Why Britain needs a digital ID system

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To puzzlement elsewhere in Europe, few issues in Britain provoke as much controversy as a national identity system. Opponents have long decried ID cards as the path to an Orwellian surveillance state. Prime Minister Sir Keir Starmer has already ruled out a suggestion that his Labour government should introduce digital ID cards to control immigration. But as Britain attempts to reform and modernise its broken public services, despite the disputes and difficulties, it would make sense to integrate a digital identity system into the plans.

Digital IDs have potential benefits far beyond old photo ID cards. Typically combining a catch-all digital identifier with personal details and biometric data, they can be used to simplify access to public services, and transact with private businesses. They can be expanded to store official documents, qualifications, membership cards and become a digital wallet. Estonia, an “e-state” pioneer whose citizens can use e-IDs for everything from ordering prescriptions to voting, estimates the system saves 2 per cent of GDP a year. Other countries such as Australia, Singapore and Italy have set up digital ID schemes, either voluntary or compulsory.

A British e-ID could supercharge public service reform — helping, for example, to integrate personal health records and patient data and streamline welfare payments. The Tony Blair Institute for Global Change, a think-tank set up by the former prime minister (a longtime digital ID proponent), estimates such a scheme could boost public finances by about £2bn a year, mostly by reducing benefits fraud and improving tax collection, on top of broader economic gains. It reckons a voluntary system, built in part on the government’s existing — but low-profile — One Login initiative to enable a single sign-in to government services, could be set up within one parliamentary term and 90 per cent of citizens would sign up.

A functional digital ID could avoid the hunt for documents when opening bank accounts or buying a home, and help prevent identity theft. Proponents argue a national identity system could also help to reduce “small boat” migrants crossing the Channel. Anecdotal evidence suggests one of the UK’s main draws is a perception that the lack of ID cards makes it easier to disappear into the grey economy than in many European counterparts. Requiring an e-ID to access benefits and housing could be a disincentive to undocumented migrants and people-trafficking gangs.

There are plenty of reasons for caution. Getting the technology right is vital given the sensitivity around data privacy and the dangers of hacking and cyber attacks. Britain has a dismal record in public sector IT — think of the Post Office Horizon scandal. Some Labour insiders argue a digital ID plan is too complex and politically noxious to add to the challenge of rebuilding already overstretched and cash-starved services. Some are scarred by the opprobrium that doomed a post-9/11 national identity scheme introduced, in much more favourable economic times, by the Blair government.

But there are plenty of functioning systems elsewhere Britain could learn from or copy. Much public service IT is so outdated it is worth trying to leapfrog to next-generation technology, as Estonia did in the 1990s. Privacy arguments have less force when most adults happily carry smartphones stuffed with apps that can track everything from how many steps they do to what colour socks they buy.

While the opposition is still vocal, moreover, YouGov polling last year found more than half of UK adults supported compulsory ID cards. A UK e-ID would require debate and consultation. It would not be easy. But if Britain truly wants a modern state, it is an idea whose moment has come.