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Digital ID and AI are drivers of UK’s economic future, says Tony Blair

Former PM’s institute says technology is Britain’s only hope for growth and prosperity
Digital ID and AI are drivers of UK’s economic future, says Tony Blair

The Economic Case for Reimagining the State is the latest technology-focused paper from the Tony Blair Institute for Global Change, published through its Future of Britain initiative. The report is an equal mix of sugar-coated bitter truths and outright bemoaning of the current state of the UK – “this is not 1997,” it says up-front, referencing the year Blair took office as prime minister. But it does propose a solution.

The answer involves AI and digital ID, among other emergent technologies. The economic environment in the UK is “woeful,” it says, and so “the new government therefore needs to tap into the only structural tailwind that is pushing in a positive direction: technological progress.”

The report’s definition of positive is deeply rooted in traditional economic measures. “We are at the dawn of a new artificial-intelligence era of technology that is already producing large financial and productivity gains among businesses at the frontier of adoption,” says the report. “If these gains scale up to the wider economy, they could boost UK growth by up to 1.5 percentage points per year for a decade, according to the International Monetary Fund (IMF).”

“Under a plausible albeit rapid AI-uptake scenario, AI-enabled growth could generate sufficient tax revenues (up to £40 billion per year within a decade and £100 billion by 2040) to offset all the extra fiscal pressure facing the UK up to 2040.”

The “radical-yet-practical” solutions that the Institute are predictably calibrated around cost-benefit analysis, more aligned with the quick deployments of the tech world than with the traditionally slogging speeds of government policy. “The new government,” it says, “will need to lean in to support the diffusion of AI-era tech across the economy by adopting a pro-innovation, pro-technology stance.”

The word “regulation” does not appear once across the report’s six lengthy chapters.

‘The world is moving to digital ID’

Digital ID, however, does make an appearance, and Blair himself has been a vocal advocate for a national digital identity for the UK. In a recent (paywelled) Sunday Times article humbly entitled “Tony Blair: My Advice to Keir Starmer,” the former PM says “we should move as the world is moving to digital ID,” citing immigration control as a key benefit.

In the Institute’s report, digital ID is highlighted as a system that “could significantly improve the way that citizens interact with government, saving them time, easing access and creating a more personalized service.” For these reasons alone, it says, digital identity is worth the investment.

Beyond that, consider the savings: “a digital ID could create about £2 billion per year in extra fiscal space,” says the document, by cutting benefit fraud, simplifying tax procedures to reduce costly errors, and targeting support during crises.

The Institute estimates that the necessary infrastructure for implementing a digital identity scheme would cost about £1 billion to set up and £100 million to run every year. “Based on international experience, we think it is achievable for the government to fully roll out a digital ID within one parliamentary term,” it says.

“A rapid rollout would see the scheme cover its initial setup costs within three years of operation and, from that point on, it could raise just under £2 billion per year for the Exchequer. This means a digital ID could result in net savings of almost £4 billion over the course of the current parliamentary term and nearly £10 billion over the next term.”

The “move fast” ethos is on equal display in its enthusiasm for AI-enabled education, which it questionably claims could improve the quality of teaching by giving teachers AI co-pilots, and increase student’s ability to learn by giving them tutor-bots.

That said, there is real urgency underneath the Institute’s numbers. A report in the Guardian details how, as the EU prepares to finally introduce its biometric exit/entry system (EES) travel registration scheme requiring facial and finger scanning for border crossings, Britons face their first significant restriction on continental freedom of movement as a result of Brexit.

UK unites three departments into DSIT

The UK is responding to technological change, albeit more slowly than Blair might like. A press release from the home office says the Department for Science, Innovation and Technology (DSIT) is expanding in both scope and size by adding experts in data, digital and AI from the Government Digital Service (GDS), the Central Digital and Data Office (CDDO) and the Incubator for AI (i.AI), “to unite efforts in the digital transformation of public services under one department.”

Secretary of State Peter Kyle will lead the revamped department, which he says will become “the center for digital expertise and delivery in government, improving how the government and public services interact with citizens.”

“Britain will not fully benefit from the social and economic potential of science and technology without government leading by example. We will act as a leader and partner across government, with industry and the research communities, to boost Britain’s economic performance and power up our public services to improve the lives and life chances of people through the application of science and technology.”

ID cards, however, do not appear to be a priority for the new unit. In an interview with ITV, Kyle says that instead, the key issue is making access to services easier and safer while preventing fraud – through effective identity verification.

“Right now, the priority when it comes to accessing digital services and online services is actually about verification,” he says. While a digital identity card cannot be ruled out for future exploration, at present, “we are talking about expanding the verification system so that people can have an easier experience of verifying their identity when they access government services.”

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