- The UK government plans to encourage the NHS and Ministry of Defence to purchase more British technology.
- Rachel Reeves is expected to outline a strategy focused on AI, EU ties and regional development.
- Officials say faster procurement could help smaller UK tech firms enter public sector contracts.
The UK government is preparing to push the NHS and the Ministry of Defence to buy more British technology, as ministers place growing emphasis on artificial intelligence and UK tech companies to drive economic growth.
Treasury minister Spencer Livermore said the move forms part of chancellor Rachel Reeves’s broader economic approach, which will be outlined in a high-profile lecture on July 1. The speech is expected to restate the government’s strategy at a time when the Iran conflict and rising oil prices are fuelling concerns about inflation and weaker economic growth.
Livermore, who works closely with Reeves on policy, suggested the government wants to make a stronger case for the economic potential of AI, even as concerns grow about the technology’s impact on employment.
“There are massive opportunities here and I think that’s what we want to try to talk about,” he reportedly said in remarks cited in a news report. The UK, he added, wants to position itself among the fastest adopters of artificial intelligence globally.
According to Livermore, ministers believe stronger economic growth driven by new technologies could ultimately translate into more jobs. But the discussion around AI remains divided, with some critics warning that rapid automation could disproportionately affect younger workers entering the labour market.
A push for British tech inside government
Officials say one of the main barriers facing domestic tech firms is simply getting through government procurement systems.
Livermore argued that the UK state has historically been slow to purchase new technologies, which often leaves innovative firms struggling to secure early contracts.
To address that, the government plans to establish a rapid innovation procurement taskforce, designed to sit outside traditional procurement processes. The idea is to test the model first in defence and healthcare, two sectors with large public spending budgets.
“We’re going to pilot that in defence and in health, so that we can get the state to buy new technologies quicker,” Livermore reportedly said, adding that the government is rarely the first customer for emerging technology companies.
The approach could also help smaller British firms compete with large international companies that currently dominate government contracts.
The issue has already drawn political criticism. Labour has faced scrutiny over its ties with major US technology firms such as Palantir, which holds contracts with the NHS. At the same time, a recent media analysis suggested that several AI investment deals previously announced by the government have yet to deliver significant funding.
EU ties and regional growth back on the agenda
Reeves’s upcoming speech is also expected to highlight two other economic priorities — closer cooperation with the European Union and stronger regional investment within the UK.
Livermore indicated that ministers are increasingly willing to discuss the economic consequences of Brexit more openly, though without revisiting core political commitments such as rejecting the return of free movement.
“The consequences of Brexit are showing to be worse even than people thought at the time,” he reportedly said, while calling for what he described as a “fact-based conversation” about the issue.
The government is also focusing on regional development projects, particularly the Oxford-Cambridge growth corridor and improved economic links between northern cities.
Meanwhile, ministers are closely watching the economic impact of the escalating Middle East conflict, which has already pushed oil prices higher. Livermore said the scale of the impact will depend on how long the crisis continues.
He pointed to what he described as stronger economic foundations before the current uncertainty, including lower inflation and improved fiscal headroom following earlier budget decisions.
Livermore also confirmed that he is part of an internal “Iran Board” established by Reeves inside the Treasury. The group is reportedly preparing contingency plans to deal with potential economic shocks linked to the conflict.
Despite the uncertainty, he suggested the government intends to stick with what Reeves calls “securonomics” — a policy approach where the state takes a more active role in supporting key industries and regions.
Exactly how far those plans will translate into new investment or growth remains to be seen. But ministers appear increasingly convinced that technology — particularly artificial intelligence — will play a central role in the UK’s economic strategy in the years ahead.
