UK Labour to scrap digital ID scheme as Burnham redirects spending

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Labour scraps digital ID scheme

Highlights

Labour will scrap the digital ID scheme, originally estimated to cost £600 million annually, redirecting funds to address immediate cost-of-living pressures.
Strong public opposition, including a petition with over 3 million signatures, and cross-party criticism led to abandoning the national ID proposal.
Mandatory right-to-work checks will still be expanded to all employers, including gig and zero-hours workers, under Labour’s border security, asylum and immigration bill.

Policy shift before change in leadership

As first reported by Financial Times, Burnham says the digital ID programme is being dropped to focus government resources on more immediate household pressures. His spokesperson says the incoming prime minister wants to improve everyday life rather than fund costly schemes through what they describe as an over-centralised model of government.

The Office for Budget Responsibility had estimated the scheme would cost £600 million a year. Burnham’s team says the time and resources previously intended for a national ID system will instead be directed to areas of greatest need, including measures to help with the cost of living.

The plans had originally been approved by Sir Keir Starmer last September as part of efforts to combat illegal migration, with backing from Sir Tony Blair and former Conservative leader Sir William Hague. But after strong public opposition, including a petition with more than 3 million signatures, Starmer dropped the idea of requiring workers to sign up and ministers later presented digital IDs as a tool for reforming welfare payments, childcare entitlements and local government services.

Officials had clarified that the ID would be mandatory only for right-to-work checks, not for access to public services. Burnham had already signalled his reluctance last autumn, when he told the Labour conference he was not yet persuaded and warned that the project could absorb significant time without being delivered.

Budget and political impact

The decision is likely to disappoint groups that backed the scheme, including Labour Together and the Tony Blair Institute. Opposition to the policy had also come from the Conservatives, the Liberal Democrats and civil liberties organisations including Big Brother Watch and Liberty.

The debate carries wider fiscal and political weight because a previous attempt to create a UK identity card system ended in failure. The Labour government of two decades ago tried to establish a digital ID framework, but it was scrapped by the Conservative-Liberal Democrat administration that took power in 2010 after an estimated £4.6 billion had been wasted.

Burnham’s position is notable because he served as the junior Home Office minister responsible for implementing the Identity Cards Act 2006. His spokesperson says the government will still pursue illegal working through mandatory right-to-work checks for all employers, with those rules set to extend to gig economy and zero-hours workers under Labour’s border security, asylum and immigration bill.

In our earlier coverage of Andy Burnham’s rise to become prime minister, we noted that his national policy agenda remained loosely defined, leaving businesses and investors looking for clearer signals on growth and markets. We also highlighted the tension between his preference for expanded public control and the reality of tight public finances, which could force difficult trade-offs and shape what his government can realistically deliver.

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