Andy Burnham becomes UK Prime Minister on Monday, July 20. He is arriving with genuine political momentum, having won the Labour leadership with backing from more than 85 percent of his parliamentary party. His public priorities are the cost of living, housing, energy, and water. Technology is not on that list, and that is now visible in the decisions he is making.
The plan under discussion is to close DSIT, the Department for Science, Innovation and Technology, and hand its responsibilities to a bigger business ministry. The body that oversees AI policy, AI in public services, tech regulation, and the UK's international science agreements would cease to exist as a standalone department. Overseeing how government itself uses AI would pass to the cabinet secretary, a permanent civil servant, rather than an elected minister accountable to parliament.
DSIT is only three years old. It was created in February 2023 specifically to give technology a dedicated seat at the cabinet table, pulling together responsibilities that had previously been split across multiple departments. In the time since, it has coordinated the UK's AI regulation approach, overseen a £500 million sovereign AI investment fund, and launched the AI Growth Lab, a programme that lets businesses test AI tools in regulated sectors like healthcare and legal services under supervised conditions. That is not a trivial body to absorb quietly into a larger department.
The backlash has been immediate. Matt Clifford, who advised both Starmer and his predecessor Rishi Sunak on AI policy, said publicly that the move would waste time and energy that is needed for the substance of the work. The Startup Coalition, which represents early-stage British tech companies, warned that merging DSIT into a business department would mean technology competing for ministerial attention alongside manufacturing and retail. That is not a small concern. Policy attention is scarce. When a minister has to choose between a steel plant closing and an AI regulation consultation, the choice is obvious.
The timing is particularly awkward. UK startups raised $17 billion in the first half of 2026, their strongest six-month period since 2022, and AI companies accounted for 74 percent of that capital. The government's own projection is that AI could add more than £550 billion to the British economy over the next decade. Major companies including Microsoft, Google, and Amazon have been expanding AI infrastructure inside the UK. Paris has been gaining ground as an alternative European destination for AI investment. The message that closing DSIT sends to investors considering London versus Paris is not a good one.
Burnham's broader instincts are about industrial policy: public ownership, regional investment, putting energy and housing under stronger government control. Those are coherent priorities. But they reflect a political economy that is primarily about physical assets and geographic communities, not the fast-moving world of software and AI. The concern is not that he is wrong about housing or energy. It is that he has not yet worked out where AI fits into his picture, and the decision to dissolve DSIT suggests he sees it as a subcategory of business policy rather than a distinct policy domain.
There is still time to change course. Some in the tech sector believe Burnham may rethink the plan in the next 48 hours before formal cabinet appointments are announced. The plans have not been signed off. But the fact that the discussion got this far, at this moment, tells you something about where AI sits in the priorities of the incoming government. For any business that operates in the UK and is paying attention to how AI policy develops, this is a transition worth watching closely.