ID cards will be issued for job-seeker's benefit: Ministers agree plans to reduce Giro fraud. Colin Brown reports

IDENTITY CARDS are to be introduced for unemployed people claiming the new job-seeker's allowance, Whitehall sources confirmed last night. Photo-passes are among the options to crack down on fraud, but the front runner is believed to be a smart card.

The introduction of an identity card to stop the spread of fraud in Giro cheque payments for unemployment benefit has been agreed in principle by ministers, according to officials.

The smart card would carry a code which would have to be matched up with the Giro cheque numbers before payments could be made.

Some Tory MPs are pressing ministers to adopt a photo-pass, but employment department sources said cost would probably rule that out. One said: 'You could get claimants to pay for it, you could have photo booths in JobCentres. But you could not really ask those with little money to pay for it out of their benefit.'

Civil liberties campaigners will see the introduction of an identity card for employment benefit as the first step towards a national identity card, to which they strongly object.

Ministers have resisted calls for national identity cards, on the grounds that it would cause more trouble than it was worth. But identity cards are being introduced across Whitehall in a piecemeal fashion.

Social security ministers are keen to introduce some form of identity card to cut fraud on other forms of benefit.

The driving licence is also likely to be turned into a form of identity card with a passport photograph. Some Tory MPs want identity cards for NHS treatment.

Leaders of the Police Federation, who have called for a national identity card, believe the plethora of ID cards will make the introduction of a single card inevitable.

Michael Forsyth, Minister of State for Employment, said checks on identity could be in the interest of the claimants, by ensuring they were not the victims of mistaken identity or wrong payments.

'We are aware of issues around the identification of clients, and the Employment Service is considering ways in which they can improve the safeguards they provide to clients about the confidentiality of the information they provide them with, and reduce the possibility of mistaken identity and wrong or inaccurate payments,' he said.

The job-seeker's allowance is to be introduced in April, 1996, to replace unemployment benefit. It will be reduced from 12 months to 6 months, as part of the Government's attempts to cut down the cost of the welfare state.

Social security department officials confirmed yesterday that the payments to young people will also be reduced by about 20 per cent or pounds 8.30 a week with the new job-seeker's allowance. Under-25s will be given about pounds 36.15 per week, instead of pounds 44.45.

Confirming the cut, Nicholas Scott, the Minister of State for Social Security, said: 'That is only right since it reflects the lower earnings expectations of people under 25 and the fact that the vast majority of them do not live independently.'

But Donald Dewar, Labour's spokesman on social security, attacked the cut as a 'nasty piece of penny-pinching'.

He said: 'The real test is living expenses. There is no reason to suppose that they are lower at 24 than at 25.'