voted strongly against the proposed bill. The major concerns centred around the costs of the scheme.

Last night peers voted in favour of an amendment to the bill, which would delay its implementation until a full account of costs has been provided. Throughout the history of the bill there has been controversy as to what the actual costs of the scheme would be. The Government insists that the administration costs would be about £584m a year (with the cost of the actual ID card and biometric passport being around £93), but this is in stark contrast to the London School of Economics, which suggests that a more realistic estimate would be between £10bn and £19bn for the first 10 years.

The Government was further attacked by a recent LSE report for providing insufficient information about the funding of the scheme. They stated that the financial arrangements for the proposals were virtually "entirely secret" and that there existed a "culture of secrecy". The Government, however, maintain that they cannot reveal precise costs yet as this would jeopardise their ability to get a good commercial deal from potential suppliers. In an unusual step designed to combat this problem, Conservative peers proposed holding a rare secret session of the Lords to establish the true costs of the scheme, but this was rejected by the Government.

The Lords also voted for more security provisions and for more controls as to who can access the identity data but the Government argued that these security concerns are covered already by existing laws.

The Home Office has already signalled that it will try to get the Lords’ amendments overturned in the House of Commons.

It remains to be seen whether the House of Lords would then try again to block the scheme or accept the choice of the elected House of Commons.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 17/01/2006.