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back to article Tories would have to compensate ID vendors

A Conservative government would have to compensate suppliers of the National Identity Scheme for lost profits as well as costs if it cancelled the project. "To guarantee these payments knowing that a future Conservative government has already said it will scrap ID cards is improper and quite extraordinary," shadow home secretary …

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Joke

pfft

You're forgetting that no newly-elected goverment has EVER done what it promissed in a pre-election warm up.

If they do.... how does £10 a week sound?

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Might be a way round it

I'm not a lawyer, but its part of what laughably passes for a constitution in this country that no Parliament can bind its successors. In effect, the ID Card Act can be repealed simply by passing another Act of Parliament. So surely a suitably drafted bill could be passed into statute that cancelled the scheme without compensation to 'stakeholders'.

Or the Tories could simply refuse to pay, say they've just moved in to the place and the bailiffs can chase the previous occupants. Though they may not be able to get their money back, between Blunkett's paternity payments and stories circulating today that the finances of the Labour Party are about to go boo.com in the next few weeks, there won't be much left.

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Moz

Money is a small price to pay...

for freedom.

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Flame

Scorched earth politics

So it looks like NuLabour is practising scorched earth politics. They know they have already lost the next election so now it is all about burdening the next government with the backlash of their illconceived and downright improper policies.

There should be an investigation into these contracts and if any member of Labour financially benefits from these contracts it should be treated as a deliberate acceptance of a bribe and criminal charges should ensue.

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Anonymous Coward

>one Parliament may not bind a subsequent one

Eh? Surely bollocks.

What if the next government wanted to cancel Trident?

Or the new aircraft carriers?

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Commercial confidentiality?

What is that anyway? Why shouldn't any contract with the government be open to scrutiny?

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Stop

Scrap them sooner rather than later.

Sure people would rather pay a one of fee of say £50 each to have the scheme scrapped rather than pay £100+ to be tagged like an animal. I won't vote for any party who plans to keep the ID card scheme running.

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Anonymous Coward

I feel the rage coming on....

I don't know if I want to weep or beat somebodies head into a bloody pulp - probably both.

STOP wasting *our* money on your bloody stupid schemes - ID cards, NHS IT, Communications database, Carbon trading and a dozen other crazy, misbegotten, intrusive, unworkable databases.

Its going to take the Tories 10 years to clean up the mess left behind by Gordon and his pet trolls.

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Compensation

Personally, I feel if any compensation should be paid out to these vendors if the project is cancelled then it should come directly out of the pockets of the numptys that created this farcical, ridiculous waste of time money and liberties in the first place.

In fact, if a new government gets into power and has to undo all the crap laws and schemes the previous bunch of cretins government has implemented then the cost of that should come directly out of the previous governments pockets.

I wonder if there is anyway this could be amde reality??

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Why?

They should stand up and make a public statement that they won't compensate them.

So a few money-grubbing government contracters lose money? Doesn't bother me. They're lying to the government anyway if they're saying this can be done without going three-times over budget.

I'm sure most voters wouldn't care either. Given the amount of public anger over ID cards it could even encourage a lot of people to vote Tory - win-win!

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Why confidential?

"and that the figures involved in cancellation are commercially confidential."

This is somthing I don't get. Two companys do buisness, they can have NDAs etc. but when the government is doing buisness on my behalf there should be no confidentila infomation. I am part of this deal, so should know the infomation. Obviously there is cases where national security is at risk, but brake clauses in ID contracts dosen't come under this.

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Stop

It is probably 'cos of the method of payment

Can put in a guess as to what is going on here.

I can only think of one reason (other than idiots being in charge of the negotiations) why there is a break clause. This Government want these various vendors to stump up huge amounts of their own cash developing the ID card system on the promise of large payments on implimentation. This keeps the large ongoing costs of ID cards off the Government current budgets (and they are broke as it is without adding this costly project).

If this is the case, then of course the Vendors are going to insist on a break clause, even more so on such a controversial scheme and one whose timescale will be over the change of Government. Do I remember that we were not allowed to see the contract because of 'commercial confidentiality'. Could that have been a good excuse to cover up the expensive clauses they were signing us all up to?

The Government is quick to castigate the 'spend today on the promise of earning it tomorrow' crowd, but are just showing the way.

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And another IT shamble

by our wonderful govt. If you provide us a service, we'll pay you. If you don't provide us a service because you're incompetent, we'll... still pay you. if you don't provide us a service because we're incompetent and won't win the next election, we'll make sure to royally bugger the next govt by making them foot an even bigger bill

fnaar

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Tell 'em to fuck off

If they don't like it, how are they going to get the money? Go to another government and tell them to get the UK one to? Ask the police?

If these leeches want their money, go to Labour and ask them to pony up the cash they promised them.

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And some more...

If the government are to have to pay for cancelling the contract, how about getting the contractors to DO THE JOB for the value they gave? So NO COST OVERRUN. If it runs over cost, the rest of the job has to be done paid for by the company contracted. If they want to back out, then they have to pay back the money given, plus interest and pay for the wasted time from government employees.

Oh, not so funny now, is it.

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Stop

@scorched earth

Labour has always done this... they screw up the economy by taking out large debt and blowing all the cash on public services and lowering taxes, then they get kicked out and spend the next decade bitching about the Tories who have got to tighten the belt and pay off the debts. Gordon's main woes is that the cheques he wrote as chancellor are starting to be returned to him and while Tony has skipped the country with a phat pension and a lifetime on the lecture circuit, Gordo is left holding the baby.

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Unhappy

A prediction.....

I predict that if Labour go ahead with this ID card project, and if they lose the next election, then the new incumbent government (presumably the Tories) will suddenly discover that ID cards are a wonderful thing after all, and given we've started, then we might as well finish it.....

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All becomes clear

Is the reason several bidders for the ID card scheme dropped out because they are expecting the scheme to be cancelled? Also, Fujitsu have just been fired from a big NHS IT sceme, so presumably the number of ID card bidders is effectively now down to four.

If you sign a contract with the government that is not legally binding because the government made promises it has no right to make, then who do you go to to get compensation? The EU law courts? This is LMFAO territory now. For years I've moaned about New labour letting the big companies scr*w over the consumer through it's incompetence - it looks like it'll be the big companies that get scr*wed over when the ID scheme goes tits-up.

Poetic justice.

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Confidentiality

The reason for confidentiality in Government contracts is quite simple. If the details are confidential, we can't find out how big a cock-up the Government is making of these hare-brained schemes. They can lie to us, and we have no means of come-back. It's transparent bullshit; they know it's bullshit, we know it's bullshit, but still they peddle it and still they don't get picked up on it.

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Anonymous Coward

@Tell 'em to fuck off

Was going to contribute my two pen'orth but you said it all perfectly.

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The history of the next five years...

...wil show that the contractors did no work between mid-2008 and whenever the general election came, betting that the Conservatives would win and they (the contractors) would get the break payments for no work at all. Sadly, Labour won. Happily, the whole project was now several years late and the government had no option but to delay final delivery. What was projected for 2012 was pushed back to 2015. Conveniently, this was slightly after the date by which another general election would have to be held, and the Conservatives promised that they'd cancel the project if they got in.

Need I go on? The good news is that the ID card scheme was never implemented because the contractors never saw any incentive to actually start work.

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Re: Peter

All that sounds right on the mark, but it doesn't mean the vendors actually have to "insist" on a break clause. They could simply demand more money for completing the project to reflect the risk that they won't ever get it. Of course, the risk premium would be absolutely stratospheric, given that Labour seem almost bound to lose the next election, making the project unthinkably expensive (even by Labour standards). And if it turned out that one of Labour's flagship projects couldn't go ahead because everyone knew the party was doomed and could never pay up, they'd lose even more of their tenuous grip on power.

So, break clause it is. Now the Tories could simply refuse to pay it. The worst the companies could do is refuse to do any more work for the government. Which is fine, you'd think, an end to outsourcing disasters sounds like a jolly good idea. Only, it's not fine, not for the Tories. They aren't angels coming to save us from NuLab, they're another bunch of politicians. They'll pay the break clause - after all, it's not their money - and they'll continue to hire EDS and chums because they want those lucrative non-executive directorships as much as Labour's cronies do.

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Exercising compensation clauses.....

...may not be beneficial in gaining future business.

Or maybe the Tories should take an example from Harry Wilson's Labour government of the 60's. When Ferranti invested heavily in semiconductor technology and managed to reduce their costs in a major missile contract, the then Labour government promptly accused them of profiteering and refused to pay the contracted amount, paying only a fraction. Ferranti was then heading straight for receivership so the government bought up 50% at a knockdown price and then carved them into smaller bits.

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@Mark

Mark, Thats a good idea mate.

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Unhappy

@Scorched Earth

"They know they have already lost the next election so now it is all about burdening the next government with the backlash of their illconceived and downright improper policies."

Are we talking about nuLabour and their stupid ID cards or the Tories and their stupid rail privatisation?

A pox on both their houses!

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@JohnG

ah, so breaking a contract is all nice and wonderful as long as it's not you ending up out of pocket.

As much as I hate how the current government is spending our money if they sign a contract we have to honour it. Now looking at the kind of off balance sheet liabilities they've saddled the country the UK might be bankrupt in 10 years but at least we'd be honestly bankrupt instead of being another bunch of weasily crooks.

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Anonymous Coward

@JonB, @Just tell them to fuck off etc

In this case however this only means the current government cannot force a subsequent one to implement ID cards but it is unreasonable (and actually unlawful) to refuse to pay a supplier for work carried out or agreed. I am not too sure about the profit side of it, but I can see how it would be just, to an extent.

@ The fucking off request. They would sue the government in court. Then they would end up paying the amounts agreed / due plus court fees, plus lawyers fees, plus probably punitive fines/compensation. As this is my money (I am a taxpayer, rotten luck) I would rather they just paid what is due.

Look at it this way. A bloke arranges to have an extension built on his house, he obtains a builder and signs the contract.

The builder starts work, maybe turns down other work that would overlap, assigns staff and acquires the bricks and copper bits to do the job.

The homeowner then dies. Tragedy as it is the builder is now out of pocket. He has only done half a job and has a stack of hardware he may or may not be able to use elsewhere but he has not been paid.

The executer / recipient of the house in the will then has a choice. He can continue the extension, pay the builder and all carries on as normal. However he can decide he doesn't want the extension for whatever reason.

That is his right, he owns the place now. But the builder is still out of pocket and would quite rightly make a claim against the estate of the deceased at a minimum for expenses incurred but arguably also for the lost profit on the job. Any court in the land would grant this, as long as the builder had acted in good faith*

WRT ID cards, all you can do is remember this at subsequent elections and allow it to influence your vote.

*this bit doesn't count for governments as they never act in good faith. They are in fact legally exempt from acting in good anything.

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@Magnus

What's this "we" bwana?

Show me where I put MY signature down on it and I'll honour it.

If it has Gordon Brown's sig, then sting him for the missing cash.

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Anonymous Coward

@Lee

The "bollocks" reference was the idea that "one Parliament may not bind a subsequent one" since pretty much any long term decision would fall under that remit, a parliamentary term being fairly short.

Although not short enough at the moment.

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Re: A prediction

> I predict that if Labour go ahead with this ID card project, and if they

> lose the next election, then the new incumbent government (presumably

> the Tories) will suddenly discover that ID cards are a wonderful thing

> after all, and given we've started, then we might as well finish it.....

Except they'll sell it to us as a population register rather than an identity database, on the grounds that we'll xenophobically agree to anything which claims to help expel illegal immigrants. It'll still be our day-to-day lives that get logged on it, though.

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@JonB

Sorry but it is the case that one Parliament can simply undo any statute by passing a further Act of Parliament. In legal terms, there is no such thing as 'entrenchment' in UK legislation; all laws are equally easy to repeal. This has a good side and a bad side. It does mean that any bad laws can be struck out in the future by a simple majority; but it also means that no rights or guarantees laid down in statute can be guaranteed. So for instance, although the people of Gibraltar or Northern Ireland have been told they will always be part of the United Kingdom, there is absolutely nothing to prevent a future government reneging on that. The same for ID cards, nuclear power stations, Blue Streak or aircraft carriers.

This is different from say the American system where the Constitution has greater legal weight than any other law and can only be amended, and even then only by a protracted process involving the state legislatures as well as Congress.

The Tories could simply introduce a bill called 'The Identity Cards Act, Repeal Bill' which stipulated that the previous act was no longer on the statute books and laid out a process for ending its terms. Once it had passed through Parliament and obtained Royal Assent (a formality actually performed by the Speaker), the Identity Cards Act would be nothing more than a legal curiosity.

As for long term projects being cancelled on the whim of a government, you just have to look back to the 1960s to see how new governments took great pleasure in cancelling ongoing projects favoured by the previous administration. Any project can be cancelled at any time; although penalties *may* be due on cancellation.

In practice bills that repeal legislation are quite rare since Parliamentary time is limited and governments much prefer to add new legislation to the books than get rid of old stuff.

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Pirate

With the guys..

who think that as soon as the tories get it, its going to be one big U-turn on the issue.

Same deal on the EU..

./*You'd be free as a pirate.

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Pirate

Worth noting...

That the cost of these contracts is just for preparatory work. (Creative accounting is being used to pretend some of it would have to be done anyway, not as part of the ID scheme.) It's not for a scheme that would actually run or do anything; and nor is the full multi-billion now-stretching-to-15-year-long programme good for more than creating inconvenience to the public and a single reference point for fraudsters, kidnappers, et al. The Home Office justs wants the scheme for its own aggrandisment and has absolutely refused to quantify the costs to other branches of government, which are expected to make their own 'business cases'. Using it for anything at all, integrating it with any other systems, would be extra.

We can therefore reconcile ourselves to losing the deposit (even though compensationless cancellation by statute does seem attractive) because by doing so we don't have to pay the full cost of buying the subsiding and dry-rot-riddled house.

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If it's our money, we should see the costs

"the figures involved in cancellation are commercially confidential".

That's the wrong way round. Start from the requirement that all government transactions must be open to the public. Then see who bids for them. If no one bids, too bad - the project won't happen. (Interesting comment though on the ethics of companies that are happy to sign secret contracts, but won't play if the terms are to see the light of day).

It's a simple and unarguable principle: if taxpayers' money is to be spent on anything, the taxpayers must know what it is, what good it will be, and how much it will cost. How much *exactly* - not "£5 billion to start with and we'll let you know how many times that in a few years, when it's too late to back out".

The trouble is that government and corporations find it much easier to join forces against the taxpayers than to earn an honest living. We should put a stop to it - if we can find any unbribed legislators, that is.

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Anonymous Coward

Legally...

...I guess the break clauses will have to be paid, as Lee says, but it does just paint Labour in an even worse light, trying to blackmail their successors into completing a project to "cut their losses" rather than having the gumption to realise that ID cards weren't the reason they were elected, even if they *were* on the manifesto. Look at the parlous state of the opposition rather than the attractiveness of the NuLab offering last time for the root of their current Commons majority.

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@Mike Richards

Spot on. Of course, if the Tories make it know that they will sever a contract without compensation if elected, nobody will bid for it.

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For JonB re binding parliament

"Eh? Surely bollocks.

What if the next government wanted to cancel Trident?

Or the new aircraft carriers?"

Then the tories can simply order them when they get into office, so they have not been bound by the previous administration.

In this case, parliament isn't being explicitly bound by statute (as that is impossible as has been explained very well by previous posters). However there would be a de-facto binding if contractual arrangements with the suppliers were arranged so that a cancellation was ruinously expensive. This is a big issue, bearing in mind that the one of the factors for the tories wishing to cancel ID cards is the cost.

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Anonymous Coward

@Mike Richards, Kevin Peacock et al.

Exactly my point!

The tories are talking bollocks when they claim that "one Parliament may not bind a subsequent one" because they do on a regular basis!

FFS It wasn't me who came up with that, it's a quote from the frigging article!

BTW If they start building some aircraft carriers I would expect a contract to be in place and that such a contract would have a penalty if one party pulls out. So David Davis is in the same boat with that.

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Black Helicopters

How the money is flowing...

"However there would be a de-facto binding if contractual arrangements with the suppliers were arranged so that a cancellation was ruinously expensive."

I can't follow this argument. If the contract is cancelled in the usual way there would be costs, but this would be cancelled BY LAW. And the law can easily say 'no compensation'. In fact, the law can say 'all suppliers will repay all their profits (estimated by the Treasury) from 2000' if it likes. Or any other penalty.

Interestingly, a little while ago I was approached to work on this project at a price nearly twice current market rate. I turned it down. I think you will find that companies are doing the work at the moment for huge overpayments now, and trusting that when the next lot get in they will just stop working, and count their profits...

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What you gonna do?

If the Tories scrap the project and refuse to pay compensation, what are the companies going to do? To my knowledge they're not allowed to sue the government, I mean, c'mon, if suing the Government were allowed we'd all have bloody done it by now. So my advice to the companies who are currently taking money off the Labour Government to screw us over with ID cards - get out now because we are going to vote the Labour Government out, probably to the benefit of the Tories and they ain't gonna pay you.

What ID Card scheme?

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Re: Legally...

How can you say this? The tory party never signed up for it, so they are a third party to the agreement. A contract cannot bind a third party (unless the third party agree to be bound, but then they really aren't a third party, because they are now part of the agreement...).

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@Lee

Lee,

If you do some work for a company (say, for example, you're a contractor). The company goes bankrupt.

How much money do you get?

Nil.

If another company buys the name or gets the people or assets or whatever, can you get the money off them?

No.

If the labour government are kicked out, they are no longer in power. IF the tories replace them, then we now have a tory government. It is not the labour government. There IS no labour government. And the opposition would have to be included in the contract negotiations to be considered bound by the agreement. If this were not needed, you could have Gordon Brown sign a contract on a job for, say Tony Blair as consultant on a £220,000 pa salary but if his contract of 20 years is cancelled, the government owe him £200Trillion.

Should the tories be forced to choose between employing Tony Blair as consultant or the bankruptcy of the UK?

No.

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Anonymous Coward

@Mark

>The tory party never signed up for it, so they are a third party to the agreement.

Yes, and the tory party wouldn't be liable.

The agreement would be between the company and HM Government - Which isn't a party, it's the government. Not "Labour Government" just "Government".

In your company example if the company you have a contract with is bought the company is still liable for the terms of that contract. Whoever owns it.

So..

1. It depends how much money there is after the assets have been liquidated. There's an order as to who gets priority, tax first, debts second, nothing left for third.

2. Yes, depending on the contract.

3. No, TB should be nowhere near any government.

As has been said however, the government make the law, so with a few legal shenanigans they can do whatever they want.

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Anonymous Coward

Retrospective Legislation

There are two principles:

- no Parliament may bind its successor (as explained above)

- no retrospective legislation, i.e. no making illegal actions that were legal at the time they were made (as opposed to making illegal such acts in the future). The UK very rarely passes laws that are retrospective: the case against the extradition of the businessman (I forget his name) for some sort of price-fixing that was not illegal in the UK under the infamous new USA-UK treaty illustrated this. One retrospective law that was passed was the Hounding Old Maybe-Nazi's law that Simon Wiesenthal lobbied to get passed, a piece of legislation almost as dumb as the Maybe-Dangerous Dogs Act.

The major case on this point is more relevant. There was a House of Lords case (something to do with Burmah Oil and their Malaya refineries, I think) about the compensation due for the British Government destroying British subjects' property to deny it to the Japanese in WWII . It took years to be decided (1962?) and the eventual decision was that compensation was due. HMG had a fit and promptly passed a retrospective law immunising the Crown from any such claims, past and future.

It would be no trouble to pass a similar law, either a general statement of principle (no compensation payable by HMG where Parliament reverses programmes of previous Parliaments) or a specific ID card law.

Now, how do we get the Tories to promise one or the other?

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@JonB

So the current government CAN make sure that all labours cronies are continuously employed by the next government?

No.

If the companies go to court and tell them that "the government" owes them money, then the courts WILL tell them to fuck off too. If the tories have said that they will NOT use their services then the companies are at fault for not getting the oppositions' agreement. These companies knew the risks they took when they took on the contracting.

And even if the courts upheld this stupid idea, the government can still say "no". The courts cannot arrest "the government" because all they'd have to do to get out of it is to abdicate and either another government gets jailed for it (ha ha!) or there IS no government.

I really don't think that ANYONE in the UK would be up in arms about a government refusing to honour a contract by the previous government. ESPECIALLY when obeying it means either

a) the election promise HAS to be broken

b) the UK taxpayer have to pay a shitlod of cash to corporations who wanted their snouts in the trough

ain't gonna happen.

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Windfall Tax

They should pay the compensation without argument. Then introduce a windfall tax (similar to the one Brown introduced on privatised utilities in the early years of the Blair government) to the exact value of the amount paid (to the nearest penny).

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@Lee

A new government would have to pass an Identity Cards Act that has a clause voiding the offending contract terms. That would make them unenforceable.

Might contravene the Human Rights Act, European law, or a trade agreement, though.

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ID cards

You know you want them........

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Announce this strategy

If the Tories promise to void the contracts, and (if necessary by act of parliament) pay no compensation, then this is a good way to kill the scheme - if I were a contractor, I'd demand payment in full up front. (which would put the cost up hugely). Even then, the Tories could promise some sort of windfall tax, thereby ensuring that the company contracting for the scheme would make no money at all!

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Anonymous Coward

NuLabour's love affair with business

They really seem to lack any form of shame. Voters of the UK need some help and it's time to roll out the 'tough decisions' line so reminiscent of an Opus dei cultist in a hair shirt. A teeny little whine from the bloodsucking contractors that seem to suck the lifeblood out of the Treasury and NuLabour are more like some street corner tart handing it out to all and sundry for whatever's on offer.

Compensation for profits? Why not just hand over the cash to anyone who can knock up a five minute 'business plan' on a piece of bog-roll. Wankers.

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