If you talk to businesses about the UK government, the same refrain crops up time and again, that nothing gets done.
It’s expressed in different ways, but the crux is that all manner of obstacles intervene to impede progress, that despite Keir Starmer and Rachel Reeves insisting they are “going further and faster to kick-start the economy”, the truth is they are not, or if they are, there is precious little tangible evidence of that effort.
Yet they continue to pour forth their vainglorious boasting, much of it reported in a breathless, excitable, unquestioning fashion.
We are assured this government is going to “mainline AI” into the UK economy. But Open AI – which recently took on former chancellor George Osborne to build capacity partnerships worldwide – has now shelved its Stargate UK investment.
The agreement was announced to a fanfare last September, as part of a joint UK-US AI package in which American tech giants said they were committing £31 billion to Britain’s tech sector. Today, high energy costs and regulation are being blamed for the stalling. Electricity rates are about 75 per cent higher than pre-2021 levels.
Quite where that £31 billion “tech prosperity deal” has reached is a mystery. The latest appears to be that the talks have been frozen by Donald Trump, with the US President said to be unhappy also about the UK hitting American firms with a digital services tax and refusing to relax food safety rules on imports.
Buckle to US?
That provides some indication of where the balance of power lies. The fact is the US needs Britain for its tech advancement far less than Britain requires the US. Food safety has nothing to do with mainlining AI but the White House, under pressure from US food producers, can afford to chuck it in anyway. In fact, they can keep adding to their wishlist, safe in the knowledge that a frantic Britain may well buckle and concede.
Such is the imbalance between the two sides that there is little the UK can give them, not in tech. The Labour MP Clive Lewis got it right when he said: “When a government has no economic strategy worthy of the name and no real industrial vision, it becomes vulnerable. The Silicon Valley companies that flew into London knew exactly what they were dealing with: a prime minister and a technology secretary desperate to project momentum, willing to dress up press releases as policy.”
Last month, it was revealed that a supercomputer scheduled to go live later this year was still a scaffolding yard in Essex. The much-vaunted plan was that UK company Nscale, which counts former deputy prime minister Nick Clegg as a board member, was going to build the Essex colossus as well as other centres for Stargate UK. This despite having no record in building data centres. The buzz term was “sovereign compute” – Britain running AI models in centres in Britain.
Bargain hunters
Expecting investors to pour in tens of billions while continuing to have the highest industrial electricity prices in Europe was always set to be a giant ask. Those charges have not come down, when the pressing case for appeasing Britain’s rich partners required that they should. Meanwhile, there resides in Washington a man well-versed in the art of negotiation, who knows exactly how to extract the best price, how to achieve a bargain and has no compunction in demanding more, in breaking a red line and attaching conditions that were never previously there.
There Trump is, hardened in Manhattan real estate, used to aiming for the stars, sure in the knowledge that if you don’t push you don’t get. Against him is Starmer, a lawyer, pedantic and methodical, happiest when sticking to the previously agreed script. One tears it up, the other clings to it for dear life.
Britain is not alone in this. To be fair to Starmer, plenty of leaders in the past and today have also shaken hands and triumphantly brandished major coups with Trump, only to find there is a world of difference between a memorandum of understanding or heads of agreement and seeing hard cash appear in bank accounts and earth to actually begin turning.
For Trump, it’s a game of pushing to the limit and beyond, to see what lands. For them, where AI is concerned, it is fulfilling an anxious need. Such is the might of Silicon Valley, so keen is he to have the Tech Bros with him – witness his second inauguration, that Trump is able to draw on their involvement, to boast of America’s generosity, as a bargaining chip. Everyone wants part of America’s AI.
The lessons in this are to take with a hefty dollop of salt those proclamations of US investment. Strip away the hype from the Whitehall spin doctors and examine them for what they really are. Adopt a cautious “wait and see”, before celebrating. Unfortunately, vote-chasing ministers and local councils do not take the same approach. There is an old saying, “many a slip between cup and lip”, and that should be the guide.
British-grown
Another is that the best policy that avoids ultimate disappointment is to grow your own. Britain ought to be focusing on encouraging its domestic start-ups, supplying them with the tools to help them expand and upscale to a level that the US takes notice and the see-saw tilts in the opposite direction.
Easier said than done, of course, but surely better than chasing bold, tech headlines, only for them to perish in subsequent accusations and finger-waving.
Britain gave so much to the world, to the US in particular. That’s what history tells us. Where Trump is concerned, we would do well to remember the past when defining our future.
