Peter Kyle pushes for AI regulation overhaul to boost UK business

£2.7 million government fund for regulation reforms

Speaking at Mansion House yesterday, Technology Secretary Peter Kyle announced a £2.7m fund for AI regulation reforms, aiming to speed up innovation while ensuring oversight and boosting the UK’s tech competitiveness.

Technology Secretary Peter Kyle has unveiled a package of measures aimed at reshaping the UK’s approach to AI regulation.

Kyle has been vocal about AI policy in recent months, previously urging UK workers to embrace AI or risk falling behind.

Speaking at Mansion House on Wednesday, Kyle announced a £2.7 million government fund to help regulators pilot AI systems across sectors, including energy, aviation and nuclear oversight. The move forms part of a wider push to reduce regulatory burdens and position Britain as a global centre for AI investment.

“We want you to keep investing here, keep building here, list here, scale here. If you invest in Britain, you’ll share in that competitive edge,” Kyle said.

Support for regulators and new AI industry standards

The funding will back initiatives such as Ofgem’s development of AI tools to speed up clean energy approvals, the Civil Aviation Authority’s use of AI to analyse air accident reports, and projects to improve nuclear waste management. Kyle says the aim is to fast-track approvals, cut delays, and support safe adoption of new technologies.

Alongside the regulator fund, the government confirmed plans for what it calls a “dedicated AI assurance profession”, supported by an £11 million innovation fund. The assurance roadmap sets out the creation of professional standards, ethical codes, and certification schemes to oversee AI deployment.

Stuart Harvey, chief executive of Datactics, welcomed the government’s direction on AI innovation, saying: “Peter Kyle’s call for AI reform is a welcome step towards making AI regulation more responsive to business needs. Too often, innovation is slowed not by lack of ambition, but by unclear governance and fragmented oversight. Creating space for innovation through AI-specific regulatory sandboxes and improving access to technical infrastructure would be a meaningful shift…”

Balancing growth with oversight

This latest pledge is tied to record levels of private AI investment in the UK, with £2.9 billion channelled into the sector last year.

It comes amid ongoing debates over the government's AI policy direction, including recent changes to the AI Safety Institute.

Amid AI safety concerns, the Labour government has been exploring various ways to boost UK AI adoption, including discussions of a national ChatGPT subscription deal.

Senior vice president international at Absolute Security, Andy Ward, urged the government to tread with caution. "AI offers huge promise to improve detection, speed up response times, and strengthen defences, but without robust strategies for cyber resilience and real-time visibility, organisations risk sleepwalking into deeper vulnerabilities," he noted.