Digital and Technology Policy: National Sovereignty

Baroness Lloyd of Effra Excerpts

Thursday 23rd July 2026 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, I welcome the opportunity to respond to this debate and I, too, thank the noble Baroness, Lady Kidron, for bringing forward the discussion on this significant issue. Despite the fact that we discuss the important issues of AI once or possibly twice a week, I always find that noble Lords raise additional points for thought and reflection to discuss with colleagues afterwards. I will endeavour to respond to the points made today, and if I do not, I will follow up afterwards.

To respond immediately to the questions on the publication of a digital sovereignty strategy, we have heard this request from one of the committees and from your Lordships and are reflecting on it, but I cannot at this stage confirm that we will be publishing such a strategy as proposed by a number of your Lordships today.

This debate raises fundamental questions concerning our economy, society and national security. The question of how we ensure that the remarkable capabilities of modern technology work in the interests of society, support economic strength, protect citizens in the UK and around the world, and remain rooted in British values is incredibly important. As many noble Lords have mentioned today, the UK has huge strengths: subsea cable connectivity; telecoms companies investing in and connecting citizens throughout the UK; our world-leading universities; and incredible companies involved space, autonomous vehicles and chips.

As the noble Lord, Lord Howell of Guildford, reminded us, now more than ever, technology is a part of global supply chains that link the smartphones we use every day to critical minerals from all around the world. The Government are committed to ensuring that the UK has the right balance between access to the best technologies that global markets have to offer and ensuring our national growth, resilience and security.

In respect of AI, as many interventions have made clear today, a small number of global firms now underpin critical infrastructure, from cloud computing to advanced AI systems. In the light of this, the Government are focused on ensuring long-term resilience, security and control over critical systems. Our approach is about reducing overdependencies and increasing resilience in key national strategic priorities.

The UK believes that the extraordinary complexity of the critical technologies of the present and future, and the range of inputs needed to bring them to market, means it is unlikely that any single country could achieve independence, let alone dominance, across the entire supply chain. Therefore, there will be an inevitable and essential interdependence hardwired into the tech stack.

The noble Lord, Lord Ranger of Northwood, and others asked what our strategy is. It is not to dominate an entire technology but about developing world-leading research and industry in specific elements of the stack; ensuring that we have sufficient domestic capacity in key elements such as compute; and having a resilient, diversified set of relationships with allies to underpin reliable access to our wider supply chain needs. As part of this, in our modern industrial strategy’s Digital and Technologies Sector Plan, the Government set out the plan to back six frontier technologies that drive growth and support UK security and sovereignty. These are advanced connectivity technologies, AI, cyber security, engineering biology, quantum and semiconductors.

As many noble Lords, including the noble Lord, Lord Vaizey, the noble Baroness, Lady Uddin, and my noble friend Lord Drayson highlighted, we are also working to create the necessary conditions for innovative companies to grow and existing companies to adopt new technologies. The UK has a strong private capital ecosystem—the third largest in the world—but there is more that we can and should do to support companies to access the capital that they need. That is why we are expanding the British Business Bank so that high-growth tech firms can access the capital they need, doubling its annual investments to £2.5 billion and committing £5 billion to growth-stage funds.

As referenced by my noble friend Lord Drayson, the Pension Schemes Act will also drive consolidation in the pensions market and boost investment in UK plc. Through the Mansion House commitments and new British Business Bank vehicles, such as the British growth partnership and venture link, we are enabling pension funds to invest at scale in UK science and technology firms, supporting high-value jobs and innovation in the UK.

The UK has one of the fastest growing and most competitive AI sectors in the world. UK AI firms raised £6 billion in investment in 2025, with estimated GVA among dedicated AI firms nearly doubling to £2.2 billion in 2024.

In respect of the sovereign AI fund, which has £500 million, we are backing strategically important UK AI companies. I was asked about the specific areas. They are infrastructure, life sciences and AI assurance—apologies, I do not have the full list here when I thought I had—so that the UK has greater resilience and influence in a global AI economy. Alongside that, in response to my noble friend Lady Berger, there is £1 billion to expand the AI research resource 20 times by 2030, including £750 million for a new national supercomputer in Edinburgh, as well as the five AI growth zones and a £1.1 billion AI hardware plan, combining to make Britain an AI maker, not just an AI taker.

On the points and questions raised by the noble Baronesses, Lady Kidron and Lady Stowell of Beeston, and the noble Viscount, Lord Camrose, we are building non-language frontier models, such as Ineffable Intelligence, and we believe that the approach for language models can look different. The recently announced BOLD lab, based at the University of Oxford, will develop human-centred, resource-efficient AI systems that can operate safely and effectively in the real world. We are also backing the UK tech sector by committing up to £2 billion to establish the UK as a world leader in quantum, and we have made the world’s first commitment to procuring large-scale quantum computers in the early 2030s.

The noble Lord, Lord Vaizey, and the noble Baroness, Lady Verma, raised points about skills and digital inclusion. These are absolutely essential. We have published a digital inclusion action plan, we are investing £187 million in the TechFirst programme, and we are supporting companies to adopt AI so that we can be absolute users and shapers of AI as it is adopted, as well as in its development.

The noble Baroness, Lady Verma, raised important points about the rest of the world and ensuring that all countries contribute to the discussion on the future of AI adoption and AI governance. We are funding practical partnerships with the OECD, the African Union and south-east Asia to support responsible AI adoption, and we participated in the UN’s Geneva AI week, which encourages a role for the UN that promotes sharing science-based information.

The investment in UK companies, UK skills and UK infrastructure puts us in a good place. However, noble Lords raised legitimate concerns about the risks of AI. Where abuses of AI technology are happening and facilitating harm to UK citizens, we have shown that we will not shy away from taking on AI firms and acting decisively—for example, in our response to Grok’s generation of vile and degrading non-consensual sexual deepfakes earlier this year.

On cyber threats and the recent cyber incident referenced by my noble friends Lady Berger and Lady Gill, the cyber capabilities of leading AI systems are indeed advancing rapidly. The UK’s AI Security Institute, as part of its world-leading efforts to make frontier AI safer, is studying the behaviour seen in this incident of an AI system pursuing goals through unintended and unauthorised means. As AI capabilities evolve, it is important that everyone steps up their cyber defences. Ministers have written to UK businesses with clear and practical steps that they can take to do so. AISI continues to work with all labs to better understand AI capabilities and improve safeguards.

Many noble Lords raised the importance of British values and British culture in shaping the development of our technologies, and many asked specific questions around where we are in our approach to copyright. In March, recognising that the previous proposals on copyright did not command widespread support, we set out a new way forward. We want creators to have greater control over how their work is used, and we will take steps to drive best practice on transparency and the use of mechanisms available to creators to control their works online. We recognise that it is right that we value and protect human creativity by labelling content so that it is clear whether it has been made using AI. This will help inform people’s choices. We will also establish a taskforce to put forward proposals for government on best practice for labelling.

The noble Baroness, Lady Kidron, and others, raised questions about public datasets. The Government have launched a call for evidence on the marginal cost restriction on public sector data reuse, seeking views on whether charging for access to public sector data should be reformed to better support innovation, growth and public value. That call for evidence explores whether the current approach of charging for access to public sector data remains appropriate, including the potential impacts of greater cost recovery on data availability, reuse and investment.

Many noble Lords, including my noble friend Lord Moraes, asked about the Government’s strategy on data sovereignty. The Government’s approach is to ensure that the UK has the right balance between access to the benefits of international data flows and carefully protecting both personal and non-personal data. This is underpinned by data protection law, UK security standards and international obligations. We continue to monitor these trade-offs and seek the best balance for the UK. The department recently published a call for evidence, Data Flows You Can Trust, which seeks to gather views from the public and businesses on the approaches they would like to see the Government take in this space.

Many noble Lords raised our public sector, rightly highlighting the role of the Government in procurement and the role of the public sector in adoption. It is crucial that the public sector has access to the best technologies offered on the market, while also supporting UK industry to strengthen capabilities across key technologies. Across the public sector, we are embedding frameworks, standards and guidance to ensure that AI is deployed in a way that is fair, transparent and accountable. This includes the Data and AI Ethics Framework and sharing resources through the AI Knowledge Hub, such as the AI Playbook. The Algorithmic Transparency Recording Standard ensures that the public can understand how systems are used. This is critical not just for risk management but for building public trust in the systems we use.

The Government recognise that cloud services underpin many public services and that concentration in a small number of suppliers can create risks for resilience, competition and value for money. We are improving the visibility of cloud use, strengthening resilience standards and using procurement to secure better value, greater choice and stronger public services. The national cloud infrastructure programme is exploring how the Government can better co-ordinate the way they buy cloud services, work with industry and secure better outcomes for taxpayers. It aims to create genuine opportunities for a broader range of suppliers, including British firms and SMEs. The recently published Cloud Challenge Book supports work to help the public sector act as a more co-ordinated customer at national scale.

Noble Lords are right to highlight the importance of international co-operation and leadership and the vital role of the UK. The UK’s first digital standards strategy, released on 17 June, recognises the important role that digital standards play nationally and globally, from strengthening national security resilience to contributing to economic growth and the innovation behind technological development. We want to ensure that the international standards development ecosystem remains effective, efficient and responsive, and that the standards it develops reflect our society’s values and interests and deliver market benefit. We will continue working strongly with the G7, the OECD and other multilateral partners to shape the future of the governance and adoption of AI globally.

Noble Lords raised the centrality of technological developments for our war-fighting capability and in defence. The Defence Investment Plan sets out the programme of investment to support this in the UK, in particular—to the points raised by a number of noble Lords—its role in procurement and in supporting novel technologies. It clearly set out the proportions in the Defence Investment Plan that will be allocated to novel technologies.

I pay tribute to the right reverend Prelate the Bishop of Oxford for his work over many years, and in particular for my engagement with him in preparing for the debate instigated by the most reverend Primate the Archbishop of Canterbury on AI and society. It is worth remarking to noble Lords that I launched the OECD policy handbook only a few weeks ago. This was informed by the work of many of your Lordships over many years. So that impact will continue.

To conclude, the UK will not be a passive technology taker in this world. Our ambition is to shape how frontier technologies are built, trusted, deployed and governed, looking not inwards but outwards with others and on our terms. We will continue to collaborate closely with global partners in the multilateral system to maximise our reach, delivering UK tech priorities through the most suitable forms and scaling up achievements with our partners. We will continue to invest in infrastructure, digital skills and AI adoption for all. Those noble Lords who have not yet had the pleasure of meeting Minister Kanishka Narayan, who will have a seat at the Cabinet table, will be pleased that he brings clarity of focus and an extraordinary amount of energy to the role of bringing this together at the centre of government. If we can seize this transformative opportunity of technology in a way that puts society first and benefits citizens across the UK and globally, the prize for all of us is significant.

AI: International Co-operation

Baroness Lloyd of Effra Excerpts

Wednesday 22nd July 2026 Lords Chamber

[Lord Davidson of Glen Clova]

To ask His Majesty’s Government what assessment they have made of the call by China’s President at the World Artificial Intelligence Conference last week for “extensive international cooperation” regarding the development of AI.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

The Government agree that international co-operation on AI is essential. That is why we play a leading role internationally on AI, including work to support shared prosperity through the UN and OECD and to improve awareness of AI risks via our AI Security Institute and the International AI Safety Report. Given that the transformative scale of AI advances requires a strategic whole of government approach, the Prime Minister is establishing a new AI task force to take this all forward.

[Lord Davidson of Glen Clova (Lab)]

I thank my noble friend for her informative Answer. The AI world is dividing into three blocks: the China side, the EU and the US. This is creating divergence, with diverging philosophies on state stability, individual rights and market form. Does the Minister consider that the UK has a convening power that it may use to guide governance of this powerful technology?

[Baroness Lloyd of Effra (Lab)]

AI can indeed be a powerful force for growth, scientific progress, better public services and sustainable development. We believe we can unlock this potential, working together with other countries, to build trust, to manage the risks and to ensure that the benefits of AI are shared widely. That is why the UK co-ordinates the international network of AISIs, which delivered the International AI Safety Report. We also fund practical partnerships with the OECD, the African Union and south-east Asia to support responsible AI adoption and drive growth worldwide.

[Baroness Teather (LD)]

My Lords, in the light of the news today that one of OpenAI’s agents went rogue in an experiment and attacked another AI start-up, does the Minister agree that this indicates an urgent need for global co-operation to agree safeguards and accountability frameworks? It seems that companies cannot be trusted to control the technology they are developing without this. Furthermore, does this not also indicate the need for us to develop a sovereign AI capability strategy so that we have the influence and expertise to shape these critical global conversations?

[Baroness Lloyd of Effra (Lab)]

With the AI Security Institute, we have a world-leading, world-class institution that is able to test frontier models and provide advice, including with the National Cyber Security Centre, in order to equip companies against the risks that are prevalent with the advances in these technologies. That is exactly what happened earlier, and we encourage all firms and other organisations to take the mitigations that are necessary to reduce vulnerabilities and increase resilience. On the question of AI sovereignty and technological developments, we are absolutely taking an approach to build out AI capabilities. That is why we have the AI hardware plan to support development in that area, as well as the sovereign AI fund.

[The Earl of Courtown (Con)]

My Lords, I thank the noble and learned Lord, Lord Davidson, for bringing this important subject to the House today. Can the Minister tell the House whether the relevant Minister or officials have spoken to trusted international partners before responding to this offer from the President of China? Can she also inform the House, since the former Prime Minister made much of his thawing of relations with China, whether our new Prime Minister will continue with that approach?

[Baroness Lloyd of Effra (Lab)]

The UK is not a member of the World AI Cooperation Organization. We are carefully assessing its implications for UK interests in global AI governance and international technology standards. As yet, we have not seen any detailed proposals for its mandate or activities. We do believe that co-operation and dialogue is essential, including dialogue with China on all these matters.

[Lord Alton of Liverpool (CB)]

My Lords, in assessing the CCP’s AI global initiative, which the noble Baroness just referred to, will she look carefully at the 29 member states of that initiative, which include Putin’s Russia, the military dictatorship in Myanmar and regimes in Serbia, Cuba, Belarus and Nicaragua? Although it is important that we should co-operate with like-minded nations, will she reflect on how the Chinese Communist Party regime has deployed AI-powered facial recognition, deploys hundreds of millions of CCTV cameras in a surveillance state and has powered biometric harvesting and digital tracking to monitor its population? Is the alliance that we need not with like-minded democratic nations living up to the standards set by the Council of Europe’s suggestions on proper guardrails? Should we not be doing what the noble Baroness said before and developing our own sovereign approach to AI?

[Baroness Lloyd of Effra (Lab)]

We are indeed co-operating with many like-minded allies and countries —for example, the G7 and the OECD, to which the noble Lord referred—on taking forward the AI principles. Those agreed standards are vital for the governance and the effective adoption of AI in all countries. As I mentioned in reference to the question from the noble Earl, we are not a member of the World Artificial Intelligence Cooperation Organization. I did review its membership before answering this Question, so I am aware of that. This is a global technology; it is providing opportunities and threats globally. It is very important that, in respect of the UK, we provide advice to our companies and the public sector, so that we can be prepared both for the risks and the opportunities.

[Lord Brooke of Alverthorpe (Lab)]

My Lords—

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[Lord Brooke of Alverthorpe (Lab)]

My Lords, I hope we will raise our sights above some of our traditional disputes. The threat we face is a worldwide one, as is recognised with what happened with the attack on Hugging Face by OpenAI. This is truly a threat to the whole world, regardless of where we come from politically, and we must therefore look to get the maximum co-operation, on a worldwide basis, that we can secure. Could we, as a starter, start to write out what principles and what guidance we should seek to put into AI that should be minimum standards for a world application?

[Baroness Lloyd of Effra (Lab)]

As I mentioned, the Government co-operate with others in numerous multilateral forums. We have taken forward the OECD principles in many of these and they include some of aspects to which my noble friend referred. We will continue to talk to allies about all these aspects. On risks, it is important to emphasise that we are both providing advice to companies on what measures they can take to improve their resilience and taking new powers, through the Cyber Security and Resilience (Network and Information Systems) Bill, to protect our essential services from attacks, wherever they emanate from.

[Lord Vaizey of Didcot (Con)]

My Lords, should China, or indeed any other country, wish to co-operate with us on AI policy, whom should they call? The Minister at DBIST, DCMS or the Cabinet Office, or the Prime Minister’s AI adviser at the Office for the Prime Minister and the Cabinet?

[Baroness Lloyd of Effra (Lab)]

We set out yesterday in our Written Ministerial Statement the allocation of responsibilities under the Government going forward. The strategy will be looked after by the Cabinet Office, which is taking the lead for AI strategy and public sector AI adoption. The Department for Business, Innovation, Science and Trade will take on responsibility for the science and innovation portfolio. As I mentioned at the beginning, it is a whole of government approach. You will find discussion of AI policy implications in every sectoral dimension, from financial services to maritime, because it is a technology that affects all areas. That is another reason why we need to look at regulation with a sector by sector approach, because it affects different sectors differently.

[Baroness Berger (Lab)]

My Lords, there can be no greater motivation for extensive international co-operation on AI than when it comes to safety. Other noble Lords have referred to this, but it is worth reiterating in detail that, last night, the co-founder of OpenAI, Sam Altman, announced to the world that its latest next-generation version GPT-5.6 Sol, and an even more capable pre-release model were involved in an unprecedented cyber incident and independently executed a complex cyber attack. Surely the time for giving advice to the tech companies is over. I welcome the Government’s Bill on cyber security and resilience, but it does not extend to AI. Will the UK lead the way and co-ordinate a global agreement on the transparency, oversight and regulation of AI?

[Baroness Lloyd of Effra (Lab)]

We will continue to build on the work of discussing AI safety, adoption and governance through existing multilateral and multi-stakeholder initiatives, such as those I referred to before, including the G7, the OECD Global Partnership on AI and the Council of Europe, among others. That is the approach we will be taking forward. My noble friend raises very important questions, and in respect of online safety, our online safety regulator co-operates closely with other regulators to look at the implications of AI for online safety and will continue to do so.

EU Technological Sovereignty Package

Baroness Lloyd of Effra Excerpts

Monday 20th July 2026 Lords Chamber

[Lord Clement-Jones]

To ask His Majesty’s Government what assessment they have made of the EU’s technological sovereignty package; and what plans they have to introduce equivalent instruments to protect and promote the UK’s artificial intelligence capabilities.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

We have undertaken an initial assessment and are working through a detailed assessment of the EU’s technological sovereignty package. This includes proposals on CADA and chips. Our current assessment is that the package presents both opportunities and risks to UK industry. We will continue to engage with industry and European partners as proposals evolve. For the UK, AI sovereignty means reducing overdependencies, strengthening resilience and backing British capability, including through the £1.1 billion AI hardware plan and our sovereign AI fund.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as a consultant to DLA Piper on AI policy and regulation. The EU’s Cloud and AI Development Act will set out a framework with sovereignty criteria for public sector procurement. The Government’s AI hardware plan, mentioned by the Minister, is welcome, but it contains no equivalent procurement-linked sovereignty framework. Given that the Government’s public procurement overwhelmingly relies on US hyperscalers, can the Minister commit to introducing a UK AI sovereignty assurance framework to ensure that public sector services and critical national infrastructure are nationally resilient?

[Baroness Lloyd of Effra (Lab)]

The Government have already set out their intention to use public sector buying power more strategically. The January 2025 blueprint for modern digital government noted that public sector organisations often contract locally and individually, limiting the impact of the £26 billion of annual technology spend, and committed to continue working on whole of public sector agreements. We are also developing the national cloud infrastructure programme, a strategic initiative to co-ordinate how the public sector buys cloud services. This programme will use the collective buying power of the whole of the public sector to secure better value for taxpayers, strengthen digital resilience and create new opportunities for British businesses.

[Baroness Neville-Rolfe (Con)]

My Lords, is the Minister concerned about the rising pre-eminence of China in AI, with several world-class developers now there and the rapid adoption of its low-cost models across, for example, emerging economies?

[Baroness Lloyd of Effra (Lab)]

Developments in AI are incredible in many respects. That only reinforces our belief that we need to invest in the UK, not just in digital infrastructure and hardware—for example, supporting UK businesses that have unique chip capabilities—but in upskilling people in the UK to adopt AI, so that we as a country can benefit from the productivity gains and that small and large businesses can adopt AI safely and securely.

[Baroness Foster of Aghadrumsee (Non-Afl)]

My Lords, I very much welcome that AI growth zones have been designated across the UK, although not in Northern Ireland. I am sure that the Minister agrees that that is disappointing. If His Majesty’s Government are looking at backing British capability, surely there should be resilience in Northern Ireland as well.

[Baroness Lloyd of Effra (Lab)]

Northern Ireland is an incredibly important region for us. It has, as the noble Baroness knows, very high levels of digital connectivity, which puts it in a great place. I know that it also benefits from a thriving and growing cyber security sector and is thus able to tap into many of the adjacent industries that are part of the AI economy as it grows. We are backing cyber businesses in Northern Ireland and supporting them to export and scale.

[Baroness Kidron (CB)]

My Lords, the EU’s tech sovereignty package recognises the importance of procurement in developing a wider sovereign technological regime. Yet, here in the UK, we are increasingly seeing extensive use of lock-in deals across Defence, Health, the Treasury and so on. Can the Minister say what actions the Government will take to prevent tech dependency when they offer public contracts to foreign-based firms to ensure that the UK retains the ultimate say over its policies across all departments?

[Baroness Lloyd of Effra (Lab)]

The noble Baroness highlights the importance of having clear guidance and a clear framework for the public sector as it makes various procurements. That is why, for example, we have published the Cloud Challenge Book 2026, which helps to identify how the public sector can strengthen resilience, improve competition and reduce unnecessary dependency on individual suppliers. That is part of our approach to cloud procurement for the whole of the public sector.

[The Lord Bishop of Hereford]

My Lords, technological sovereignty is not simply about developing domestic capabilities but about the values that guide their development. What steps are His Majesty’s Government taking to embed accountability, transparency and public oversight in technological development?

[Baroness Lloyd of Effra (Lab)]

Investments that are backed by, for example, the sovereign AI fund must of course abide by UK laws, including copyright laws. However, this also goes to the point about AI technology in terms of discerning values and the understanding of everybody, from children to workers to older populations, about how to safely adopt AI. The assurance market in AI is something that we are backing very strongly, so that people have real clarity about the underlying credentials of the AI that they use.

[Lord Markham (Con)]

My Lords, as someone who has experienced a few PM changes myself, I genuinely wish all the Ministers good luck and thank them for the work that they have done—I know how hard it is. Technological sovereignty ultimately depends not on where AI is regulated but on who owns the compute cloud infrastructure and frontier models. What proportion of government AI investment is building genuine UK-owned capability, rather than further increasing our dependence on overseas hyperscale cloud providers?

[Baroness Lloyd of Effra (Lab)]

The Government are taking the approach of reducing overreliance and building up our own capability. We welcome foreign investment, including in our AI growth zones, and the ability of UK companies and citizens to access the best technology available, whether it is in the UK or elsewhere. That is an important part of our being able to benefit from the developments in AI. However, I absolutely agree that AI compute is the engine behind every AI breakthrough. That is why we are investing up to £2 billion in public compute infrastructure to 2030, so that researchers, start-ups, SMEs and public services can have free access to the computing power they need to work at the frontier of AI.

[Baroness Gill (Lab)]

My Lords, the UK’s AI Security Institute does evaluate frontier models, but it lacks pre-market enforcement powers to block software releases. Pre-market enforcement would force developers to proactively prove that their models meet rigorous safety standards, such as we have for aviation, pharmaceuticals and medical devices. Are the Government open to setting a global standard for AI by backing upfront, rigorous safety evaluations?

[Baroness Lloyd of Effra (Lab)]

The AI Security Institute is one of the pre-eminent institutions in the UK in AI development and the transformations we are seeing. It works very closely with other AI security institutes. I think it was only two weeks back that it was meeting other similar institutions, developing common standards and approaches to assessment, which is one of the important ways that we keep a baseline across the globe for how we should appraise frontier models as they are developed.

[Viscount Colville of Culross (CB)]

My Lords, when the Government support a UK sovereign AI fund, will UK government investment be focused on models trained only on properly sourced and remunerated material?

[Baroness Lloyd of Effra (Lab)]

The AI sovereign fund invests in companies based in the UK. They must adhere to UK law, including UK copyright law, for those investments made in the UK.

[Lord Bellingham (Con)]

My Lords, following on from the question from my noble friend Lord Markham, will the new EU CADA rules block out UK-based infrastructure and cloud service providers?

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[Baroness Lloyd of Effra (Lab)]

We are assessing and having detailed discussions with EU counterparts about exactly the implications of EU CADA for UK businesses. As I mentioned in my opening remarks, we continue to engage very closely because there are some risks to UK businesses, but our strong view is that the EU is stronger with the UK as a partner in these technological developments.

Artificial Intelligence: Legislation

Baroness Lloyd of Effra Excerpts

Thursday 16th July 2026 Lords Chamber

[Lord Taylor of Warwick]

To ask His Majesty’s Government whether, and if so when, they expect to bring forward legislation on the development and use of artificial intelligence in the United Kingdom.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, AI has the potential for significant advances in science, productivity and living standards if adopted securely. While we are taking steps to develop our sovereign capability, we are also bringing forward the regulation for growth Bill to ensure that our regulatory environment drives the growth we need to seize the opportunities brought by AI. Through our world-leading AI Security Institute, we are supporting international safeguard developments and ensuring that the Government have the best understanding of model capabilities as they advance.

[Lord Taylor of Warwick (Non-Afl)]

My Lords, I thank the Minister for that Answer, but I also say well done to the England football team for reaching the semi-finals of the World Cup. In doing so, they demonstrated AI—actual intelligence.

The stone age did not end because we ran out of stone. AI technology has given us amazing ways of solving everyday problems. The Minister mentioned the AI Security Institute. It plays an important role, especially concerning research, but it does not have powers to compel companies to engage with or to protect us against serious risks from AI. We know that AI can bring great benefits, from health to wealth, but it can also bring problems. Can the Minister therefore tell us when we will have AI regulation? The Government seem to have a “wait and see” attitude. AI also sees, but it does not wait.

[Baroness Lloyd of Effra (Lab)]

The Government are acting to ensure that the UK can grasp the transformative potential of AI. That includes developing our sovereign capability and, as the noble Lord mentioned, relying on the advice of the AI Security Institute. Our approach is that we will legislate where we need to. We have done so through the Online Safety Act and we are doing so in other areas where we see the need. We believe that the best way of regulating is through context-specific regulation, which will take into account the specific issues that arise when AI is adopted by particular sectors.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as an adviser to DLA Piper on AI regulation and policy. The Government followed Australia in its approach to access to social media for under-16s. Will they do the same with AI, now that Australia will be adopting mandatory standards for AI, as nine in 10 of the British public clearly want?

[Baroness Lloyd of Effra (Lab)]

The UK’s approach is to develop our sovereign capabilities. We are investing in infrastructure and in AI growth zones. We are working to ensure that everyone in this country benefits from the potential of AI and are upskilling 10 million workers. In respect of the regulatory environment, AI can be adopted in many different areas: it can advance drug discovery, or it can support teachers in classrooms so that they have more face-to-face time with pupils. It is right to take a context-specific regulatory approach.

[Viscount Colville of Culross (CB)]

My Lords, the Government have recognised that greater transparency about AI model training data would help rights holders to assert their rights. Can the Minister tell the House why she has not committed in principle to statutory transparency requirements for commercial AI developers?

[Baroness Lloyd of Effra (Lab)]

We set out our approach in March in respect of the issues around copyright and AI. We acknowledged that the approach we had taken previously in respect of the proposals we had put forward did not command the support of the creative industry or the technology industry—or indeed of noble Lords. We have set out a plan to take all that forward over the summer and beyond.

[Lord Redwood (Con)]

What benefits and staff reductions will the Government achieve with their £3 billion commitment to spending on AI for their own purposes?

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[Baroness Lloyd of Effra (Lab)]

The noble Lord is right that there may be many advances in productivity and efficiency across all the public sector and, indeed, in the private sector. We are setting up the AI Economics Institute to make sure we are well informed with the best advice on the implications for the labour market and the fiscal environment. This is a rapidly developing technology. We are drawing on the best advice so that we can be best prepared to support the UK in this transformative potential.

[Lord McNicol of West Kilbride (Lab)]

My Lords, the increasing use of AI in education is transforming teaching and learning at all levels. The Government are currently focused on investment in AI skills for work, through tertiary education, as well as having introduced measures to reduce the burden on teachers through innovation funding—all to be welcomed. Will the Government recognise the importance of taking a stronger stance in exposing younger generations to the tools AI offers and commit to a more in-depth curriculum that teaches primary and secondary students the safe and correct ways to use these AI skills?

[Baroness Lloyd of Effra (Lab)]

My noble friend is absolutely right to highlight the fact that AI technology is with us today. It is absolutely right that, as he mentioned, we support all parts of society—children, students, workers—to understand this, discern it and use it wisely. That is why we are also developing our digital skills programme and ensuring that everybody can benefit from this transformative technology.

[Viscount Camrose (Con)]

My Lords, we understand the Government’s policy of placing most of the burden of AI regulation on to existing sectoral regulators, but the cyber security and resilience Bill will create new burdens for those regulators. The Minister will accept that this is collectively an extremely significant expansion of those regulators’ powers and workload. First, are any further additions planned? Secondly, are the Government taking steps to ensure those regulators have the necessary skills and resources? Thirdly, is the new Prime Minister aware of and supportive of this approach?

[Baroness Lloyd of Effra (Lab)]

The noble Viscount is right that the cyber security and resilience Bill will indeed place new obligations on regulators, but that goes hand in hand with the support and the changes in funding and fee recovery that they will be able, after consultation, to enact. They are also supported by the technical authority of the NCSC, which provides them with advice on this. It is obviously the nature of all regulatory activities that they must take into account developments in society and the economy, and the transformative impact of AI. The Regulatory Innovation Office supports regulators to look at how they can adopt AI themselves to improve their regulatory efficiency, as well as looking at developments in their own sectors.

[Lord Houghton of Richmond (CB)]

Can the Minister inform the House what body will hold ultimate responsibility for the authorisation and regulation of artificial intelligence in autonomous weapons systems?

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

The Ministry of Defence has set out guidance for the adoption of AI in defence. I am afraid that I cannot recall the name of the document—I will need to write to the noble and gallant Lord with that—but it sets out exactly where humans should be involved in defence decision-making. The ministry has consulted and it has expert panels advising it on its approach.

[Lord Beamish (Lab)]

My Lords, I agree with my noble friend that AI is going to be transformational, but the noble and gallant Lord, Lord Houghton, raises a very important point about warfare, where it is going to be transformational and not necessarily for the good. I hear what my noble friend says about the MoD, but this will have to be approached on an international basis. We also have to recognise that some of our adversaries will not be concerned about regulation. Is that not a challenge that we should face now?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right that AI is transforming the military and defence. It is indeed incredibly important that we work internationally. Last week, the UKAC co-ordinated the most recent meeting of the International Network for Advanced AI Measurement, Evaluation and Science, where we are working together with other countries’ ACs on best practices for model evaluations, using that expertise to build tangible international consensus to mitigate AI risks.

[Lord Holmes of Richmond (Con)]

My Lords, I declare my technology interests as set out in the register as an adviser to the Crown Estate and to Simmons & Simmons LLP. I thank the Minister for her response to my Written Question of 8 July, setting out what the Government are doing on the international stage, not least with the Council of Europe AI framework. But does the Minister agree that if the UK Government take a point-of-use, sector-by-sector approach then there will be accountability deficits, transparency difficulties and a lack of the three Cs that are crucial whether you are an investor, an innovator, a creative or, crucially, a citizen when it comes to AI: clarity, consistency and a coherent approach? Would an AI Bill not resolve that for the benefit of us all?

[Baroness Lloyd of Effra (Lab)]

It remains the case that we must be very attuned to developments in AI, in AI risks and in AI opportunities. We are extremely fortunate to have the AI Security Institute, which can provide us with that advice. Obviously, we will always look at whether there are regulatory or legislative gaps and we will act if we need to.

Cyber Security and Resilience (Network and Information Systems) Bill

Baroness Lloyd of Effra Excerpts

2nd reading
Tuesday 14th July 2026 Lords Chamber

Moved by

[Baroness Lloyd of Effra]

That the Bill be now read a second time.

Northern Ireland, Scottish and Welsh legislative consent sought. Relevant document: 3rd Report from the Constitution Committee

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, we are a proudly online nation, embracing interconnectivity in all walks of life. Cloud-based working, the rise of software as a service, the advent of artificial intelligence and more have rocketed the UK forward. They have enabled us to work faster, more efficiently and with more flexibility than ever before.

However, with these advancements come risks. As the technology powering our modern economy has leapt forward, so too have the tools that our adversaries use to extort, disrupt and surveil. Last year, more than 600,000 UK businesses were subject to cyber attacks. This is not only holding businesses back; it is undermining our security. These are criminals and hostile state actors seeking to disrupt the very foundations of our country.

The UK is now the most targeted country in Europe for cyber attacks. It is the duty of this Government to take bold action. We have been clear that all businesses must protect themselves from cyber attacks, but this does not mean regulating every single business. They know their customers and their suppliers, and they are best placed to protect themselves, using the free tools that we have provided.

I commend those who have already signed our Cyber Resilience Pledge, and urge more to do so, committing to take the three simple steps recommended in it: making cyber a board-level responsibility and following the cyber governance code of practice; signing up to the National Cyber Security Centre’s early warning service; and taking a risk-based approach to requiring Cyber Essentials across supply chains. This is our government certification scheme to help organisations improve their cyber resilience. Cyber Essentials works. Organisations with it are 92% less likely to claim on their cyber insurance than those without it. Taking these steps can make a huge difference.

However, where the risks are so great that public safety, the economy or our national security is threatened, it is right that we regulate. The Network and Information Systems—NIS—Regulations 2018 are the UK’s only cross-sector cyber legislation. They apply to operators of essential services in the energy, health, transport, drinking water and digital infrastructure sectors, as well as some digital service providers. The NIS regulations are designed to protect the security and resilience of our most essential services, to keep lights on, to ensure that taps keep running and to protect our NHS. We regulate only where we must, which is why the scope of the NIS regulations is precise. They are a targeted security intervention and the best tool in our arsenal to protect our most essential services. However, the regulations have fallen out of date. If we do not act, the essential services on which we all depend will remain under threat.

That is why we have introduced the Bill. The Cyber Security and Resilience (Network and Information Systems) Bill is a vital opportunity to improve the UK’s defences. In fact, it is the first Bill in British history to have “cyber” in its title. It will update the NIS regulations for the modern age and ensure that the Government can maintain their effectiveness and respond to imminent national security threats.

The objectives behind the Bill are threefold. First, it will safeguard the services on which our people rely most, making our essential and digital services more secure. Secondly, it will deliver a step change in our national security, improving our defences against the cyber attacks that threaten this country. Thirdly, it will better protect our economy. The UK will be a safer and more attractive place for businesses to establish themselves, thrive and grow.

The Bill will achieve these objectives through proportionate and timely measures, which I will speak to in turn. First, the Bill brings more sectors into scope of the NIS regulations. As our economy becomes more interconnected, so do the routes that cyber criminals exploit. For example, data centres in the UK have become critical to nearly all our economic activity and public services. From NHS patient records to financial systems, these vast digital depots are a key part of the modern world. That is why data centres meeting the Bill’s thresholds will be regulated as essential services, ensuring that they take steps to secure their networks.

The Bill also brings large load controllers under regulation. These are organisations that manage significant electricity flows to or from smart appliances. They must be safeguarded to secure our electrical grid and protect consumers using such appliances.

We are also bringing large and medium managed service providers—MSPs—into scope of the NIS regulations. These are organisations offering ongoing services, such as remote IT support or cyber security threat management, to customers. MSPs have deep access into their customers’ systems. As more and more organisations rely on them, MSPs become an increasingly attractive entry point for disruption.

Noble Lords will remember last April’s cyber attack on M&S. It involved a managed service provider being socially engineered, with attackers being able to gain access and compromise systems. We need to close this gap. But these regulations must be proportionate and targeted. Large and medium MSPs comprise fewer than one in 10 of the MSPs active in the UK but account for around 97.6% of the UK’s MSP revenue, so small and micro MSPs will be exempt from this measure. By targeting regulation where the risk and reach are greatest, we will protect almost all MSP customers without burdening small businesses.

In limited circumstances, small and micro-businesses supply critical goods or services to the essential and digital services on which we rely. The Bill therefore enables businesses, including smaller companies, supplying critical goods or services to be designated as “critical suppliers”. This is designed to combat the cyber risks stemming from increasingly complex supply chains.

Members may be aware of the 2024 attack on Synnovis, a pathology provider to some NHS trusts. Criminals thousands of miles away deployed ransomware and made Synnovis’s files unusable, delaying 11,000 appointments. This demonstrates the ripple effect that a compromised supply chain can have on the services at the ends. Duties that critical suppliers will be subject to will be set out in secondary legislation.

I turn to our 12 NIS regulators, whose sectoral expertise is critical to protecting our essential and digital services. These regulators are often operating with one hand tied behind their backs. They do not have the information, resources or levers necessary to properly fulfil their duties. For instance, organisations need only tell their regulator about an incident once it has already caused significant disruption. Under the Bill, they will have to report more types of breaches, to their regulator and the NCSC, within 24 hours and provide a full report within 72 hours. This includes incidents such as pre-positioning and ransomware, where an incident may not cause immediate damage but poses a real threat to the UK economy or society.

This will not only enable the NCSC to support those affected more quickly and warn others but allow the Government to better understand the threat landscape. Furthermore, the Bill requires digital and managed service providers and data centres to inform their customers about reportable incidents that are likely to adversely affect them. This way, customers can take appropriate steps to protect themselves.

However, effective reporting must be matched by consistency. Our 12 regulators cover all NIS sectors and the UK’s four nations. We must utilise their sectoral expertise but ensure that the rules are applied consistently. We cannot allow any sector to become an easy target. This Bill enables government to designate a single set of strategic priorities, as well as objectives tied to them, that regulators must seek to achieve. This will complement the security and resilience requirements, to come in secondary legislation, setting clear, consistent expectations and putting good practice on a firmer footing.

The Secretary of State will be required to consult the regulators on a draft of the statement before designating it. In addition, the Bill gives regulators new powers to recover their full regulatory costs from the organisations that they oversee. This includes enforcement costs, ensuring that this is not conducted to the detriment of a regulator’s books. Regulators must consult on how these fees will be calculated and publish a yearly statement to show how these funds were used.

The Bill also raises the maximum penalty enforceable for regulatory breaches while simplifying the penalty bands for easier, more consistent application. Regulators must consider all circumstances of a case before setting a penalty. This is not designed to punish companies but to incentivise their compliance. The ideal scenario is no penalties at all.

We are also fixing legacy issues concerning information sharing, so regulators can better understand what can and cannot be shared and with whom. All information shared must meet a specified purpose or require permission to be shared and be relevant and proportionate to the purpose for which it is shared. This Bill unties our regulators’ hands, giving them the information, resources and powers that they need to hold the line. That is what effective regulation should look like.

Finally, the Bill contains some important measures to enable future resilience, ensuring that the NIS regulations remain effective into the future. This Bill introduces a targeted, essential set of delegated powers to enable the NIS regulations to keep pace with the ever-changing cyber landscape. These include powers by which the Government can bring new services or sectors into scope of the regulations, so long as they meet the Bill’s strict criteria, or make regulations to further mitigate the risks from security and operational compromises. In the majority of cases, these delegated powers will be subject to consultation and the affirmative procedure will apply. Today’s threats were unimaginable in 2018, so we must not legislate as though today’s threats will stand still. These are carefully targeted, and it would be remiss not to take this opportunity to provide for careful, proportionate delegated powers. In almost all cases of these powers, the Government must consult on any changes. Parliament will still have the final say over legislation made under these powers. Our delegated powers memorandum contains greater detail.

In exceptional cases, even secondary legislation is too slow. Right now, if our intelligence community becomes aware of a NIS incident that threatens our national security, the Government have no emergency power within the NIS regulations to protect our people. This Bill provides powers for the Secretary of State to direct regulators and regulated entities where national security is threatened. This could entail instructing a sector to follow new guidance in response to a crisis or requiring an organisation to take technical steps to remove an intruder from a network. These are essential last-resort levers. The Bill has strong safeguards to ensure that they are used accordingly and only where strictly necessary for national security.

This Bill is about protecting the foundations of a modern economy. Growth cannot flourish where essential services are vulnerable, where businesses are exposed to disruption and where hostile actors can exploit weaknesses. We are not choosing between security and growth; we are recognising that one depends on the other. This will help secure the services that our people rely on, give businesses the confidence to invest and grow and strengthen our national security in an increasingly dangerous world. I beg to move.

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

I thank noble Lords for their insightful and wide-ranging content, and I am pleased to hear the broad support for the Bill. I also thank the Minister in the other place and the parliamentarians who engaged with your Lordships and others ahead of the Bill’s introduction. The dialogue has been shaped by pragmatism and a genuine interest in protecting our people and businesses. Should I not be able to respond in the allocated time to all the very many specific points that were raised today, I will make sure that I review Hansard carefully and reply to noble Lords accordingly, placing copies in the Library.

The noble Viscount, Lord Camrose, raised an excellent point about the scope of the Bill and the many other government actions and activities to equip our businesses to tackle cyber threats. I agree that the national cyber action plan is the right place to set out exactly how this is all put together, but today I cannot provide noble Lords a date for the publication of the national cyber action plan.

As other noble Lords did, I started writing down the names of all the noble Lords who raised the question of scope—and I too decided that it was probably better to say “everybody”. This is a very pertinent question. Cyber security and resilience are a shared responsibility. The Government and the NCSC provide a range of tools for all parts of the economy, and it is for all organisations to make use of those to enhance their protections. We have invited all businesses, charities and other organisations to sign the Cyber Resilience Pledge and take the three tangible actions that can help boost their resilience to cyber attacks. For many organisations, this will be a significant step in their defences, and regulation will not be necessary nor proportionate.

Under the Bill, we have chosen to regulate where disruption to services—hospitals, drinking water, and cloud service providers—would mean that people and businesses are left with little or no easy alternatives. The significant steps we are taking in the Bill are reflective of the digital nature of our economy today and the risks we encounter. I recognise and share the sentiment of exploring other parts of the economy that would benefit from being under these regulations in the future, and I assure the House that I have asked my officials to work with other government departments to consider what additional services could be brought into scope in future. At the same time, this work needs to be undertaken with thorough consideration for a range of factors, such as the threats posed to such services by hostile actors and the potential impact they could have on the wider economy, as well as the overall value of the sector. We need to take into account the important points that noble Lords have made about proportionate regulation. I confirm to the noble Baroness, Lady Neville-Jones, that, were we to extend these regulations to further sectors, that would follow consultation.

The noble Baronesses, Lady Northover, Lady Neville-Jones and Lady Ludford, and the noble Lords, Lord Londesborough and Lord Clement-Jones, raised an important point about the government cyber action plan. It is crucial that our Government and public sector are covered. The government cyber action plan, which was published in January, will transform cyber security and resilience across government and the entire public sector by 2030. It will enable us to achieve the same outcomes that we want to achieve for services regulated under the Bill: clear and robust requirements, better incident reporting, and stronger accountability and transparency. The plan sets out accountability structures to ensure that cyber risks at all levels of government are actively owned and effectively managed. I assure your Lordships that we will continue to work with Parliament to ensure proper oversight of the plan’s implementation.

The extension to local government is also covered under the overarching strategy of the Government’s cyber action plan. I say to my noble friend Lady Alexander of Cleveden that MHCLG is taking action to strengthen local authorities’ cyber resilience, backed by £20 million of cyber grant funding and technical support, because it is incredibly important that local authorities are prepared and enhance their cyber action.

On the question about the food and retail sector, raised by the noble Lords, Lord Holmes of Richmond and Lord Taylor of Warwick, and the noble Baronesses, Lady Northover, Lady Ludford and Lady Harding of Winscombe, probably among others, it is very important that the sector enhances its cyber resilience. The food sector is unusual among critical sectors because of its high levels of diversity. There are approximately 20,000 small and medium-sized food manufacturers in the UK alone, and many more farms, distribution services, retailers and other types of businesses that form the UK’s food supply chain. Given the lack of a single point of failure, we think there are more proportionate levers to pull than bringing food into the scope of the NIS regime.

The question of AI was raised by the noble Earl, Lord Effingham, the noble Viscount, Lord Colville of Culross, the noble Baroness, Lady Kidron, and my noble friend Lady Berger. The Government are committed to protecting our national security against the risks posed by advanced AI models, and our AI Security Institute is world leading and one of a small group of organisations with access to Anthropic’s Claude Mythos model before its release. As for addressing the risks of cyber attacks facilitated by AI, it is true that AI capabilities are moving very fast, but strong cyber fundamentals still work. Our advice, and that of the NCSC, is to ensure that organisations get the basics right and that they are managing risks at board level. There is extensive guidance on this from the Government and from the NCSC.

As for whether AI is in scope, the Bill does not specifically bring large language models or AI companies into scope, but where organisations in scope use AI models and systems, those organisations will need to take appropriate and proportionate steps to manage the risks to these from hackers. For example, if an LLM is used as part of the day-to-day software available to staff in a hospital, and is therefore part of the network and information systems, it would be considered in scope.

On the example given by the noble Baroness, Lady Kidron, of how this would happen, the Bill grants the Secretary of State the power to direct entities if the compromise of the relevant NIS or the threat of one gives rise to a national security risk. This could, for example, require an entity to cease using and to isolate an AI model. These powers are a backstop to an effective cyber security regime, enabling the Government to act swiftly in the face of unexpected national security threats, but they are also designed to be proportionate, recognising the need for stability among regulated entities and the importance of proper accountability.

Many noble Lords reflected on the need for effective implementation and the importance of consultation and secondary legislation. There will indeed be secondary legislation and guidance and a business adjustment period for the Bill. To answer the question posed by the noble Baroness, Lady Neville-Jones, this will probably be for the period up to 2028, when we expect the duties to come into force.

On the questions about incident reporting raised by the noble Earl, Lord Effingham, the noble Lord, Lord Ravensdale, and the noble Baronesses, Lady Northover and Lady Harding of Winscombe, we have heard the clear ask from businesses to minimise the time they spend filling in different reporting templates following an attack. We understand the pressure that institutions can be under in the midst of an attack, and we want to make sure that they can prioritise the technical response. We are exploring all options and will look closely at other regimes in the UK and the new template used by EU member states for the NIS2 reporting, reflecting questions posed by noble Lords about where we are looking at the EU regime.

We do not believe that there is a risk of overreporting, but we will provide further clarity by setting out thresholds in secondary legislation following consultation. That will set out when an incident is considered to have had, or to be likely to have had, a significant impact—a question posed by the noble Lords, Lord Holmes of Richmond and Lord Ravensdale.

On the questions raised by the noble Baroness, Lady Bennett of Manor Castle, the ability to share information with like-minded countries is important if we are to make cyber security a global effort. But the Bill does not mandate information sharing across borders, and there are important safeguards around the sharing of information for the purpose of prosecuting a crime. I followed the debate on this topic in the other place, and I would be happy to meet with those interested in this topic to discuss it further.

Noble Lords raised the question of the balance between a single consistent approach and being attuned to sector-specific issues. One of the ways in which we are going to pursue consistency and provide clarity on what is expected is through the new security and resilience requirements for regulated entities, which will be set out in secondary legislation. These will set out the clear and consistent steps that regulated entities will need to take to mitigate their security risks. On the questions posed by the noble Lords, Lord Arbuthnot, Lord Birt and Lord Ravensdale, these will be high-level, outcomes-based requirements that will be consistent with the NCSC’s cyber assessment framework, including requirements on board responsibility and governance, supply chain and incident reporting and recovery, as well as requirements around testing and exercising protective security. These proposals will be technology- and sector-agnostic, and take an all-hazards approach to ensure resilience in the face of an evolving threat landscape and emerging technologies. They reflect the requirement for regulated entities to have regard to state-of-the-art technology when assessing the risks they face.

On the question posed by the noble Lord, Lord Ravensdale, and others on post-quantum cryptography, and that posed by the noble Lord, Lord Birt, on quantum, these would be considered as part of that requirement by regulated entities, but would not necessarily be singled out as a specific technology in the regulation so that we keep these regulations up to date and matched to the cyber risks that individual entities face.

In addition to how the requirements in the Bill will capture board responsibilities, we recognise that board-level governance is essential to effective cyber risk management, which is why the Cyber Resilience Pledge sets out that making cyber a board responsibility is one of the three clear tangible actions that any organisation can make to boost its resilience. The Government’s forthcoming modernising corporate reporting consultation will seek views on whether the existing risk reporting framework produces sufficient reporting on cyber risk management as an additional step that could be considered.

On the questions about the Secretary of State reporting to Parliament at least every five years, this is a minimum baseline. Additional reports can be published if deemed appropriate.

The noble Earl, Lord Effingham, and the noble Lords, Lord Londesborough and Lord Ravensdale, asked about business burden and the definition of small businesses. We believe that this legislation is targeted and proportionate, only regulating where necessary to protect the most essential services on which we rely. That is why small and micro digital service providers are exempt from the regulations, unless designated as a critical supplier. Small businesses are defined as entities that employ up to 50 people and have an annual turnover or balance sheet of less than €10 million. They are exempt from being an RDSP or an RMSP under the Bill. They can be regulated only if they are designated as critical suppliers, for which there will be a high bar for designation.

My noble friend asked how we can support small businesses. This is a very important part of our approach. The NCSC provides support through the Cyber Action Toolkit and Cyber Essentials, which also includes cyber insurance for those who get the certification. For any organisation that experiences an incident, the Government’s Cyber Incident Signposting Service helps point them towards where the issue should be reported and where appropriate support can be sought.

Questions on regulator capacity and consistency were raised by the noble Lord, Lord Vaizey, and my noble friend Lady Alexander. The framework will drive consistency across sectors through these common security requirements and through the statement of strategic priorities, which will set the objectives that regulators must seek to achieve. Sector-specific guidance from regulators will also remain key to address sectoral nuances and risks, building on a common foundation of good practice.

Many noble Lords raised the importance of building out sovereign capability in the UK, and I note that the Government are committed to pursuing that. I am sure that we will have other opportunities to talk further about tech sovereignty in the coming week in Oral Questions and the forthcoming debate on that subject.

My noble friend Lady Paul of Shepherd’s Bush and the noble Lords, Lord Ashcombe and Lord Arbuthnot, discussed cyber insurance. It can absolutely play an important role as part of a wider approach to cyber resilience, particularly in helping organisations to manage the impacts of cyber resilience and to support recovery. We do not believe that cyber insurance is a replacement for cyber security, but it is definitely part of a wider suite of cyber measures.

Many noble Lords made points about skills, which are incredibly important. We are improving industry understanding of cyber security, we are investing in cyber skills through TechFirst, and we are working with the UK Cyber Security Council to develop professional standards to bring cyber security in line with professions such as engineering and accounting. I also heartily endorse the points made by the noble Lords, Lord Ravensdale and Lord Vaizey, about the strength of the cyber security industry and sector in this country. It is not only strong within this country; it is also exporting to many other parts of the world, building on our strengths.

I note that product security, which was mentioned by many today in the sense of building in requirements, is indeed a feature of our product security and telecoms infrastructure—or PSTI—regime, which is an important complement to what is in the Bill.

Finally, the noble Lord, Lord Clement-Jones, led the charge on the Computer Misuse Act. We highlighted in the King’s Speech that a Bill focused on national security will update that Act and provide law enforcement with the updated powers and capabilities, so they can remain effective in the digital age.

I, too, look forward to Committee. This is an incredibly important Bill. I welcome the high level of engagement from across the House tonight on the practicalities and the details.

This Bill is fundamentally about national security. It will deliver stronger protections against those who want to disrupt our way of life. It will do so with growth at the forefront, focusing first on support and partnership and regulating only where it is necessary. I thank noble Lords and look forward to the Bill’s next stages.

Bill read a second time.

Moved by

[Baroness Lloyd of Effra]

That the bill be committed to a Grand Committee, and that it be an instruction to the Grand Committee that they consider the bill in the following order:

Clauses 1 to 22, Schedule 1, Clause 23, Schedule 2, Clauses 24 to 61, Title.

Motion agreed.

Employment: Artificial Intelligence

Baroness Lloyd of Effra Excerpts

Monday 13th July 2026 Lords Chamber

[Lord Khan of Burnley]

To ask His Majesty’s Government what assessment they have made of the impact of artificial intelligence on employment in the UK; and what support they plan to provide for affected workers.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

We published an assessment of AI impacts on the labour market in January, and the new AI Economics Institute will broaden and deepen our analytical capability. We will upskill 10 million people through the AI skills boost and help people to develop digital skills through the £187 million TechFirst programme. Our £20 million Early Careers Jobs Alliance will bring together employers, unions and young people to redesign roles while maintaining progression in the digital and technology sector.

[Lord Khan of Burnley (Lab)]

I thank my noble friend the Minister for her response. The Open University’s latest Business Barometer report on the employer skills gap included a survey of 1,500 UK businesses and over 1,000 young people outside education, employment and training. Some 42% of young people agree that AI is threatening their job prospects, and 49% are wary of the future of AI and its impact on their future work. Do His Majesty’s Government agree that the best way to equip our people for the future is upskilling, as the Minister talked about, and investing in people? What assessment, strategy and planning are taking place to ensure that all regions are upskilled and no one is left behind?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right about the potential of AI and that many people are uncertain about how it will develop in the future. The critical point that I think he and I agree on is that the best way of approaching this technological development is equipping people in all regions of the country—young people and those who need retraining—which is exactly the approach we are taking. With our AI skills boost, we will upskill 10 million people in work, and we have already reached 1.7 million. In that way, workers in this country will be able to make the most of this technological revolution.

[Lord Clement-Jones (LD)]

My Lords, the Milburn interim report, Young People and Work, found that a growing share of entry-level roles are now filtered by algorithmic screening before a human has even seen an application. Given that NEET numbers are shockingly high, what specific assessment have the Government made of the extent to which AI-driven recruitment tools are narrowing rather than widening life chances for these young people? Will the Minister commit to mandatory algorithmic impact assessments, as suggested by the TUC, for recruitment algorithms so that employers and platforms are required to test for bias before these tools are deployed at scale?

[Baroness Lloyd of Effra (Lab)]

The Government previously set out guidance on recruitment in the age of AI. The new future of work unit will look at what is developing in the labour market and at whether guidance such as that needs updating and in what respect. In the meantime, we are supporting young people, through our youth guarantee and through provision of early training opportunities for them, so that they can get into work now and continue to advance through their careers.

[Baroness Manzoor (Con)]

My Lords, what action are the Government taking to tackle interoperability within government departments? What are they doing to ensure that there is AI investment in the regions? We need actions, please.

[Baroness Lloyd of Effra (Lab)]

On investment in the regions, the Government are supporting huge investment in AI through AI growth zones and through investment in people, with the £10 million jobs boost and £187 million to support young people and those returning to work to get the skills that they need. These programmes are developed centrally and delivered in partnership with local organisations and civil society. We are investing in infrastructure and we are investing in people.

[Viscount Colville of Culross (CB)]

My Lords, I am concerned about the adverse effect that AI is having on employment in the creative sector. The Communications and Digital Committee, in its recent report on AI and copyright, recommended protections against both unauthorised digital replicas and harmful AI outputs in the style of a creator’s work. The consultation that the Government announced in March appears to cover only digital replicas. Will the Minister tell the House whether she will address harmful “in the style of” outputs?

[Baroness Lloyd of Effra (Lab)]

The noble Viscount is right that we have a programme of work looking at digital replicas. We will be consulting on that. The fact that there are many who are affected by this—musicians, politicians and everyday citizens—means that it is an extensive piece of work. I will take back his question on the precise remit of this consultation and reply to him.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, my noble friend the Minister is right that skills are critical, and the launch of the AI skills hub is welcome, with its focus on providing free training for 10 million workers. However, is she aware of reports that the majority of courses on the hub charge fees and that some are tied to particular products? Will she agree to monitor the quality of courses on the hub, alongside unions and educational professionals, to ensure that workers get the training they need?

[Baroness Lloyd of Effra (Lab)]

I will indeed do what my noble friend suggests and make sure that we look at the quality of the courses that are available. They are provided in concert with a large number of providers who are developing these courses to support their workers and are extending them to other workers, in particular SMEs, because we know that SMEs and other workers are those who most need to adopt AI and who may be currently lagging in this country.

[Baroness Lane-Fox of Soho (CB)]

My Lords—

--- Later in debate ---

[Baroness Lane-Fox of Soho (CB)]

My Lords, I declare an interest as chair of the Mayor of London’s taskforce on the effect of AI on jobs in London. What we found consistently in our live data and in talking to employers is that there are crucial skills that are not being delivered right now, around the human part that goes alongside AI: critical thinking, judgment, creative ability and curiosity. What steps are the Government taking to ensure that, in a world of augmented humanity, we are developing the human skills, for young people in particular?

[Baroness Lloyd of Effra (Lab)]

The noble Baroness raises an important point. The development of technology and what can be augmented leaves the human aspect very much to the fore, which can include issues around discernment and judgment. The Government have a number of courses and training opportunities—for example, to support businesses in management. I know that the Office for Students is looking carefully at what all this means for higher education, for example, and the Department for Education has provided a range of advice to schools about this. The noble Baroness’s point is well made and is something that the future of work unit will look at, among its other considerations.

[Lord Hintze (Con)]

My Lords, the Minister has been very clear on how much it will cost. But it is not clear to me, and not for the first time, how effective the Government’s money—taxpayers’ money—will be when it is spent in this way.

[Baroness Lloyd of Effra (Lab)]

Some of the programmes that I have mentioned, including the TechFirst programme, have been running for some time. TechFirst has been successfully run and we learn from what is effective. We work carefully with partners to deliver these programmes. They are seeing good outcomes in the alumni who then go into the industry.

[Lord Fox (LD)]

My Lords, whatever the effect on jobs, the figures set out by the noble Lord, Lord Khan, indicate that there is already a crisis of confidence among our young people as they face the future. The point made by the noble Baroness, Lady Lane-Fox, is key. What are the Government doing, alongside training, to set out a vision—a human vision—for the young people of today?

[Baroness Lloyd of Effra (Lab)]

We are supporting young people to get into work. We are supporting youth employment through the changes to the youth guarantee and to the growth and skills levy, so that we can provide work and training places in jobs. We can support businesses hiring those young people, so that they get the opportunity of the experience of work and of the changing labour force, and can be supported through that.

[Viscount Camrose (Con)]

I welcome the Government providing a great deal of skills education, but I do not see how the Government know what skills the marketplace is looking for in AI, particularly in the situation in which we find ourselves, where the recruitment marketplace has been so badly damaged by the misapplication of AI that the market signals on what skills are actually required are not getting through. What does the AI Economics Institute think about this and how will the incoming Prime Minister take this forward?

[Baroness Lloyd of Effra (Lab)]

The Government have set up the future of work unit and have built on that with the AI Economics Institute precisely to examine the changes in the labour market and the changes to jobs—whether that is sector-specific changes or changes to particular cohorts, such as if women are particularly affected—and to then determine what action should be taken in that resolve. That is exactly what we are doing; we are being very active in understanding the technological change coming.

The Space Economy (UK Engagement with Space Committee Report)

Baroness Lloyd of Effra Excerpts

Thursday 9th July 2026 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, I am pleased to respond for the Government. I thank my noble friend Lady Ashton of Upholland for securing this debate and for her committee’s important report on this matter. I also thank the chair for her expert leadership on the very thorough and seemingly enjoyable work that the committee undertook. It is a particular pleasure to have heard the appreciation across your Lordships’ House for the importance of the space sector today and the enormous potential it holds for the future.

As we have heard, the space dimension of our economy is coming to the fore. The UK has a strong space sector, with over twice the UK’s average productivity and global satellite services underpinning nearly 18% of the UK’s GDP. Beyond our financial services and well-known uses in telecommunications, space technology is helping farmers increase crop yields and enabling faster, more effective responses to natural disasters such as floods. As we have heard, it is a sector that contributes over £18 billion to the UK economy and employs over 55,000 highly qualified people. Over the past year, I have had the pleasure of meeting many of the industrial and scientific partners who make up this sector.

The sector relies on a strong partnership with government. Every pound invested by the Government through the European Space Agency sees a £7.49 return into the UK economy. In 2024-25 alone, UK Space Agency activity is estimated to have catalysed £2.2 billion in investment and revenue across the UK space sector. As was recognised by noble Lords today, space is also critical for national security and defence, providing the intelligence, communication and navigation required to keep the UK and its citizens safe. Reflecting many of the recommendations of the committee, we have recently taken further action to support our space sector. One of our strengths is the “one government” co-ordinated approach.

Noble Lords asked about the governance of space. Over the last year, Ministers from across government have met together four times to discuss critical issues for the space sector, our capabilities and support. Our teams work together, particularly across defence, national security, all parts of DSIT and transport, to align our approach. A clear example is the UK’s National Space Operations Centre, a joint civil-military command that brings together the UK Space Agency, UK Space Command and the Met Office Space Weather Operations Centre. Together, they help protect the critical space assets we rely on every day and provide the central hub for the UK’s space domain awareness. In response to my noble friend Lord Shamash, I am very happy to meet him and other members of the committee to talk further about how we work together on that front.

Noble Lords asked about the UK Space Agency’s move into the department. It is an important step towards closer collaboration, reducing duplication and gaining greater consistency across strategy, policy and delivery, while retaining the world-leading expertise and technical advantage to which the noble Lord, Lord Willetts, referred.

Our upcoming space strategy will set out how space remains a government priority, in a funded way, and how the co-ordinated vision will ensure the very best outcome for the UK. I reassure noble Lords that we have taken action in the interim. I set out the strategic direction, alongside £500 million in funding, in my speech at Space-Comm Expo earlier this year. I am sure the committee will be looking forward to reading the strategy when it is published, which unfortunately will now not be before Summer Recess.

Noble Lords commented on prioritisation. As I set out earlier this year, we are moving further and faster in the areas that matter most to the UK’s future in space. One of those areas is satellite communications, which are critical for national security and resilience. In response to the questions from the noble Baroness, Lady Stowell of Beeston, and the noble Lord, Lord Tarassenko, sovereign capability is an important consideration as we look at satellite communications. The Skynet programme run by the MoD provides that sovereign capability in satcoms, and we have increasing sovereign capability in space domain awareness.

In response to the questions posed by the noble Lords, Lord Willetts and Lord Clement-Jones, and others, DSIT is leading cross-governmental work to develop our proactive relationship with Eutelsat, which will include working with defence colleagues on requirements following the publication of the defence investment plan. UK launch is not yet operational, but we are encouraging the company to take advantage of the UK’s capability as this becomes available. We are also encouraging the company to take more advantage of the UK’s world-leading satellite manufacturing and supply chain capabilities.

In response to the questions from my noble friend Lord Shamash and the noble Baroness, Lady Mobarik, who I had the opportunity to discuss the opportunities of Sutherland with earlier this year, assured access to space is critical to our national security and economic growth. To the point made by the noble Lord, Lord Lansley, both those objectives, national security and economic growth, have caused this to be a priority for the Government. We are making significant progress towards that ambition. SaxaVord was Europe’s first licensed vertical launch site and expects to see its first launch this summer. We have established a world-leading regulatory regime and secured a comprehensive set of international agreements to enable launch operations from the UK.

The third area that we set out as a priority is in-orbit servicing, assembly and manufacturing, and the fourth is space domain awareness. These are the capabilities that will drive growth, strengthen resilience and protect our ability to operate in space, so we are pivoting our support to those, where it will have the greatest impact.

Prioritisation is challenging and requires the Government to intervene assertively if we are to succeed. We know that space industries thrive with clear priorities, the right funding, a clear public procurement approach, the right regulation and strong international partnerships.

We are increasing the financing for space in recognition of many of the long-term projects, which, of course, include areas such as earth observation. The Government increased the UKSA budget in 2025-26 by 8%. That funding for space is inclusive of our subscription to Copernicus and is carried forward to over £3.3 billion over 2026-27 to 2029-30. Wider civil funding for space from other departments and organisations, from science funded by UKRI to critical meteorology services provided through the Met Office’s membership of EUMETSAT to planned procurements of satellite services from other departments, will further bolster this by over £900 million.

To the questions posed by the noble Lord, Lord Tarassenko, and others about research, the STFC has spent considerable time engaging with the particle physics, astronomy and nuclear physics community, its advisory bodies, scientific board and council to understand the implications of different options and gather feedback from across the sector. Given the significance of that decision, it was right to test options, understand the impacts and ensure that expert advice was fully reflected in the final outcome. That engagement has now concluded, and UKRI will set out the outcome of the prioritisation extremely shortly, if not now.

My noble friend Lady Ashton and the noble Viscount, Lord Camrose, highlighted skills, an incredibly important point. Some areas of targeted education and future workforce programming are supported by the department in UKSA, alongside other government programmes such as TechFirst and the advanced manufacturing skills package. As noble Lords have mentioned, the defence investment plan published on 30 June sets out future spending priorities, demonstrating clearly the importance of further developing capability in satcoms, ISR and SDA. The capability of defence funding to 2029-30 is £2.3 billion for satcoms and £880 million for space-based ISR and space control. Together with UK Space Agency funding, Ministry of Defence funding and planned activities across the rest of government and arm’s-length bodies, we anticipate that funding for space over the spending review will exceed £7.4 billion—a substantial increase over previous spending review periods.

My noble friend Lord Stansgate, the noble Baroness, Lady Stowell, and the noble Viscount, Lord Camrose, raised the importance of supporting companies to commercialise and grow. The point was very well made and is well taken. We are moving away from serial grants to more structured contracts for services. We are also supporting companies as they grow. Some of this relates to wider changes; for example, the announcements by the Chancellor under the Mansion House agreement, visas for talent and the support for the British Business Bank. Some of this is space-specific, such as the Unlocking Space for Investment programme. We are committed to supporting British companies to develop next-generation space technologies. At London Tech Week I announced new investment of more than £9 million to support early-stage UK companies through the UK innovation and science seed fund and a £10 million investment in the Welsh company SpaceForge, which is pioneering in-space manufacturing technology. That action is happening now.

Important points were raised by my noble friend Lady Ashton, the noble Lord, Lord Willetts, and the noble Baroness, Lady Stowell of Beeston. Procurement is indeed extremely important, as is the balance around contracts and small-scale grant funding. Our upcoming space strategy will set out how we will refocus grant programmes and use contracts to support innovation. We are also making greater use of contracts for innovation, which enable public sector organisations to work with businesses to test innovative solutions and build the evidence that is needed for wider adoption. I agree with the noble Lord, Lord Clement-Jones, that this can bring real benefits. We have awarded contracts for innovation through our partnership with the Department of Agriculture, Environment and Rural Affairs in Northern Ireland to improve water quality monitoring in Lough Neagh, support for an earth observation-enabled flood forecasting service at the University Hospitals Coventry & Warwickshire NHS Trust, and with the Home Office. This procurement for innovation is very important. We will continue to innovate in many different areas.

On regulation, all cutting-edge applications of technology need agile regulation and space is no exception. From the changes in the liability and indemnity regime for satellites to regulatory sandboxes for rendezvous and proximity operations, we have acted and will continue to do so; for example, with space multi-mission licensing and re-entry.

International partnerships and collaboration have always been a feature of advances in space. Given the global uncertainty, they are more important than ever. We are strengthening our international partnerships. In 2025, the UK committed £1.7 billion to ESA programmes over the next five years, which deliver against our objectives and leverage international collaboration to drive economic growth in the UK and bolster national security here. To the point made by the noble Lord, Lord Lansley, we also collaborate, for example, with Japan and France, with bilateral funding, including on LiteBIRD, where UK universities are helping to explore the universe’s earliest moments.

To the points on Europe made by the noble Lords, Lord Clement-Jones and Lord Willetts, we are clear-eyed about the changing regulatory environment in Europe. The proposed EU space Act will have implications for UK companies and for our wider co-operation with European partners. We are engaging actively with the EU to shape that discussion where we can, but we will also act where necessary to ensure that UK industry remains competitive, our access to markets is protected and our regulatory framework continues to support innovation and growth. We have unique capabilities and assets in the UK with locations such as Shetland for launch. Europe will be stronger with the UK as a trusted partner.

It is also important to recognise that the US partnership is critical in both the civil and national security domains. Within the civil domain, our collaboration through missions such as NASA’s James Webb Space Telescope, through which UK-led instrumentation is transforming our understanding of the universe, continues to open new scientific frontiers. On national security, we rely on deep transatlantic co-operation.

Important points were made by the noble Baroness, Lady Bennett of Manor Castle, and my noble friend Lord Stansgate, about space sustainability and debris. Space sustainability is evolving with the increased use of space. We are clear that no one country alone can do this. Our aim is to ensure that growth in space does not come at the expense of its long-term safe and sustainable use by shaping international norms and standards, investing more in space domain awareness and debris removal technologies, and working with partners to build global tech capability. Our licensing regime already expects operators to minimise debris creation through robust mitigation measures, and we will strengthen that further through clearer guidance and incentives for more sustainable missions.

As we know, space underpins the systems we rely on every day—from finance, energy and transport to emergency services—enabling the secure communications, navigation and timing to keep the country running. That is why strengthening our space capability is not simply an ambition for the future; it continues to be a strategic priority, and one we will build on further in our upcoming space strategy.

[Lord Lansley (Con)]

Before the Minister sits down, at several points in the Government’s response to the Select Committee’s report, they say that more detail will come forward in the “spring space publication”—not my language, the Government’s. The Minister has not said when we might expect to see that important spring space publication.

[Baroness Lloyd of Effra (Lab)]

I set out earlier this year, in a speech to the Space-Comm Expo, a number of elements that are important for taking forward the measures envisaged in the space strategy, which include the £500 million of funding. We have taken action in many other areas set out in that report, since it was published and since our response to it. The noble Lord is right: we wish to bring it all together, and we are working to do so. Unfortunately, we will not be able to publish it before the Summer Recess. We hope to do so as soon as possible after that.

[Baroness Ashton of Upholland (Lab)]

My Lords, I thank all noble Lords who participated in this debate and my noble friend the Minister for her response. It is clear from everything that has been said that we have real opportunities in economic growth, world leadership and resolving problems, both in space and on earth. It is also clear that we need to get on with it.

Wireless Telegraphy Act 2006 (Directions to OFCOM) (Revocation) Order 2026

Baroness Lloyd of Effra Excerpts

Tuesday 7th July 2026 Grand Committee

Moved by

[Baroness Lloyd of Effra]

That the Grand Committee do consider the Wireless Telegraphy Act 2006 (Directions to OFCOM) (Revocation) Order 2026.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, I beg to move this draft order. Wireless connectivity underpins a vast range of everyday services, from mobile phones and wifi to broadcasting and satellite communications. All these rely on access to radio spectrum. Spectrum is a finite and valuable resource, and it must be carefully managed to ensure that different services can operate without interference, that networks function reliably and that consumers and businesses benefit from competition and innovation.

In the UK, Ofcom, the independent communications regulator, manages spectrum by issuing licences, setting conditions and promoting efficient use. Government set the overall policy and strategic priorities for spectrum, including through the statement of strategic priorities that Ofcom must have regard to when discharging its functions. Maintaining a clear and effective framework for managing spectrum is therefore an important part of supporting investment in digital infrastructure and the wider economy. This instrument contributes to that by improving legal clarity without changing existing services, business models or regulatory requirements.

This draft order revokes a direction given to Ofcom in 2010. At the time, the Government used this direction to ensure that a specific set of reforms to support the rollout of mobile broadband was implemented clearly and at pace, alongside Ofcom’s existing statutory framework and in line with wider European measures to harmonise the use of key spectrum bands. These measures included allowing operators greater flexibility in how they could use key spectrum bands, enabling spectrum trading so that licences could be bought and sold, updating licence conditions to support long term investment, setting licence fees to reflect full market value and preparing for major spectrum auctions. Together, these changes helped operators transition from older mobile technologies towards newer ones, enabling the rollout of 3G and 4G services more quickly and efficiently and supporting the widespread availability of modern mobile services across the UK. The reforms also reflected wider European measures to harmonise the use of key mobile spectrum bands and support this transition.

All the obligations set out in the direction have now been fully implemented by Ofcom through a series of regulatory actions over the past decade. As a result, the direction no longer has any practical effect and is now redundant. This instrument therefore revokes that direction. Its removal will improve the clarity of the legal framework and remove the risk of confusion that could arise from retaining obsolete provisions. For example, when Ofcom looks to set annual licence fees for mobile spectrum, we want to minimise the risk of unnecessary legal challenge. The direction requires Ofcom to have particular regard to the outcome of the 800 megahertz and 2.6 gigahertz auction when setting certain licence fees. That auction took place in 2013; retaining the direction could create uncertainty about whether those historic auction outcomes should continue to carry special weight today.

This instrument does not introduce any new policy or change the way that spectrum is managed in the UK. Ofcom will continue to exercise its functions under its existing statutory framework, including duties set out in the Communications Act 2003 and powers under the Wireless Telegraphy Act 2006. These provide the framework for managing spectrum efficiently, promoting competition and investment and protecting consumers. This step will help ensure that the framework underpinning wireless connectivity remains clear and effective and supports continued investment. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, I thank the Minister for introducing this order. I am somewhat intrigued as to why we are privileged to have two Ministers for these orders, which are both under the heading of electronic communications. No doubt the mystery will be resolved. Of course we do not oppose this instrument and I do not intend to detain the Committee long on what are, on the face of it, tidying-up measures. However, they raise a question or two worth putting to the Minister.

We have no quarrel with removing a direction that has plainly served its purpose. As the Minister said, Ofcom completed the work that the 2010 direction required years ago. However, can she say a little more about why now? The Explanatory Memorandum notes that retaining the 2010 direction risks creating

“legal challenge against Ofcom if they proceed with changes to licence charging arrangements”.

That is not a housekeeping observation but a forward-looking one; it suggests that Ofcom already has changes to spectrum licence fees in contemplation. Can the Minister tell the Committee what those changes are and on what timetable we might expect to see them?

Looking further ahead, can the Minister say something about how the Government see the framework for spectrum direction-making evolving to meet the demands of 5G and 6G rollout, non-terrestrial and satellite networks, and the rising spectrum needs of AI-related infrastructure? The 2010-era framework, tied as it was to 3G liberalisation, was never designed to anticipate those needs.

[Viscount Camrose (Con)]

My Lords, I too thank the Minister for her introduction. This is indeed a short and straightforward instrument, but certainly one worth a little bit of careful thought because of its real strategic importance. As we have heard, the Government propose to revoke the 2010 directions to Ofcom. The directions were originally issued to support the release of additional spectrum for next-gen mobile broadband. The directions have now served their purpose, and the Government, completely plausibly, argue that they are redundant.

Certainly, on the face of it, this revocation is sensible. The 2010 framework was designed for a very specific moment in the evolution of mobile networks. The market has moved on, Ofcom’s regulatory toolkit has matured, and spectrum management now operates under a more flexible and market-driven regime. Removing obsolete directions is, in principle, good housekeeping.

However, it is worth briefly pausing to consider and to put a couple of questions. Spectrum is a national strategic asset. The stability and predictability of the regulatory environment underpinned billions of pounds of private investment, and the balance of responsibility between Ministers and Ofcom must, of course, be handled with care.

I will put two questions to the Minister. First, how does this revocation sit within the Government’s wider spectrum strategy? The questions posed by the noble Lord, Lord Clement-Jones, were absolutely right in this respect. The UK faces increasing pressure on spectrum availability, from 5G and 6G deployment, satellite services, defence requirements and emerging industrial uses. Removing a set of directions is tidy, but more broadly, do the Government have a long-term strategic plan for spectrum allocation, resilience and competitiveness? If so, how does the instrument fit into that strategic plan?

Secondly, what assurances can the Minister give that revocation will not inadvertently reduce investment certainty? The 2010 directions were introduced precisely to give operators confidence during a period of rapid technological transition. We must ensure that today’s decision does not create ambiguity at a time when the UK needs sustained private investment in digital infrastructure.

Of course, we do not oppose the instrument, but we ask the Government to demonstrate that revocation is part of a coherent strategy, not simply administrative pruning. Ofcom must have the clarity it needs, operators must have the certainty they expect, and Parliament must have confidence that spectrum policy is being managed with foresight rather than drift. I look forward to the Minister’s response.

[Baroness Lloyd of Effra (Lab)]

I thank noble Lords and the Committee for their support for this housekeeping measure to remove an obsolete direction. The direction was fully implemented and cast for its time. As noble Lords have indicated, technology has moved forward, as indeed has the state of mobile coverage and other investment.

The noble Lord, Lord Clement-Jones, specifically asked, “Why now?” We want to ensure that obsolete regulations are not in place. We have heard from the market that there is a possibility that having active obsolete regulations could provide a lack of clarity and could potentially lead to legal challenge. That is why we want to make this move now. Ofcom last revised annual fees last year and new ones are envisaged in the next year, so we are doing it now to provide clarity before then.

On the framework for spectrum, I heartily agree with the points that the noble Viscount, Lord Camrose, and the noble Lord, Lord Clement-Jones, made about the importance of spectrum. We designated an updated statement of strategic priorities in April this year; it set out our priorities across telecoms, the Post Office and, of course, spectrum, including the Government’s policy direction to Ofcom for spectrum. It touched on a number of the important matters that noble Lords have raised, including the importance of growth, innovation and the multiple uses of spectrum. This is very much a housekeeping matter in the context of that wider discussion, and it will have no impact other than that. It supports a clear and coherent framework for spectrum management, and it gives certainty to the regulators and the industry.

On certainty for investment, investment is currently at high levels. For example, the investments being made by mobile phone companies in stand-alone 5G are significant. It is being commercially led and there is committed investment in that area, such that Ofcom reports that, as of January 2026, stand-alone 5G was available outside 93% of premises across the UK—an increase of 10 percentage points since July 2025. The stability and certainty of that regulatory framework is indeed important. With that, I commend the instrument to the Committee.

Motion agreed.

Artificial Intelligence: Global Governance

Baroness Lloyd of Effra Excerpts

Tuesday 23rd June 2026 Lords Chamber

[Lord Pitkeathley of Camden Town]

To ask His Majesty’s Government what discussions they are having with international partners regarding global governance frameworks for artificial intelligence.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

AI is a global technology, so the UK is working with partners to advance secure, responsible and trustworthy AI design, development and adoption. This includes bilateral programmes and multilateral collaboration through the AI summit series, the G7, the United Nations and partnerships with national AI security institutes worldwide.

[Lord Pitkeathley of Camden Town (Lab)]

I thank my noble friend the Minister for that reply. I agree that international co-operation is essential and, from a domestic point of view, I warmly welcome the new AI Economics Institute, and indeed the work that the Prime Minister has been doing in this area on the international stage. Does my noble friend agree that, as recent events have shown, the danger is not simply regulatory fragmentation but the concentration of AI power in the hands of a small number of states and companies? Given the United Kingdom’s long experience of shaping legal and commercial frameworks, what leadership role does she see for this country in developing global governance arrangements for artificial intelligence?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to draw attention to the strengths of the UK in AI. Given the pace of change, the UK is determined to shape AI and not be shaped by it. These are issues that countries do not face alone, so we are working with international partners to seize the opportunities and address the challenges that AI presents, both bilaterally and multilaterally. The UK is well placed to lead, including through our AI Security Institute, working with allies to share expertise, build capability and strengthen our resilience together.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as a consultant to DLA Piper on AI policy and regulation. The UK signed the Council of Europe Framework Convention on Artificial Intelligence nearly two years ago. Can the Minister tell the House when the UK intends to ratify the convention, and what steps the Government intend to take to implement it, given their own statement that

“existing laws and measures will be enhanced”

once ratification occurs? Has the moment arrived for the UK to champion binding international obligations on AI, rather than continuing to place its faith in voluntary commitments that have clearly failed to hold either Governments or developers to account?

[Baroness Lloyd of Effra (Lab)]

The convention on AI is flexible and does not create new human rights obligations. Contracting states are given broad discretion when it comes to selecting the appropriate form of implementation, including sector-led regulation. That fits with our mission to highlight the benefits of AI for working people in a way that recognises that regulation largely is based on a sector-based approach.

[Lord Ranger of Northwood (Con)]

My Lords, as we know, and as I have said quite often in this House, the UK AI sector for SMEs is booming. Thousands of new businesses have set up in the UK over the last few years, and the UK can be proud of that on the global stage. With the last Prime Minister, and maybe the new Prime Minister, searching for growth, when will the Government meet organisations such as SMEs, particularly around the challenges of procurement into government? I declare my interest as a co-founder of the Business AI Alliance, a not-for-profit organisation that champions 300 UK AI businesses.

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right to pay testament to the strength of the UK economy and sector in both AI adoption and in new businesses taking opportunities, whether in law tech, fintech, or health and life sciences, to name a few. I am sure that colleagues in the department will be happy to meet the organisations he mentions. We meet other alliances such as those who represent start-ups and scale-ups in the UK. As he mentions, they are a source of growth and employment here.

[Baroness Nargund (Lab)]

My Lords, I welcome the Government’s commitment to using AI in healthcare to improve patients’ outcomes. However, AI brings risks too. We need international collaboration for large studies to establish effectiveness and long-term risks to patients. The World Health Organization has published a document on ethics and a governance framework for AI in health. Can the Minister say how the UK Government are contributing to the WHO-led governance framework for AI in healthcare, in order to not only improve outcomes but establish risks and equity in outcomes for our patients?

[Baroness Lloyd of Effra (Lab)]

The UK collaborates with many different forums, such as the OECD and the UN, and I am pleased to hear of the advances made by the WHO in setting out frameworks for ethical developments. In the UK, we are working carefully with the MHRA to allow advances in AI to bring real patient benefits through the development of new treatments and drugs.

[Lord Patel (CB)]

My Lords, does the Minister agree that we are more likely to succeed in having international regulation for AI if the regulations are based not on a single set of regulations for all algorithms but on risk-based classifications in a set of regulations, as with other technologies such as atomic energy?

[Baroness Lloyd of Effra (Lab)]

Developments in AI, with AI as a general technology, are indeed permeating many sectors, including health, as we heard from my noble friend, and other areas, as the noble Lord mentioned. The best approach is to keep collaborating in multilateral forums and with bilateral partners, so that we can share standards and approaches, and be agile and nimble as the technology develops.

[Lord Markham (Con)]

My Lords, recent restrictions by the United States on access by foreign nationals to certain advanced AI models have highlighted the extent to which access to frontier AI technology can be determined by decisions taken overseas. What discussions have the Government had with international partners to ensure that the United Kingdom retains reliable access to strategically important AI capabilities?

[Baroness Lloyd of Effra (Lab)]

The noble Lord highlights the developments in frontier models, which are delivering unprecedented advances at present. We are ensuring that the UK has sovereign capability based on our strengths, so that we can compete in this new, developing technological area in areas where we contribute. For example, that is why we are backing the AI hardware plan, an area of real strength in the UK, and we have set up the sovereign AI fund to back those particular sectors which the UK is particularly strong in.

[The Lord Bishop of Leicester]

My Lords, a deepfake or AI-generated social media post manufactured in one country can inflame communities in another country within hours. Ahead of the UN global dialogue in Geneva next month, can the Minister give us a reassurance that the Government are pressing international partners for common standards on content provenance and authentication, so that citizens can tell what is real from what is synthetic and deliberately sown to divide communities?

[Baroness Lloyd of Effra (Lab)]

The right reverend Prelate is right to highlight the importance of applying our values and laws, whether the content is generated by AI or by other actors. In the UK, the Online Safety Act takes that approach, whether content is developed by AI or elsewhere. It is through these kinds of dialogues, including with the UN, that we will share our best practice, so we can have standards globally that are based on the approach we are taking here in the UK.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, is it not a fact that, if we are to secure international agreements, we are dependent on the Chinese being willing to enter into them, and in particular our close friends the Americans, who are showing a preference not for international regulation but to lead the world, have competitiveness and be in charge? In those circumstances, I welcome what the Minister was saying about UK sovereignty. Could she define it a bit more precisely? Are we going to establish an independent sovereign UK AI which would give us greater power than we have at the moment?

[Baroness Lloyd of Effra (Lab)]

Our sovereignty strategy includes many elements, such as developing AI growth zones, supporting the expansion of compute, and the sovereign AI fund, which is focused on five priority areas. We are supporting the building of a series of non-language frontier models, for example Ineffable. Also, as language models develop, we are seeing how the next era of them could be different. Today, there was an announcement of a further investment in that area from UKRI.

Social Media: Substances Unfit for Human Consumption

Baroness Lloyd of Effra Excerpts

Wednesday 17th June 2026 Lords Chamber

[Lord Addington]

To ask His Majesty’s Government what steps they are taking to prevent substances which are not fit for human consumption from being advertised and sold on social media platforms as physique enhancing products.

[The Parliamentary Under-Secretary of State, Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, the Government recognise the serious risks posed by substances marketed online that are unsafe for human consumption. Under the Online Safety Act, platforms must take proactive steps to prevent and remove illegal content, including the promotion or sale of unlawful substances, and to tackle fraud. Where products fall within the definition of medicines, robust controls apply to their sale, supply and advertising, and unauthorised products are subject to enforcement action.

[Lord Addington (LD)]

I thank the Minister for her Answer and accept that this is a cross-government problem; the Department of Health could just as easily have taken this Question. What exactly are the Government going to do to make sure that influencers who make money out of saying, “You will look better if you take certain drugs”, are punished? If we cannot get at them, will we be closing down the sites or platforms on which they are doing this marketing?

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

The Online Safety Act has duties in respect of children. Platforms that provide services to children must ensure that harmful content is not provided. Ofcom’s children’s harms guidance makes it clear that sponsored or influencer-promoted content can be in scope where it actively encourages children to consume harmful substances. Ofcom has considerable powers to monitor compliance with the Act and Parliament has given it the ability to fine and take enforcement action, which I think everyone in this Chamber supports.

[Lord Winston (Lab)]

My Lords, I wish to raise a personal issue. For about three months now, I have been plagued by complaints from members of the public who have seen videos and digital images apparently of me promoting certain medicines on Instagram and Facebook. These medicines generally refer to erectile dysfunction and other issues with the prostate. I wonder what we can do about this kind of advertising, because people have been paying money for these completely dangerous remedies.

[Baroness Lloyd of Effra (Lab)]

My noble friend raises an important and serious point. Fraud is illegal and a priority offence under the Online Safety Act, and platforms are required to act where services are used for scams or misleading advertisements. It is in Ofcom’s hands to ensure compliance with the Act and the duties under it, and we have made it very clear to Ofcom that we support it taking that kind of enforcement action.

[Baroness Bull (CB)]

My Lords, is the problem here not often one of classification? Selective androgen receptor modulators, or SARMs, which are so often the basis of the physique-enhancing supplements to which the Question refers, are classified as novel foods by the FSA. This means that while they are not approved for human use and cannot be marketed as dietary or medical supplements, they can be sold online as research-use only chemicals, which is how people get around the social media loophole. Should the Government not be moving to reclassify them and close the legal loophole which allows them to be sold online?

[Baroness Lloyd of Effra (Lab)]

Substances that are illegal or that cause harm to children are caught under the Online Safety Act. Where they are classified as medicines, that is caught by the MHRA under the Human Medicines Regulations. Products sold on online marketplaces that fall outside of medicines or food regimes must still be safe and comply with UK requirements. The Office for Product Safety and Standards oversees that. The Department for Business and Trade is currently consulting on changes, using the powers under the PRAM Act, which is now in force, to look at what more needs to be done to make sure that online marketplaces are marketing safe products to UK consumers.

[Baroness Davies of Devonport (Con)]

My Lords, my question is very much on the same lines as that from the noble Lord, Lord Addington. Influencers play a huge part in this. We have just seen the Enhanced Games on television. For anyone not aware of it, it is a sporting event where they pump the athletes full of as many drugs as possible so that they can win races. Does the Minister have any plans for how we will tackle this and stop young people buying things online such as testosterone without any prescription whatever?

[Baroness Lloyd of Effra (Lab)]

The Government support clean competition in sport, and the Department for Culture, Media and Sport supports UK Anti-Doping and UK Sport in their efforts to protect clean sport and educate athletes on the risks of performance-enhancing drugs. The Online Safety Act covers situations where illegal products are marketed, and it is for Ofcom to enforce that area. As I mentioned, the children’s harms guidance makes it clear that sponsor or influencer-promoted content can be in scope where it actively encourages children to consume harmful substances.

[Lord Clement-Jones (LD)]

My Lords, the BBC investigation found that these illegal substances are readily available from online sellers based both in the UK and overseas, yet there is no systematic requirement for platforms to know who is placing these advertisements, particularly of the kind that the noble Lord, Lord Winston, referred to. Will the Government ensure that forthcoming work on online advertising standards includes a requirement for platforms to verify the identity of those placing advertisements for health and physique-enhancing products so that enforcement bodies can identify and pursue those responsible?

[Baroness Lloyd of Effra (Lab)]

The noble Lord is right that the Online Safety Act already covers illegal content and child safety duties. Those duties are in force. Ofcom is now turning its focus to the additional duties for categorised services, which will include protections against fraudulent advertising. We are expecting Ofcom’s consultation on the additional duties next month, which should cover a number of the issues that the noble Lord raises.

[Viscount Camrose (Con)]

My Lords, to pick up on the point that was well made by the noble Baroness, Lady Bull, sellers of unapproved SARMs routinely use labels in their advertising such as “not for human consumption”, while simultaneously promoting their physique-enhancing effects elsewhere on social media. Since sophisticated AI advertising tools allow sellers to target consumers with almost perfect precision, these tricks are actually no less effective than openly advertising illegal products. Can the Minister tell us who is responsible for enforcing against this and what progress they are making?

[Baroness Lloyd of Effra (Lab)]

Where it is claimed that products are sold for research purposes only, that does not prevent regulatory action where the available evidence suggests that they are in fact unauthorised medicines intended for human use. If the product is classified as a medicine and is not appropriately authorised, the MHRA can take compliance and enforcement action.

[Lord Harris of Haringey (Lab)]

My Lords, my noble friend the Minister has, very properly, talked about enforcement and the role of Ofcom, but there are other enforcement agencies which have a role in all of this. The issue of advertising standards has been raised, and that has got to be looked at, but there is also enforcement by trading standards. Can my noble friend the Minister tell us what discussions have taken place with DBT about the powers and resources available to trading standards to take these cases, which are often complicated, against bodies with a great deal of financial power?

[Baroness Lloyd of Effra (Lab)]

My noble friend raises an important question. The landscape here includes action by law enforcement agencies, such as that under the fraud strategy. It involves the MHRA and Ofcom, and indeed the ASA and trading standards. These activities are co-ordinated across government to make sure that there is effective action. On the specific resources available to trading standards, I will take that question back to the department and come back to him.

[Lord Watts (Lab)]

My Lords, do we not need effective legislation and a regulator that will actually do the job? Which one is failing us—the regulator or the legislation?

[Baroness Lloyd of Effra (Lab)]

As we discussed a little earlier this week in the House, advances are being made in the regulation in the measures that we are bringing forward to restrict social media companies in advertising or providing services to under-16s. There are the consultations that I mentioned by the OPSS on product safety, which go hand in hand with the importance of enforcement. The Secretary of State has written to Ofcom stressing the importance of that body enforcing effectively and prioritising, and has requested an enforcement strategy and framework to be available, so that that can be scrutinised by Parliament.