UK PM Burnham axes digital ID scheme to shift focus to economy

Andy Burnham will abolish the UK's planned digital ID system on his first day as prime minister on Monday. The move redirects public resources away from a controversial national technology project towards tackling the country's cost of living crisis. A spokesperson said the incoming government will prioritise "the daily priorities facing people across the country" over expensive state schemes, aiming to strengthen local economies.

The Office for Budget Responsibility estimated the digital ID programme would cost £1.8 billion over three years, a figure previously disputed by Downing Street. Under former prime minister Sir Keir Starmer, the policy had already been scaled back from a mandatory worker ID to a voluntary app after nearly three million people signed a petition opposing it. Dame Karen Bradley, the former Home Affairs Committee chair, had described the initial rollout as a "fiasco" that raised fears of state overreach.

For European markets, the cancellation marks a stark divergence from the EU, which is currently rolling out its own digital identity wallet for citizens across the bloc. The decision immediately removes a major public sector IT contract from the pipeline, disappointing tech firms that had positioned themselves for the procurement process. More broadly, it signals that the new UK administration is unwilling to commit long-term capital to digital infrastructure when public finances are under pressure.

The digital ID reversal is accompanied by another significant shift in economic direction. Burnham is preparing to announce plans to accelerate oil and gas drilling in the North Sea. While he is expected to honour the Labour Party's 2024 manifesto commitment by refusing to issue new exploration licences, he intends to fast-track existing approved projects that have stalled. This approach could provide a short-term boost to the UK's energy sector and its tax revenues, even as it widens the policy gap with European climate strategies.

The rapid policy reversals have drawn immediate political fire. Conservative technology secretary Julia Lopez accused Burnham of claiming credit for a decision that had already been taken, while Liberal Democrat MP Lisa Smart welcomed the end of what she called a "huge waste of taxpayers' money". As Burnham meets King Charles III to assume office, outgoing Conservative leader Kemi Badenoch warned that his broader agenda remains "airy fairy".