Societal Impact of AI: Government Policy

Esther McVey Excerpts

Wednesday 8th July 2026 Westminster Hall

[Esther McVey (in the Chair)]

It is a rather glorious day, so if people would like to remove their jackets, they should please feel free to do so.

[Neil Duncan-Jordan (Poole) (Lab)]

I beg to move,

That this House has considered Government policy on AI and its impact on society.

It is a pleasure to serve with you in the Chair, Ms McVey. I think we all agree that AI is a transformational technology with the potential to bring many benefits to our society, but to fully realise them we will require the Government to look at radical changes to taxation, welfare and our industrial strategy. Everyone in the UK needs to benefit from a managed AI transition that puts workers and human dignity at its heart. It must make the world fairer, not more unequal, and it should give UK citizens a meaningful say in decisions that will affect their lives.

Evidence from the New Contract, a pro-worker AI campaign organisation, reveals that the public are deeply suspicious about AI. Around six in 10 people expect the gains to flow to wealthy investors and big corporations, while just 7% think they will be shared fairly across our society. Understandably, seven in 10 workers are worried about the impact of AI on their jobs. Even the Foreign Secretary said recently that AI poses a Hiroshima-style threat to humanity unless global rules are put in place.

In today’s digital age, a cartel of technology giants—Google, Meta, Microsoft, Amazon and Apple—wield extraordinarily influence over our lives online. These platforms have become so embedded in daily life that meaningful participation in society depends on using their services. Similarly, the digital infrastructure that facilitates our work and public services is now an essential layer of the economy, but that gives oligarchs like Elon Musk enormous power to distort public discourse. We have effectively subcontracted our right to information to a handful of big tech gatekeepers.

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[Several hon. Members rose—]

[Esther McVey (in the Chair)]

Order. I will call the Front Benchers from 3.30; I will not impose a fixed time limit, but about six or seven people want to speak.

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[Emily Darlington (Milton Keynes Central) (Lab)]

It is a pleasure to serve under your chairship, Ms McVey. I have rewritten my speech because I do not want to repeat all the things that have been said. I think we are in agreement, although we may have different perspectives.

I want to take us back to 80 years ago, to a country house a few miles from Milton Keynes in my constituency. A handful of mathematicians built a machine that cracked the enigma code, and it gave birth to modern computing. That was Bletchley Park, where Britain proved that it could outthink the world. That inheritance still runs through Milton Keynes in the data centres rising on our edge, the British Standards Institution at Knowlhill—the oldest standards institute in the world, whose kitemark has told people that a product is safe since 1903—and a plethora of AI start-ups that outnumber Oxford or Cambridge.

Britain is standing at another one of those moments, as we see with our economy and our military tech coming together and pushing forward either for the good of the nation or for its ultimate damage. The potential benefits of artificial intelligence are enormous, and not only for the private sector. AI is a tool that can pull our public services back from years of managed decline. The technology will allow us to detect diseases earlier and cut NHS waiting lists. It will free nurses and other public servants from back-office grind for work that only people can do.

However, every country can see that prize, and the question that decides whether Britain leads or merely buys in is whether we make the technology or just import it. A maker exports its products, services and ideas around the world, as we did in world war two, but the UK is at risk of becoming an AI taker and simply handing over the keys to giant US tech firms that are buying up our best young AI companies. It is still our technology; it is just being bought up, packaged and sold back to us so that we become indebted.

As we are talking about the impact on our economy and our society, I want to point to Palantir, which has the contract with the NHS. We know that UK companies could do exactly the same work, because I and many Members present have spoken to them. Even more concerning is that the Ministry of Defence now uses the company. With the activist Government in the US turning off technology and restricting its availability outside the US, that puts at risk not only our NHS but, most importantly, the defence of our realm against Russia, for which others may have more sympathy than we do.

There is also a social cost, as people look at a company such as Palantir and say that it does not reflect their values. It is used by US Immigration and Customs Enforcement and by Israel to target Gaza. That has a huge impact on public trust. It is also bad for the UK economy and innovation, because it crowds out UK firms that could have those public contracts. That is just one example of a dependency that is putting us at risk both socially and economically.

It does not have to be that way. British AI firms need three things to succeed: customers who will buy their products, the ability to increase supply to meet demand, and a USP that British AI is the most trusted. The Government can help with all three. First, we have to act as a good customer. Why should those NHS and MOD contracts not go to British AI firms? Not only would that increase trust, but those products would be developed in a way that meets our needs; we would not be buying something that had been developed elsewhere. That would also mean that we had to invest in the entire British AI stack—it must be British from start to finish.

The second issue is supply. We need to make sure that we have the compute power we need and that we are not relying on US firms again for that. We are overly reliant: despite the fact that we part-own Crown Hosting, that accounts for only 6% of public sector data; the rest is nearly all on Amazon Web Services, which is a significant risk. We need to look at how we diffuse the supply of compute power—the underused capacity—to increase that.

Finally, we need to increase AI take-up across British businesses by building trusted products. The British Standards Institution is at the heart of that. It does not always have to be about regulation; it can be about standards that lift everything up. What attracts the world to the BSI is that it is known for doing that and its standards become international, so we get first-market advantage.

This partnership model of an industrial strategy is mission-driven, creates public trust, evaluates the impact on society and creates opportunities for our ideas and innovation to flourish. That is something we did with the innovations at Bletchley Park. We need to become an innovation leader again—an AI maker, not just an AI taker, which puts us at risk.

[Esther McVey (in the Chair)]

As three Members wish to speak, the time limit for speeches is three to four minutes, because we are going to the Front Benchers at 3.30 pm.

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[Dr Spencer]

I thank the hon. Member for his challenge regarding a future hypothetical that has yet to be realised. I think I will be able to address some of his points, but I think the premise he is setting is a bit beyond the scope of this discussion. However, I can give some concrete proposals for protecting human jobs. As a starter for 10, rather than inventing a new tax, we could start with some old ones, and rather than inventing new regs, we could start with some newish ones.

The Labour Government’s approach has been to make it as difficult as possible to employ human labour by increasing national insurance contributions from employers; making it more difficult for younger people to compete in the workplace by increasing the minimum wage; and increasing employment regulations, making it a greater gamble for businesses to take on new starters. To support jobs in the UK, we should, before looking at AI, look at the Labour Government’s policies, which are uniquely designed to make it more and more difficult to employ a person over a machine.

We are right to think about the workforce implications of the adoption of AI, but the future is always unclear and uncertain; that is the challenge of working in this sector, and I am very mindful of that position of humility as I move on to the following, more specific remarks.

Other technological disruptions, while displacing jobs, have ultimately led to more jobs through elasticity of demand. As costs decrease through automation, demand increases. That is the story of what happened with mass manufacturing in the automotive sector: to begin with, people were concerned that mechanised manufacturing would reduce jobs in the sector. Of course, the car sector exploded because the cost of a car went through the floor, and as a net result there were more jobs in the automotive sector. The issue was that they were different jobs; it is more of a transition than a replacement.

There are signals and concerns that the current decrease in the number of youth jobs is due to AI. However, as my right hon. Friend the Member for East Hampshire said, it is unclear whether that is due to AI replacement, the current prevailing economic circumstances, or a mixture of the two. The data remains unclear, but I appreciate that we need to be thinking now about what possible futures could unfold. Equally, our tech sector provides growth and jobs. The UK could be the world’s fastest AI adopter, but only if it is not punished with burdensome taxes and regulations. We are already seeing a hint—just a hint—of what AI can offer, especially in the research and health sectors. Our economic future needs AI, or we are going to be left behind.

Before I come to my final questions for the Minister, let me touch on AI and tech sovereignty, which is increasingly being talked about in the media and in this place as people focus on it more and more. AI and tech sovereignty, as described in this debate and in other forums, is illusory. We work and operate in global supply chains, with technology enmeshed around the world. Whether it is microchips built by TSMC in Taiwan, microchip etches created in the Netherlands, quantum tech built in the UK or frontier models, most of which are based in the States, our sectors are completely and utterly enmeshed.

Rather than talking about tech and data sovereignty, we should be talking about resilience and leverage. What are the core functions and features that we want to have on domestic soil? We can have a discussion about that. What should it be necessary to have on British soil, and what are the core technologies on which we want to be elite? We want to be world leaders, and to be indispensable to the world so that it looks to us, as opposed to the other way around. We need resilience and leverage rather than to chase the illusory rainbow of tech and data sovereignty.

Given my remarks about regulation and competitiveness, can the Minister rule out any part of the UK being brought into the EU AI Act? That would reduce our competitiveness with the EU. Will the Minister summarise the impact on the UK AI sector of Government taxation and employment policies? Have they been positive or negative? If they have been negative, to what extent? Can he confirm that there will be a decent statement before recess, as has been promised, on social media and the regulation of chatbots? Has he spoken to the virtual Prime Minister, the right hon. Member for Makerfield (Andy Burnham), about the importance of anti-protectionist policies in the UK’s AI sector?

[Esther McVey (in the Chair)]

I call the Minister, mindful that I would like to give some time to the hon. Member for Poole to wind up the debate.