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

To ask His Majesty's Government what steps they are taking to support collaboration between artificial intelligence researchers and video game developers to increase innovation and high-skilled employment.

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

The government recognises AI’s established role in the UK's video game sector, such as supporting content generation and character behaviours. As technology advances, AI has the potential to further enhance creativity, efficiency, and accessibility in games development.

UK Research and Innovation (UKRI) has invested in the Centre for Doctoral Training in Intelligent Games and Game Intelligence (IGGI) since 2014. IGGI has produced over 60 PhD graduates at the intersection of AI, games, and human-computer interaction, focused on using games to drive innovation, improve well-being, and tackle societal challenges. Graduates have turned research into business value across the creative industries, including roles at Sony AI and Google DeepMind. The Government will continue engaging with the games industry to understand opportunities and challenges regarding responsible use of AI, to ensure the UK’s innovative games industry thrives in the age of AI.

Our Creative Industries Sector Plan, published in June, announced a number of measures that will support innovation across the creative industries. This includes a £100 million investment to support R&D creative clusters across the UK; and the UKRI will lead efforts to significantly increase public funding and leverage substantial industry investment to promote R&D and innovation in the Creative Industries.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to monitor the compliance of artificial intelligence systems deployed in the UK with standards on privacy, transparency and non-discrimination.

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

The UK’s data protection framework adopts a technology-neutral and principles-based approach, that applies to all organisations processing personal data, including those deploying Artificial Intelligence systems. The Information Commissioner’s Office (ICO), which is responsible for enforcing data protection laws, has taken steps to provide guidance on how data protection law applies specifically to AI systems, including through updates following recent generative AI consultation series. The ICO also has the power to investigate and impose penalties for non-compliance. Organisations deploying AI systems are required to ensure that any personal data is processed fairly, lawfully, transparently, and securely. Where legal or similarly significant decisions have been made about individuals based solely on automated processing, organisations must put in place safeguards to allow individuals to exercise their right to make representations about the decisions, contest that decision, and to obtain human intervention for it.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to support the development of UK-based autonomous and agentic artificial intelligence start-ups, particularly in regard to partnerships and infrastructure.

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

The Government is backing UK-based AI start-ups through targeted investment and strategic partnerships via several initiatives.

In partnership with DSIT, Innovate UK is launching a £1 million Prize Fund. This initiative aims to accelerate Agentic AI adoption for design across Advanced Manufacturing, Health and Life Sciences, and the Creative Industries.

Alongside this, the Sovereign AI Unit was announced in the AI Opportunities Action Plan as a new initiative specifically designed to build homegrown capability in emerging areas of the AI ecosystem. Backed by £500 million at the Spending Review, the programme is focused on unlocking opportunities where targeted public intervention can support UK leadership, scale national champions, and secure long-term strategic advantage.

The government has also committed over £1 billion to expand the capacity of the AI Research Resource (AIRR) at least twentyfold by 2030. AIRR is now live and is free to use for academics, public sector organisations, and SMEs. By taking these measures, we are ensuring the UK remains a top destination for leading AI innovation, fostering resilience and long-term prosperity.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the risks to financial stability arising from increased equity valuations linked to artificial-intelligence companies.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The government does not comment on individual market moves.

The Bank of England’s Financial Policy Committee (FPC) is responsible for identifying and monitoring risks to UK financial stability. Their latest Record (October 2025) sets out their views on the financial stability outlook, including their assessment of risks related to artificial-intelligence company valuations.

HM Treasury continues to work closely with the FPC and UK financial regulators to assess risks to financial stability, including those relating to financial markets.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the potential use of artificial intelligence by mobile networks operators to detect and block number-spoofing scams.

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

The Government recognises the threat of number-spoofing scams and thinks artificial intelligence has a key role to play in detecting and preventing telecoms fraud.

We recently published the second Telecoms Fraud Sector Charter with industry where one of the commitments is to share case studies across the sector, including with law enforcement, on where artificial intelligence has disrupted fraud. We will keep our assessment under review as the case studies develop.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of firms prioritising investment in artificial intelligence systems over recruitment for entry-level roles.

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

AI has the potential to transform jobs and the economy. The government is working to ensure the UK is well prepared, so that AI drives growth, productivity and opportunities for workers, businesses, and communities.

Whilst the evidence on the impact of AI on entry-level roles is mixed, we are actively preparing for a range of scenarios and closely monitoring its effects on early-career jobs and skills.

Through TechFirst, we are supporting those entering the workforce by funding innovation in recruitment and career pathways, enabling people to directly benefit from the growth of frontier technology sectors through better paid job opportunities.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to require artificial-intelligence shopping assistants to disclose when they are acting autonomously on behalf of consumers.

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

AI is a general-purpose technology, with a wide range of applications, which is why the UK believes that the vast majority of AI should be regulated at the point of use. A range of existing rules already apply to AI systems, such as data protection, competition, equality legislation, and online safety. In response to the AI Action Plan, the government confirmed it would work with regulators to boost their capabilities.

The Government is committed to preparing the UK for the changes AI will bring and welcomes evidence on novel consumer developments which may inform future policy.

Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government what assessment they have made of the use of artificial intelligence to generate objections to planning applications.

Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)

We are aware of concerns that AI could be used to generate objections to planning applications, and the impacts this may have on local planning authorities and the Planning Inspectorate. We are considering this and the role of AI more generally in the planning system and want to ensure that an appropriate balance is reached.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the impact of the decision of the High Court in Getty Images v Stability AI [2025] EWHC 2863 (Ch) on copyright and innovation policy, in particular in relation to the use of copyrighted materials to train AI models.

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

The Government is aware of the judgment in this case and is considering its implications. We are currently preparing a report on copyright and artificial intelligence, for publication next year. This report will take into account a range of views and evidence, including this judgment.

We recognise how important decisions on AI and copyright are to individuals and business across the creative industries and AI sector and are committed to developing an approach that allows both to thrive.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the Cyber Security Breaches Survey 2025 finding that over 40 per cent of UK businesses experienced a breach or attack in the past 12 months.

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

The Cyber Security Breaches Survey shows the cyber threat is significant and it is critical businesses leaders take urgent steps to improve their cyber security. That is why the Government wrote to chief executives and chairs of leading UK companies recently asking them to make action on cyber security a top priority.

The Government has developed tools for businesses to protect themselves, including:

• The highly effective Cyber Essentials Scheme, shown to reduce the likelihood of a cyber insurance claim by 92%,
• The Cyber Governance Code of Practice, to help boards and directors manage cyber risks, and
• NCSC free tools and support, including training for boards and staff, the Early Warning system and the Cyber Action Toolkit for small businesses.

The Government is also taking action to protect the economy. The Cyber Security and Resilience Bill, introduced earlier this week, will boost our cyber defences and better protect our essential public services. Next year, we will publish a new National Cyber Action Plan setting out how Government will respond to the cyber threat and work with industry to raise resilience across the economy.

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

To ask His Majesty's Government what steps they are taking with industry partners to develop innovation funding and training programmes for the use of generative artificial intelligence in the video games sector.

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

The Government has partnered with leading tech firms to deliver AI skills training to 7.5 million UK workers. In the creative industries, Skills England have conducted research and analysis to identify AI-related skills gaps across the creative industries and support emerging creative AI roles. As outlined in the Creative Industries Sector Plan, we will introduce short courses in England, funded through the Growth and Skills Levy, in areas including AI. We will also work with the Digital Skills Council, an industry-led advisory body, to support sector training pathways and ensure the workforce is prepared for the future of work.

The Government recognises that AI already plays an established role in the UK's video game sector, having multiple use cases from content generation, character behaviours, and more. As technology advances, AI has the potential to further enhance creativity, efficiency, and accessibility in games development.

DCMS will continue to engage with the games industry to understand opportunities and challenges related to the responsible use of AI, ensuring that we continue to support our innovative games industry to thrive in the age of AI.

Question to the Department for Business and Trade:

To ask His Majesty's Government what steps they are taking to develop a regulatory framework to ensure that workplace use of artificial intelligence tools complies with UK employment and data protection law.

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

The Information Commissioner’s Office has committed to developing a statutory code of practice on artificial intelligence, so organisations have certainty on how to deploy AI in ways that uphold people’s rights and build public confidence.

Artificial Intelligence is a general-purpose technology with many applications, which is why the government believes most AI systems should be regulated at the point of use by our existing regulators.

The Plan to Make Work Pay set out the Government’s commitment to work with workers, trade unions, employers and experts to ensure rights and protections keep pace with technological change.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of international policy cooperation on regulating artificial intelligence in financial services; and whether they plan to develop further UK policy in this area.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The government’s ambition is to make the UK a global leader in AI, leveraging our dual strength in financial services and AI to drive growth, productivity, and consumer benefits. Encouraging safe adoption is an essential part of realising that ambition.

International collaboration is vital to ensure that we can collectively unlock AI’s potential. The UK remains committed to working internationally, including through fora such as the Financial Stability Board (FSB), to support the safe adoption of AI in the financial sector.

Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to review tax and residency rules, following reports of UK technology founders relocating overseas.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The UK uses the Statutory Residence Test (SRT) to determine UK residency for tax purposes. UK tax residents normally pay tax on their worldwide income and gains, while non-UK residents only pay UK tax on their UK income and gains.

The Government’s priority is improving the UK’s competitiveness internationally and securing economic growth.

The Government is backing entrepreneurs and fostering a pro-business environment by ensuring the tax system is designed to support innovation and economic growth. That is why we have announced a package of measures to back entrepreneurship at Autumn Budget 2025.

The Government keeps tax and residency rules under review to ensure they remain competitive and responsive to the needs of innovative sectors, including technology.

Question to the Department for Business and Trade:

To ask His Majesty's Government what assessment they have made of the findings of SumUp's UK Business Confidence Report 2025, and of the implications of those findings for policies relating to the cost pressures faced by small and independent retailers.

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

We recognise the challenges facing businesses at the moment. This is why we are taking action – including through creating a fairer business rates system which includes introducing permanently lower rates for eligible retail, hospitality and leisure properties.

We're protecting the smallest businesses from the impact of the increase to employer National Insurance by increasing the Employment Allowance from £5,000 to £10,500, which means that 865,000 employers will pay no employer NICs at all this year.

We also recognise the challenge in accessing the right skills which is why we've created Skills England, the new Growth and Skills Levy, the introduction of the Lifelong Learning Entitlement, as well as qualifications reform and the Independent Curriculum and Assessment Review, this Government is ensuring employers will be better supported to recruit and train the domestic workforce with the skills they need.

Finally, our Plan for small and medium-sized businesses aims to tackle late payments, boost access to finance, and remove red tape to enable SMEs across the country to grow and thrive.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to work with technology companies and child safety agencies on regulatory frameworks for detecting child protection risks in artificial intelligence systems.

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

Illegal provisions have been in place since March, and additional protections for children since July of this year. Under the Online Safety Act, AI services that allow users to share content with one another or search live websites to provide results must protect all users from illegal content and children from harmful content.

The Government engages with a range of stakeholders on the impact of AI and will continue to act to address new and emerging AI harms. Through the Crime and Policing Bill we are introducing an offence to criminalise AI models which have been optimised to create child abuse material and have tabled amendments to support the stringent testing of AI systems for child sexual abuse material risks.

Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to improve data quality standards in financial services to ensure the reliable use of artificial intelligence in regulatory compliance.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The government’s ambition is to make the UK a global leader in AI, leveraging our dual strength in financial services and AI to drive growth, productivity, and consumer benefits. Encouraging safe adoption is an essential part of realising that ambition.

As set out in the Bank of England and Financial Conduct Authority’s October 2022 discussion paper on artificial intelligence and machine learning, a range of existing legal requirements and guidance are relevant to the UK financial sector’s use of AI across the AI lifecycle. This includes in relation to data quality.

The government’s response to the AI Opportunities Action Plan also sets out the steps we will take to responsibly unlock data assets in the public and private sector.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the risk to consumers using AI chatbots for financial advice, following the consumer study findings from Which? stating such tools provided inaccurate financial advice.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The government recognises that many people lack the support they need to make financial decisions and are increasingly turning to technologies such as general purpose large language models for help.

Together with the Financial Conduct Authority (FCA), the government wants to ensure that people can receive meaningful support from firms they know and trust, such as their bank or pension provider. That is why we are enabling trusted firms to do more to proactively support their customers.

To deliver this, the government is introducing a new regime for targeted support, which will allow firms to engage directly with customers and suggest products or courses of action for their financial situation. As announced by the Chancellor at Mansion House, targeted support will be available online in time for the next financial year.

Alongside this, the UK’s data protection framework applies to the processing of personal data across the design, development and deployment of AI tools. Organisations are required to ensure that personal data is processed fairly, lawfully, transparently, and securely. People also have a number of rights over how their personal data is used, such as the right of access, rectification, or erasure.