Resetting the UK-EU Relationship (European Affairs Committee Report)

Baroness Lane-Fox of Soho Excerpts

Thursday 26th February 2026 Lords Chamber

[Baroness Lane-Fox of Soho (CB)]

My Lords, I congratulate the noble Lord, Lord Ricketts, and the European Affairs Committee on their report. Our EU relationship has always concerned trade, regulation and security. What has changed is that each of these now runs through technology. Competitiveness, resilience and strategic influence increasingly depend on data, digital markets, infrastructure and talent. If this reset is to be durable, it must reflect that reality.

I want to emphasise four technology-related themes that underpin many of the committee’s recommendations. The first is scale. If we are serious about producing world-leading companies—firms that shape markets rather than follow them—scale is decisive. Advanced technology and AI businesses rely on large markets, secure cross-border data flows and regulatory clarity that enables rapid deployment. AI systems improve through real-world use. They learn from diverse users and datasets. Fragmentation does not just add friction; it shapes where capital flows and where growth ultimately anchors. The European Union represents a market of around 450 million people. For a British technology firm deciding where to expand engineering capacity or launch a new platform, predictable access to that market is strategically significant.

The second theme is talent. Frontier industries depend on people. AI researchers, engineers, chip designers and cyber specialists are globally mobile. The strength of our technology sector has long rested on the flow of European talent into our universities and start-ups, and on British talent collaborating across Europe. We have many examples of British companies with genuine global ambition. I declare an interest in one of them as non-executive director of Multiverse, which uses digital platforms to transform workforce skills across borders. There is also the autonomous vehicle developer Wayve, much in the news this week, which is advancing frontier AI systems that require diverse European testing environments at scale. These firms want to operate within integrated markets. The question is whether that integration will be as seamless as it can be with our nearest partner. Barriers to mobility may not show immediately in trade statistics, but over time they erode innovative capacity.

The third theme is standards and alignment. In digital markets, those who set standards shape outcomes. Rules governing AI, cyber security and data protection define the environment in which innovation occurs. We instinctively look to the United States when we think about technology leadership and, as many have said, it must remain an indispensable partner. Yet deeper transatlantic digital alignment has stalled recently, and some of the deals already announced are looking increasingly flaky. Meanwhile, Europe is not a peripheral AI player. It has serious research depth, industrial capacity and firms such as Mistral, Europe’s leading foundation model company. In a world where compute, standards and deployment scale matter, proximity matters too. The British firms serving European customers already work within European frameworks. The choice is whether we help shape those rules or simply adapt to them from the outside.

The final theme is resilience and security. Recent UK-EU discussions have rightly put cyber, emerging technologies and even shared AI and supercomputing on the agenda, but no European state, including our own, can secure that resilience alone. These steps still fall short of a comprehensive technology pillar in our relationship. The Prime Minister speaks often of Britain as an AI and technology superpower. That ambition cannot be delivered by domestic policy in isolation. Without a fuller reset of our technology relationship with the European Union on talent, regulation and data, as well as security, we will not reach the scale that that ambition implies. Are the Government prepared to put a serious technology negotiation at the heart of the future UK-EU relationship, rather than treating it all as individual, isolated initiatives?