Digital and Technology Policy: National Sovereignty

Baroness Kidron Excerpts

Thursday 23rd July 2026 Lords Chamber

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[Baroness Kidron]

That this House takes note of the impact of digital and technology policy on national sovereignty.

[Baroness Kidron (CB)]

My Lords, I am grateful to all noble Lords taking part in this debate. I pay particular tribute to the right reverend Prelate the Bishop of Oxford for his leadership in advocating for digital systems to reflect our ethics and values, who today makes his valedictory speech.

Anyone who has heard me speak about technology over the past 15 years could be forgiven for thinking that I do not much like it. Nothing could be further from the truth. I love what technology makes possible. I rely on it for my health; I use artificial intelligence every day; and I still marvel that I can speak face to face with people on the other side of the world as though they were in the room. My criticism has never been of what technology can do, but rather of the political and economic choices that we have allowed to shape its development.

Technology is not an independent force that arrives from nowhere. It reflects the interests, incentives and values of those who build it, finance it and control it. Technology now underpins every area of public and private life, so digital policy is no longer simply about innovation, information or efficiency. It is a constitutional issue that raises serious questions about sovereignty, including whether Governments retain the practical ability to govern in the interests of their own citizens. That is why I secured this debate. At heart, sovereignty is the capacity to choose. Sovereignty means that Parliament makes the laws, government governs, regulators regulate and courts enforce our law, and that Britain is free to pursue its national interest without coercion or dependence. Yet we have allowed that capacity to be eroded by the tech sector in four distinct ways.

First, we have surrendered political leverage: on copyright, where the Government put their proposed UK-US technology deal above our own copyright law— a deal that, incidentally, never materialised; on child safety, where, as the former Minister Jess Phillips observed, it took a year simply to persuade the Government just to threaten legislation, not to legislate; and on data protection, competition policy and consumer protection, and across government departments, where public lobbying and private pressure have urged officials not to upset the Americans.

That pressure is increasingly reinforced by an activist White House. We are threatened with sanctions for any policy that might impact on US tech. The US tech sector is uniquely concentrated in a small number of companies and beholden to the views of a small number of powerful funders who possess dual-class shares that give them total control. They tell us that Britain will be left behind, that innovation and growth depend on abandoning our own laws, or that complying with them is technically unfeasible. That is very hard to take from companies that promise immortality and colonies on Mars—the very same companies that insisted that age assurance, two-factor authentication and the right to be forgotten would break the internet. Backed by unprecedented wealth and unparalleled political access, they have exercised extraordinary influence over government policy.

Secondly, we have surrendered economic leverage. For years, we have tolerated economic arrangements that place British businesses at a structural disadvantage. Our high streets pay taxes that e-commerce does not, black taxis are subject to obligations while ride-hailing is not, hotels meet standards that short-term letting platforms do not—each is a transfer of wealth overseas. The Government have poured billions of pounds of public money into global technology companies, while British firms that employ people here, pay taxes here and invest here—and, importantly, train the next generation—struggle to gain a foothold in public procurement.

An investigation in last week’s London Review of Books describes how, after years of recruiting former officials and consultants with access to Ministers and senior decision-makers, Palantir secured its position at the heart of the NHS, culminating in a £330 million contract for its federated data platform. Many trusts either have chosen not to use it at all or regard it as inferior to cheaper alternatives. Leeds Teaching Hospitals NHS Trust warned that it would

“lose functionality rather than gain it”,

while NHS Greater Manchester said that its own system

“exceeds anything the FDP currently offers”.

The issue is not only quality or value of money but that, over time, the NHS will become bound to Palantir: it will continue to own its own data but will depend on Palantir’s software to use it. Similarly, the Ministry of Defence admits that replacing one of its Palantir systems

“would involve rebuild of the underlying data analytics architecture”.

That is not simply vendor lock-in; it is a strategic dependency at the heart of our national security. Choice exists in theory but increasingly disappears in practice. Palantir is not unique. Across Whitehall, the same pattern is emerging in cloud computing, enterprise software and artificial intelligence. Sovereignty is not simply the freedom to make a decision; it is the freedom to make a different decision in the future.

Thirdly, we have surrendered technological capability. Every procurement decision is also an investment decision. Buying technology elsewhere means investing in someone else’s industrial future rather than our own. I have spoken to sources in health, defence and policing, who all told me they had been forced to contract AWS because no UK cloud provider was considered financially secure. Yet when I asked whether the combined purchasing power of government could itself create financial resilience for a British provider, the answer was an unqualified yes. Parliament has already provided tools to the competition regulator to challenge entrenched digital market power. The problem is not legislative capacity but political strategy. Cloud computing is only one example. The same logic applies wherever government buys technology. Procurement does not simply purchase capability; it determines where future capability is built.

Fourthly, we have created strategic vulnerability: from Microsoft, which suspended services used by the chief prosecutor of the International Criminal Court and refused to answer questions from Police Scotland about where sensitive law enforcement data was being processed; to Elon Musk withdrawing Starlink access from Ukraine’s military operations; President Trump’s decision to limit access to AI models Fable and Mythos 5 to US nationals only; and this week’s news that an OpenAI agent has autonomously hacked Hugging Face, just weeks after OpenAI’s chief executive argued that frontier AI should be regulated under US leadership. The US has no such regulatory regime, and the risks are imminent.

Together, these reveal the problem of allowing critical public capacity to depend entirely on infrastructure controlled offshore. I fear that those who argue that Britain must wait for global agreement are whistling in the wind. History suggests that meaningful international regulation follows major incidents rather than prevents them. Meanwhile, across government, hospitals, schools, critical infrastructure, and security and intelligence communities, we are replacing technologies whose risks we broadly understand with systems whose capabilities and failures remain, at best, uncertain. A nation that depends on decisions beyond the reach of its own Parliament and Government and its own regulators and courts has, in practice, surrendered its sovereignty.

We have a new Government, and that is an opportunity to lead. Britain begins from a position of enormous strength. We have world-leading universities, exceptional scientists, some of the richest and most trusted datasets in the world in the NHS, the BBC, the Met Office and beyond, and institutions, such as the AI Security Institute, that have demonstrated international leadership. These are not simply public services; they are strategic national assets that we could capitalise on to drive prosperity and independence across some of the technology stack—from AI and quantum to specialist models, medical advances, infrastructure and even a new media environment.

During the passage of the Data (Use and Access) Bill, I argued that these unique datasets should be formally categorised as sovereign datasets. Those working at the frontier of artificial intelligence accept that high-quality data is the scarce resource of the future, but it is a resource that we have in abundance. That is why my noble friend Lord Tarassenko has repeatedly argued that Britain should develop a publicly supported foundation model, so that data generated by the British people continues to create value for Britain. The objective is not to build the world’s largest model. Systems that may or may not be sentient and that foment unemployment for half the world’s population, with no corresponding plan for humankind, are Silicon Valley’s vision, not ours. The objective is to build models that are responsible and trusted, trained on known data, capable of audit, secure by design and, most of all, tailored to the needs of British businesses, public services, legal frameworks and security requirements. A trusted AI ecosystem also requires robust systems of transparency that protect our national security and present an opportunity for licensing at scale.

Government must get off the fence. Companies that refuse to respect British intellectual property should not expect access to public contracts. Britain should create conditions for its intellectual property to be licensed and commercialised across the global economy.

It is time for government procurement to support British values and build national capability: a “sovereign as service” unit across government, promoting British business, including SMEs, enabling pre-authorised procurement and ensuring that public money develops future skills and capability. We want procurement that rewards openness, interoperability, competition and genuine exit strategies, so that the Government never again mistake convenience for resilience or political access for innovation. They should always ask, “Efficient for whom?”—not just whether savings are made but where value is created and where it stays, so that public spending strengthens regional and household prosperity, not simply the market cap of overseas firms. Above all, government contracts should go only to companies that commit to respecting British law.

Finally, we must transform sovereignty from a strapline into a measurable strategy. Ministers speak about reducing strategic dependence, increasing resilience and retaining leverage. They have spoken about building British capability and working with trusted partners. Yet in practice they have pursued the logic of dependence, buying, subsidising and valorising foreign technology, in the belief that being close to power is the same as exercising it. It is not.

I have been working with colleagues at the British Computer Society to develop a national sovereignty dashboard so that we have objective measures of resilience, dependency and capability. Governments already measure inflation, productivity, emissions and debt, because what gets measured gets managed. To ensure sovereignty, we must have a way of measuring it. France, Switzerland, India, Brazil, UAE and South Korea have all made sovereign decisions about aspects of their technology infrastructure. They are investing in their capability and simultaneously protecting their future security. For too long, our approach has been subservient to the lobbying trope that all but America and China are too late. In fact, the vast majority of the world’s population live outside those two superpowers, and tech multilateralism offers the UK a powerful role.

Sovereignty never meant doing everything ourselves; it means retaining the freedom choose now and to make another decision tomorrow. Sovereignty is not protectionism; it is statecraft. There is a different sovereign future available to Britain, built on capability, confidence, trusted systems, respectful partnerships and, above all, the capacity to choose. I beg to move.

--- Later in debate ---

[Baroness Kidron (CB)]

My Lords, I start by disappointing the noble Lord, Lord Holmes: there will be no biopic about me, but Oxford University is currently building a “Baroness Bee” chatbot that might help my productivity. I apologise for the cost of the hardback book, but let me say that I have donated one to the Library; that is the importance of culture and sharing in our communities.

I am very often met with a level of surprise at the sophistication of this House on this subject. There are a lot of people inside and outside the technology sector who do not quite believe that there is such a depth of knowledge and passion—I mean that in the best possible way—on this subject. Today’s debate is indicative of that.

A number of noble Lords used the words “full stack”—we do not have enough capacity to do the full stack. Then I realised that I had written it down as “full-fat” sovereignty. I think we can all agree that we are not going to have full-fat sovereignty, but there were so many ideas in today’s debate that it adds up to a strategy. I say to the Minister, with deepest respect, that the list that she was asked to give us is a series of activities. Some of them are very important and some are very welcome, but it is not yet a strategy.

Across the House, there were only two disagreements. The first was on whether “Take back control” was a good slogan. I think we can leave that to one side. The other was on whether we should have open-weight models and regulation, or just open-weight models. We can probably walk forward on the basis that there is cross-party agreement that we desperately need an urgent strategy. Whether these responsibilities sit within DSIT or another department is ultimately a machinery of government question, but it cannot be the case that we wait for a strategy on sovereign tech. I absolutely agree with those who say that it goes beyond AI to all kinds of technology. Without a strategy, we cannot put into practice all the brilliant ideas that noble Lords have put forward today. I thank all noble Lords for their contributions.

Motion agreed.