The Treasury has framed artificial intelligence as a test of institutional readiness, with the chancellor, John Healey, pledging to use Wednesday’s budget to commit the biggest ever investment in guarding against cyber risks while setting out what he calls a “distinctively British” approach to the technology.
The pledge, made as Healey prepares for his debut budget, amounts to a statement of policy direction from government: hundreds of millions of pounds directed at a frontier technology that, in the chancellor’s framing, presents both transformative economic potential and existential threats. “At a fork in the road,” he said, the budget would aim to harness AI for security and prosperity while managing the dangers of an accelerating global technology arms race.
The fiscal commitments at the centre of the plan are substantial and specific. The Treasury said it would back up to £300m in public-private investment in a new AI Biosecurity Lab, designed as a world-leading institution drawing together scientific expertise to protect people from emerging biological threats. Fresh investment is promised for the AI Security Institute and other critical institutions, alongside public money to support the use of the technology for good.
Regional capability is also part of the state’s response. New investment will go into AI chip design capability in Edinburgh, while a new AI Centre of Excellence in Manchester is intended to enable the UK to capture the technology’s benefits. The government will additionally spend £10m a year on work to understand how AI will reshape jobs and industry, a measure aimed squarely at concerns about potential job disruption.
Healey’s rhetoric on accountability to workers was prominent. “I understand and share the concerns of working people, so I am setting out a distinctively British approach to AI, one that doesn’t leave workers behind and defends our national interest, while ensuring the benefits of AI-enabled growth are felt right across the country,” he said. He argued that every firm, community, hospital and school, and every aspect of the economy, could benefit as AI transforms daily life.
Meanwhile, the security dimension of the policy has been reinforced from elsewhere in government. The defence secretary, Wes Streeting, warned on Thursday that UK households should make preparations against mounting risks from weather, cyber incidents or other serious emergencies, under a campaign called Be Ready that advises stocking up on supplies to last 72 hours. That advice comes as Silicon Valley bosses sound the alarm over increasingly existential threats AI could pose, and amid growing official concern over the climate crisis, technological dependency and hostile state threats. Dan Jarvis, the security minister, said he was proud that the UK has repeatedly been at the forefront of global efforts to use AI for the benefit of humankind, adding that the investment would help the country strengthen national security while staying “one step ahead of those who seek to use AI to do us harm.”
The budget will be delivered against an increasingly volatile backdrop three months into Andy Burnham’s premiership, after he replaced Keir Starmer this summer. The war in the Middle East is sending shock waves through the global economy, putting pressure on public finances and reigniting the cost of living crisis. On Friday, fresh tensions in the Gulf sent the oil price to its highest level in six months, rising above $117 a barrel at one point. Healey has vowed to use his first budget to give households and businesses “breathing space” as the global surge in energy costs triggered by the war hits millions of families this winter. He also intends to use the statement to flesh out Burnham’s policy priorities and spell out a vision for Britain amid the turbulent global economic outlook.
There is, on the government’s account, an economic case to point to. Official figures show AI investment has helped the UK outperform gloomy economic forecasts as the Iran war pushes up inflation and drags down business confidence, powering the country to the strongest growth performance in the G7 in the first half of this year. Healey framed seizing the technology’s opportunities to raise living standards, back UK businesses and support growth as a central plank of Labour’s plan for growth, alongside nurturing homegrown talent to cut Britain’s dependency on other countries also making strides in AI.
The risks he cited are already visible. Websites around the globe went dark this week after a serious vulnerability was found in a computer language used to build much of the world wide web, a development made possible by rapid AI advances. It also emerged this week that Barclays is cutting 5,000 jobs under cost-saving plans identified by bosses as the rollout of AI across the bank helps deliver efficiency gains, underlining the fears over cyber-attacks, rogue IT systems and job losses as companies invest in machines rather than humans.
Whether the budget’s commitments can keep pace with those developments will now be the measure against which the government’s approach is judged.