Prime Minister Sir Keir Starmer has promised to make Britain “the best state partner” for artificial intelligence companies globally, as he bids to boost the UK’s growth prospects amid worrying economic and political.
Starmer, write for the Financial Timesclaimed that “British values of democracy, open trade and the rule of law” made the UK a natural place for AI companies to invest, and pledged to remove planning restrictions and creating new “AI growth zones”.
“I am determined that the UK will become the best place to start and grow an AI business,” he wrote on Monday. “I know that growth in this area cannot be state-led. But it is absolutely the government’s duty to ensure that the right conditions are in place. »
Starmer hopes to regain momentum after a week in which his economic plans were battered by markets, leaving Chancellor Rachel Reeves potentially facing the need to cut spending or raise taxes to maintain his budget plans on track.
Sterling fell 0.8 percent to a 14-month low of $1.211 on Monday, extending a decline fueled by a stronger U.S. dollar and a global sell-off in bond markets that hit the U.K. particularly hard .
Britain’s borrowing costs rose to a 16-year high last week amid persistent inflation and fears that Reeves’ tax rises Budget had contributed to stagnant growth.
At a press conference on Monday, Starmer pledged to respect Reeves’ budget rules and expressed his “full confidence” in his chancellor. But he did not directly answer questions about whether the government would cut spending further this year to comply with the rules.
The British Prime Minister claimed that AI would “change things faster than we think”, helping to increase the country’s growth rate.
The UK has a mixed record in promoting the AI industry. It has struggled to remain competitive with Silicon Valley-based start-ups, with UK companies raising just a fraction of the $56 billion invested globally in generative AI groups last year, according to PitchBook.
Both the previous Conservative government and the current Labor administration have also considered how aggressively to regulate this fast-growing sector. In recent years, British regulators such as the Competition and Markets Authority have been regularly attacked by U.S. executives for slowing the pace of deals in the sector.
London is home to pioneering AI group DeepMind, which was founded in 2010 but sold to Google four years later and is now a central part of the search giant’s AI strategy.
Big tech companies such as Meta and Apple have also been slower to roll out their latest AI services in the UK than in their home market, and some in the tech industry are concerned about the passage of the UK’s AI law. digital markets, competition and consumers last year. , could impose similar restrictions on the EU.
Starmer’s attempt to position the UK as a global force in AI also comes as he has faced a series of inflammatory allegations in recent weeks from Elon Musk, the one of the most powerful figures in the industry, regarding his record in combating child sexual exploitation during his time as head of AI. of the parquet.
Starmer also pledged to establish a “benchmark” data access regime that will “unleash the innovation potential of NHS data”. Ministers believe NHS data could be part of a new national data library, which would be made available to “support AI research and innovation”, as well as improve public services and help the academic world.
Although the project is still being finalized, all NHS data would belong to the National Data Library rather than being passed to AI companies, a person close to the project stressed.
However, any attempt to offer health data to US tech giants would remain controversial. A previous agreement between DeepMind and London’s Royal Free NHS Foundation Trust to share records of 1.6 million patients triggered a backlash privacy activists and the project was ultimately canceled.
The government said the National Data Library – proposed in Labour’s election platform last year – would ensure all sensitive data is kept secure and protect privacy, for example by removing any information that could be used to identify the patients involved.
As Starmer seeks to attract more investment from the AI industry, Reeveswho returns Monday from a visit to China, will this week “appeal” to regulators to tell them to be more ambitious in eliminating obstacles to growth.
The sense of economic gloom was compounded by a Deloitte survey of UK CFOs which showed business optimism fell to a two-year low in the fourth quarter.
The survey finds that a net 26% of CFOs say they feel more pessimistic about their company’s prospects than three months ago, marking the first time sentiment has tipped into negative territory since the second quarter of 2023 .
Finance chiefs said cost cutting would be their most likely response to the £25 billion increase in employer national insurance contributions announced by Reeves.
Deloitte said UK businesses expected to reduce capital and discretionary spending and reported the biggest drop in hiring expectations since the pandemic. Nevertheless, the survey found that confidence was well above the lows seen in 2020 and 2022.
In early trading Monday, the 10-year government bond yield was up 0.05 percentage points at 4.89 percent, but below last week’s high of 4.93 percent .
Mel Stride, shadow chancellor, told the BBC that “business confidence is collapsing because of the government’s actions” and insisted Reeves should have canceled his visit to China to calm the markets.
But an adviser to the chancellor said: “Is he seriously saying she should have abandoned the trip to stay at home over the weekend to address a closed market? The markets would have rightly seen this as a panic.”
A Starmer ally said any suggestion that Reeves’ position was under threat was “complete nonsense”.
Starmer continues to believe that Reeves’ October budget, which aimed to stabilize public finances and shore up public services with a £40 billion tax rise, will be justified in the long term, despite market turmoil .
Reeves is preparing his own speech on growth, but it has been postponed until after his trip to the World Economic Forum in Davos later this month.
On Thursday, she will summon eight regulators to explain what they are doing to stimulate growth. In her Mansion House Speech In November she told watchdogs: “The UK has regulated for risk, but not for growth. »
Additional reporting by Oliver Ralph, Tim Bradshaw, Anna Gross and Madhumita Murgia in London
