Labour plans overhaul of government's 'anti-innovation' approach to tech regulation

The Labour Party will completely overhaul the government’s light-touch, ‘anti-innovation’ approach to digital regulation if it ever came to power.

Chi Onwurah, shadow minister for science, research, and innovation, told delegates at State of Open Con 2023 that a future Labour government would view a stronger regulatory landscape as one that promotes investment and industry-wide innovation.

Onwurah, who was formerly head of telecoms regulation at Ofcom and has a rich technology background, critiqued the failure of successive Conservative governments on shaping key pieces of regulation, branding its agenda as “wholly inadequate”.

She claimed that, due to a lack of regulatory certainty, Britain has the lowest levels of business investment in the G7 and that many startups are either being acquired by foreign entities or are moving abroad due to a lack of finance.

“Successive [Conservative] governments, their legislative and policy agenda on digital – whether it be the 'online harms' bill or AI strategy or security and resilience – lacks ambition or is wholly inadequate,” Onwurah said. “It doesn’t understand and reflect the opportunities of technology.

“One particular reason is successive Conservative governments do not see regulation as supportive of innovation. Regulation can be a barrier to innovation, but also regulation can support innovation – particularly access of smaller, more agile companies to government contracts [and] to marketplaces.

“The government has the wrong-headed idea that regulation is anti-growth and I just wanted to say regulation can be pro-growth and there’s strong evidence that a lack of agile regulation is undermining competition across many sectors of our economy, dragging down innovation and productivity.”

The “new settlement for the digital age” will see ambitious measures introduced on several fronts, with the aim of democratising technology and giving a competitive edge to small and medium-sized businesses (SMBs).

It marks a dramatic shift from the orthodoxy of the incumbent Conservative government, in which industry regulation has often been seen as detrimental to innovation and competition.

Regardless, fears continue to mount over the pace of innovation, particularly in areas such as generative artificial intelligence (AI), and how it’s outpacing lawmakers’ capacity to mitigate any risks.

“When they’re well-targeted, activist regulation can be pro-growth and pro-innovation,” said Onwurah. “So, good regulation can create some virtuous circles, where more people trust and use the systems, encouraging greater investment and, in turn, more adoption across sectors.”

Labour’s digital programme for government centres around several priorities such as opening up data across the business landscape, upskilling workers, diffusing tech across public services, and ensuring 5G potential is fully unlocked.

Other key measures include harnessing data for the public good, building resilient supply chains and embedding AI and data analytics in government.