The “UK’s Leading Think Tank”, Policy Exchange, has just published a report on digital identity. The report, written by historian Benjamin Barnard, has a foreword by Matt Warman (the Minister for Digital Stuff) and says that the UK needs a reliable public sector identity model to support the creation of a digital identity marketplace across both private and public sectors. The report doesn’t contain an identity model, although it does make some useful points about what such a model might look like. What did catch my eye though was the suggestion that the government do something about digital identity for companies. This is a really good idea and it is long overdue. It’s one thing to talk about identities for things that exist, such as people, but quite another to talk about the identities of things that don’t exist, such as companies.
In his book “Sapiens — A Brief History of Humankind”, the historian Yuval Noah Harari talks about the cognitive revolution, which he defines as the point as which “history declared its independence from biology” because human beings gained the ability to think about things that do not exist, such as Facebook. Harari says that “Corporations do not exist in nature any more than Catholicism or human rights. These are stories. Lawyers are shaman who tell stranger tales”. Well, yes. Limited liability companies are, I agree with Mr. Harari wholeheartedly, one of our species most ingenious inventions. They need digital identities and they need them now.
As in the case of personal identities, the COVID crisis has thrown into pretty sharp relief the tremendous costs of not having infrastructure in place. The problem is particularly bad in the UK. The government’s recent review of company registrations procedures concluded that the official record of companies (known as “Companies House”) should be reformed to introduce proper checks on whether directors are real people, in an attempt to combat major crime. Yes, you read that correctly. Right now, there is no check on whether a company directors is even a real person or not, let alone whether they are a “fit and proper” person, to the use the English legal description, to even act as the director of a company.
So we are in the unusual position of having no idea whether companies or their directors are legitimate or fraudulent. According to the latest figures from the Treasury, a total of £38bn has been borrowed under the COVID business loans scheme by 1.3 million firms. Assuming lending through the scheme totals £43bn by the time it closes at the end of November, the National Audit Office (NAO) estimates that taxpayers could end up footing a bill of between £15bn and £26bn to cover bad debts on these loans.
Hence my interest in the Policy Exchange recommendation that the government establish a “Digital Business Identity” programme.
So how is a business identity different from a person identity? Well, in my opinion, it isn’t.
Snippings 