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John Healey has vowed not to let AI “leave workers behind” as he unveiled more than £600m in investment ahead of next week’s Budget, amid mounting concerns over AI-driven job losses.
The Treasury will commit £10m a year to studying the impact of AI on employment, alongside hundreds of millions of pounds for cyber security, British tech companies and domestic AI infrastructure.
The announcement comes just days after Barclays revealed plans to cut 5,000 jobs as part of an efficiency drive involving AI, adding to fears that the technology could accelerate redundancies across Britain’s biggest employers.
Healey said the government would take a “distinctively British approach to AI”, balancing its potential to boost economic growth with the need to protect workers.
“I understand and share the concerns of working people, so I am setting out a distinctively British approach to AI – one that doesn’t leave workers behind and defends our national interest, while ensuring the benefits of AI-enabled growth are felt right across the country,” he said.
The package, announced on Saturday ahead of Wednesday’s Budget, includes an additional £23m over three years for the AI Economics Institute, which will examine the technology’s effects on productivity and jobs.
It follows warnings from AI minister Kanishka Narayan that Britain must avoid repeating the painful transition experienced by workers during the Industrial Revolution.
AI security and British tech
The largest share of the funding will go towards strengthening Britain’s defences against emerging AI threats.
The Treasury has allocated £165m to a National AI Biosecurity Initiative, including £100m for a new laboratory using AI to detect biological threats and develop medical countermeasures.
The facility will also receive up to £200m in AI model credits from OpenAI and Anthropic, alongside partnerships with Google DeepMind and British life sciences firm Basecamp Research.
A further £120m will go to the AI Security Institute, while £60m will fund a National Cyber Shield using AI agents to strengthen cyber defences.
Ministers will also establish a £70m centre to identify vulnerabilities across critical national infrastructure.
The investment comes amid growing concern over the risks posed by increasingly autonomous AI systems.
Financial Conduct Authority chief executive Nikhil Rathi warned this week that emerging technologies were putting threats to financial markets “on steroids”, while regulators have called for greater oversight of AI failures and security risks.
The Chancellor is also committing an additional £60m to the Sovereign AI Fund to support British AI companies, expanding its remit to robotics, autonomous systems and advanced manufacturing.
Narayan said Britain could not afford to rely entirely on overseas technology.
“By backing British science, advanced chips and our own AI companies, we can strengthen our national security, rebuild Britain’s industrial strength and create good, skilled jobs across the country”, he said.
The package also includes £30m for local AI partnerships, a new cyber security training centre in Manchester and £15m for a competition rewarding AI innovations tackling health problems.
Julian David, chief executive of techUK, welcomed the investment, saying it would help British AI companies “grow here, not abroad”.
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