ID Cards Bill in crisis after peers inflict defeat

Proposals for a national ID card scheme are in crisis after peers inflicted a treble defeat on the Government's flagship programme.

Conservatives and Liberal Democrats lambasted the potentially huge costs involved. They demanded a full costing and called for MPs to be given an unprecedented vote on the scheme's budget. Ministers also faced pressure from Labour's left-wingers to abandon their plans.

Academics from the London School of Economics criticisedsecrecy over the potential costs of the scheme and warned that the legislation would pave the way for "endemic" checks on identity, and predicted that firms would make "substantial profits from relentless and unnecessary identity checking".

Ministers suffered their first major setback over the ID Cards Bill last night as peers voted by 237 votes to 156 for an amendment demanding that the National Audit Office draw up a report on the estimated cost.

The Government suffered a second defeat in the House of Lords when peers voted to demand a secure and reliable method of recording and storing personal data. In a third defeat, peers voted by 194 to 141 for an amendment limiting the potential for ID cards to be required before people can access public services.

Ministers will try to overturn the defeat in the Commons. But they will face renewed pressure next week when peers will try to throw out a key part of the Bill to prevent people being forced to register for an ID card when renewing passports and driving licences.

Ministers say the scheme will cost £584m a year to administer, with a combined ID card and passport costing no more than £93. But research by the LSE suggests the real cost could be between £10bn and £19bn over three years; up to three times the Government's estimate.

An updated LSE report, released yesterday, attacked the Home Office for failing to provide information about funding. The report said: "Dozens of questions about the scheme's architecture, goals, feasibility, stakeholder engagement and outcomes remain unanswered ... The security of the scheme remains unstable, as are the technical arrangements for the proposal. The performance of biometric technology is increasingly questionable. We continue to contest the legality of the scheme.

"The financial arrangements for the proposals are almost entirely secret, raising important questions of constitutional significance."

Baroness Noakes, the Conservative home affairs spokeswoman, told peers: "This amendment is about transparency and openness in Government, and I do not believe that the Government have demonstrated those qualities.

"Parliament deserves better. We must give the Commons the opportunity to approve the costs and the benefits, and to decide themselves about affordability."

But Baroness Scotland of Asthal, the Home Office minister, said: "I simply do not accept that there should be any such unprecedented review of the estimated costs of the ID card scheme, covering a period of 10 years and covering the consequential costs falling on other departments, before the Bill can come into effect. I simply do not think that that is necessary."

In the Commons, Charles Clarke, the Home Secretary, also came under pressure over ID cards from all sides.

David Winnick, the Labour MP for Walsall North, said: "Can I suggest in the friendliest way possible that perhaps it might be useful if the whole issue of identity cards was looked at again in the Cabinet."