Liz Kendall departs as Technology Secretary: SME impact

Liz Kendall has left government as Andy Burnham takes office, ending a tenure as technology secretary that produced Sovereign AI, a £1.1 billion chip plan and the ban on under-16s using social media, and leaving founders to wonder who now champions tech in cabinet, with the future of her own department in open doubt.

In a statement released on Monday, the Leicester West MP said serving in a Labour government had been “the privilege of my life”, thanked Sir Keir Starmer for his leadership and pledged loyalty to his successor. “I stand ready to support him in any way I can,” she said of the new prime minister.

Her departure will register well beyond Westminster. For the thousands of firms that draw on grants, compute and skills programmes run through the Department for Science, Innovation and Technology, Kendall was the minister who put sovereign capability at the centre of UK tech policy, and she leaves just as Burnham weighs breaking up DSIT altogether, a proposal that has already provoked a revolt from industry leaders.

Kendall used her statement to defend that agenda in unambiguous terms. “AI is the most powerful technology of our lifetimes and we need greater leverage and sovereign control to make AI work for Britain and the British people,” she said, pointing to Sovereign AI, which she described as “a unique initiative that matches the speed of venture with the power of the state”, and the £1.1 billion AI Hardware Plan unveiled at London Tech Week, which reserved £150 million to buy chips from British startups this summer.

Echoing her RUSI speech, she added: “the choice facing our country isn’t whether we have AI or not, but whether we shape it to our advantage or are left at its mercy and whim.”

Whether those commitments survive the transition intact is now the live question for chip designers, AI firms and any SME banking on the funding streams she opened, from the record £55 billion R&D settlement to the Women in Tech taskforce.

The other half of her legacy lands on a different set of desks. Kendall announced the ban on social media firms serving under-16s last month, a measure platforms, advertisers and agencies are still digesting. “I believe this will be one of the lasting achievements of this Labour Government, resetting how children interact with technology and creating a healthier and more fulfilling online world for this generation and generations to come,” she said.

At the Department for Work and Pensions she launched the Youth Guarantee, the promise that every young person should be earning or learning, now carried forward by Pat McFadden, and co-chaired the Child Poverty Taskforce that scrapped the two-child benefit limit.

Her parting message was aimed squarely at the businesses she worked with. “Working with the UK’s world leading scientists, innovators and entrepreneurs gives me great hope for our country’s future,” she said. “If we are to build a modern Britain for a modern age we must do everything we can to support and nurture our world-leading tech sector.”

That argument carries weight. The latest ONS figures show scientific and technical activities were the biggest single contributor to growth in May, driven by a 5.1 per cent jump in scientific research and development.

Kendall wished her successor well in “the most exciting and transformative brief in government”. As things stand, nobody knows who that is, or whether the brief will exist in its current form at all. For Britain’s tech firms, that is precisely the problem.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk