Treasury unveils £600m AI package to protect jobs and security

John Healey has pledged that artificial intelligence will not leave workers behind as the Treasury announced a package of investment exceeding £600m ahead of next week’s Budget. The Chancellor stated that the government intends to adopt a distinctively British approach to AI, aiming to balance the technology’s potential to drive economic growth with the imperative to protect employment and national interests. This announcement arrives amid heightened concerns regarding AI-driven job losses, following recent disclosures by major financial institutions about workforce reductions linked to efficiency drives involving the technology.

The Treasury will commit £10m annually to study the impact of AI on employment, alongside hundreds of millions of pounds allocated to cyber security, British tech companies and domestic AI infrastructure. A further £23m over three years will support the AI Economics Institute, which will examine the technology’s effects on productivity and jobs. These measures follow warnings from AI minister Kanishka Narayan that Britain must avoid repeating the painful transition experienced by workers during the Industrial Revolution. Healey emphasised that the strategy is designed to ensure the benefits of AI-enabled growth are felt right across the country while defending the national interest.

The largest share of the funding is directed towards strengthening Britain’s defences against emerging AI threats. The Treasury has allocated £165m to a National AI Biosecurity Initiative, including £100m for a new laboratory using AI to detect biological threats and develop medical countermeasures. This facility will also receive up to £200m in AI model credits from OpenAI and Anthropic, alongside partnerships with Google DeepMind and British life sciences firm Basecamp Research. A further £120m will go to the AI Security Institute, while £60m will fund a National Cyber Shield using AI agents to strengthen cyber defences. Ministers will also establish a £70m centre to identify vulnerabilities across critical national infrastructure.

The investment comes amid growing concern over the risks posed by increasingly autonomous AI systems. Financial Conduct Authority chief executive Nikhil Rathi warned this week that emerging technologies were putting threats to financial markets on steroids, while regulators have called for greater oversight of AI failures and security risks. The Chancellor is also committing an additional £60m to the Sovereign AI Fund to support British AI companies, expanding its remit to robotics, autonomous systems and advanced manufacturing. Narayan said Britain could not afford to rely entirely on overseas technology, adding that backing British science and companies would strengthen national security and create good, skilled jobs. The package also includes £30m for local AI partnerships, a new cyber security training centre in Manchester and £15m for a competition rewarding AI innovations tackling health problems. Julian David, chief executive of techUK, welcomed the investment, saying it would help British AI companies grow here, not abroad.