Government Introduces Bill to Abolish $6.6 Billion Identity Cards Program

Home Secretary Theresa May pledged to scrap Britain’s identity-card program within 100 days and said the government is negotiating with the companies involved to void their contracts.

International Business Machines Corp., Computer Sciences Corp. and Thales SA were awarded work for parts of the 4.6 billion-pound ($6.6 billion) project, a flagship policy of the previous Labour administration.

The Conservatives and the Liberal Democrats, which formed a ruling alliance after inconclusive May 6 elections, argued identity cards infringed on civil liberties. The process of cancelling the contracts may set an example for departments seeking to cut costs by dropping technology projects.

“We were always very clear with the contractors, and indeed with the public, if the Conservatives were in government in relation to cancelling ID cards,” May told reporters in London today.

The 11-page Identity Documents Bill, the first piece of legislation introduced by the new government, seeks to abolish identity cards as well as the national identity register, the database that was to store biometric details of the cardholders.

Cancelling the eight-year-old project will cost a net 5 million pounds this year and save 86 million pounds in the next four years, May said. Overall, Labour spent more than 257 million pounds preparing for the program, which it said was vital in the fight against crime and terrorism. The project was set to cost 4.6 billion pounds over the next decade.

Less Intrusive State

The bill is “not about saving money” but “symbolic” of a move toward a less intrusive state, May said.

May declined to comment on the commercial negotiations between the government and the companies involved. James Hall, chief executive of the Identity and Passport Service, told today’s briefing the Cabinet Office is handling the talks.

“We are working very closely now with the Cabinet Office to ensure that we terminate or partially terminate these contracts in the very best terms that we can, and that is very much part of the government’s focus in ensuring that we get better value for money out of all the suppliers,” Hall said.

The contractors “understand that government policy has changed and they want to find a way through this that is sensible for everyone concerned,” he said.

Existing card holders, who paid 30 pounds, will no longer be able to use them to prove their identity or travel within Europe and they will not be compensated for having bought one. Foreign nationals in Britain will still be required to hold biometric residency permits in line with European Union rules.

The Home Office said the government is in the process of terminating an 18 million-pound contract awarded to Thales, based near Paris, to enable the launch of ID cards.

Britain plans to scale back Falls Church, Virginia-based CSC’s 385 million-pound contract to deliver new systems. IBM, based in Armonk, New York, will also see its 265 million pounds of work to store biometric information pared back. An agreement with Basingstoke, England-based De La Rue Plc to design passports will remain unchanged, Hall said.

To contact the reporter on this story: Kitty Donaldson in London at kdonaldson1@bloomberg.net or

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