Compensation cost of scrapping ID cards revealed

The coalition government has revealed that it has paid out over £2m in compensation to suppliers after scrapping the ID cards scheme planned by the last Labour government.

Minister for immigration Damian Green MP disclosed in a letter to Labour MP Meg Hillier that the government paid out just over £2m to defence and aerospace firm Thales, while 3M and Cable & Wireless were paid £183,000 and £68,000 respectively.

The letter, sent in February, has recently been published online through parliament's library.

However, according to Georgina O'Toole, research director at TechMarketView, this figure represents "a drop in the ocean", and £800m of taxpayers' money has been saved as a result of scrapping the scheme.

"The cost over the lifetime of the ID cards was estimated at £4.5bn, a good proportion of this will be saved," she said.

O'Toole explained however that much of this has already been laid out including spend on The National Identity Register and biometric passports, schemes that are still going ahead.

She added that when the coalition scrapped the ID cards scheme, the UK taxpayer had already spent £250m on developing the programme. But the abolition of it means that a lot more expenditure in the future has been saved.

"The government would have been spending a further £800m over the course of the decade, so in the grand scheme of things, the £2m compensation paid is very much a drop in the ocean," she said.