Andy Burnham will scrap Sir Keir Starmer’s digital ID scheme when becomes prime minister on Monday.
Burnham’s team said cash put aside for the scheme will now be spent on tackling the cost of living crisis – and described the move as a “reset of priorities”.
Money will be redirected to more “tangible” improvements to people’s lives, they added.
A spokesperson for Burnham said his Government would “put its focus where people need it right now”.
They added: “That means all the time and resource that was going to be spent on a national ID scheme will go instead to where it’s most needed, such as helping with the cost of living.”
The Office for Budget Responsibility estimated last November that the programme would cost £1.8 billion over three years.
Downing Street rejected this figure, but the Government did not provide an estimate of its own, which a parliamentary committed noted earlier this year left open the possibility it could cost more.
Starmer announced plans to introduce digital ID ahead of last year’s Labour conference, saying it would be mandatory for right-to-work checks as part of a crackdown on illegal immigration.
Ministers expected the programme to go further, becoming the “bedrock of the modern state” in a system of “government by app”.
The scheme first announced in September last proved to be deeply unpopular with voters after following a major public backlash it abandoned plans to make digital IDs compulsory for workers .
Ministers then relaunched the app as a voluntary tool to streamline access to public services and for right-to-work checks.
A spokesperson for Burnham said his Government would ‘put its focus where people need it right now’ (Photo: Getty Images)Shadow technology secretary Julia Lopez said: “Labour have wasted millions of pounds on this project and now Andy Burnham is trying to pretend he’s riding to the rescue.
“After pressure from the Conservatives, mandatory ID was already apparently off the table. Andy Burnham now needs to explain whether that was untrue, or whether he is simply claiming credit for a decision that had already been taken.
“Andy Burnham should stop the political theatre and be clear about what exactly he is scrapping. Only the Conservatives have the team and the plan to restore common sense to public policy.”
Lib Dem Cabinet Office spokeswoman Lisa Smart said: “This is a huge win for the Liberal Democrats and all those who have fought tooth and nail to stop the Government from pushing through its doomed mandatory digital ID scheme.
“People will be hugely relieved to know they are no longer set to be forced to hand over their data just to go about their daily lives.
“We have long said the obscene sums earmarked for digital ID would be a huge waste of taxpayers’ money, and it’s a relief that Burnham has woken up to that.”
Jack Coulson, head of advocacy at Big Brother Watch, welcomed the decision, saying the public had been “clear that they do not want mandatory ID”.
He said: “The Government backing down shows what campaigns like Big Brother Watch’s can achieve”
“But the dangers of a ‘papers please’ society have not gone away. Big Brother Watch is concerned that the Government’s approach to social media restrictions will lead to a de facto mandatory ID regime for the internet.
“If this is a signal, it is a positive one, but we must all keep a wary eye on Tony Blair’s former ID card minister.”
The decision marks the first major break from Sir Keir’s policies that Mr Burnham has confirmed before becoming prime minister.
He is expected to provide further detail of his plans on Monday after visiting the Palace to “kiss hands” with the King and formally take over as prime minister.
Additional reporting by Press Association.
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