How a Labour Government Will Change UK Tech, According to Experts

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labour government impact uk tech

The tech sector is gearing up for a new era of governance and regulation following Labour’s landslide victory in the UK General Election on Friday. 

The new government, led by new UK Prime Minister Sir Kier Starmer, is set to shake up the business community with policies promising increased investment and economic stability. 

The historic win arrives following successive years defined by macroeconomic headwinds against the backdrop of rapid technological change.

In its campaign, Sir Keir Starmer’s Labour Party made a point to win over the tech and business community with more investments for development and new safety regulations to manage the development of emerging technologies like generative AI. 

But how confident are tech leaders in the promises of Starmer’s new government? We spoke to multiple experts from across the tech space to understand their take on Labour’s victory and how it could impact the UK tech space.

‘Binding AI regulation’

One of the big questions on everyone’s mind with Kier Starmer’s takeover is how it will manage and regulate the development of artificial intelligence. 

The previous government, under Conservative leader Rishi Sunak, had positioned the UK as the centre of AI regulation and hosted the world’s first AI safety summit in October last year. 

Sunak expressed the need for ‘guardrails’ on AI development to protect British citizens from the risks that come with the technology while insisting that innovation must be protected. 

"AI has an incredible potential to transform our lives for the better, but we need to make sure it is developed and used in a way that is safe and secure," Sunak said in June last year. 

“Our job in government is to make sure that we can get those benefits, whether it is in drug discovery or other areas, but make sure that at the same time, we are protecting ourselves against the clear risks that the technology poses.”

In their manifesto, the Labour government has talked about setting out “binding regulation” for major AI firms in a move towards improved AI safety. This will be important to focus on, plus AI investment opportunities to transform the UK into a tech superpower.

Considering this, Eduardo Crespo, VP of EMEA, PagerDuty, told EM360Tech that Labour’s plans for a “binding regulation” on AI could impact the way tech firms develop and implement the technology. 

“Labour’s promise to introduce “binding regulation” for AI safety will create ripple effects across the UK private and public sectors. And while stricter regulation for major AI firms is planned, organisations leaning on these emerging technologies will have to scrutinise their AI strategy here and now.

“With Labour’s wider review on the misuse of AI for harmful purposes, companies need to telegraph they are mitigating risk with AI. 

“Both ‘good AI’ and ‘bad AI’ exist, and combatting threats from bad AI is critical in an increasing risk environment, as over half (59%) of IT leaders say that customer-impacting incidents have increased, growing by an average of 43% in the last 12 months.”

James Hall, VP & Country Manager UK/I at Snowflake, warned that Starmer’s new government would need to juggle ensuring safe AI development with investing in promising AI initiatives. 

“Now we know the Labour party has won the election with a substantial majority, it is crucial the new government emphasizes tech investment, particularly around AI, which will be paramount to streamlining services and enhancing citizens’ lives,” Hall told EM360. 

“We expect to see Chief AI Officers hired across government departments, to ensure AI underlines the priorities in all the parties’ manifestos, while a foundational data strategy with governance at its core will help meet AI goals.”

“An AI fund can also help promote public-private innovations and enable the commercialisation of data and assets globally through synthetic data. This approach would offer a unique opportunity to unlock value from data whilst maintaining robust privacy protections, as synthetic data can mimic real-world information, without exposing sensitive personal details.”

A new National Data Library

Delivering economic growth and raising productivity will require Starmer’s new government to create the conditions to support the appropriate application of digital technology and provide an environment where innovation can thrive. 

Labour plans to create a National Data Library to help deliver data-driven public services introduce a new industry strategy to support the development of the AI sector and remove planning barriers to new data centres. It will introduce 10-year funding cycles for key R&D institutions and aims to develop better industry and academic partnerships. All of which will be welcomed by the tech sector.

Dale Peters, Senior Research Director at TechMarketView said this move would be welcomed by the tech community and allow the government to address some key issues with the public sector, especially in healthcare. 

“We expect a strong emphasis on the use of digital technology in healthcare, including the introduction of a new NHS innovation and adoption strategy and a drive towards greater use of AI to accelerate diagnosis and shift the focus of care upstream,” said Peters.

“In many ways this will be more of the same. However, many of the challenges in the NHS cannot be solved without tackling the social care crisis. Labour is planning to undertake a programme of reform that will lead to a National Care Service, which is likely to require greater use of digital and IoT technology to deliver on its principle of 'home first' care. However, tackling social care will not come cheap and will require more radical thinking and significant investment.

Amanda Brock, CEO of the non-profit OpenUK, agreed that the new government will need to focus on building up the UK’s digital infrastructure. This, Brock said, will require Starmer to focus on updating outdated technologies across the public sector and invest in technological solutions to key infrastructure challenges. 

“To fix our broken NHS, Labour must first look to the countries’ digital infrastructure. It is not too late for the UK to break free of the shackles of vendor lock-in which has been allowed to infantilise our public sector. 

“To mature will require developing skills that allow the NHS to take care of itself and its own infrastructure. With 96% of software codebases having open-source software dependencies today, the public sector must learn how to manage open-source properly. 

“Only this change allows interoperability that can open up data flows between systems, unlock efficiency and break patient and practitioner frustration. Our new government owes the NHS this change.” Brock added.

Securing the public sector

A key aspect of empowering the public sector will be protecting it from cybercrime. The sector has found itself the victim of several major cyber incidents over the past few years, most recently with last month’s attack on NHS service provider Synnovis last month. 

Details from the Labour party have been minimal on how this will be done. However, as Adam Pilton, cybersecurity consultant at CyberSmart, notes, their manifesto recognises the threat to our safety and security. 

"At CyberUK this year, the message was clear: Nation-state actors, particularly China, pose a significant threat to our country and its businesses," said Pilton.

labour government uk tech securing public sector

“Labour proposes to tackle this by conducting a Strategic Defence Review. This will happen within their first year in government and their manifesto states this will set out the path to spending 2.5% of GDP on defence.”

"The Strategic Defence Review will be critical in determining how successful the UK are in defending our virtual borders and our connected population.

“ I urge Sir Keir and the Labour Party to speak with a broad spectrum of people across the cyber security industry, including those at the front line of law enforcement activities. The reality of the problems and the needs of the UK must be seen and addressed in this review."

Removing business inefficiencies

Along with the public sector, experts say the new Labour government will need to continue investing in the technology sector to ensure the UK continues its trajectory of becoming a European technology superpower.

The new Government needs to channel a more immediate focus on removing inefficiencies within UK businesses, which both the private and public sector are being weighed down by,” said Rupal Karia, Country Leader UK&I, Celonis.

“Process intelligence can make this a reality, providing organisations with data-based methods of generating positive impact at the top, the bottom, and the green line.

“Delivering fast growth is tough, but in the meantime businesses can become leaner and more agile, gaining maximum value within their current processes. This allows greater efficiency, increases productivity and accelerates digital transformation – all of which will help Labour in achieving its economic goals.”

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