The Rt Hon Peter Kyle MP, Secretary of State for Science, Innovation and Technology, delivered a keynote address at City Week’s AI & Digital Innovation Summit, outlining the UK government’s AI Opportunities Action Plan.

His speech offered a commitment to harnessing AI for economic growth and public service transformation, while addressing key challenges such as skills gaps and regulatory complexity.

UK government’s proactive AI stance

Kicking off his address, Kyle highlighted the government’s proactive stance on AI, a sentiment echoed by the Prime Minister’s earlier statement: “There’s two ways of looking at AI: be scared of it or take advantage of it. We’re going to lean into taking advantage.” This ethos, the Secretary of State explained, is driving the UK’s strategy.

He shared a striking anecdote from an internal trial of a new AI Copilot for civil servants, revealing “the results were so spectacular… it was saving civil servants 13 days of work and productivity gains per year – 26 minutes every single day.” This successful pilot, he confirmed, is now being rolled out across government departments, including his own, marking “the first baby steps that we’re taking towards transforming government from top to bottom.”

Kyle didn’t shy away from the current inefficiencies within government, citing the State of the Digital State Review he commissioned last year. The review uncovered that “52% of its transactions between citizen and state is carried out currently in an analogue way.” He painted a vivid picture of the scale of this challenge: “HMRC answering the phone a hundred thousand times a day, DVLA… opening forty-five thousand envelopes every day, seven days a week.”

He asserted that such practices simply aren’t “the way that we should be doing government in 2025, that is sure as hell will not be the way we’re doing government by the time 2030 and 2035 comes around.”

Drawing parallels with Singapore’s economic reinvention, a country he recently visited to celebrate 60 years of partnership, Kyle emphasised the need for the UK to remain “squarely focused on the future.” He lauded the financial services sector as a prime example of reinvention, noting how “centuries-old Banks have had to rip up the playbook to compete with nimble digital first firms.”

Reflecting on his own early career in finance in 1989, he highlighted the dramatic evolution from “Arcane mainframe computers” to today’s sophisticated systems, acknowledging the industry’s pioneering spirit in “keeping the sector as an engine of economic growth.”

Speed and adoption

The Secretary of State stressed the unique nature of the current AI revolution: “The simple difference between this change and the changes that have come before… is sheer speed.” Unlike past transformations where industries could “afford to dip the toe in,” this time, he asserted, “we simply need to jump up.”

Six months ago, the government launched its AI Opportunities Action Plan to seize the “massive potential for economic growth.” As part of this, 230 areas across the country have applied to become “AI growth zones,” demonstrating a nationwide “hunger for the AI Revolution.” He further highlighted the Chancellor’s commitment of £2 billion pounds to deliver this plan.

A crucial aspect of the plan, Kyle emphasised, is adoption. He noted that “around three quarters of firms surveyed by the Bank of England and the FCA already use AI,” making the financial services sector a leader in AI adoption across the UK economy. This, he suggested, is a testament to the UK’s strong reputation in fintech, exemplified by “Revolut, a British company” being the “most valuable private tech company in Europe.”

Talent and regulation

Addressing the two primary barriers to AI adoption – a lack of skills and complex regulation – Kyle outlined the government’s approach. On skills, the government is partnering with 11 tech companies to train “7.5 million workers in the UK with essential AI skills by the end of this decade,” alongside initiatives with CyberFirst to deliver tech and AI skills to “a million students.”

To tackle regulatory hurdles, the Secretary of State announced a significant consolidation effort. He highlighted the work of the “Regulatory Innovation Office (RIO),” a dedicated unit launched nine months ago to “cut red tape and to get game-changing Tech into the public’s hand as quickly and safely.” He cited the success of a British startup using drones for blood sample delivery for the NHS, dramatically cutting delivery times.

Digital Regulation Cooperation Forum

Kyle revealed a new development: “Today I can announce that RIO is now joining forces with digital regulators to consolidate a labyrinth of regulation, and make it easier for innovators to bring AI products to Market quicker and easier.” This collaboration with the Digital Regulation Cooperation Forum aims to create a “One-stop shop visual library” to provide clear guidance, eliminating the need for firms to “go from regulator to regulator picking your way through different sets of rules.”

Concluding his address, Kyle reiterated the government’s commitment to clearing the way for businesses to “harness AI to stay ahead of this game and to make people’s lives fundamentally better.” He expressed confidence that with the right backing on adoption, access to skills, and regulatory clarity, the financial services sector will not just be “a part of a change” but will “also be a change that you are able to lead.”