May 2009


UK ID Cards Open Way for Taxman to View Our Spending

The UK ID Cards Open Up A Way For The Taxman To View Our Spending

Forget the public furore over fraudulent spending by MPs revealed by the Daily Telegraph this month because the Daily Mail has spotted new Orders that have been laid before parliament to give Commissioners for Revenue and Customs access to the planned National ID card‘s audit logs.

These logs record every time an ID card is used to verify a person‘s identity when they make a large value purchase, open a bank account or take out a mortgage. In addition it is proposed that the card should be used for new job applications thereby alerting the taxman as to how many jobs you have compared with what is claimed. You might argue that this invasion into our personal spending habits is all a step too far?

There are many things people do (legitimately) that they may not want to get into the public domain and somehow or other past government experience with managing our personal data suggests that it will get published or at least lost on some laptop or memory stick. VIPs should seriously worry here because their spending habits will be a target of all and sundry.

There are of course other spending behaviour patterns that might alert the taxman to new sources of income, perhaps we could use the UK Parliament‘s Green Book of expenses as an example of where most payments apparently are within the rules no matter how outrageous they might appear at first sight.

Every time a check is made using the ID card it will be logged on the National Identity Register and therefore made available to the taxman. Companies apparently will be charged 60p to check details held on the database (includes prime address, NI number and second homes) for which officials are hoping will account for up to 770 million verifications per year according to the Daily mail. Further details suggest that 44,000 organisations would be accredited to undertake the verification tests including government departments, banks and other financial institutions, mobile phone shops and video rental stores to name a few.

Companies are being told that by using ID verification they can cut millions from their annual fraud bill and can also avoid being prosecuted for employing illegal immigrants. For the Citizen it is clear that an ID card will avoid all the kafuffle of having to present a driving license or passport – or does it?

The trouble with the ID card project is that people are becoming more and more disillusioned as to why they need it, when do I use it, for what purpose? And then once you fail to be convinced of any positive benefit you start to look at the downside and the disadvantages seem to increase the further you look. This latest bit of proposed legislation inviting the taxman and other government departments to monitor our private habits which in most cases are probably perfectly legitimate is just not going to wash. In fact if you were into Machiavellian conspiracies you might imagine it is a deliberate ploy to get enough public support to kill the project. Perhaps the government is not listening very well, they already have enough support to quietly drop it off the books.

So the question is what impact does all this have on the plethora of vendors waiting for a slice of the action in the ID card space?

So far Thales, CSC and IBM have won contracts to supply parts of the scheme. Fujitsu and EDS are also on the shortlist and can bid for further contracts expected to be awarded over the next year.

The Home Office estimates the National Identity Scheme will cost £5.4bn over the next 10 years and argues that 70 per cent of these costs would be needed to support new passport systems regardless.

The smart card suppliers are of course much lower in the value chain and I suspect are not getting too excited about the latest launch of ID cards in Manchester later this year using Post Offices and Chemists. The volumes involved are unlikely to be earth shattering. As for the new passports, well at least they now all include an RFID chip albeit that the security mechanisms don‘t yet seem to be agreed at the national let alone the international level. Has anybody heard of an international Certification Authority for passports?

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Email: info@smartcard.co.uk

Dr David Everett – Smartcard & Identity News





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