The government has published its entitlement card consultation, but the back-end infrastructure of the scheme could cause more problems than the cards themselves.
The government says the cards may cut the cost of identity theft and fraud, which runs up a bill of £1.3bn a year. The cards are needed, it said, to make public services more efficient by creating a single source of identity.
At the heart of the government's plan is a new 'central register' database that holds personal information inclusing name and address, and biometric details such as iris scan and fingerprint.
It would also include a unique personal identification number and a secret password used to authenticate transactions.
The Home Office estimates that a system based on simple plastic cards could cost around £1.3bn to set up. But use of a sophisticated smartcard would push the final cost up to around £3.2bn.
The central register database and links to other systems would cost around £107m, and the biometric recording equipment £29m.
Operating costs of the central register would cost £263m, while processing applications would cost £608m. Plain plastic cards would cost £180m to produce, but sophisticated smartcards would cost £2bn.
About 140 million cards would need to be issued if each card lasted for 10 years. If sophisticated smartcards needed to be re-issued twice during the 10 year period, the total number of cards issued would rise to 314 million.
But whether or not entitlement cards are introduced, work on similar projects is already going on behind the scenes.
The Passport Service and the Driver and Vehicle Licencing Agency are planning a single database containing details such as fingerprints or iris scans to identify UK citizens.
Only a small amount of information would be held in the central register. Other information - such as which benefits an individual is allowed - would be held on other databases.
These databases would link to the central register only to share core personal information, according to the consultation. "The card and the central register would be used as a gateway to other services."The Home Office said links may be made to credit rating agencies, which could be used to prove a 'historical footprint' of the individual paying bills and opening bank accounts, for example.
But a spokesman for credit rating agency Experian said: "We couldn't see it working without the involvement of the credit rating agencies."
The data held by the government tends to be of poorer quality, he said, because people rarely updated information through official channels when, for example, they moved house.
But John Wadham, director of Liberty, said that only a small amount of fraud related to identity.
"Why should 60 million of us be forced to carry cards as a result of the failures and incompetence by the Home Office and Benefits Agency?" he said.
"These cards will be sold and forged and yet they may even create greater complacency amongst those trying to protect us."
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