The expansion of AI infrastructure is critical to the UK's long-term economic growth, resilience, and global competitiveness. This Government is working with industry to improve understanding of the demand for agricultural land.

National planning policy gives clear preference for development sited on brownfield, industrial, contaminated, or previously developed land. Where development of agricultural land is necessary, lower-quality land should be preferred to higher-quality land.

The Land Use Framework included a clear, long-term commitment to maintain overall food production in England while increasing resilience to climate change and safeguarding our best and most versatile agricultural land.

The Government recognises that growth in AI and data centres is increasing electricity demand and that grid connection delays are a major barrier to new capacity in the UK.

To address this, the Government is reforming the connections process to better support strategically important demand, including data centres. Working with DESNZ, Ofgem and the National Energy System Operator, reforms will reduce delays, limit speculative applications and prioritise viable projects, helping unlock capacity faster while maintaining security of supply. Through the AI Energy Council, co-chaired by the Secretaries of State for DBIST and DESNZ, DBIST is exploring resilient, sustainable and scalable.

The Secretary of State for Science, Innovation and Technology engages regularly with the Secretary of State for Energy Security and Net Zero to ensure the UK energy system supports growing digital and AI‑driven demand.

This year, the Government passed legislation that facilitates the direction of data centres into the Nationally Significant Infrastructure Projects planning process. The National Policy Statement for Data Centres, when published, will provide a clear framework for the relevant Secretary of State to grant development consent to data centres through this process.

My department has made no specific assessment. However, the National Planning Policy Framework (NPPF) sets out that planning policies and decisions should recognise and address the needs of different sectors, including data centres. In determining appropriate locations, the NPPF is also clear that the impacts of the local environment must be considered. Decision makers will need to consider both of these factors when determining whether specific locations, whether greenfield or previously developed land, are appropriate.

Between 16 December 2025 and 10 March 2026, we consulted on a new NPPF. That consultation, which can be found on gov.uk here, included proposals relating to how data centres should be planned for.

We are currently analysing the feedback received and will publish our response in due course.

HM Treasury continuously monitors developments in the economy, including the drivers of inflation and wider cost-of-living pressures. The inflationary impact of investment in AI data centres will depend on its scale, timing and interaction with wider supply conditions. While investment in AI data centres could in principle add to inflationary pressures, we have not seen evidence to date of a significant impact in the aggregate inflation data.

The Office for Budget Responsibility’s (OBR) forecast that inflation was due to return close to target in Q2 this year, before the impact of the war in Iran began to increase motor fuel prices.

The Monetary Policy Committee at the Bank of England has responsibility for controlling inflation, and the Government has full confidence that it will sustainably return inflation to the 2 per cent target. The Government supports the Bank of England through responsible fiscal policy, alongside targeted support for the cost of living. The OBR forecast that government policy will reduce CPI inflation by 0.4 percentage points in 2026/27.

DSIT is working closely with the Department for Energy Security and Net Zero, the Department for Business and Trade, Ofgem and the National Energy System Operator to ensure that we can attract sufficient investment in AI infrastructure and deliver on our ambition of being a global leader in AI. While energy prices are a critical factor in the cost and competitiveness of operating AI infrastructure in the UK, they are one of several key considerations for investors.

The Government is committed to ensuring electricity networks can meet rising electricity demand, including from data centres, by deploying new renewable and low-carbon generation, plus new network infrastructure, in line with the Clean Power 2030 Action Plan. In parallel, the Government is encouraging the data centre industry in the UK to be world-class in lowering its energy use. Through the AI Energy Council, it has been working with the Royal Academy of Engineering to understand better the metrics and technologies to facilitate long-term sustainability in the industry.

It has not proved possible to respond to this question in the time available before Prorogation. I will correspond directly with the noble Lord.

It has not proved possible to respond to this question in the time available before Prorogation. Ministers will correspond directly with the Member.

Data centres are foundational to a competitive UK economy, underpinning the digital services that drive productivity across sectors—from finance and advanced manufacturing to public services and the creative industries. By enabling AI, cloud computing and data‑intensive services, they deliver economy‑wide productivity gains nationally and regionally, as well as strengthen the UK’s attractiveness as an investment destination.

TechUK has estimated that UK data centres contribute £4.7 billion pounds in gross value added each year and support-tens of thousands of high-quality jobs across construction, operations and specialist supply chains. Operational employment is generally highly skilled and well paid, with wider employment supported through demand for electrical engineering, cooling, digital infrastructure and maintenance services. More widely, TechUK estimates that each job funded by data centre operations supports between 1.4–2.5 jobs in the wider economy.

HMG’s AI Growth Zone programme unlocks significant private investment and secures compute to drive AI growth, supporting high‑value local jobs and skills. HMG is investing up to £5 million per AI Growth Zone, in the North-East of England, Oxfordshire, North and South Wales, and Lanarkshire in Scotland, working with local areas to design tailored schemes to realise local economic benefits and boost AI adoption in local communities.

The National Planning Policy Framework (NPPF) requires local planning authorities to plan for growth sustainably, taking account of infrastructure needs and environmental impacts. It also ensures planning decisions contribute to meeting statutory environmental targets, including by preventing unacceptable pollution and protecting local environments. Planning authorities must also consider water and wastewater capacity, with the cross-government Water Delivery Taskforce helping to ensure infrastructure keeps pace with growth.

Subject to draft Regulations that are currently before Parliament being in place, environmental impacts, including energy and water impacts will be assessed as part of the overall consideration and determination of data centre projects that have been directed to proceed through the Nationally Significant Infrastructure Projects consenting process.

The Planning and Infrastructure Bill will further streamline consenting while maintaining strong environmental safeguards.

The National Planning Policy Framework sets out that planning policies should pay particular regard to facilitating development to meet the needs of a modern economy, including by identifying suitable locations for uses such as data centres.

We laid the draft Infrastructure Planning (Business or Commercial Projects) (Amendment) Regulations in Parliament on 15 October which, if approved, will enable developers of certain proposed data centres on request to ‘opt in’ to the Nationally Significant Infrastructure Projects consenting regime. To support this change, the Department for Science, Innovation and Technology will prepare a new National Policy Statement for data centres which will set out the national policy for this sector and the policy framework for decision-making for data centre developments under that regime.

We are exploring whether further measures may be appropriate to support the delivery of AI infrastructure and will engage with the sector on this.

The Government recognises the need to ensure data centre infrastructure does not compromise the resilience of public water supplies. We are taking steps to ensure that water availability is a key consideration in planning.

The National Planning Policy Framework is clear that the planning system should take full account of water scarcity. Local plans and decisions should take account of the long-term implications for water supply. The Government encourages data centre developers to contact their proposed water and wastewater supplier early in the planning process. Water companies are not obliged to approve the supply of water for non-domestic uses, such as for data centres, if doing so would require unreasonable expenditure or risk their ability to meet domestic supply obligations.

Modern data centres can also employ cooling methods that use minimal water such as free cooling or advanced closed-loop systems, which only require minimal water top-up. Additionally, data centres can use non-potable or grey water for cooling purposes.

The forthcoming National Policy Statement for data centres will set out environmental criteria – including water supply considerations – for data centre proposals that are taken forward as Nationally Significant Infrastructure Projects.

With respect to the Government’s AI Growth Zone (AIGZ) plans, proposals for data centres are required to set out:
(1) the volume of water required;
(2) the availability of that volume and the timeline of delivery; and
(3) any wider infrastructure requirements or constraints

Applications should include a confirmation of the above from the relevant water supplier. This will ensure that AIGZs are delivered where there is sufficient water capacity.

DEFRA is undertaking work to examine how the efficiency of water use in data centres can be improved, as part of the Government’s commitment to reduce the use of public water supply by 20% by 2037/38.

The government agreed to take forward all the AI infrastructure related recommendations in the AI Opportunities Action Plan.

As part of this we’re enabling the build out of AI data centres by: establishing AI Growth Zones; classifying data centres as critical national infrastructure; and supporting delivery through planning and power reforms. These initiatives have already resulted in £45 billion in private-sector investment announced since July 2024.

In addition, at the Spending Review, we committed £1 billion to expand the UK's public compute capacity through the AI Research Resource.

The Government is working with Ofgem and NESO to deliver fundamental reform to the grid connections process. Subject to Ofgem’s final decision this could release over 400GW of capacity from the connection queue, which will accelerate connections for AI data centres.

The Government have also sought expressions of interest to identify promising locations which can benefit overall grid infrastructure whilst still having quick project development times to remain attractive for infrastructure investment.

The Government is also setting up the AI Energy Council, through which senior representatives from both the energy industry and the AI industry will look at where best to locate AI data centres and proactively manage the energy requirements of AI. These efforts work in tandem with the Clean Power 2030 Action Plan.

This Government is committed to supporting data centre builds in the UK and removing barriers to sustainable development, including reviewing and improving grid connections and exploring other ways to provide capacity.

Since last July, over £40 billion has been announced in private investment in new data centres in the UK. In January, the Prime Minister launched the AI Opportunities Action Plan, which included plans to develop AI Growth Zones, dedicated hubs designed to fast-track AI infrastructure development, support planning approvals, and unlock energy access.

More widely, we are streamlining planning rules to accelerate buildout, have designated the sector as Critical National Infrastructure, and are introducing a stable regulatory environment to improve security and resilience.

The UK Government is taking several steps to ensure sufficient energy supplies for AI technologies, data centres, and electric vehicles.

Building the low carbon economy of the future will lead to significant increases in electricity demand across many sectors. These projected increases are a key part of the analysis that underpins the work happening across government on future AI energy needs. The Department is working closely with the Department for Science, Innovation and Technology in setting up the AI Energy Council that will have senior representatives from both the energy industry and the AI industry to look at where best to locate AI data centres and proactively manage the energy requirements of AI.

By unlocking new low carbon electricity generation, improving access to the electricity grid and efficient use and operation of the energy system we will achieve Clean Power by 2030 and maintain secure, resilient energy supplies that can meet electricity demand.

Locating electricity demand in areas with high levels of electricity generation can help reduce the costs of managing the electricity system and the amount of new grid infrastructure that is needed. The government is committed to including data centres as part of its strategic energy plans and this department is working closely with the Department for Science, Innovation and Technology to ensure the growth of AI and data centres in the UK is done in a way that supports our clean power mission and longer-term decarbonisation goals.

The Government is actively taking steps to remove blocks to the growth of our data centre sector. This includes changes to planning rules, designating the sector as critical national infrastructure (CNI), introducing new legislation to improve security and resilience, and securing more than £25 billion in investment for the sector.

CNI designation signals the Government’s intention to better partner with data centres to promote development that delivers maximum community benefit and mitigation of risks.

Additionally, as part of work to future-proof digital infrastructure, the Government is implementing cross-sectoral power reforms to reduce connection timelines and publishing an AI Opportunities Action Plan.

In addition to securing recent investment in data centres, including a £10 billion investment in the North East of England, a £3.75 billion investment in Hertfordshire and £8 billion investment across the UK from Amazon Web Services, this government is ambitious in its approach to securing the data centre capacity needed to support the digital economy and its AI strategy. DSIT Secretary of State has asked entrepreneur Matt Clifford to create an AI Opportunities Action Plan, which will include recommendations for how to encourage further investment in AI infrastructure.

The government is already taking action to address obstacles to this investment. In the recent consultation on the National Planning Policy Framework, the government has proposed changes to planning policy that would facilitate growth in UK data centre capacity. This is supplemented by work to reform the National Grid connections process, making it easier for data centres to secure a timely grid connection. We continue to closely engage with relevant investors and operators and will take further action where necessary to enable the data centre investment that will underlie our AI strategy and wider economic growth.