The Government has not made a formal assessment of the impact of artificial intelligence on the capacity of corporate in-house legal teams to deliver legal services. However, we recognise the potential for AI-enabled tools to improve access to legal information and support, including by helping individuals better understand legal processes and prepare documents.

The Ministry of Justice supports responsible innovation through LawtechUK and in February we announced a further £4.5 million funding for the next 3 years. More recently, the Government also announced the Advisory AI Growth Lab for legal services. These initiatives are designed to help legal technology develop in a way that supports affordable, accessible and high-quality services.

The Government also continues to back the safe and responsible adoption of AI across the legal services sector by working closely with regulators to support innovation while upholding robust professional and consumer protections and encouraging them to update their guidance accordingly where necessary.

HM Government (HMG) has undertaken an evidence-led programme to assess the workforce skills requirements arising from the adoption of artificial intelligence (AI) across UK businesses. This assessment is grounded in three complementary strands of work led by Skills England.

First, Skills England’s AI Skills for the UK workforce report (October 2025) provides a detailed assessment of AI skills demand across ten priority growth sectors, identifying the need for a broad spectrum of capabilities—from advanced technical expertise (such as machine learning and data engineering) to applied skills and foundational AI literacy for workers across occupations. It also highlights key barriers to meeting these needs, including limited training provision and uneven employer capability, particularly among SMEs, and introduces practical frameworks and tools to support workforce planning.

Secondly, Skills England has evaluated what constitutes effective AI upskilling in practice. The Skills for AI: What Works for AI Upskilling in the UK programme (June 2026) draws on extensive employer engagement, surveys, and case studies to demonstrate that AI is increasingly embedded in everyday work, but that organisations require support to build workforce capability. It identifies the importance of role-specific training, organisational readiness, leadership capability and responsible use, and provides a structured framework (PRIMES) to guide employers in implementing effective and inclusive AI training programmes. These findings are reinforced by wider government-commissioned research, including the AI Skills for Life and Work report (2026), which highlights that many employers report low levels of AI capability within their workforce, and that demand for AI-related skills is expected to grow significantly, with most roles requiring some level of interaction with AI.

Thirdly, these insights are integrated within HMG’s wider labour market intelligence. Skills England annual skills report and Sectoral Skills Needs Assessments 2026 provide a system-wide view of current and future skills demand across priority sectors, combining labour market projections with employer evidence. These assessments explicitly consider the impact of technological change, including AI, on occupational demand, identify skills shortages and gaps, and highlight the need for a more flexible, employer-led and evidence-driven skills system to respond to emerging requirements.

The Government has undertaken significant research efforts to better understand the risks from AI. As AI systems become more capable, autonomous, and widely deployed, ensuring they remain under human control becomes critical. The Government’s world-leading AI Security Institute (AISI) is examining how to ensure advanced AI systems follow human goals, ensuring they remain under human oversight and control as their capabilities continue to advance.

Independent research published by the Centre for Long-Term Resilience – supported by an AISI grant – has highlighted public examples of AI systems behaving in unintended ways, circumventing instructions, or acting in ways developers did not intend.

In recently published research conducted with Grey Swan, AISI carried out the largest open AI Agent Red Teaming study ever, identifying 62,000 vulnerabilities across finance, healthcare, customer support, and more. We continue to work hand in hand with developers and with organisations like the National Cyber Security Centre to make AI protections stronger.

AI assurance is crucial to ensure that AI systems are developed and deployed responsibly and in compliance with the law.

At the AI Adoption Summit, Government announced the launch of the AI Assurance Stakeholder Consortium, led by The Chartered Institute for IT, to support the professionalisation of the AI assurance sector and to deliver AI that people can trust.

The Consortium builds on work the Government is already doing to support the sector. In September 2025, the Government published the Roadmap to Trusted Third-Party AI Assurance, setting out our ambitions for the UK’s AI assurance market and the immediate actions we’re taking to support this emerging sector. This includes our new Centre for AI Measurement, led by the National Physical Laboratory. The Centre will provide targeted support to industry through the AI Assurance Innovation Fund and create a collaborative environment for conducting research on new and innovative AI assurance techniques.

UK business AI adoption has more than doubled since December 2023, reaching26% in March 2026. The latest available data form the previous year indicates that the UK business adoption rate was higher than the EU-27 average and comparable with Germany and the Netherlands.

In January, DSIT published an initial assessment on AI’s impacts on the UK labour market. This includes evidence of productivity gains from AI use at the task and worker level, drawn from experimental studies. Realising these gains across the wider economy is likely to involve a period of organisational adjustment, in which firms experiment with AI tools, integrate them into their workflows, and train staff. This may temporarily slow measured productivity before the benefits are fully realised.

In June 2026, the Government launched the AI Economics Institute (AIEI) – the first government-backed institute of its kind in the world – to build the data infrastructure, analytical capability and external relationships needed to rigorously assess AI’s economic impacts. A joint research organisation of HM Treasury and DSIT, the AIEI will examine how AI is affecting UK productivity and growth, improving the quality and timeliness of the evidence and analysis on which policy decisions rest.

This Government is committed to making the UK the leading adopter of AI in the G7, so that businesses and workers can realise its full benefits. OECD analysis indicates that widespread AI adoption could raise UK productivity by 0.4–1.3 percentage points annually, potentially adding £55–140 billion in GVA by 2030.

To drive adoption across our key sectors, we have appointed AI Sector Champions to work with industry to identify barriers and unlock investment, and to develop sector-led adoption plans. At the recent AI Adoption Summit, our Champions published five of these plans, showcasing what effective AI adoption looks like in practice so that others can follow. The Government has committed over £200 million to boosting AI adoption including by expanding InnovateUK’s BridgeAI programme across the Industrial Strategy sectors and taking forward lead recommendations from AI Sector Champions’ Plans. This is complemented by our AI Skills Boost programme, which will equip 10 million workers with essential AI skills by 2030.

The Government and the Financial Reporting Council (FRC) have over the past two years published guidance and tools to help companies manage responsibly the risks and opportunities of using artificial intelligence (AI) in corporate decision-making. These include a Code of Practice specifically covering the cyber security of AI, and a Cyber Governance Code of Practice addressing the broader issue of integrating cyber risk management into wider enterprise risk management. The FRC has also recently published guidance for audit firms on the use of AI in audit. The Government and regulators continue to assess the uses of AI in business and more generally.

Since this government came to power, nearly £100 billion worth of investment has been pledged to be spent in the UK's AI sector.

Throughout this time, many of our world-leading AI start-ups have raised significant investment. For example, Wayve have raised $1.2bn to deploy its autonomous driving software, including in London; and ElevenLabs raised $500m at an $11bn valuation, to expand its research and product development and continue its international expansion. David Silver, one of Britain’s top AI researchers, has raised more than $1bn in seed funding for his new London-based AI startup, Ineffable Intelligence, including investments from the British Business Bank and the Sovereign AI Fund.

As highlighted in His Majesty’s Government’s Technology Adoption Review, Historical trends indicate that technological innovations have significantly contributed to GDP growth, with emerging technologies, like AI, expected to drive substantial productivity gains in the coming years.

The Government is committed to realising these benefits. This includes working with industry to upskill 10 million workers with essential AI skills for work through our AI Skills Boost programme, and developing sector specific approaches to galvanise AI adoption in our growth-driving industrial strategy sectors by working with recently appointed AI sector champions. We are also ensuring AI adoption benefits local businesses, workers and communities through our recent announcement of Barnsley as the UK’s first Tech Town, and by delivering local skills and benefits packages in AI Growth Zones.

This government is committed to harnessing the power of compute to enable innovations that will deliver growth and opportunity and for people across the UK.

The AI Research Resource (AIRR) is now live and is free to use for the UK’s scientists, public sector organisations, and start-ups and SMEs. It is made up of two supercomputers: Dawn at Cambridge, and Isambard-AI in Bristol – one of the world’s top 10 public supercomputers and the 4th greenest in the world.

DSIT are investing up to £2 billion in public compute until 2030. This includes expanding our AI Research Resource twentyfold by 2030. As part of this, HMG recently announced a £36 million investment to expand Cambridge’s DAWN supercomputer sixfold by spring 2026. These investments will provide UK researchers and start‑ups free access to world‑class AI compute, enabling breakthroughs in areas such as personalised medicine, climate modelling and more efficient public services.

AI is a central focus of the Government’s economic and innovation priorities.

Due to data lags, 2025 AI Sector size is not currently available but will be released later this year in the 2025 AI Sector Study. Our most recent analysis highlights that between 2022 and 2024, the number of AI firms operating in the UK increased from 3,170 to 5,863, an 85% rise. This reflects both the strength of the UK’s AI investment environment, which is the highest in Europe, and ongoing work across Government to support safe and effective AI adoption.

Key policies continuing to drive this growth include the launch of the AI Opportunities Action Plan — with 38 of its 50 recommendations already in progress. This includes the development of five AI Growth Zones across England, Scotland and Wales, and initiatives such as the AI Skills Hub and support for employers to upskill 10 million workers so they can thrive in an AI‑enabled economy, as well as the Barnsley Tech Town programme.

Delivering on our plan to Make Work Pay is a core part of the mission to grow the economy, raise living standards and create opportunities for all. We are committed to working in partnership with businesses to realise that ambition, enabling businesses and workers to thrive.

My department has published a set of Impact Assessments that provide a comprehensive analysis on the potential impact of the Employment Rights Bill. This analysis is available at: https://www.gov.uk/guidance/employment-rights-bill-impact-assessments

The OBR judged that none of the tax measures in this Budget will have a material impact to justify adjusting their employment forecast and have not yet made a judgement on the Employment Rights Bill given ongoing policy development.

HM Treasury does not prepare forecasts for the UK economy. These forecasts, including assessments of the impact of policy decisions, are the responsibility of the independent Office for Budget Responsibility (OBR). The OBR publishes its forecast in the Economic and Fiscal Outlook (EFO). The OBR’s latest EFO is available here: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/

Our economic strategy to deliver growth is investment across the public and private sectors, and in every part of the country. Our modern Industrial Strategy is making a difference. We have taken bold action by tearing up red tape with plans to reduce business regulatory costs, delivering the biggest planning reforms in a generation and reducing electricity bills for over 7000 businesses.

The Cyber Security Breaches Survey shows the cyber threat is significant and it is critical businesses leaders take urgent steps to improve their cyber security. That is why the Government wrote to chief executives and chairs of leading UK companies recently asking them to make action on cyber security a top priority.

The Government has developed tools for businesses to protect themselves, including:

• The highly effective Cyber Essentials Scheme, shown to reduce the likelihood of a cyber insurance claim by 92%,
• The Cyber Governance Code of Practice, to help boards and directors manage cyber risks, and
• NCSC free tools and support, including training for boards and staff, the Early Warning system and the Cyber Action Toolkit for small businesses.

The Government is also taking action to protect the economy. The Cyber Security and Resilience Bill, introduced earlier this week, will boost our cyber defences and better protect our essential public services. Next year, we will publish a new National Cyber Action Plan setting out how Government will respond to the cyber threat and work with industry to raise resilience across the economy.

The UK and the US have reached a deal which was announced on 8th May 2025. We continue to negotiate a wider economic deal with the United States that will further support our industries and safeguard jobs.

We have announced an additional £500 million in lending capacity under the Growth Guarantee Scheme (GGS), delivered by the British Business Bank and we are also expanding UKEF’s business support package by £20 billion, £10 billion of which will be used specifically for businesses impacted by the current US tariffs.

Businesses concerned about the impact of US tariffs can also find clear guidance on business.gov.uk.

The Government is committed to building a firm economic foundation, working closely with businesses and workers to kickstart and rebuild our economy.

The SME Strategy will be published later this summer, including the Business Growth Service that will make it easier for businesses to get the advice and support they need to grow and thrive. The Government-backed British Business Bank aims to improve access to finance to help businesses invest and grow.

Employment is central to the recently announced Industrial Strategy, supporting growth sectors to create high-quality, well-paid jobs across the country.

The IMF estimates the adoption of AI across the economy could boost productivity by up to 1.5 percentage points a year, if we embrace it fully and safely.

The Technology Adoption review, an evidence review used to inform our Industrial Strategy, also found that AI was consistently raised by stakeholders across all sectors as the technology that could drive efficiency and growth, and the review identified the barriers limiting uptake of AI.

That is why the Government has committed to fully funding the AI Opportunities Action Plan, including adoption and skills packages that raise industry awareness of AI and ensure businesses across the growth-driving sectors address AI skills shortages.

We are working to harness the benefits that AI can bring in terms of productivity gains, rising living standards, and improved worker wellbeing; while mitigating the risks. Government is planning for a range of plausible outcomes and closely monitoring the data that will help us track and prepare for these. We will continue to work closely with other government departments through the AI Opportunities Action Plan to ensure we shape AI to deliver economic prosperity for the UK.

The government’s Cyber Security Breaches Survey 2025 shows that many businesses do not have sufficient measures in place to protect against cyber threats. This is why the government is taking a range of action to drive up cyber resilience across the UK. This includes the Cyber Security and Resilience Bill which will improve the UK’s cyber defences and better secure our essential services and more of the digital infrastructure the public and businesses rely upon, and a new Cyber Governance Code of Practice which supports boards and directors to effectively govern digital risks and help protect their businesses and organisations from cyber attacks.

The latest data from the Office for National Statistics (ONS) shows that in first quarter of 2025, average weekly pay (including bonuses) across the whole economy grew by 5.5% from the first quarter of 2024.