Burnham must not succumb to a populist techlash

Those seeking to comprehend the fundamental nature of the looming Andy Burnham government have not unreasonably chosen to focus on whom he makes chancellor. The lucky winner will be scrutinised for signs of being Ed Miliband or anyone likely to raise taxes and borrowing.

But business should also pay heed to another important clue; how Burnham thinks about AI and tech. In the words of one minister: “You can’t have a successful economy growing faster than average if you don’t have great science and tech companies in there.”

The next prime minister has so far largely limited himself to uplifting but empty pledges to make the UK “the world’s leading innovation nation”. But there have also been discordant noises. Admittedly, many of those in his orbit are setting out their own stalls rather than his, but some signals have raised concerns about Burnham leaning into the populist appeal of a “techlash”.

There have been briefings against automated vehicles. A trial scheme in London launched by Uber and Wayve, a British company developing self-driving vehicles, is raising fears over taxi jobs. Others expect Burnham to bow to political pressure to push the Donald Trump- and Israel-aligned US company Palantir out of an NHS data platform programme that is easing bureaucracy and helping to deliver more treatments. Science department officials fear excessive regionalisation will weaken strategic decision-making.

More broadly, one Burnham ally talks of ending “unfettered tech boosterism”, seeing it as a vote loser. This is a swipe at the former prime minister Sir Tony Blair, an unabashed booster, but also a recognition that voters are scared of AI’s impact and of hegemonic US tech giants. You can see the electoral appeal of fighting job losses and standing up to Trump-backing tech plutocrats.

It is reasonable to recognise the dangers. The Trump administration’s temporary decision to restrict access to Anthropic’s AI models highlights the risk of tech dependency. But there is a certain defensiveness that fosters higher regulation and could undermine competitiveness and growth by making the UK appear less open to tech business. Others also worry about the impact of plans to increase capital gains tax.

A new AI strategy is promised, focusing on more UK tech sovereignty, reducing reliance on foreign-owned data centres and building in more accountability. But is this a significant rethink or simply a touch on the tiller?

David Lawrence, co-founder of the Centre for British Progress, whose staff are talking to the transition team, expects Burnham to “draw a distinction between productive and predatory technology”, being tougher on social media companies while welcoming AI investment that secures jobs.

AI advocates meeting the Burnham staff remain sanguine. Policy talks are being led by Josh Simons, the former science office minister who gave up his seat for Burnham. Simons, who once worked in Meta’s AI division, also favours a hard-headed view of national interest over boosterism but one of those who has talked to him avers: “Josh gets it.”

So what does an “innovation nation” need from Burnham? Some steps will sit easily with him. As Manchester mayor he also championed Atom Valley, a proposed manufacturing and tech hub in the towns north of the city, and he will back more regional innovation clusters. But you do need to place some big bets and not every town can be a science hub.

The UK must remain a welcoming home for the best minds. Part of the lure of the King’s Cross AI hub is proximity to the pioneering DeepMind. The UK dominates the European venture capital market, attracting nearly 40 per cent of investment across the continent so far this year. This is something to be prized and nurtured with friendly visa regimes and rewarding opportunities in frontier work. But the challenge is turning start-ups into scale-ups. The business model for many British start-ups is selling to a foreign giant. Finding more investment capital is the key to changing this.

One step Burnham will pursue in his focus on tech sovereignty is using the state’s procurement power in defence or the NHS especially to back British firms, guaranteeing them a first customer and therefore investors. There is a model for this already in the government’s quantum programme, which offered £1bn of procurement funds for large-scale computers to UK firms.

Easing dependence on the US must also mean seeking closer collaboration with the EU, though this also raises issues of divergent tech regulation.

But signalling matters and Burnham must avoid too defensive a posture. The UK has an envied tech and life science status within Europe. It would be a crime to lose it. He must be wary of easy Labour instincts, over-regulating to protect jobs or succumbing to a latent anti-Americanism. Wayve is a British tech success story. Palantir offers a better service for NHS patients.

A sceptical approach to boosterism is wise, as is the greater security and resilience that comes from more tech sovereignty, but it must not be an excuse for ever more protectionism.

Close allies seem to get this point. One says the new strategy will be “far from all defensive”. This is essential. A government capable of leading the British economy through this technological revolution must recognise the challenges. But there is no future in simply wishing them away.

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