ID cards: the cost to business

Cost has been the ID card battleground on which the Home Secretary's Cabinet opponents have decided to fight so far.

The government estimates that each card will cost £35. A further £4 has been factored in to avoid "accusations of underestimating the cost", admitted David Blunkett this week.

The payback, he believes, would be greater security, fraud reduction and convenience. What remains uncalculated, however, is the potential costs beyond the individual cardholder.

The Home Office admits that intricacies such as private sector compliance have not been factored into the final bill of about £3.2bn.

There has yet to be any discussion about the potential effect on business, particularly if the ID card number replaces the social security number. The Home Office will only say that the idea is "being looked at".

Social security reform is, however, the logical place to start if the government wants to achieve 'efficiencies'.

For that to happen, ID cards would have to sit at the centre of a new database that would become the government's main source of information for dealing with the populace.

The government admits that one of the reasons for social security fraud is that there are more social security numbers in existence than people entitled to claim benefits.

The existing database is corrupted, and the only way to change that is to pin benefits to an ID card and phase out the old one.

That would make the ID card number the basis for the government's relationship with citizens. But what no one is mentioning are the ramifications for businesses which, up until now, have built their systems on the social security number.

For this new system to work, someone, presumably the employer, will be required to check and store IDs.

As we are talking about a biometric ID here, that means there has to be some means of scanning, and that can be costly.

And for those who are not convinced that it will work like this, consider the government legislation on banks to stamp out fraudulent accounts.

Last year the Royal Bank of Scotland was fined more than £750,000 by the Financial Services Authority for failings over the opening of new accounts.

It is a racing certainty that banks anxious to avoid such penalties will feel that the only way they can cover themselves in the future is by pinning a biometric against an account applicant.

In the same way, it is also clear that companies anxious to avoid prosecution for illegal working and other government compliance issues will rapidly see the legal value of storing a government sanctioned biometric on their systems.

Blunkett assured parliament this week that the process would not be rushed. About 80 per cent of the population are in favour, but support is largely based on a vague idea, inspired by terrorist threats. A more sober debate has yet to begin.

ID cards: can technology cope?