Employers are already legally obliged to check that people have the 'right' to work, and can be fined something like £45k for employing someone who's not meant to be working in the UK.
Most law-abiding employers already have a system of checking passports/ photographic ID, as they (understandably) don't want to be fined. They don't need a new form of digital ID to be invented in order to do this.
Colleges and universities also have a legal duty to check students' status, and landlords (incl housing associations) have a legal duty to check their tenants. They are not demanding new digital ID either.
Dodgy employers/ landlords/ supposed 'colleges' who seek to financially exploit people who lack the legal right to work/rent/ study will continue operating as they do right now, i.e. under the radar. The introduction of digital ID will make no difference to them.
In every other country with ID cards/ digital ID, there is still a black market in employment.
We know that at least 5% of the UK population (many of them over 70 and/or on a low income) do not have access to the internet, and a higher % do not own smart phones.
A PP made the laughable suggestion that digital ID could be used by the police to identify a confused/ vulnerable/ demented person found wandering around - this would only work if (a) they owned a smart phone in the first place; (b) had it with them while they were wandering around; (c) the police who came across them were able to turn it on and work out the password/code (& would you really trust them with vulnerable people's passcodes?!)
What happens if you lose your phone? Or it gets stolen?
Would this result in more phone theft? And more data hacking by criminals?