AI Opportunities Action Plan

Lord Vallance of Balham Excerpts

Thursday 5th June 2025 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my technology interests as set out in the register.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

The Government are taking action to capitalise on AI’s potential and welcomed the publication of the AI Opportunities Action Plan, accepting all 50 recommendations. Implementation is well under way. We have launched the AI growth zone application process, held the first meeting of the AI Energy Council and signed an MoU with Anthropic. We are delivering the AI research resource, including the Isambard-AI and Dawn supercomputers, which will boost the UK’s AI compute capacity thirtyfold.

[Lord Holmes of Richmond (Con)]

My Lords, Matt Clifford delivered an excellent report, with 50 wide-ranging recommendations across our economy and society. Does the Minister agree that the fact that they rightly range widely makes clear the need for the Government to bring forward cross-sector AI regulation to ensure that, wherever we come across AI in our lives, there will be clarity, certainty and consistency on how we have that AI experience, which would surely be good for innovators, investors, creatives, citizens and our country?

[Lord Vallance of Balham (Lab)]

There are three approaches to making sure that we get consistency and appropriate regulation and support, as the noble Lord suggested. The first is that the regulators look after AI in the domains which they already look after. We are making sure that they are properly supported to do that and can join up—for example, in the Digital Regulation Cooperation Forum—to learn lessons across different areas as they apply AI in their domains. The second is the approach of assurance: to develop an assurance industry in the UK which can assure people that, when they use AI, it performs what they expect it to and in the way they expect. That is true both for the Government—the Artificial Intelligence Playbook for the UK Government addresses some of the wider issues—and in developing the assurance industry overall and looking at areas such as bias in systems. The third, as he alluded to, is the question of what happens as artificial general intelligence, artificial superintelligence and the latest models come along. We remain committed to bringing forward AI legislation so that we can realise the enormous benefits and opportunities of this technology in a safe and secure way. We continue to refine our proposals and hope to launch a public consultation before the end of the year.

[Lord St John of Bletso (CB)]

My Lords, will the Minister elaborate on what steps are being taken to promote more co-operation and collaboration between the public and private sectors in AI development and utilisation?

[Lord Vallance of Balham (Lab)]

The interaction between the public and private sectors is crucial in this, as it is in many other areas. UKRI is leading a number of public programmes which support universities and the ability to get spin-outs and developments from them, so there is considerable interaction at the beginning of the process. There is also interaction throughout the process; for example, the AI Security Institute is working with some of the largest companies and looking at their models to ensure that, as they are developed, issues that could come up are foreseen and, we hope, mitigated in advance. Collaboration between the public and private sectors is crucial in AI, as in many areas of technology development.

[Lord Clement-Jones (LD)]

My Lords, the Government have agreed to create a new function—UK sovereign AI—to partner with the private sector and maximise the UK’s stake in what is described as frontier AI. Further details were promised by spring 2025. By my calculation, spring is over. What powers will this unit have to invest directly in companies, create joint ventures or provide advanced market commitments, as recommended in the plan, and how will it ensure economic benefit and influence on AI governance in the UK?

[Lord Vallance of Balham (Lab)]

AI sovereignty is a crucial issue. It ranges from questions of what infrastructure and companies we need in this country to what public work we need to do to make sure that we can access the AI required. AI sovereignty is very much part of the AI action plan; the spending review is under way and there will be more information on what exactly will happen in its different areas post spending review. The areas the noble Lord raises are all important—they are the right ones. Spring is nearly over. It will not be in spring, but we hope to give more information shortly.

[Lord Hamilton of Epsom (Con)]

My Lords, the press have indicated that there could be enormous improvements in public sector productivity if AI were introduced. What savings might be made in the public sector if we introduce AI?

[Lord Vallance of Balham (Lab)]

A series of funded programmes have been looking at the introduction of AI in government in particular. Some reports were published in the last couple of weeks showing time savings and degree of satisfaction, and identifying where the use of AI will be most useful and where it will be problematic. There are already some outputs from that work in the public domain. We will continue to make them public as we assess the performance of AI in government systems. A unit called i.AI is developing new approaches, such as Humphrey, which have been widely publicised.

[Viscount Camrose (Con)]

My Lords, I declare my tech interests as set out in the register. We welcome the GDS report, to which the Minister referred, on driving tactical productivity improvements in the Civil Service with AI tools. Does he agree that to realise deep strategic change through AI in the Civil Service will require a hugely ambitious digital transformation? Are the Government being realistic about how challenging this is likely to be? How will they keep Parliament updated on their approach and progress?

[Lord Vallance of Balham (Lab)]

Oddly enough, I am aware of how difficult this is and how much work is needed. The requirements range from data to the ability to get it into a form that can be read and be interoperable; that is behind the national data library and the health data research service which we have announced. There are skills issues right across the Civil Service and elsewhere which need to be addressed, with skills increased, along with the application uptake of AI by businesses across the UK. All those are part of the AI Opportunities Action Plan, and there are things under way in each of those areas. I do not think this is straightforward. It will require some experimentation. There will be some things that will not work as well as expected and others that we will need to move faster on. I expect this to be a very dynamic field over the next few years.

[Lord Tarassenko (CB)]

My Lords, a strong emphasis in the AI Opportunities Action Plan is the development of human capital to maintain the UK as one of the leading countries in the world for AI. In the last four years for which the figures are available there has been a decrease of 39% in the percentage of UK-domiciled computer science graduates undertaking doctorates. This year, the situation is likely to be even worse, as for the first time EU students finishing a four-year undergraduate course in the UK will no longer count as home students. Is the Minister as concerned as I am by the sharp decrease in home students undertaking PhDs in computer science and AI? Are the Government considering any measures to reverse this trend, perhaps by reducing the interest rate on undergraduate loans to zero while graduate students are doing their PhDs?

[Lord Vallance of Balham (Lab)]

As the noble Lord points out, there has been a decrease in PhD funding through UKRI from 2018 to 2022. The overall number of PhD students has not gone down, but the sources of funding have become more diversified. It is an important issue for the UK to be good and capable in the numbers of PhD students we have. Two new programmes are being developed as part of the AI opportunities plan: the AI fellowship programme and the AI scholarship programme. Both will be important to ensure that we have the skills we need to deliver on the plan. I take the point about the number of students who have gone from computer science into PhDs. That is an area that we need to look at and understand. As the noble Lord is aware, some of it is a classification question, in relation to EU students, but there is no doubt that we need to keep the number of students doing PhDs up.

[Lord Vaizey of Didcot (Con)]

My Lords, to follow on from the noble Lord’s point about skills, behind the flashiness and excitement of AI lie some boring things that have to be done. One of the big challenges to support an AI ecosystem in the UK is the byzantine procurement rules of government. Can the Minister tell us what he is doing to ensure that small and growing British-based AI companies have a crack at getting government contracts and therefore growing?

[Lord Vallance of Balham (Lab)]

This is an area close to my heart. It is a crucial part of stimulating innovation right across the patch. Government procurement ought to be a way in which innovation companies get their first indication of a signal, in many cases, of a potential customer. A commercial innovation hub has been set up in the Cabinet Office, precisely to try to make it much easier to deal with SMEs and others, which has historically been extremely difficult to do from a government procurement perspective.

Science and Innovation: Alan Turing Institute

Lord Vallance of Balham Excerpts

Monday 19th May 2025 Lords Chamber

[Lord Clement-Jones]

To ask His Majesty’s Government what steps they are taking to strengthen science and innovation following reports that the Alan Turing Institute is cutting research projects.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

My Lords, the Government are protecting record levels of R&D investment, with £20.4 billion allocated in 2025-26. Through UKRI and other mechanisms, we are supporting science innovation across the UK to better deliver on the Government’s priorities and maximise the potential of UK science. The Alan Turing Institute is of course an important part of the R&D system and is currently focusing its research activities on fewer projects, in line with its refreshed Turing 2.0 strategy. The Alan Turing Institute is an independent organisation, and this realignment process is being handled internally.

[Lord Clement-Jones (LD)]

My Lords, I welcome today’s funding announcements. However, after a review by the EPSRC, a revised strategy and a further external review, the Turing is shutting down at least 21 science and innovation projects, three out of the four science and innovation directors have resigned, together with the chief technology officer, and at the end of last year staff sent a letter of no confidence in the leadership, saying there had been a “catastrophic decline in trust” and claiming that the viability of the institute was under question. What does all this mean for the future of the Turing, which has an enormously valuable track record and role in the AI research and innovation ecosystem? Will it continue to have a leading role in advising on AI ethics, regulation, standards and responsible innovation?

[Lord Vallance of Balham (Lab)]

The Alan Turing Institute was set up by six universities and now has some 65 university partners. The 2023 quinquennial review identified a number of governance and programme issues that needed to be addressed, including that the institute was spread thinly across a broad area. The Turing 2.0 strategy will focus on fewer areas, put more resource behind those projects and ensure that there is real progress to build on the strengths that the noble Lord has rightly identified. The four Alan Turing Institute challenges are in health, the environment, defence and security—in which it has a very major role to play—and fundamental AI. Going through this repositioning is a major undertaking, involving a lot of current upheaval.

[Baroness Bull (CB)]

My Lords, I declare my interest as a board member of UKRI. Does the Minister agree that, in terms of innovation, science research and arts and humanities research play a complementary role, and that the latter helps us to, among other things, better understand the historical context and the impact of change on society, as well as to communicate science to a broader audience? What are the Minister and the Government doing to promote and enhance arts and humanities research and to promote its value to the broader innovation economy?

[Lord Vallance of Balham (Lab)]

I thank the noble Baroness for her very important question. She may be aware that the final thing I did before leaving my job as the Government’s Chief Scientific Adviser was to commission work on the creative industries by the Council for Science and Technology, for exactly that reason. Most start-ups are populated not just by technicians or scientists; they have people from arts and humanities backgrounds as well. The business of where your science fits into society is incredibly important and requires people with a multitude of skills. Therefore, we will continue to support the arts and humanities for their own sake, and for the benefit they bring to the economy through creative industries and their contribution to science and technology companies.

[Baroness Morgan of Drefelin (Lab)]

My Lords, the life sciences sector plays a key role in promoting innovation in the UK, and we can all be very proud of the work that it does. One of the key factors in promoting an enhanced impact is the speed at which clinical trials can be accelerated. Can the Minister say a little bit more about what progress is being made? It is quite a complex challenge to speed up clinical trials, given all the regulation, but doing so has the huge benefit of creating more jobs, contributing to growth and helping patients access new and potentially more effective drugs.

[Lord Vallance of Balham (Lab)]

My noble friend is quite right that clinical trials are of huge importance and benefit healthcare just from the very fact that they take place in the healthcare system, irrespective of their outcome. Historically, we have been extremely good at clinical trials in this country. Indeed, during Covid, the world’s most important clinical trial took place here: the recovery study, which was the biggest, fastest and most important study and gave definitive results. However, it is also true that our performance in commercial clinical trials has deteriorated over the past few years. We are absolutely determined to return that to where it should be, and we will be clear in a very public way about the metrics and our progress against those, to make sure that we get back to where we belong.

[Baroness Royall of Blaisdon (Lab)]

My Lords, I remind noble Lords of my interests in the register. My noble friend the Minister is the Oxford-Cambridge innovation champion, to ensure the success of this economic engine for the country as a whole. Would he agree, however, that, in addition to the brilliant research and innovation from our universities and other institutions, it is necessary to bring local, regional and national government together to support the necessary infrastructure and investment, and the skills base? Would he further agree that it is vital to make all such developments inclusive, so that nobody is left behind and the people of the local communities can benefit from it?

[Lord Vallance of Balham (Lab)]

I thank the noble Baroness. I wonder whether she read the piece I wrote, which said something very similar. I agree entirely that this has to be inclusive innovation and that it is not about two shiny objects at the end of the line—Oxford and Cambridge—but about the corridor in its entirety. It absolutely needs to involve all the local partners in making this happen. At the end of it, it needs to improve opportunities and the economics for everybody.

[Lord Markham (Con)]

I am sure the Minister would agree that, if we are to continue to be the tech superpower, we need regulatory clarity, institutional continuity and competitive energy costs. Does he therefore share our concern that, in all three areas, we are losing ground?

[Lord Vallance of Balham (Lab)]

I agree that those areas are important. They are, of course, part of the system, including other matters such as procurement of innovation and the skills we need. On the regulatory side, the Regulatory Innovation Office is there to try to free the obstructions that exist to some innovation. The need to reduce reliance on gas and increase our ability to have a domestic supply is crucial to get energy prices to the right place. All these things are important. It is not just the initial science; it is the ability to turn that into companies that can subsequently scale.

[Lord Patel (CB)]

My Lords, I agree with what the Minister said about why the Alan Turing Institute ran into trouble. It was partly because of poor governance—it was thinly spread, as he said—but he also mentioned that the institute is independent and will therefore reform itself. What oversight does his department have to ensure its governance works this time?

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

I thank the noble Lord. The Alan Turing Institute is indeed an independent charity, but it receives funding from the Government. Indeed, from 2024-29 it will receive £20 million a year of core funding, which is higher than the previous period, so more money is going into the institute. With that contribution, and, indeed, the contribution that comes from UKRI, there is a clear responsibility for government to ensure that this is run well and that it does indeed deliver on the changes. I met the leaders of the Alan Turing Institute this week and visited it very recently to look at some of the programmes. We will keep an eye on the progress towards this Turing 2.0 programme for transition and, indeed, the very important work that goes on, especially in defence and security.

[Baroness Blackwood of North Oxford (Con)]

My Lords, I declare my interest as a former trustee of the Alan Turing Institute. Bearing in mind the outline that the Minister gave of the Turing 2.0 strategy, does he agree that the Turing could have a pivotal role in readying our public servants, but also our regulators, for the upcoming benefits of AI, and in optimising the use of AI for greater effectiveness and readiness?

[Lord Vallance of Balham (Lab)]

The Alan Turing Institute now has four main themes—health, environment, defence and security, and fundamental AI—but it also has the Centre for Emerging Technology and Security and the AI Standards Hub. It will continue to be a beacon for some of these areas. It is working closely with government on some of the issues that will then lead to greater adoption in the public sector, which is important. The one that has happened most recently is its work on Aardvark Weather, an AI weather forecasting system that is 10 times faster and uses a thousand times less power than conventional approaches.

Scientists: Working in the United Kingdom

Lord Vallance of Balham Excerpts

Tuesday 13th May 2025 Lords Chamber

[Viscount Stansgate]

To ask His Majesty’s Government what action they are taking to encourage scientists from around the world to do their research and associated work in the United Kingdom.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

The UK has a world-leading science base, supported by some of the top universities and research institutions, and offers prestigious fellowships and professorships through UKRI and the national learned academies. As the immigration White Paper sets out, we will now go further in ensuring that the very highly skilled, including top scientists and researchers, have opportunities to come to the UK and access our targeted routes for the brightest and best global talent. We will set out more details in due course.

[Viscount Stansgate (Lab)]

My Lords, I like to think that my noble friend the Minister’s Answer does not go quite as far as he personally would want it to. In America, the Trump Administration are mounting an attack on universities and scientific research. That is a matter for them, but for us it offers an unparalleled opportunity, and we must grasp it. Can the Government not develop proposals that would attract, encourage and facilitate not only talented individuals but whole research groups, who could come to do their work in universities around the UK? Does my noble friend not agree that this would offer the prospect of a brain gain of immeasurable potential for our future growth?

[Lord Vallance of Balham (Lab)]

I thank my noble friend. We have always been the beneficiaries of brain gain; we have been attractive to top-class overseas researchers for many years. Indeed, about one-third of our Nobel prize winners are first or second-generation immigrants. For 2025-26, UKRI has roughly £770 million for talent funding, of which £170 million is for future leader fellowships. There is an opportunity, as there always is, to attract people from overseas to the UK, both individuals and groups; indeed, there are mechanisms in place to do so. I am looking very carefully at what further mechanisms can be put in place to make sure we remain a country that attracts the very brightest and best.

[Lord Clement-Jones (LD)]

My Lords, the Government’s immigration White Paper, as the Minister said, expresses the ambition to attract top global talent, including scientists. However, measures such as the increased skills charge, alongside high UK visa costs and the challenging context of flat cash real-terms cuts in core research funding, create barriers to recruitment. The Government seem not to be very clear whether they want to attract international scientists or not. Do we not need a proper long-term plan with increasing investment to maintain the UK’s research leadership and attract talent?

[Lord Vallance of Balham (Lab)]

The current SR period has £20.4 billion for R&D, which is the highest amount there has been. Of course, a proportion of that is about talent attraction. The talent attraction announced in the White Paper was geared towards the global talent visa—the level of highly skilled people who can bring great value added to this country. The desire is to increase the threshold for the skilled worker visa to aim for more qualified, more talented people. On the high-talent end of the system, there are clear measures in the immigration White Paper to try to get those systems to work better and faster. The cost of visas and the health surcharge is now met on UKRI grants and on Horizon Europe grants.

[Lord Tyrie (Non-Afl)]

The Minister will have sensed the widespread support for the Government’s plan to launch an initiative in this field. Can we have a date on which this is going to be published, and clarity on whether it will target American academics, who have become very unsettled by the assault on academic freedom in the United States? Can he also tell us whether the Prime Minister’s recent announcement on immigration will have any adverse consequences for what was originally planned?

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

As I said in answer to an earlier question, I am keen to make sure we have a robust system to attract the best talent from all over the world—this is not targeted at any particular place—and I will make announcements about that very shortly. In the immigration White Paper, the routes for a global talent visa are specifically pulled out as ones that will become easier. They will be facilitated to make this happen, as will those in other highly skilled areas. There are measures in the White Paper that make that easier for the highly skilled individuals we need both for the research sector and, indeed, the tech sector and companies.

[Lord Turnberg (Lab)]

My Lords, I am sure my noble friend is aware of the large number of charities that support research that brings overseas senior academics to the UK. I mention the Royal Society Wolfson Fellowships; Weizmann UK, which brings scientists from the Weizmann in Israel to the UK; and a large number of others. They contribute enormously to our science space.

[Lord Vallance of Balham (Lab)]

I thank my noble friend. He is quite right; there are a number of schemes from charities and, indeed, as I have said, from the academies. Over £200 million of funding goes to the national academies to support their core activities. The vast majority of that is spent on research and talent schemes. Some £400 million was given to the Royal Society and the Royal Academy of Engineering as an endowment for their specific fellowship schemes—the Faraday Discovery Fellowships, and, for engineers, the Green Future Fellowships. There are many charities that also contribute, and we are fortunate in this country to have charities, including the Wellcome Trust, that provide substantial funding for fellowship schemes.

[Lord Mair (CB)]

My Lords, other countries have been quick to act decisively in the light of the Trump Administration’s severe cuts to US science budgets. Is there not a real danger of the UK falling behind? Should this not be addressed very urgently?

[Lord Vallance of Balham (Lab)]

I reiterate the point I made: it is very important that we make schemes available to people from all over the world; it is not about targeting a specific country. We will do so, and we are working on schemes to make attractive offers both to individuals and to groups. This is an important area. There have already been many approaches to universities for people who want to base themselves here, and it is important that we have a system that is sustainable and effective, making sure that researchers can work in what is a world-class system in the UK.

[Viscount Camrose (Con)]

My Lords, whether they are homegrown or imported, it is clear we are increasingly going to need more researchers in this country. Equally increasingly, we are competing internationally for research talent. What, therefore, is the Government’s assessment of our overall net attractiveness to researchers right now? How do the Government propose to monitor this going forward and adapt as needed?

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

An estimated 17% of R&D workers in the UK in 2023 were non-UK. In that year, 7% were EU nationals and 10% were non-EU. In the university sector, about 37% at the top research and teaching universities are non-UK nationals. About 25% of the life sciences workforce was born outside the UK. The noble Viscount is quite right that there are many people we need here. We have always needed them, we will need them, and we are monitoring very carefully how these numbers are evolving.

As part of the immigration White Paper, the labour market evidence group is being set up—comprised of the Industrial Strategy Advisory Council, the Department for Work and Pensions, Skills England and the Migration Advisory Committee—to make sure that we have a clear view of future needs.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, will my noble friend the Minister talk to his colleagues in the Home Office to ensure that the graduate route, which was established some years ago and provides universities in the UK with academic talent and scientists from other countries—I think particularly of Queen’s University Belfast, which is assisted by students and scientists from south-east Asia—is not minimised or undermined in any way?

[Lord Vallance of Balham (Lab)]

I thank the noble Baroness for her question. In answer to the first part, I can confirm that the Minister sitting next to me heard that, so the Home Office will be aware. The graduate visa system is an important system. The changes in the immigration White Paper effectively reduce from 24 months to 18 months the amount of time a graduate has after finishing their course to get a job. The reason for that is clear: to try to make sure these people get jobs that are highly skilled and that they can continue in, rather than jobs that are not highly skilled.

This is an important route. It is worth noting that in 2023-24, the number of graduate visas increased by 49%. This has been a rapidly growing area. It is important that we make sure we get this right and that these people enter high-skilled jobs.

Artificial Intelligence: Public Services

Lord Vallance of Balham Excerpts

Tuesday 6th May 2025 Lords Chamber

[Lord Brooke of Alverthorpe]

To ask His Majesty’s Government what plans they have to use artificial intelligence to improve public services.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

Public services are of course central to the AI Opportunities Action Plan, which outlines how we will improve these services to drive growth. We have announced £42 million for three frontier AI exemplars, driving departments to use AI to boost productivity and citizen experience. We are adopting a flexible “scan, pilot, scale” approach to AI adoption in public services and, just this week, the NHS published guidance on ambient voice technologies, which can transcribe patient-clinician conversations and more.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am grateful to my noble friend the Minister for his reply. Could we bring this a little nearer to home? Perhaps he might say what we can do, if there is the need for it, to improve our performance and the efficiency and effectiveness of both Houses of Parliament. If so, what plans do we have to seek those objectives?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord. It is in the Government’s interest to help here as much as we can. However, as the noble Lord will know, that is a parliamentary accountability, not a government one. The Parliamentary Digital Service has issued guidance for Members and their staff on the use of AI, which is going to be updated regularly as required—and, of course, as the understanding around AI improves. Seminars on how to use generative AI effectively are available to all Members and their staff, and the Parliamentary Digital Service is looking at opportunities to apply AI safely to support the work of Members in both Houses.

[Baroness Coussins (CB)]

My Lords, does the Minister agree that caution is needed if public services, in an attempt to be inclusive but also to save money, convey information in languages other than English that has been produced by machine translation? That works pretty well for standard Romance languages and for German, but it is much less effective for languages with many dialects, such as Arabic, and it is currently virtually useless for Asian or African languages because they have not been used in AI training data. Is all this being fed into emerging AI policy and prospective regulation?

[Lord Vallance of Balham (Lab)]

I thank the noble Baroness. This is an incredibly important point. As the noble Baroness rightly says, the AI training datasets are often not on the right things, and this is an example where there is a need for training of models in different languages and dialects. It will be very important as part of public service improvements. I thank the noble Baroness for raising this issue—and yes, it is something that is being looked at.

[Lord Kirkhope of Harrogate (Con)]

This Parliament and our Governments have a chequered history of procurement of software to be used in various government departments. Can the Minister kindly confirm that we will be more rigorous whenever we are procuring services to assist us in the deployment of AI in the public service?

[Lord Vallance of Balham (Lab)]

As I mentioned, there are three AI exemplars being used at the moment. They are: future customer experience; citizen AI agents —so starting with an AI agent to help young people to find a job or an education pathway; and the government efficiency accelerator. In all these examples, procurement is exactly one of the things that needs to be looked at. I have mentioned previously in this House that AI assurance services are part of this as well. The point raised, which is that it is easy to get the wrong thing, is right, and we need to look very carefully at this.

[Lord Clement-Jones (LD)]

Back in January, the Blueprint for Modern Digital Government stated the intention to establish

“an AI adoption unit to build and deploy AI into public services, growing AI capacity and capability across government, and building trust, responsibility and accountability into all we do”.

How will this new AI adoption unit ensure that ethical principles, safety standards and human rights considerations are embedded from the very beginning of the AI adoption process throughout the public sector rather than being treated as a secondary concern after deployment?

[Lord Vallance of Balham (Lab)]

The deployment of AI has started, as the noble Lord recognised, and I have given the three headline exemplars—and others are being put in through the incubator for AI that sits within DSIT. He raises a crucial point, and that is why the responsible AI advisory panel is being set up, which will include civil society, industry and academia to make sure that this is looked at properly. An ethics unit is already looking at this, and there are many diverse groups across government. What the Government Digital Service is trying to do is to pull it together into something more coherent, of which I think the responsible AI advisory panel is an important part.

[Baroness Chakrabarti (Lab)]

My Lords, a slogan from the early days of computing is, “Rubbish in, rubbish out”. Biased historic training data can bake discrimination and historic bias into the system, whether on stop and search, which we have discussed, or whether on insurability or employability, and so on. To flip my noble friend’s very positive and commendable Question, what are the Government going to do to ensure that there are safeguards to ensure that historic bias is not baked into the system?

[Lord Vallance of Balham (Lab)]

Once again, that is a very important question. The noble Baroness is absolutely right. It is as true for AI as it is for other systems: rubbish in, rubbish out. Well-curated, properly understood datasets are crucial. It is one of the reasons that where there are well-documented, well-curated datasets that can be used to train models for government purposes, we will be pursuing those. We will use the AI assurance mechanism that I discussed previously to try to make sure that we identify where there are systems that carry risks such as the one the noble Baroness raises.

[Baroness Bull (CB)]

My Lords, the Minister will know that the US and China are currently responsible for the 80% of the world’s largest AI models. Does he agree that in an increasingly unstable geopolitical environment, and with clear evidence of diversions on values, Europe’s dependency could quickly become a vulnerability, in terms of not just public services but the upholding of our democratic values? Given that the EU and UK have complementary strengths and values in common, will he persuade the Government to pursue, with the EU, a shared attempt to close the competitive gap? Might this be on the agenda at the EU-UK summit in May, given that the trade and co-operation agreement is totally silent on AI?

[Lord Vallance of Balham (Lab)]

We are working closely with our friends in Europe on AI, both at the safety and security level through the AI Security Institute and more broadly. We have a bilateral meeting with France coming up in July, where this will be discussed. There is a need for all of us to think about which models we want to rely on and become dependent on and, indeed, where models can be made that are not general-purpose, wide, generative models but narrower models that can answer the questions we need to answer. Not everything comes down to broad, generative AI.

[Viscount Camrose (Con)]

My Lords, the Government’s plan to drive tens of billions in productivity savings in the public sector with AI is, of course, welcome. But does the Minister agree that any success here will depend on the effective measurement and reporting of progress? If so, what can he tell us today about how progress is going to be measured and what progress has been made so far?

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

As the noble Viscount, Lord Camrose, rightly suggests, between 4% and 7% of public sector spend could be reduced with a mix of digitalisation and AI. Both those things become important; it is not all AI, a lot of it is digital change. I have indicated the exemplars that are being piloted at the moment, both at a cross-government level and the ones being led out of DSIT as part of the incubator for AI. These are being assessed and evaluated. For example, programmes that look at the responses—sometimes tens of thousands—to consultations are being evaluated not only for the answers they give but for the time that might be saved by using them. So a series of metrics will be developed to understand the impact of these measures.

[Lord Brennan of Canton (Lab)]

My Lords, the Government are to be congratulated on seizing the opportunity that AI presents to improve our public services; it is a great example of how it can be a great servant to humanity. Is the Minister aware, though, of concerns in the creative industries about it becoming a master rather than a servant of human activity? What measures are the Government taking to ensure that those concerns are met?

[Lord Vallance of Balham (Lab)]

Like almost every technology that has been introduced, this can do good and harm. The noble Lord is quite right to raise the question of where it is going to cause more harm and, indeed, where it does something that is not in the interest of the community. That is something that is being looked at; it is one of the reasons that the AI Security Institute was set up—to try to understand what these models will do and where we need to have particular concern for risks. He is also right that one of the aims that should be there for any AI is to free up time for humans to do the things that only humans can do. It is a very important principle, whether for application in the NHS or across the public sector.

AI: Cross-sector Legislation

Lord Vallance of Balham Excerpts

Tuesday 29th April 2025 Lords Chamber

[Lord Holmes of Richmond]

To ask His Majesty’s Government whether they plan to introduce cross-sector legislation on artificial intelligence in 2025.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

The Government remain committed to bringing forward AI legislation to realise the enormous benefits of this technology in a safe manner. We are continuing to refine our proposals to deliver this, ensuring that they are proportionate and incentivise investment and innovation. We will launch a consultation later this year. Most AI systems are already regulated at the point of use by the UK’s existing regulators. In response to the AI action plan, the Government are committed to working with regulators to support them in boosting their capabilities.

[Lord Holmes of Richmond (Con)]

My Lords, last month I published a report making the case for cross-sector AI legislation. Is it not clear that AI is already impacting, positively and otherwise, cross-sector, cross-society and cross-economy? If we do not have a cross-sector approach through legislation, how will we enable the clarity, the certainty and the consistency of approach which will bring forward the confidence to enable innovation and investment—good for citizen, good for consumer, good for creative, good for British business and good for our country?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for his question and enjoyed reading his report very much. There are three ways in which this cross-government AI approach will be looked at. First, as I say, the existing regulators will regulate their own areas. They will also be brought together more. The digital forum already brings together regulators around AI and has been given more money to ensure that the regulators can join up on this. Secondly, the development of assurance tools, which has been outlined in the AI Opportunities Action Plan, will allow us to understand that the actual use of AI is using tools that are validated. There will be a market in making sure that the validation system grows and becomes an important way of assuring users. Thirdly, the consultation around the newer models —advanced general intelligence and superintelligence, as it arrives—will require a cross-cutting general piece of work, which is where the consultation starts later this year.

[Lord Watts (Lab)]

My Lords, is it not the case that there has to be balance between AI and big tech and the creative industries? Do we not need to make sure that one of our major industries, the creative industries, are protected by any changes in the legislation?

[Lord Vallance of Balham (Lab)]

I am sure that the noble Lord is aware that the creative industries are some of the greatest users of AI. Of course, it is important that creativity is protected. That is why a consultation has been put out around the copyright issue, which has been discussed many times in this Chamber. In all walks of life, it is important that we understand what AI brings and where it must be controlled in order to allow other things to happen. That is true not only in the creative industries but in many other areas.

[Lord Clement-Jones (LD)]

My Lords, the Government failed to sign up to the declaration signed by 60 other countries at the recent Paris AI Action Summit. How much confidence can that now give us that any new AI Bill will prioritise a requirement for AI, in the words of the declaration, to be

“open, inclusive, transparent, ethical, safe, secure … trustworthy”

and sustainable? Given that the Government did sign up to the Seoul communiqué last year and hosted the Bletchley Park summit, are they now going backwards in this respect?

[Lord Vallance of Balham (Lab)]

I can assure the noble Lord that the Government are most certainly not going backwards in this respect. I can also assure him that the AI Security Institute which has been set up has driven much of this across the world. It is linked to similar units elsewhere; it is undertaking work on many models that are evolving; and it is making its own work open, including the approach it takes. There is a very robust system being developed to make sure that the UK is at the forefront of this, not in the following stream.

[Lord Kirkhope of Harrogate (Con)]

It is very encouraging that the Government’s AI opportunities action plan is proceeding, and I very much welcome it. The Minister just referred to the precautions—including the AI Security Institute, which clearly needs resources—that we need to take to protect interests of various kinds, and to regulators, where it was admitted by the Government that capabilities needed much enhancement. Has the Minister anything further that he can say to give reassurance to those who are concerned?

[Lord Vallance of Balham (Lab)]

Yes, regulation is clearly important, and that is why we formed the Regulatory Innovation Office, which is looking at AI, among other areas, including AI in healthcare. There are a number of actions being taken to boost regulator capability; that is one of the things that the Regulatory Innovation Office is working on. The regulators’ pioneer fund is also relevant to increasing and boosting the ability of regulators to undertake this. Development of capabilities takes place through the DRCF, the forum of the digital regulators that I have referred to, and there will be more in that area. In the SR, regulators have been encouraged to put in bids relating to boosting capability in AI.

[The Earl of Clancarty (CB)]

My Lords, one of the things that the creative industries are seeking—perhaps the most immediate priority—is the transparency of information held by tech companies. Is that going to happen?

[Lord Vallance of Balham (Lab)]

As the noble Earl is aware, transparency is one of the key issues in the consultation at the moment. We know that transparency of use of and output from AI systems is possible and should be encouraged. It requires technological advances to do that fully, but it is exactly what needs to happen to be sure what is being used, how it is being used and how the output relates to the input.

[Viscount Stansgate (Lab)]

My Lords, I do not know whether my noble friend knows but, this very afternoon, the University of Liverpool, in conjunction with the Parliamentary and Scientific Committee, is holding a meeting here in the House about AI and the law. I wonder whether, in preparation for the cross-sectoral legislation about which the Minister spoke, he can assure the House that the Government are in close touch with the legal profession, because the effect of AI in areas such as the law will be just as great as it is in other areas.

[Lord Vallance of Balham (Lab)]

I thank my noble friend. I am unaware of absolutely everything that is going on in the House this afternoon, and I am afraid that I was not aware of that. However, he is right to point out that the professions will be greatly affected by AI and the legal profession is certainly one of those. There is an enormous amount of work that could be done by AI, just as an enormous amount of work can be done with AI across the Civil Service. That is why there is a big push at the moment to adopt AI across the Civil Service. I think the same will happen in other professions, including medicine, law, architecture and many other areas.

[Viscount Camrose (Con)]

I note what the Minister said about remaining committed to AI legislation, but the uncertainty for everybody affected by AI, whether in the tech industry or elsewhere, is a real challenge. Can the Minister flesh out, in some small way, the scope, timing and purpose of planned AI legislation?

[Lord Vallance of Balham (Lab)]

I can certainly give the noble Viscount an indication of the scope. As I have said clearly, this is not going to deal with regulation that can be done by existing regulators. The use of AI in existing areas is something for the regulators that are specialists in those areas. It will not deal with the AI assurance tools, which will be developed separately, but it will look at artificial general intelligence and the emergence of new, cutting-edge AI—the things that we know will cut right the way across other areas and require particular attention.

[Lord Lansley (Con)]

My Lords—

[Baroness Kramer (LD)]

My Lords, perhaps the Minister could tell us why the UK did not sign the Paris declaration and which words the Government wanted removing from that declaration to make it acceptable.

[Lord Vallance of Balham (Lab)]

I am very happy to write to the noble Baroness and give her the precise details of that. However, I reinforce that the UK has been at the forefront of this, and the AI Security Institute is one of the most prominent actors in this space around the world.

[Lord Lansley (Con)]

My Lords—

--- Later in debate ---

[Lord Lansley (Con)]

I am grateful. I draw the House’s attention to my register of interests. Is it the Government’s intention to use the powers in the Product Regulation and Metrology Bill, when enacted, to bring in product requirements based on ISO 42001 relating to AI governance, as a mechanism to bring us some degree of AI assurance through regulation?

[Lord Vallance of Balham (Lab)]

I referred to assurance tools, and that will be part of those. The noble Lord is quite right to raise the important area of standards, because they are critical here, and the UK is well linked to all the national and international standards bodies.

Engineering Biology (Science and Technology Committee Report)

Lord Vallance of Balham Excerpts

Monday 28th April 2025 Grand Committee

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

My Lords, I start with three disadvantages: I cannot read in the dark; I am a doctor, so I cannot read my own handwriting; and I have had quoted back to me in various guises many of the things I have written over the past seven years, so I had better make sure that some of them happen.

I thank noble Lords for raising a number of important and extremely well-informed points today. Thanks must go to the noble Baroness, Lady Brown, for leading this inquiry and report and for starting us off with her insightful contribution and a few questions that I will answer as I go through. Several noble Lords have said in different ways that we cannot afford not to do this. That is a key and correct point. I thank all the members of the Science and Technology Committee for bringing Don’t Fail to Scale into the world. I reassure the noble Viscount, Lord Stansgate, and the noble Lord, Lord Mair, that reports are indeed useful. This is useful; it is exactly what we need at a time when we are thinking about allocation in a spending review.

The comparison made in the report—that, just as AI is rewriting the “software” of our world, engineering biology is rewriting the “hardware”—is a useful one but, of course, the ability to redesign the software code of life is one of the key advances that has unlocked the ability to engineer biology. As the noble Baronesses, Lady Neuberger, Lady Bennett and Lady Freeman, said, in order to do that, we must proceed appropriately and with public acceptance.

The 1,000 or so engineering biology companies that we have in the UK are showing how we can harness this power. They are perfecting the alternative proteins that will strengthen our food supply and help us reach net zero. They are converting factory waste into low-carbon fuel for cars, planes and even RAF unmanned aircraft, as C3 Biotech is doing in Manchester. They are designing lab-grown red blood cells that have been genetically manipulated to treat disorders steadily for 120 days at a time, rather than using a daily dose of pills. They are engineering cells to last for years by replacing missing proteins to correct genetic deficiencies in what, to all intents and purposes, look like cures—something that has not been possible with medicines in the past.

The UK remains a global leader in engineering biology. We rank fourth in the world for the impact of our research in the sector. Last year, UK biotech—it is perhaps a proxy for some parts of engineering biology—raised £3.7 billion, more than double the year before. The news that Professor Jason Chin—who, if anyone, will be the person to make the engineering equivalent of unobtainium—will head up a team of 300 world-class researchers at Oxford’s Generative Biology Institute is a vote of confidence in the UK’s prominence in this area.

However, if we are to hold on to this position, we must act—and urgently. We have heard many good points from across the Committee on why and how we should do this. I will respond to as many of them as I can—if I do not respond to any points, I will follow up afterwards—but let me first make a few points on how the Government are helping engineering biology companies to scale in the UK. We need to give the sector the strategic focus that it deserves and needs. I cannot say much about the outcomes of the industrial strategy or the spending review; however, in line with the timelines set by the Treasury, we will set out those plans, and noble Lords can expect to see the industrial strategy shortly.

What I can say is that this is the first time that a sector—the digital and technologies sector—will have its own dedicated, 10-year plan. This plan offers significant opportunities for growth across UK science and technology and will include engineering biology specifically; I assure the noble Baroness, Lady Brown, that there is a specific section and clear focus on engineering biology. The Secretary of State highlighted the critical role of engineering biology as a key technology for future growth in his speech at techUK on 10 March; this is important because techUK is often thought of an organisation for digital tech only, but it is not.

Supporting the engineering biology sector means having the right funding, regulatory framework, infrastructure, government procurement and skills. I will set out what we are doing on some of those. Before I do so, I should add that we have an engineering biology advisory board, with experts from academia and industry, which, just last month, actively discussed the role of a national champion, including what that might look like and how it could lead to coherence across the sector; indeed, it invited people from other sectors that have had national champions to discuss what that might turn into.

I assure the noble Lord, Lord Borwick, and the noble Baroness, Lady Willis, that there is join-up across government here. Part of the role of DSIT is a horizontal one across government. It is not a purely vertical department; as a horizontal department, it has to make sure that these things are joined up. One of those areas of join-up occurs around biomass strategy, on which there is an active piece of work going on at the moment; that is particularly for engineering biology and is linked to the Circular Economy Taskforce. I hope that the noble Lord, Lord Lucas, and the noble Baroness, Lady Young, are reassured that that is being looked at.

Last year, UKRI announced £100 million of funding for six engineering biology hubs across the country and 22 awards for two-year R&D projects. These hubs are working on priority applications from developing vaccines to preventing plastic pollution. ARIA has also announced more than £60 million of funding to develop the next generation of synthetic crops, which aim to remove CO₂, improve food security and deliver medicines. New research programmes from ARIA are looking at engineering biology from pandemic preparedness right the way through to ocean biomanufacturing.

Short-termism, which has been raised by many speakers, has long held back R&D in sectors such as these where projects are likely to take many years to go live, let alone see outcomes. That is why the Government have committed to 10-year funding for key R&D activities where this certainty will make the most difference. Further details on this will come with the spending review. I am unable to give exact amounts—anyone in this Room will know that you cannot give exact amounts before a spending review—but I hope noble Lords hear my commitment to this area. I am sure that the noble Viscount, Lord Camrose, will understand that you do not pre-empt spending reviews by announcing the outcomes.

The report we are debating speaks clearly about the late-stage funding gap. The interesting thing about the valley of death is that it moves; this one has moved from the very beginning to somewhat later in the process. As several noble Lords, including the noble Lords, Lord Mair and Lord Drayson, have said, the funding for this needs to be sustainable, allow scaling and have a UK base. We cannot afford for these companies to move overseas.

We absolutely get the need for a joined-up pipeline across all the areas we have talked about to help companies scale. I will list some of the actions taken, but I recognise that much more needs to be done.

The National Wealth Fund has deep pockets of £27.8 billion. Its new strategic direction, steered by the Chancellor, allows it to invest in technologies such as engineering biology. That is important, because that was not initially the focus. In private financing, the Mansion House compact, which has been discussed, could see us unlock £80 billion from pension funds, but, as of 2024, Mansion House signatories held only around 0.36% of their assets in unlisted equities against a target of 5% agreed in 2023. This needs to be driven faster, which is why the Pensions Minister is reviewing pensions investment, the outcomes of which will be shared shortly. Many noble Lords have observed, and I agree, that there is an opportunity here that is about not just science and technology companies but better pension returns. We will continue to encourage the rapid implementation of the Mansion House compact, and I assure noble Lords that DSIT is very involved in those discussion.

Government is doing better at being a customer via the new Procurement Act,as well as a champion procuring from UK engineering biology companies. For example, the Ministry of Defence supported C3 Biotech to establish its pilot facility in Stockport to produce aviation fuels from industrial waste. The new defence innovation unit will have a percentage of its spend on procurement of UK technologies.

I want to deal with the important question of IP. I am very well aware of its importance, but I want to correct an impression that might have been given. It is not the case that grants from UKRI have their IP taken. It is the case that for a very small subset, which is departmental contracts, it has been necessary to put in a clause on IP that is to do with the Subsidy Control Act. I am actively looking at this to see what can be done, but it is a very small percentage. The vast majority of UKRI grants—all grants, actually—and Innovate grants do not have that IP claim.

We are making sure that the UK has the right skills in the sector by looking at both building homegrown skills and the right approach to attracting talent from overseas. We rightly had questions on training from the noble Baroness, Lady Willis, among others. Last year, the UK announced £10 million for a new centre for doctoral training for engineering biology; and, in January this year, UKRI opened a call for new doctoral focal award centres, worth £17 million. Indeed, it has put £16 million towards another important area that was raised—that of research technical professionals. These are the people who actually run the equipment and who have been ignored in the science system for a long period, much to the detriment of being able to run large bits of kit. There is more to be done, but having PhDs funded shows a very clear direction of travel. As the noble Lord, Lord Tarassenko, made clear, the overlap in other areas, including AI, is rather important.

We have four of the top 10 universities in the world. Being open to international talent is clearly a part of what makes our academic base, as well as our industrial base, so strong. Our funding offer is competitive, with prestigious fellowships and professorships from UKRI and the national academies, and we will do more. I assure noble Lords that they will shortly hear more about what we are doing specifically to try to make sure that we have an attractive inward route for people from around the world. This includes what the noble Baroness, Lady Northover, asked me about in her comments.

Our continued partnership with Horizon Europe provides a route for European researchers to work with us. It is very important that we are back in that system. Fast-track visas for global talent, high-potential individuals and skilled workers give scientists opportunities to pursue paths to engineering biology opportunities in the UK. The Chancellor has been clear that she wants easier routes for scientists and technicians to come to the UK, and I continue to advocate for that. In the words of my noble friend Lord Berkeley, we need more scientists. There is no doubt about that. We have never been and will never be self-sufficient in this area—and nor should we be, because this change of people from other countries is an important part of the scientific process.

Engineering biology needs a regulatory environment that can foster innovation and boost public confidence; without that, we cannot fully realise the benefits of what we have discussed. This issue was raised by a number of speakers. It is an urgent point to get right, which is why we established the Regulatory Innovation Office; I am very pleased that the noble Lord, Lord Willetts, is now leading it. We have a clear plan to push ahead fast with some changes. Noble Lords will have already seen some of the changes outlined by the noble Lord, including the sandbox for the Food Standards Agency, the work to have precision fermentation foods looked at by that agency, and new legislation on genetic technology for plants: the precision breeding Act, which is being discussed at the moment.

I turn to the point made by the noble Baroness, Lady Neuberger. We can unlock the benefits of engineering biology only if the public want to use it and accept it. This will come only by building trust. The Government have been gauging public opinion, with two reports from UKRI and Sciencewise on applications in health and food, and a DSIT survey on public understanding last year. A group funded by UKRI, the Cellular Agriculture Manufacturing Hub, is looking at that space specifically. I commend to noble Lords the report from the Government Office for Science published in only the past couple of weeks, which—the noble Lord, Lord Freyberg, will be extremely pleased to hear—speaks directly to engineering biology in fashion, among other areas. Using the insights that we are getting, we will consider how best to continue to structure public engagement for regulated technologies so that we build awareness and the potential is understood.

Engineering biology needs specialist infrastructure, such as biofoundries and large-scale fermentation facilities. We must maintain what we have and build new scale-up infrastructure for SMEs. We have funded the Cell and Gene Therapy Catapult to deliver a state-of-the-art manufacturing innovation centre for advanced therapies at Braintree, and the Centre for Process Innovation receives government funding to develop and retain engineering capabilities, including sustainable food production, in its novel foods facility. However—this is important—affordability is an issue. The CPI is now undertaking a study of 50:50 match funding in Greater Manchester in order to make it more accessible for engineering biology SMEs to access its facility. We know that affordable cost of access is a key requirement, which is why we are trialling this cost-sharing scheme. Incidentally, it is true that there are five biofoundries in the network that was referred to, but there are more than 11 in total across the UK. The variable access to them is an issue.

There is no one-size-fits-all approach. The wrong infrastructure solutions would come at a great cost to the taxpayer and would not be beneficial. There is no point in having facilities that lie idle or that are not at the cutting edge. We will continue to push to get them in the right place and get them accessible at the right cost.

Several of the speakers, particularly the noble Baronesses, Lady Freeman, Lady Young and Lady Bennett, asked about safety and responsible use. The Responsible Innovation Advisory Panel has been set up precisely to look at these issues. It has looked at gene synthesis and has issued guidance, and it will consider what else needs to be done there. It has looked at gain-of-function research, mirror life and gene drive, and will continue to do so. These issues are important, as are those of lab safety and security, which are being looked at by the Cabinet Office.

When it comes to the fundamental science and talent in engineering biology in this country, we are doing well. Our task now, as the report so clearly says, is to create a landscape of the right skills, infrastructure and interventions in finance, regulation and procurement, among other areas, and to partner across Whitehall to bring this science to life in applications that will affect pretty much every department.

The Government are taking the actions that will be required. We do not need more reviews now; we need action on what we have. This report has been an incredibly important part of that, so I again thank all the speakers today for their very insightful contributions.

[Baroness Bowles of Berkhamsted (LD)]

Before the Minister sits down, if an innovative company is looking to get some assistance in developing a product to market, it will go to the departments. The departments work with these small businesses on these pre-procurement issues. Innovate UK has these clauses in its contracts—I can show them to the Minister online, if we have to go to that extreme.

There is probably a difference from what universities have nowadays, which might offer pure research grants. However, as soon as a company gets anywhere near to seeking procurement—the thing that will open the door to being able to sell into the private sector and to build its reputation for export—the IP is undermined, including the background IP. I am sure that I can provide people who will sit with the Minister’s staff and show them the links.

[Lord Vallance of Balham (Lab)]

I want to be absolutely clear: that is not the case for grants, whether they are for companies or academics; this applies only for a subset of contract research. I am looking at that to see what can be done, but it is a very small minority. I would not like noble Lords to go away thinking that it applies to companies overall—it does not if it is a grant.

[Viscount Stansgate (Lab)]

My Lords, before the Minister sits down, could he say one word about the regional distribution of work in this area? I have had an interesting approach from the Tees Valley Combined Authority and the York and North Yorkshire Combined Authority, saying that they have ambitions to be a regional hub in the north-east. Does my noble friend agree that it is important to spread out this work around the country and not concentrate it in one particular part?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for that question. In fact, the biofoundries, the manufacturing side of this and the hubs are quite well spread out across the nations and, indeed, across the UK. I agree that it is important that we look at that as part of what we do, as we develop this as an important sector in the UK.

Artificial Intelligence: Emissions

Lord Vallance of Balham Excerpts

Wednesday 23rd April 2025 Lords Chamber

[The Lord Bishop of Oxford]

To ask His Majesty’s Government what plans they have to measure the emissions associated with artificial intelligence in relation to the United Kingdom’s net zero target.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

I thank the right reverend Prelate the Bishop of Oxford for the Question. The Climate Change Act, as noble Lords know, made the UK the first country to introduce legally binding long-term emissions reductions targets. This sets in law our commitment to reach net-zero emissions by 2050 and means that the Government must address emissions across the whole economy to reach our targets. This includes consideration of increased electricity demand from new and growing sectors, including AI, to ensure that we are compliant with our carbon budgets.

[The Lord Bishop of Oxford]

My Lords, I thank the Minister for his Answer. He will be aware—I was not, until I researched this—that, in Ireland, data centres now account for over 20% of electricity use and the largest data centres under construction consume as much energy potentially as 2 million households, according to some estimates. Does the Minister agree that there is a need for more joined-up thinking between the Government’s energy policy and the rising energy demands of AI and data centres? As a first step, are the Government ready to accept the recommendations of the Royal Academy of Engineering for mandatory reporting for data centres on energy consumption, water consumption, carbon emissions and e-waste recycling?

[Lord Vallance of Balham (Lab)]

Recent estimates from 2022 show that data centres, including those for AI, account for about 4% of UK electricity consumption. The recently formed AI Energy Council, which is co-chaired by the Secretaries of State for DSIT and DESNZ, is set up to do exactly what the right reverend Prelate is suggesting, which is to ensure that we have a joined-up approach between energy and AI.

[The Earl of Devon (CB)]

My Lords, do His Majesty’s Government have a view on the merits of the Xlinks power project, which is designed to bring renewable energy from Morocco to the south-west peninsula via cables? Were it to be successful, this would provide a good renewable source of energy for data centres in the south-west.

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

Not being from DESNZ, I will ask somebody from that department to give the noble Earl a specific answer on that project, but we will look for where there are sources of energy as we think about where to place data centres. The recent call for expressions of interest in AI growth zones has had more than 200 expressions of interest. They will be considered on the basis of where the energy is available, or could be available, and how we can ensure that we get a clean energy supply to data centres.

[Lord Holmes of Richmond (Con)]

My Lords, will the Minister consider leading a review into the PUE measure for data centres? The power usage effectiveness measure has been around for some time now. Does he consider it to be effective and the optimal way of measuring the impact of data centres from an energy perspective?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for that important question, on which I have had discussions with him before. I think it is an important way of measuring it, but the new AI Energy Council is looking at all forms of link between energy and AI. It is worth also noting that the advances in technology mean that the energy consumption is dropping for many of the approaches to new compute and data centres. In fact, some of the chips being designed now may reduce the energy consumption between hundredfold and thousandfold. There is a need to keep an eye on this and to think about what the appropriate way is to measure both the energy consumption and, as the noble Lord rightly says, the broader environmental impact, including water usage.

[Earl Russell (LD)]

My Lords, generative AI is exceptionally energy hungry. The head of the National Grid said in March last year that data-centre electricity demand in the UK will rise sixfold in the next 10 years. While the Climate Change Committee has some headroom in its carbon budgets, what work are the Government doing with it to ensure adequate and accurate calculations can be made of AI’s future energy requirements?

[Lord Vallance of Balham (Lab)]

The current estimate for 2024 was something like 7 terawatt hours of consumption; if we go forward to 2050, that is expected to be something like 62 terawatt hours, but, as I have just mentioned, the advances in technology may change that. There is a lot of uncertainty around the requirements. It is worth noting that, over the same time period, the increase in energy consumption from many other areas, including from electric vehicles, means that the proportion taken up by data centres, even if there is no technology improvement, is probably something like 10% of the total.

[Lord Mackinlay of Richborough (Con)]

My Lords, the House will note my directorship of the Global Warming Policy Foundation. For the diminishing number of people who still believe that diminishing Britain’s 0.8% of global CO₂ still further is an undertaking worth having, I bring good news: the amount of CO₂ to be released from UK data centres will be close to zero because, with energy prices in the UK some three times higher than in the US, double the price of much of mainland Europe, notably Switzerland, where this is a developing industry, I very much doubt we will have any—or we will have very few—energy-hungry AI centres. Could the Minister give some assurance that we will not simply be reliant on expensive unreliables into the future, and pursue a sensible energy policy for the UK?

[Lord Vallance of Balham (Lab)]

The question of renewable energy is of course an important one. Last year, 50% of the energy was provided by renewables, about 30% from gas and the rest from nuclear and other sources, and, as I said, the consumption of energy by AI and data centres will not rise to about more than about 10% of that under current projections. It is the case that many places across the UK have expressed an interest in becoming an AI growth zone. It is also the case that many data centre providers are interested in coming to the UK, so there is a good chance of getting a large number of data centres here in the UK.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, is the Minister aware that, contrary to the previous question, AI itself is concerned about the amount of electricity it is using and that, if questioned, it has a long list of possible solutions to try to find a way through and to reduce the amount of electricity that it is using? Is it not a fact that, if we spend a little bit more time getting a little closer to the Chinese, we might find ways in which we can save even more electricity in this area?

[Lord Vallance of Balham (Lab)]

I think it is the case that AI is going to be very important in reducing energy consumption across a number of industries. Estimates suggest that, even factoring in the increased amount of energy consumed by data centres and AI, the reductions in use as a result of applying AI to a number of industries and elsewhere could outweigh that increase. So this is a complex picture, where AI itself will be part of the solution.

[Lord Offord of Garvel (Con)]

My Lords, I thank the right reverend Prelate for bringing this up. As he has pointed out, and as has been mentioned in two or three questions already, these AI data centres are extraordinarily energy hungry. We think that, on a site with a perimeter similar to that of a call centre, a data centre could use 25 times more energy. So the Minister must explain how he thinks the UK can fully capitalise on this 21st-century opportunity with the most expensive energy. In fact, to pick up my noble friend’s point, our industrial electricity is actually five times more expensive than in the US and seven times more than in China. Could the Minister please work out whether this is just an academic question? We are unlikely to see many AI data centres with the level of energy prices that we have at the moment.

[Lord Vallance of Balham (Lab)]

The ability to become self-sufficient in energy is of course dependent on renewable energy, the price of which has come down dramatically since it was first introduced. Making sure that the UK is protected from the volatility of supply of energy from elsewhere is an important part of what this Government are doing. The energy supply from renewables will increase as we get towards a carbon-neutral position, which will also increase growth in terms of the technologies invented, developed and implemented in this country.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, could my noble friend the Minister ensure that discussions take place as quickly as possible to ensure that, as well as a solution regarding data centres, there is a solution or a resolution in respect of the UK-EU emissions trading scheme, which is due to expire shortly?

[Lord Vallance of Balham (Lab)]

I thank my noble friend for that question. Discussions are ongoing on all these matters, and I am happy to get a detailed response to her.

[Lord Grade of Yarmouth (Non-Afl)]

My Lords, I draw the attention of the House to my interest in the register. Does the Minister agree that many of the concerns expressed on all the Benches on this issue, particularly in the Question of the right reverend Prelate, can be answered by the speedy rollout of small modular nuclear reactors, which will provide the energy that this country badly needs?

[Lord Vallance of Balham (Lab)]

The noble Lord may know that I am on record agreeing with the importance of small modular reactors, and that is being looked at carefully.

Artificial Intelligence: Regulation

Lord Vallance of Balham Excerpts

Monday 10th February 2025 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my technology interest as set out in the register.

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

As set out in the manifesto, the Government are developing legislative proposals which will allow us to safely realise the benefits of the most powerful AI systems. The Government are also consulting on AI and copyright. Next steps, including on potential legislation, will be decided once all evidence is considered. The Data (Use and Access) Bill will enable the responsible deployment of solely automated decision-making, with stringent safeguards in place for individuals.

[Lord Holmes of Richmond (Con)]

My Lords, with the world talking AI in Paris this week and with parts of the EU AI Act already brought into force earlier this month, is it not over time for the Government to bring forward AI legislation in the UK: for the jobseeker who constantly finds herself not making the shortlist, not even knowing that AI is in the mix, or for the creative constantly finding her work stolen by AI with no consent, no remuneration and no respect? Does the Minister agree that sector-wide AI legislation, ushering in right-sized regulation, is good for investment, good for innovation, good for creatives, good for citizens and good for all our AI futures?

[Lord Vallance of Balham (Lab)]

As the noble Lord points out, getting regulation right here is good for investment and good for business. We are taking the approach of regulation by the existing regulators for the use of AI. We intend to bring forward legislation which allows us to safely realise the enormous benefits of AI in the frontier space. Of course, in the Data (Use and Access) Bill, some of the issues the noble Lord raised are already addressed.

[Viscount Colville of Culross (CB)]

My Lords, last week, the Startup Coalition of AI companies told a House of Commons Joint Committee that the Government should support a full commercial text and data mining model for AI training which would get rid of all copyright licensing for commercial AI training in the UK. Does the Minister support this suggestion?

[Lord Vallance of Balham (Lab)]

As I think I have made clear on several occasions at this Dispatch Box, we do not support that position. We believe that there needs to be control for creators; we need much better transparency in the system, and there needs to be access to use those images for AI. Those three things go hand in hand.

[Lord Watts (Lab)]

My Lords, the creative industries are the second-most important industry in the UK. Will the Minister guarantee that under the legislation creators’ work will be protected and they will be properly rewarded for the work that they do?

[Lord Vallance of Balham (Lab)]

We absolutely agree that creators need to be appropriately recognised and rewarded. That is why the system being developed will give greater transparency on what is being used for what purposes and will allow access while also protecting the rights of creators. It is important to have a technological solution to allow this and to prevent access where creators did not want it to occur.

[Lord Foster of Bath (LD)]

My Lords, ideally, as your Lordships agreed recently, proposals for an opt-out from a mechanism for text and data mining exceptions should be dropped, but if the Government continue, the Minister has made it clear that it will be adopted only if a workable solution can be found and that the views of the creative industries will be taken into account. Can he go further and agree to rule out any mechanism unless it has the full support of rights holders, and if not, why not?

[Lord Vallance of Balham (Lab)]

The noble Lord may find that not all rights holders have the same views, so I do not think it is possible to give the assurance he asked for, but I am very clear that we need a workable solution, and that means for creators as well as for access.

[The Lord Bishop of Oxford]

My Lords, according to the Government’s own recent survey, 43% of the public trust that the impact of AI will be positive, but 33% believe it will be negative. Given this very narrow gap and the critical importance of building trust in embracing new technologies, what specific steps are the Government planning to take to improve that public trust as they embed AI in the nation’s most trusted institutions, not least in the NHS?

[Lord Vallance of Balham (Lab)]

I thank the right reverend Prelate for that important question. Trust is key to all this, and it is why we are committed to maintaining high standards of data protection in whichever context the AI system is deployed. The right reverend Prelate is quite right to raise the question of the NHS, where already AI is being used to read scans, to improve performance in terms of missed appointments and to advance pathology services, many of which are narrow AI uses which are extremely important.

[Viscount Camrose (Con)]

My Lords, in opposition and in government, the party opposite has promised an AI Bill, but it continues to say very little about what it will do. This uncertainty is creating real challenges for AI labs and their customers, as well as for copyright holders and civil society groups. In short, everyone needs to feel more confident about the scope, the timing and the intentions of the Bill. What can the Minister say here and now to reassure us that there is actually a plan?

[Lord Vallance of Balham (Lab)]

As the noble Viscount says, this is an urgent matter. A summit is going on in Paris at the moment discussing many of these issues. We remain committed to bringing forward legislation. We are continuing to refine the proposals and look forward to engaging extensively in due course to ensure that our approach is future-proofed and effective against what is a fast-evolving technology.

[Lord Patel (CB)]

My Lords, if the UK were to consider AI regulation, which specific areas that are not covered currently by a whole bunch of other regulations does the Minister think would be worth regulating?

[Lord Vallance of Balham (Lab)]

That is precisely the point that I was trying to get to in the last few questions. There is regulation by the existing regulators, all of whom will need to deal with AI, and there is regulation which is covered in the Data (Use and Access) Bill, leaving frontier model control as the unregulated area. That is the area in which we seek to bring in some form of legislation in due course. We want to consult on it; it is a very complicated, fast-moving area, and an important one, and it is why the AI Safety Institute is such an important body in the UK.

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

My Lords, does my noble friend the Minister agree that AI has the potential to be a liberating force for workers in terms of repetitive work and so on if workers have strong rights and the gains are shared fairly? Is he aware of the TUC manifesto on AI, and does he agree that workers should have the right to a human review when it comes to recruitment and indeed sackings?

[Lord Vallance of Balham (Lab)]

I completely agree with my noble friend that the aim of AI should be to increase the opportunity for those things that humans can do, and that includes, of course, human-to-human interaction. It is a very important point to consider as this is rolled out, including across the NHS. On automated decision-making, we have been clear that there needs to be human involvement in terms of somebody who knows what they are doing having the opportunity to review a decision and to alter it if necessary.

[The Earl of Clancarty (CB)]

My Lords—

--- Later in debate ---

[The Earl of Clancarty (CB)]

My Lords, the Government will have heard clearly enough by now—consultation or no consultation—that the creative industries want, and indeed require, an opt-in on the use of their own data. Will the Government simply listen and do this?

[Lord Vallance of Balham (Lab)]

We are clearly in the middle of a consultation. It is due to read out on 25 February. We are accumulating evidence both on how this would work and on the technologies necessary to make it work. It would be inappropriate to jump to a conclusion before we hear all that.

[Lord Ranger of Northwood (Con)]

My Lords, I refer your Lordships to my interests as declared in the register and as vice-chair of the APPG on AI. I have a simple question about the AI Opportunities Action Plan. I have been speaking to many AI SMEs in the UK—UK businesses that are booming and growing—and they feel that the conversation about regulation and safety drowns out their success stories. What activities are the Government pursuing to hear from those SMEs and how can the Government help them? Those businesses are so successful that they are being drawn into other markets, such as the US, via investment and taken away from the growth opportunities in the UK.

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

I could not agree more with the noble Lord, Lord Ranger. We have a thriving start-up scene in AI. We need to encourage that; they need to grow. The AI action plan is about exactly that. The 50 recommendations in it are very much geared towards opportunities. We should grasp those opportunities and make sure that those small companies grow into big, sustainable companies in the UK.

AstraZeneca

Lord Vallance of Balham Excerpts

Thursday 6th February 2025 Lords Chamber

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

Clearly, I understand this area rather well. It is disappointing that the AstraZeneca deal fell through. The deal was first raised in 2020 and was then offered in 2024. Subsequent to that, AstraZeneca changed its mind on how much work it wanted to put into the UK, including reducing the R&D component, which meant that there was a reduction in the offer that came from the Government. I understand that there are a number of reasons why this particular deal fell through, but I also reassure noble Lords that there is a very active programme of attracting investment, including discussions with AstraZeneca which are ongoing on other matters.

[Lord Kakkar (CB)]

My Lords, I draw noble Lords’ attention to my registered interests as chairman of the Office for Strategic Coordination of Health Research. Is the Minister content that His Majesty’s Government are doing enough to support global investment in UK life sciences, not only through fiscal measures but through their own investment in securing the infrastructure and capacity for clinical research in our country and the base for fundamental and translational research in our universities through funding for the National Institute for Health and Care Research and the Medical Research Council? Is the Minister able to reassure us that these matters will be considered very carefully in any future comprehensive spending review?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for his question. Yes, I am very aware of the need for funding in this area and for attracting external inward investment. The noble Lord may well know that a number of companies have been attracted to the UK recently, such as Eli Lilly, with a big deal of £279 million. Last week, Moderna opened its new facility in Harwell within two years. There is a lot going on in terms of inward investment, and the noble Lord is quite right to point out the importance of both NIHR and MRC funding as part of that process.

[Lord Storey (LD)]

My Lords, when the former Chancellor announced that AstraZeneca was set to inject £450 million into the establishment of a new manufacturing plant in Liverpool, the metro mayor hailed the investment as a vote of confidence in the work of the Liverpool combined authority, providing the new investment and jobs for local people that the plant would bring. Just days after the Chancellor laid out billion-pound plans mainly for the south-east, the so-called “golden triangle”, AstraZeneca, as we know, pulled out of Liverpool. Can the Minister tell us whether the metro mayor was involved in the discussions over AstraZeneca, and if not, why not? Secondly, how do the Government plan to develop the city’s life sciences and pharmaceutical sector?

[Lord Vallance of Balham (Lab)]

I reassure the noble Lord that the metro mayor was aware of the discussions with AstraZeneca. It is important to remember that AstraZeneca will continue to produce vaccines in Speke. It is not that AstraZeneca has pulled out of there; it is that the new investment has not come there. I have recently been speaking to metro mayors about how we can make sure that the R&D funding is supportive of what metro mayors are trying to achieve.

[Lord Scriven (LD)]

My Lords, the Minister is a little bit complacent because, as he knows, the investment was for future-generation flu vaccines and not for existing vaccines. As the Lords Science and Technology Committee said recently, this raises “troubling concerns” about the UK’s lack of

“capacity to manufacture vaccines for future biological threats”.

What are the Government doing to ensure a portfolio of vaccine technology can be manufactured in the UK and that we are not just relying on mRNA?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord—that is the first time I have been called complacent about vaccines. There is a lot going on: the Moderna investment in a new facility at Harwell; the BioNTech investment; the recent announcement of £60 million by GSK with Oxford; and there is a review of all the vaccine facilities across the country. It is absolutely essential to get this right, as the noble Lord has said, for future pandemic preparedness, as it is a key area. AstraZeneca remains, of course, with its major R&D base in this country, and I will be speaking to it again shortly.

[Baroness Chakrabarti (Lab)]

My Lords, I would call my noble friend the Minister a very dedicated public servant and not a bit complacent. Does he agree that a number of pharmaceutical companies, not least AstraZeneca, have benefited a great deal over the years from UK investment, including in universities and including through the purchasing power of the NHS, which is not inconsiderable? What do the Government plan to do to introduce an element of contingency into those relationships? Have the Government considered perhaps even their own state manufacturing capacity?

[Lord Vallance of Balham (Lab)]

I thank my noble friend for her question. The UK is fortunate to have two very large pharmaceutical companies in this land, and we have many biotechs starting up as a result, because many of the people in those biotechs were trained in the big companies. As my noble friend quite rightly points out, the relationship with the NHS is important. All of these things create an ecosystem for life sciences investment which we are very keen to continue. The history of state-run manufacturing facilities is not one that generally leads to advanced manufacturing and efficiency.

[Lord Northbrook (Con)]

My Lords, can the Minister give us more detail as to why AstraZeneca pulled out? He said there were a number of reasons, so I wonder if he could go into more detail.

[Lord Vallance of Balham (Lab)]

Yes, I am happy to do so. The first was the restructuring of the deal because of the AstraZeneca decision to put less into R&D, which meant that there was a proportionate decrease in the state funding, which I think most people would think would be an appropriate position in a deal. Secondly, I think that it has expressed concerns about the voluntary scheme for branded medicines pricing and access programme. It was also concerned about NICE’s decision to refuse approval for its recent drug Enhertu. But I think noble Lords would agree that it is not appropriate for the Government to link decisions on individual drugs to investment in other parts of the system.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, would the Minister confirm that the chief executive of AstraZeneca has said that it was a purely commercial decision and that a potential grant of £80 million should not be significant to a company that has made a profit of nearly £9 billion and increased its profits by 38% in the last year? Surely it is the company’s responsibility, unlike what has been suggested by the unfortunate spokesperson for the Opposition?

[Lord Vallance of Balham (Lab)]

I think it is undoubtedly a commercial decision. Having been head of R&D for a multinational pharmaceutical company, I know exactly how these decisions are made. It will have been a commercial decision as to where it needs to make the right investments for its vaccine manufacturing. I think the small change in the deal from the UK Government was probably a minor part in the overall decision-making.

[Baroness McIntosh of Pickering (Con)]

Given the fact that the project will not now go ahead and that we wish to be self-sufficient in the production of vaccines, what steps are the Government taking to ensure that we will be self-sufficient in producing vaccines going forward and not dependent on imports?

[Lord Vallance of Balham (Lab)]

I refer the noble Baroness to the answer I gave earlier: the Moderna facility in Harwell is a massive new vaccine investment in this country; there is the BioNTech deal to bring that company here as well; and there are several other opportunities, including the life sciences innovation manufacturing fund of up to £520 million, which people are applying for at the moment. There is a lot more going on in vaccines now than there has been, but I am absolutely not complacent about this. It is an area we need to get right and an area where we need to make sure that the vaccine facilities are being used to produce vaccines on a daily basis—there is no good at all in having plants lying idle, waiting for something to happen.

Creative Industries: Rights Reservation Model

Lord Vallance of Balham Excerpts

Thursday 30th January 2025 Grand Committee

[The Minister of State, Department for Science, Innovation and Technology (Lord Vallance of Balham) (Lab)]

My Lords, I thank the noble Lord, Lord Foster, for introducing this debate and everyone who contributed. Clearly, several of the amendments that we discussed earlier in the week have been touched on in one form or another in today’s debate. The fact that those amendments were voted through demonstrates the intensity of noble Lords’ passion for and interest in this topic; of course, that is recognised. I acknowledge clearly, because I was asked this question, that I recognise the importance of these issues and I absolutely understand the concerns of the creative industries and, as the noble Lord, Lord Black, mentioned, the media sector.

In some ways, what we have discussed today speaks directly to the question of whether we need a consultation. On 17 December, we published a consultation that seeks to deliver a competitive copyright regime and a package of measures that support our creative industries and the AI sector. I do not want to sound like a broken record, but the proposals aim to deliver three objectives, and I agree with the way the noble Viscount, Lord Camrose, framed objectives. The three objectives that we have put forward are: transparency about the use of copyrighted works to train AI models and AI-generated content, providing greater control for rights holders’ material so that they can be supported in protecting it and can be remunerated where it is used—again, I say that the aim here is quite the opposite of theft: it is to give more control—and enhancing lawful access to the material to be used to train world-leading AI models.

I reiterate what I said on Tuesday: this is a genuine consultation, and many people from a range of sectors are engaging to share their views and evidence. The Government continue to believe that it is important that we have the benefit of that public consultation before we act. A central issue that the noble Lord, Lord Foster, set it in his Question is how to make sure that rights holders can easily reserve their rights and control the use of their material. These are the challenges that rights holders face today. Although they may have copyright on their work, they are often unable in practice to control how it is used or to gain remuneration. This is often particularly true for new or solo artists, the very people we need to protect, a point that the noble Lord, Lord Holmes, and others made.

The rights reservation model proposed in the consultation aims to enhance rights holders’ ability to withdraw their content from being used. It would support their ability to license this content for use with AI if they wish to do that. To do this, we will need the right blend of technology and regulation, and the consultation seeks views on how this should be achieved. Importantly—many noble Lords raised this point—this model would have to be simple, effective and accessible for rights holders of all sizes, something that, frankly, is not available in the current position. The Government have been clear that we will not proceed with this model unless we are confident that these criteria will be met.

On transparency, we want to consider how to achieve this broadly, ensuring that rights holders understand how and where their content is used, while also ensuring any measures are not disproportionate for small businesses and individuals.

On our third objective, access, for all the reasons that the noble Viscount, Lord Camrose, said, we want to ensure that there is a system in place that allows AI developers to access the high-quality material they need to train world-leading models in the UK. We want that access to be without uncertainty and without legal liability slowing down investment and adoption.

These are undoubtedly complex issues, and we need to strike the right balance to ensure that we are able fully to benefit from AI and guarantee the success of our world-leading creative industries. This is why we are asking about all these elements in the consultation.

The question asked by the noble Lord, Lord Foster, raises important issues about the impacts on creators and our assessment of these impacts. This was also something mentioned in the debate earlier in the week. I reassure noble Lords that gathering further economic impact evidence is one of the main reasons for conducting a full inquiry, but it is also worth pointing out that alongside our proposed paper on this, we published a 22-page summary options assessment that set out its initial analysis of the proposals that we have put forward, so it is not correct that there has been no options impact appraisal. This options assessment received a green rating from the independent Regulatory Policy Committee. It recognises, however, that quantitative evidence is currently limited in this area and highlights areas where the Government hope to receive further data during the course of the consultation.

The options assessment sets out the expected impacts of different options and assesses them against those three objectives in the consultation: control, access and transparency. The assessment does not provide detailed data on economic impact, as publicly available evidence in this area is currently rather limited. It is important that we let the consultation run its course so that we can gather evidence of impacts on the full range of affected parties. We are particularly keen for respondents to the consultation to provide further economic evidence to inform how we achieve our objectives. To answer partially, without being able to have singing in the streets, the question from the noble Lord, Lord Clement-Jones, depending on the evidence we receive through the consultation, we will revise, update and expand on the assessment of the options and better determine how we move forward with any potential legislative change. Acting without this would risk imposing legislation that does not have the intended effects.

Alongside our analysis, the Government of course continue to consider a broad range of external studies to assess AI’s economic impact. Modelling the potential economic impact of AI is complicated, and there are several external studies on this. We know that it is complicated, as we have seen just this week with the entry of DeepSeek and how that may change many of the things we think about, but AI adoption has the potential to drive growth across the economy, including, as many noble Lords mentioned, in the creative industries, where more than 38% of creative industry businesses have used AI technologies as of September 2024, with nearly 50% using AI to improve business operations. Earlier this week, I attended the launch of the Institute for the Future of Work’s report into the future of work and well-being, which looks at the impact of AI on work and well-being in all sectors. The Government have considered this external evidence alongside our internal analysis to inform our approach to AI and will continue to do so.

I will now move on to a few other areas. In passing, I agree with the noble Lord, Lord Black, that the question of truth in the effect of AI is crucial. We are in an era where this is increasingly difficult; it is the first wave of the AI challenge. It is crucial for everybody in society and, of course, for the media. Technology will play an important part in delivering greater rightholder control. The Government are clear that any solutions need to be effective, proportionate and accessible to all parties of all sizes, and they must be easy to use. Again, I want to reassure noble Lords that we do not intend to go forward with this approach until we are confident that this is the case.

The noble Lord, Lord Foster, asked whether anything is already available. Things are available; they are not good enough yet but coming along very fast. I know from my time as chair of the Natural History Museum, where we looked after vast amounts of data of huge potential value, that we had ways to try to block people getting hold of it. Things are available now but they need to be better; they also need to be simpler and usable by the individual.

The consultation recognises that more detailed work needs to be done, and an important function of the consultation is to help us work through this detail. A number of industry initiatives are already under way to deliver effective standards. As has been mentioned, these standards—international and national—will be crucial. These efforts, combined with careful regulation, will make it possible to deliver workable rights reservation tools, and a reimbursement mechanism that, again, should be easy to operate and not available only to the largest players or by going to court.

As noble Lords have raised it during the passage of the data Bill, I reiterate the central importance of transparency in the way that creative content is used. The use of web crawlers, metadata and watermarks as different forms of technological solutions could have a number of benefits for those who wish to control or license the use of their content with AI and could provide the very basis for a rights reservation tool.

We agree that a key issue to be addressed is the role of some web crawlers that are used to obtain content for AI training. However, it is important to recognise that web crawlers are used for different purposes, the most familiar being indexing online content so that it can be searched with a search engine. Standards on the use of web crawlers may also be important to improve the ability of rightholders to prevent the use of work against their wishes.

I spoke about workability, and several noble Lords made it clear that it must mean workability for the creative sector and creatives, as well as for others. The noble Lord, Lord Foster, asked about the temporary copy issue. We have asked about that in the consultation.

To conclude, I again thank noble Lords for contributing to this debate. They can rest assured that the Government understand the strongly held and legitimate concerns which creators and rightholders have about their content being used. We also agree that transparency is fundamental. However, it would be wrong to commit to specific legislation while the Government’s consultation is ongoing. Indeed, we should and must consider stakeholders’ responses fully and progress our package of objectives together.

We will consider all the points raised by noble Lords today and during the passage of the Bill. We will do this alongside the responses and evidence received as part of the consultation, before bringing further proposals. I end on the specific point raised by the noble Lord, Lord Holmes, on the LAION case, which is under German law. I will ask the IPO to give him a full answer on that.