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Gov says new UK digital ID plans could add £5bn to economy, promises no mandatory ID cards

Introduction of a UK Digital ID could boost economy by up to £5.4bn.

Introduction of a UK Digital ID scheme could bring net benefits of up to £5.4 billion to the economy according to a government estimate, as it announces plans to create an Office for Digital Identities and Attributes.

The announcement came as part of the government’s response to its public consultation on digital identity, which concluded in September 2021. Under the proposals the government would create the ODIA under the Department for Digital, Culture, Media and Sport (DCMS), where it would be the initial provider of a framework and “trustmark” system for UK digital ID providers.

Alongside the public consultation response the government published its De Minimis Assessment (DMA) of digital identity proposals, which provides more detail on the economic rationale of the scheme. The DMA gave a range for the potential net economic benefit over 10 years, from just over £1 billion at the low end, to a £3.7 billion “central case estimate”, to a best-case scenario £5.4 billion impact.

The DMA also estimated costs to private organisations of implementing and using a UK digital ID scheme over 10 years, ranging from £822m to £2.6 billion. These costs are included in the net benefit estimates, along with public sector costs of up to £505m.

The government has specifically excluded small enterprises from its cost considerations, noting in the DMA: “[T]heir expected benefits are less likely to significantly outweigh the expected costs, making small-micro firms less inclined to use digital identity.”

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Under the initial proposals, which include few details, the ODIA would create a framework for government-held data to be used as part of a digital identity, and regulate and certify digital ID providers who wish to use this data.

The ODIA would give providers “an easily recognised trustmark” to prove they can be trusted with personal information. Limiting the amount of personal data people have to provide – for example all the details on a driving licence such as full name and address when buying age-restricted products – is one of the main justifications for a digital ID.

The public consultation saw 270 responses from organisations and individuals. Almost half (134) of these were apparently direct rejections of the whole concept of digital identity and did not engage with the questions, so were rejected by the government – however it did make it clear any digital ID scheme would be voluntary, and there would be no introduction of ID cards.

A government-backed UK digital ID scheme has been in the works since before 2013, when Verify was introduced – and promptly flopped. Since then the UK government has not had much success with digital IDs, even for government services, with its “One Log-in” programme still a work-in-progress – currently of the 370 services on GOV.UK, around half need unique accounts.

What are your views on HMG's response/its plans? We'd like to hear from you.

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