Residency registration and national identity cards
There are two issues: identity cards and registration of residency - the UK has neither. In many other countries, in Europe and elsewhere, citizens and other residents are required to register their address with local authorities, within some period since moving in (usually, within three months). Not registering is seen as tax avoidance.
Similarly, national identity cards are often mandated in many countries, often with a requirement to produce ID on demand. ID is typically also required when signing up for a mobile phone, opening a bank account, registering a car, renting or buying a property, etc. When done without the sort of draconian nonsense attempted by UK government, ID cards can be quite useful.
Whilst not having residency registration in the UK seems like freedom, it can be a problem if you ever need to prove your residency in the UK for tax/pension purposes, entitlement to free non-emergency NHS treatment, etc. For immigrants, trying to prove the duration of their residency to establish their right to permanent residence or to British citizenship, it is a mess: The Home Office don't have a definitive way of proving residency and historically, they have rejected documentation that courts have subsequently declared as being conclusive.
Personally, I would quite like to see the UK introduce simple national identity cards (without all the draconian nonsense of previous attempts). I think registration of residency for everyone is essential, regardles of the ID card debate.