The UK will embrace AI faster than any other G7 nation in a bid to boost growth and investment, the chancellor has promised in a wide-ranging speech on her economic vision.
Rachel Reeves argued that putting the UK at the forefront of the AI revolution will drive growth and investment – and ensure that “the technologies of the future” are “invented, built and deployed here in Britain”.
Reeves made her case at the annual Mais lecture – an event for bank bosses, chancellors and prime ministers to set out their economic vision – on Tuesday afternoon, following the launch of a landmark £2.5 billion AI funding package.
She warned against “burying our heads in the sand” on AI, calling the technology “the defining technology of our era”.
“We can leave it to the market alone, and let the balance of risk and reward be determined by a super-wealthy few. Or we can chart our own course,” she said.
And despite fears that AI could wipe out millions of jobs, the chancellor promised that her strategy will boost employment, creating more than 100k jobs and £212 billion of investment over the next two decades.
She says these will come largely from her ambition to “lead the quantum revolution”, as the UK will become the first country in the world to commit to rolling out quantum computers at scale.
Quantum is a new type of computer technology that uses physics to process more data and solve more complex problems than traditional computers.
ITV News has previously reported on how quantum technology is helping to make improvements in healthcare, including in identifying the early signs of life-limiting conditions.
Nearly all of the new AI money the government has announced will go towards investment in this area, with funding targeted at buying new quantum computers, training experts and backing research and existing companies.
£500 million will also go towards British AI companies – money which the government will launch in full this April.
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A focus on quantum and AI is one part of what Reeves has called the “three biggest opportunities for economic growth in the UK”.
In her wide-ranging speech, Reeves also announced that the UK will become more closely aligned with the EU, as she hit out at the “deep damage” caused by Brexit.
The chancellor warned that the UK is facing the risk of being “stranded between powerful trading blocs”.
“Our fate as a country is inescapably bound with that of Europe,” the chancellor added.
She insisted her vision – which would see the UK routinely align with EU regulation in a bid to improve trade – did not mean she was trying to “turn back the clock” on Brexit – but instead that she was building “new and stable future relationship” with Brussels.
“Where it is in our national interest to align with EU regulation, we should be prepared to do so, including in further areas of the single market,” she said.
She also explained her plan for regional devolution, which will see regional mayors gain “control of a share of some national taxes”, including income tax.
That part of her vision is backed by a £2.3 billion “city investment fund”, a package designed to give regional leaders power to spend money, as part of a mission to spread economic growth across the UK.
“What most distinguishes Britain from our closest peers is the relative underperformance of our major cities outside of London compared to their European counterparts,” she said.
Reeves is hoping her priorities will improve the UK’s economic prospects, amid rising oil prices and global economic uncertainty as a result of the war in Iran.
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