Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the work to fit tokenised collateral into existing financial market regulation frameworks; and what discussions they are having with the Financial Conduct Authority and the Bank of England about ensuring those frameworks support innovation and financial stability.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Last July, the Government published the Wholesale Financial Markets Digital Strategy, which sets out its commitment to establishing a regulatory and legislative framework that enables new digital solutions, such as tokenisation, to be taken forward.

The Strategy notes that current use cases demonstrate that English and Welsh law, alongside UK financial services legislation is, in many cases, sufficiently flexible to accommodate digital assets. However, the Strategy commits the Government to providing legal clarity where it is needed to accommodate distributed ledger technology and we are working closely with the financial services regulators to identify where such clarifications may be necessary.

As part of this, the Government has established the Digital Securities Sandbox (DSS). This addresses priority areas where existing requirements can create barriers to adopting new technology. The DSS allows participating entities to be subject to modified legislative requirements, to facilitate new digital infrastructures in the UK market.

Question to the Department of Health and Social Care:

To ask His Majesty's Government what assessment they have made of the data protection and confidentiality risks of the deployment of generative AI workplace tools in public sector bodies; and what guidance they have issued regarding the use of those tools in environments handling sensitive or personal data, including NHS organisations.

Answered by Baroness Merron - Parliamentary Under-Secretary (Department of Health and Social Care)

The Government recognises that the deployment of generative artificial intelligence (AI) workplace tools across the public sector presents data protection, confidentiality, and security risks, particularly where these tools may process sensitive or personal data.

The Government has assessed these risks which are addressed within the Artificial Intelligence Playbook for the UK Government and the Generative AI Framework for UK Government, both published in February 2025.

The AI playbook makes clear that public sector organisations must comply with UK data protection law when using generative AI, including the UK General Data Protection Regulation and the Data Protection Act 2018. It emphasises the need for data protection impact assessments, clear accountability, human oversight, and restrictions on the use of generative AI tools in environments handling sensitive or personal data unless appropriate safeguards are in place. The generative AI framework provides detailed guidance on privacy, security, and information governance, including data minimisation, purpose limitation, and preventing the disclosure of personal or confidential information through prompts or outputs.

Specific guidance has also been issued for health and care settings. NHS England has published information governance guidance on the use of AI, which has been reviewed by the Health and Care Information Governance Working Group, including the Information Commissioner's Office and National Data Guardian. This guidance addresses confidentiality, lawful processing, consent, and human oversight, and applies to NHS organisations considering or deploying AI technologies, including generative AI tools. NHS bodies are expected to operate within established information governance frameworks and, where appropriate, adopt local AI governance and acceptable use policies consistent with national guidance.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the integration of buy now pay later services into digital payment platforms; and what steps they are taking to ensure that consumer credit regulation and affordability safeguards remain effective for the use of those services.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government recognises that Buy-Now, Pay-Later (BNPL) products are increasingly embedded within digital payment platforms and are now widely offered to consumers at checkout. Millions of people across the UK have used BNPL products, which can help spread the cost of purchases. However, without regulation there are risks — particularly around unaffordable borrowing.

That is why, in July 2025, Parliament passed legislation to bring BNPL products within the scope of Financial Conduct Authority (FCA) regulation. The new regulatory regime will come into force this July and last month, the FCA published its final rules for BNPL lending.

Under these rules, BNPL providers will be required to carry out affordability checks as well as provide consumers with clear and upfront information about costs and repayment obligations. Consumers will also benefit from stronger rights, including access to the Financial Ombudsman Service and protection under section 75 of the Consumer Credit Act, making it easier to obtain refunds where purchases go wrong. These new rules will ensure that BNPL products remain a useful payment option while protecting consumers from harm.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the launch of the London Stock Exchange's private securities market under the private intermittent securities and capital exchange system framework; and what assessment they have made of the impact of that market on UK capital formation for high-growth technology businesses.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

In May 2025, the Government delivered legislation to establish the Private Intermittent Securities and Capital Exchange System (PISCES), which will support private firms to scale and grow.

The Financial Conduct Authority (FCA) has since approved two PISCES operators.

The Treasury and the FCA will jointly assess the efficacy of PISCES over the five-year sandbox period. Consideration will be given to the functioning of the legal and regulatory framework, as well as to the outcomes for market participants.

Question to the Home Office:

To ask His Majesty's Government what assessment they have made of the use of AI by police forces, including facial recognition and predictive systems; and what measures are in place to ensure that those systems are subject to appropriate oversight.

Answered by Lord Hanson of Flint - Minister of State (Home Office)

The Government has already begun to support police to make responsible use of AI, and since the election we have allocated £50 million to areas such as facial recognition, deepfake detection and the automation of force control room operations. This is beginning to free up officer from administrative tasks to be on the frontline and improve policing outcomes. The Police Reform White Paper announced plans for a further £115m over the next three years, including a new National Centre for AI in Policing which will be charged with rolling out AI across policing and ensuring it is used in a responsible manner with the appropriate oversight.

The Covenant for Using Artificial Intelligence in Policing provides a high-level framework for AI adoption by police forces. It sets out clear principles for the development and deployment of AI in policing and operates alongside existing statutory obligations. It is supported by published guidance from the College of Policing and local governance and ethics arrangements within forces. We expect all law enforcement agencies to work within the current laws.

The AI Centre will provide technical testing and assurance of tools, in order to ensure high levels of accuracy, and minimise potential bias. It will also develop clear guidance and best practice for police forces on the responsible adoption of AI, complementing the existing legal and professional standards.

In addition, the AI Centre will support greater transparency through the development of a public-facing registry of police uses of AI, setting out what tools are being used, the purpose for their deployment, and the mitigations and safeguards in place. These measures are designed to provide a greater level of oversight of police AI use, to deliver benefits while mainlining responsible adoption and building public confidence.

Building on this broader programme of work to ensure responsible and transparent AI adoption, facial recognition technology remains an important tool that is helping police to quickly locate suspects and bring offenders to justice. The Government intends to bring forward a new framework to ensure all police forces across the country can use facial recognition and similar technologies with greater confidence, and that their uses and limits are clear to the public. Last year, we launched a public consultation on when and how biometrics, facial recognition and similar technologies should be used, and what safeguards and oversight are needed. The consultation will inform the scope and content of legal changes before they are brought before Parliament.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the impact of adoption of digital and information technologies by businesses on productivity growth in the UK economy; and what steps they are taking to support the adoption of artificial intelligence to improve productivity.

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

As highlighted in His Majesty’s Government’s Technology Adoption Review, Historical trends indicate that technological innovations have significantly contributed to GDP growth, with emerging technologies, like AI, expected to drive substantial productivity gains in the coming years.

The Government is committed to realising these benefits. This includes working with industry to upskill 10 million workers with essential AI skills for work through our AI Skills Boost programme, and developing sector specific approaches to galvanise AI adoption in our growth-driving industrial strategy sectors by working with recently appointed AI sector champions. We are also ensuring AI adoption benefits local businesses, workers and communities through our recent announcement of Barnsley as the UK’s first Tech Town, and by delivering local skills and benefits packages in AI Growth Zones.

Question to the Department for Business and Trade:

To ask His Majesty's Government what assessment they have made of the impact of AI adoption on the productivity and competitiveness of small and medium-sized enterprises (SMEs); and what steps they are taking to support the responsible uptake of AI tools by SMEs.

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

Adoption of Artificial Intelligence by Small and Medium-sized Enterprises (SMEs) can unlock significant productivity gains. An OECD paper published last year estimates that AI could increase UK annual labour productivity growth by 1.4 to 2.7 percentage points over 10 years. This has been estimated by DSIT analysts to be equivalent to £55 billion to £140 billion economic (GVA) growth.

It is important for government to support with this, in partnership with industry. That is why the Department for Business and Trade created the SME Digital Adoption Taskforce and are working to deliver on their ten recommendations, including a series of industry roundtables and local-level pilots to tackle barriers SMEs face when adopting digital technologies including AI.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the contribution of international cooperation to the delivery of the UK's AI strategy; and what steps they are taking to strengthen bilateral and multilateral partnerships to promote responsible AI development and economic competitiveness.

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

International collaboration is vital to ensure the UK can unlock AI’s full potential.

The UK has sought to be a global leader in AI, developing our bilateral and multilateral partnerships to ensure effective collaboration towards safe, secure and responsible AI, and deliver on the AI Opportunities Action Plan.

We work bilaterally to advance UK interests and support economic growth, ranging from bilateral AI and compute partnerships with countries including Canada, France and the Netherlands, funding UK involvement in the multilateral EuroHPC Joint Undertaking and signing the U.S.-UK Technology Prosperity Deal in September 2025. We are also leading contributors to multilateral fora, including the AI Summit series initiated by the UK at Bletchley Park in November 2023. The most recent summit took place in India, and the Deputy Prime Minister led the UK delegation. The UK is secretariat to the International AI Safety Report – the world’s first comprehensive synthesis of evidence on advanced AI risks and capabilities, which is an important foundation for international collaboration. We are also shaping the global conversation on AI at the UN, OECD, G7 and G20.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the potential contribution of AI to productivity growth in the UK, particularly in professional services; and what steps they are taking to ensure that small and medium-sized enterprises are able to adopt AI tools to increase productivity.

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

The Government recognises the significant role that digital and information technologies play in driving productivity growth across the UK economy. OECD analysis indicates that widespread AI adoption could raise UK productivity by 0.4–1.3 percentage points annually, potentially adding £55–140 billion in GVA by 2030.

The Government is committed to realising these benefits, especially for small and medium-sized enterprises (SMEs). Shaheen Sayed, Chief Commercial Officer at Accenture has been appointed as the Professional Business Services (PBS) AI Champion. She will serve as a strategic link between industry and government, with a key objective to encourage PBS SMEs to adopt AI and digital technologies as a key enabler to growth and improved productivity. We are also working directly with industry on our ambitious commitment to upskill 10 million workers with essential AI skills for work through our AI Skills Boost programme.

Question to the Department of Health and Social Care:

To ask His Majesty's Government what assessment they have made of the use of AI and assistive technologies in adult social care and elderly support services, in particular its impact on improving independence and quality of life for older people.

Answered by Baroness Merron - Parliamentary Under-Secretary (Department of Health and Social Care)

Artificial intelligence (AI) and assistive technologies can support people to live high-quality, independent lives for longer. Such technologies are already being used across adult social care by care providers and local authorities to enable more preventative and personalised care, save staff time, and improve care coordination.

To help assess the use of technologies in adult social care, the Government has funded testing and evaluation of technologies in social care, including AI-enabled technologies, through the Adult Social Care Technology Fund. Emerging evidence indicates positive outcomes for people in receipt of care, care professionals, and the wider health and social care system. People using technology experienced greater independence, safety, wellbeing, and quality of life. We will publish the findings from these projects.

The Government is committed to supporting safe and appropriate adoption of technologies in social care. We are setting new national standards for care technologies and producing trusted guidance, so that people can confidently buy and use technology which support them or the people they care for. To support appropriate use of AI in adult social care, we have published guidance for care providers on AI use cases and tips for safe and responsible use. We will be setting out the Government’s strategic approach to AI in adult social care, alongside its approach to AI in health, through the National AI Roadmap. We have also launched the Adult Social Care Assessments Improvement Toolkit to help local authorities find digital and AI-enabled tools to improve services and the quality-of-care delivery.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the role of publicly-backed development finance institutions in supporting access to growth capital for small and medium-sized enterprises; and what steps they are taking to encourage collaboration between those institutions and commercial lenders to support regional economic development.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government recognises the important role that Public Financial Institutions play in improving businesses’ access to growth capital.

The British Business Bank (BBB), as the UK’s economic development bank, has supported over 100,000 smaller businesses through its programmes and has a strong track record of crowding in private capital into early‑stage equity and later‑stage growth finance.

At the Spending Review the Government expanded the BBB’s total financial capacity to £25.6 billion, enabling it to support a greater volume and range of investments. As part of this uplift, the BBB’s new Industrial Strategy Growth Capital initiative will provide £4 billion of capital to the eight priority Industrial Strategy Sectors, leveraging £12 billion of further private investment.

To help the next generation of UK unicorns at the critical stage when access to scale-up capital is most challenging, the BBB will support 10 new-to-market growth-stage fundraisings over the next 10 years, increasing the number of such funds in the market by 100 per cent.

The BBB will also deploy £2.6 billion to ensure entrepreneurs across the UK — regardless of location or background—can access the finance required to grow. This support will boost smaller business growth across all nations and regions.

The UK’s export credit agency, UK Export Finance (UKEF), also supports SMEs and regional growth by ensuring no viable UK export fails through lack of finance and insurance. UKEF offers finance for SME exporters through commercial lenders. Last year, the Government increased UKEF’s capacity by £20 billion, bringing the total to £80 billion, and is legislating to increase statutory limits of UKEF support so lack of capacity does not limit support for exporters.

We continue to strengthen coordination between PuFins. The BBB’s new Strategic Plan commits to working more closely with other Public Financial Institutions to provide clearer, more joined up routes for businesses to access the right form of finance at the right stage of their growth.

The Government will continue to monitor the effectiveness of development finance interventions and ensure they complement private‑sector activity while supporting enterprise, innovation and economic growth across every region.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the potential labour market impacts of AI-related displacement of staff; what consideration they have given to transitional income support or retraining mechanisms to assist affected workers; and what assessment they have made of the fiscal and productivity impacts of those measures.

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

The Government recognises that AI is transforming workplaces, demanding new skills and augmenting existing roles. We have launched the AI and the Future of Work Unit - a cross‑government function to research and monitor AI’s economic and labour market impacts and provide timely advice on when new policies should be implemented. We published an initial assessment of AI impacts on the labour markets in January 2026 and are preparing for a range of possible futures to ensure positive outcomes for the economy, jobs, and workers.

We are also acting now to upskill 10 million workers in AI skills by 2030 through the AI Skills Boost programme, which aims to build a digitally skilled workforce to support long-term economic growth, drive innovation and expand individual

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the cybersecurity risks arising from the deployment of advanced or autonomous AI systems with significant access to the data of businesses and public sector organisations.

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

We're confident that AI will bring huge benefits to businesses and public sector organisations.

Last year the government published the AI Cyber Security Code of Practice which sets out measures to address cyber security risks to AI systems.

Organisations which develop and deploy AI systems should use this code to protect our citizens and our digital economy, while ensuring the many benefits of AI can be realised

To complement this, the AI Security Institute conducts research on the risks posed by frontier AI, including cyber offensive capabilities. The Institute shares insights with Government security organisations, including the National Cyber Security Centre, to ensure the Government can plan for serious AI impacts.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the UK's role in international AI safety governance; and what steps they are taking to strengthen the capacity, resources and global partnerships of the AI Security Institute to support international standards setting and risk evaluation.

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

The UK AI Security Institute (AISI) was the world’s first state-backed organisation dedicated to providing a scientific of understanding transformative AI capabilities and their associated risks. AISI work and research is world-leading and similar institutes have been created across the world in UK AISI’s image.

UK AISI works closely with international partners to share information on the latest AI capabilities to inform decision making. UK AISI works particularly closely with the UK’s security partners to share information on AI capabilities as they relate to mutual national security matters.

UK AISI has agreements in place with the US Center for AI Standards and Innovation (US CAISI), Singapore AISI and other international partners to formalize AI security co-operation, informing international AI governance.

UK AISI is the coordinator of the International Network for Advanced AI Measurement, Evaluation and Science. The Network brings together international partners to advance AI evaluation science and measurement.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the deployment of AI systems in robotics and machinery; and what plans they have to introduce frameworks to regulate that deployment.

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

AI-enabled capabilities in robotics and autonomous systems are supporting growth as an essential driver of productivity across sectors including manufacturing, healthcare, and logistics. The Government is accelerating the adoption of these technologies through a new set of £52m Robotics Adoption Hubs to provide businesses with the expertise to understand and use these systems.

In response to the AI Action Plan, the Government committed to work with regulators to boost their capabilities. The government has been clear that we will legislate where needed but we will do so based on evidence where any serious gaps are.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the use of AI tools in recruitment processes, including automated screening systems; and what guidance or regulatory frameworks are in place to prevent algorithmic bias and promote fair access to employment opportunities.

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

The Government is committed to removing barriers to AI adoption, unlocking new opportunities, while ensuring technologies are fair, inclusive and accessible.

We have published the Responsible AI in Recruitment guidance which sets out good practice procuring and deploying AI systems for HR and recruitment. This guidance highlights the mechanisms that can be used to ensure the safe and trustworthy use of AI in recruitment.

A range of existing regulatory frameworks already apply to AI systems in the UK, such as data protection, equality legislation and other forms of sectoral regulation. The government will act where additional protections are needed.

Question to the Department for Business and Trade:

To ask His Majesty's Government what assessment they have made of the impact of digitalisation and automation on recruitment patterns in the UK financial services sector; and what steps they are taking to ensure that higher education and professional training pathways meet changing skills demand in this regard.

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

Setting the UK’s financial services sector up with the skills and talent it needs is an important pillar of the Government’s Financial Services Growth and Competitiveness Strategy.

The Economic Secretary commissioned the Financial Services Skills Commission (FSSC) to produce a report on how the skills system can drive growth and productivity by supporting more effective adoption and innovation of AI and other disruptive technologies. The FSSC have committed to reporting back by the end of the year.

We work closely with employers, sector bodies and providers to ensure training aligns with labour‑market demand, including through Local Skills Improvement Plans. Our reforms to higher technical education, including the rollout of Higher Technical Qualifications and the expansion of degree apprenticeships and modular learning through the Lifelong Learning Entitlement, are improving the quality and flexibility of skills pathways.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what guidance they have issued to civil servants about the use of generative AI tools in drafting policy advice and official correspondence; and what measures are in place to ensure accuracy and data security.

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

His Majesty’s Government has issued cross‑government guidance and training to civil servants supporting the safe and responsible use of generative AI.

The AI Knowledge Hub was launched in May 2025. This includes core principles and relevant guidance for civil servants and supersedes the AI Playbook for Government.

From October 2025 to February 2026 over 221,000 civil servants took part in a learning initiative ‘AI for All’ which built foundational AI knowledge, developed literacy and gave staff the skills to use AI responsibly, including drafting advice and correspondence.

We are committed to ensuring that the adoption of AI is safe, effective, efficient and ethical. Tools such as the Data and AI Ethics Framework and Model for Responsible Innovation help teams manage risks.

To ensure accuracy and application of data security principles, departments participate in large‑scale pilots designed to generate real‑world evidence on AI performance.