In an era where technological advancements and sustainable development are crucial to economic growth, the new Labour government is said to wish to bring significant changes and drive innovation. These changes are welcome if they aim to enhance regulatory oversight, adjust taxation policies, and promote technological innovation.
However, such reforms may also introduce new challenges. Labour’s vision is not yet clear, but they have talked about reshaping the financial landscape with increased regulation which could be a hurdle to growth. They have also noted a push towards sustainable investments and to lead the way in ethical AI development which could help reinvigorate the UK post-Brexit. Labour appears to envision a future where the UK leads in cutting-edge innovation while addressing pressing societal and environmental challenges.1
What are the main changes and expectations in AI development and regulation?
Labour’s manifesto reflects its commitment to creating an innovation-driven economy that is sustainable, inclusive, and globally competitive. The party’s AI approach aims to balance innovation with the need for oversight, which will impact the tech industry. The key points that were included in their manifesto are: 2
1. Establishment of the Regulatory Innovation Office: Labour plans to create a Regulatory Innovation Office to address the regulatory gaps in AI. This office will streamline approval processes, manage cross-sectoral issues, and introduce binding regulations for companies developing powerful AI models.
2. Focus on Ethical AI and Data Centres: “Labour intends to remove planning barriers for new data centres by designating them as Nationally Significant Infrastructure Projects”3, speeding up their approval process.
3. National Data Library: Labour plans to create a National Data Library to consolidate existing research programs and support data-driven public services.
4. Enhanced AI Regulation: Labour Leader Keir Starmer has emphasised the need for an overarching regulatory framework for AI that provides stronger oversight compared to the previous government’s pro-innovation strategy.
Although the Labour Party has discussed AI regulation, their manifesto did not propose substantial legislation in this area. The need for regulation was briefly mentioned during the King’s speech in July, where His Majesty said the government would ‘seek to establish the appropriate legislation to place requirements on those working to develop the most powerful artificial intelligence models’ 4. This represents a stronger stance compared to former Prime Minister Sunak’s more relaxed approach, which focused on a strategy where “the UK developed a non-binding, cross-sector, principles-based framework to enable existing regulators such as the Information Commissioner’s Office, Ofcom and the Financial Conduct Authority to apply bespoke measures within their respective fields of data protection, telecommunications and finance” 5.
Despite this, tech industry executives had been expecting more comprehensive plans for an AI Bill, but the speech did not provide details. Questions remain about the new government’s regulatory approach and whether it will be similar to or even stronger than the EU AI Act. Although we do not know, in a recent CNBC article Ryan Browne said “The U.K. government wants to avoid pushing too hard with AI rules to the extent that it ends up hampering innovation.”6 There is still widespread uncertainty about AI regulation therefore even as, the development of AI continues to progress. On July 26th, the government issued a press release announcing that Peter Kyle, the new UK Science Secretary, has prioritised AI in the government’s agenda to promote change, economic growth, and improved public services. Matt Clifford, a tech entrepreneur and chair of the Advanced Research and Invention Agency (ARIA), has been appointed to develop an AI Opportunities Action Plan. This plan aims to accelerate AI adoption, improve services, create new products, and build a competitive UK AI sector. It will address necessary infrastructure, talent, and data access to boost technology uptake in the public and private sectors.7 As such we remain optimistic about a stronger focus on both AI regulation and development.
Leo and AI
As a leading tech company at the forefront of AI innovation, we diligently monitor regulatory developments to ensure full compliance and prioritise the protection of our clients in the financial services sector. We are committed to adhering to all relevant regulations and maintaining the highest standards of security and transparency in our operations, but to remain pragmatic so that the benefits of using large language models are not lost in a competitive industry where regulatory compliance grows every year. This year alone we had to adapt ongoing compliance questionnaires to Sustainability Disclosure Requirements and how that affected our tools to review financial promotions. We work with AI to write up policies and in due course to review gaps in policy language directly with the user.
The aim of Leo is to create an efficient platform to make compliance easier and simpler which is why we have taken a significant step forward and already use AI to reduce false negatives by 60% in KYC adverse media checks and read and verify ID without the need to send a client to a notary, thanks to the review of state documents and biometrics. We have also introduced a conversational AI “Eva” into our software, which handles queries about Leo itself and shortly enquiries on compliance rules.
Watch this space as more releases are made in Q4 for AI features to read Fund Documents and complete DDQs!
To learn more about Leo and its features click below
1Labour-Party-manifesto-2024https://labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-2024.pdf
2 Same as 1 / https://www.dechert.com/knowledge/onpoint/2024/7/a-new-uk-labour-government–a-fresh-approach-to-ai-regulation.html / https://www.politico.eu/article/starmer-labour-will-bring-in-stronger-ai-regulation/
3https://www.dechert.com/knowledge/onpoint/2024/7/a-new-uk-labour-government–a-fresh-approach-to-ai-regulation.html
4https://www.cnbc.com/2024/07/17/kings-speech-2024-uk-labour-policies.html / https://researchbriefings.files.parliament.uk/documents/LLN-2024-0040/LLN-2024-0040.pdf
5https://www.jdsupra.com/legalnews/a-new-uk-labour-government-a-fresh-8617164/
6‘Britain’s Labour faces an uphill battle as it looks to rein in AI’s key players’ https://www.cnbc.com/2024/07/19/britain-explores-first-formal-rules-for-ai-what-next.html
7https://www.gov.uk/government/news/ai-expert-to-lead-action-plan-to-ensure-uk-reaps-the-benefits-of-artificial-intelligence
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