The Labour government has announced a significant policy shift on its proposed national digital ID system, scrapping plans to make a new government-issued digital ID compulsory for every worker in the UK.

While the government still intends to move towards digital-only “right to work” checks by 2029, the requirement for workers to hold a specific digital ID app has been dropped. When introduced, the system will now operate on a voluntary basis.

When Prime Minister Sir Keir Starmer first announced the plans in late 2025, the scheme’s central pillar was its mandatory nature for employment, with ministers arguing it would help crack down on illegal working.

At the time, Starmer said: “Let me spell that out: you will not be able to work in the UK if you do not have digital ID. It is as simple as that.”

Although the ID was described as voluntary for accessing public services such as health or welfare, it would have been the only legal way for people of working age to prove their right to work.

South Devon MP Caroline Voaden has welcomed the government’s change of direction.

She said: “The U-turn on digital ID was on the cards from the day it was haphazardly announced without any narrative or strategy to bring those who opposed it on side. Its faults were clear: a colossal amount of time, money and effort for a product whose benefits were dubious at best.”

Ms Voaden added that the Liberal Democrats now want the government to redirect the billions originally earmarked for a mandatory digital ID system towards policies that “will deliver value” to people’s lives.

Government sources say that right-to-work checks will still have to be completed digitally, but individuals will be able to use existing digital documents — such as e-Visas or biometric passports — rather than a new standalone ID app.

Chancellor Rachel Reeves said the government is now “pretty relaxed” about which form of digital identification is used, provided it is secure and verifiable.

A full public consultation will be launched to determine exactly which digital documents will be accepted. By 2029, paper documents such as physical passports are expected to be phased out for right-to-work checks, but people will be able to choose how they prove their status digitally.

The original proposals faced strong opposition from civil liberties groups, opposition parties, and some Labour backbenchers. A petition opposing the mandatory system attracted nearly three million signatures.

Ministers later acknowledged that requiring a new digital ID for every worker — particularly those in rural communities or older people less comfortable with technology — risked inadvertently preventing legally entitled citizens from working. Critics also warned the system could become a “honey pot” for hackers.

Conservative shadow ministers have criticised the move, describing the reversal as “humiliating” and claiming the Prime Minister has abandoned a key part of his border security strategy at the first sign of pressure.

Despite the U-turn, the government insists that moving to digital right-to-work checks remains a central part of its long-term plans.