AI and Creative Technologies (Communications and Digital Committee Report)

Lord Holmes of Richmond Excerpts

Friday 13th June 2025 Lords Chamber

[Lord Holmes of Richmond (Con)]

My Lords, it is a pleasure to take part in this debate. I declare my technology interests as set out in the register. It is also a pleasure to follow my friend, the noble Baroness, Lady Lane-Fox, who has done as much as anybody in this country over the past two decades for all the technology industries in her work both as an entrepreneur and as a visionary for what technologies can do—not least, public good.

I congratulate my noble friend Lady Stowell—and, indeed, all members of the committee—on this excellent report. I can also comment positively on the approach that she took when doing this report in having it not just as an isolated moment in time but as a series of reports, one building on another, during her time chairing the Communications and Digital Select Committee.

In my final initial thank you, let me say that I am grateful to our two maiden speakers. Both of them, not least my noble friend Lord Massey, gave us excellent perspectives and a number of excellent ideas for not just this current Minister but all HMT Ministers to consider; all were excellent suggestions that would really make a difference.

My comments on the Select Committee’s report could be quite short. I agree with pretty much everything in it and all the recommendations. It goes to the heart of the issue, which we have discussed certainly in my time here, over the past 12 years, and previous to that. We have a stunning start-up scene in the UK, with fabulous universities, great spin-outs and a very good seed funding model, but it all gets tricky when you get to the scale-ups. This report highlights the issues, puts the recommendations and, I hope, gives the Minister much to think on.

As my noble friend Lord Willetts put it, when it comes to Silicon Valley, nobody should be beguiled to believe that this is a great success of the free market. It is birthed very much from state intervention—intervention in the right way, to enable and to empower the crowding-in of private capital. I cannot improve on his perfect construction—Hamiltonian, not Jeffersonian.

This debate, like so many that we have had on artificial intelligence and other technologies, goes to the heart of an issue. Government and wider society often struggle, because it can be seen as “a part of” or as “sector specific”. As has been noted in this debate, AI is a technology. I go beyond that. It is a series, a set, a constellation of technologies, some yet to be brought into being. I gently suggest that part of the problem with the current narrative and with the Government’s approach is that AI is not seen as this constellation of technologies but, reductively, as just gen AI. Although important, that is but one part of this constellation. Time will tell, but I do not believe that gen AI will be either the most interesting element of AI or the one most likely to deliver anything that we would recognise as a return on investment.

How much does it cost to do an AI model—£500 billion, £5 million, or somewhere in between? The answer is complex. However, getting to grips with smart funding in the UK AI ecosystem and context gives us the best chance of solving this scale-up challenge. I suggest there are three elements we may want to consider in the overarching approach to solving this issue. The first is to consider principles rather than prescription. We give ourselves the best opportunity if we take a principles-based, outcomes-focused, input-understood approach to everything that we do in this space, with trust and transparency—the technologies are nothing without those—inclusion and innovation, interoperability of both the technologies and the regulatory frameworks around the world, accountability, accessibility and assurance. These are good principles for all approaches, certainly regarding AI. Perhaps the Government will consider putting such principles on a statutory basis. They are largely set out in the 2023 White Paper. Giving them statutory effect would only be positive in this mission, which we all need to focus so clearly on.

Secondly, we need a right-sized, agile, adaptive and flexible AI authority. Do not think “big, behemothic, do-it-all AI regulator”. It could be just a development of the role of RIO, so ably chaired by my noble friend Lord Willetts. It could be a coming together of RIO and the DRCF. Maybe it could be a new entity in toto. Although it is right to take a domain-specific approach—that is where the domain expertise lies—we need to assure those three core elements that any of us need when we come across AI, or indeed anything: clarity, certainty and consistency. Without a guiding mind or an agile regulator, how can we have that clarity, certainty and consistency of application? Whether we come across AI in health, education or defence, how can we be assured that we will be having a similar experience? The AI authority could be that champion of the principles, the custodian and a centre of experts, giving an efficient and effective solution to the current situation of various regulators competing for a scarce talent pool. How does the nation benefit if Ofgem, for example, gains a particular data scientist and Ofcom does not? We do not benefit as a nation, and nor does our AI ecosystem.

Thirdly, we need to thoroughly and finally smash the myth, the false dichotomy that recurs with tedious inevitability, that you can have either innovation or regulation but never the twain shall meet. All history—not least, recent history—tells me that right-sized regulation is enabling and empowering of innovation. Take the regulatory sandbox in fintech. A measure of its success is that it has been replicated in just under 100 nations around the world—a UK creation by a UK regulator. It was great to see the announcement earlier this week from that regulator, the FCA, in combination bringing forth the supercharged AI sandbox.

We know how to do this, yet we are not doing enough of it. We all know bad regulation. In no sense does that mean that regulation is, of itself, bad. Right-sized regulation is good for investor, for innovator, for citizen, for creative, for consumer and for our country. Right-sized regulation, structured in an agile way, can be our path to the future and those future technologies, however they may be and in whatever form they come into being. The Government rightly talk of growth. These sectors, deploying these technologies, are most likely to bring this growth to bear.

How are we to move from being an incubator economy, an incubator country, when it comes to these technologies, to putting the right support in place, having the right skills, putting the right funding and expertise in place, at start-up and certainly at scale-up, and at the right level to shoot at nothing short of the “unicornification” of the UK economy? That is because of not only the economic benefit that will flow from having unicorns but the role-modelling that having those companies in our country can do, and how that brings forward all levels of the developmental pyramid. We know how to do this. We can do it at pace and we must. We are talking of our data, our decisions and, if we get this right, together, our human-led, AI-enabled, AI-empowered futures.