What does Labour really think about tech?

Recent months have been confusing for those working in tech public policy. The source of this confusion has been a lack of clarity around what Labour really thinks about tech.

This stands in contrast to how tech has been treated by recent administrations (the Truss interregnum aside). Under Rishi Sunak, Boris Johnson, and to a lesser extent Theresa May, tech policy and progress had formed a central plank of government policy, even if some interventions had been underpowered, or lacked clarity and consistency.

Before the election, it was difficult to discern how much – even whether – Labour saw tech policy as important. It did not feature in key policy announcements or the Party’s missions (aside from green tech), and for the most part it seemed to be an area where Labour felt it could mimic government policy.

Tech was also notable by its relative absence from the Party’s manifesto, although there were some welcome commitments including the creation of a national data library to allow AI developers to exploit world-leading datasets and moving to long-term R&D budgets.

Much of this is understandable. Although we may wish it were different, the reality is that tech policy is not going to sway votes in marginal constituencies. A Party with Labour’s laser-focus on winning the election was never likely to dwell on the intricacies of how it planned to fund R&D, regulate emerging technologies, and boost innovation.

Those of us trying to discern what Labour’s approach would be were largely left to read between the lines of what (then shadow) ministers said, watching the influence of techno-optimists like the Tony Blair Institute for clues as to how much of its prospectus might be adopted, and waiting for Labour in government to provide the clarity that had been missing.

A month into the Labour Government then, are we any clearer?

Early indications from Labour in government

In truth, this first month has seen several conflicting announcements.

The positives

The appointment of Sir Patrick Vallance to DSIT (one of a number of expert appointments to ministerial positions) showed a seriousness towards science and R&D by recruiting one of the UK’s most high-profile experts, with industry and academic experience, and who has a track record of overseeing successful government R&D interventions.

The relaxation of planning rules should enable the UK to expand its data centre capacity at a much quicker pace, laying the foundations for the necessary computing infrastructure to realise the potential of AI – although when this runs into conflict with Labour’s climate commitments it will be interesting to see what is prioritised.

The commission of an AI Opportunities Action Plan, led by Matt Clifford, should help to identify areas where the UK can lead AI development and apply the technology to improve public services, although it also risks being yet another iteration of the various R&D and AI strategies that previous governments have published, which has led to a lack of consistency and stymied progress.

On the one hand, this seems like a productive first month for a government that has prioritised more visible actions on areas like housing, prisons and the economy. However, for every positive announcement, we have seen others which threaten to undermine the suggested progress.

The contradictions

Confusion over the Party’s plans for regulating AI continue. After widespread briefing that an AI Bill would be announced in the King’s Speech, its absence seemed to suggest that government would take the time to work out what it wants to regulate and how. However, according to the FT, the DSIT Secretary has since suggested an AI Bill will be introduced during 2024.

While the move of CDDO, GDS and i.AI into DSIT could enable more effective policymaking by joining up the key governmental stakeholders involved in developing tech policy and driving digital transformation of government, moving these functions out of the Cabinet Office suggests a lack of central government coordination and ministerial oversight which could undermine any attempts to drive digital adoption across HMG.

In perhaps the starkest sign of the schizophrenic nature of Labour’s tech policy agenda, on the same day that Peter Kyle and Rachel Reeves hosted leading tech companies it was revealed that the commitments to funding supercomputing facilities in Edinburgh and Bristol, intended to facilitate access for academia, had been dropped.

So what are tech companies to make of the last month, and what does it signal for Labour’s priorities?

Implications for business

Firstly, there is no clear Labour tech agenda taking shape yet, aside from its commitment to adopt technologies for public services. Its decision making so far suggests it is approaching decisions individually. Perhaps Matt Clifford’s AI opportunities plan and others will help to add structure and strategy to this in future, but for now decision making is unpredictable and doesn’t add up to a holistic approach to tech.

Related to this, Labour’s tech policy does not have the strategic wrapper and focus of the Party’s missions for government and is therefore likely to play second fiddle to those missions. This will have implications for spending decisions and for future policy where tech progress may rub up against missions, such as in the data centre climate impact example.

There is likely to be an increased regulatory burden in the coming years. This will not only result from new measures, such as an AI Bill. It will also be evident in how existing legislation is implemented, including the Online Safety Act and the Digital Markets, Competition and Consumers Act, which Ofcom and the CMA are consulting on respectively.

All of this means that the UK is at risk of falling behind global comparators as a destination for tech investment and tech companies. If this turns out to be the case, the foundations on which the UK’s technology based is built would suffer, with a relative degradation of talent, funding and infrastructure compared to other countries. Similarly, R&D in academia, which can act as a driving force for wider innovation and create new businesses, would suffer.

For business, the result would be that the UK becomes a much tougher environment, particularly for start-ups and scale-ups. The fiscal constraints that the Chancellor has made obvious, coupled with early funding cuts for R&D infrastructure, suggest that public investment in tech and R&D will be lacking. This will make it more difficult for the UK to crowd in private investment in infrastructure and companies. For those companies dependent on new or regular funding rounds, the combination of growing regulation, lower private and public funding, unpredictable policymaking, and a potential degradation in the foundations and infrastructure needed for R&D, would create a much more difficult operating environment.

The challenge for business in this landscape will be helping the government to identify how it can achieve greater impact with relatively reduced spending, and particularly areas where public investment can act as a multiplier of private investment. Early conversations around the Budget and Comprehensive Spending Review will be important, as well speaking to the new advisers and tsars the government is still appointing over the summer as after this point much of fiscal and monetary levers will be set for some time. This will include, for example, indirect investment in tech through updated procurement practices can boost UK innovation and export opportunities, alongside traditional funding mechanisms, as well as making clear how tech can act as an enabler for Labour’s missions.

Following the announcement that the UK’s computing infrastructure funding was being cut, Prof Neil Lawrence described the UK as ‘cash short but capability rich’. The challenge for the government will be to ensure that the UK doesn’t become both cash and capability short. He also said ‘in some ways it also enables a fresh start’. As of yet it isn’t clear that Labour has a plan for what that fresh start should look like and it will need business to help it define it.

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