Undersea Cables

Lord Vallance of Balham Excerpts

Tuesday 3rd December 2024 Lords Chamber

[Lord Harris of Haringey (Lab)]

My Lords, I refer to my interest as chair of the National Preparedness Commission and beg leave to ask the Question standing in my name on the Order Paper.

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

We are working closely with international partners following the breakage of two subsea telecommunications cables in the Baltic Sea a fortnight ago. It is important that we let those investigations run their course. Subsea cables are critical to UK telecommunications digital infrastructure, and we are committed to maintaining and enhancing the security and resilience of that infra- structure. We will continue to co-ordinate with security partners, the subsea cables industry and international bodies on this issue.

[Lord Harris of Haringey (Lab)]

My Lords, I am grateful to the Minister for that reply and the recognition of the criticality to the UK of these subsea connections. What consideration are the Government giving to protection and making sure that we can recover quickly in circumstances in which those cables are disrupted or severed? I understand that in Australia, for example, the equivalent of Ofcom requires a licence from those making those connections, and that licence must specify what arrangements are in place for the immediate repair of any severed cable. Are we considering such measures or any others?

[Lord Vallance of Balham (Lab)]

I thank my noble friend for that question. There are 64 cable systems that leave the UK, with 116 cables. About 200 cables break every year around the world, and 10 to 20 of those are in the UK. There is a system of payment from the companies for a ship which gives 24-hour, seven-days-a-week coverage for repairs, as well as systems, of course, to get other commercial repairs done at a slower pace. We work closely with others around the world, including the Australians, and are aware of that model. There are rather specific circumstances which mean that, at the moment, that does not work here, but the ability to get ships rapidly to broken cables is important and that is facilitated by the planning arrangements in place.

[Lord Stirrup (CB)]

My Lords, protection is important, but there is no such thing as a perfect defence. Apart from repair, resilience is crucial in this area as in so many others. What stress-testing has been carried out to identify the range of impacts that could result from interruptions to our undersea infrastructure? What measures would be necessary to ameliorate the impact of those interruptions?

[Lord Vallance of Balham (Lab)]

The cable system is regularly reviewed. As I said, 10 to 20 cable breaks occur per year, largely as a result of fishing, anchor pullage and undersea landslips. DSIT, the MoD and other parts of the system review this under the national risk assessment to keep looking at what is required for a resilient system.

[Earl Attlee (Con)]

My Lords, do we have an agreed retaliation doctrine?

[Lord Vallance of Balham (Lab)]

As I have said, the view is that, of the 10 to 20 breaks per year, nearly all are due to fishing vessels, anchors and natural events under the sea. Clearly, that is not a retaliation issue. I think the noble Earl is talking about malign attacks, and we have to wait for the outcome of the investigations into the current breaks.

[Lord Anderson of Swansea (Lab)]

My Lords, the German Defence Minister was quick off the mark in ascribing the damage to sabotage. Do the Government agree? Do they point the finger at the Chinese or the Russians?

[Lord Vallance of Balham (Lab)]

At the moment, the answer is neither, because an investigation is being undertaken by Lithuanian, Swedish, Finnish and German ministries to try to understand exactly what went on. Until that report is out, it is premature to speculate.

[Earl Russell (LD)]

My Lords, it is not just undersea fibre-optic cables which bring vital supplies to our shores. UK energy security is highly dependent on undersea gas pipelines and electricity interconnectors. Recently, we have seen reports of suspicious Russian ships near Norwegian gas hubs. Pat McFadden has warned of cyberattacks on our energy networks. Can the Minister reassure us that the UK Government are actively working with our allies to provide adequate protection for our undersea energy infrastructure?

[Lord Vallance of Balham (Lab)]

I thank the noble Earl for the question. This is an important area. As I have said, most of the breaks are not malign, but there is, of course, that risk. Regular reviews are undertaken as part of the national risk assessment. The MoD works with DSIT and others to look at what the risks are. We also work continuously with partners, including NATO. In 2023, there was a specific NATO action to look at critical undersea infrastructure co-ordination to make sure that a response and detection system was in place.

[Lord West of Spithead (Lab)]

My Lords, the joint maritime operations centre, together with the embedded national maritime intelligence centre, are able to monitor shipping throughout our EEZ and European waters, so we know where those ships are. We know which Russian ships in particular are involved in this sort of operation. We have now purchased the RFA “Proteus”, which we should be able to get to where these events are happening. When will we get the second ship? When will we be on top of one of these when it is doing something? I do not know about retaliation, but would we then be able to arrest a ship in our EEZ that was damaging one of our cables?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for the question. It is quite a long way from my brief in DSIT. If I may, I shall try to get somebody to answer it for him.

[Lord Rogan (UUP)]

My Lords, according to experts, around 75% of transatlantic undersea cables in the northern hemisphere pass through or near Irish Sea waters. As a country that spends around 0.2% of its GDP on security and defence, the Republic of Ireland does not possess anywhere near the capability to protect them. Has this job fallen to the United Kingdom Government? If so, who is paying the bill?

[Lord Vallance of Balham (Lab)]

The detection of breaks is done from land, but the ability to repair them is through an agreement with the commercial companies, which pay into a fund that allows a ship to be on 24/7 standby to provide protection. That is paid for by the companies that put the cables in place.

[Viscount Camrose (Con)]

My Lords, we of course recognise and share the Government’s and House’s concern about increased Russian military activity around these undersea cables. I was pleased that the Minister a couple of times referenced the risk assessments going on, but can he tell the House a little more and expand on his earlier answers about those risk assessments? How do they take place and how often do they occur?

[Lord Vallance of Balham (Lab)]

The national risk assessment is undertaken regularly and led by the Cabinet Office. In this instance, DSIT is the department responsible for the risk to the cables overall, but it is in collaboration with the MoD, the Cabinet Office and others, particularly in relation to assessing risks other than those that I have outlined.

[Lord Trefgarne (Con)]

My Lords, are these cables used only for civilian purposes or also for military purposes?

[Lord Vallance of Balham (Lab)]

The cables provide the connections that we need for all purposes across telecommunications.

[Baroness Stuart of Edgbaston (CB)]

My Lords, may I tempt the Minister again to stray a little from his brief and to return to naval support? At the moment, RFA “Proteus” is the only ship that protects our undersea cable structure. Is his department making representations to the strategic defence review to ensure that a second vessel is purchased?

[Lord Vallance of Balham (Lab)]

There are two vessels. The “Sovereign” is the repair vessel I referred to, which the cable companies pay for and is on standby 24/7 to repair the cables. “Proteus” has a different purpose; it is an MoD vessel that can take account of all underwater structures. It is not a DSIT vessel but an MoD vessel with broad responsibilities.

[Lord Fox (LD)]

My Lords, one way to mitigate risk is to have redundancy in the capacity of the cables, but redundancy costs money for the commercial organisations that own those cables. What is DSIT doing to ensure that there is sufficient redundancy to give us the protection that we need?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for a very important question. As I said, there are some 64 cable systems and 116 cables. We have a lot of redundancy in the system. Despite getting 10 to 20 breaks every year, they do not lead to an interruption because of that redundancy. Three things are important for the redundancy: the number of cables, the geographical diversity or spread of the cables—which provides protection—and the 24/7 emergency repair capability, with a planning consent that allows the vessel to get in very quickly.

Large Language Models and Generative AI (Communications and Digital Committee Report)

Lord Vallance of Balham Excerpts

Thursday 21st November 2024 Lords Chamber

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

We have heard really wonderful insights and thoughtful contributions from across your Lordships’ House this afternoon and I am really grateful to the noble Baroness, Lady Stowell, for organising this engaging debate on such an important topic. It is probably the only debate I am going to take part in which has LLMs, SLMs, exaflops, Eeyore and Tigger in the same sitting.

The excellent report from the Communications and Digital Committee was clear that AI presents an opportunity, and it is one that this Government wish to seize. Although the report specified LLMs and generative AI, as has been pointed out by many, including the noble Lord, Lord Knight, AI is of course broader than just that. It represents a route to stronger economic growth and a safer, healthier and more prosperous society, as the noble Viscount, Lord Camrose, has just said, and we must harness it—it is incredibly important for the country.

Breakthroughs in general-purpose technologies are rare—the steam engine, electricity and the internet—and AI is set to be one such technology. The economic opportunities are already impressive. The AI market contributed £5.8 billion in GVA to our economy in 2023, it employs over 60,000 people and is predicted to grow rapidly in size and value over the next decade. Investing in technology has always been important for growth, and investing in AI is no exception.

Today, already, a new generation of UK-founded companies is ensuring that we are at the forefront of many of these approaches, and leading AI companies have their European headquarters in London. We have attracted significant investment from global tech giants—AWS, Microsoft, CoreWeave and Google—amounting to over £10 billion. This has bolstered our AI infrastructure, supported thousands of jobs and enhanced capacity for innovation.

The investment summit last month resulted in commitments of £63 billion, of which £24.3 billion was directly related to AI investment. The UK currently ranks third globally in several key areas: elite AI talent, the number of AI start-ups, inward investment into AI, and readiness for AI adoption. But we need to go further. In July, DSIT’s Secretary of State asked Matt Clifford to develop an ambitious AI opportunities action plan. This will be published very soon and will set out the actions for government to grow the UK’s AI sector, drive adoption of AI across the economy, which will boost growth and improve products and services, and harness AI’s power to enhance the quality and efficiency of public services. Of course, as was raised early in this debate, this also has to be about creating spin-outs and start-ups and allowing them to grow.

One of the largest near-term economic benefits of AI is the adoption of existing tools to transform businesses and improve the quality of work—a point raised very clearly by the noble Lord, Lord Ranger. AI tools are already being used to optimise complex rotas, reduce administrative burdens and support analytical capabilities and information gathering, and in healthcare to interpret medical scans, giving back more time for exchanges that truly need a human touch. Government will continue to support organisations to strengthen the foundations required to adopt AI; this includes knowledge, data, skills, talent, intellectual property protections and assurance measures. I shall return to some of those points.

In the public sector, AI could unlock a faster, more efficient and more personalised offer to its citizens, at better value to the taxpayer. In an NHS fit for the future—the noble Lord, Lord Tarassenko, made these points very eloquently—AI technology could transform diagnostics and reduce simpler things, such as administrative burdens, improving knowledge and information flows within and between institutions. It could accelerate the discovery and development of new treatments—and valuable datasets, such as the UK Biobank, will be absolutely essential.

The noble Lord, Lord Tarassenko, rightly identified the importance of building large multimodal models on trusted data and the opportunity that that presents for the UK—a point that the noble Lord, Lord Knight, also raised. Several NHS trusts are already running trials on the use of automated transcription software. The NHS and DHSC are developing guidance to ensure responsible use of these tools and how they can be rolled out more widely.

The noble Lord, Lord Kamall, rightly pointed out the role of the human in the loop, as we start to move these things into the healthcare sector. The Government can and should act as an influential customer to the UK AI sector by stimulating demand and providing procurement. That procurement pool will be increasingly important as companies scale.

DSIT, as the new digital centre of government, is working to identify promising AI use cases and rapidly scale them, and is supporting businesses across the UK to be able to do the same. The new Incubator for Artificial Intelligence is one example.

The Government recently announced that they intend to develop an AI assurance platform, which should help simplify the complex AI assurance and governance landscape for businesses, so that many more businesses can start with some confidence.

Many noble Lords touched on trust, and AI does require trust; it is a prerequisite for adopting AI. That is why we have committed to introducing new, binding requirements on the handful of companies developing the most advanced AI models, as we move towards the potential of true artificial general intelligence. We are not there yet, as has been pointed out. This legislation will build on the voluntary commitments secured at the Seoul and Bletchley Park AI safety summits and will strengthen the role of the AI Safety Institute, putting it on a statutory footing.

We want to avoid creating new rules for those using AI tools in specific sectors—a point that the noble Viscount, Lord Camrose, raised—and will instead deal with that in the usual way, through existing expert regulators. For example, the Office for Nuclear Regulation and the Environment Agency ran a joint AI sandbox last year, looking at AI and the nuclear industry. The Medicines and Healthcare Products Regulatory Agency, or MHRA, launched one on AI medical devices. We have also launched the Regulatory Innovation Office to try to streamline the regulatory approach, which will be particularly important for AI, ensuring that we have the skills necessary for regulators to be able to undertake this new work. That point was raised by several people, including the noble Baroness, Lady Healy.

New legislation will instead apply to the small number of developers of the most far-reaching AI models, with a focus on those systems that are coming tomorrow, not the ones we have today. It will build on the important work that the AI Safety Institute has undertaken to date. Several people asked whether that approach is closer to the USA or the EU. It is closer to the US approach, because we are doing it for new technologies. We are not proposing specific regulation in the individual sectors, which will be looked after by the existing regulators. The noble Lords, Lord Knight and Lord Kamall, raised those points.

It is important—everyone has raised this—that we do not introduce measures that restrict responsible innovation. At the recent investment summit, leaders in the field were clear: some guidelines are important. They create some clarity for companies. Companies currently do not have enough certainty and cannot progress. Getting that balance right will be essential and that is why, as part of this AI Bill, we will be launching an extensive consultation, leading to input, I hope, from experts from industry, academia and, of course, from this House, where many people have indicated today the very insightful points they have to make.

I was asked by the noble Lord, Lord Ranger, whether pro-innovation regulation would be the theme. That was a topic of a review that I undertook in my last role and that will certainly be a theme of what we wish to do. We will continue to lead the development of international standards through the AI Standards Hub—a partnership between the Alan Turing Institute, the British Standards Institution and the National Physical Laboratory—and by working with international bodies. Indeed, I went to speak to one of the international standards bodies on this topic a few weeks ago.

I turn to some other specific points that were raised during the debate. The AI Safety Institute’s core goal is to make frontier AI safer. It works in partnership with businesses, Governments and academia to develop research on the safety of AI and to evaluate the most capable models. It has secured privileged access to top AI models from leading companies, including test models pre deployment and post deployment with OpenAI, Google DeepMind and Anthropic among others. The institute has worked very closely with the US to launch the international network of AI safety institutes, enabling the development and adoption of interoperable principles, policies and best practice. That meeting has taken place in California this week. The noble Baroness, Lady Wheatcroft, asked for an update and I think we will have the update when the readout of that meeting is known. Just this week the AI Safety Institute shared a detailed report outlining pre-deployment of Anthropic’s upgraded Claude 3.5 Sonnet model. This will help advance the development of shared scientific benchmarks and best practices of safety testing and is an important step because it begins to show exactly how these things can also be made public.

I was asked about mandatory safety testing. I think this model, which has been a voluntary one and has engaged big companies so that they want to come to the AI Safety Institute, is the correct one. I have also noted that there are some other suggestions as to how people may report safety issues. That is an important thing to consider for the future.

To respond to the points raised by the noble Lords, Lord Strasburger and Lord Griffiths, the question of the existential threat is hotly debated among experts. Meta scientist Yann LeCun states that fears that AI will pose a threat to humanity are “preposterously ridiculous”. In contrast, Geoffrey Hinton has said it is time to confront the existential dangers of artificial intelligence. Another British Nobel prize winner, Demis Hassabis, the CEO of DeepMind, one of the most important AI companies in the world, suggests a balanced view. He has expressed optimism about AI, with its potential to revolutionise many fields, but emphasises the need to find a middle way for managing the technology.

To better understand these challenges, the Government have established a central AI risk function which brings together policymakers and AI experts with a mission to continuously monitor, identify, assess and prepare for AI-associated risks. That must include in the long term the question of whether what I will call “autonomous harm” is a feature that will emerge and, if so, over what time and what the impact of that might be.

I turn to data, the very feedstock for AI. First, data protection law applies to any processing of personal data, regardless of the technology, and we are committed to maintaining the UK’s strong data protection framework. The national data library will be the key to unlocking public data in a safe and secure way, and many speakers this afternoon have indicated how important it will be to have the data to ensure that we get training of the models. There is a huge opportunity, particularly, as has been indicated, in relation to areas such as the NHS.

The Information Commissioner’s Office has published guidance that outlines how organisations developing and using AI can ensure that AI systems that process personal data do so in ways that are accountable, transparent and fair.

On copyright, I will not list the numerous noble Lords who have made comments on copyright. It is a crucial area, and the application of copyright law to AI is as disputed globally as it is in the UK. Addressing uncertainty about the UK’s copyright framework for AI is a priority for DSIT and DCMS. We are determined to continue to enable growth in our AI and creative industries, and it is worth noting that those two are related. It is not that the creative industries are on one side and AI on the other; many creative individuals are using AI for their work. Let me say up front that the Government are committed to supporting the power of human-centred creativity as well as the potential of AI to unlock new horizons.

As the noble Baroness, Lady Featherstone, has rightly pointed out, rights holders of copyright material have called for greater control over their content and remuneration where it is used to train AI models, as well as for greater transparency. At the same time, AI developers see access to high-quality material as a prerequisite to being able to train world-leading models in the UK. Developing an approach that addresses these concerns is not straightforward, and there are issues of both the input to models and the assessment of the output from models, including the possibility of watermarking. The Government intend to engage widely, and I can confirm today that we will shortly launch a formal consultation to get input from all stakeholders and experts. I hope that this starts to address the questions that have been raised, including at the beginning by the noble Baroness, Lady Stowell, as well as the comments by the noble Baroness, Lady Healy.

On the important points that the noble Viscount, Lord Camrose, raises about offshoring and the need for international standards, I completely agree that this is a crucial area to look at. International co-operation will be crucial and we are working with partners.

We have talked about the need for innovation, which requires fair and open competition. The Digital Markets, Competition and Consumers Act received Royal Assent in May, and the Government are working closely with the Competition and Markets Authority to ensure that the measures in the Act commence by January 2025. It equips the CMA with more tools to tackle competition in the digital and AI markets. The CMA itself undertook work last year that identified the issues in some of the models that need to be looked at.

Demand for computing resource is growing very quickly. It is not just a matter of size but of configuration and systems architecture. Two compute clusters are being delivered as part of the AI research resource in Bristol and Cambridge. They will be fully operational next year and will expand the UK’s capacity thirtyfold. Isambard-AI is made up of more than 5,500 Nvidia GPUs and will be the UK’s most powerful public AI compute facility once it is fully operational next year. The AI opportunities action plan will set out further requirements for compute, which we will take forward as part of the multiyear spending review. I just say in passing that it is quite important not to conflate exascale with AI compute; they are different forms of computing, both of which are very important and need to be looked at, but it is the AI compute infrastructure that is most relevant to this.

The noble Lord, Lord Tarassenko, and the noble Baroness, Lady Wheatcroft, asked about sovereign LLMs and highlighted the opportunity to build new models based on really specific trusted data sources in the UK. This point was also raised in the committee report and is a crucial one.

I have tried to answer all the questions. I hope that I have but, if I have not, I will try to do so afterwards. This is a really crucial area and I am happy to come back and update as this goes on, as the noble Viscount, Lord Camrose, asked me to. We know that this is about opportunity, but we also know that people are concerned, rightly, about socioeconomic risks, labour market rights and infringement of rights.

There are several other points I would make. It is why we have signed the Council of Europe’s convention on AI and human rights, why we are funding the Fairness Innovation Challenge to develop solutions to AI bias, why the algorithmic transparency recording standard is being rolled out across all departments, why the Online Safety Act has powers to protect against illegal content and specifically to prevent harms to children and why the central AI risk function is working with the AI Safety Institute to identify and reduce the broader risks. The Government will drive private and public sector AI development, deployment and adoption in a safe, responsible and trustworthy way including, of course, with international partners.

I thank noble Lords for their comments today. It is with great urgency that we start to rebuild Britain, using the technology we have today, and prepare for the technologies of tomorrow. We are determined, as the noble Viscount, Lord Camrose, said, that everyone in society should benefit from this revolutionary technology. I look forward very much to continuing engagement on this important topic with what I hope is an increasing number of noble Lords who may find this rather relevant to everyday life.

Satellites: Adverse Effects on Astronomy

Lord Vallance of Balham Excerpts

Wednesday 20th November 2024 Lords Chamber

[Viscount Stansgate (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. The updated register of interests will show that I am a member of the All-Party Parliamentary Group for Dark Skies.

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

The Government recognise the importance of mitigating the adverse effects of satellites on astronomy. At this year’s United Nations Committee on the Peaceful Uses of Outer Space, the UK played a key role in securing an agenda item on dark and quiet skies, focused on protecting optical and radio astronomy. The Government work with astronomers and industry to develop mitigation strategies, and remain committed to international collaboration on this issue.

[Viscount Stansgate (Lab)]

My Lords, I thank my noble friend for that Answer. This is a complex area because the sky is being filled with thousands of satellites —around 28,000 are currently going around the earth—and they interfere with astronomy in both the radio and the optical wavelengths. Mr Elon Musk personally controls two-thirds of all the active satellites going around the earth, having launched his 7,000th satellite this autumn, and he has plans for 34,000 more. Against this backdrop, can my noble friend the Minister be confident that major international astronomical facilities—such as the Square Kilometre Array, which is based in South Africa and Australia and is headquartered at Jodrell Bank here in the UK—can undertake their work without serious interference from large satellite constellations? If not, what can the Government try to do to mitigate this interference by working with satellite operators, astronomers and international partners?

[Lord Vallance of Balham (Lab)]

I thank my noble friend for the question. There is a 10% increase, year on year, in light pollution from land, and there is a substantial increase in the problem of radio and light interference from satellites, as my noble friend says. The number of satellites circulating was about 2,000 in 2019, but it is now well over 10,000 and projected to go very much higher. Because of that, we have pushed to get this very item discussed next year by the scientific and technical committee, which is a sub-committee of the Committee on the Peaceful Uses of Outer Space, to try to make sure that there is an international approach to reducing the problem, including mitigation strategies for satellites that will be put up.

[Lord Lancaster of Kimbolton (Con)]

My Lords, the UK space sector is worth over £20 billion and employs about 50,000 people. The UK launched its first space strategy in September 2021, and the noble Viscount may be concerned to learn that the first point of its 10-point plan is to dominate the European satellite industry. Do the Government still support the space strategy published in 2021, or do they intend to review it?

[Lord Vallance of Balham (Lab)]

The cost of launch has come down by something like 95%. The UK remains committed to getting a launch and remains committed to the space strategy as laid out.

[Lord Clement-Jones (LD)]

My Lords, in that National Space Strategy, the previous Government focused on encouraging lower earth orbit satellites, which are increasingly contributing to the loss of dark skies, as we have heard. Will this Government focus on incentives for the development of higher-orbit satellites, such as geostationary satellites, particularly the micro versions, of which far fewer are needed? They offer the best cost economics, compared to LEO systems, and have a lower impact on the night sky.

[Lord Vallance of Balham (Lab)]

The noble Lord makes an extremely important point about the size of satellites, which is one of the problems with the interference from both radio and optical imaging. The smaller satellites, which the UK is extremely good at making, will become an increasing part of the solution. On orbit, we have a commitment to low orbit through the OneWeb approach—where there are about 700 in low orbit—and to higher orbit where it is appropriate to do so.

[Lord Cromwell (CB)]

My Lords, the global space industry is said to be worth about $500 billion. As we launch more and more material into space, which is largely unregulated, the orbits around this planet are getting clogged with blizzards of flying junk. A single bolt took out a French satellite not long ago. Does the Minister agree with me that the environment around our planet is every bit as important as the environment on our planet? Will he commit to raising public awareness of this underappreciated tragedy?

[Lord Vallance of Balham (Lab)]

My Lords, the question about the number of things circulating in space and the implications of that is very important indeed. The number of satellites projected to be launched by 2030 could be as high as 400,000, with estimates ranging from 50,000 to 400,000. This is a very big issue. The amount of space debris is increasing as well, which also contributes to the problem. The UK promotes the sustainable use of space and there is a range of initiatives, from regulation and standards to research, space observation and monitoring capabilities, as well as technologies for active debris removal and in-orbit servicing to try to make things last longer, all of which we will continue, along with the notion of satellite refuelling. This is a growing problem and one that we have raised with the United Nations body and will continue to do so.

[Lord Harris of Haringey (Lab)]

My Lords, I refer to my interests in the register as chair of the National Preparedness Commission. As an economy, we are increasingly reliant on positioning, navigation and timing signals from satellites in space. The Minister participated in the event organised by the Royal Institute of Navigation this morning, which I also spoke at. Could he share with us the Government’s plans around the vulnerability that our national economy and all our businesses will face if there is disruption to PNT signals, either because of space junk or solar activity, or malign activity by another nation? How well prepared are we to deal with those issues?

[Lord Vallance of Balham (Lab)]

This is a critical question. The Royal Institute of Navigation has recently—in fact, today—launched a paper on how to prepare for this. It is something that all critical national infrastructure will be urged to look at, to have a plan for what would happen in the event of GPS failure. There is a longer-term question about the alternatives to space-based navigation and there is active work going on in the UK on terrestrial approaches, including the use of quantum systems to try to get a robust secondary approach to PNT.

[Viscount Camrose (Con)]

My Lords, now that over 70 nations have their own space agency, how will the Government pursue the widest and most effective possible international co-operation in support of Astra Carta’s aim,

“to care for the infinite wonders of the universe”?

[Lord Vallance of Balham (Lab)]

There is a series of international collaborations in place. We are a member of the European Space Agency. A large proportion of the £1.9 billion of the UK Space Agency money goes to the European Space Agency and our collaborators there. We also spend through the MoD and through UKRI. We are members of the UN bodies that deal with the question of a sustainable space sector and space environment. The space environment is increasingly important and needs attention. We will continue to raise this question at the UN bodies.

[The Earl of Devon (CB)]

My Lords, what steps are the Government taking to ensure that we retain access to independent satellite launch capacity in the light of SpaceX’s close relationship with the next US Administration and the recent challenges at the Cornwall spaceport?

[Lord Vallance of Balham (Lab)]

The next UK launches are planned from Scotland, and several operators, including Orbex, Skyrora, and RFA are targeting orbital launches in 2025-26. The launch date depends on a range of factors, including technical readiness of launch operations, but we believe that we have a particularly important launch site which leads directly to polar orbit, which is of particular importance.

[Lord Hamilton of Epsom (Con)]

My Lords, I am very interested in the cost of satellites coming down quite so dramatically. Is this something to do with the private sector producing satellites much more cheaply than NASA used to do as a state-owned organisation?

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

Launch has decreased in cost dramatically and so have satellites. A large part of the reduction in satellite cost has been the advent of small satellites. Surrey Satellite Technology, among others in the UK, has been particularly important in developing those technologies. That was a spin-out from the University of Surrey, and has led the way in producing much cheaper satellites. Multiple satellites can therefore be launched with one launch. That has been a very important change in the system.

Science and Technology: Economy

Lord Vallance of Balham Excerpts

Thursday 31st October 2024 Lords Chamber

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

My Lords, I am sure noble Lords will agree that we have heard many thoughtful and insightful comments from all sides of this House. Like everyone else, I thank my noble friend Lord Stansgate for organising such an engaging and important debate this afternoon. I also thank him for introducing me to the concept of the POBA and for mentioning the Science and Innovation Network, known as SIN. It gives me an opportunity to apologise for the fact that I introduced the right reverend Prelate the Bishop of Oxford to SIN, which does not feel entirely right. I congratulate the noble Baroness, Lady Freeman, on her terrific maiden speech and thank her for the reminder of the ubiquitous value of applying the scientific method in all sorts of ways.

Science, technology and engineering are fundamental to every aspect of modern government, from healthcare and education to housing, planning, green energy and climate. Indeed, I cannot think of a single area of government policy or operations where science, technology or engineering would not make a difference, and none of the national missions are achievable without investment in innovation. Science and technology are essential for national security; they are the bedrock of our shared prosperity in an era of global instability—as the noble Baroness, Lady Neville-Jones, rightly pointed out—when relationships and partnerships will be important. I agree with my noble friend Lord Stansgate that science and technology are not just for DSIT but for all of government, and that there needs to be an all-of-government approach to this. That is why there is a Cabinet Science and Technology Committee, chaired by the Prime Minister.

Our discussion today is focused on growth. Growth is the first mission of this Government but it is also the first mission of my department, because the economic importance of science and technology is hard to overstate. In historical terms, to state the obvious, the impact of innovation is so profound that standard metrics cannot really grasp it. I do not know how you measure the effect of electricity on growth, or how you really look at the impact of the invention of engines, whether that is James Watt’s steam engine, the combustion engine or the jet engine.

Science and technology remain essential for economic growth today. Seven out of the world’s top 10 companies are science and tech companies, and, in the UK, engineering businesses such as Airbus, BAE Systems and Rolls-Royce employ tens of thousands in communities right across the country—whether they are designing the defence technologies needed to keep us safe or developing small modular reactors to drive forward clean energy. My noble friend Lord Hanworth rightly identified the importance of both SMRs and advanced modular reactors. Pharmaceutical giants such as GSK and AstraZeneca, now Britain’s most valuable company, have transformed healthcare for billions, here and around the world.

Today, a new generation of UK-founded—I emphasise that—companies are putting us at the forefront of the global race for tomorrow’s technologies. Our thriving start-up scene means that the UK receives two times more venture capital investment than anywhere else in Europe. Companies such as DeepMind and Darktrace are harnessing the power of artificial intelligence to tackle some of the toughest challenges, whether that is accelerating the discovery of life-saving drugs or protecting us against increasingly sophisticated cyberattacks.

As the noble Lord, Lord Tarassenko, pointed out, Demis Hassabis and Geoffrey Hinton this month became Britain’s latest Nobel Prize winners for their contributions to artificial intelligence. I know that noble Lords will want to join me in congratulating them on their extraordinary achievement. The noble Lord, Lord Tarassenko, rightly asked what it would take for these companies to grow to be major stable companies in the UK. That is a key question.

I hope noble Lords will join me in welcoming the soon to be Baroness Gustafsson to the Government and to this House. We will all benefit immeasurably from her experience and expertise, and I look forward to working closely with her in the Department for Business and Trade.

As several speakers touched on, investment in science and tech is about not just today’s economy but the economy for decades to come. The rather sudden success of large language models is the result of 70 and more years of research. The outcome of that research was never inevitable, and nor can we possibly predict the path that certain technological progress might take in the century ahead. The scientists and engineers who launched the initial spacecrafts could hardly have imagined the impact of GPS technologies, and the post-war pioneers of quantum theory could not have known how British businesses would one day start using quantum science to devise new scanners, transform the way we monitor climate change or, in the future, enhance rapid financial analysis.

While we cannot always know where innovation will take us, nor predict all of the challenges we will face, we can be certain that science and technology will be fundamental in overcoming them and therefore an absolutely core requirement for any modern Government. Countries that invest in science and technology for the long term will perform better than those that do not. The rapid rise of Singapore or South Korea—now two of the most innovative economies on earth—reflects sustained, strategic R&D co-operation between government, industry and academia to invest in the high-value sectors that hold the key to long-term economic growth.

In this context, I am of course pleased to note that, in the Budget, the overall public R&D spending will rise to a record level of £20.4 billion. Of course, as the noble Lord, Lord Stevens, pointed out, we have a multi-year settlement coming up in March, and it will be crucial to make sure that this future-looking approach and the points raised in this debate are taken into account as we think about what needs to happen then. The noble Lord, Lord Waldegrave, rightly pointed out that long-term funding is essential, and we have recently seen the seven-plus-seven years funding for new MRC centres, which I will come back to, and we have a plan for 10-year funding for certain types of science activity.

The UK’s historical success in science and technology is testament to the strength of our research base, with four of the top 10 universities in the world. This simple point was not just noted by academics but raised repeatedly by investors at the recent investment summit. ARIA is a new part of our important funding landscape, adding different ways of thinking and contributing to this vibrant system. The right reverend Prelate the Bishop of Newcastle is absolutely correct to point out that this is right around the UK—the strength of the north-east and the Helix project she referred to is an important part of this.

In the years ahead, researchers and businesses will, of course, continue to push the limits of the possible. Their innovations will provide security, opportunity and prosperity for future generations: better jobs, better public services and longer, happier and healthier lives. However, they will only do so if we protect basic, curiosity-driven research—as several speakers have said—and if we invest in the skills and the infrastructure that research and development need. That includes the development that is not always about economic growth, but has other purposes, as has been pointed out by the noble Baroness, Lady Freeman.

Moreover, as many people have mentioned, including my noble friend Lord Hanworth and the noble Lord, Lord Mair, we must support the formation and growth of companies through strong partnership with the private sector. This is why the industrial strategy will have R&D running through its core. I will say a little more about that in a minute. If we wish to lay the foundations for long-term growth, we must support the businesses that are taking ideas out of the lab and into lives. We know that £1 of every Innovate UK grant creates £3 of benefits for businesses, and we know that businesses that have Innovate UK funding do better than those that do not.

My noble friend Lord Liddle asked about spin-outs. In yesterday’s Budget, the Chancellor announced £40 million to support researchers spinning out from UK cutting-edge research into the firms of the future, right the way across the UK. That money will go to the sorts of things that take place before the private sector is prepared to come in but will catalyse private sector investment. As the Science & Technology Framework makes clear, however, this has to be about more than just public sector research funding and start-ups. The noble Lord, Lord Tarassenko, listed several of the things that need to be done if we are to be successful at growing companies. We need to unlock private sector capital for scaling; we need to have a supportive regulatory environment; and—a point made very eloquently by the noble Baroness, Lady Bowles—we need clear procurement signals and processes.

The recently announced regulatory innovation office will streamline the regulatory journey for high-tech firms to ensure that the process is easier and simpler and that people and public services can benefit from early access to transformative technologies, whether that is AI for healthcare, pest-resistant crops or cultivated meat that could provide food security—all these are in scope. The noble Lord, Lord Taylor, asked about AI in healthcare, and it is one of the topics that will be covered by the regulatory innovation office.

The noble Lord, Lord Lucas, spoke quite rightly about standards and their importance. This will be looked at as part of what the regulatory innovation office does. He also made a point about the poor quality of people sent to standards meetings—I went to two of those in Edinburgh two weeks ago, so I apologise if that was not satisfactory.

The Government will seek to use procurement to be an early customer of high-tech businesses, learning from models such as the National Security Strategic Investment Fund. This will not only help grow our domestic companies but enhance public service delivery. The missions of course provide a very clear opportunity to link procurement through to R&D. The industrial strategy will have R&D running through every sector. It identifies “life sciences” and “digital and technologies” as two of the key growth-driving industries in the decade to come. In yesterday’s Budget, the Chancellor announced the first £70 million—as has been pointed out—for the new Life Sciences Innovative Manufacturing Fund, which is up to £520 million.

The noble Baroness, Lady Greenfield, rightly pointed out—this point was also raised by the noble Lord, Lord St John—that there is something about join-up that becomes very important here. It is about not looking at each of these things individually, but having a package that can work. That package includes everything, including of course the tax environment, which is important for those companies.

My noble friend Lady Donaghy and the right reverend Prelate the Bishop of Newcastle both raised the importance of the space sector. It is an increasingly significant commercial sector for the UK that now employs over 50,000 people. It is one of four areas in the initial wave of work for the regulatory innovation office and, over the current spending period, UKSA will have spent something like £1.9 billion. We will continue to look at ways to support and grow this sector, including through the catapult network and through some of the sectors identified in the industrial strategy, including advanced manufacturing and defence.

We must harness science and technology for public good and for public services. To achieve sustainable, equitable economic growth, it will be necessary to champion the adoption and diffusion of technologies to ensure that everyone can access the benefits that they bring. Today, the UK’s AI sector is the third-largest in the world. At the international investment summit a fortnight ago, over £24 billion in inward investment was directed specifically to AI. However, without the right infrastructure and the right skills, too few British people stand to benefit from the enormous opportunities.

My noble friend Lord Stansgate and the noble Lords, Lord Mair, Lord Rees and Lord Willetts, all raised questions about skills and education. We remain strongly committed to the idea of supporting teachers in their ability to teach these subjects through the subject knowledge enhancement training programme. I also draw to noble Lords’ attention the £300 million for FE. I would like to reassure the noble Baroness, Lady Bowles, and my noble friend Lord Hanworth that, in terms of mathematics, I have recently met both the Royal Society and the Academy for the Mathematical Sciences—which has just got started—on the topic of maths teaching and education. The noble Baroness, Lady Greenfield, rightly raised the question of diversity. I can assure her that we will be very focused on that question of diversity, both in grants and in terms of training. It is crucial if we are to be successful.

We will shortly publish the AI opportunities plan—work done by Matt Clifford—to set out how we will drive up the research, development and adoption of AI across our economy and how we will ensure that the public sector is well positioned to harness its power to improve the quality and efficiency of the services it provides.

We will also, as part of that, look at the question of compute power, which was raised by noble Lord, Lord Waldegrave, and the noble Viscount, Lord Camrose. It is an important area for the UK where we need significant compute infrastructure. The Exascale project in Edinburgh—I visited Edinburgh very recently—was not funded at the time we took over. It is important that we get the AI and the Exascale process sorted out, so that we have proper compute infrastructure right the way across the UK academic and business communities.

I am very pleased to say that the Government Chief Scientific Adviser and the National Technology Adviser will undertake a review to advise on how to promote adoption of technologies more broadly, which is very important. In answer to the specific question asked by the noble Lord, Lord Markham, about the med tech pathway, I can tell him that the innovative devices access pathway has been launched, eight technologies are under review and, in addition, the NICE process has undertaken a review to see what could be done to improve uptake and adoption. I can certainly provide more detail if the noble Lord would like.

Finally, I would like to say something about the national data library, to unlock the full value of public data assets. This is going to be important and will address the questions that were quite rightly raised by the noble Lord, Lord Markham, about the real value and opportunity in life sciences data. We have huge resources, including UK Biobank. Bringing these together and getting them properly interoperable and accessible will be important.

I turn now to some specific points that have been raised by individual noble Lords. The noble Lord, Lord Willetts, rightly identified cell and gene therapy as a crucial and transformative industry, and he raised important points about the complexity of VAT being applied to something that is both a service and a product. I will certainly raise these issues with both the Department of Health and the Treasury, and I will also point out that the Dutch system has found an answer to this, so there may be a model to look at.

Coming back to the question of procurement, I agree with the noble Baroness, Lady Bowles. It is crucial; we have to get this right. It is a big part of what will drive innovation. In terms of the points on IP, I will not go into details, but the IP requirements for Innovate UK are not for any IP. There is a specific requirement in one part of the process, called “Contracts for Innovation”, which concerns departments looking for grant-giving for companies. Because of the Subsidy Control Act, there is a nuance which means that it is quite difficult for them not to have some IP taken—but I want to look at that and see if we can get to an answer.

International work was raised, and it is so important that we are back in Horizon and that we have an uptake both from academia and industry, which should be everywhere across the country. The noble Lord, Lord Drayson, asked about the links to the US. I point him to the interest that has come up as a result of the AI Safety Institute, where there is now a very strong link with the US and, indeed, with US companies. His point about where we align regulation is a critical one.

Europe also came up in relation to FB10. I have commented on this previously; we are keen to be part of future European programmes, provided they are based on excellence and create value, and we have already issued a statement on FB10 in a paper.

The noble Lords, Lord St John and Lord Taylor, talked about skills, visas and talent, and it is important that we get that right. We know that the ability to retain skills in this country will be crucially important, and we know that we have always relied on significant overseas skills to be at the forefront of what we do in science and technology. I completely agree with the noble Lords, Lord Mair, Lord Waldegrave and Lord Stevens, that universities are key and I am working very closely with the Department for Education to make sure that we get the right support for them.

In reply to the noble Baroness, Lady Bennett, I am afraid I do not have the answer on agro-ecological approaches and the per cent spend, but I will find the answer and get it to her. I will also come back to the noble Lord, Lord Winston, on the MRC centres, which are important—I gave quite an extensive answer on that earlier this week, but I will come back to the noble Lord with more details.

Finally, I will pick up on the point about failure and the acceptance of it, raised by several noble Lords, including the noble Lord, Lord Lucas. It is crucial that we have a system that allows failure to occur; you cannot innovate without failure. I have talked to the National Audit Office about this and, as we look at UKRI and Innovate UK, it will be part of trying to get this into a much better position.

In the Budget yesterday, the Chancellor set out an ambitious plan to fix the foundations of our economy and to rebuild Britain by mending public services and delivering sustained economic growth. None of that is possible without science and technology. Without science, technology and innovation, we will not be able to transform the quality and efficiency of our hospitals and schools. Without championing science and technology in start-ups and scale-ups, we will not create the good jobs that are needed. It is a crucial part of what we need to do for today and tomorrow, it will reap benefits for years to come, and it is important for national resilience. I end by saying that I completely agree with the fire drill point.

Specialised Research Units: Closures

Lord Vallance of Balham Excerpts

Monday 28th October 2024 Lords Chamber

[Lord Winston]

To ask His Majesty’s Government what assessment they have made of the Medical Research Council’s plans to close certain specialised research units; and of the implications of those plans for affected scientists.

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

The Medical Research Council is changing how it supports research across its units and centres following a review of its funding models. The new MRC centres of research excellence model will improve how we bring together the best science, skills and leadership to focus on key challenges in medical research. All existing units can apply for funding through this new model, or transition to other models of MRC grant funding.

[Lord Winston (Lab)]

I am very grateful to the Minister for answering my Question and I am pleased to hear that he supports the notion of these specialised units. Does he agree, too, that these units are particularly important in the study of relatively uncommon diseases, often with a very high profile, and are extremely unique? They all have an international reputation and have produced a number of Nobel Prize winners. Is it not possible that the current review, having received successful grant money from the MRC, might destabilise these units, and we would end up losing scientists who may be forced to go to other places? Does he feel there is something we can do about that?

[Lord Vallance of Balham (Lab)]

The noble Lord makes a very important point. In the transition to this new model, all the existing units will be able to apply to the new model and there will be transition arrangements for those staff who do not become part of the new model and return to funding from the host institution or through grant funding. He is right that there will be specific centres with some role in global resilience, or another bespoke reason to keep them going, that will be looked at as special cases as part of this process.

[Lord Patel (CB)]

My Lords, I declare an interest as professor emeritus of the University of Dundee and its previous chancellor. The MRC unit in Dundee on protein phosphorylation and ubiquitylation has spawned many other sub-sections in cell signalling. I know the Minister is aware of the number of drug molecules developed using reversible phosphorylation. One of the aspects of the new system will be that it will limit the number of postgraduate trainees. I was always amazed how many postgraduates were graduating with a doctorate—20 to 30 at any one time. The new system will limit the ability to recruit that number of PhD students. That will be damaging to the reputation of the unit and our global recognition. Does he agree?

[Lord Vallance of Balham (Lab)]

The noble Lord knows that I know that unit extremely well. It is a very important unit globally and it was given an award of £30 million recently. The new model will allow for a longer period of funding—seven years plus seven years’ funding, so a total of 14 years—with a different process of evaluation, which is a lighter-touch, less bureaucratic process. There is no reason why there cannot be a similar number of trainees going through the new system.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as chair of a university governing council. To some extent the Minister’s responses are reassuring, but is this part of a wider trend towards centralising decisions on research funding through UKRI? Are we moving towards a situation where the Government will fund research only within particular sectors set out in their industrial strategy? If that is the case, will that not stifle new research talent and innovation?

[Lord Vallance of Balham (Lab)]

As the noble Lord may be aware, I have been very clear about the need for supporting basic curiosity-driven, investigator-led research, and I will remain resolute in that determination. Some of these new centres have specified areas, such as mental health and multi-morbidity, but there is a whole round which is unspecified, allowing for people to put forward ideas of their own for units of the future, which I believe will be important for the very reason the noble Lord says.

[Lord Kakkar (CB)]

My Lords, I draw noble Lords’ attention to my registered interests. The funding base to support science in some of our leading universities, including those that may host these centres in the future, has become dependent on cross-subsidy from overseas student income. Is the Minister content that, with the obligation for universities to play a greater role in supporting those centres that receive MRC status, the funding base for scientific research in our universities is sufficiently secure to make that possible?

[Lord Vallance of Balham (Lab)]

Universities have been under pressure, as the noble Lord knows, for a number of reasons, including student fees, overseas student numbers and questions about the full economic costs of research in addition to inflation. These are all important areas that will need to be looked at. It is worth remembering that, over the years, roughly one MRC unit per year has closed and a new one has started. This process is part of that continuing change, which I believe is important to make sure that we stay at the cutting edge. As part of that, the staff on the new wards will be fully paid. The principal investigator salary is the one that will have to be picked up in part by a host institution or by other grants coming in to provide support.

[Lord Markham (Con)]

Given the well-known fact that every £1 of government investment generates a return of £3 to £4 to the UK economy, does the Minister agree that any move to reduce government R&D spend or to close specialist research centres would be an act of economic self-harm, in direct contradiction to the Government’s claim to prioritise economic growth?

[Lord Vallance of Balham (Lab)]

The noble Lord will be unsurprised that I am a strong supporter of R&D funding and know the importance of its links to economic growth. It is crucial that we look at the spread of R&D funding. It is the case that it will be necessary, from time to time, to shut some things and open new things—that has always been the case—otherwise things become ossified and you never end up with new programmes. I fully expect there to be a continued pattern of renewed support for some areas and a closing down of others. What is important in the context of this particular scheme is that the same proportion of MRC funding will be spent on these new centres as was spent on the old units and centres.

[Lord Fox (LD)]

My Lords, the Minister will be aware that there has been both veiled and explicit criticism of the way in which UKRI conducts its work, particularly work of a bureaucratic nature. Will the Minister tell your Lordships’ House what conversations are being had between UKRI and his department, and indeed himself, to clear up those issues?

[Lord Vallance of Balham (Lab)]

I will speak about these particular schemes first. These are seven years plus seven, with one review at the beginning and one review at six years. The whole idea is to reduce bureaucracy and make this simpler. UKRI is undergoing a full review of all its activities, with the aim to reduce bureaucracy, following the Grant review. I have discussed this with the CEO of UKRI and will keep a very close eye on it. I believe it is important that scientists get as much time as they can to do science.

[Baroness Morgan of Drefelin (Lab)]

My Lords, does the Minister agree that, in the new set-up, the role of the charity sector, particularly the medical research charities and the support that they give for what are often MRC-funded or underpinned research projects, will be key going forward? Is he sure that we have the right kind of environment and that the ecosystem is working well enough to support this charity contribution?

[Lord Vallance of Balham (Lab)]

As my noble friend says, the charity sector has been incredibly important for medical research in the UK, ranging from large charities such as the Wellcome Trust through to smaller ones. This new scheme will allow centres to have funded technical and other support, which are the things that need great constancy, and will allow the principal investigators to seek research funding from others, including the charitable sector. The charitable sector will remain an incredibly important part of our system for funding scientific research in the UK.

[Lord Harlech (Con)]

My Lords, I declare my interest as a serving Army reservist. With all departments facing intense budgetary pressure, can the Minister give any assurances about safeguarding budgets for military research and development and, in particular, the Minerva project?

[Lord Vallance of Balham (Lab)]

I am obviously unable to comment on the upcoming Budget, but I recognise the importance of military spending and of the DSTL within that. I will continue to be a strong advocate for the need for that as part of a successful resilience and defence strategy.

Artificial Intelligence: Regulation

Lord Vallance of Balham Excerpts

Thursday 17th October 2024 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)]

My Lords, as set out in the King’s Speech, we will establish legislation to ensure the safe development of AI models by introducing targeted requirements on companies developing the most powerful AI systems, and we will consult on the proposals in due course. This will build on our ongoing commitment to make sure that the UK’s regulators have the expertise and resources to effectively regulate AI in their respective domains.

[Lord Holmes of Richmond (Con)]

My Lords, with individuals having loan applications rejected off the back of AI decisions and creatives having their works ingested by GenAI with no consent or remuneration, would not the Minister agree that we need economy-wide and society-wide AI legislation and regulation for the benefit of citizens, consumers, creatives, innovators and investors—for all our AI futures?

[Lord Vallance of Balham (Lab)]

Thank you. It is an important area, and one where we have huge opportunities for growth. There is definitely the need for regulators to become upskilled in the ability to look at AI and understand how it impacts their areas. That is the reason we created the Regulatory Innovation Office, announced last week, to make sure that there are the capabilities and expertise in sector-dependent regulators. We also believe that there is a need for regulation for the most advanced models, which are general purpose, and of course cross many different areas as well.

[Baroness Chakrabarti (Lab)]

My Lords, notwithstanding the need for sector-specific approaches and expertise, does my noble friend agree that public confidence and constitutional legitimacy require primary legislation, and sooner rather than later?

[Lord Vallance of Balham (Lab)]

The reason we are establishing the prospect of an AI Act is to look at those models that are the ones that are at the biggest forefront in general use and carry with them specific opportunities and risks that require that specific legislation. It is not the case that that is true for every aspect of the application of AI in every single area, much of which can be covered by existing regulation and can be dealt with by regulators, provided that they are appropriately reinforced with the skills, capabilities and knowledge required.

[Earl Russell (LD)]

My Lords, if a photograph tells 1,000 words, an AI-generated image can tell 1,000 lies. As a photographer, I am concerned about altered or manipulated imagery in journalism and on social media. Generative AI images used in journalism will soon be good enough to blur our ability to discern truth from fiction. What are the Government doing to support a move to a standard of authenticity signatures on real images, so that all photographs can be quickly verified as either real or AI-generated?

[Lord Vallance of Balham (Lab)]

This again is a very important area in which there are rapid technological advances. Watermarking to enable understanding of what is original and what is not, and indeed what component of originality is in any finished product, is an important development that is not there yet but is on the way. In the meantime, there are specific provisions in the Online Safety Bill to make sure that the most egregious examples of this are caught—and, indeed, are illegal.

[Viscount Colville of Culross (CB)]

My Lords, this Government have pledged to recalibrate trade relations with the EU. However, the new EU AI legislation is much more prescriptive than the regulation proposed by the Government. How will the Government ensure that UK-based AI organisations with operations in the EU, or which deploy AI into the EU, will be aligned with EU regulation?

[Lord Vallance of Balham (Lab)]

As the noble Viscount points out, the EU regulation has gone in a somewhat different direction in taking a very broad approach and not a sector-specific approach. In contrast, the US looks as though it is going down a similar sort of route to the one that we are taking. Of course, there will be a need for interoperability globally, because this is a global technology. I think that there will be consultation and interactions with both those domains as we consider the introduction of the AI Act, and we are starting an extensive consultation process over the next few months.

[Baroness Stowell of Beeston (Con)]

My Lords, I am somewhat concerned by the Minister’s reference to regulating the most powerful and general purpose models, because I fear that that is a pathway to closing down markets and preventing access to challenger firms. But, in the context of copyright, which is of concern to all content creators and certainly to publishers, are the Government considering a mandatory mechanism to ensure transparency, so that those publishers that choose to opt out their data from the training purposes are able to do so?

[Lord Vallance of Balham (Lab)]

In passing, I will just reference the first part: even Eric Schmidt, at the investment summit on Monday, made the point that some sort of guard-rails and some sort of certainty for business are required in order to grow those most important models. There is a demand for something there and that is what we want to try to get right. It is not right to leave nothing as these models progress. I am sorry, I have completely forgotten the second point.

[Baroness Stowell of Beeston (Con)]

Transparency.

[Lord Vallance of Balham (Lab)]

Yes—the question of intellectual property and transparency is important. We are consulting widely on this with the creative industries and with others. Indeed, in my own review, which I did for the previous Government when I was in my post as the Government Chief Scientific Adviser, I made the very clear point that we need to distinguish between the inputs to these models and what is required for intellectual property control there, and the outputs of the model, which goes back to the question about watermarking and understanding what component of the output is derived from which part of the input.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, one area of AI technology that has been used a lot without regulation for many years, and has been exposed as having some quite severe flaws, is that of facial recognition. It is being used a lot by police forces all over Britain and clearly has caused a lot of confusion and made a lot of mistakes. Will that be one area that the Minister will be looking at, specifically for regulation?

[Lord Vallance of Balham (Lab)]

That is an area that of course comes under several other parts of regulation already. It is also an area where there are massive changes in the way that these models perform. If one looks at GPT-4 versus GPT-3—I know it is not facial recognition, but it gives an indication of the types of advances—it is about twice as good now as it was a year ago. These things are moving fast and there is indeed a need to understand exactly how facial recognition technology is valid and where it has problems in recognition.

[Viscount Camrose (Con)]

My Lords, the supply chain for the development of the more advanced AI systems is, in almost every case, highly global in nature. That means that it becomes quite straightforward for AI developers to offshore their activities from any jurisdiction whose regulations they might prefer not to follow. This being the case, do the Government agree that the regulations for AI development, as distinguished mostly from use, are going to have to be global in nature? If the Government agree with that, how is it reflected in their plans for AI regulation going forward?

[Lord Vallance of Balham (Lab)]

The noble Viscount makes an important point. This will be global; there is no question about it. Therefore, there needs to be some degree of interoperability between different regions in terms of the regulations put in place. At the moment, as I said, of the two most advanced, the US is the biggest AI nation in the world and is developing a regulation along similar lines to ours, we believe. The EU is of course the most regulated place in the world for AI and we need to work out, in consultation over the next months, how to make sure that we work out where the areas of interoperability will lie.

[Baroness Winterton of Doncaster (Lab)]

My Lords, does my noble friend the Minister agree that any advisory committees on regulation of AI should include smaller companies involved in the sector and also representation from the regions?

[Lord Vallance of Balham (Lab)]

This is an area where there were something like 100 new start-ups in the last year alone. We have something like 4,000 small companies. It is an area where small companies are critically important and must be involved in the discussion. It is worth remembering that some of the enormous companies were small companies not very long ago in this space; it is moving fast. I will also take this opportunity to say how fantastic it is that, in our own country, we had a Nobel prize awarded to Demis Hassabis for his extraordinary work and that of his colleague John Jumper at Google DeepMind.

[Lord Hannan of Kingsclere (Con)]

My Lords, I was delighted to hear the Minister’s response to my noble friend Lord Camrose. I am so pleased that the Government are taking advantage of this Brexit opportunity. Last week, I got a new iPhone—for the first time in 10 years —and it came with an Apple intelligence function that was not available on the iPhones released on the same day in the EU. Will the Minister confirm that we have no plans to follow Brussels in imposing needless regulation that is hostile to growth and innovation?

[Lord Vallance of Balham (Lab)]

We are very minded of the opportunity of AI—the report by Matt Clifford on AI opportunities will be coming out shortly. We want to see this as a growth industry in this country and, as I said, we are developing in the AI Bill an approach that is only about those general models and is not sector-specific regulation, thereby differing from the EU currently.

Framework Convention on Artificial Intelligence

Lord Vallance of Balham Excerpts

Tuesday 15th October 2024 Lords Chamber

[Baroness Chakrabarti]

To ask His Majesty’s Government what assessment they have made of the value of, and the progress towards achieving the aims of the Council of Europe Framework Convention on artificial intelligence and human rights, democracy, and the rule of law, adopted on 17 May.

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

Artificial intelligence has the potential to significantly boost economic growth, but to enable this it is essential to build public trust. That is why the UK has, together with international partners, signed the first ever legally binding treaty on AI, which, alongside our existing legal framework, will enhance the protection of human rights, democracy and the rule of law, supporting democratic institutions and ensuring that AI can develop and be used in line with our values.

[Baroness Chakrabarti (Lab)]

I am grateful to my noble friend, whom I belatedly welcome to the Dispatch Box. It is easily done on all sides of politics, but one minute we berate so-called red tape and the next minute we weep for tragedies like Grenfell. So does my noble friend agree with me that concepts like human rights, democracy and the rule of law are far from red tape? Does he agree that the Council of Europe, which at least one pretender to the Conservative crown wants us to pull out of, will be essential to navigating this very difficult territory in the years to come?

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

It is important that the convention does not introduce new human rights. Instead, it is meant to make sure that, during its development, AI takes into account the existing rules and regulations and the appropriate respect of democracy and freedoms that are already enshrined in laws and taken into account in practice. I agree that this can be done in a way that does not mean new red tape.

[Lord Kirkhope of Harrogate (Con)]

My Lords, it is important to note the remarks of the Prime Minister, and indeed his Ministers, at the investment conference yesterday. When talking about artificial intelligence, they encouraged entrepreneurs in particular to have as little limitation on the development of AI as possible. Bearing in mind the position of the United States, which has a very free approach, and the European Union, which now has strict regulation, is the Minister confident that this Government will be putting in place the right balance in regulating AI?

[Lord Vallance of Balham (Lab)]

The convention has been signed by the US as well as the EU, the UK and various other nations. On the point about red tape, it is very important that, as we think about AI, we do not introduce measures which restrict innovation. At the investment summit yesterday, Eric Schmidt said very clearly that some guidelines are rather important; otherwise, companies do not have certainty and cannot progress. Getting that balance—getting some guidelines without restrictions—will be our clear priority.

[Earl Russell (LD)]

My Lords, given the Lord Chancellor’s statement that the framework

“convention is a major step to ensuring that these new technologies can be harnessed without eroding our oldest values, like human rights and the rule of law”,

and given that the convention is specifically designed to protect human rights, democracy and the rule of law, is it not crucial that this be reflected and implemented in the AI Bill as promised in the Labour Party’s manifesto, and will the Minister confirm that it will be?

[Lord Vallance of Balham (Lab)]

We have signed the convention and will bring it forward in the usual way—it will not happen overnight—providing a chance for wide consultation and consideration in Committee as it is laid before Parliament. The AI Bill itself is of course a different proposition.

[Lord Browne of Ladyton (Lab)]

My Lords, Article 3 of the framework convention, at the insistence of the United States, is discretionary in nature, offering signatory states a choice as to how to apply the convention’s principles to private actors, including those operating at the state’s behest. Given this and the somewhat vague nature of the enforcement procedures contained in Article 23, how does my noble friend the Minister envisage this convention affecting the operations of private firms contracted to supply, for example, facial recognition software—much flawed—to the Home Office and police forces?

--- Later in debate ---

[Lord Vallance of Balham (Lab)]

The convention sets out activities in the life cycle of AI systems, and they should not infringe our values of human rights, democratic processes and the effectiveness of democratic institutions or the rule of law. It applies to the public sector, to the public sector when using the private sector, and there is an obligation to consider how private sector activities can be taken into account when this is implemented in a national framework.

[Viscount Camrose (Con)]

My Lords, international bodies currently working on AI safety and regulation include the UN, UNESCO, the ITU, the G7, the G20 and the GPI, among several others. Do the Government agree that although each of these groups is crucial and has a very important role to play in creating safe and well-regulated AI globally, they will be successful only to the extent that they are effectively co-ordinated? If so, what steps are the Government taking to bring that about?

[Lord Vallance of Balham (Lab)]

We are in active discussion with all those partners. As we consider an AI Act, we will work closely with partners in the US and elsewhere and apply it only to the limited number of companies at the very forefront of AI, to those models of tomorrow which carry particular risk and, again, where guard-rails have been asked for.

[Lord West of Spithead (Lab)]

My Lords, a number of countries are using AI and developing weapons systems that have no human being between sensor and shooter. What are we doing to regulate this arena? It is extremely dangerous and is becoming a growing area of endeavour for a number of countries that, I have to say, I do not particularly like.

[Lord Vallance of Balham (Lab)]

I thank my noble friend for that important question. The convention does not apply to military matters, but the responsible AI in the military domain—the REAIM Forum, which the UK co-hosted in September this year—covers exactly those issues, which are incredibly important.

[Lord Kakkar (CB)]

My Lords, I draw attention to my registered interests. The Minister will be aware that the regulatory approaches to approving innovative medicines and to approving novel medical devices are quite different. With the introduction of AI to drive many of those devices, their impact on human health may be just as profound as administering a novel therapeutic. How do His Majesty’s Government propose to go about aligning the regulation of devices in the future when they are AI labelled?

[Lord Vallance of Balham (Lab)]

We are taking a sector-specific approach to AI regulation. On medicines, we announced last week the formation of the regulatory innovation office, which will look specifically at the question of AI in healthcare to try to bring together the different regulators and make sure that we have a clear system.

Horizon Europe

Lord Vallance of Balham Excerpts

Tuesday 8th October 2024 Lords Chamber

[Viscount Stansgate (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I warmly welcome my distinguished noble friend to the Dispatch Box for his first Parliamentary Question.

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

We have early indications that UK applications have increased in 2024 following Horizon Europe association in January. Making the association a success is our priority, but we recognise that it will take time to recover to the participation levels that we enjoyed in Horizon 2020. We are working with businesses and academia to address the barriers to entry and to support greater participation in the programme.

[Viscount Stansgate (Lab)]

My Lords, I hope the House will welcome the Minister’s reply, because it shows that we are moving in the right direction. I also welcome the letter sent by the Secretary of State last week to the Science and Technology Select Committee, of which I am a member, which outlined the Government’s negotiating stance in respect of framework programme 10 —Horizon’s successor. Do the Government hope to associate themselves with work on computing and space, with which we have not so far been associated? Finally, can the Minister, as I hope he will, give the House some encouragement that his department and the Home Office will have discussions to ensure that the visa system and its costs are designed in such a way as to maximise the chances of getting the best and brightest scientists to come to do their research here in Britain? That would be good for science and good for Britain.

[Lord Vallance of Balham (Lab)]

I praise my noble friend Lord Stansgate for his persistence and effectiveness in bringing the matter of European science funding to this House. He will have seen that, on 26 September, we published a position paper on FP10, laying out that we would like to explore greater association with that programme and to be part of trying to shape it, provided that it delivers excellence, is relevant and delivers value for money for both the taxpayer and researchers. Visas are under constant review by the Home Office. What is encouraging is that the visa costs, for both the fast-track visas and others, can be covered by Horizon Europe funding.

[Lord Krebs (CB)]

My Lords, it was reported in the press about a year ago that a substantial sum of money allocated to the research budget in relation to our association with Horizon had subsequently been withdrawn by the Government. Can the Minister tell us whether those reports were correct, and, if so, what the sum of money was?

[Lord Vallance of Balham (Lab)]

Any underspend on Horizon in the last year has been fully kept within the department.

[Lord Fox (LD)]

My Lords, following the answer on visas, I think we all know that it is harder now for scientists to come in, and to bring their families, to work in the United Kingdom. We also know that Horizon projects have to be multinational, or have the most success by being multinational. Anecdotally, we hear that progress being made on Horizon is difficult and slow. How much of that slow progress does the Minister attribute to visa issues? In his conversations with the Home Office, what is the ask of that department to speed those visas up?

[Lord Vallance of Balham (Lab)]

There are, of course, a number of visa programmes—it is a points-based system—including the global talent visa and the skilled worker visa. We know that the number of applications for the global talent visa increased by about 16% between 2023 and 2024, so that we had 8,000 or so in 2024. It is important that the costs of those, including the immigration health surcharge, can be put on to the grants. The noble Lord is absolutely right that it is also important that it is as easy as possible to get these things done. We rely, and always have relied, in this country on immigration of talented scientists and exchange of people, and I hope that that will continue and be as easy as possible.

[Lord Johnson of Marylebone (Con)]

My Lords, rejoining Horizon was a no-brainer. Will the Government reassess their position on Erasmus, a student mobility scheme that polls suggest has very wide public backing?

[Lord Vallance of Balham (Lab)]

I am very glad indeed that the noble Lord thinks it was a no-brainer; that was not always the situation when trying to get that through. Erasmus, of course, was an important scheme that it was not possible to reach an agreement on. Consequently, it is important that universities can attract the best people through other means. The Turing scheme that was put in place in 2021 provides an opportunity for exchange; in the last round, the number of applications was up from 520 in 2022 to 619 in 2023, and more than 40,000 pupils and students were able to do exchange programmes, 60% of whom came from a disadvantaged background. The proposal at the moment is to continue with that scheme.

[Lord Kakkar (CB)]

My Lords, I draw noble Lords’ attention to my registered interests. The Minister indicated that we have got off to a good start in 2024, but that is particularly in terms of applications for European Research Council funding. The start has been less promising for Horizon pillar 2 funding, which requires collaboration between businesses and academia. What action do His Majesty’s Government propose to take to ensure that those kinds of relationships can once again be established and that we have a more successful approach to achieving that funding?

[Lord Vallance of Balham (Lab)]

The noble Lord is quite right that the numbers are looking more promising for 2024, particularly in the European Research Council mono-beneficiary schemes. In the collaborative and industry schemes, things still look fairly flat, although there are some examples of very good progress. In the European rail project, 61% in the most recent round had a UK participant and five out of the seven successful bids had UK participants, so there is some progress. We are doing a number of things: there is an increased communications campaign, the last one having led to a substantial increase of 64,000 hits on the UK Horizon website; there are roadshows, most recently in Birmingham and Glasgow and soon in Northern Ireland and Wales; there are pump priming grants, which have led to an ability to get money to work out how to make applications to Horizon programmes—I am pleased to say that of those people who received those grants and put in applications, 100% were eligible. Finally, European network programmes are being set up to link UK academic teams and industry to European teams in the most successful countries.

[Lord Markham (Con)]

I also welcome the Minister to answering his first Question—I know what it feels like. Following on from the last question, obviously we want to maximise participation and I am pleased to hear that the roadshow that we introduced is continuing to be rolled out. Are there particular sectors that we need to focus on in the outreach? I hear that the SME sector is particularly underrepresented.

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for his question. He is right that the SME sector is underrepresented, and there is a specific effort to increase its ability to engage and to raise awareness within it. We hope that will be a major part of the European networking programme as well.

[Lord Bassam of Brighton (Lab)]

My Lords, can the noble Lord give us an estimate of the damage done to our research and development programmes through our absence from the Horizon scheme over the past few years?

[Lord Vallance of Balham (Lab)]

There is absolutely no doubt that quite significant damage was done. That the participation rate dropped so dramatically, from 16% of all grants coming to the UK in 2015 to 6.5% in 2022, shows the scale of the damage. At the moment, it is not possible to work that out in terms of patents or publications, partly because those indicators are so lagging, but we will look at that and I fully expect to see some change.

[Lord Wallace of Saltaire (LD)]

My Lords, is the Minister confident that the UK’s association with Horizon and its successor programme can be dealt with as a one-off or does this have to be wrapped up in a broader reconsideration of our relations with the European Union?

[Lord Vallance of Balham (Lab)]

Now that we are back in Horizon Europe and FP10, we will be looking to engage in that fully and shape it. In answer to an earlier question, I hope that that will include areas from which we are currently excluded. That will all depend on the backdrop of our relationship with Europe; you will see that it is warmer now and therefore we have had encouraging noises. I am due to meet Manuel Heitor, who is chair of the expert group on Horizon and FP10, to discuss how we can fully engage.

[Lord Patel (CB)]

My Lords, it is good to hear the Minister, whom I welcome, say that the Government will engage in the Horizon 10 programme and its future form. Important also is that, when we were not members of Horizon, we collaborated with the Swiss research foundations. Will the Government assist in a negotiation to engage with Switzerland and the EU Horizon programme to readmit and collaborate with Switzerland?

[Lord Vallance of Balham (Lab)]

Obviously, it is up to the Swiss to determine their association, but I will travel shortly to Switzerland to meet Science Ministers there. I will discuss our memorandum of understanding and how we can further engage in collaborations with Swiss scientists, which we see as incredibly important for the UK science base.

King’s Speech (4th Day)

Lord Vallance of Balham Excerpts

Monday 22nd July 2024 Lords Chamber

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

My Lords, it is a great honour to open this adjourned debate on His Majesty’s most gracious Speech. Today’s debate will focus on economic growth, infrastructure and employment, but before I turn to today’s debate I should say that I believe it is customary for new Members of your Lordships’ House to offer some personal remarks.

I start by saying how grateful I am to the many noble Lords of all sides and the wonderful and patient staff here who have already made me feel most welcome. I also thank my supporters for my introduction last week: the Minister, my noble friend Lady Jones of Whitchurch, and the noble Baroness, Lady Manningham-Buller, who has provided advice and support to me on more than one occasion.

My family comes from Cornwall, and I grew up in a small hamlet called Greenbottom, near Truro. My mother came from the Isles of Scilly. However, when thinking about the name I should bear when taking my seat on these red Benches, I decided that perhaps neither Greenbottom nor Scilly were quite right. I plumped for Balham. Some of your Lordships of a certain vintage will recognise it as the famous gateway to the south.

I am a doctor and scientist and have worked in the NHS, academia, industry and government. It is an enormous pleasure and privilege now to be joining your Lordships’ House with its reputation for expertise and wisdom. I am at heart a scientist. Karl Popper said:

“Science may be described as the art of systematic oversimplification”.


He reminded us that

“Knowledge can only be finite, while our ignorance must necessarily be infinite”,


while

“ignorance is not the absence of knowledge, but the refusal to acquire it”.

However, in my time as the Government Chief Scientific Adviser I found that the scientist’s approach does not always align perfectly with that of others. A scientist will often be pleased to find that the results of new experiments showed that what they held to be true was in fact wrong and the world is not quite as they thought it to be. This process of discovery and self-correction is, of course, at the very heart of the scientific method.

I discovered, however, a little philosophical difference. In some political and media circles, changes resulting from new evidence may not always be so readily welcomed. Indeed, they are instead that most dreaded of things: a U-turn. I look forward to welcoming changes based on scientific findings, advances in technology and innovation.

I shall turn to today’s debate, but first I must extend a warm welcome on behalf of the whole Chamber to my noble friend Lord Timpson and my noble and learned friend Lord Hermer, who have been introduced today, as well as to the noble Lord, Lord Petitgas, who will give his maiden speech today and I hope share some of the invaluable business experience he brings to your Lordships’ House. Your Lordships will also hear from my noble friend Lord Livermore, who will wind up this evening. With his deep experience, and the expertise and insight in evidence on all sides of the Chamber, I look forward to the debate ahead.

The programme of legislation put forward in His Majesty’s gracious Speech is, in essence, about potential and how to realise it. Noble Lords will know that talent, energy and ambition are found in abundance right across the four nations of our union, from the Isles of Scilly to the Shetlands. However, they will also know that, far too often, our communities are unfairly held back by an economy that does not deliver for them.

Decades of low growth and lower investment mean that we risk falling behind international competitors, and it is hard-working people who will pay the price. That is why, as we set about the work of rebuilding Britain brick by brick, innovation by innovation, we have made growth our national mission. Without growth, we cannot answer the profound challenges that our country faces. It is growth that will provide the good jobs that hard-working people deserve, improve the public services they depend on and make people better off, and it is growth that the measures set out in His Majesty’s gracious Speech will deliver.

That plan starts with economic stability. We have been clear that we will not risk public trust or market credibility in the pursuit of political convenience. To put it simply, that means no more unfunded spending commitments. Each of the measures set out in His Majesty’s gracious Speech has sound money as its bedrock. Every decision will be shaped by strong fiscal rules designed to deliver a balanced budget and drive down the national debt.

The Budget Responsibility Bill will enshrine that commitment—the fiscal lock—in law, ensuring that every significant change to tax and spending is subject to independent assessment from the OBR. My noble friend Lord Livermore will have more to say on this later. Stability is where we start, but your Lordships should not take that stability to signal a lack of ambition. Long-term growth—growth that involves every person and every community, in a strategic partnership with business—requires change, and His Majesty’s gracious Speech shows that we are ready to turn the page.

Since the global financial crisis, the United Kingdom has been plagued by low productivity. Today, real average weekly earnings have only just returned to 2008 levels. Millions remain stuck in insecure work, and millions more are without work at all; the number of workers inactive due to long-term sickness is close to an historic high. These headline statistics also hide insidious inequalities. The national gender pay gap stands at over 14%, and a quarter of reported sexual harassment takes place at work. This is patently appalling. I am sure noble Lords will agree that, in modern Britain, it cannot continue.

Work must pay, no matter who you are. The employment rights Bill is born from that belief. It will empower British people with workplace rights that are fit for a modern economy by helping more people to stay in work—and ensuring that work puts more money in their pockets. It will not just grow the economy but will ensure that the benefits of growth are felt by all.

A modern workplace is necessary for sustainable growth but it is not sufficient. That brings me to infrastructure. Tomorrow’s economy brings demands, from laboratories and gigafactories to large-scale computers and digital infrastructure, and of course the infrastructure requirements for clean energy. Yet, from roads to railways and reservoirs, Britain’s basic infrastructure is too often the stuff of yesterday. This is not for want of trying. Many businesses have told us that they are ready to build, but burdensome planning regulations and a fragmented investment landscape prevent them from doing so.

In our cities, the sight of brownfield land sitting unused and abandoned is all too common. This House may recall the tale of a £2.5 billion data centre blocked for spoiling the views over the M25. Far be it from me to take a view on the aesthetic merits of one of Britain’s great scenic motorways, but I am confident that we can all agree on one thing: confused infrastructure and investment policies are a brake on Britain’s growth. To kick-start our economic engine, we must remove that brake. In His Majesty’s Gracious speech, we have taken our first steps to doing that.

By accelerating the planning process for housing and streamlining the delivery of major infrastructure projects, the planning and infrastructure Bill will unlock much-needed development at an unprecedented speed and scale. We will also consider how we can remove blocks to the growth of our data-centre sector—the largest in Europe—including changes to planning rules, designating the sector as critical national infrastructure, and introducing a stable regulatory environment to improve security and resilience.

Infrastructure will be a driving force behind our industrial strategy. Guided by the Industrial Strategy Council, which we will put on a statutory footing, this long-term plan will provide business and investors with the certainty and stability they need to invest and grow.

The national wealth fund is anchored in those same values. It will align the UK Infrastructure Bank and the British Business Bank under a permanent institution that provides a coherent offer for business and a compelling proposition for investors. By working closely with regional mayors, the fund will strategically deploy public capital to deliver long-term growth and prosperity for communities in every corner of the country. By mobilising billions more in private capital, its impact will be transformative, creating thousands of good jobs for British people in the industries of the future.

Science and technology can improve the lives and life chances of our citizens by driving economic growth, improving public services, and providing resilience and security. Government has a vital role to play in making that possible. It is only by realising the full potential of technological innovation that Britain’s businesses will succeed, Britain’s public services will modernise and the British people can prosper. Our task therefore is to accelerate innovation, investment and productivity as essential elements of Britain’s industrial strategy. Our approach combines discovery and delivery, opportunity and security.

The strength of Britain’s research sector already provides us with a clear competitive advantage. These islands are home to four of the top 10 universities in the world. We have many more world-class institutions that create the knowledge we need for the future. They act as catalysts and anchors for innovative start-ups and scale-ups. The phrase “Silicon Fen” may lack a certain something, but the story it points to is remarkable. Last year, Cambridge was the most intensive science and tech cluster in the world. It is not just Cambridge: from small satellite manufacturing in Glasgow to compound semiconductors in south Wales, diverse science and tech clusters are creating opportunities for communities up and down the country.

Yet, in each one, the same challenges put prosperity in peril. A lack of laboratory space is stifling the expansion of a life sciences sector which, until now, has been one of our great industrial success stories, employing over 300,000 people and generating over £100 billion in turnover. At the same time, firms are struggling to access the capital they need to grow, and rigid regulation prevents them bringing innovative products to market. If we are to face up to these challenges and provide opportunities for these firms to grow a more productive and prosperous economy, improve our public services and make people better off, we need change.

Once again, the starting point for change is stability. We will scrap short-term funding cycles for certain types of R&D activity, replacing them with 10-year budgets that will provide researchers with an opportunity to form meaningful partnerships with business and to take a long-term view—partnerships that support the cutting-edge research and development needed to remain at the forefront of global innovation.

The economy will not be the only beneficiary, because innovation is an enabler for every one of our national missions. Take artificial intelligence. Today, the UK ranks third in the world for AI talent, start-ups and inward investment. If you go to the so-called Knowledge Quarter—or, as some people call it, the new square mile—in King’s Cross, you can see what those statistics look like in reality. Sandwiched between the station and the Francis Crick Institute—Europe’s largest biomedical laboratory—a new crop of companies is growing out of the coal drops from which Britain’s first Industrial Revolution was born. Goldman Sachs estimates that AI could double the rate of growth since 2010—but that is just part of the picture. Many of the businesses there are harnessing the power of AI to discover solutions to some of our most pressing social and environmental problems.

This is not some distant future. Noble Lords will know that industry is already feeling the impact of the rapid development of large language models. Technologies such AlphaFold, developed by DeepMind, have shown the transformative effect that AI can have. By predicting the shape of almost every protein in the human body, AlphaFold has ushered in a step change in the understanding of disease and the measures we need to tackle it. We can expect to see more examples like this. This is not an opportunity that we can afford to miss. From breast cancer screening and stroke detection to fraud prevention and personalised education, this Government are committed to harnessing the power of AI to transform how we deliver public services and boost living standards right across the country.

To do this, we must champion our domestic science and tech sector; and, in a country where 25% of people struggle to engage with the internet and digital devices and 2.1 million people live largely offline, we must remain relentlessly focused on driving up digital skills to ensure that the opportunities of our modern economy are open to all.

We must also lead by example by delivering modern digital government that promotes the responsible and innovative use of technologies, with public services that are more productive, less time-consuming and, frankly, more in tune with how we live our lives. The public sector must walk the walk as well as talk the talk. My department, as the centre for digital expertise and delivery, has been tasked with making that happen.

None of that, of course, is possible without data. We have committed to creating a national data library that will make it easier to access data, deliver data-driven public services, support research and create opportunities for economic growth, while maintaining strong safeguards. These principles also underpin the new digital information and smart data Bill. Putting digital verification schemes, the National Underground Asset Register and smart data schemes on a statutory footing will accelerate research, innovation, investment and productivity. Improved data sharing and standards will make public services more efficient and accessible. In all of this, we will prioritise protecting people’s data. We will modernise the Information Commissioner’s Office and give it new, stronger powers; and we will introduce reforms to data laws to address the uncertainty that prevents the safe development and deployment of new technologies.

We cannot seize the opportunities of innovation without getting regulation right. Regulators must be equipped to deal with the pace at which new technologies are developing, particularly when they cut across traditional industries and sectors, as they increasingly do. In 2022, more than two-fifths of businesses said that regulation was an obstacle to success. That is why we are establishing a regulatory innovation office. By enhancing regulatory innovation to update rules, speed up approval timelines and co-ordinate issues that span existing boundaries, the office will transform the journey that new technologies take—out of the lab, on to the market and into our lives.

Trust is a central part of this journey. That is why we will bring forward highly targeted legislation to introduce binding regulations on the handful of companies that are developing the most powerful AI models. Ending the regulatory uncertainty for AI in the UK will strengthen public trust, enhance security and boost business confidence.

Nowhere are security risks more apparent than in cyberattacks. In light of last week’s global IT outage caused by a failed software update, ensuring that our digital systems are safe and resilient feels more important than ever. In the last 18 months, we have seen devastating cyberattacks at the Ministry of Defence, the Royal Mail and the British Library. A recent attack on the NHS resulted in thousands of appointments and elective procedures being postponed, impacting health provision right across the capital. The CEO of our National Cyber Security Centre, Felicity Oswald, said earlier this year that these are risks that we cannot afford to ignore. I am sure noble Lords will agree. To reduce the damage from further attacks, we must urgently update our cybersecurity regulations. That is what the cyber security and resilience Bill will do, strengthening our defences and ensuring that digital services that are more essential than ever are protected.

His Majesty’s gracious Speech has set out an ambitious long-term strategy to unlock Britain’s potential. To deliver sustained growth that will bring prosperity and opportunity to every British person we must build strong and secure foundations anchored in an unwavering commitment to fiscal responsibility and rooted in advances in science and technology. With those foundations, the work of immediate change can begin. From employment rights and regulation to infrastructure and investment, our reforms will rebuild Britain’s economy. By combining discovery and delivery, opportunity and security, we will fix our broken public services and make lives better for British people.