Online Safety

Lord Vallance of Balham Excerpts

Thursday 16th January 2025 Lords Chamber

[Baroness Ritchie of Downpatrick]

To ask His Majesty’s Government what assessment they have made of the implications for online safety posed by small, high-risk online platforms, such as 8Chan.

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

The Government are extremely concerned about the impact of small but risky services that host hateful and harmful content. The Online Safety Act will require such services to remove illegal content and, where relevant, protect children from legal but harmful material. Ofcom has established a Small but Risky supervision task force in recognition of their unique risks. The regulator will identify, manage and enforce against such services where they fail to comply with their duties.

[Baroness Ritchie of Downpatrick (Lab)]

I thank my noble friend the Minister for his Answer, but will he set out whether the Government expect Ofcom to take enforcement action against small but high-harm sites that are identified as problems? Have they made an assessment of the likely timescales for enforcement action, including the use of service disruption measures?

[Lord Vallance of Balham (Lab)]

I thank my noble friend for that important question. Where there is evidence of non-compliance, Ofcom has set out that it will move quickly to enforcement, and that action will follow in spring this year, because companies will have had three months to get their positions sorted out—I think that 16 March is the date by which they have to do it. Ofcom will be able to apply fines, including global levies, and it will be able to apply to the courts for business disruption measures and have the flexibility to submit these applications urgently.

[Lord Clement-Jones (LD)]

My Lords, the Minister’s response is somewhat baffling. Given the amendment to the Bill as it passed through the House, as a result of the amendment from the noble Baroness, Lady Morgan, it was quite clear that high-risk smaller platforms would be included in category 1 and bear all the consequences. Yet, despite the Secretary of State’s concerns, which were expressed in a letter last September, the Government have not insisted that Ofcom include those platforms in category 1. What does that mean? Why are the Government not taking proper legal advice and insisting that these smaller, high-risk platforms bear all the duties of category 1 services?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord for his question. Category 1, in the way that the Bill was ultimately approved, was for large sites with many users. The possibility remains that this threshold can be amended. It is worth remembering that category 1 imposes two additional duties: a duty that the company must apply its service agreements properly and a duty that users can make it possible for themselves not to see certain things. For many of the small and harmful sites, those things would not apply anyway, because users have gone there deliberately to see what is there, but the full force of the Act applies to those small companies, which is why there is a special task force to make sure that that is applied properly.

[Viscount Colville of Culross (CB)]

My Lords, Ofcom’s illegal harms code states that it has removed some of the code’s measures from smaller sites, due to evidence that they were not proportionate, but it is not clear which measures have been removed and why. Can the Minister provide further detail on which small sites are impacted and what measures they will not be required to follow?

[Lord Vallance of Balham (Lab)]

My understanding of this is that the Online Safety Act applies to all small companies and nobody is exempt. The things that would not apply would be the specific things in category 1, or indeed in category 2A and 2B, which are to do with the ability to apply and monitor a service contract, and the ability to ensure that users can exempt themselves from seeing certain activities. Those would not apply, but everything else does apply, including all the force of the Act in terms of the application to illegal content and the priority harms that have been identified.

[Lord Markham (Con)]

I must admit that, probably like many noble Lords, I had to do a bit of research into 8chan and the others as part of this. In fact, I got a bit worried that I might get into trouble doing it on House of Lords servers. What I saw was that, before 8chan, there was 2chan and then 4chan, and 8chan is now 8kun. It is like whack-a-mole: while we can try to do all the technical moves, it is very difficult. So, coming at it from the other end of the telescope, the user end, I think we have done a lot of good things about getting messaging out about anti-fraud and I wonder whether there are things we can learn from that, to educate and equip young people, teachers and parents so that they are aware, and attacking it from that end as well.

[Lord Vallance of Balham (Lab)]

I hope the noble Lord does not get caught out from his search terms. Of course, he is absolutely right that part of this is about education and making people aware of what is there. I suspect that, as this gets introduced over the course of this year and enforcement starts, awareness will rise, and it will be incredibly important to include education as well.

[Lord Winston (Lab)]

My Lords, will my noble friend the Minister kindly tell the House how the Government can ensure that the people who are putting their dates of birth online are actually the people who are putting their dates of birth online? How do we ensure that accuracy?

[Lord Vallance of Balham (Lab)]

I thank my noble friend for his question. I am not able to give him a technical answer on exactly how that is done. There are verification systems in place to ensure that, and indeed there are more detailed verification systems coming online in terms of children’s ages. That is something that Ofcom is pursuing, but I will find a more detailed answer for him.

[Baroness Bull (CB)]

My Lords, the Minister quite rightly mentioned children in his initial Answer, and we all want to protect children primarily, but will he also recognise the harm that can be done to vulnerable adults? I think particularly of those with addiction problems, eating disorders and people with learning disabilities, who are not as safe online as we are. Can he say whether the Government have made an assessment of the different types of harms that are on these smaller sites that fall outside the regulations? Have they broken down this type of harm by distinct categories and will they make this information available?

[Lord Vallance of Balham (Lab)]

The so-called Small but Risky task force that was set up in response to an exchange of letters between the Secretary of State and the CEO of Ofcom is undertaking a review of all the risks of these small units. I do not know the detail of whether it has broken it down into the categories suggested by the noble Baroness but I think that is an extremely good idea and I hope it will do it, because it is an important activity.

[Lord Vaizey of Didcot (Con)]

My Lords, having recognised the Herculean task that Parliament has given Ofcom in terms of regulating platforms—Ofcom is set to become probably the world’s most formidable regulator in this space, with commensurate expertise—I will trot out a quick cliché and say, let us not allow the best to be the enemy of the good but support Ofcom as it navigates this very complex environment. Picking up what the Minister mentioned earlier about education, can he update the House on Ofcom’s plans for what is clunkingly called “media literacy”, because prevention is better than cure and the more we can educate children, and indeed adults, on the perils of the internet and how to navigate it safely, the better it will be? It seems almost to be a bit of an orphan within Ofcom’s responsibilities.

[Lord Vallance of Balham (Lab)]

I think the noble Lord is right that Ofcom has a very large task ahead of it. It is a very professional organisation and one that takes all its duties very seriously. I cannot comment in detail on what it is doing on the media side, but I know that that is part of what it intends to do. I will pick up on something else he said: the urgency now is to get this implemented and the danger is that we add lots of things to it now. We must get on and do this. It is very important to get this working. We know that the enforcement starts just after March and that the new codes for children will come out in early summer. Getting this moving is the key priority, and working out how to stop the really unacceptable activity that goes on on some of these sites.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, is the Minister sensitive to the dangers to free speech of overfetishising online safety and to the censorship recently admitted to by the head of Meta, Mark Zuckerberg? This is all under the cloak of Governments demanding the clamping down on online harms. Are the Government advising Ofcom to ensure that any overzealousness, however well intentioned, should be reined in for the protection of free speech in a democratic society?

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[Lord Vallance of Balham (Lab)]

Well, the issue of Meta is one for the US. It applies there and not here. The rules of the Online Safety Act apply across all companies and we expect all companies to adhere to them. They are carefully calibrated and designed to ensure the safety of users and to protect them from sometimes disgraceful content.

Artificial Intelligence Opportunities Action Plan

Lord Vallance of Balham Excerpts

Thursday 16th January 2025 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I also welcome this plan, perhaps with rather less baggage than the Conservative Benches. The Prime Minister and the Secretary of State invoked Babbage, Lovelace, Turing, the pioneering age of steam and even the white heat of the technological revolution, but at its core there is an important set of proposals with great potential. However, it is a wish list rather than a plan at present.

I particularly welcome the language in the plan around regulation, particularly where it refers to regulation assisting innovation, which is a change of tone. However, the plan and Statement raise many questions. In particular, how will the Government ensure that AI development mitigates risks beyond just safety to ensure responsible AI development and adoption, especially given the fact that a great deal of UK development will involve open-source applications?

On the question of the introduction of AI into the public sector, the Government are enormously enthusiastic. But, given their public sector digital transformation agenda, why are the Government watering down citizens’ rights in automated decision-making in the Data (Use and Access) Bill?

We welcome the recognition of the need to get the economic benefits for the UK from public sector data which may be used to develop AI models. What can the Minister tell us at this stage about what the national data library will look like? It is not clear that the Government yet know whether it will involve primary or secondary legislation or whatever. The plan and response also talk about “sovereign compute”, but what about sovereign cloud capability? The police cannot even find a supplier that guarantees its records will be stored in the UK.

While the focus on UK training is welcome, we must go beyond high-level skills. Not only are the tech companies calling out for technical skills, but AI is also shaping workplaces, services and lives. Will the Digital Inclusion Action Committee, chaired by the noble Baroness, Lady Armstrong, have a role in advising on this? Do the changes to funding and delivery expected for skills boot camps contribute to all of this?

On the question of energy requirements for the new data centres, will the new AI energy council be tasked with ensuring that they will have their own renewable energy sources? How will their location be decided, alongside that of the new AI growth centres?

The plan cannot be game-changing without public investment. It is about delivery, too, especially by the new sovereign data office; it cannot all be done with private sector investment. Where is the public money coming from, and over what timescale? An investment plan for compute is apparently to be married to the spending review; how does a 10-year timescale fit with this? I am very pleased that a clear role is identified for the Alan Turing Institute, but it is not yet clear what level of financial support it will get, alongside university research, exacompute capacity, and the British Business Bank in the spin-out/start-up pipeline support. What will the funding for the Compound Semiconductor Applications Catapult and the design and manufacturing ecosystem consist of?

The major negative in the plan for many of us, as the Minister already knows, is the failure to understand that our creative industries need to be able to derive benefits from their material used for training large language models. The plan ominously recommended reforming,

“the UK text and data mining regime so that it is at least as competitive as the EU”,

and the Government have stacked the cards in the consultation over this. We on these Benches and the creative industries will be fighting tooth and nail any new text and data mining exemption requiring opt-out.

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

My Lords, I anticipated that this Statement would attract interest from Members of this House, and I thank the noble Lords, Lord Markham and Lord Clement-Jones, for their comments and their broad welcoming of the report. I will try to respond to as many points as I can, but first I will reiterate the importance of this announcement.

Through the publication of the AI Opportunities Action Plan and the Government’s response, we are signalling that our ambition is high when it comes to embracing the opportunities presented by AI. This is a plan to exploit the economic growth that AI will bring and to drive forward the Government’s plan for change. Training the UK’s workforce is a key part of the plan, and there are steps with clear timelines as to when we will do that. I will come back to training a little later.

We need to diffuse AI technology across the economy and public services for better productivity and opportunity, and embrace the transformational impact it is going to have on everyday lives, from health and education to business and government services.

As has rightly been pointed out, AI is advancing at an extraordinary pace. That is why you will see in this response very tight timelines for actions. The one that was picked out on training, which is 2027, is only one part of the response; you will see that Skills England is due to report very shortly with the first phase of its recommendations and will follow that in autumn with further work. So most of the timelines are very tight, recognising the challenge that the pace of advancement in AI brings.

The benefits extend far beyond economic growth. It is the catalyst that we need for a public service revolution, including, of course, in the NHS. It will drive growth and innovation and deliver better outcomes for citizens. It also lies at the heart of two important missions for the Government: kick-starting economic growth and delivering an NHS fit for the future. By investing in AI now, we are ensuring that the UK is prepared to harness the transformational potential that undoubtedly exists. This will improve the quality and delivery of public services. The plan is a way to do that with real speed and ambition.

The issue of regulation has been raised and there is no doubt that the regulatory environment will be critical in driving trust and capitalising on the technology offers that arise. By bringing forward the recommendations in the plan, we will continue to support the AI Safety Institute and further develop the AI assurance ecosystem, including the small companies that will arise as a result, to increase trust in and adoption of AI.

The Government are committed to supporting regulators in evaluating their AI capabilities and understanding how they can be strengthened. Part of this is the role of the regulatory innovation office. The vast majority of AI should be regulated at the point of use by the expert regulators, but some relates to fast-evolving technology. That is why we will continue to deliver on manifesto commitments by placing binding requirements on the developers of the most powerful AI models. Those commitments will build on the work that has already been done at the Seoul and Bletchley AI safety summits and will be part of strengthening the role of the AI Safety Institute. This issue of making sure that we get the safety side of this right as we develop opportunities is of course key.

The question of copyright was raised by the noble Lord, Lord Clement-Jones, and I know that this is an extremely hot issue at the moment, which will be discussed many times over the next few days and weeks. The Government have issued a consultation, in which there are three principles: the owners of copyright should have control; there should be a mechanism to allow access to data to enable companies to develop their models in the UK, rather than elsewhere in the world; and, critically, there must be transparency. Where does the data flow and how can you work out the input from the output? Those three areas are a key part of the consultation and the consultation is crucial. We have a session planned for next week to go through this in some detail, and I invite and welcome all noble Lords to it, because getting this right will be important for the country. I look forward to discussing those proposals over the next few days and weeks.

Delivering the AI Opportunities Action Plan will require a whole-of-government effort. We are starting that work immediately to deliver on the commitments, build the foundations for AI growth, drive adoption across the economy and build UK capability. We are already expecting initial updates on a series of actions by this spring. For instance, DSIT will explore options for growing the domestic AI safety market and will provide a public update on this by spring this year.

Turning to some of the very specific points, I completely agree that training is crucial and we have to get it right. There are several recommendations and, as I said, the earliest will give a readout this spring. I do understand that this is not something that can wait until 2027; it has to start immediately.

It is important to lay out for the House the situation with compute. This spring, there will be access to two new major compute facilities for AI: Dawn in Cambridge and Isambard-AI in Bristol. When fully active this year, they will increase the AI compute facility something like thirtyfold, instantly. Those are the types of compute infrastructure that are needed. It is AI-specific compute infrastructure. It is not the case that the plan for the future starts now; it is happening now and those compute infrastructures will be used by academia, SMEs and others over the course of the year and beyond. The plan beyond that is to increase the compute infrastructure twentyfold by 2030. That requires a 10-year plan and for us to think into the future about what will be needed for us to be at the forefront of this. Exascale of course is different; it is being looked at as part of that, but it is not the same.

On energy, the noble Lord recognises that one of the most difficult things in government is to join up across departments. That is why it is important.

The national data library will be essential. I welcome the offer of help on health from the noble Lord, Lord Markham, and I will certainly take him up on that; this is an important area to look at. Noble Lords will be hearing much more about the national data library over the next few months. I completely agree that, as we develop this technology, we will need to ensure that citizens’ rights are properly protected. That is something that we will continue to discuss as part of the Data (Use and Access) Bill, among other issues.

Funding will be picked up; it is a fully funded programme, but then we will need to go into a spending review, as Governments always have to.

I will wrap up there to leave plenty of time for others to ask questions, but I hope that I have addressed some of the initial questions.

[Baroness Stowell of Beeston (Con)]

My Lords, on behalf of the Communications and Digital Select Committee of your Lordships’ House, I am pleased to welcome the AI Opportunities Action Plan, with the exception of the recommendation that relates to copyright. We will come back to that. It is important to emphasise the extent to which change will be necessary to deliver on this plan. In particular, the Government have to acknowledge a change in mindset across Whitehall and the public sector.

Perhaps I could ask the Minister how the Government will ensure that the action plan benefits UK start-ups and scale-ups and does not entrench market dominance by the established players in this area.

[Lord Vallance of Balham (Lab)]

I thank the noble Baroness for her input to date and on the important copyright issue. The question of market dominance is important. It is worth reflecting that Matt Clifford is an entrepreneur who deals with start-ups; the report is very strong on start-ups and what needs to be done to make sure that they are part of this, including what regulatory change needs to take place to encourage start-ups to do this. At the moment, it is quite difficult for them to navigate the system, including procurement. Government procurement is notoriously difficult for start-ups, and many of the specific aims of the plan pull that together to allow start-ups to access government procurement plans.

So there are very clear ambitions here to make this about growing an ecosystem of companies in this country, while recognising that many of the existing major companies, with which we will also have to work, are not here. Driving this forward will be a key task for DSIT right the way across government. It will need all-of-government activity, as outlined in the report.

[Viscount Colville of Culross (CB)]

My Lords, the Minister talked about the national data library, which is very welcome, but data in the library needs to be safe and its use carefully thought through. What role does the Minister think public interest thresholds should play in deciding what data is collected and how it should be used?

[Lord Vallance of Balham (Lab)]

Noble Lords will hear much more about the national data library over the coming months, but it is important to recognise that data is valuable only if it is collected well, curated properly and is interoperable and accessible. We need to ensure that it is properly protected, both for individual privacy, which is the point the noble Lord raises, and to make sure that we get the appropriate valuation of the data and that that value flows back into the UK and into public services. These will all be key features of the national data library.

[Viscount Stansgate (Lab)]

My Lords, I welcome the Statement, but I draw my noble friend’s attention to the element which refers to the “immense” energy used by this new technology. Is the AI energy council already in the process of estimating the quantity of energy required, and am I right in thinking that the data centres will be placed around the country in locations that enable them to have access to sufficient energy for them to work?

[Lord Vallance of Balham (Lab)]

My noble friend is quite right. The energy issue is crucial for any plan for AI, and that is why the energy council is being set up. It is precisely why Culham is the first place identified; it has a significant energy supply already. We anticipate that the centres will be based around the country in places where there is renewable energy or where other sources of energy can be accessed easily in order to provide the power the centres require. It is also important that the council looks at the overall environmental impact, which will be part of this.

On energy consumption, it is known what is required for a single data centre and, as we need multiple data centres, the type and amount we will require is known. It is crucial that this is done on top of everything else that the energy is required for. This is a big and difficult problem, but we can already see an answer to it with the first identification of a site for the AI growth zone.

[Lord Holmes of Richmond (Con)]

My Lords, I declare my technology interests as set out the register. I welcome the plan; it has 50 excellent recommendations, but does the Minister not agree that to bring these to life we need an arrowhead focus from government on broad AI legislation—much broader than what is currently planned—that includes an AI authority that is agile, nimbly focused and horizontally applicable; AI-responsible officers; the protection of creatives; and right-sized regulation that is good for citizens, innovators and consumers, in order to deliver according to the fundamental truth that these are our data, our decisions and our AI futures?

[Lord Vallance of Balham (Lab)]

I certainly agree that it is a significant challenge, and I add one other thing. The challenge is not only one of regulation of procurement and making sure that we have the data systems correct; it is one of making sure that we actually deliver, rather than talking about it. Delivery will be key, and we need a proper mechanism to deliver this in the form of a mission with real delivery outcomes. That is why I was pleased to see that we have very tight timelines on all the recommendations in the report. We must make sure that that happens and, as we do so, that we bring in the other necessary controls and actions to propel every part of this, from funding start-ups right the way through to procurement, and, as the noble Lord said, ensuring that we look after the privacy and autonomy of the data.

[Baroness Stuart of Edgbaston (CB)]

My Lords, the Minister acknowledged the importance of the data collected being interoperable and very reliable. With that mind, what discussions has he had with the First Ministers of Wales and Scotland to ensure that data such as NHS data is collected in a fashion that is comparable and therefore usable?

[Lord Vallance of Balham (Lab)]

Clearly, this is a UK-wide issue. I am pleased that Scotland has been at the forefront of data in health for many years and has done an extremely good job of getting that into the right place. As we develop the national data library, these questions of data collection, interoperability, curation—which is incredibly important—and systems to ensure privacy and protection will be discussed widely right across the UK. We need to make sure that everything is interoperable, otherwise we will undo the value that we are creating.

[Lord Vaizey of Didcot (Con)]

My Lords, I welcome the Minister’s focus on delivery, which is vital if we are to make an impact in AI. I say with the greatest respect to my noble friend Lord Holmes that legislation is the last thing we need. The coalition Government’s experience with the Government Digital Service was to find that we made rapid progress before powers were devolved down to individual departments, which then did everything in their power to make sure that nothing worked. While the Minister focuses on the delivery of the AI action plan, could he sort out the confusing quango landscape that now exists after 14 years of endless initiatives, and perhaps have a central function which relentlessly pushes through this excellent plan?

[Lord Vallance of Balham (Lab)]

I thank the noble Lord very much. I will not add to his comments about the 14 years of endless initiatives, but it is crucial that when we do something such as this, we do it properly. Obviously, my experience was in setting up the Vaccine Taskforce to do just that, and this is the same sort of problem. We have to get everybody across government working on this; there is a big delivery task. Delivery should be our focus and we should keep holding ourselves to account for timelines and deliverables.

[Lord McNicol of West Kilbride (Lab)]

My Lords, Monday’s Statement on the AI Opportunities Action Plan highlighted the Government’s ambitious vision on AI adoption across the UK, and I welcome it. While the plan outlines significant investment and initiatives to boost AI infrastructure and capabilities, there are concerns about how SMEs will fare in this rapidly evolving landscape, which is largely dominated by the big tech companies. Recent data shows that only 25% of SMEs are currently using AI, despite 42% of them wishing to use it to increase their productivity. However, these small companies often lack the resources and the expertise to fully benefit from AI adoption. What specific measures will be implemented to protect SMEs from being squeezed out by the larger AI companies, and how will the Government facilitate meaningful collaborations between SMEs and the AI giants to foster the innovations and maintain a diverse, competitive AI infrastructure?

[Lord Vallance of Balham (Lab)]

I thank my noble friend. There are two different aspects to his SME question—the SME use of AI, and the AI SMEs—and both are dealt with in the report, I think. Many of the recommendations indicate what would be done, but I will outline some of the points on SMEs for AI. There is an important join-up task to be undertaken, which is part of what this plan does: the things we fund at the beginning of the process, such as grants from Innovate UK to get companies off the ground, to supporting that funding through BBB and beyond, linking to regulation to make it as simple as we can to enable innovation, and linking in turn to procurement to ensure that there are procurement signals to allow these companies to get the investment to grow and to scale into the companies they could be.

On the adoption side, there is a specific group working on adoption of AI technologies across the UK and a report is due out by the Government Chief Scientific Adviser and the National Technology Adviser on adoption of technologies more broadly, which is about ensuring that we get uptake of new technologies in companies. We know that we have a long tail of companies that do not do that in the UK, and it will be an important part of making sure that the entire economy benefits.

[Lord Howell of Guildford (Con)]

My Lords, I am sure the Minister has noted that the Statement he has given us has a certain flavour of the 1960s about it, with the talk of harnessing the “white heat” of revolution, and all that, but from the point of view of those of us who went through that period, it might be helpful to know one or two of the things that went wrong, because it did not end terribly happily the last time we had this revolution of white heat. The problem then was that the Government’s PR people became a little too enthusiastic, and the Minister might discourage them today from phrases about seizing the future, embracing this, that and the other, and other generalities, of which there were plenty last time, but none of them led to the results that people wanted.

There is a repeat of the old fallacy that the Government deliver growth. It does not. We know that the Government can facilitate growth and can stop growth, and certainly that has happened in the past, but the idea that the Government alone are somehow going to lead, rather than develop entirely new relationships with the private sector as the digital age demands, is one that needs to be examined carefully before the Government rush into more mistakes.

There is another problem, which the noble Viscount, Lord Stansgate, reminded me of—it was not quite so intense then but it is intense now. This whole revolution and the data centres demand enormous amounts of electricity—far more than seems to be planned by the energy department. It talks about 200 gigawatts, moving up from 65 gigawatts, but data centres can drink whole communities’ electricity, just like that. The Statement mentioned 500 megawatts, but we are really talking about gigawatts of a kind for which no planning is in place at the moment. Can we be assured that the SMR side of the Government’s energy transition gets a push? Will the Minister talk to the energy people and tell them that, unless they bring forward the SMR revolution, which is going on in many other countries, and go slow on the white elephant technologies such as Sizewell C—

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[Lord Vallance of Balham (Lab)]

I thank the noble Lord for his enthusiasm for the white heat of SMRs, which is an important point. There is a very clear set of recommendations, from an entrepreneur who understands how to set up and run companies. The approach is one of ensuring that there is funding for start-ups, innovation, regulatory clearance and a procurement pool, which are exactly the types of things that will deliver growth. They are facilitators of growth, because the noble Lord is right that growth comes from the private sector. That is what must be supported and that is what this plan aims to do.

On the power supply, I have already said that the join-up between DSIT and DESNZ in the energy council is exactly the right approach to make sure that we get a joined-up government approach to this. I suspect that it will require SMRs, among other approaches to getting energy in the right place.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I draw the Minister’s attention The AI Mirror, a book by Shannon Vallor, who holds a chair at the Edinburgh Futures Institute. It makes the crucial point that generative so-called artificial intelligence is not intelligent or creative but only reflects back to us—hence the mirror metaphor—what we have previously created. Will the Government acknowledge that one of the great risks of the explosion in the use of AI is stagnation—a building in and entrenching of the discrimination, racism and inequalities that already exist across our public and private systems, as was infamously demonstrated in Australia in the Robodebt scandal?

[Lord Vallance of Balham (Lab)]

It is important to recognise that there is more than one type of AI, including generative AI and specific models. It is the case that AI is very dependent on the data put in, and there are risks of bias being entrenched. That is an important safety issue that must be looked at and that we must be aware of. On whether it is intelligent, the answer is that we are not in the era of general artificial intelligence but at an earlier stage. These are not yet fully intelligent machines. Whether they get to that and over what time period is something of an unknown, but we are in an era where we can do pretty remarkable things, and we should harness that.

[Lord Wallace of Saltaire (LD)]

My Lords, the Minister will be aware that there has been a tendency for high-tech and research investment to go overwhelmingly to the south and east of England in recent decades. I want to underline the regional dimension of AI. The supercomputer was going to be in Edinburgh, which has an excellent computing faculty and a large element of highly trained people. Leeds and Manchester also have useful workforces already trained for this. The renewable energy and the water—which I understand is necessary to cool these computers—is much more easily available in the north and west of the United Kingdom than in the south and east. Can the Minister ensure, to the best of his ability, that we do not yet again have facilities built in the south and east of England, thus increasing the pressure on housing and everything else in the south and east and leaving the north and west in poverty?

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[Lord Vallance of Balham (Lab)]

I absolutely assure the noble Lord that he will see growth zones in those areas. They will not be concentrated in the south-east. The reason the first one happened to be in Culham was to do with the immediacy of potential private sector interaction and the power supply. On the compute facility in Edinburgh, ARCHER2, the very important computer there, will be extended to the end of 2026, and we are looking actively at what happens next. I reiterate that that computer is not primarily about AI, although it will have AI capabilities.

[Lord Browne of Ladyton (Lab)]

My Lords—

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[Lord Browne of Ladyton (Lab)]

My Lords, I reassure my noble friend on the Liberal Democrat Benches that he should not worry too much about this. In September, I spent a significant amount of time in Ayrshire, in the company of a representative of one of the largest asset managers in the world. They were looking for a site in Ayrshire, thankfully, for what has become known as critical compute infrastructure. I was in the company of the local Member of Parliament, who was very keen to get this infrastructure there. In the first conversation we had with this investor, it was clear that access to energy was the most important factor as to whether we got this substantial investment. It was equally clear that global competition for this sort of investment was going to be dependent on the comparative rollout of newer advanced reactors.

We have a particular problem with this in Scotland. The current Scottish National Government are in opposition to building new nuclear power stations. When they were in coalition with the Scottish Greens, the position of the Scottish Greens was that there was nothing safe or secure about nuclear power. The point is that the new advanced reactors are much safer than they were. Will the Government, and the Minister in particular, come to Scotland to talk to SNP politicians and explain that this nuclear power is much safer, and that investment in it will bring this sort of investment into the country, so that we will not be left behind?

[Lord Vallance of Balham (Lab)]

I reiterate that SMRs are part of the solution to this: they have lower core power and lower pressure, use a large fraction of coolant, and have safety advantages over traditional approaches. That will be made clear. That is why the AI energy council is so important, to make sure that this is properly thought-through and that we get these in the right place to support the data centres that are required.

Data (Use and Access) Bill [HL]

Lord Vallance of Balham Excerpts

Wednesday 15th January 2025 Lords Chamber

Moved by

[Lord Vallance of Balham]

That the Bill be considered on Report in the following order:

Clauses 1 to 56, Schedule 1, Clauses 57 and 58, Schedule 2, Clauses 59 to 65, Schedule 3, Clauses 66 to 70, Schedule 4, Clause 71, Schedule 5, Clauses 72 to 80, Schedule 6, Clauses 81 to 84, Schedules 7 to 9, Clauses 85 to 102, Schedule 10, Clauses 103 to 107, Schedule 11, Clauses 108 to 111, Schedule 12, Clauses 112 and 113, Schedule 13, Clauses 114 and 115, Schedule 14, Clauses 116 to 119, Schedule 15, Clause 120, Schedule 16, Clauses 121 to 138, Title.

Motion agreed.

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?

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[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?

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[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.