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Summary
The British government seems torn as it tries to balance disparate views on it. However, it cannot muddle along for too long. At some point or another, its ‘special’ ties with the US will probably intervene, forcing it to attain clarity.
Last week, Keir Starmer proudly told an audience of engineers and investors at a London tech conference that the UK was “the third largest technology economy in the world,” and that half of all startup investment in Europe flowed to Britain.
And then, in the same speech, the prime minister gave tech companies a three-month deadline to prevent children’s phones from sending or receiving explicit images. He followed this up by announcing a social-media ban for under-16s.
Starmer is responding to what voters—and a cohort of his lawmakers—want. They would welcome a more adversarial approach to aspects of the tech revolution that they believe harm their children and endanger Britain’s democracy.
But this sits uncomfortably with the government’s broader ‘tech forward’ posture, which seems to position that sector—and AI in particular—as central to the UK’s growth revival.
Starmer has promised to deliver “the best state partner for tech entrepreneurs anywhere in the world.” When his government launched an AI Opportunities Action Plan, it claimed that £14 billion had been committed by the giants of Silicon Valley in response.
The PM is right that Britain’s vibrant tech environment sets it apart from European peers. But that edge depends, in the end, on a stable flow of foreign capital—especially from the owners and funders of the very platforms and companies over which Whitehall wants to assert control.
These self contradictions are visible elsewhere in government as well. Officials are fretting about the effect of Big Tech on politics and young people while rolling out new AI tools for job seekers and disadvantaged students.
Is this Janus-faced approach sustainable? It might be if one could draw a clear line between ‘good tech’ and ‘bad tech.’ But everyone has trouble doing that, including Whitehall.
Nor has the UK stuck to targeting social media alone. Its antitrust authority has gone after Apple and Google, demanding changes to their app stores and that British fintech companies be allowed to trial their alternatives to Apple Wallet on iPhones. Earlier this year, the government reversed plans to let US AI labs train their models on copyrighted material.
As with all of Starmer’s U-turns and half measures, these are attempts to unite competing factions with often irreconcilable views. There is an unresolved conflict about American Big Tech at the heart of the British establishment—one that divides Labour but extends beyond the ruling party.
Labour has plenty of members of Parliament who see their primary mission in government as kick-starting growth, investment and job creation. They seem unable to easily imagine a world where they reject the economic advantage of being ahead in the tech race.
This side also includes some of the old UK-US ‘special relationship’ diehards in new clothes, as well as various Anglo-futurists and techno-optimists who genuinely believe Britain’s future relies on being at the cutting edge.
Ranged against them is a disparate, disconnected coalition that privileges sovereignty above growth. Many on the centre-left are dismayed about the UK subcontracting child rearing, governance, health, etc, to large corporations that they instinctively distrust.
That most of these firms are based in the US is an additional cause for complaint. Europhiles are in this group too, recognizing that pushback against US dominance will only be effective if coordinated with Brussels.
And there are many refuseniks on the centre-right, who simply do not see how British greatness can be restored unless it finds a way to bend these new industries and supply chains to its will.
It does not help that the debate between these opposing sides is coloured as much by today’s geopolitics as it is by a hunt for sustained British growth over the next decade. The pro group worries that if Westminster overdoes Big Tech badmouthing, it might attract the unwelcome attention of the US president. This might destroy the fragile truce that has developed between the two nominally allied countries.
The other faction—known to some as the ‘Love Actually’ group, a nod to Hugh Grant’s fictional prime minister standing up to a bullying American president—would like to see exactly that. Many in Labour hope that detaching Britain from tech billionaires and Trump would shore up confidence in the government.
At some point, these contradictions will be resolved; but not, I suspect, because of any conscious choice by the British prime minister. Trump is openly weaponizing America’s AI dominance. Any country, ally or not, trying to carve out its own niche in this new tech landscape will attract his ire. At that point, the time for half-measures will pass. Starmer, or his successor, will have to pick a side. ©Bloomberg
The author is a Bloomberg Opinion columnist.
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