Small and Medium-sized Enterprises: AI Sector

Lord Clement-Jones Excerpts

Thursday 29th October 2026 Lords Chamber

[Lord Leong (Lab)]

My Lords, yesterday’s Budget announcement demonstrates our commitment to turning AI ambition into practical outcomes. Alongside the £700 million in wider AI investment, we are providing, as the noble Lord has mentioned, £30 million for locally led AI adoption partnerships, starting in Yorkshire, and £60 million for an AI pathway fund. These initiatives will help businesses overcome adoption barriers, build skills and improve productivity. Working alongside local leaders in the industry will ensure that funding delivers measurable benefits for British businesses across the country.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as an adviser to DLA Piper on AI policy and regulation. The Government talk of sovereign AI but continue to award their biggest data and tech contracts to US hyperscalers. What share of public AI procurement is intended to go to British SMEs under the new UK supplier definition?

[Lord Leong (Lab)]

I hear what the noble Lord, says but I say again that our £100 million R&D procurement scheme will help British start-ups develop innovative solutions to government challenges. We are making government a smarter, more accessible customer and creating procurement opportunities for smaller firms instead of favouring established suppliers. Through the sovereign AI fund, we are also supporting early start-up procurement, enabling innovative businesses to demonstrate that technologies generate revenue and attract private investment.

I encourage noble Lords to visit local university science and technology hubs and see innovative AI companies. I was up in Manchester yesterday and there I saw young people and exciting projects. Perhaps noble Lords could go out to university science parks and be encouraged by what is being developed in this country.