Tony Blair and William Hague call for a remade strategic state to stoke UK innovation

Former prime minister Tony Blair and erstwhile Conservative Party leader William Hague have joined forces to argue for a remaking of the British state to capitalise on artificial intelligence (AI), biotech and climate tech.

The Tony Blair Institute for Global Change think tank report that bears their names, A new national purpose: innovation can power the future of Britain, contends that if the UK state is not remade to be a “strategic state”, the country will decline as the US and China continue to rise.

The report laments that “any ‘Brexit dividend’ is yet to be fulfilled. Ministers have made a start on considering where UK regulation can be made more nimble and efficient in areas such as gene editing and clinical trials, but regulatory restrictions on innovation remain relatively high”.

Blair is well known to have not possessed a mobile phone until he left office. Since then, he has developed a keen interest in technology as a panacea that has bemused even his former director of communications and strategy, Alastair Campbell.

Hague is famous for his modish baseball cap with his own name on it, and for his barnstorming “evils of socialism” Churchillian speech at the 1977 Tory Party conference, aged 16. Since retiring from public life in 2001, he has written political biographies.

But the social democratic architect of New Labour and the young fogeyish Tory Hague have found common ground in their newly minted report. The report envisages a smaller but more effective state apparatus, with science and technology at the apex of it.

Its fundamental argument is that the UK can only reverse its evident decline by reinventing its state. The report depicts the centrality of the Treasury to British government as a blocker to innovation. It criticises the “culture and mindset of the Treasury whose excessive power creates a system of ‘policy-making by accountant’. This stands at odds with what is required for science and technology investment. Notably, Institute for Government data suggest that the Treasury does not have any dedicated science and technology staff, despite the civil service being a large employer of scientists and engineers”.

The report advocates the creation of a new central unit, displacing the Treasury, and making a shift from “value for money” to “investment decisions instead being guided by the judgement of expert science and technology figures”.

It welcomes the recent setting up of the Department for Science, Innovation and Technology (DSIT), but notes it will necessarily fail to embed a “science and innovation agenda across the whole of government” on its own. Instead, it recommends “creating a central coordinating brain that spans Number 10 and the Cabinet Office, with a high density of expert talent closely connected to the key organs of power in both. This should be a central strategic and delivery unit, along the lines of the White House Office of Science and Technology Policy”.

It says the government should also create a new kind of unelected technocratic minister, “a new kind of ministerial position to attract expert leaders to run programmes in an executive fashion, similar to how the Vaccine Taskforce was run. These executive ministers would be accountable to Parliament in the normal fashion, but would bypass the usual House of Lords appointment process”.

The technology infrastructure Blair and Hague advocate includes a “health infrastructure that brings together interoperable data platforms” and a digital ID for citizens.

They want to see “new models of organising science and technology research”, including greatly expanding the Advanced Research and Invention Agency (ARIA), and an “edtech-training fund to improve teachers’ confidence”.

And they advocate a “coalition between the UK, EU and US to find areas of common ground on global technology standards, enable associate membership of EU research programmes including Horizon, Copernicus and Euratom”.

The report makes reference to a litany of great British inventions, such as antibiotics, the radio telescope at Jodrell Bank, and the jet engine. Implicit is the idea that the peculiar circumstances that led to Britain’s boasting the first industrial revolution, based on coal, can be replicated to fashion a new niche for the UK in the world economy in the 2020s and beyond.

The report strikes a note of realism with its glum recognition that California has an economy bigger than the UK’s with only 60% of the population. But it does invoke the UK’s “strong reputation in AI”, as evidenced by Google’s DeepMind, as well as Bristol chip design company GraphCore.

The UK lags in supercomputing, the report states, behind Italy and Finland. It approvingly notes then-chancellor Rishi Sunak’s commissioning of a review of the UK’s needs in this area, in 2022.

Life sciences is another area of British weakness spotted by the report. There has been a “marked decline across all phases of UK clinical research” in recent years, it notes. And it laments what it describes as the 2022 Autumn Statement’s stifling of “smaller life sciences innovators, with a cut to the small- and medium-sized enterprise (SME) R&D tax-relief credits scheme that will reduce its value by 50%”.

Climate technology is showing some signs of promise for the UK, the report states. Investment in this area was roughly £7.5bn in 2022, up from £4bn the year before. And there are said to be approximately 5,000 startup companies in climate tech, compared with more than 14,000 in the US.

Moreover, "[nuclear] fusion is one of the areas in which we still project a sense of ambition. It is also one that allows us to strengthen transatlantic ties. For example, in 2022, the UK Atomic Energy Authority signed an agreement with US company Commonwealth Fusion Systems to advance commercial fusion energy”.

One big recommendation of the report is likely to open old wounds from the time when Blair, as prime minister, wanted to introduce identity cards. This report advocates a “single digital ID system for all residents, providing a digital wallet to access it, while ensuring that digital and physical copies of ID have the same legal status”.

It also stresses the centrality of a digital ID system: “Far from being a nice-to-have or a question of marginal improvements in online public services, a properly functioning digital ID system is the cornerstone of a digital-era public sector.”

Its fundamental assertion is: “The debate over digital IDs has raged in the UK for decades. In a world in which everything from vaccine status to aeroplane tickets and banking details are available on our personal devices, it is illogical that the same is not true of our individual public records.”