UK lawmakers grapple with divide between working digital ID sector, future plans

Parliament is aware of the conflicts within the current version of the UK’s digital ID system. That is the top takeaway of an update of the “Digital ID in the UK” research briefing from the House of Commons Library, which provides official notice of what recent government policy changes mean.

The document updates one published near the end of 2025 with details on the policy under new Prime Minister Andy Burnham. The mandatory-ish system of former PM Keir Starmer is off the agenda.

The GOV.UK One Login and the GOV.UK digital wallet are not affected, as they are “separate to the national digital ID scheme.” The One Login scheme, which provides the identity people need to use the government-issued digital wallet, has been integrated with 58 services as of August.

Then there’s the private sector.

The report cites OfDIA’s estimate that the digital verification service sector made 2 billion pounds (roughly US$2.7 billion) in revenue in 2024/2025, added over £1 billion ($1.4 billion) in gross value to the economy and employed the equivalent of 10,000 full-time workers.

The Data (Use and Access) Act 2025 has taken effect, leading to the publication of the DVS trust framework. The report goes on to review interactions which private sector digital IDs are intended to be used for, such as proof of age under the Tobacco and Vapes Act 2026 and the Crime and Policing Act 2026 (for knife purchases). These interactions protect user privacy with selective disclosure or zero-knowledge proofs, and because, according to the report, they are “decentralized.”

The details of how these IDs will be derived from foundational documents are pending, however, and could undermine the purpose of decentralization.

The report notes that the ADVP has “argued that the government’s proposed system is not ‘truly decentralised’ because a ‘government-issued ID will be linked directly to the various state-owned databases on which it was based.’”

Further, the lack of a digital signature makes derived credentials fundamentally less valuable than foundational digital documents like a digital (or “mobile”) driving license.

A blow-by-blow account of the reactions to the scheme and the Labour government’s gradual walk-back acknowledges that the conflict between the government and DVS sector is not resolved in the current version of the plan.

Private sector checks continue as certification deadlines approach

As of October 1, many of those use cases for private sector digital identity will only be legal if carried out by a certified DVS service. That means digital Right to Work (RtW) and Right to Rent (RtR) checks must be conducted by a digital ID provider certified by a Conformity Assessment Body (CAB).

The official change is found in the Immigration (Restrictions on Employment and Residential Accommodation) (Prescribed Requirements and Codes of Practice) (Amendment) Regulations 2026 (SI 2026/700), Kantara Initiative points out in a LinkedIn post.

For due diligence under anti-money laundering (AML) regulations, digital identity verification can be performed by certified DVS providers, and a blog post from DCMS and OfDIA notes that the government recommends using certified DVS providers for attributes, too.

Article Topics

digital verification service (DVS)  |  digital wallets  |  DVS Trust Framework  |  GOV.UK Wallet  |  UK digital ID