Chancellor Healey Pledges to Harness AI in Budget to Bolster Britain's Security, with Hundreds of Millions in Investment

Chancellor John Healey has pledged to use the power of artificial intelligence to bolster Britain's security and prosperity against the risks of the accelerating global technology arms race. In Wednesday's budget he is set to outline what he calls a 'distinctively British' approach to AI.

As he prepares for his debut budget, Healey said Andy Burnham's government would commit hundreds of millions of pounds to develop that approach and capitalise on the benefits of the frontier technology. AI, he argues, stands at a fork in the road, posing both existential threats and transformative economic potential.

Healey said he would make the biggest ever investment to guard against cyber risks and the disruptive potential of the technology. The measures include fresh investment for Britain's AI Security Institute and other critical institutions, alongside public money to support the use of the technology for good.

'AI will transform daily life: every firm, community, hospital, school and every aspect of our economy can benefit,' Healey said. '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.'

Under the plan, new investment will go into AI chip design capability in Edinburgh, alongside a new AI Centre of Excellence in Manchester. The government will also spend £10 million a year to lead the UK's work on understanding how AI will reshape jobs and industry, aiming to address concerns about potential job disruption.

One of the biggest announcements is Treasury backing for up to £300 million in public-private investment in a new AI Biosecurity Lab, designed to serve as a world-leading institution bringing together scientific expertise to protect people from emerging biological threats.

Three months into Burnham's premiership, Healey's budget comes against an increasingly volatile backdrop, as the war in the Middle East sends shock waves through the global economy, putting pressure on public finances and reigniting the cost of living crisis. On Friday, the latest tensions in the Gulf sent the oil price to its highest level for six months, rising above $117 a barrel at one point.

Even so, the chancellor has vowed to use his first budget to provide households and businesses with 'breathing space'. He will also use the critical Commons speech to flesh out the policy priorities of Burnham's government after he replaced Keir Starmer this summer, and to spell out a vision for Britain amid a turbulent global economic outlook.

Economic figures have also played a part in the push. Official figures show AI investment has helped the UK outperform gloomy forecasts, powering the country to the strongest growth performance in the G7 in the first half of this year. Yet fears are growing over security and jobs as the technology opens up the danger of cyber-attacks, IT systems turning rogue and devastating job losses.

Those fears found a real illustration this week. Websites around the globe went dark after a serious vulnerability was found in a computer language used to build much of the world wide web, a development made possible by rapid AI advances. In the same week, Barclays announced it is cutting 5,000 jobs as part of cost-saving plans in which the rollout of AI helps it make efficiency gains.

Security minister Dan Jarvis said: 'I'm proud the UK has repeatedly been at the forefront of global efforts to use AI for the benefit of humankind. Today's investment will help the UK seize the opportunities AI presents to strengthen our national security, while staying one step ahead of those who seek to use AI to do us harm.'

Earlier, on Thursday, defence secretary Wes Streeting had warned that UK households should prepare against mounting risks from weather, cyber or other serious emergencies, advising people to stock up on supplies to last 72 hours in a campaign called Be Ready. Healey's budget announcement is being seen as a major step in placing AI at the centre of that same national-security preparedness.