The problem with digital ID is that it can be switched off in an instant. I was talking to some people in a strike picket line about this. They seemed unaware of it. Suddenly you would be unable to travel, pay your bills and access internet etc for doing the wrong thing.
But GP raise a valid point: If IDs are ubiquitous and commonly used for non-government business, the government does implicitly gain substantial "veto power" over non-government transactions (by revoking existing credentials or not issuing new ones).
Availability has to be ensured just as much as security and privacy in such a scenario, and that's not trivial. (I still personally think it's worth trying.)
In those places where a system like Sweden's has been implemented, the usage is constricted to certain areas. And in the case where it's used elsewhere, that's an option that is not mandatory (and in any case far and few between). A way to identify an individual is typically related to financial or contractual issues. So far, at least. Looking at you, the UK
Yes, but those "certain areas" are mandatory for functioning in society. And that ID is managed by a single central authority.
The US by contrast, has a distributed system where there are many authorities that can issue IDs that are valid for the activities of daily life.
The only common nationally issued ID in the US is a passport and people only get that for international travel -- and it wasn't even until 2024 that a majority of Americans even had one.
A digital ID is not doing all of that. The way it's implemented in Sweden, just to take an example already mentioned, is simply to identify you, and only for certain parts of society (mostly governmental services, banks, insurance and the like, and a few more). It's not about authorizing you for travel. If you need an ID for picking up your valuable shipment from the post office then you simply show your driver's license or passport, you don't use a digital ID for that. At all. If someone took away your digital ID then that would mean zero for your internet access, and zero for your ability to travel. It's not used for that at all. What would be a problem is paying the bills, because the ID identifies you for using network banking. However, alternative ways for identifying you for the latter are far worse concerns.