Anyone who wants to work in the UK will need to have a digital ID by the end of the Parliament, Sir Keir Starmer has said.
The Government hopes the proposed IDs will deter people from coming to the UK illegally by curbing their ability to earn money.
But the move has sparked some criticism from opposition parties, with accusations it is a âgimmickâ that will not stop small boats, as well as concerns over privacy.
The Prime Minister said the immigration system needed to be âfairâ otherwise it would undermine âpeopleâs faith that weâre on their side and their belief that the state can and will work for themâ.
âThat is why today I am announcing this Government will make a new, free of charge, digital ID mandatory for the right to work by the end of this Parliament.
âLet me spell it out, you will not be able to work in the United Kingdom if you do not have digital ID.
âItâs as simple as that because decent, pragmatic, fair-minded people, they want us to tackle the issues that they see around them,â he said during a speech at the Global Progress Action Summit in London.
The plans envisage ID cards being stored on devices in the same way as contactless payment cards or the NHS App.
People will not be required to carry the ID, which will be held on smartphones, or asked to produce it.
Cabinet minister Lisa Nandy said the digital document will only be needed as proof of the right to work.
âAlthough all UK citizens will have a digital ID, it will not be mandatory for people to use it. It will be entirely their choice,â she told Sky News.
However, there is scope for it to be used in future to access other services, following the model of countries like Estonia and Denmark.
Doubts have been cast on how effective the move will be to stop people working illegally.
Shadow pensions secretary Helen Whately said current ID documents being easy to falsify is âsimply not the problemâ.
âWeâre hearing about people working in the grey economy being paid in cash being often paid well below the minimum wage.
âThis is not about law-abiding employees failing to be able to identify whether peopleâs ID is legal or not, theyâre not even checking ID,â the Conservative MP told Sky News.
Ms Nandy acknowledged that nothing would change in terms of what penalties businesses face for failing to check whether employees have the right to work.
But she insisted the IDs would make a âsignificant dentâ in the number of people who are able to work illegally because current documents can be too easily falsified, in comments to BBC Breakfast.
Sir Keir said in his speech on Friday that progressive politicians have been âsqueamishâ about saying things that are âclearly trueâ.
âFor too many years, itâs been too easy for people to come here, slip into the shadow economy and remain here illegally because, frankly, we have been squeamish about saying things that are clearly true.â
He added: âItâs not compassionate left-wing politics to rely on labour that exploits foreign workers and undercuts fair wages.
It comes after he admitted Labour shied away from addressing concerns over immigration in the past said it is now âessentialâ to tackle âevery aspect of the problem of illegal immigrationâ in an article for The Telegraph.
But he argued that it is possible to be concerned about immigration while rejecting Reform UKâs âtoxicâ approach.
The digital ID would be the authoritative proof of identity and residency status in the UK and include name, date of birth, and a photo as well as information on nationality and residency status.
How the scheme will work for those those who do not use smartphones will be addressed as part of the consultation process.
Those who do not want to carry a digital ID card or do not operate digitally could be given a physical card instead, according to The Telegraph.
Mandatory ID cards have previously only existed during wartime.
Ms Nandy said Labour had changed its mind on the policy after previously ruling it out because it had been looking at ways to tackle illegal immigration after coming into Government.
Reform UK called the plans a âcynical ployâ designed to âfoolâ voters into thinking something is being done about immigration.
Tory leader Kemi Badenoch also dismissed the plans as a âgimmick that will do nothing to stop the boatsâ.
The Liberal Democrats said they would fight âtooth and nailâ against ânonsensicalâ plans for mandatory digital ID cards.
Lib Dem leader Sir Ed Davey said: âKeir Starmer seems determined to lead a Government of gimmicks â that just adds to our tax bills and bureaucracy, whilst doing next to nothing to tackle Channel crossings.
âImagine if the Government devoted this much money and focus on getting GP waiting times down, or fixing social care, instead of pursuing the Labour Partyâs decades long obsession with ID cards and more state control.
âIt is nonsensical and the Liberal Democrats will fight against it tooth and nail â just as we successfully did against Tony Blairâs ID cards.â
Meanwhile, Sir Tony Blairâs think tank said the IDs could act as a âgatewayâ to Government services.
âThe contribution digital ID can make to combating illegal migration and the criminal groups that exploit desperate people is part of this, but importantly, digital ID can do so much more for our citizens, our communities, and our country,â Alexander Iosad, director of government innovation policy at the Tony Blair Institute For Global Change said.
The former prime minister made moves to establish a voluntary ID card system during his time in office in the early 2000s and has since repeated his call for their introduction.
