22 July 2026
Scrapping digital ID frees funds for cost of living relief
The news
Andy Burnham will scrap plans for a government-issued digital ID for all British adults when he becomes prime minister. The decision follows a petition that gathered close to 3 million signatures, the second-largest on record. Burnham's office said the time and resource that was going to be spent on a national ID scheme will go instead to where it is most needed, such as helping with the cost of living. The move also funds a tax cut on energy bills that will save the average household about 45 pounds a year from 1 October 2026. It echoes the axing of a similar identity cards programme in 2011 after the 2010 general election.
What's at stake
The scrapped scheme was introduced by former prime minister Keir Starmer, who argued it would crack down on migrants working illegally and modernise access to government services. Under Starmer the proposals had already been watered down from mandatory digital ID for workers. Critics warned of high costs, data breach risks and potential for increased state surveillance. Supporters pointed to efficiency gains in public services, banking and reducing fraud across government. The funds freed will instead support cost of living measures, including the electricity VAT cut worth around £45 annually per household from October 2026. The choice reflects a shift from long-term modernisation to immediate household relief at a time when energy bills remain a daily pressure.
The case for
Scrapping the scheme protects privacy, avoids billion-pound IT failures and prevents surveillance overreach. Past UK identity card efforts, including the programme launched in the 2000s and axed in 2011, demonstrated the scale of public opposition and delivery risk. Redirecting the planned spending delivers tangible savings, such as the VAT cut that will reduce average household electricity bills by about 45 pounds a year from October 2026. This approach prioritises immediate cost of living relief over uncertain technological transformation. Similar concerns about data security and state reach have repeatedly stalled national ID projects in the UK.
The case against
Retaining the scheme would have delivered efficiency gains in public services, banking and reducing fraud across government. Starmer's original plan aimed to modernise access to services and tackle illegal working by migrants. The petition of close to 3 million signatures, while large, did not reflect potential benefits such as streamlined verification that could cut administrative costs and fraud losses. Dropping the programme means forgoing modernisation that had already been scaled back from mandatory requirements. Previous attempts at identity systems were abandoned for political rather than operational reasons, leaving public services without updated tools.
Why it matters now
If the decision stands, resources shift permanently toward cost of living measures such as the October 2026 VAT cut rather than digital infrastructure. A future government could revive similar plans, but Burnham's move sets an early tone for his administration after Keir Starmer's resignation. Cabinet formation and the first meeting on Tuesday will test how fully the new team embraces this reprioritisation. The choice will shape both household budgets in the short term and the UK's approach to digital government services for years ahead.
Further reading
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