UK-based Tech Companies

Julia Lopez Excerpts

Wednesday 11th March 2026 Westminster Hall

[Julia Lopez (Hornchurch and Upminster) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) on securing this incredibly important debate. He brings a unique blend of glamour and tech nerdery to the House. Frankly, it is something Parliament could do with much more of.

I am grateful for the valuable contributions from the hon. Members for Tunbridge Wells (Mike Martin), for Strangford (Jim Shannon), for Paisley and Renfrewshire North (Alison Taylor), for West Dorset (Edward Morello) and for Caerphilly (Chris Evans). There is a real showing of strength for the tech sector across the country, which I welcome.

As we are debating Government support for UK-based tech companies, I would like to do a bit of scene-setting. Before 2010, Britain’s digital economy was fragmented and under-developed; London’s emergence as Europe’s tech capital was not destiny; the Silicon Roundabout was only nascent; Government digital services were scattered across thousands of outdated websites; and the connection between our world-class universities and a thriving start-up ecosystem had not yet been fully realised.

In Government, the Conservatives deliberately worked with the tech sector to create an environment in which it could grow—the hon. Member for West Dorset made a point about how we need to do that—which included targeted measures on start-ups, such as the seed enterprise investment scheme. Scale-up has been mentioned as a real challenge that remains today, as has inflation in relation to the SEIS. We supported Tech City, which turned east London into a global hub for start-ups and innovation; we modernised Government services through the creation of the Government Digital Service and platforms like gov.uk; and we invested heavily in digital infrastructure, substantially expanding gigabit broadband coverage. The hon. Member for Strangford talked about how our parties like to help each other to help every corner of the United Kingdom. I remember that particular help on gigabit broadband was given to the DUP when a particular political deal was done a few years ago.

Over the following decade, that strategy paid off. Entire sectors, from fintech to artificial intelligence and from cyber-security to digital health, took root and expanded. Today, the UK digital sector generates well over £200 billion in GVA and employs 2.6 million people in its digital companies. In 2025, the combined market valuation was $1.2 trillion. It is the largest tech ecosystem in Europe, and among the largest outside the US and China. I confess that when Labour wangs on about 14 years, I say, “Yes, 14 years in which Britain built Europe’s most dynamic tech sector and the economic output of our digital sector more than doubled.”

We were also alive to the risks that a strong tech sector could pose if it was not managed correctly. That is why we introduced major legislation to shape the digital economy, and promoted competition and consumer choice. Principally, that was the Digital Markets, Competition and Consumers Act 2024, which addressed the market powers of the largest digital platforms. The principle behind that legislation was simple and profoundly Conservative. We believe that in a strong, competitive, capitalist economy, success should come from innovation, talent and providing a great product to the customer, not from gatekeeping power or monopoly control.

That brings us to the challenge at the heart of this debate, which is that in digital markets, power has been concentrated in a handful of global firms. Those firms are brilliant; they bring many tools and skills, and they bring scale. However, that scale has consequences. If we are to prevent it from being used to steamroller other businesses that may be more innovative or provide a better product to the consumer, and if we are to generate more growth and retain more value in this country rather than see it taken abroad, we need digital markets to be open and competitive.

One obvious place for intervention is the mobile app ecosystem. For many digital businesses today, the app stores operated by Apple and Google provide incredibly useful and efficient distribution platforms. However, that value comes with a toll, because it creates huge gatekeeping power for those companies. Consumers may not realise it, but that risks costing them and our economy significantly. Developers are often required to use the platform’s payment systems and to pay commissions of up to 30% on digital purchases. That is a gigantic revenue stream generated from not doing an awful lot.

Those companies may argue that they provide security and maintenance and so on, but app store commissions for Google and Apple are thought to generate up to £2 billion each in net revenue from their UK operations. That means higher prices for consumers, fewer resources for innovation, greater entrenchment and platform dominance. Then we throw up our hands and ask, “What can realistically be done? What is the alternative to those companies?” It becomes a downward spiral where we have less power to deal with these challenges.

Google and Apple’s power extends far beyond simply running app stores. They can control direct communications and what developers can say to customers, insist on particular payment platforms, prevent developers from informing users when products are cheaper elsewhere, and so on. My hon. Friend the Member for Bromley and Biggin Hill listed some critical examples, but he also mentioned companies such as Amazon. We are all familiar with the sheer power of Amazon, but if it cannot sufficiently challenge app store market power, what chance does a smaller British tech company have?

The legislative framework to address this exists in the DMCC Act, which gave the Competition and Markets Authority conduct requirement powers and allowed it to mandate specific behaviours. However, developers, competition lawyers and tech businesses tell me that they worry the CMA has gone soft, with long investigations and voluntary remedies. They believe it reflects political direction.

This exposes a wider problem with the Labour Government. We left them with the strongest tech ecosystem in Europe, but I fear they have no real plan for growth. As a result, they have a troubling reliance on big tech companies, because they are telling them they will give them big investment headlines—but that risks entrenching dependency and stifling home-grown innovation.

In their first set of returns, Labour Ministers had met big tech firms roughly 70% more often than their Conservative predecessors. That culminated in the US-UK tech deal, where there were a lot of big headlines, but I am not entirely sure what the substance was. There were interesting articles in The Guardian this week about some of those deals and I think there was a lot of circular investment going on. There was also a very interesting debate yesterday in this Chamber in which Labour MPs began to question some of what was going on; they were worrying about the dependency being created, along with the security and economic implications that brings.

Last year, the Government asked the competition watchdog to support

“the overriding national priority of…economic growth.”

However, if growth is defined as just bringing in big tech, it is predictable how the regulator will act. In February, the CMA approved voluntary commitments from Apple and Google. In fairness—I have spoken to it about this directly—it contends that this could deliver faster results. However, smaller tech firms worry that it will delay action on the substantive issue of fees.

As we highlighted in yesterday’s debate on tech sovereignty, the UK risks drifting into a position of high dependency and low resilience, where too much of our digital economy relies on infrastructure and platforms that we simply do not have any control over. That matters not just for innovation but for economic strength, consumer protection and national security.

I must stress that this is not an argument against American companies; it is an argument about competition and the dangers of its absence. In fact, courts in the US have already upheld these principles to the benefit of smaller US tech firms. We must ensure an open digital market that rewards innovation from wherever it comes and gives UK consumers and developers the same freedoms that American developers can now enjoy because of that court ruling.

The same problem exists with the CMA’s cloud inquiry, which is examining the extraordinarily important issue of market concentration. We expect a determination this month. Amazon Web Services and Microsoft dominate the cloud market, and the Government recognise this as a chronic risk. It is a red light that will be flashing more urgently after the three recent global cloud outages, not to mention the destruction of AWS data centres in the Gulf. The answer to our chronic dependency must surely come through robust competition measures. We await the CMA’s strategic market status decision with bated breath.

The rapid development of AI could, in the best-case scenario, inject real competition into these markets, with AI agents empowering the consumer. Or—this is my real worry—it could entrench the market dominance and power consolidation that we have seen in other parts of the digital economy. Will the Government and the regulator start to think about the power of agentic AI in particular? What happens when an AI starts to curate products for the consumer in ways that shut out smaller vendors from the picture, or necessitate expensive deals with the AI giants to get products into the agent’s selection?

What kind of digital economy do we want? Do we want one that is dominated by a handful of global gatekeepers, or one where a broad range of innovative companies can compete, innovate and grow on merit, delivering a diverse economy and benefits to the consumer? As Conservatives, our view is very simple: we have to give UK tech firms the tools to win. Those are: low taxes, so that innovators can invest and scale; cheap, abundant energy and high-quality digital infrastructure; access to the best global talent; and the celebration of successful people, not taxing them out of the country with envy-driven politics. It is about public procurement that backs British innovation, deeper pools of investable capital and, critically, strong competition policy that ensures that no company, no matter how large or powerful, can use its market position to drive up prices and crowd out competition. That was our approach in office, and it remains our vision for the future of Britain’s tech economy. I hope that the Minister can set out some specifics about how he, too, recognises the importance of competition in the digital sphere.

[Mr Clive Betts (in the Chair)]

Can the Minister make sure that he allows two minutes at the end for the mover to wind up?