The government's approach to ID cards is all wrong. That's not to say that the scheme should be scrapped, but founding it on a lot of bombast about terrorism and illegal immigration is missing the point by a mile.

There is no evidence that national ID cards help fight terrorism, and the emphasis on crime and immigration gives the scheme an air of iron-fisted central control at odds with the country's perception of itself as a stroppy citizenry with closely-guarded freedoms.

Whether we need smartcards to combat fraud or not, what we do need is government to live up to its promises about the UK leading the world into the technological future.

That future is the internet. The explosion of online usage in the past five years, even in the face of a bursting dotcom bubble, is only the tip of the iceberg.

But one major piece of the puzzle is still missing. Put simply, for the internet to fulfil its potential to change every aspect of our lives, people logging on need to do so unequivocally as themselves.

The western world stands on the brink of a major change, with every aspect of our lives increasingly taken out of the real world and into cyberspace.

In the real world people can 'see' who you are. The same needs to be true in cyberspace and an obvious role for the government is to create that guaranteed online identity.

No longer is it a question of government as 'Big Brother' invading our privacy, but of it making the most of its unique position at the centre of society to provide a much-needed service.

ID cards should not be about the negative 'freedom from', but the positive 'freedom to'.

With a government-issued biometric ID card, swiped through a reader as I open my browser, I am free to buy, sell, bank, chat, pay my council tax, apply for a job - whatever it is I want to do - without having to remember a hundred passwords or retype my address a hundred times.

And whoever I am dealing with can be sure I am who I say I am, not a fraudster, a hacker or a 45-year-old logging on to a chatroom as a 12 year-old child.

Businesses operating online would be able to rely on customers being who and what they say they are, and customers would be safe in the knowledge that personal and financial details are secure. Such a system would also lay the foundations for future development.

Technology is all about personalisation. At the moment personalised internet content - Amazon knowing me by name, the BBC website remembering I like news and not sport - is done by storing cookies on the hard drive.

But IP cookies are only useful while PCs and laptops are bulky, expensive and largely stationary devices with their own discrete hard drives.

In a world of computing power accessed through generic sockets, such as electricity, with personal preferences, desktop applications and storage capacity held centrally by ISPs, it will need more than a password and my mother's maiden name to give me confidence that my stuff is secure.

Logging on to 'my' internet with a biometric swipe card would solve the problem. But instead of considering the potential of authenticated identity to put the UK at the forefront of the internet revolution, the government is emphasising a dubious link with anti-terrorism, and fighting a rearguard action against accusations of violated privacy and heavy-handed central control.

ID cards are of less value to the police than to banks and online retailers. This is not about Big Brother. This is about free trade. This is not about national security. This is about trust.

The current ID cards debate is standing on its head. We are having a 20th century discussion in a 21st century world. The government needs to catch up, think smart, and help the UK take the lead.