Reeves vows UK will ‘beat G7 at AI adoption’ as she searches for growth agenda
Chancellor Rachel Reeves will promise that the UK will beat G7 counterparts in adopting AI over the coming years with fresh investment set to focus on quantum computing and researchers specialising in healthcare, clean energy and national security.
In a speech on Tuesday afternoon, Reeves is expected to set out the government’s AI ambitions to improve public services and shape the future of British industry through investments worth more than £2bn.
Reeves is expected to defend the government’s “active and strategic” interventions in technology and business development.
“In this changing world, Britain is not powerless. We can shape our own future.
“The choice is this: we can bury our heads in the sand and leave [AI] to other countries – whose values may differ from ours – to shape and own this technology. We can leave it to the market alone, and let the balance of risk and reward be determined by a super-wealthy few. Or we can chart our own course.
“That’s why I am setting out an ambitious plan for the UK to achieve the fastest AI adoption in the G7. In a world defined by technological change, Britain cannot afford to stand still.”
The main chunk of government investment will be in a procurement programme for quantum computers, with systems to be made available for adoption by researchers and the public sector, as well as businesses.
It is believed that the technology will support medical diagnostics, monitoring gas leaks and making communication lines “ultra-secure”.
Reeves’ speech is also expected to feature details on the creation of a government-backed development firm to plan the Oxford-Cambridge “growth corridor” as well as further plans for spreading investment.
Reeves to touch on Brexit
The most contentious side of her lecture is expected to be on plans to boost trade relations with the EU through expanding access to the EU single market.
She will also draw upon her ambition to clinch a youth mobility scheme for 18 to 30-year-olds, with talks dragging on for months amid reports that EU officials are holding out for UK university tuition fees to be cut.
Last year, Reeves said the mobility scheme was key to her efforts to improve productivity levels in the UK.
Greater alignment with the EU’s single market across specific sectors beyond food standards could face more opposition given some industries are sceptical of stringent EU regulation. Earlier this year Steven Fine, chief executive of investment bank Peel Hunt, said: “The UK has made substantial progress on financial services reform over the past few years and most regulatory lawyers will tell you that we have significantly less friction in our regulatory framework compared with most jurisdictions in Europe.
“You don’t want to create potential uncertainty just as the City is recovering its mojo.”
Last year’s “reset” deal on food standards will only come into effect once a bill has passed through parliament.
Labour ministers have said re-joining the customs union, which would level import duties in the UK with those in the EU and subsequently align the UK’s trade strategy with the EU, was a “red line”.
Government officials have argued that trade deals agreed with the likes of India and the US would be null if the country joined the EU’s customs union, though No 10 economics adviser Minouche Shafik has reportedly argued that it would boost UK productivity.
Tories: ‘Labour are desperate’
Exports to the EU excluding precious metals dropped from £206bn in 2016 to £177bn in 2024, per prices set in 2024, while imports have remained largely flat.
The Office for Budget Responsibility (OBR) suggested at the end of last year that the overall trade intensity of the UK economy was expected to decline by 15 per cent over the long term due to protectionism in various countries and the “ongoing impact of Brexit”.
Other independent economists have argued that Brexit has had a small impact on the growth in the UK.
Shadow chancellor Sir Mel Stride said: “It’s no secret that Reeves and Starmer have wanted to row back on Brexit since day one.
“Labour are desperate to blame anyone but themselves for their economic failures. Under increasing pressure having mismanaged the economy, Reeves would rather point the finger at Brexit than accept their poor choices have been a disaster for our economy.”