Artificial Intelligence: Legislation

Lord Vallance of Balham Excerpts

Monday 21st July 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. They include being a member of the global advisory board at Endava plc and a member of the science and technology advisory committee of the Crown Estate.

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

My Lords, the Government are preparing a consultation on AI legislation in order to gather views on the proposals. This would better prepare the UK for AI security risks, while making sure that our statute book is ready for the age of AI and its undoubted opportunities. The Government will update Parliament in due course.

[Lord Holmes of Richmond (Con)]

My Lords, I was rather hoping that we might have a consultation for our summer reading, but we will await the consultation and subsequent Bill. The Government have said that they will take a domain-specific approach to the legislation and regulation of AI, rather than cross-sector. To that end, how will consistency be assured through such an approach?

Similarly, what about areas that currently do not have any competent regulator, such as hiring and recruitment? People find themselves not being shortlisted for roles because AI has made that decision, without even knowing that AI was in the mix. Even if they knew that AI was in the mix, there would be no place to seek redress. Surely, clarity, certainty and consistency are what anyone in the country requires when it comes to AI, whether they are an investor, innovator, consumer or creative. How will a domain-specific approach, with no guiding mind, ensure that clarity, consistency and certainty?

[Lord Vallance of Balham (Lab)]

I am sorry that I disappoint the noble Lord with his summer reading list. I am happy to meet him to give him some other recommendations of good books.

As set out in the AI Opportunities Action Plan, we believe that most AI systems should be regulated by the existing regulators. They are the experts. They need the AI skills to be able to do it. The Government are working with regulators to drive collaboration and alignment across the regulatory domains through, for example, the Digital Regulation Cooperation Forum’s AI and digital advisory hub and the Regulatory Innovation Office, which is working with DRCF to collaborate on the support of the development of tools to help businesses and investors better navigate digital regulations.

We recognise the point the noble Lord has raised, which is that there are some aspects of AI that need to be looked at across AI generally. That is why we are undertaking consultation on legislation, and why we have ongoing work with all the departments around the impact on jobs that he described.

[Lord Clement-Jones (LD)]

My Lords, as long ago as February, the Minister’s Secretary of State said:

“AI is a powerful tool and powerful tools can be misused. State-sponsored hackers are using AI to write malicious code and identify system vulnerabilities, increasing the sophistication and efficiency of their attacks. Criminals are using AI deepfakes to assist in fraud, breaching security by impersonating officials”.


He went on to say:

“These aren’t distant possibilities. They are real, tangible harms, happening right now”.


If that is the case, why are the Government not taking a much more urgent approach to the introduction of regulation? I declare an interest as an adviser to DLA Piper on AI policy and regulation.

[Lord Vallance of Balham (Lab)]

I agree that this is an urgent issue, and it is changing day by day. The urgency is reflected in the work that has already taken place through the Online Safety Act, the Data (Use and Access) Act and, of course, the Crime and Policing Bill. But the need to get the legislation right for a more widespread AI Bill is important and has to be taken with due consideration. It would be very wrong to try to rush this. A consultation that brings in all the relevant parties will be launched, and that will be the time when we can make sure that we get this absolutely right.

[Viscount Colville of Culross (CB)]

My Lords, at the Bletchley AI safety summit, major AI companies, such as Google, signed a voluntary agreement that they would not release AI frontier models without a safety card explaining how they had been tested and by whom. However, in March this year, Google released its Gemini 2.5 model without such a safety card. Does the Minister agree that examples such as this only add pressure for AI models safety testing to be put on a statutory basis?

[Lord Vallance of Balham (Lab)]

We do agree that the issue of safety in AI is very important. That is why we formed the AI Security Institute, which is busy working with companies around the world, testing their models, bringing their models in, working out where the vulnerabilities are, working in a way that allows those companies to build in the safety requirements that are needed, and, importantly, working with other AI safety and security institutes around the world. They have between them formed a group that is looking at these very issues. This is something we will be very vigilant on. It is something the world needs to be vigilant on as these models rapidly advance.

[Viscount Stansgate (Lab)]

My Lords, I agree with my noble friend that it is important to get it right. But, in addition to the consultation, will it be the case that any future proposed Bill will be subject to pre-legislative scrutiny, to allow both Houses of Parliament to look in more detail at these very important issues?

[Lord Vallance of Balham (Lab)]

I thank my noble friend. The consultation, which is in the process of being developed, will need input from everybody. It is important that we get the right people looking at what this consultation needs. As that consultation rolls out, it will be important that we have very widespread engagement right across Parliament.

[The Lord Bishop of Newcastle]

My Lords, I am very pleased that Blyth in north-east England has been chosen as the site of a new AI data centre. This represents good investment in training and skills and in transport infrastructure. However, data centres have a lot of impact on the environment and local communities, particularly in terms of water shortages. What ongoing assessment has been done of the impact, particularly on water shortages in local communities?

[Lord Vallance of Balham (Lab)]

I thank the right reverend Prelate for that question. I gave quite an extensive Answer on water and AI last week. There are specific requirements for places that could host the new AI growth zones, including for the power supply but also, importantly, the ability to look at how water is used, the use of technologies to reduce water use, including recirculation and the types of chips that allow you to generate less heat during processing, and an obligation to work with water companies to come up with a clear, credible plan.

[Viscount Camrose (Con)]

My Lords, on 3 July, over 150 major EU businesses wrote to the European Commission seeking a pause on the rollout of the EU’s AI Act. They objected, among other things, to its rigidity, complexity, overregulation and threat to competitiveness. What do the Government make of these objections? Do they remain as keen as they were in opposition on close alignment with the EU on AI regulation?

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[Lord Vallance of Balham (Lab)]

I think the noble Viscount is very well aware that we have taken a rather different approach, in that we are proposing regulation largely through the existing regulators rather than having everything in one place. We are now looking at an AI Bill that would go across; that is what the consultation will be about.

This is one of those areas where it is crucial to work with colleagues around the world. This is not a domestic but a global issue, and one that has to be dealt with with our colleagues in the US and in the EU. We will look very carefully at some of the features of the EU Act, which, as the noble Viscount rightly said, have been carefully looked at by a number of people, who found some things that I think the EU also wishes to change as it looks at its legislation. This goes back to my earlier answer: if we rush the consultation, we will get this wrong; if we take the time and do it right, we could end up having the best regulation in this area, which will none the less need to change, as this advances very rapidly.

[Baroness Kidron (CB)]

My Lords, both the AI Opportunities Action Plan and the industrial strategy outline a commitment to sovereign AI, including the creation of a UK sovereign AI unit, but with little detail about the timeline or the terms under which it will operate. Meanwhile, the Government continue to sign contracts with global AI firms across multiple government departments without reference to the concerns expressed in both Houses about the need to protect the UK’s valuable datasets. Could the noble Lord reassure the House that the UK’s very valuable public datasets will not be shared with international tech companies before Parliament has the opportunity to understand the terms on which they are being shared? Given that the Government have pushed back the timeline of the promised AI Bill, could he also explain how and when the details of what constitutes UK sovereign AI will be established?

[Lord Vallance of Balham (Lab)]

The noble Baroness will be aware that we have allocated up to £2 billion for AI, £500 million of which is on sovereign AI. That unit is just being established now. It will look at the features, which, of course, include data, hardware and software. One thing I can tell her, which I hope she will be pleased with, is that there is a programme on the creative content exchange in the creative industries sector that is specifically designed to look at how data from the creative industries can be pulled together so that it is easy to license it, easy to understand what has happened to it, and, therefore, easier to use it appropriately in an AI setting.

Data Centres: Energy and Water Consumption

Lord Vallance of Balham Excerpts

Tuesday 8th July 2025 Lords Chamber

[The Lord Bishop of Oxford]

To ask His Majesty’s Government what plans they have (1) to measure, and (2) to regulate, the amount of (a) energy, and (b) water, consumed by data centres in the United Kingdom.

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

The Government are actively monitoring the data centre sector and published the first government estimate of data centre capacity on 1 May, including measures indicating energy use. As part of the Government’s commitment to reduce the use of the public water supply by 20% by 2037-38, Defra is examining how the efficiency of water use in data centres can be improved and the Environment Agency is working to improve the understanding of water and resilience needs.

[The Lord Bishop of Oxford]

I thank the Minister for his Answer. As he is aware, the Government have a dedicated energy council, but there is, as yet, no similar provision for water, no formal record of all the current data centres or the water they use and no public criteria for assessing new proposals such as the one in Culham in Oxfordshire. Does the Minister agree that water demand and supply in AI growth zones is a pressing problem? Do the Government have any plans to establish an AI and water task force and will it have representation from local communities?

[Lord Vallance of Balham (Lab)]

The right reverend Prelate is right that water is a very large issue for data centres, as they consume large amounts of it. There are now technologies that reduce that use, such as recirculation of water. The AI growth zone proposals are required to set out water use—the volume of water required, the availability of that volume, the timeline of delivery and any wider infrastructure requirements or constraints—and they must work with the water provider to do that. Applications must confirm the above from the relevant water supplier and include any other associated impacts. A working group on sustainability has also been set up under the AI Energy Council.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am an officer of the All-Party Parliamentary Water Group and follow these issues very closely. Does the Minister share my concern that data centres are being built and expanded very close to major new housing developments in areas of deep water stress? What is the Government’s policy to ensure that households, as well as the data centres concerned, will have sufficient drinking water and sufficient evacuation of wastewater sewage?

[Lord Vallance of Balham (Lab)]

The proposal process for AI growth zones, which is where the big data centres will be placed, started in early February and ended at the end of February. Over 50 proposals have come forward, each of which needs to deal specifically with water in relation to the local environment and local plans, and to plan that with the water company.

[Earl Russell (LD)]

My Lords, demand is increasing faster than our policies for AI energy usage. AI is desperately power hungry, just at the pinch point where we are desperately trying to reach clean power by 2035 and our electricity demand is set to more than double by 2050. I call on the Government urgently to create an AI energy efficiency strategy, with the target of ensuring that AI usage and savings are better than carbon neutral before 2030.

[Lord Vallance of Balham (Lab)]

The AI Energy Council is set up as a joint council between the Secretary of States for DESNZ and for DSIT. The noble Earl is right that, at the moment, around 2.5% of current total energy consumption is in data centres. The total amount of electricity use is due to go up from seven to 62 terawatt hours by 2050. In relation to the overall increase in requirement for electric vehicles and others, that is still about 10% of the total. However, it is a really important issue that the energy council is looking at and it leads to questions about the supply, and work on small module reactors may be part of the solution.

[Lord Wigley (PC)]

My Lords, would the Minister accept that, for both energy and water, there may be significant implications for the devolved Governments in Scotland and Wales, particularly with water needed in north-west England, the Midlands and the Thames area coming from water supplies from Wales? Can he undertake to keep in close touch with the Governments of Wales and Scotland on these matters?

[Lord Vallance of Balham (Lab)]

The AI growth zones can be distributed right the way around the country. There is a very specific plan for each of those proposals, and they must be looked at with local engagement with the relevant authorities. I am sure there will be contact with the devolved Governments as part of that.

[Viscount Stansgate (Lab)]

My Lords—

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[Viscount Stansgate (Lab)]

My Lords, I for one am very grateful to the right reverend Prelate for raising this issue. I think the House is only beginning to realise just how staggering big tech’s energy usage is. I understand that Google has doubled its CO₂ emissions since 2020 and signed a contract with Commonwealth Fusion Systems for 200 megawatts of power, using a power plant that does not even exist yet. Can my noble friend say whether more can be done to enable big tech companies to reveal how much energy usage and water is going to be involved in the use of AI? We ought to have an honest discussion about the costs involved in both those areas.

[Lord Vallance of Balham (Lab)]

I have given answers on the data centres. The broader question of AI has been looked at by a number of publications, including recently in the journal Nature, which looked at the overall energy consumption by AI and the overall potential energy reduction by the application of AI across industries. It turned out to be slightly net positive for energy. The noble Viscount is right that energy consumption is a major area to think about. There are new chips that are reducing energy consumption by a thousandfold and new approaches to machine learning that can reduce it. It is high on the list of concerns, and that is why the AI Energy Council has formed a sustainability working group.

[Baroness Stuart of Edgbaston (CB)]

My Lords, in the light of the National Preparedness Commission report and the energy requirement of the AI data centres, is the Minister satisfied that this is not undermining our energy systems’ resilience?

[Lord Vallance of Balham (Lab)]

The latest data suggests that it is about 2.5% of total energy consumption. That will increase, and is being taken into account. It is clearly important that, as we move to more renewable sources of energy and come off reliance on gas, we have an increased supply. It is also why the Government announced that Rolls Royce will be the first partner for small modular reactors, which will be an important part of our energy system going forward.

[Viscount Camrose (Con)]

My Lords, building on the question from the noble Baroness, now that the Government have renamed the AI Safety Institute as the AI Security Institute, can the Minister confirm that its expanded role will indeed include energy security? If so, what view does it take of the resilience of UK- hosted AI systems of exposure to high energy costs and intermittent energy sources?

[Lord Vallance of Balham (Lab)]

The Government believe that the best way to deliver price reductions for clean power is the clean power 2030 mission, so that the marginal price of electricity is set by gas less and less often. The increase in renewables will allow that, plus the advent of small modular reactors. The AI Security Institute is not the place to consider energy security; that is the AI Energy Council. Its sustainability working group is considering whether renewable and low-carbon energy solutions should be adopted, and where; how innovation in AI hardware and chip design can improve energy efficiency; whether new metrics, alongside the PUE—power usage efficiency—metric should be introduced; and the impact of new energy solutions such as small modular reactors. That speaks to the issue of resilience.

[Lord Harris of Haringey (Lab)]

My Lords, I refer to my interest as chair of the National Preparedness Commission. I am grateful to the noble Baroness for referring to a report that we issued. My question is a slightly different one. Given that data centres are now an integral and necessary part of the infrastructure of this country in the private sector and the public sector, who is responsible for their security?

[Lord Vallance of Balham (Lab)]

The Government are aiming to designate data centres as a type of commercial project to be considered under the nationally significant infrastructure projects plan, allowing the Secretary of State to decide on applications for new centres and bringing this into clear view of the security agencies. The security agencies are, of course, engaged in the question of how to ensure the security of what we have in data centres. On the broader point about the data itself, that is covered by the AI Security Institute.

ARIA: Scoping Our Planet Programme

Lord Vallance of Balham Excerpts

Tuesday 8th July 2025 Lords Chamber

[Lord Clement-Jones]

To ask His Majesty’s Government what assessment they have made of the Advanced Research and Invention Agency’s handling of an Environmental Information Regulations request regarding its “Scoping Our Planet” programme.

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

ARIA fully complies with its responsibilities under the Environmental Information Regulations. ARIA is committed to transparency; it publishes regular information on its programmes in its annual reports and accounts, in the corporate plan and through the quarterly transparency disclosures on its website. It publishes its responses to all EIR requests.

[Lord Clement-Jones (LD)]

My Lords, the Minister mentions ARIA being committed to transparency, but that highlights the fact that it is not subject to the general freedom of information provisions under the ARIA Act. I note that on Report on the ARIA Bill the Labour Opposition Front Bench signed and supported in a Division an amendment tabled by me to bring ARIA into the provisions of the Freedom of Information Act. In fact, the noble Baroness, Lady Chapman of Darlington, said:

“The Government’s determination to keep ARIA’s projects and decision-making secret is worrying. This is a matter of principle: do they believe in transparency, or not?”—[Official Report, 14/12/2021; col. 209.]


I can now ask the same question of this Labour Government: do they believe in transparency? Will they bring ARIA within the Freedom of Information Act?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for his question. I know that he is prone to shaking his head when Ministers answer. I fear that I may give him a neck injury during this answer.

Of course we are committed to transparency, but we have no plans to bring ARIA into the scope of the FoI Act. ARIA is a unique organisation with unique freedoms; it has been designed deliberately to be a small, agile body with limited administrative capacity so that most of its efforts can be spent devoted to finding the answers to some of the missions that it funds —long-term transformation research for the benefit of the UK. However, both the Government and ARIA understand the importance of transparency, and ARIA publishes all its information on recipients of programme funding, transactional information on its operational costs, and data on the regional distribution of its programmes and funding. It complies with the Environmental Information Regulations, is audited annually by the NAO, and publishes its annual reports and accounts.

[Lord Patel (CB)]

My Lords, I support what the Minister just said about the transparency that ARIA has managed to establish, despite the absence of freedom of information legislation. Its work in terms of requests for research and the research funding awarded are all available on its website. Would the Minister agree that ARIA has been a great success hitherto in establishing strong co-operation and relations, nationally and overseas, and bringing in some inward investments from overseas? The current CEO, Ilan Gur, should be congratulated on doing so, as he is leaving his job for personal reasons to go back to the United States.

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for his comments. I agree that ARIA has got off to a tremendous start under the leadership of Ilan Gur, who will leave his role when a new CEO is appointed—he will stay up until that point. ARIA has done a number of things, including training a whole group of people who otherwise would not be entrepreneurial scientists to be entrepreneurial scientists. Eight new start-ups have occurred as a result of this, and seven UK subsidiaries of global companies have come to the UK. The projects are all at an early stage, but there are some very exciting pieces of work that are now recognised and admired globally.

[Lord Watts (Lab)]

My Lords, have the Government looked at the implications of AI for the Freedom of Information Act? Someone could quite possibly generate 100,000 questions in about half an hour, which will put pressure on the public sector.

[Lord Vallance of Balham (Lab)]

I have not looked at that specific point, but I accept that that is indeed a possibility. The Freedom of Information Act has an enormous number of important roles, but it can be overwhelming. That is another reason why a very small organisation such as ARIA, which is focused on getting its work out while being very transparent about what it is doing, is freed from some of the requirements of that Act, which can place a very large administrative burden on a small organisation.

[Lord Reid of Cardowan (Lab)]

My Lords, when the Minister is considering whether to apply freedom of information, will he consider the learned comments of the former Prime Minister who introduced it, Mr Blair, who described it as the worst mistake he ever made?

[Lord Vallance of Balham (Lab)]

I will not get into whether it was or was not that, but I say again that we have no plans to bring ARIA under the Freedom of Information Act, which I think is important. If we go back to the origins of ARPA—the organisation in the US that led to DARPA, IARPA and many other such organisations on which ARIA is based—its originators in the 1950s and 1960s said that the reason no other country had managed to emulate that successful programme was because they kept everything on too short a leash. We should not make that mistake.

[The Lord Speaker (Lord McFall of Alcluith)]

Second Oral Question.

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[Lord Grocott (Lab)]

I have a question for the Minister; I am pretty sure that the answer will be that he has no idea, and that will not be any reflection on him because I do not have any idea either. What has been the total cost to the public purse of the implementation of freedom of information legislation for all the numerous organisations, large and small, across the public sector?

[Lord Vallance of Balham (Lab)]

Perhaps unsurprisingly, I do not carry that figure in my head. I can tell my noble friend that ARIA has spent 300 hours over the past few months dealing with requests under the Environmental Information Regulations alone, so he can imagine the scale of requests that can come through other things. I am sure the cost of providing information requests to public bodies has been very high.

[Viscount Camrose (Con)]

My Lords, when Ilan Gur recently and sadly announced that he intended to step down as CEO of ARIA, he said that his role was always intended to be time-bound. That being the case, was a succession plan in place to appoint his replacement? Once a new CEO is appointed, will the Government strain every sinew to make sure that a succession plan is in place for their successor?

[Lord Vallance of Balham (Lab)]

It has been known for a little while that Ilan Gur would return to the US, where his family is now back. I know, because I was on the board of ARIA for a period before I took up this post, that there were lots of discussions around succession planning. I am sure there will be succession planning in the future as well. What is important—this is why the announcement has been made in this way—is that Ilan is clear that he will stay until the new person is in place.

[Lord Clement-Jones (LD)]

My Lords, the Minister’s arguments are sounding dangerously like those made by the noble Lord, Lord Callanan, on Report, which I am sure he will be delighted by. Does he accept that DARPA is covered by US freedom of information legislation, whereas ARIA is not?

[Lord Vallance of Balham (Lab)]

DARPA is a much larger organisation and the ARPA family overall probably has close to 1,000 people working in it in total. DARPA is covered by the US Act, but it has a much larger base and many more people working with it. As the noble Lord, Lord Patel, said, the amount of information that ARIA puts in the public domain is more than that of almost any other body in the world.

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.