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The £2bn sector fears the state’s own digital ID plans could knock the bottom out of its market — and see it caught in a public backlash.

Thousands of protesters marched in central London to oppose the announced digital ID plans. | Krisztian Elek/LightRocket via Getty Images

November 10, 2025 4:18 am CET

LONDON — Keir Starmer’s vow to develop a digital ID and mandate its use for “right to work” checks has sparked intense criticism from political rivals, civil liberties groups — and even the prime minister’s own MPs.

But no one was more dismayed than the firms which already provide accredited digital verification services (DVS) to millions of Brits.

The country’s private digital ID sector has spent years working with the U.K. government. It’s grown to become a £2 billion a year industry, according to the state’s own estimates.

Now, with a state-issued single ID looming, those firms fear the government is about to knock the bottom out of a market it has spent years helping to foster.

“The September announcement means we are now entering a critical new phase of the U.K.’s digital ID debate – a phase that has brought uncertainty for citizens and the private sector alike,” Julian David, CEO of lobby group TechUK, has warned.

The industry is not taking it lying down — and plans to drive a clear wedge between the prime minister’s policy of a “mandatory” digital ID and their own sector.

From immigration to ‘faff’

Starmer initially billed the plan as a way to curb immigration, saying “mandatory” employment checks will make it easier to stop migrants working in the U.K. illegally.

The sector points out that this is a service it’s already got the tools to provide.

Under a “trust framework” that became law earlier this year, accredited digital verification services can be used to prove someone’s identity on everything from opening bank accounts to background checks — and even “right to work” checks.

Starmer’s plan landed straight into a backlash — with public confusion over just how compulsory the scheme would be, and cries of mixed messaging from Labour MPs, who feared the government was failing to sell the upsides of the plan in making Brits’ lives easier.

Keir Starmer’s plan landed straight into a backlash — with public confusion over just how compulsory the scheme would be, and cries of mixed messaging from Labour MPs. | Jeff J Mitchell/Getty Images

Firms which already provide digital ID feared the row to would tarnish their sector, too. A more recent pivot by ministers to emphasize the benefits of digital ID — with Starmer saying the plan would “cut the faff” people face when trying to do things like applying for a mortgage — offers a glimmer of hope, three industry representatives told POLITICO.

The sector now plans to use an upcoming consultation on the policy to convince ministers to dramatically limit the state’s role in digital ID provision.

Who does what

Ministers insist their plans will be subject to extensive engagement with industry, with any system “designed and built in-house.” But the question of who does what is now a live one.

One government official, granted anonymity to speak about internal Whitehall thinking, said a single, state-issued ID would be most effective in driving uptake of digital IDs.

But TechUK’s associate director for technology and innovation, Laura Foster, said: “Government should integrate proven technologies, rather than starting from scratch.”

Iain Corby, executive director of the Age Verification Providers’ Association, argued that giving a competitive market of multiple digital ID providers can reduce privacy concerns — and would avoid risking taxpayer money on an unproven public alternative.

“If government tries to nationalize digital ID, taxpayers will be left funding development, maintenance, integration and customer support, while innovation — especially the investment needed to keep IDs secure from AI threats — will be stifled,” he said.

The sector has taken heart from Starmer’s move to give the Cabinet Office, a coordinating department at the heart of Whitehall, responsibility for “policy development, legislation and strategic oversight” of plan. The Department for Science, Innovation and Technology (DSIT) will lead on “technical design, build and delivery.”

David Crack, chair of the Association of Digital Verification Professionals, said it was “unambiguously good news” that the center of government was gripping digital IDs.

“Now the real work begins,” he said — “defining boundaries, building trust, and managing the politics of compulsion versus choice.”

Julie Dawson, chief policy and regulatory officer at Yoti, a U.K. DVS provider, said clearer separation of responsibilities “could actually bring benefits,” with the Cabinet Office taking point on the politically sensitive issue of “mandatory” digital IDs, while DSIT enables wider use through private sector providers.

Technology Secretary Liz Kendall has also backed the move, saying it was “fantastic” to have the Cabinet Office’s support. “This is a top priority for the prime minister that requires all government departments to be engaged,” she said.

Peace offerings

It’s not the first time the sector has raised concerns — with then-Technology Secretary Peter Kyle forced to apologize at an event in May for failing to adequately engage with the sector before announcing plans for a digital driving license.

In private, officials have reassured the sector that work to drive adoption of private tech will carry on despite plans for the government to issue its own digital ID.

Following fresh calls for clarity in the wake of the Starmer’s announcement of “mandatory” work checks, officials told private sector representatives at an event last month that the government remained committed to creating an “information gateway.”

Technology Secretary Liz Kendall has also backed the move, saying it was “fantastic” to have the Cabinet Office’s support. | Stefan Rousseau/Getty Images

This will allow accredited providers to tap into government data — and could allow their products to be used in even more scenarios that involve statutory ID checks.

Officials also reaffirmed plans to allow a DVS to be used to prove someone’s age when buying alcohol by the end of this year.

“The private DVS sector remains an important part of our economy,” a government spokesperson said.

“It will continue to play a key role as we deliver the Digital ID scheme, with the Data (Use and Access) Act enabling the use of digital verification services across the economy,” they added.

Mizy Clifton contributed reporting to this article.