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In a new interview with Vixio, Lord Holmes of Richmond, a leading voice on technology and financial services in the UK parliament, urged the new Labour administration to introduce AI legislation to ensure legal certainty.
Lord Chris Holmes, a crossbencher in the House of Lords, the upper chamber of the UK’s parliament, has emphasised the urgent need for legislation to prevent uncertainty and instability that could hamper innovation and investment in AI.
Holmes said the previous government was worried about regulating too early, which he believes was a mistake, noting that a lack of clear guidelines can stifle progress.
"Properly sized regulations are good for innovation," Holmes told Vixio, urging the government to act "proportionally and effectively" to maintain the country's leadership in this sector.
He expressed disappointment over the absence of an AI bill in recent legislative announcements, despite prior mentions by Prime Minister Keir Starmer and in the King's Speech.
Holmes believes that focusing solely on large players like developers of large language models is insufficient.
Instead, he wants to see a "horizontal focus" in AI legislation, stressing the importance of addressing both opportunities and challenges while implementing competent regulatory oversight and consumer protection mechanisms.
“There is currently a significant gap in the legislative programme,” he said.
"AI is already impacting people's lives, and there are numerous issues that need to be addressed".
Leading in fintech
On the topic of fintech, Holmes stressed the UK's potential to remain a global leader, citing the nation's top universities and its favourable legal system.
"The UK is certainly able to remain a leader in the fintech space. We have demonstrated our understanding of what is required,” he said.
Previously, Holmes has been credited as a leader in payments and banking due to his action on issues such as financial inclusion, having previously pushed for an access to digital payments review.
Holmes also successfully proposed an amendment to the Financial Services Act 2021 that would permit cashback without purchase. The government accepted the amendment and the change came into force when the law was passed.
He called on the government to prioritise fintech initiatives, such as the CMA9 order and the regulatory sandbox, to attract talent and ensure the sector's growth.
"This is a key part of the levelling-up agenda," he noted, emphasising the importance of the fintech industry to the nation's economic future.
Holmes also pointed to the significance of open banking as a UK success story and stressed the need for smart data provisions, which were initially part of the Data Protection and Digital Information (DPDI) bill but were lost in the legislative shuffle around the general election and the installing of the new government.
He expressed optimism about the inclusion of these provisions in the forthcoming Digital Information and Smart Data Bill, urging its swift passage to support a smart data economy and the broader open finance opportunity.
