Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to improve access to AI computing capacity for UK researchers, start-ups and businesses.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

This government is committed to harnessing the power of compute to enable innovations that will deliver growth and opportunity and for people across the UK.

The AI Research Resource (AIRR) is now live and is free to use for the UK’s scientists, public sector organisations, and start-ups and SMEs. It is made up of two supercomputers: Dawn at Cambridge, and Isambard-AI in Bristol – one of the world’s top 10 public supercomputers and the 4th greenest in the world.

DSIT are investing up to £2 billion in public compute until 2030. This includes expanding our AI Research Resource twentyfold by 2030. As part of this, HMG recently announced a £36 million investment to expand Cambridge’s DAWN supercomputer sixfold by spring 2026. These investments will provide UK researchers and start‑ups free access to world‑class AI compute, enabling breakthroughs in areas such as personalised medicine, climate modelling and more efficient public services.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the 85 per cent increase in AI companies in the UK between 2023 and 2025; and what steps they are taking to support sustainable and regionally balanced growth in the AI sector.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

AI is a central focus of the Government’s economic and innovation priorities.

Due to data lags, 2025 AI Sector size is not currently available but will be released later this year in the 2025 AI Sector Study. Our most recent analysis highlights that between 2022 and 2024, the number of AI firms operating in the UK increased from 3,170 to 5,863, an 85% rise. This reflects both the strength of the UK’s AI investment environment, which is the highest in Europe, and ongoing work across Government to support safe and effective AI adoption.

Key policies continuing to drive this growth include the launch of the AI Opportunities Action Plan — with 38 of its 50 recommendations already in progress. This includes the development of five AI Growth Zones across England, Scotland and Wales, and initiatives such as the AI Skills Hub and support for employers to upskill 10 million workers so they can thrive in an AI‑enabled economy, as well as the Barnsley Tech Town programme.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the increase in technology company incorporations in the UK in 2025; and what impact that increase is having on their policies for regional economic development and tech entrepreneurship.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

This Government welcomes the increase in technology company incorporations in the UK in 2025, which reflects the strength of the UK’s tech ecosystem and growing levels of tech entrepreneurship across the country. We are encouraged that new tech businesses are being founded across UK regions and cities, supporting local growth, attracting investment, and helping to build strong regional tech and innovation clusters beyond London. And we are committed to removing barriers to growth for startups across the UK – ensuring the UK is one of the best places for tech companies to start, scale and stay.

We are supporting regional economic development through measures such as the Regional Tech Booster, a programme supporting startups and accelerating tech clusters beyond London. Partnerships across the UK have bid for up to £20 million through our Local Innovation Partnerships Fund - a new £500 million UKRI-led programme to grow regional strengths including those in the digital and technology sector.

We are supporting tech entrepreneurship and the sector through venture capital schemes, R&D tax reliefs, targeted visa routes, the AI Opportunities Action Plan, and by streamlining regulation to support innovation. We are investing in skills, compute, and designated AI Growth Zones; on R&D, we are committing £38.6 billion to UKRI over five years; and powering entrepreneurship through the Entrepreneurship Prospectus, Enterprise Fellowships, and Innovate UK’s £130 million Growth Catalyst.

We are also unlocking finance via pension and capital‑markets reforms, while the British Business Bank increases annual investment to £2.5bn and commits £5bn to growth‑stage funds.

Together, these measures set out a comprehensive, long‑term plan, backed by record funding, to support tech entrepreneurship and drive economic growth across all regions of the UK.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the effectiveness of cybersecurity legislation for AI-associated cyber threats; and what steps they are taking to improve legislation to address those threats.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

A range of existing rules already apply to artificial intelligence (AI) systems, such as data protection, competition, equality legislation, and online safety. The Department for Science, Innovation and Technology (DSIT), in close collaboration with the National Cyber Security Centre (NCSC), has created a voluntary Software Security Code of Practice which enables software vendors to secure software at all stages of their lifecycle.

As a government, we have also committed through the AI Action Plan to work with regulators to boost their capabilities, and DSIT and NCSC have taken a leading role in the development of the world's first published global standard for AI cyber security in ETSI (EN 304 223), which sets minimum-security requirements to help secure AI models and systems.

The Cyber Security and Resilience (Network and Information Systems) Bill does not specifically bring large language models or AI companies into scope. However, where organisations in scope of the Bill use AI models and systems, that organisation will need to take appropriate and proportionate steps to manage the risks to these from hackers. This would include large language models which are used as part of the day-to-day software available to staff in a hospital.

The practices recommended to protect against AI-driven cyber threats are essentially the same as those recommended for protecting against “traditional” cyber threats, which are to get good cyber hygiene measures in place, such as using the government’s Cyber Essentials scheme, and managing digital risks by using the Cyber Governance Code of Practice.

Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to support the responsible adoption of AI by UK financial services firms; and what assessment they have made of the impact of AI use by those firms on productivity, service delivery and competitiveness.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government believes that the safe adoption of artificial intelligence (AI) by the financial services sector is a major strategic opportunity, with the potential to power growth across the UK. As set out in the Government’s Financial Services Growth and Competitiveness Strategy, it is our ambition to make the UK ”the world’s most technologically advanced global financial sector”, leveraging our dual strengths in FS and AI to drive growth, productivity, and deliver consumer benefits.

The Government has appointed Financial Services AI Champions, Harriet Rees and Rohit Dhawan, who will focus on helping firms seize opportunities of AI while protecting consumers and financial stability.

AI is already widely used across financial services, with around three-quarters of UK firms now deploying AI according to a recent survey by the Bank of England and the FCA. Additionally, recent reports from the City of London Corporation suggests AI could add tens of billions of pounds to the financial and professional services sector by 2030, as well as transforming services for consumers, and increasing productivity by up to 50% - underlining both the pace of adoption and the scale of the opportunity ahead.

The Government will continue working closely with industry and the regulators to safely capitalise on the opportunities AI presents while protecting consumers and financial stability.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of increased automation and AI-driven financial workflows on the fintech sector; and what policy measures they are considering to support the UK's competitiveness in the digital economy.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

As set out in the Government’s Financial Services Growth and Competitiveness Strategy, the UK aims to be the world’s most technologically advanced global financial centre, and to remain a leading jurisdiction for Fintech firms to start-up, scale and list.

The UK has a long history as a powerhouse of financial services innovation. The Financial Services Strategy set out a comprehensive package of reforms to maintain the UK’s global leadership in Fintech, and the sector attracted $3.6 billion of investment in 2025 - second only to the US. This drive to deliver innovation also includes the safe adoption of artificial intelligence (AI) by the financial services sector, which the Government believes is a major strategic opportunity, with the potential to power growth across the UK.

The Digital and Technology sector has also been identified as one of the key growth driving sectors for the UK, as part of our Industrial Strategy. The Government’s 2025 AI Opportunities Action Plan sets out our strategy on AI in particular, including putting in place the foundations to capitalise on the opportunities of AI. In January, a year after its publication, the Government announced that 75% of the recommendations committed to have been actioned, including developing AI talent through the £187 million tech first package and the designation of five AI Growth Zones across the UK, with streamlined planning and energy access.

The Government also recognises the huge productivity and growth opportunity that the adoption of digital technology offers the wider economy. The Technology Adoption Review focussed on adoption in the Industrial Strategy sectors and was published in June 2025, while DBT established the Digital Adoption Taskforce, working with industry members to identify the current needs of SMEs in their digital adoption journeys. Their final report was published in July 2025 with government response included in the Small Business Strategy. The Government is responding to these recommendations, including progressing with mandating e-invoicing and expanding successful firm level programmes such as Bridge AI.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the use of external industry expertise to support innovation in UK financial services through the appointment of AI Champions in the Treasury; and how this fits within their policy on the safe and responsible use of AI.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

As set out in the Government’s Financial Services Growth and Competitiveness Strategy, it is our ambition to make the UK ”the world’s most technologically advanced global financial sector”, leveraging our dual strengths in FS and AI to drive growth, productivity, and deliver consumer benefits.

To help achieve that ambition, the Government has appointed Financial Services AI Champions, Harriet Rees and Rohit Dhawan, who will focus on helping firms seize opportunities of AI while protecting consumers and financial stability. The AI Champions will engage with industry experts, the regulators and other stakeholders to provide HM Treasury Ministers and officials with recommendations on areas of potential growth for AI in financial services and what action could be taken to seize the opportunities that AI brings in financial services.

The Government will carefully consider any recommendations before setting out its next steps, taking into account the benefits of innovation but also ensuring that risks are appropriately considered.

The Government will continue working closely with industry and regulators to inform our approach to safely capitalise on the opportunities AI presents while protecting consumers and financial stability as the technology continues to evolve.

Question to the Department for Energy Security & Net Zero:

To ask His Majesty's Government what steps they are taking to support the deployment of AI technologies in the energy sector, for example in smart grids, fusion research and wider energy transition efforts.

Answered by Lord Whitehead - Minister of State (Department for Energy Security and Net Zero)

Embracing the opportunities that AI offers to drive economic growth and productivity is a core government objective. As per the government funded AI for Decarbonisation Virtual Centre of excellence’s annual report, AI can support delivery of Clean Power by 2030 by enabling low carbon electricity generation, improving grid access, and enhancing the efficient operation of the energy system. As part of the government’s wider AI-and-decarbonisation programme, we are launching a review led by the AI Champion for Clean Energy. This will provide an expert assessment of the opportunities, risks, and enablers for AI technologies, aligning government, regulators, and industry.

Question to the Department for Energy Security & Net Zero:

To ask His Majesty's Government what assessment they have made of the potential role of artificial intelligence and smart data technologies in modernising energy networks and forecasting operational capacity; and how this assessment informs policy on national energy resilience and industrial competitiveness.

Answered by Lord Whitehead - Minister of State (Department for Energy Security and Net Zero)

Embracing the opportunities that AI offers to drive economic growth and productivity is a core government objective. As per the government funded AI for Decarbonisation Virtual Centre of Excellence’s annual report, AI can support delivery of Clean Power by 2030 by enabling low carbon electricity generation, improving grid access, and enhancing the efficient operation of the energy system. As part of the government’s wider AI-and-decarbonisation programme, we launched a review of the grid by the AI Champion for Clean Energy. This will provide an expert assessment of the opportunities, risks, and enablers for AI technologies, aligning government, regulators, and industry.

Question to the Department for Business and Trade:

To ask His Majesty's Government what assessment they have made of the role of financial services firms in promoting the adoption of AI tools among UK small and medium-sized enterprises; and how this is being considered in government policy on SME digitalisation.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

Adoption of Artificial Intelligence can unlock significant productivity gains. It is important for government to work in partnership with industry, including financial services firms, to support Small and Medium-sized Enterprises (SMEs) with this.

The Department for Business and Trade created the SME Digital Adoption Taskforce and are leading a series of roundtables to tackle barriers SMEs face when adopting digital technologies. Members include Lloyds Banking Group, Barclays, Mastercard and Visa.

Innovate UK’s Next Generation Professional and Financial Services programme supports digital innovation and adoption across financial services. Within this, the Future Finance strand accelerates uptake by providing targeted support to Financial Services firms.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the extent to which the AI-Driven Innovation Centre, announced at the World Economic Forum in January, aligns with the UK’s artificial intelligence strategy and wider policy objectives.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

AI is already transforming how we make products, discover new medicines and power innovation in areas like financial services. Scaling up adoption across these sectors and beyond is essential to boosting productivity, creating good jobs and driving Britain’s economic renewal.

The new Centre for AI-Driven Innovation will play a central role in delivering the UK’s ambitions for AI—bringing together world-leading research, industry expertise and international partners to turn ideas into real-world impact. By accelerating progress on the AI Opportunities Action Plan, it will help the UK go further and faster in strengthening its position as a global leader and hub for innovation in the age of AI. Innovation will play a central role in delivering the UK’s ambitions for AI—bringing together world‑leading research, industry expertise and international partners to turn ideas into real‑world impact.

The Centre’s focus on driving responsible AI adoption across key sectors—including advanced manufacturing, life sciences and professional services—directly supports the Government’s aims to boost productivity, enhance technological leadership and promote the safe, trustworthy deployment of AI across the economy.

Question to the Department for Transport:

To ask His Majesty's Government what assessment they have made of plans to introduce fully autonomous taxi services in London by late 2026; and how regulatory, safety and workforce issues relating to autonomous vehicles are being addressed.

Answered by Lord Hendy of Richmond Hill - Minister of State (Department for Transport)

The Government intends to introduce the Automated Passenger Services (APS) permitting scheme in Spring 2026 to regulate self-driving taxi-and private-hire-like and bus-like services.

Self-driving vehicles intended for use within a commercial APS fleet will need to undergo an assessment, by the Vehicle Certification Agency (VCA), to demonstrate that they can safely drive themselves at all times.

The initial roll-out of automated services is expected to be more small-scale, and we anticipate that automated services can complement human-driven services.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of recent volatility in the share price of software and data companies and the implications of this volatility in terms of (1) market transparency, (2) disclosure practices, and (3) investor protection.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government does not comment on specific movements in financial markets.

The Government, together with the Financial Conduct Authority, has already undertaken significant reforms to ensure UK capital markets deliver for British businesses and investors. This includes an ongoing programme to implement reforms to wholesale markets. These have been designed to maintain high regulatory standards, promote openness and competitiveness, deliver fair and proportionate regulation, and support economic growth, innovation and wealth creation across society.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the risks posed by the deployment of autonomous AI agents by businesses, in particular for governance, security and data protection; and what steps they are taking to mitigate those risks.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

The progression of autonomous AI capabilities offers transformative potential to UK industries, the economy and productivity. However, the more complex and more sensitive the tasks we delegate to AI, the more thoughtful we must be about how we deploy the technology.

To facilitate responsible use of AI, the Roadmap to Trusted Third‑Party AI Assurance sets out the Government’s ambitions for the UK’s AI assurance market and the immediate actions we are taking to help the sector mature. This includes establishing the £11 million AI Assurance Innovation Fund and convening a national consortium of expert stakeholders to support the quality and growth of the assurance market.

This is complemented by the work of the AI Security Institute who are working to deepen our understanding of the novel risks posed by autonomous AI systems.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to ensure regulatory frameworks on the use of AI in consumer financial services protect users and support innovation.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

I refer the noble Lord to the answer I gave on 12 February 2026 to Question UIN HL14084.