Digital and Technology Policy: National Sovereignty

Lord Drayson Excerpts

Thursday 23rd July 2026 Lords Chamber

[Lord Drayson (Lab)]

My Lords, I declare my interests as a science entrepreneur and, in particular, my roles as chairman and shareholder in Locai Labs and Freevolt Technologies. I add my congratulations to the noble Baroness, Lady Kidron, on securing this debate and, frankly, her outstanding impact in campaigning against the harms of big tech, which were brilliantly set out in her recent book.

On tech sovereignty, the public are well ahead of Westminster. On AI, they are both alarmed and impatient. Polling published last month found that 80% of the UK public distrust our Government’s ability to control AI at all. The dependency they sense is real and structural. US hyperscalers dominate the UK cloud market. Despite us being a leading nation in AI science, the UK has failed to invest in the infrastructure needed to enable our science to scale a modern industry. It has allowed the infrastructure it does have to be controlled by US companies.

This risk is not hypothetical. Under the US CLOUD Act, American authorities can compel a US-owned provider to disclose data held anywhere in the world, including data held in its UK-resident data centres. Asked under oath by the French Senate whether he could guarantee that French citizens’ data would never be handed over, Microsoft France’s legal director answered: no. When Washington sanctioned officials of the International Criminal Court, its chief prosecutor lost his Microsoft email and a Canadian judge lost her Google and Amazon accounts. Yet in this Parliament we are still using Microsoft 365. Why? Government cloud spending runs at over £6 billion a year across the public sector, paying annual rents on infrastructure that we do not own and do not control.

These decisions to buy from big tech, rather than procuring from businesses owned and managed in the UK, are why we do not have a globally leading British-owned tech company resident in the UK. Either they have been sold, like DeepMind and Arm, to foreign companies, or they have moved offshore using the Delaware flip to access US capital. Your Lordships’ Science and Technology Committee reported in November that our failure to scale has reached “crisis point” and that our economy is “bleeding out” as a result.

The causes are three self-inflicted wounds: procurement that finds that the foreign big tech offer is the cheapest on the day and ignores the strategic cost of failing to build our own industry; capital markets that no longer finance our own companies, with London having shed some 800 listed companies since 2015; and UK pension funds holding as little as 4% of their capital in UK assets. When UK founders incorporate in Delaware, they are not being unpatriotic; they are just going where the capital is.

We already know how to solve this. When we name the capabilities that must be sustained onshore—such as designing and building nuclear submarines—sustained procurement, aligned with strategic sovereign clarity over decades, has meant that Barrow-in-Furness is world leading, and we export these submarines to our allies. This method works.

So I have three asks of the Minister. The first is to make UK government procurement seriously support the British tech sector. The Prime Minister has said he wants to reindustrialise Britain. That means ensuring that the billions currently spent with foreign-owned tech companies are spent at home. Will the Minister commit to creating a strategic sovereign list naming the digital capabilities this country will not outsource? The second is to turn the capital taps back towards Britain. Will the Government now mobilise our pension savings into UK businesses and UK infrastructure? We have the laws to do so. We just need to do it. The third is to buy open, not closed, systems. Germany, Denmark, France and others have moved public employees off Microsoft. Yes, that Microsoft Office 365 that we are all using comes under the US CLOUD Act. There are plenty of open-source alternatives we could be using. I know that some will say it is too difficult or there is no practical alternative to what we are doing but it is not true. Last week, Airbus announced that it is moving its systems off Amazon Web Services to the French provider Scaleway. If a company of that scale and complexity, regulated as it is to manufacture aircraft, can do it, we can do it.

This is not a question of capability but of will. By ensuring that the digital technology shaping our lives is built to our values, rather than somebody else’s, and that it respects the rights of creators, protects children, creates British jobs and pays UK taxes, we have an alternative.