Scrapping ID cards would cost £40m

Tories attack compensation clauses as a "poison pill" against future government policy

The Tories want to scrap ID cards

Home secretary Jacqui Smith has revealed that scrapping ID cards would cost £40m in compensation for suppliers.

The Tories, who have promised to stop the initiative should they win the next general election, have attacked Smith for engineering a “poison pill” defence of the government's ID card proposals.

Shadow home secretary Chris Grayling lashed out after Smith said that cancellation clauses in contracts being let for work on the scheme will mean ending the project would cost an incoming government £40m.

"It looks as if the government is deliberately making it as expensive as possible for a future Conservative government to scrap ID cards,” said Grayling.

“At a time when the public finances are under such pressure, it is simply outrageous for ministers to employ a poison pill strategy against their opponents."

The attack followed a questions session in the Commons in which Smith told MPs the compensation provision was "standard".

“Cancellation of the ID cards contract and partial termination of the application and database contracts would cost in the region of £40m in the early years,” she said.

“Therefore, as I have made clear on many occasions, scrapping ID cards and the identity database will not free up a large fund of money to spend on other priorities.”

The Home Office claimed later that without the termination provisions, ID card contracts would include a premium as companies sought to cover the risk of cancellation in the event of a change of government.

A spokesman said the cost of cards had been "overstated" by opponents and amounted to £1.19bn out of the £4.7bn being spent by the Identity and Passport Service over the next 10 years. Storing biometrics would cost a further £550m to £750m.