Societal Impact of AI: Government Policy

Iqbal Mohamed Excerpts

Wednesday 8th July 2026 Westminster Hall

[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.

[Iqbal Mohamed (Dewsbury and Batley) (Ind)]

The hon. Gentleman is making a powerful point about big foreign tech companies. Does he believe that our dependency on six tech companies in all aspects of our lives poses a national security threat and needs to be assessed as such?

[Neil Duncan-Jordan]

I thank the hon. Member for his intervention; I will deal with AI sovereignty a bit later in my speech.

We should ensure that, like a socialist Government’s approach to energy or water, the public have a stake in the development of AI technology, to ensure that the value it creates is captured and shared for the good of society as a whole. Previous waves of technological change have brought with them huge economic disruptions, but the human and social costs that followed were not inevitable. They were the product of political choices, as Governments left workers and communities to absorb the shocks alone.

--- Later in debate ---

[Sir John Hayes (South Holland and The Deepings) (Con)]

I rise in support of much of what the hon. Member for Poole (Neil Duncan-Jordan) has said. He has done a service to this Chamber, and Parliament more generally, by highlighting the threats that AI will bring.

Perhaps I can set the scene by reminding Members present that it took 25 years for Parliament and successive Governments to recognise that the internet must be regulated. That is extraordinary. When I was in the IT industry back in the ’80s and ’90s, I became aware of the concept of the internet—before it was widely spoken about—and even then I knew the harm it might do.

In 2000, at the beginning of the new millennium, I was privileged to be able to speak at the Spalding Gentlemen’s Society, with which I do not imagine you are familiar, Ms McVey, but suffice to say it is a learned society of the old school—it now does admit women, you will be pleased to know. It has a lecture programme on all manner of things, and I was pleased to be invited to give the first lecture of the millennium. Then, I warned of what the internet might do. Most of the audience, by the way, disbelieved what I said. It was a very civilised meeting—it was not raucous in any way—but they could not quite come to terms with what I predicted.

What I predicted then has come to pass. What has occurred is the distortion of public discourse, the enabling of widespread fraud and the provision of the means for every imaginable form of harm, from hardcore pornography being available to children, to internet gambling addiction, suicide sites and much more. Now, the prospect of AI will make all that still more chilling. As the recognition of what is real and what is invented is increasingly blurred, it will become more and more difficult for people to navigate the inevitable vicissitudes that pervade every life.

Imagine a future where the once secure certainty of what really exists is so undermined that people can no longer believe what they are told and have no place to go to establish that certainty—the basis on which we all gauge reality and are able to live reasonably productive lives. I see wellbeing being affected by that detrimentally; unless the Government take very urgent and extremely serious action, that will happen far more quickly than anyone here envisages.

[Iqbal Mohamed]

Does the right hon. Gentleman agree that one of the primary obligations of any Government is to keep their citizens and the people living in their country safe from all avoidable harms? AI is a major potential cause of harm, and it is avoidable. Does he agree that the Government cannot wait 25 years to catch up?

[Sir John Hayes]

I absolutely agree. That is why I began by describing what has occurred over the last quarter of a century and the misunderstanding—a pervasive one that affected all political parties and Governments of all kinds—that a dangerous fascination with novelty was more important than the certainty that I have just outlined.

The hon. Member for Poole is right to issue a clarion call for action. Let me go into a little more detail. He is right, for example, that we have allowed a handful of multinational corporates, which have displayed a carelessness to the effects of what they do, to wield immense power—more power than national Governments. It is increasingly difficult for Governments to pull levers that affect these people, because they exist beyond the purview of this House or of any Government Minister. They have shown by their example that carelessness, and only when they have been prevented from doing harm have they ceased to do so.

I am delighted that the Government are now taking steps to prevent children from accessing social media and mobile telephones; I would like to go much further, actually, and I hope the Government will. I called for the ban on phones in schools, along with many other Members of this House, a long time ago. But AI makes all that more serious, because the AI available through that technology, which has the ability to distort the very nature of reality, will be immensely difficult to control. And yet we must try to do so. Legislation is not always the only means of doing that but, as the hon. Gentleman set out, it certainly must play a part.

Umberto Eco described the internet as the “empire of imbeciles”. Over time, it has become impossible to distinguish experts from idiots, and every bar-room bigot now has an audience of millions. Most people had a sense of proportion; my parents were working-class people who left school at 14, but they had a very good sense of what really mattered. Now we have elevated trivia to an extraordinary degree and, as a result, that sense of proportion, which was once taken as read, can no longer be guaranteed.

--- Later in debate ---

[Damian Hinds (East Hampshire) (Con)]

I commend the hon. Member for Poole (Neil Duncan-Jordan), as well as his two friends and allies who have just spoken, my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) and the right hon. Member for Oxford East (Anneliese Dodds), on bringing this important subject to Westminster Hall. This is in danger of turning into one of those rare debates in Parliament where one learns something from everybody who speaks and we all come away better informed and equipped.

This subject is enormous, and it is only a 90-minute debate. It obviously will not be the last time we discuss these matters, and I freely confess to not being an expert on the subject. Like many colleagues, I am trying to educate myself more to understand better the implications, including the upside for productivity, the implications for energy and water, and the effect on all manner of things in the public and private spheres, such as healthcare, education, international relations, and foreign and security policy and so on. I am no expert, but one thing I have learned is that no one knows what the societal effect of AI is at this moment in time. A lot of people have a story to tell, but no one really knows. That is one of the reasons why we have to keep coming back to these subjects as our understanding iterates and evolves.

[Iqbal Mohamed]

The right hon. Gentleman says no one knows, but throughout history, when we have approached technologies or situations that we have never experienced before, we have done scenario planning and risk assessments, and we have prepared as best as possible for scenarios that may be plausible or possible. Does he agree that when it comes to AI, we have been absolutely asleep at the wheel and that planning has not happened?

[Damian Hinds]

I agree with large parts of what the hon. Gentleman says. The timeframes are obviously shorter this time than they were for say, the industrial revolution, the printing press or any of the other massive changes that we have seen in the past. When Gutenberg invented his printing press, I am not sure it was foreseeable to even the most far-sighted, omniscient individual what all the effects of that would be. That does not mean we do not try to scenario-plan and to think about the different possible outcomes and try to mitigate them.

Labour market effects are probably what we as politicians worry about the most, along with all the other implications, like the consequences for income distribution, intergenerational fairness and so many other aspects. People already say that AI has had a big impact on job markets, particularly on the graduate job market. I honestly do not know whether that is true or not. It strikes me that it is quite an easy thing to say: if a company is not doing that well this year and is not employing graduates to the same extent that it used to, it is a great thing to say, “Well, we’re investing in AI.” I do not see how a professional services firm, with the current technology deployment, would be able to substitute people for AI in quite that way.

In the future, it is true that there is a scenario in which there is mass unemployment. But it is also true that when there have been huge upheavals previously, labour markets have adapted, albeit over time, and sometimes it is that gap that makes the difference. Labour has found its way into different sectors—

--- Later in debate ---

[Iqbal Mohamed (Dewsbury and Batley) (Ind)]

Responsible AI, done right, could be the saviour of humanity. Irresponsible AI, done wrong, could lead to the destruction of humanity. There is, to my knowledge, no effective, self-regulated industry anywhere in the world that puts consumers and the planet before profit and shareholders.

I thank the hon. Member for Poole (Neil Duncan-Jordan) for securing this important debate. As he and many Members have highlighted, a handful of companies run by men answerable to no electorate and standing before no constituents are making decisions right now that will shape healthcare, education, employment, childhood and the economy more than most Acts of this Parliament ever will.

I will focus on topics that have not been covered and speak about safety and economic risks. I have spent 20-plus years in the pharmaceutical regulatory industry, and we can learn much from it. We regulate medicines before they reach a single patient. We do not wait for harm; instead, we test, we license and we monitor. That is the entire logic of the GxP framework that underpins pharmaceutical safety in this country, yet AI is being deployed in our hospitals, schools, courts and welfare system with no comparable safety regime at all, not because the risk is smaller but because the oversight is simply not there.

I put the following demands to the Government. First, where GxP protects patients from medicine, we need GAIP—good AI practice—regulation to protect patients from algorithms. Any AI system used in healthcare must meet a statutory standard before it touches a single patient record or clinical decision. The AI Security Institute already evaluates frontier models for biological, chemical and cyber risk, but only if the AI companies allow it to. That is progress, but progress in security assessments is not the same as regulating delivery in the healthcare industry.

This Government brought Palantir into the heart of our NHS; in doing so, they handed a US surveillance contractor that is complicit in genocide the keys to patient data that belongs to the British public, not to a share price on Wall Street. I ask the Minister to guarantee the British public that their NHS data will never be given to or allowed to be stolen by Palantir or any other private company.

Secondly, the Government must mandate independent statutory testing for AI before its release, and a yellow card scheme that would be a national register where safety incidents, near misses and harms caused by AI were reported, tracked and acted on exactly as we do for adverse drug reactions. It must not be the manufacturer marking its own homework and hoping that nobody checks; self-certification does not work and must end. Thirdly, every AI system developed in this country must have a kill switch that is triggered automatically the moment a system takes unauthorised action and that any human being can trigger manually at any time without obstruction or AI override.

This danger is not only about safety but about who pays the bill as AI unfolds. More than 300,000 private-hire drivers in this country face displacement by robotaxis. I ask the Minister how the Government will fund public services going forward. There are dangers, but there are opportunities from AI. We must try to access them as much as possible, but we must address the societal, economic and safety consequences that AI poses.

--- Later in debate ---

[Victoria Collins]

Absolutely, and that has been at the core of a lot of our debate today.

AI can drive inequalities, break down our society, security and safety, and take away jobs, or it can be used to tackle our biggest problems, empower individuals and drive growth. AI is a bit like the electricity of today—a supercharged version of electricity—and we need to think about where we are going to direct it. At some point, we started using electricity to light our cities and to power our homes, businesses and industries; now we need to think about where we will direct AI, and how we prepare people for that future.

The hon. Member for Poole and others talked about the future of our economy, tax and wealth, and there are key examples that highlight how important that is. We have started talking about donkeycorns; Members may have heard of unicorns, but donkeycorns are billion-dollar companies with one or two people. There is a legend that OpenClaw was a one-person company that was sold for £1 billion. That is a real shift in our economy, and we need to tackle it head-on.

As Liberal Democrats, we believe in embracing that progress and change, but we also believe in empowering individuals. When it comes to AI, we thought about tackling that big picture, which is why we launched a project called “Everyday AI”. We brought together over 100 global stakeholders from industry and civil society—to look at a Liberal vision for AI and how Britain can thrive in the age of AI. We looked at backing British innovation, empowering people and building trust, and building infrastructure for success.

As the right hon. Member for East Hampshire (Damian Hinds) said, no one knows where we are going. As a Member of Parliament and a politician, I often feel it is difficult to sound neither utopian nor dystopian about this issue. However, it is crucial that we ask the right questions, and keep on asking them, to make sure we are going in the right direction.

[Iqbal Mohamed]

Will the hon. Lady give way?

[Victoria Collins]

I am going to advance, because I want to hear from the Minister.

Crucially, we need to lean into the opportunities and challenges, and I will share some of our proposals, which I would be happy to discuss with the Minister afterwards. When it comes to leaning into the opportunities, it is about helping start-ups and small and medium-sized enterprises to thrive with AI, with AI procurement guides, skills tax credits and capital expenditure reliefs for AI software and adoption.

We need to look at supporting our university spin-outs and the incredible research in this country; quintupling proof of concept funding; having a standardised national framework for negotiating IP between universities and staff; and moving towards full IP ownership by researchers and research teams. We have to help to grow these things here in the UK.

As mentioned by the right hon. Member for Oxford East (Anneliese Dodds) and the hon. Member for Milton Keynes Central (Emily Darlington), we must use Government procurement to support UK tech. It has to be a catalyst for British sovereign tech. We are calling for a trial increase to 30% for the social value in procurement contracts. That would align with our strategic goals on digital sovereignty and AI, while maintaining open borders.

When it comes to tackling the challenges head-on, we need to look seriously at the cyber-security threats that have been talked about today. The hon. Member for Poole talked about the impact of big tech companies, and Mythos was a wake-up call. We hear that China is now developing such models, but I am most worried about those we are not hearing about.

We need to prepare for the future of work and fuel our creative industries, because we are nowhere without them. When it comes to NEETs, we have to realise that we are at a squeeze point, because companies are looking at how AI is bringing down costs. However, I would gently add that this is not the time to increase the cost of employment; that will not tackle the employment question.

We need to look at establishing safety by design in AI systems and models. We must tackle harm from chatbots through a harm-based framework, but enforcement is crucial. The AI Safety Institute is now the AI Security Institute. It is such a shame that that focus has been diminished, because we should be looking at AI ethics, as well as safety and security. We have to ensure that AI systems are not used for harm.

Members talked about AI fraud, which is a massive, serious problem in the UK. Revolut told us that the UK accounts for 22% of its customer base but 68% of its fraud costs. We are not tackling that massive problem properly, and AI is supercharging it. We are therefore calling for an online crime agency and AI labelling. We are also saying that social media companies, where a lot of AI-enabled fraud starts, should be financially liable for it.

We must tackle the energy question for AI datacentres and their role in the community, which my hon. Friend the Member for Mid Dunbartonshire (Susan Murray) mentioned. We have to make sure they add value to our communities, and the AI Energy Council must tackle those issues head-on. On public services, we need to make sure a person stays in the loop.

Ultimately, we need to prepare for a future that is arriving very quickly. Underpinning that, we are calling for a national people strategy. Things are changing very quickly, so we need a single, coherent framework, from primary school to the workplace, with regional input. We must realise that the skills we need for an AI future are not just technical skills, but critical thinking and analysis.

We must also look at a digital sovereignty strategy, as many Members have said. We need to look at our tech stack to ensure that we do not have a single point of failure. A resilient tech stack would be good not just for our security and for businesses, but for our tech and our economy, so we absolutely need to look at that.

We cannot give up on frontier models; we need to start looking at them now. A point was made about proportionality in models. We do not all need massive, complex models that require massive amounts of energy to solve most of our problems. Most companies probably need simple models. They can be UK models, but if we do not start now by backing and investing in them, we will be left behind very quickly.

Finally, we need to move quicky on smart regulation. The Financial Conduct Authority has a fantastic approach to fintech that looks at output and standards. We need a flexible approach to AI, because things are moving quickly. We also need a digital Bill of rights.

We need to unlock the benefits by addressing the challenges head-on. According to the Ada Lovelace Institute, 91% of the public feel that it is important that AI systems are developed and used in ways that treat people fairly, and almost 90% are calling for an independent regulator for AI. Will the Minister listen to those concerns, take back the many great ideas that have been raised today and speak to his colleagues across Departments? AI is an extremely powerful tool, and we must embrace it. The Government must tackle this head-on. Where will they let the power be focused?

If anyone is unsure how quickly AI is going to change, I am repeatedly reminded that this year is the slowest we will ever see in AI development. If a plane going around the world is 1° off, it will be 500 miles off course. We need to decide now the direction we are going in with AI. We need to look at that holistically. We are here to support that Government work and make sure it empowers society, so that Britain can really be the leading nation on trustworthy, innovative technology.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

It is a pleasure, as always, to serve under your chairmanship, Ms McVey. I thank the hon. Member for Poole (Neil Duncan-Jordan) for bringing forward this interesting debate, and all the Members on both sides of the House who have taken part. I recognise many of those who have participated in many debates such as this and who will, I am sure, participate in many more to come.

I will start by thanking my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes)—I wish I had attended his lecture in 2000, not least to have had the experience of being in a room where everyone disagreed with him, which must have been rather unique—for making an important point about how slowly Parliament regulates and responds to change.

My right hon. Friend the Member for East Hampshire (Damian Hinds) made a similar point about our responsiveness to this rapidly evolving sector. I also very much welcome his point about education and the challenges involved, particularly given his experience in the sector. However, more than anything, I welcome his point that nobody knows what the future outcomes will be—a point I shall come back to a bit later.

I want to focus the bulk of my remarks on employment. I share the desire of the hon. Member for Poole to look at how to support and enhance employment through the AI transition, and we do need to have more such discussions. However, I am saddened that one core proposal from Labour Back Benchers is a plan on who or what we should tax now. I regret that the hon. Member’s plans for an employment levy, which he is very passionate about and has written about previously, would not work to protect jobs—protectionism never does. It would simply put a brake on the ability of organisations, large and small, to adapt to AI, and leave us behind our competitors, losing jobs across all sectors.

The history of protectionism is, sadly, frequently a very tragic one. With each technological intervention and change, there are often calls for protectionist approaches, and when they come in—

[Iqbal Mohamed]

Will the hon. Member explain how this will work, then? Human beings at work pay national insurance, income tax and pension contributions, and then they can support their families. AI agents and AI-powered robots do not pay any of that—there are no tax receipts for the Government—so how will Government fund public services in that scenario?

[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?