Digital and Technology Policy: National Sovereignty

Lord Clement-Jones Excerpts

Thursday 23rd July 2026 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as a consultant to DLA Piper on AI policy and regulation and as chair of the board of the Authors’ Licensing Collecting Society. I join other noble Lords in congratulating the noble Baroness, Lady Lloyd, on her reappointment, but the bed of nails that is having a debate on the last day of term comes with it.

It is both a privilege and a sadness to follow the right reverend Prelate in his valedictory speech. Before turning to the substance of this debate, I hope that the House will allow me to say a brief word about him. He has, unusually, served both as a Bishop of Sheffield and of Oxford in this House, the latter for exactly 10 years this month. Bishop Steven has been an influential and instrumental voice on artificial intelligence in this House, a member of our original House of Lords Select Committee on AI and crucial in developing the principles for AI development set out by the committee. We just avoided designating them our 10 AI commandments.

He was a founding board member of the Centre for Data Ethics and Innovation, and is someone who has always put the ethical and human dimension of these technologies—dignity, trust, the value of work and human flourishing—first. He was a co-founder member of the House of Lords Select Committee on the Environment and Climate Change. He anticipated the NEETs and AI human flourishing debate by emphasising the importance of adequately preparing young people for changing economic and technological conditions by providing meaningful routes from education into work and ensuring that technological change does not undermine opportunities for younger generations.

It is fitting that his last contribution to this House should be in a debate on digital sovereignty, since the question he has pressed throughout his time here—whether we are shaping these technologies or being shaped by them—is precisely the question that this debate poses at a national and European level. With his insights, collaborative spirit, friendship, and enduring dedication to ethical innovation and policy-making, he will be greatly missed. I know I speak for all of us across the House in wishing him well and all best wishes for the future.

I am grateful to the noble Baroness, Lady Kidron, for securing this debate and for her superb introduction, and to all noble Lords who have spoken today. I congratulate the noble Lords, Lord Moraes and Lord Drayson, on their summer reading material. The debate has ranged widely, from infrastructure to intellectual property and from procurement to accountability, but a single thread runs through it: digital sovereignty is not an abstract concept but crucial for our economic, societal and security future.

The noble Baronesses, Lady Kidron, Lady Berger, Lady Gill and Lady Shields, reminded us of what the absence of that sovereignty looks like in practice. Last month, the US Government placed export controls on Anthropic’s newest models. President Trump gave the company less than 90 minutes to cut off non-US citizens. This restriction was lifted on 1 July, but this episode—and, potentially, the recent OpenAI episode mentioned by some of the noble Baronesses—shows that what we have built in this country is not technological independence but, in the AI Minister’s own phrase, a search for strategic leverage. However, leverage is not control. Karim Khan, chief prosecutor at the International Criminal Court, could tell us the same. Sanctioned in 2025, he lost his Microsoft 365 email account on the decision of a boardroom in Redmond, Washington state, not a court.

There is an economic cost to this dependency. The Competition and Markets Authority found that AWS and Microsoft hold 70% to 90% of our cloud market, as the noble Lord, Lord Drayson, said. This costs UK customers in the region of £500 million a year. The same is true of the rest of the AI stack. We are heavily dependent on US big tech. The noble Baroness, Lady Verma, used “colonisation” in this context. However, as the noble Baroness, Lady Uddin, said, this is not isolation and as the noble Baroness, Lady Shields, said, we need to determine where our advantages lie.

The noble Baroness, Lady Kidron, said that this persists not because of market failure alone but regulatory timidity. I believe very strongly in competition, but I part company with the noble Baroness, Lady Stowell, in that I believe strongly in regulation and competition. I agree with the possibilities of open-source and open-weight models. The CMA, with strong cross-party support, has the powers that it needs under the Digital Markets, Competition and Consumers Act, but only three designations as an SMS of big tech services have been made. The CMA declined to designate Amazon or Microsoft in cloud services as having strategic market status, despite strong recommendations from an independent inquiry. A requirement for Google to negotiate fair and reasonable payment terms with news publishers has been repeatedly delayed. A new strategic steer, which could be issued within weeks, directing the CMA towards binding remedies and reaffirming its independence, would cost nothing and require no legislation. Will the Minister commit the Government to that?

The noble Baronesses, Lady Berger and Lady Shields, and the noble Lords, Lord Vaizey, Lord Drayson and Lord Ranger, talked about data. The noble Lord, Lord Ranger, used the expression “data assets”. I agree that it is very much about exploiting the sovereign data assets that we have in the UK. It is not only about where the data sits. The security systems that protect our networks must read the data that they are guarding to do their job, so a residency promise does not get to the heart of the problem. Microsoft’s own European digital resilience commitment, a pledge to legally contest any order to suspend services here, may be welcome, but, as critics rightly call it, this is “sovereignty washing”. A contractual promise cannot override a foreign law. I very much agree with the noble Lord, Lord Moraes, in wanting answers in this respect.

The noble Baronesses, Lady Kidron and Lady Gill, touched on the importance of copyright. The noble Baroness, Lady Kidron, has already secured the Minister’s confirmation on the record in this House that the sovereign AI fund recipients must comply with UK copyright law. Yet she has called that assurance disingenuous, pointing out that some funded firms will not disclose whether their training data complies at all. We need transparency. I share that scepticism. Confirmation of compliance is not the same as verification of it. I would welcome the Minister’s assurance today that the difference is understood.

The noble Baronesses, Lady Kidron, Lady Bennett and Lady Sheilds, and the noble Lords, Lord Moraes and Lord Drayson, all raised the importance of procurement. In that context, many of them also mentioned Palantir. The Commons Science, Innovation and Technology Select Committee found that the Government was “worryingly comfortable” with dependence on a small number of providers and named Palantir specifically. The Financial Times has reported that the Ministry of Defence’s own data systems are now built on architecture that only Palantir is licensed to support—lock-in by design, not accident.

The noble Lord, Lord Moraes, drew an instructive comparison with Europe. On 3 June, the European Commission adopted what it explicitly called its “tech sovereignty package”. President von der Leyen was blunt:

“We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure”.


Set against our own sovereign AI unit, I think the contrast is stark. The EU has a structured, published, cross-sectoral strategy; we do not.

Many noble Lords raised the question of accountability. Indeed, the noble Baronesses, Lady Kidron and Lady Bennett, referred to the “constitutional” issue. This is particularly the case with the prospect of artificial general intelligence and the reality of agentic AI. Sovereignty is hollow without this; we need a single or lead AI regulator, mandatory algorithmic impact assessments, an accountability for algorithms Act and a strict human-in-command standard. We need to ensure responsible AI through that, as the right reverend Prelate said.

I leave the Minister with two questions already put by several noble Lords, in different forms. First, will the Government publish a clear, measurable cross-departmental definition of digital sovereignty, addressing infrastructure, standards, data and procurement, which would replace the current fragmented approach? Secondly, will they commit to reporting annually to Parliament on our strategic dependency risk, as our allies in the EU, Japan and the United States are already doing?

Every procurement decision that embeds foreign dependency is an accumulation of strategic vulnerability. It is time to decide our digital future in Westminster, not Silicon Valley. As the noble Lord, Lord Drayson, said, it is a question of will, not capability. Like the noble Lords, Lord Vaizey and Lord Holmes, I am not convinced by the reorganisation of AI and tech structures in government. But with the new Government there is an opportunity for a new effective sovereignty policy. I very much hope that they take it.