Energy Security

Danny Kruger Excerpts

Tuesday 19th May 2026 Commons Chamber

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

I welcome the measures in the King’s Speech on energy security, as on many other issues. The Opposition’s wrong-headed approach would leave us tethered to global markets that we cannot control. They would lock our country out of much-needed jobs and condemn Brits to higher bills. The energy independence and nuclear regulation Bills, in contrast, are further leaps towards the stronger energy security we need.

In my speech, I want to tackle an issue—it was actually touched on by the previous speaker, the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale)—which will increasingly drive the amount of energy our country needs to generate: the development and deployment of artificial intelligence. The Government did not bring forward in this King’s Speech our manifesto commitment to

“ensure the safe development and use of AI models by introducing binding regulation on the handful of companies developing the most powerful AI models”.

Indeed, AI was not mentioned in the speech. The Government have acted decisively on one symptom of the lack of regulation: the widespread production of sexualised images. That, however, followed 3 million such images being generated. Harm was already done, and I underline here the recent comments made by my hon. Friend the Member for Birmingham Yardley (Jess Phillips).

The Government have, rightly in my view, launched their sovereign AI fund, supporting innovative start-ups to scale up and generate value here in the UK, including access to compute. I know that many Ministers in the Department for Energy Security and Net Zero have been working hard to ensure that the capacity is there to deliver that additional compute. However, when it comes to the design and use of AI systems and models, we have only the AI Security Institute, a world-first, expert-led organisation, but one that lacks statutory powers and has to ask companies politely to engage. Even the Trump Administration now appear to recognise the need for the evaluation of frontier AI models before release. If we are genuinely serious about our country’s economic security, we must devote as much attention to AI and its astonishingly transformative, productive and disruptive potential as we are rightly devoting to energy security and the delivery of home-grown renewables. That will first require working with the EU on digital regulation, and I will push for that to be reflected in the welcome EU partnership Bill.

In the briefing pack for the King’s Speech, the Government maintain that nearly one third of UK AI start-up leaders are considering relocating overseas due to regulatory complexity and capital constraints. Given that regulatory complexity will often relate to cross-border issues, the prescription is not deregulation but regulatory co-ordination.

[Danny Kruger (East Wiltshire) (Reform)]

Will the right hon. Member give way?

[Anneliese Dodds]

In order to keep to time, I will not.

Capital constraints, and relatedly, constraints in compute, are real. We must recognise that while unilateral measures to support sovereign AI are important, their scope is necessarily limited. We must again work with reliable partners that share our values, not least within the EU.

Finally, we must be brave enough to open up the discussion on the fiscal framework for AI. We currently tax labour, the very thing that AI will—in some sectors and in specific ways—displace. We must examine now how we might use the public stake from our sovereign AI investments, or mechanisms such as a token tax or reform to capital gains, as the TUC has suggested, to build up the resources that may be needed. There is potential for significant disruption to the labour market, and we must be more ready for it.

Research out today from King’s College London suggests that 69% of workers and 64% of employers are worried about the economic impact of AI-related job losses. A majority of all groups surveyed predicted that AI’s benefits will mainly go to wealthy investors or companies, not workers or society. A majority of all groups also backed Government intervention. If we are to secure the fastest adoption of AI in the G7, as is the Government’s intention, we must deal with those issues too. Our young people will not forgive us if we fail to engage with this generational challenge.

--- Later in debate ---

[Danny Kruger (East Wiltshire) (Reform)]

It is a pleasure to follow the hon. Member for Nottingham East (Nadia Whittome), because she made a very important point at the end. She is right: this is a very underwhelming King’s Speech. There are some welcome headlines, but the fact is that the ambition is very diminished. The reason for that—and she represents it—is that the Labour party is fundamentally split. It is unable to move forward boldly in any direction that is needed. I do not make personal accusations. I know what it is like; I sat on the Government Benches in the last Parliament, supporting a Government who were also fatally split and unable to move forward. This is the consequence of the politics that we are in. By the way, I welcome the eloquent and elegant repudiation of her previous position by the shadow Secretary of State, the right hon. Member for East Surrey (Claire Coutinho). She made an excellent speech about the difficulty of the Government’s policy, and she is now in the right place.

Across the board, and particularly on the topic of energy security, we see bold ambition and the right statements being made, particularly about energy independence and resilience, but the detail that follows is utterly underwhelming. In this area, we see a decision not to exploit the enormous opportunities of the reserves we have in the North sea. We should all welcome the aspiration of energy independence, including eventually to reap the huge benefits of the abundant natural resources that we should be using for energy, but I am afraid we are not going to get there this way.

Likewise, in other crucial areas of national priority—defence being the main one—we hear the right language about the need for investment. We hear about the need to recover our defences, which have been sadly depleted over many decades. We have a chronic weakness in our national defences, and yet we still have no defence investment plan and no clarity on where the money will be spent or even where it will come from.

I represent a military constituency with many amazing tech and military firms that are developing the kit we need for our defences. They are laying off staff as we speak, because the money is not promised and it is not available to them. It is scandalous: in all sectors where the United Kingdom has real current and enormous potential advantages, the high-tech sectors of fintech, agri-tech and AI—areas that, thanks to Brexit, we are able to drive ahead on, boldly and independently—we are being hobbled by a lack of ambition and a chronic inability to release the talents and opportunities there.

I was going to intervene earlier on the right hon. Member for Oxford East (Anneliese Dodds), who was bewailing the exit of UK tech entrepreneurs in the AI space and saying that we should be more like Europe in that regard. Those entrepreneurs are not leaving the United Kingdom to go to the EU; they are going to the middle east, the United States or the far east, because those countries have a pro-tech industrial policy, and that is what we need in our country.

I have been meeting a bunch of businesses recently—we are on a bit of a prawn cocktail operation in the Reform party, and it is amazing which businesses want to come and talk to us at the moment. It is very encouraging, but they are all depressed about the state of the economy. Yesterday, an AI entrepreneur said to me, “If we are not careful, this country’s economy will simply be US tourism.” That is all we will be able to offer, because we are driving away all the entrepreneurs and businesses that represent opportunities for growth in future. Last week I was talking to a pharmaceutical firm that is now exiting to Europe—to Switzerland, in fact. This morning I saw a company developing the technology for small modular nuclear reactors. They are giving up and going to the United States. We are driving away the talent that we need for the future.

I am enthused by the opportunities that our high-tech sectors represent and what we could be doing, but there is also the ordinary economy. Labour used to talk a lot about that—indeed, some years ago the Chancellor wrote a book called “The Everyday Economy”—and it is a vital focus for us. But what are we doing for businesses that are the backbone of our highstreets—both national businesses and small and medium-sized businesses? We are ramping costs on to them through national insurance contributions and business rates. For small businesses the VAT threshold is way too high, inhibiting growth and job creation. A Government who want growth and productivity are going in directly the opposite direction.

I end with a plea to Ministers: I extol and applaud their aspiration for a clean transition, but right now we are in a national emergency, and we need to crowd in every possible source of electricity that we have to get our economy growing. That includes nuclear and it includes fossil fuels.