Liz Kendall: ‘I’d love to stay as UK tech secretary’

0:01Hello, it's your host John Thornhill and you're listening to the Sifted Podcast. Joining me today in London is Liz Kendall, Member of Parliament for Leicester West, and since 2025, Secretary of State for the UK's Department of Science, Innovation and Technology. Established in 2023, DSIT's mission is to make the UK a global tech and science superpower, focusing on frontier tech like AI, quantum and semiconductors. Under Liz, the department has launched the Sovereign AI Unit, a£500 million fund which has already backed the likes of David Silver's Ineffable Intelligence and Drug Discovery Scale-Up Isomorphic Labs.

0:39Last month, it also unveiled its£1.1 billion AI hardware plan, aimed at supporting UK chip companies. Despite this progress, it's an open question whether Liz will be part of the presumptive new Prime Minister Andy Burnham's team and whether she will be in the same post by September. Liz, it's great to have you on the podcast.

1:00Liz Kendall:It's lovely to be here. What's the latest news on that front? Well, I don't know. I absolutely love doing this job, especially in this country at this time. In my, I think it was my first week in the post, I met Fei-Fei Li, who she doesn't like being called the godmother of AI, but that's what she's seen as. She said, to be in this job in this country at this time is incredible. Do not squander the opportunity. And those words have been ringing in my ear ever since. And what's the opportunity that you see? I believe we are genuinely third in the world outside of America and China on the most powerful technology of our lifetimes.

1:50Liz Kendall:a technology that I think is now the engine, not just of economic power, but of hard power. And my job, the government's job, whoever is the prime minister and whoever is the secretary of state, is to seize the opportunities of AI to make it work for the British people and to deal with its inevitable challenges and risks. And I think we are probably better placed than almost any other country to do this because of our incredible talent in this country. Do you think Andy Burnham and his team realise that? I believe they do. I believe they will. I know he has a big vision for re-industrialising the country, for growth in every corner of the country.

2:42Liz Kendall:And I don't believe that you can do that without AI at its heart. This isn't some sort of strange model in a different country or in a different place. I see every day how it is already being used in businesses, in public services. It is developing at this incredible rate. And I want to do more to back our brilliant British founders to get those jobs, get that growth, get that transformation in our economy and public services and to win for Britain. Have you spoken to Andy Burnham directly about this? Do you expect to stay in your job? I would love to stay in my job, but that's for the new Prime Minister to decide.

3:28Liz Kendall:I'm certainly speaking to his team about all of these issues. There's a very tight transition period between now and a new prime minister coming in and we need to ramp up our efforts I think that it's a crucial moment for Britain I think the next 24 months are mission critical for us you know this is as you know and as all your listeners will know you know this is this technology is developing at an exponential rate and you we have got to put our foot even further down on the pedal. We can't go into cruise control here. So I'm very seized of the importance and the urgency and I'll do whatever I can to make sure that we do make the most of this.

4:15One of the things Andy Burnham has talked about is the importance of having growth in every postcode. Thank you. And one of the criticisms of the AI industry, I guess, is that it's very much focused on the kind of golden triangle of Oxford, London and Cambridge. How are you able to convince your colleagues in government that AI benefits everyone in the country?

4:37Liz Kendall:You know, I've seen directly for myself how brilliant founders and startups are using this technology in all parts of the country. So I recently went to Liverpool to see their materials, chemistry, very, very strong cluster there where AI is being used to transform products, doing tests in weeks that would have previously taken months, you know, products in every household in the country. Or Cardiff with its semiconductor industry or Sage in Newcastle. You know, Sage, one of the biggest tech companies here, you know, brilliant products for SMEs in particular to use to transform their businesses.

5:20Liz Kendall:I can really see on the ground how it is being used and our AI growth zones, not just the data centres, but the sort of clusters of support around that, skills training, universities involved to get those spin outs to scale up. They are literally being built on former industrial sites in Lanarkshire, in North Wales, in South Wales and in the North East. So if we are going to get growth in every part of the country, there's no route to stronger growth and no answer to how we compete and pay our way in the world unless AI, science and tech are really embedded in this sort of modern re-industrialisation.

6:01In April, you delivered quite a punchy speech at the Royal United Services Institute where you said that a failure to invest in the AI would be a betrayal of British talent and British interests. those are very strong words, do you think there is a danger of betrayal?

6:17Liz Kendall:I think lots of people are worried about this technology. They think it's going to take their job. They're worried about existential risks. They don't like to see just a very, very few extraordinarily wealthy people benefiting. But the choice isn't between having this technology or not to somehow sort of stop AI. The choice is between seizing it and shaping it to work for us or being left at its mercy or whim. And if you, as I believe we are, the best Western country outside America for this powerful technology, why wouldn't we seize this and actually have confidence? You know, we're not powerless in this.

7:06Liz Kendall:We can choose to seize the opportunities for Britain, to back more British AI companies, which is what my Rousy speech was all about, how we actually gain greater leverage and sovereign control over this and to help people through the inevitable jobs transition. Because there will be changes. Some jobs will be created, some will change and some will be lost. But we have to help people through that. It's not surprising in a way that people have this sense of AI dread. Is it when the leaders of the tech companies themselves are the ones who are talking about 50 % of all entry level white collar jobs are going to get eliminated in five years and they are the ones who have raised the spectre of existential risk and so on.

7:50So do you think they're irresponsible in raising all those concerns?

7:52Liz Kendall:But we're also seeing AI create jobs. We're seeing not just in the 15 ,000 jobs that will be created in our AI growth zones, but through new companies, brilliant companies that are taking on new staff through the boom that we're seeing, but not just in London and the Golden Triangle, as you said. But I, you know, I studied history at university, not computer science or engineering. And I think what history has taught me from the Industrial Revolution onwards is that you aren't powerless. You can choose to come together and deal with the challenges new technologies bring. But there is no choice about whether we have it or not.

8:40Liz Kendall:I take this extremely seriously. And for me, AI must be a core strategic priority for the UK, for our economy, but also critically our national security too. One of the things though about the Industrial Revolution was that the Luddites were perfectly rational economic actors, weren't they? They suffered in the short term, even if there was a massive upsurge in productivity in the long term. But then it was out of that that we actually had the collective action through the trade union movement, through government policies, which actually dealt with some of the consequences that that new technology brought.

9:22Liz Kendall:And my argument is, if you have the will, if you have a government who's determined to act, to seize the opportunities and deal with the risks, that is the best way forward for our country. Do you think we need new institutions, new policies to do that? Do we have to change our tax system, for example? So we have had new institutions to begin to deal with this, one of which actually was put in place by the last government, the AI Security Institute, which I think is an incredible organisation which has really helped us evaluate these new models and some of the risks. And it's really interesting how many other countries want to work with ACI.

10:03Liz Kendall:Even just last week met with the German tech minister, signed a memorandum of understanding on this because they want to share our knowledge, our evidence, our experience, the skills that we have there. So new institutions are required. and even at the defence investment plan last week there was an announcement that we'll have a new fund looking at AI security risks, biosecurity risks, agentic AI. So new things are always going to have to develop to deal with that. You mentioned these very powerful new models that have been developed like Anthropics, Mythos and Fable and so on. But it was fascinating how the American government exercised a kill switch on these.

10:44They were worried about the misuse. how vulnerable is Britain to the kill switch?

10:50Liz Kendall:I do think that is a wake-up moment for the country. As you mentioned, back in April, I actually argued that precisely because I knew that something like this would be coming, that we have to gain greater sovereign control for this country. That is not about pulling up the drawbridge and attempting to go it alone. It is about trying to secure greater leverage, greater leverage, you know, and becoming what I call the keystone in the global tech architecture. Britain as an indispensable partner here. You know, you've written about this before, you know, the huge value chain from the, you know, the metals to the chips to the data centers to the models.

11:38Liz Kendall:No country can control that all on its own. For us, it's about where are Britain's key strengths? And we are investing in new foundational models. You mentioned David Silver's Ineffable, which Sov.ai is actually putting the money into. But we're, you know, Cosign, we're putting compute into that. And UKRI is investing in new foundational research labs. We are the brilliant ideas that our founders, our startups are coming up with. We are investing in that. But crucially, we've taken two really, really big bets. One is on AI hardware. You know, as Pat Gelsinger, who now runs Playground Global, has said many times before, you know, the country that wins on compute wins on AI.

12:33And this is a former head of Intel.

12:34Liz Kendall:Exactly. The former head of Intel, because, you know, if you want the best life sciences or the best financial services, you need the best chips. So we've got this£1.1 billion investment in AI hardware, but also these new foundational models that we're looking at. I've compared this a bit in the past to the Olympics. You know, I don't know the average age of your listener, but for those of us who remember in 1992 how terrible we were in Atlanta at the Olympics, something like 36 in the gold medal table, okay? But we didn't give up, did we? What did we do? We backed our best sports. Not the individuals, but the sports.

13:16Liz Kendall:Where are our strengths? And then we invested more into those, and they built better teams. So they did better, they attracted more people. And I see it like that for AI. Investing in where backing our key strengths. So on AI hardware, on the Sov AI fund for our founders, but also the£2 billion bet we've put on quantum because I don't want to miss out on that incredible technology for the future. So you think we can win gold medals when it comes to tech? I absolutely believe. I mean, I don't know if it's because I am inherently competitive. But let me tell you this. Nobody runs their fastest race to come second or third, do they?

14:02Liz Kendall:You run your fastest race to win, and that's what I want to do. Do you think that when it comes to sovereign AI that Britain really can win when it comes to chips or cloud computing or foundation models? I mean, And colossal sums of money are being spent on all of these areas by the US tech companies. How can we possibly compete? Or even, you know, the announcement around South Korea just last week. I mean, combined with private sector,$880 billion over the next 10 years. What that says is we have to go faster and we have to do more. I think Sov.ai is doing incredibly well. It isn't just the£500 million direct investment, it's unlocking that key to wider government support, seamlessly linking to the British Business Bank that's got£2 billion a year, but also the holy grail which is government procurement, which is really where I think we need to go next to back our brilliant British AI and tech companies.

15:03A lot of start-ups here say that they would love to have more growth capital and Andy Haldane gave a very interesting speech at the British Chamber of Commerce. The other week where he was talking that UK pension funds should have a home bias in terms of investment, that they benefit greatly from kind of tax relief. They should be investing more, a greater proportion of their assets. Do you support that?

15:27Liz Kendall:Yeah. Well, in fact, when I was in my last job as Secretary of State for Work and Pensions, I actually introduced the Pensions Act to try and get more institutional investment into British companies. I absolutely support that. I think that's a really big question for the country. We've taken measures to make sure that happens. I know the companies want that money to come on extremely quickly, but we need to act at all these different levels. And I do when I look around the world and some of the measures countries are taking to try and win in this race. I mean, many not just for their economies, but their national security.

16:10Liz Kendall:That just tells us that AI must remain a core strategic priority for the government. But would you favour legislation or a kind of government mandate to have home bias for UK pension funds? Well, we've already taken these steps in the Pensions Act that I've talked about. Let's see that working. And I'm sure you'll be hearing more and more about this in the coming weeks and months. But my responsibility at DCIT is to use every possible lever that I have to back more British AI companies because we do need that greater sovereign control. Last week, the FT reported that Burnham's, on Burnham's AI strategy, and one person who had been involved in developing this thinking said that, well, they were quite critical of the government's courting of driverless car companies, in particular like Wave.

17:06Were you surprised by that?

17:09Liz Kendall:I personally think Wave is an incredible company. You know, this amazing idea that they had, which is self-driving car, but not with the sort of lasers on top and having to learn the roadmaps of every city, but actually learning to drive. A brilliant idea that they stuck with for 10 years. and, I may say, training it on the terrible, bumpy, complex roads in London with all the weather and all of that. The hardest environment in the world. Absolutely brilliant. And now look at them. 80 % of Nissan's new cars, I think it is, are going to have their model in them. I think it is a brilliant British success story.

17:55But are you not afraid that they will just go to the US if we suddenly introduce legislation that is going to stall the development of driverless cars?

18:02Liz Kendall:Well, actually, we are removing the regulatory barriers so that they can actually, you know, be rolled out quickly here in the UK. So there's two things here. We should be backing British companies in this technology because if we don't, we'll end up reliant on US companies, which is precisely what some people are worried about. But at the same time, we do have to take seriously people's worries about their jobs, which is why, you know, the two things that I have done on tech and AI. is firstly to back British companies, but secondly, say explicitly, we won't leave you to cope on your own. We aren't like the Tories in the 80s and 90s who saw whole industries decimated and left people to cope on their own.

18:46Liz Kendall:We will help people through the jobs transition. In this report, one of Burnham's teams said, what's the point of driverless cars and who's it for? How would you answer those questions? Well, I certainly know from my discussions with them and the people who've used those cars. You know, it's everything from, you know, if people are worried about maybe driving their kids around at the weekends, you know, constantly taking them to different places or women who want to feel safe, but also elderly parents as well. That may be something that can be done. I want that available for all. I think it's really important, the safety issues as well.

19:30Liz Kendall:they've got very good safety data because that's really important for them. So I do think that there is a market there and I want us to back a brilliant British company. Okay. You told the UK tabloid The Mirror the other day that Burnham's team had spoken to you about the proposed social media ban for under-16s. How is that developing? Do you think Burnham will support what the government's current position is on that? Yeah, because this is another part, I think, of the, or a really important part of the strategy, which is if you're going to get people to use tech and AI, they've got to know it's going to help them with their job, not just take it, and they've got to feel that their children are safe.

20:17and I think this is a really significant moment because it is a reset of social norms and expectations.

20:30Liz Kendall:I have absolutely no doubt that loads of kids will try and succeed in getting round the ban, you know, kids who are currently on it. But for me, this is as much about future generations and I think that there is broad support in the Labour Party because there is overwhelming support in the country for this. I've never seen such strong support amongst parents for something. Nine out of ten people who responded to our consultation, the parents said they supported it. It's a simple and clear message. It reshapes social norms. And I think it's about giving children their childhood back. Kanishka Narayan, the AI and online safety minister, gets very positive reviews, I think, from the tech community.

21:16But some people question whether the brief is too broad, AI and online safety. Do you think that is right?

21:21Liz Kendall:Well, there's huge amounts of issues to cover. But let me just say one thing about Kanishka, who is incredible. He is perfectly able to cope with both of those issues. And in fact, I think it's part of how you, as I said, how do we seize those opportunities. If people see problems for their children or problems with AI deepfakes online, including politicians or actors or musicians, you've got to be able to deal with those issues. Otherwise, people won't feel confident in using the technology. One of the other things you've talked about is that tech is a very male-dominated world, and you're trying to do something to address that.

22:07How are you going about that?

22:08Liz Kendall:Well, actually, I've literally hot-footed from the last meeting of the Women in Tech task force over at Tech UK's offices. Now, we've got two sets of reports that are coming out about women staying in tech and women leading in tech. Because we know we are losing so many women in tech every single year. I think we lose about£4 billion from the economy. and that's a real concern because companies are losing out on their talent as well as women missing out and there's quite a lot of issues there around culture in workplaces that we need to address and on the women leading in tech in I've been really struck that only 2p in every pound of VC funding goes to women tech founders yet on average the research shows they're delivering a 35 % higher return on investment.

23:02So we're looking more about that because I suppose it's not just that I believe all