The Labour Party’s landslide victory in the general election promised to shake up the IT industry.
For those who came in late, Keir Starmer secured 412 seats, while the Conservatives suffered a heavy defeat, retaining only 121 MPs.
TechMarketView senior research director Dale Peters said: “Delivering economic growth and raising productivity will require the new government to create the conditions to support the appropriate application of digital technology and provide an environment where innovation can thrive.”
Labour’s proposed initiatives, such as the National Data Library and the new industry strategy for AI, could bring significant benefits to the IT industry. These plans, along with the removal of planning barriers for new data centres, signal a potential boost for the sector.
Labour also plans to introduce 10-year funding cycles for key R&D institutions and aims to develop better industry and academic partnerships, which the tech sector will welcome.
Another critical area for Labour to focus on is the country’s poor IT security record, which makes it a target for Russian hackers. In its election manifesto, Labour promised to address this.
Under Labour’s government, the country’s digital capabilities are set to increase, potentially leading to a surge in demand for cloud computing services. This promise could be a significant opportunity for cloud providers in the tech sector.
Labour’s pledge to introduce binding regulations on companies developing powerful AI models could significantly impact the IT industry. This move, along with the removal of planning constraints for new data centres and the creation of a National Data Library, could reshape the sector’s landscape.
Although Labour hasn’t committed to a new data bill (after the Data Protection and Digital Information Bill failed due to the general election), industry groups are calling for legislation to make the UK more attractive for data-driven R&D. They want clearer provisions and support for smart data schemes and more flexible ways for companies to transfer data across borders legally. Given the close relationship between AI and data, the new government might introduce legislation to address both.
We might also see updates or necessary provisions for existing legislation. For example, Labour plans to build on the Online Safety Act to address online harms facing women and children and explore further measures to keep everyone safe online, especially on social media. The new Technology Secretary will confirm the thresholds for services’ categorisation under the Act. Meanwhile, the Digital Markets, Competition and Consumer Act still needs several statutory instruments before it comes into force, which Labour will now handle, though no significant changes are expected.
With few tech-specific commitments from Labour, the tech sector must communicate its urgent needs to the new government and compete with other interest groups for attention.
