Britain scraps digital ID scheme to fund cost-of-living relief

What's happened

The government has scrapped the planned digital ID program, shifting funds to ease households’ electricity bills. Burnham’s administration says the move aims to provide relief amid rising living costs, and reverses Starmer’s earlier plan that faced widespread opposition and a large petition.

What's behind the headline?

What’s new

• Burnham is reversing the prior government’s digital-ID plan and replacing it with VAT relief on electricity bills, funded by scrapping the ID scheme.
• Critics warn the reform may not reach the digitally excluded and could shift costs elsewhere.
• The move signals a broader shift in the UK’s approach to public services and data governance.

Why it matters now

• The policy shift comes as households face high energy costs and inflation.
• The new administration is prioritising cost-of-living relief and political stability.

Forward look

• The government will likely face scrutiny over how the saved funds are distributed and how digital services evolve without a universal ID.

How we got here

Prime Minister Starmer announced a plan for mandatory digital ID last year, arguing it would curb illegal work and modernise access to services. The policy faced a massive petition and broad criticism, and Starmer has since resigned; Burnham has taken over, pledging to restore stability and redirect funds to domestic priorities.

Our analysis

Al Jazeera reports that Burnham’s government is eliminating the mandatory digital ID and shifting funds to VAT relief on domestic electricity bills, while noting the staunch opposition this scheme faced; TechCrunch details the broader fiscal context and personnel moves under Burnham, including Healey’s appointment as chancellor and Reeves’s departure.

Go deeper

• What does this mean for digital public services in the UK?
• How soon will households see a reduction in bills?
• What other reforms is Burnham planning to address political instability?

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• Keir Starmer - Member of Parliament of the United Kingdom

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• Andy Burnham - Mayor of Greater Manchester

  Andrew Murray Burnham is a British Labour Party politician who has served as Mayor of Greater Manchester since 2017. He attended Gordon Brown’s Cabinet as Chief Secretary to the Treasury from 2007 to 2008 and served in the Cabinet as Culture Secretary f

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  The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom or Britain, is a sovereign country located off the north­western coast of the European mainland.

• Tony Blair - Former Prime Minister of the United Kingdom

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