The first Labour government since 2008 was elected in the UK in July 2024, with a strong focus on economic growth. A “pro-innovation approach” towards tech and digital industries is a core part of these ambitions. Various government policies, including the Labour manifesto, the July King’s Speech, the October budget, and the Invest 2035 Industrial Strategy, provide insights into the expected direction of tech and digital regulation in 2025. Below are the key developments anticipated for the year ahead.
The UK Will Introduce AI Legislation
New AI legislation was announced in the King’s Speech on 17 July 2024. The government aims to create rules for those developing powerful AI models, focusing primarily on safety. However, details remain unclear, as briefing notes did not elaborate on specific measures. The legislation is expected to be less extensive than the EU’s AI Act, concentrating on transparency and the right to opt out of copyrighted materials being used for AI training.
Additionally, discussions are ongoing about introducing an extended text and data mining (TDM) exemption similar to the EU Copyright Directive, which was previously rejected in 2023. There is also speculation about whether the AI Office will gain statutory authority. These new policies signal a shift from the previous government’s stance, which did not prioritize AI-specific legislation in its 2023 White Paper. The public sector may also fall within the remit of AI regulations, given the focus on using AI to enhance government services.
In October 2024, the UK government launched the Invest 2035 Industrial Strategy, emphasizing AI’s role in strengthening sectors like life sciences, digital technologies, and defense. The AI Plan, expected by the end of 2024, will outline further strategies. Whether the legislation will be finalized by the end of 2025 remains uncertain, but it will be a major priority.
Tech Will Enhance Public Services
Labour’s policies aim to modernize public services using technology, particularly in the NHS. The Data (Use and Access) Bill (DUA) will introduce standardized information-sharing across health and social care. A new digital healthcare record accessible via the NHS app is also expected.
Beyond healthcare, Labour plans to use AI to improve public sector efficiency, modernize tax collection, and enhance government services. The National Data Library will support data-driven public sector improvements.
As technology advances, digital services in the UK continue to expand, including the online entertainment sector, such as mobile casinos. With new government oversight and evolving regulations, British players can expect greater transparency and enhanced safety measures when accessing online casino games. These measures align with the government’s broader initiative to create a safer and more innovative digital economy, ensuring that entertainment and financial security go hand in hand.
Online Safety Will Remain a Priority
Labour has committed to exploring additional online safety measures, particularly regarding social media use. The party has proposed banning social media access for those under 16 and restricting mobile phone use in schools. The DUA Bill includes provisions to modify the Online Safety Act (OSA), granting researchers access to online safety-related information and enhancing coroner access to child-related cases. A new offense for sharing intimate images without consent has also been introduced.
Regulatory Bodies Will Expand Their Influence
On 8 October 2024, the UK government launched the Regulatory Innovation Office (RIO) to accelerate access to new technologies. However, its role and structure remain somewhat unclear. The Labour manifesto indicated that RIO would unify existing regulatory functions and absorb independent bodies like the Regulatory Horizons Council. Minister Patrick Vallance suggested that RIO might implement “experimental regulation” to fast-track innovation.
The creation of another regulatory body may seem counterintuitive if the goal is to reduce bureaucracy. Existing regulators like Ofcom, the ICO, the CMA, and the FCA already coordinate under the Digital Regulation Cooperation Forum (DRCF). RIO’s mandate is broader, encompassing engineering biology, space, AI in healthcare, and autonomous technology.
Funding remains a challenge. Regulators have voiced concerns over resource allocation, particularly with the expanding responsibilities of the CMA, Ofcom, and the FCA under new laws such as the Digital Markets Competition and Consumers Act (DMCCA), the OSA, and the DUA Bill. Increased enforcement is expected in 2025, with regulators taking swift action under new legal frameworks.
The UK Will Align More Closely with the EU
Labour’s policy direction suggests a shift towards regulatory alignment with the EU rather than divergence. Unlike the previous government, which prioritized independence from EU rules, Labour appears focused on minimizing regulatory burdens and business costs.
For example, the DUA Bill has removed some accountability measures that would have complicated UK-EU data protection alignment. The influence of the Secretary of State has also been reduced, likely to maintain EU data adequacy. Similarly, the Product Regulation and Metrology Bill provides powers to align with EU regulations in areas such as environmental protection.
Data Will Continue to Drive Innovation
As AI and blockchain technology advance, demand for data is increasing. However, the government is also prioritizing data sharing between businesses, consumers, and government entities. The DUA Bill introduces a framework for data sharing, with provisions for smart data schemes similar to Open Banking.
The UK’s data protection and ePrivacy frameworks are also expected to evolve in 2025, alongside new cybersecurity legislation. The King’s Speech hinted at regulatory updates to align the UK’s cyber security laws with the EU’s NIS2 Directive, aimed at protecting critical infrastructure.
Data processing capacity is another key concern. The government has pledged to remove planning barriers to data centers as part of its broader digital infrastructure strategy. Additionally, AI’s increasing role in various industries will require further investment in data processing facilities and cloud computing resources.
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