ID card deal shelved as Tories brace its bidders

The showpiece contract for national identity cards will be held back, prompting speculation that a Tory pledge to scrap the entire scheme may have unsettled its front-running companies.

The companies – Thales, IBM and Fujitsu – learnt last week that the contract to make the biometric cards will not be awarded until the autumn of 2010, a year later than expected, after the general election.

The delay by the Home Office was confirmed after Chris Grayling, the Tory Shadow Home Secretary, said he had written to the companies warning them not to enter into further ID card contracts with the government.

His letter, received by all five of the scheme's pre-qualified IT contractors, explains that the work they invest in now will be abandoned outright if a David Cameron-led government is elected.

The warning is likely to disappoint Intellect, which said any hint of the Tories encouraging IT firms not to bid for the scheme's contracts was "inappropriate," when the party wrote a similar letter in 2007.

"We have no problem with the Conservatives criticising government policy, but we don't expect interference in commercial decisions that companies make," the hi-tech group told CUK at the time.

Trying to head off this criticism remerging, Tory MP Damien Green told the BBC last week that his party was merely reminding of its position on ID cards, and that it would be down to each individual firm to decide whether to bid for more work.

Yet Mr Grayling maintained the harder line, accusing the government of attempting to insert "poison pill provisions" into the contracts, which were designed to stop successive governments from cancelling them.

He said: "I am increasingly concerned that the government is putting in place contractual arrangements that are designed to tie the hands of a future government, and I want to make the contractors absolutely aware that we do not intend to complete this work."

Adding to the issues facing the scheme's IT contractors, who also include EDS and CSC, anti-surveillance lobbyists at NO2ID say the ID scheme will benefit nobody apart from "Whitehall and its favourite IT firms."

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