Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to encourage technology start-ups to scale-up and remain in the UK.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

This Government is committed to supporting the digital economy, removing barriers to inclusive economic growth, and ensuring that the UK continues to be one of the best places in the world for our great tech businesses to start, scale and stay. Programmes such as the SEIS/EIS schemes, R&D Tax Credits and various visa routes demonstrate the UK’s commitment to supporting tech companies in thriving in the UK. The Government has also announced the AI Opportunities Action Plan, and set up the Regulatory Innovation Office to reduce the burden for businesses hoping to bring new products and services to market.

Question to the Department for Business and Trade:

To ask His Majesty's Government what assessment they have made of how the UK's trade relations with the EU could harm the UK's trade relations with the United States.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

The Prime Minister has made clear that the UK is not choosing between the US and the EU. As set out by the Chancellor, we recognise that our markets are highly interconnected. This government's main priority is growing the UK economy - strengthening trade with our most economically important markets is a major part of that.

We are committed to continuing our work with both the US and the EU to remove barriers to trade and help UK businesses grow.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to encourage the public sector to adopt artificial intelligence; and to ensure sufficient funding is allocated for artificial intelligence investment within the public sector.

Answered by Lord Vallance of Balham - Minister of State (Department for Science, Innovation and Technology)

As set out in the AI Opportunities Action Plan and the blueprint for modern digital government, both of which were published in January, the UK government has a vision for supporting the UK’s leading position in the global AI sector through the safe, effective, efficient and ethical adoption of AI in the UK’s public sector.

The UK government is in the process of a spending review which will be used to tackle the state of historic legacy IT, invest in cyber security, cloud-based computing, and the technologies that harness the benefits of AI for the public sector. The Government has a clear focus on taking advantage of new technologies such as AI to improve public sector productivity and deliver a better user experience for citizens.

The cross public sector AI community now has over 1000 members. The community meets every month to collaborate on AI use cases, best practice and trends.

On 10 February 2025 the GDS in collaboration with the AI community launched the AI Playbook on Gov.uk. The AI Playbook will help government departments and public sector organisations harness the power of a wider range of AI technologies safely, effectively, and responsibly.

Question to the Department for Business and Trade:

To ask His Majesty's Government what steps they are taking to enhance productivity in the UK; and whether artificial intelligence has a role to play in achieving this.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

The UK Government is committed to building a world-leading Artificial Intelligence (AI) sector, encouraging investment, and enabling adoption across the economy. Our ambition is to shape the AI revolution on principles of shared economic prosperity, improved public services and increased personal opportunities.

On 13 January, the Prime Minister announced the AI Opportunities Action Plan.
This Government is committed to implementing all 50 recommendations outlined in the Plan. Delivering the Plan will lay the foundations for AI growth, drive adoption across the economy and build UK capability.

The Technology Adoption Review will also provide practical recommendations on how the Government can work with businesses to address barriers they face when adopting both established and novel technologies, with a focus on the 8 growth-driving sectors identified in the Industrial Strategy green paper.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to ensure that the AI Opportunities Action Plan is followed and is successful.

Answered by Lord Vallance of Balham - Minister of State (Department for Science, Innovation and Technology)

The AI Opportunities Action Plan sets out how we will lay the foundations for AI growth, drive adoption and build the UK’s AI capabilities.

The government welcomes the Action Plan and will take immediate action to take forward its 50 recommendations. In the response, government has outlined how it will implement the plan. This includes the steps needed to collaborate with industry, while also investing in the required infrastructure.

For example, we are immediately doubling the AI Research Resource capacity, establishing new AI Growth Zones, and renewing our focus on skills.

We are also establishing a new function in Government to ensure the UK can remain at the forefront of AI development. Matt Clifford has been appointed as the Prime Minister’s AI Opportunities Adviser to support this work.

Question to the Department for Digital, Culture, Media & Sport:

To ask His Majesty's Government what assessment they have made of the potential held by video games for aiding the development of language education; and particularly regarding the encouragement of video games to be available in Welsh.

Answered by Baroness Twycross - Baroness in Waiting (HM Household) (Whip)

The Government recently announced £5.5 million funding for the UK Games Fund (UKGF) for 2025/26, which will provide grants to early-stage studios to develop new intellectual property and deliver the graduate talent development programmes Tranzfuser and Dundee Development (DunDev).

Video games companies can benefit from the Video Games Expenditure Credit and access support from the Create Growth Programme and the UK Global Screen Fund.

The Government recognises the educational value of games, including in helping with language development. While Welsh language is a devolved matter, the UK Government supports the Welsh Government’s Cymraeg 2050 strategy to reach a million Welsh speakers by 2050.

Question to the Department for Digital, Culture, Media & Sport:

To ask His Majesty's Government what steps they are taking to support the development of start-up video game companies in the UK, particularly with regard to government investment.

Answered by Baroness Twycross - Baroness in Waiting (HM Household) (Whip)

The Government recently announced £5.5 million funding for the UK Games Fund (UKGF) for 2025/26, which will provide grants to early-stage studios to develop new intellectual property and deliver the graduate talent development programmes Tranzfuser and Dundee Development (DunDev).

Video games companies can benefit from the Video Games Expenditure Credit and access support from the Create Growth Programme and the UK Global Screen Fund.

The Government recognises the educational value of games, including in helping with language development. While Welsh language is a devolved matter, the UK Government supports the Welsh Government’s Cymraeg 2050 strategy to reach a million Welsh speakers by 2050.

Question to the Department for Business and Trade:

To ask His Majesty's Government, in view of  the 12 per cent fall in vehicle manufacturing in the United Kingdom between 2023 and 2024, what plans they have to support that industry.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

Our automotive industry directly supports over 150,000 jobs and contributes £19.4 billion to the economy - it is a growth sector. Production did dip last year, due in part to weaker global demand, but also because factories are retooling to build Electric Vehicles - so, we remain confident in the sector.

That is why the Budget included a £2 billion commitment to build on previous innovation programmes that have leveraged over £6bn of investment from the private sector. Just last month, this government, Nissan and JATCO (a component manufacturer) secured a £50 million deal to establish JATCO's first European manufacturing site in Sunderland.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the current UK inflation rate, and what steps they are taking to support progress towards the 2 percent target.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Inflation has returned close to target, and while inflation may rise slightly in the near term, the OBR expect it to remain close to the 2% target across the forecast period. The Chancellor has commissioned the OBR to produce an update economic and fiscal forecast on March 26^th, which will include their latest assessment of UK inflation as well as a forecast.

The independent Monetary Policy Committee of the Bank of England are responsible for controlling inflation. We fully support them in maintaining price stability sustainably in the medium term.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of how the AI Cyber Security Code of Practice will help businesses use AI responsibly; and how they will encourage businesses to adopt the Code of Practice.

Answered by Lord Vallance of Balham - Minister of State (Department for Science, Innovation and Technology)

As part of the Government’s efforts to ensure technologies can be used safely, the Code of Practice was published and will be used to create a global standard in the European Telecommunications Standards Institute (ETSI). Addressing AI cyber risks will help businesses harness AI benefits. The updated Code, informed by a risk assessment, literature reviews, an enterprise survey, Call for Views feedback, and NCSC’s Guidelines for Secure AI Development, includes an implementation guide with detailed actions and AI use case examples. DSIT will engage with industry to understand how to support businesses in adopting the future standard.

Question to the Department for Education:

To ask His Majesty's Government what assessment they have made of the impact of VAT on private school fees on international students studying at private schools in the UK.

Answered by Baroness Smith of Malvern - Minister of State (Education)

The government estimates that in the long term steady state, 37,000 pupils will leave or never enter the UK private school sector as a result of the removal of the VAT exemption applied to school fees. This represents around 6% of the current private school population. More information is available in HM Treasury’s ‘Private school fees – VAT measure’ policy paper, which is available here: https://www.gov.uk/government/publications/vat-on-private-school-fees/ac8c20ce-4824-462d-b206-26a567724643.

Of those leaving or never entering the private sector, the government estimates an increase of 35,000 pupils in the state sector in the steady state following the VAT policy taking effect, with the other 2,000 either being international pupils who do not move into the UK state system, or domestic pupils moving into homeschooling. This state sector increase represents less than 0.5% of total UK state school pupils, of which there are over 9 million. This movement is expected to take place over several years.

Children of compulsory school age, which is broadly those aged 5 to 16, living in England are required, by law, to receive a suitable full-time education. This includes foreign national children and, if they are resident in the UK, they will normally have the right to attend state-funded and independent schools in England.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to address the AI skills gap, particularly regarding universities.

Answered by Lord Vallance of Balham - Minister of State (Department for Science, Innovation and Technology)

Reducing the AI skills gap is critical for increasing the UK’s productivity and delivering long-term growth. DSIT regularly reviews the status of the UK’s AI labour market and has commissioned Gardiner & Theobald LLP to conduct a survey of the labour market, published later this year. We are also working with DfE and Skills England to assess the AI skills gap and map pathways to fill it.

As set out in the AI Opportunities Action Plan, government will further address the AI skills gap by working with universities to increase the number of AI courses, expanding educational pathways into AI, and establishing a prestigious AI talent scholarship.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what criteria they will use to assess where to implement new AI Growth Zones.

Answered by Lord Vallance of Balham - Minister of State (Department for Science, Innovation and Technology)

The Government will lay out the formal selection process in spring. Local and regional authorities along with industry will be able to nominate themselves to host an AI Growth Zone (AIGZs).

AIGZs will be designed to ensure AI infrastructure developers have access to the power they need to rapidly scale and, are supported via streamlined planning processes.

On Monday 10 February, local and regional authorities, along with industry, were invited to come forward with potential sites suitable for hosting AI infrastructure as an early expression of interest.

Question to the Cabinet Office:

To ask His Majesty's Government what steps they are taking to ensure that the UK’s Labour Force Survey is providing correct and current data.

Answered by Baroness Anderson of Stoke-on-Trent - Baroness in Waiting (HM Household) (Whip)

The information requested falls under the remit of the UK Statistics Authority.

A response to the noble Lord Taylor of Warwick’s Parliamentary Question of 10/02/25 is below and attached.

Professor Sir Ian Diamond | National Statistician

The Lord Taylor of Warwick

House of Lords

London

SW1A 0PW

19 February 2025

Dear Lord Taylor of Warwick,

As National Statistician and Chief Executive of the UK Statistics Authority, I am responding to your Parliamentary Question asking what steps the Office for National Statistics (ONS) are taking to ensure that UK’s Labour Force Survey (LFS) is providing correct and current data. (HL4910).

In my previous letter to you in February 2024 (HL2453) I included details on the comprehensive recovery plan[1] rolled out by the ONS in the last quarter of 2023 to improve the GB sample of the LFS. Since that letter, we have seen the implementation of further measures[2] introduced in the second half of 2024 to ensure the continued sustainability of the LFS.

These measures cover a combination of improvements to both data collection and methods which help make the survey estimates more representative of the UK population. We have continued measures introduced under the 2023 recovery plan, such as the reintroduction of in-home interviewing, the increased incentive, and the sample boost. We have also recruited and trained additional interviewers to increase the resource assigned to LFS. Interviewers were previously focused primarily on the wave 1 sample of the survey, with waves 2-5 being picked up by field interviewers as a lower priority. Since our letter to the Treasury Select Committee in December 2024[3], which included detail on our planned interviewer up-lift, we have increased the number of interviewers working on waves 2-5 by 50 so far.

As part of our continued efforts to make the survey estimates more representative, the ONS have reweighted[4] the LFS data periods back to 2019 using more recent population information published in January 2024. This reweighting exercise resulted in increased levels’ estimates across most of the labour market series, with rates and averages seeing little change, and reduced the gap between the LFS employment data and payroll estimates of the number of employees. This partial reweighting exercise has also been extended to the two-quarter longitudinal outputs, which we released on 18 February 2025. Further work is under way looking at the implementation of a more comprehensive full reweighting of our data when new population projections are released later this year.

There are ongoing work streams aiming to understand the statistical quality, such as attrition, mode effects and bias in the longitudinal and cross-sectional samples. In addition, we are conducting a number of research projects exploring our approaches to communication with respondents and the incentives to participate in our surveys. These projects will also help us to understand how we can optimise the response to our surveys. As part of our agreed user and methods assurance, we continue to engage with our Stakeholder Advisory Panel and external methods advisors, Ray Chambers and James Brown, to discuss and invite feedback on all work stream developments.

To date, the aforementioned sustainability improvements have had a positive impact. In July to September 2023, the quarterly LFS data included 44,238 individual responses across the UK[5]. By the October to December 2024 quarter this had increased to 63,069 individual responses for the UK[6]. With the additional interviewer resource enhancing our data collection efforts over coming months, we expect the achieved sample and dataset size and its representativeness to improve further.

As we expect to continue seeing higher volatility in LFS data in the short term than might have historically been expected, we continue to advise users to apply caution when observing changes in the survey-based estimates. Users should also consider the commentary we publish alongside our statistical bulletins, as well as consulting the wider range of labour market data we publish when forming a view on the labour market.

In summary, progress has been made in recovering the LFS with the achieved sample now significantly higher and the incorporation of the latest population information into the estimates. The major changes we have made to the LFS will be fully included through all five survey waves by the first quarter of next year, which will inform the LFS estimates for publication in May 2025.

While we are working hard to improve our LFS-based data, our long-term solution for collecting labour market data is delivery of the Transformed Labour Force Survey (TLFS). We conducted a range of tests towards end of 2024, investigating the effects of a shortened questionnaire and specific changes to the content. We are planning to up-date users on the next steps in Spring 2025.

Yours sincerely,

Professor Sir Ian Diamond

[1] Labour Force Survey: planned improvements and its reintroduction, ONS article, 2 November 2023,
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/methodologies/labourforcesurveyplannedimprovementsanditsreintroduction

[2] Labour market transformation – update on progress and plans: December 2024, ONS article, 3 December 024, https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/labourmarkettransformationupdateonprogressandplans/december2024

[3] UKSA Response to the Treasury Select Committee, UKSA letter, 3 December 2024,

https://committees.parliament.uk/publications/45859/documents/227537/default/

[4] Impact of reweighting on Labour Force Survey key indicators: December 2024, ONS article, 3 December 2024,
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/impactofreweightingonlabourforcesurveykeyindicators/latest

[5] Labour Force Survey performance and quality monitoring report: July to September 2023, ONS article, 14 November 2023, https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/methodologies/labourforcesurveyperformanceandqualitymonitoringreportjulytoseptember2023

[6] Labour Force Survey performance and quality monitoring report: October to December 2024, ONS article, 18 February 2025, https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/methodologies/labourforcesurveyperformanceandqualitymonitoringreportoctobertodecember2024