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Full text of letter from Paul Boateng to David Blunkett
Full text of letter from Paul Boateng to David Blunkett

Chief Secretary to the Treasury

25 September

Dear David

IDENTITY CARDS

Thank you for your letter of 16 September. I am grateful to you and your officials for your work to address the points raised by Cabinet. I thought it would be helpful if I set out the points we must address before taking proposals back to DA Committee.

2.  Costs and charging. I welcome the work your officials are putting into the cost-benefit analysis and I have asked mine to continue their support. There are a number of issues that the analysis must fully cover before your proposals are brought back to DA Committee in order to meet the minimum requirements for bringing policy proposals to Cabinet or its committees, which I understand our officials have discussed and agreed:

  • First, the analysis needs to set out the various problems we are seeking to tackle, and the options, including ID cards, for addressing them. There may well be alternative options that would provide us with a series of quick wins with much lower risks and costs. Some of these were explored in the Cabinet Office review of identity fraud last year.

  • Second, specifically for ID cards, the different elements of the scheme - broadly, I think there are four: the core card, employment, security and access to public services. For each of these elements, the analysis should be clear about the social and economic benefits and costs. Where possible these should be quantified, but at the very least must be clearly described and appraised. The economic costs of compliance, to the public and private sectors, should be estimated, as should the cost to the public purse, which should include costs to other government departments. I remind colleagues that if we decide to go ahead with the cards, it is on the basis that any costs associated with the cards not covered by the charge must be absorbed from within existing budgets.

  • Third, it should be clear about some of the cost/benefit trade-offs we face in each of these elements. For example, a differing degree of verification of employees will have different compliance costs and different potential benefits. This would enable us to be clear about the impact of changes in benefits and costs as the project's definition develops.

  • Fourth, it should be clear about the breakdown of the different parts of the core card costs, such as capturing the biometric, producing the card and building the databases (including costs of links to existing databases). First, to identify the overlaps with the developments already being proposed by DVLA and UKPS, so we can be clear about the additional costs of any ID card. Second, to identify some of the choices we face in rolling out the card, especially for the existing stock of adults. This links closely to the point in your letter on technical and practical issues - I think there are different ways of rolling out, to different degrees of security, that will cost different amounts. Having these choices is important in determining overall affordability, and thus the charges for the card.

  • Finally, it should make an assessment of the expected costs of the risks involved, and consider how robust the proposals are given areas of future uncertainty. This will need to develop into a full risk mitigation strategy if the project proceeds further.

    3.  Compulsion. I welcome your proposal to develop the pros and cons of both options. In doing this, it is worth noting that under a fully compulsory option, the charge for the card may be classified as a tax by the Office for National Statistics.

    4.  Delivery. I strongly welcome the development of a proposed programme and procurement strategy and appointment of a programme director; and encouraged by the focus on OGC's recommendations. Before going back to DA, we need to be clear about the proposed degree of security, the proposed requirements for accessing key public services and the proposed arrangements for delivering the project (crucially, including the relationship between CIP on one hand and DVLA and UKPS on the other).

    5.  Specifically on the CIP - if we decide to go ahead with ID cards, I agree the principle of two separate projects, but which are managed in parallel is the right one. I understand that the independent consultant's report sets out helpful proposals on the interaction between ID cards and the CIP along these lines and is now being considered by officials from the ONS and the Home Office in consultation with the Treasury. I will write to you on what is proposed in this area shortly.

    6.  Also, the labour market. I strongly welcome your position that ID cards should not increase burdens on employers or adversely impact the labour supply. Any agreement on ID cards will need to be accompanied by an agreement that they go hand in hand with measures to protect the labour supply, including increased managed migration. I suggest that our officials work jointly on developing a specific set of proposals for consideration in parallel with decision on ID cards.

    7.  Finally, while I strongly welcome the progress we have made since DA first discussed ID cards before the summer, the practical points raised by Cabinet are substantial, though not insurmountable. It is important therefore that timing and nature of any decisions we make reflect this. Firstly, in working towards considering an in principle decision, I would encourage you to allow sufficient time for colleagues' points to be fully addressed before bringing revised proposals back to DA. Secondly, following any in principle decision, further or final decisions to actually proceed should be made in parallel with the development of the cost-benefit analysis and the OGC Gateway Zero process.

    I am copying this letter to Cabinet colleagues and to Sir Andrew Turnbull.


    Paul Boateng

  • Full text of letter from Jack Straw to David Blunkett
    CONFIDENTIAL

    Foreign and Commonwealth Office
    24 September 2003

    Identity Cards

    Summary

    1.  Reply to your minute of 17 September. Continued doubts. Request for further analysis to demonstrate ID card will achieve its aims. Need to take Foreign Office aspects into account.

    Detail

    2.  Thank you for copying me your minute of 17 September to the Prime Minister. You asked for contributions to put together a comprehensive list of outstanding questions which need to be resolved. I have also seen the letters from Charles Clarke of 23 September and from Paul Murphy of 22 September.

    3.  This minute is my contribution but I should re-emphasise that I remain unconvinced by the overall policy. I believe the proposed plan is flawed, and that no tinkering with particular issues will be able to resolve what is a fundamental political matter. We remain as far apart as ever on the acceptability of charging. How will we get people to accept a fee when asylum seekers get the card free? What about the practicality of ensuring every citizen provides a biometric sample while no effective procedures are in place for those who refuse? The potential for a large-scale debacle which harms the Government is great, and any further decisions on the next steps must be made collectively. I will continue to urge strongly that this issue be shelved.

    4.  Let me offer you a view on the list of substantive issues you raised in your letter. All will need considerable thought. I would like to see more analysis of exactly how the scheme is to meet its stated objectives. Technical issues and public acceptance to one side, we must be clear we will never be able to require from all people the production of a card to access employment or services. There will be large numbers of people who will be entitled to both without a card, starting with EU nationals, who will be able to stay and work here for three months without any official documentation. Other groups both of UK citizens resident abroad and other categories of third country nationals will also need exceptions. This is an obvious loophole for illegals to exploit, given poor security of some EU documents. So it is hard to see how the scheme will effectively combat illegal working. I wonder whether we will be capable of resolving this issue effectively without error rates so high that they would undermine the scheme. I welcome your commitment to further clarification on achievability in the DA paper, which must be realistic about what will be achieved by the introduction of ID cards and be much clearer about how those objectives will be met.

    5.  My minutes of 24 July and 9 September covered the Foreign and Commonwealth Office's key interests that I would want resolved prior to a decision in principle. I have not seen evidence that these have been taken into account. You may find it helpful if I go through them below, and I am also enclosing a more detailed paper drawn up by my officials. As details of the scheme become clearer there may, of course, be other issues of interest to the FCO.

    Biometrics: the effectiveness of ID cards with biometrics also depends on the introduction of equivalent security safeguards for UK passports and visas. Work is now beginning on the implications of requiring passport and visa applicants to undergo fingerprinting. The costs are likely to be very significant, particularly because the buildings from which we currently issue these documents would be unable to cope with the increased flow of callers. This could mean a funding requirement of several hundred million pounds which the Foreign Office does not have. The Home Office will need to bear in mind the need to meet the financial consequences of the application overseas of changes in policy for which the FCO is not funded.

    EU law: I remain concerned that there are a number of pitfalls which could either lead to ECJ challenge or render the policy ineffective.

    For example, will it be legally possible to issue ID cards to EU nationals which are not valid for travel within the EU? My preliminary legal advice is that Member States are required to accept an Identity Card as a travel document and it might be ineffective or illegal to issue EU nationals with an Identity Card designated as "Not valid for travel".

    We will not be able to require EU nationals to show UK ID cards when first seeking or taking up employment. So we are likely to end up with a situation where we require a UK national to show the card when applying for a job, but not an EU national. This could in certain circumstances be vulnerable to ECJ challenge.

    I also note that other Member States' identity schemes differ in significant respects. Our officials have been working on a comparative study of the practice in other countries and I hope analysis of that work could be included in your paper. For example what charges are levied? What measures do others use to allow access to benefits? How do they deal with non-residents? We need to be confident that we will not have any unnecessary spats with EU law over this and the experience of others might inform our decision.

    In summary, we need to be completely certain on the relationship between your proposal and EU law. I would like sight of your legal advice, including analysis of the Free Movement of Persons and Employment provisions.

    Schengen and the Common Travel Area with Ireland: I have mentioned in my previous minutes the need to be clear about how the introduction of ID cards fits with policy on Schengen. This will attract close attention both overseas and domestically. We should agree our handling strategy with EU governments, who may believe that ID cards will lead to the removal of our frontier controls and full integration into the Schengen structure. We should also consider implications for the CTA with Ireland. There are up to one million Irish nationals in the UK who would require ID cards in the same way as British Citizens. Even if the UK authorities issued the card, we would need to work closely with Ireland to ensure there were no extra resource implications for them (e.g. in sudden extra demand for supporting documentation). The implications for security on the common border also need to be considered if the UK introduces ID cards. Overall I wonder whether in reality, for our cards to be effective, the Irish will need to have an ID card as well. Given this, I consider that we need high-level discussions with the Irish well before any public statement is made.

    Nationality: we need to think carefully about issuing ID cards to foreign nationals and whether and how nationality is recorded on the face of the card. I want to avoid a heavy bureaucratic burden on non-EU foreign nationals. The UK needs to remain a competitive place for foreign nationals to work and study. The arrangements should be as simple and accessible as possible. As I have argued before, proof of identity will be a particular problem for all  non-British applicants. There would clearly need to be stringent checks to make the scheme effective, but it is not easy to see how this would be done. It may not be possible to do background checks for applicants from overseas. So what proof of identity will suffice which allows the application of foreign nationals to be processed as quickly as those of British applicants? On a point of detail, there are categories of British Nationals without right of abode, such as the BN(O)s connected with the former Dependent Territory in Hong Kong, who will be sensitive to how their nationality is recorded and what card they would be entitled to.

    British Citizens resident overseas: 15 million British citizens live abroad. Many retain rights to services and benefits (which can be exercised from abroad) and are entitled to vote in UK elections. To enable these people to continue to exercise their entitlement from their country of residence, some method other than the ID card will presumably be needed. Similarly, when visiting the UK, people entitled to access services may need a card. In this case, they will need to be able to apply for and get a card without delay, even though not resident, or be able to provide other forms of ID in order to access services. There may be further problems around the franchise. British citizens wishing to vote from abroad have to appoint a proxy. If an ID card were to be required to vote, some arrangement should be made for proxy voting which will take into account those abroad who do not hold an ID card.

    6.  I would want all these questions answered satisfactorily resolved [sic] before I could contemplate agreeing in principle to an ID card scheme. Moreover before any announcement I would need the following two points to be resolved:

    Costs: my officials have contributed to the work of your team on cost benefit analysis. However, leaving aside the question of the introduction of fingerprint passports and visas, I want to be sure that the significant FCO costs are being taken into account, notably a potential loss of 33 million per annum in Consular Premium from reduced passport issue. This may be caused by use of the ID card instead of a passport for travel to the EU. I need complete assurance that the Home Office will ensure protection of Consular Premium, either through a charge on ID cards or through issue of ID cards only with passport booklet. I note that there is no intention at present to issue ID cards overseas. Were that to change, the financial consequences could be very much greater.

    Consultation and Presentation: there is no reference in your minute to handling foreign governments and overseas press. I would want a careful handling strategy particularly with EEA governments (especially Ireland) and our key partners elsewhere such as the US and Australia. This briefing would need to be tailored to cover points of sensitivity (e.g. Gibraltar for Spain, any connection with Working Holidaymaker Scheme for Australia etc).

    7.  I am copying this minute to the Prime Minister, Deputy Prime Minister, Cabinet colleagues and Sir Andrew Turnbull.


    Jonathan Sinclair

    pp (Jack Straw)

    (Agreed by the Foreign Secretary and signed by the Private Secretary in his absence overseas)