Labor will ditch green belt data center councils to boost AI industry

Labor will push aside local councils to build data centers on the green belt, while Sir Keir Starmer's opposition wants to strengthen the UK's artificial intelligence sector.

Peter Kyle, shadow science, innovation and technology secretary, is considering designating data centers as nationally important infrastructure projects. The move would allow developers to bypass opposition from local residents.

Britain is facing warnings of a shortage of data centers to meet rising demand for cloud computing and AI. The easing of planning restrictions is expected to lead to more applications for data centers in the green belt, particularly around the West London data corridor, the world's largest data hub outside the US.

Industry experts argue that brownfield sites in green belts are some of the few viable locations for large modern data centers needed to support urban populations. By classifying these projects as nationally important, planning decisions will be made by ministers rather than local councils.

Last year, plans for Britain's largest “hyperscale” data center, with a proposed investment of £2.5 billion, were blocked over green belt protections, partly because it would spoil the view from bridges over the M25. The developer criticized the decision as 'green belt theology', and others emphasized the need for planning reforms.

Mr. Kyle recently met with major data center investors on the US West Coast, including Microsoft, Amazon and Oracle. The difficulties in obtaining building permits in Britain have been a major concern, especially by Microsoft, which is investing heavily in AI infrastructure.

Microsoft and Google have both announced new UK data center projects in the past year, but the cumbersome planning process remains a major frustration for the industry. Once built, large data centers typically provide hundreds of construction jobs and a smaller number of permanent jobs. They are crucial for powerful AI services, which Labor wants to deploy to cut NHS waiting times and improve public services if elected.

Labor is increasingly focusing on technological opportunities, despite spending constraints. Darren Jones, the shadow chief secretary at the Treasury, is working with Mr Kyle and Pat McFadden, the party's national campaign coordinator, to identify areas for AI deployment across all government departments. This effort is part of a broader strategy to boost productivity, especially in healthcare, where spending is expected to rise due to an aging population.

Pilot projects are already underway in four hospitals in Wales, using AI to accurately predict patient discharge times. “This time there really is no money left, so they have to approach government spending in a different way,” said one source.

Mr Kyle is expected to meet tech companies at Imperial College London on Monday to drum up support ahead of London Tech Week. The government had published a consultation in December identifying data centers as critical national infrastructure, but has not yet responded to the evidence gathered.

Industry lobby group TechUK has called for a review of planning laws to support the construction of data centres, pointing out that current regulations do not specifically cover data centres, which like warehouses are classified as storage facilities.

Nationally Important Infrastructure Projects (NSIPs), such as airports and power stations, are managed by the Planning Inspectorate, bypassing local authorities. Labour's shadow justice secretary, Shabana Mahmood, recently stated that prisons would also be designated as nationally important to support their construction.

Even if data centers are not classified as critical, Mr Kyle has assured the technology industry that Labor will reform planning laws to facilitate the development of more facilities.

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