February28 , 2026

Competitive Edge: Britain and AI  

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As Sir Keir Starmer’s Labour government faces mounting issues at home, namely NHS backlogs, an overcrowded prison system, and soaring borrowing costs, ministers have no room for mistakes this parliament.

Among the most pressing yet unknown is the portfolio of Peter Kyle, Secretary for Science and Technology, who is tasked with making Britain a global leader in artificial intelligence.

Kyle aims to attract Silicon Valley’s biggest names to invest in the UK’s AI future. 

However, this comes as some tech leaders, such as Elon Musk, openly criticise Britain and Labour’s policies, while others, like Meta’s Mark Zuckerberg, align with Donald Trump’s deregulation agenda.

Speaking to The Observer, Kyle highlighted the stakes. “We need a concerted effort as a country to ensure we are laying the foundations while still in the foothills. I don’t want us to be a country always buying off the shelf from others. I want us to be at the cutting edge.”

What does that mean and how are policies being put into practice?

Government Policy: Action Plan for AI

The government plans to unveil an AI action plan, focusing on building a “sovereign AI team”, to support businesses establishing themselves in the UK. Kyle believes Britain is uniquely positioned as an AI “sweet spot,” capable of cutting state costs and driving economic growth. However, achieving this requires difficult decisions, some of which may conflict with Labour’s founding principles.

A key aspect of Kyle’s strategy involves learning from Silicon Valley’s rapid development and avoiding “overregulation”, which he sees as a misstep of Rishi Sunak’s administration. Kyle also views Brexit as an opportunity to craft more flexible AI regulations than the EU, giving Britain a competitive edge.

UK AI Policy: A Choice Between Dogma & National Interest

Zuckerberg’s end to compulsory fact-checking at Meta, suggests an alignment with Trump’s policies.  Inevitably, this could complicate the UK’s enforcement of the new Online Safety Act. Musk’s regular criticisms of Labour add another layer of difficulty.

Despite this, Kyle remains pragmatic. “I’m available to talk to any innovator or potential investor about AI in the UK,” Kyle said, emphasising his focus on collaboration. 

However, Kyle draws a line when it comes to the role of safety and social responsibility, particularly regarding protecting children and combating harmful content across social media platforms.

At home, concerns are brewing about the immense energy needs of data centres to foster an AI industry. The creative sector also fears AI companies will use original content for model training. Kyle insists on balancing any conflicts of interest, “I am in listening mode”, he said, promising to consider all perspectives in the ongoing consultation.

Kyle’s mission is ambitious, requiring bold decisions and political tact. As he launches the government’s AI plan, Starmer’s government will have to put aside economic orthodoxy, instead focussing on the potential for sustained growth through AI.


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