Starmer vows to make Britain ‘world-leader’ in AI to boost growth as private firms commit £14 billion to the industry

12 January 2025, 22:32

Sir Keir Starmer will vow to throw the full weight of Whitehall behind AI in a bid to boost growth and make the UK a world-leader in the sector, in a speech on Monday.

The Prime Minister is set to unveil his Government's AI Opportunity Action Plan on Monday as he seeks to make Britain a world leader in the sector.

The plan includes the creation of dedicated ‘AI Growth Zones’, starting in Culham, Oxfordshire, which will accelerate planning approvals for data centres and improve access to the energy grid.

Alongside the announcement, Labour has also revealed £14 billion of investment in AI infrastructure in the UK from private tech firms.

Prime Minister Sir Keir Starmer said: "The AI industry needs a Government that is on their side, one that won't sit back and let opportunities slip through its fingers.

"And in a world of fierce competition, we cannot stand by. We must move fast and take action to win the global race.

“Our plan will make Britain the world leader. It will give the industry the foundation it needs and will turbocharge the Plan for Change.

"That means more jobs and investment in the UK, more money in people’s pockets, and transformed public services."

Monday's plan will take forward all 50 recommendations made by tech entrepreneur Matt Clifford, who was commissioned by Science Secretary Peter Kyle in July to come up with a plan to identify AI opportunities.

The Government has also pledged to increase the UK's compute capacity 20-fold by 2030, including by building a new supercomputer.

Even before being asked to formulate the plan, Mr Clifford had called for a significant increase in the UK's computation power as a way of attracting AI investment.

The previous government had said it would support an exascale supercomputer at the University of Edinburgh, but the plans were shelved shortly after Labour came to power with the Government saying the Tories had failed to allocate any money to the project.

Construction of a new supercomputer, at a location yet to be decided, is expected to be funded in partnership with the private sector.

Mr Clifford said: "This is a plan which puts us all-in – backing the potential of AI to grow our economy, improve lives for citizens and make us a global hub for AI investment and innovation."

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Ministers argue that embracing AI could boost GDP growth, claiming that the plan could net the UK an average £47 billion each year. That figure is based on International Monetary Fund (IMF) figures, but is not an official IMF estimate as it is derived from separate calculations and assumptions.

By making the announcement on Monday, ministers hope that it will bring some optimism amid headlines warning of sluggish growth, inflation and the rising cost of borrowing.

The Government is not just hoping to attract AI investment with its action plan, but also spur the adoption of the technology across Whitehall in a bid to improve productivity and cut costs.

Sir Keir has personally written to Cabinet ministers ordering them to make driving AI adoption and growth in their departments a top priority.

A new digital centre of government will be set up within the Department of Science, innovation and Technology, which will scan for new ideas, pilot them in public sector settings, then scale them into wider uses.

Alexander Iosad, director of government innovation at the Tony Blair Institute, welcomed the plan, saying AI could "help take care of drudgery in the public sector", helping retain more staff who are currently "overwhelmed and overworked".

He said: "AI is no longer an if, or even a when; it is here and it is urgent.

"The opportunities for Britain's economy and our public services are too great for us to ignore."

Ministers have billed the action plan as a sharp change from the approach of the previous government, which they say focused too much on safety and not enough on the opportunities AI provided.

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Lewis Goodall is joined by Technology Secretary Peter Kyle | Watch in full

Mr Kyle said on Sunday that while safety must be the "first step", and should not be "pitted against economic investment", it had proved to be "the only step" under the Conservatives.

Speaking ahead of Monday's launch, he added: "AI has the potential to change all of our lives but for too long we have been curious and often cautious bystanders to the change unfolding around us.

"With this plan, we become agents of that change."

But as well as safety, the Government must grapple with competing demands of different sectors such as the creative industries.

Artists and media companies have complained that AI developers' use of their material to train programmes such as Chat-GPT has infringed their copyright, and the Government is currently consulting on the issue.

Monday's plan is also expected to set out the Government's approach to building the infrastructure required to develop AI.

This includes building more data centres, something the Government has appeared to make a real focus for the UK, including by declaring them "critical national infrastructure" in September.

In addition, the Government will have to address the energy and water needs of the AI industry, with the technology requiring significant amounts of both to operate.

Under Monday's plan, Mr Kyle and the Energy Secretary, Ed Miliband, will chair an AI Energy Council tasked with understanding the demands and challenges AI presents for energy companies.

Alongside Monday's announcement, the Government revealed tech companies had committed a total of £14 billion of investment in AI infrastructure in the UK, expected to create 13,250 jobs.

This includes a £12 billion commitment from Vantage Data Centres, which is already building one of Europe's largest data centres in Wales, and 2.5 billion dollars (£2 billion) from Nscale, including a contract to build the largest UK sovereign data centre at Loughton, in Essex, by 2026.

Shadow science secretary Alan Mak said: "Labour's plan will not support the UK to become a tech and science superpower. They're delivering analogue government in a digital age.

"Shaping a successful AI future requires investment, but in the six months leading up to this plan, Labour cut £1.3 billion in funding for Britain's first next-generation supercomputer and AI research whilst imposing a national insurance jobs tax that will cost business in the digital sector £1.66 billion.

"AI does have the potential to transform public services, but Labour's economic mismanagement and uninspiring plan will mean Britain is left behind."