Identity Cards Bill

I want to take the Minister back to his opening remarks when he mentioned fraud worth £1.7 billion. Such fraud is central to the debate because it determines whether the Bill is a proportionate response to the problem. I have no doubt that the figure of £1.7 billion was put in the public domain to give the impression that when the ID card system was fully deployed in the public and private sectors, a problem of such magnitude could be resolved, but I question that assertion. I also wish to focus on the fraud because it is the only argument in favour of the identity card scheme that the Government have consistently used from the outset—they abandoned all their other justifications at various points along the way. There are many components to the £1.7 billion figure. Although I will not bore the House by going through them all, I shall outline several because it is genuinely important that I make this case. The Association of British Insurers says that the estimate of financial loss due to identity fraud is £22 million. If the biometric system and ID cards are to tackle such fraud in the insurance system, every insurance policy will have to be linked to a biometric card and its holder. Every time an assessor checks water or fire damage against a policy, the holder’s biometric card will have to be verified so that there is a link between the person, the card and the policy. That is the only way in which the scheme could help to tackle fraud in the insurance system, but the process would be expensive, and no doubt the full cost of it would be passed on from the insurers to the citizen. The Association for Payment Clearing Services says that £504.8 million is lost due to plastic cards being used by criminals who are not their rightful owners. It has been said several times that the cost of fraud due to payments made when a card is not present is £150 million. If a person buys a plane or cinema ticket with a plastic card, both that card and the ID card could be presented at the aircraft or cinema for checking to prove that the person had made the purchase. However, if people buy goods by mail order that are simply delivered by a man with a white van, the scheme will provide no assistance whatsoever because goods can be delivered when people are not at home and the man is not going to have a biometric scanner in the cab of his van. That part of the £1.7 billion figure cannot be dealt with by the biometric register or the identity card. According to the Building Societies Association, £3.1 million is lost to identity fraud, but the same applies to building societies as it does to insurers. Every building society account would have to be linked to a person with a biometric profile and every time a transaction on that account took place, fraudulent or otherwise, the person involved would have to verify their card against the central database and the central database against their account. That is the only way in which the proposed system could prevent fraud in the building societies sector, but it would be disproportionate and highly expensive, and the full costs would be passed on to the citizen and the customer. CIFAS, the UK’s fraud prevention service, says that the cost of identity fraud to the retail sector is £2.3 million. Much of that involves stolen cards being used in corner shops or supermarkets. It is inconceivable that there would be a biometric scanner at every till in Sainsbury’s or Tesco’s or—even worse—at the till in every corner shop. It is unlikely that the biometric register and the ID card could tackle that type of retail without placing a massive cost burden on the consumer and the citizen. The Driver and Vehicle Licensing Agency and the Driving Standards Agency say that the cost of preventing identity fraud—not of fraud itself—in their sectors would £2.5 million and £1.2 million.