Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Dame Chi Onwurah
The level of interest shows just what an important issue this is. I will come on to discuss some aspects of collaboration as it relates to sovereignty, but I observe that the last time our sovereignty as a mid-sized power was seriously debated was during Brexit, and the slogan “Take back control” reflected the sense that too much sovereignty had been ceded to the European Union without an honest debate with the British people. As a member of the Labour party, I know that we are stronger together and that that can require some loss of autonomy to deliver results, which actually make people more secure, but that must not be done without an honest debate.
Let us look at the four specific sovereignty challenges, the first of which is critical infrastructure and cloud data dependency. The Competition and Markets Authority found that cloud services in Britain are dominated by AWS at 40% to 50%, and Microsoft at 30%. Crown Hosting is meant to be our sovereign hosting capability, but it only hosts 4% of Government legacy services. Both Amazon Web Services and Oracle claim to offer a sovereign cloud—they do say to deal with the difficult part in the title!
The second issue I want to look at is the hot topic of AI. There is no Brit large language model but there is the ambition to transform our public services and industry through AI. The AI opportunities action plan repeatedly references sovereign AI and sovereign compute without defining them. The major AI companies Google, Anthropic, OpenEye, Microsoft and DeepSeek are all headquartered abroad. DeepMind formed Google’s AI capability and was founded right here in the UK before being bought. What capability does the UK now have in AI? What minimum capability does the Minister think we need? How do we respond to the EU Cloud and AI Development Act, which may exclude UK companies?
Anneliese Dodds (Oxford East) (Lab/Co-op)
My hon. Friend is making an important point. When it comes to AI, an enormous amount of investment is needed. There are many discussions at the moment about the impact of that huge investment in AI. It is very difficult for a smaller country such as the UK to compete in that regard. Does she agree that we need to work with like-minded countries on these issues, including those in the EU? Does she agree that we need to make sure that this is one of the key topics when President Macron visits the UK later this year?
Dame Chi Onwurah
I agree with my right hon. Friend that we certainly need to work with like-minded countries.
The third area is cyber-security and data governance. Some argue that we are already at war in the cyber-sphere. Last year’s strategic defence review emphasised cyber and electromagnetic domains, and established a new UK cyber and electromagnetic command to enhance that, with £1 billion in new funding for homeland air missile defence and cyber-security initiatives. Should these be British suppliers? Should they be European? Should they be exclusively NATO suppliers?
On data governance, the foreign direct product rule allows the United States to restrict access to advanced computing chips and AI-related software. By adding UK companies to the entity list, the US can immediately cut them off from cloud services, software and AI tools, while the Cloud and Patriot Acts expand data access powers to compel US companies to hand over data even if held overseas—that is, in the UK. Has the Minister discussed those powers with Microsoft, AWS and Palantir?
Fourthly and finally, we have the UK’s reliance on global supply chains. Critical minerals are an obvious example, but because I am a bit of a geek I want to mention the common information models that enable the things in the internet of things to talk to each other. By 2030, there will be 6 billion CIM connections globally. China controls 70% of the market, creating a huge possibility for the disruption of everything from traffic systems to energy grid operations.
That is a really quick canter through just a few of the technology sovereignty issues. I want to look at two specific examples in more detail. First, the NHS has the largest and most comprehensive longitudinal and structured patient level datasets in the world. I support the push for digital integration as we transition the NHS from analogue to digital, with interoperability and standardisation bringing faster access and better analytics, yet a growing share of NHS data flows through US companies.
The federated data platform contract places core NHS data operations on Palantir’s proprietary systems. Why? There have been numerous reports of irregularities in the way the contract was awarded. In addition—this, for me, is a key point of sovereignty—Palantir’s founder and controlling stakeholder, Peter Thiel, has a political worldview which is at odds with British values. The same is true of Elon Musk. It does our constituents’ sense of agency no good to see their Government so dependent on these companies. Nearly half of adults say that they would opt out of NHS data sharing if the platform was operated by a private foreign provider.
The second example is also to do with Palantir. Its recent defence contract also raised many questions. The strategic defence review emphasised AI as a core enabler of military capability. Reports suggest that Palantir serves primarily as a vehicle for integrating Anthropic’s AI models. The US has just declared Anthropic a supply chain risk for US companies, so will Palantir break UK workflows that are using Anthropic? I am certain that President Trump would not allow British companies to control US defence datasets, so why are we allowing American ones to control ours?
I could go on about civil nuclear, telecoms infrastructure, subsea cables, quantum, space and drones, but I will stop there, and finish by looking at possible solutions. Technology sovereignty was a big theme at the Munich security conference, and the US-Europe trust gap was a yawning chasm following the shock realisation that we could not always count on the US as an ally. Technology sovereignty solutions that focus on technological leadership, such as in the Secretary of State’s definition, reflect the basic idea that if the UK leads on, say, protein folding then Google may be less inclined to switch off ChatGPT if we side with Denmark when the US tries to seize Greenland.
Whether I agree with that approach or not, it certainly resonates with the evidence that the Committee heard from witnesses in so many domains regarding how important it is for the science and business community to understand where the Government are seeking to lead, so that resources can be focused and skills built there. Can the Minister say whether the Government plan to decide which aspects of AI, quantum, space or bioengineering we will seek to lead in? AI is often thought of as having three layers: infrastructure, data and applications. Can the Minister tell us where in the AI stack we are aiming for control, leadership, sovereignty or whatever we want to call it? Also, does he agree that weak competition in the AI and digital sectors, caused by giant incumbents, reduces our ability to lead?
Open source is often cited as at least part of the solution to sovereignty. I am a huge advocate for open source, open interfaces, transparent code and standard protocols, which can reduce or minimise dependence. Despite the policy ambitions, three quarters of NHS trusts’ development teams do not use open source approaches. None of the AI models currently being deployed within the public sector is an open ecosystem; all are proprietary in nature. The Minister’s Department has sign-off on all significant IT procurement. Is open source a requirement of it?
Finally, can science diplomacy help us to negotiate technology sovereignty? A number of Members have raised the issue of collaboration. Can we build on our human capital strengths by collaborating and working with partners who have respect for our values, take collaborative approaches, and can share with us the financial capital needed to make our sovereign objectives a reality? Are we happy to share leadership, and perhaps sovereignty, with our allies?
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Kanishka Narayan)
It is such a pleasure to serve under you in the Chair, Ms Vaz. I thank my hon. Friend the Member for Newcastle upon Tyne Central and West (Dame Chi Onwurah), the Chair of the Science, Innovation and Technology Committee, for securing this debate and bringing to it her deep expertise across engineering, policymaking and leadership in the House on the question of tech sovereignty. I also thank all hon. Members for making very thoughtful points and bringing to the debate a range of experiences—as well as swiftness of speech, given the constraints imposed by time today.
I have long felt that the central question in our politics and for our country is the future of technology in this country. It will be the major driver of prosperity and dignity for people, and the central question is whether Britain gets to shape it or is shaped by it. In Westminster, we sometimes talk about technology sovereignty as an abstract geopolitical goal, but we have to keep in mind that, ultimately, it is the basis for our NHS radiologists to have access to the best tools for detecting cancer, with data here in the UK; for British founders and builders to be able to train and deploy models, rather than depending on foreign APIs and pricing; and for people in their homes and workplaces across the country to know that their everyday AI systems are governed transparently and democratically here in the UK.
My view is that technology sovereignty is a state’s ability to have strategic leverage when it comes to a technology, such that it can ensure ongoing access to critical inputs and ongoing assurance that its wider economic and national security objectives can be met more broadly. It is to take the best tools the world has to offer today, but also to shape the rest, and ultimately to make that which is critical here in Britain.
As I think of it, that strategic leverage is obtained by three steps on a ladder. The first is just to have enough of the critical inputs. Taking AI as an example, we have to have enough chips today to be able to do anything with AI in the first instance. With that in mind, the Government have always been very keen to secure the level of capital investment that means that Britain is at least at the table with critical inputs.
Once we are at the table, the second part of sovereignty is to make sure that we have some diversification in who we procure critical inputs from so that we can bargain effectively. We are the party of labour; we understand that who has power matters as much as what the powers are. In that context, one of the first things I did in my role was to engage with a series of companies in every part of the stack so that we were able to build more diversity into the landscape.
The third rung of the ladder is, ultimately, to build British in order to make sure that we have the full-fat version of sovereign capability here in critical parts of the stack.
Dame Chi Onwurah
I thank the Minister for setting out his sovereignty stack. Just as an example, is an LLM a critical input or another level in the stack—and does it need to be British?
Kanishka Narayan
I valued my hon. Friend’s earlier point that sovereignty has to be seen in the round. We cannot make everything here; we have to look at the entire bundle that we have to offer. In the context of LLMs, there is some uncertainty as to whether all the capability will ultimately accrue in closed proprietary models, or whether open-source, open-weight models might be part of it. To me, as things stand today, it is a pretty important part of the stack. The question then is whether we have enough of it to be able to make the most of it by adopting it for economic and national security usage here, or whether there are aspects in which, at least from a distillation or small-model point of view, we need to develop some capabilities here as well. I do not think there is a binary answer to the overarching question; the answer is much more nuanced. I am happy to discuss that further if it is of interest.
As I said, the third rung of the ladder is, ultimately, to build British and focus on areas in which we can develop our strengths. I have to point out that we made sure that Nscale, one of our neocloud hyperscale providers, was an important part of the supply chain for AI growth zones. I noticed that yesterday Nscale raised the largest ever series-C funding in Europe, in part as a result of the Government’s support and convening in that context. Arm, the leading chip design company globally, is still headquartered in Cambridge, and we have fantastic companies in the AI inference chip part of the stack, Fractile and Olix being two of them. It is an area that I spend a lot of my time on.
When it comes to models, we have huge strengths, not just because a number of the Gemini teams and researchers continue to sit in King’s Cross at DeepMind, but because companies developing foundation models in AI for science and autonomous vehicles, embodied AI, and aspects of world models and computer vision reside here in the UK. Wayve raised £1.5 billion just this year, the largest funding round in Europe to date for that stage. It is a fantastic company that looks in particular at embodied AI and vision. I am proud of those companies. It is right that the Government are supporting them through the lens of tech sovereignty, as that is what both Britain’s and the companies’ best interests dictate.
The sovereign AI unit will be crucial to that. I am glad to see the level of interest in that across the House. It will concentrate efforts on priority areas. There was interest in my specifying those areas. The four areas that are of interest at the outset are novel compute, in particular focusing on the inference chip part of the stack; novel model architecture; AI for science—I point hon. Members to the AI for science strategy published by the Department three or four months ago, which set out particular areas of focus and priority—and embodied AI.
To give a concrete example of early action that the sovereign AI unit has taken, we have already invested £8 million in the OpenBind consortium to accelerate AI-driven drug discovery, and £5 million in the Encode: AI for Science fellowship to support the next generation of world-class talent. The focus of the unit will be on both capital and compute, to incrementally anchor more and more British companies here, but I know that the unit will only be part of the solution. We have a role to look at innovation and market support much more broadly across the tech landscape.
In November, we also announced a significant advance market commitment—a deeply innovative procurement shift—which meant that up to £100 million in Government funding was available to buy products from promising UK chip companies once they reach a high-performance benchmark. That presents UK start-ups with an exciting opportunity to grow and compete right here, building for the world.
AI is of course just one area of Britain’s flourishing tech ecosystem. I point out to my hon. Friends the Members for Milton Keynes Central (Emily Darlington) and for Lichfield (Dave Robertson), who made important points about quantum, that the Government have doubled the rate of investment in quantum, with about £1 billion committed over the next four years. The points on helium made by my hon. Friend the Member for Lichfield have very much been taken into account. The Government are looking at the developing situation on helium supply in the middle east, which is of concern.
Through our national programme, we broadly want to anchor development and access to technological capabilities that are most important to economic growth and national security. That means, in the context of quantum, more companies starting, growing and staying here and, in the context of AI, not just developing capabilities in particular parts of the stack, but in part looking upstream for skills as well.
In that context, I agree totally with my hon. Friends the Members for Cambridge (Daniel Zeichner) and for Southend East and Rochford (Mr Alaba) that the quality and scale of our talent and skills in our universities and schools is the single biggest determinant of where we end up. I am happy to write to my hon. Friend the Member for Cambridge about the UKRI changes that we are making. In answer to my hon. Friend the Member for Southend East and Rochford, IP capitalisation is a deeply important part of what I focus on with the Intellectual Property Office, and I am happy to engage him on the question of Essex University in particular.
Ben Lake (Ceredigion Preseli) (PC)
The Minister knows that the Computer Misuse Act 1990 criminalises a lot of legitimate cyber-resilience and vulnerability research. I think that the Government are minded to introduce a statutory defence for such research, but can he share whether that defence will be introduced as part of the cyber Bill?
Kanishka Narayan
The hon. Member is absolutely right to raise that point about a defence for cyber-security purposes. The Computer Misuse Act is being reviewed at the moment—the Home Office is looking at it—but, as I mentioned in Committee on the Cyber Security and Resilience (Network and Information Systems) Bill, that is not the appropriate vehicle, given its much narrower scope than the broad scope that we would like in the context of a defence. For those reasons, I am keen that we pursue the matter, but elsewhere.
I am conscious of time, so I will proceed at pace. Alongside quantum and AI, semiconductors are another technology that underpins the global economy and is fundamental to our way of life. As part of our industrial strategy, digital and technology sector plan, we are taking measures to foster the growth of that particular sector.
My hon. Friend the Member for Mansfield (Steve Yemm) spoke very thoughtfully about the fact that we should not just rely on venture-focused companies in particular parts of the country, but look at our industrial heritage. That is exactly why I have focused on ensuring that the AI growth zones programme puts data centres in the north-east, alongside the headquarters of our largest listed tech company. A deep heritage of financial services technology innovation in Newcastle and the surrounding area is now able to benefit from good jobs anchored by that data centre.
In south Wales, the data centre planned for the site of the old Ford car manufacturing plant gives hope for jobs in the semiconductor cluster, anchored by that data centre. That is critical. In north Wales, data centres are pulling our nuclear small modular reactor into the future, which is critical to thousands of jobs in that community. In Lanarkshire, the old steelworking community, which lost thousands of jobs and never fully recovered, now has hope from half a billion pounds of community investment as a result of data centres. That is precisely what I believe in.
Anneliese Dodds
In one sentence, will the Minister say something about another geographical issue: collaboration with like-minded countries, especially in the EU?
Kanishka Narayan
I will simply give a note of total affirmation on the importance of that. Having met a series of Ministers from Europe, I know that we have a huge amount in common and a huge amount to do in the future.
I am being tested pretty intensively on time, so I will focus on one final point. Some Members rightly raised the question of mergers, acquisitions and investment controls. As my hon. Friend the Chair of the Select Committee will know from the time that I worked for her on the Bill as it was proceeding through the House, the National Security and Investment Act 2021 is an excellent example of where we are ensuring that investment and sensitive areas maintain the national security interests of Britain now and in the longer term.
In summary, the Government will continue to support our tech sectors as best they can. Only yesterday, Nscale raised the largest series-C funding round in all of Europe. Isambard-AI has raised a £50 million round for embodied AI—manufacturing AI—as well. Those are testaments to the approach that I have set out, which will ensure that British firms and people can seize every opportunity they can in tech-enabled Britain.