Chancellor's Speech at Labour Party Conference: What does it mean for tech?

Chancellor John Healey has delivered his speech at Labour Party Conference 2026, setting out further details of the government’s mission to ‘bring back hope’. Delivered just one month ahead of his first Autumn Budget, the Chancellor emphasised the difficult economic conditions and need to adhere strictly to the government’s fiscal rules, implying a difficult Budget for businesses.

Understandably, the Chancellor was reticent to say too much, and details on tech and reindustrialisation were both limited, however below we unpack the key announcements related to tech and the wider reindustrialisation agenda and what we are able to infer.

What does it mean for tech?

Healey made multiple references to technology throughout his speech. Notably, the Chancellor declared that AI is “the greatest innovation of our time… a general purpose technology that will simply transform our society at every level” and said that “every business, every community, every hospital, every school, everywhere can benefit from adopting AI. By doing so, he made AI the driving force of the Government’s new age of industrialisation.

This is right - the UK’s AI challenge is not invention but diffusion. The UK builds world-class AI, but too few firms, particularly SMEs, are deploying it. Describing AI as a general purpose technology is describing an adoption agenda, and it is on that front that the economic benefits of AI will be gained or lost.

Finally, Healey also praised UK start-ups and scale-ups, noting “a groundswell of new world-leading British tech companies”. Beyond the tech sector, the Chancellor also explicitly highlighted the importance of business to driving UK growth, noting that “it is businesses that will create this country’s jobs and wealth and growth.”

AI and the workforce

The Chancellor also spoke about AI’s ability to reshape the labour market. Key to his points was a mission to not let “AI leave Britain’s workers behind.” techUK is supportive of bolstering the UK’s workforce to responsibly adopt AI technologies. That’s why we’re excited to see the Chancellor announce new package of skills and training support that includes £100 million in funding for new local apprenticeships led by devolved mayors and the reinstatement of the Union Learning Fund, an education programme run by trade unions to support the upskilling of disadvantaged workers. techUK agrees with this principle, and is proud to have joined the AI Skills Boost and Early Careers Job Alliance, two related initiatives focused on helping the UK labour market in the age of AI.

A note of caution

We should be conscious that this Government’s position on AI is a tale of two halves. While the Chancellor is focused on everyday AI adoption, the Government is not forgetting frontier risks that might be emerging or starting to affect vulnerable cybersecurity in firms and Governments. The Chancellor acknowledged risks “to national security, to personal data and to our children’s wellbeing”. Foreign Secretary Ed Miliband went further. He committed to using the UK’s G20 presidency next year to lead international efforts to manage AI, and said “no tech titan should stand in our way”.

We see these two tales as complementary: firms deploy what they can trust - but firms also need a reason to invest and confidence that it will pay back. As we recently set out in our Confident Sovereignty paper, techUK believes that the UK tech sector has a unique opportunity to leverage the best technology while also building strategic capability and national resilience.

Industry’s ‘new age’

The Chancellor’s speech included further details on the government’s reindustrialisation agenda, which he said would help to drive “new confidence in Britain” with a renewed focus on advanced manufacturing, including £6 billion in new contracts for British shipyards.

As the Chancellor himself noted, however, this does not mean a return to the industrialisation of previous decades – or as Healey put it, “our coal mines are not coming back”.

techUK agrees. Reindustrialisation should not be a restoration project, but rather it should focus on rebuilding the UK’s productive capacity: the ability of places across the country to make, power, move, maintain, design and export things at scale, and to keep doing so. That makes it, first and foremost, a technology deployment agenda.

Announcements

In his speech, the Chancellor made several announcements related to reindustrialisation, including a new £300 million investment from Rolls-Royce in manufacturing and engineering facilities across Derby, Bristol, Glasgow, Rotherham and Warwickshire. He pointed to Rotherham’s Advanced Manufacturing Park, built on top of former coal mine sites, as an exemplar blueprint for how reindustrialisation could be done. The priority now should be ensuring the UK’s regional capabilities are threaded together into a stronger and more coherent whole.

This came alongside announcements that capital from the National Wealth Fund would be strategically deployed to crowd in private sector funds and create 130,000 jobs by 2030 in AI, technology, defence and clean energy. Deployed well, this is the kind of patient capital industry needs to invest in plant and machinery.

Finally, it is important to recognise that the future of the 2025 Modern Industrial Strategy also appears to be relatively settled, with Healey referring to multiple IS-8 sectors including life sciences, defence tech, AI, financial services and the creative industries, among others. techUK sees reindustrialisation as a timely frame to build upon the Industrial Strategy rather than replace it.

Tech-enabled reindustrialisation

Technology is vital to the reindustrialisation agenda. Every component of a modern industrial base, from design to simulation to process control, quality assurance, supply chain visibility, predictive maintenance and energy management, is now a digital system. Modern industry also depends on connectivity, digital infrastructure such as data centres, and effective cybersecurity. Without the technology sector, reindustrialisation would be a building programme, not an industrial one.

In techUK’s view, making this work depends on three things:

The UK will not out-scale competitors on volume manufacturing, and should not try. Its strength is high-value, low-volume, complex production in areas such as aerospace, defence, pharmaceuticals, motorsport, composites, compound semiconductors and specialist instrumentation. This is exactly where simulation, AI-driven design, digital twins and automation deliver the greatest advantage, meaning the UK’s manufacturing strengths sit in the same place as its strengths in software and AI. The ambition should be for the UK to become a net exporter of industrial technology as well as industrial goods.

Alongside a frontier of highly capable firms sits a long tail of SME manufacturers without the capital, digital maturity or in-house expertise to adopt advanced technology. Because these firms are often located in different places from the frontier, supporting adoption is how reindustrialisation reaches places, not just individual firms.

Capability that can be moved at short notice is tenancy, not reindustrialisation. Deep local supply chains, skills embedded in the local workforce, institutions built to last and value retained in the local economy are what turn a plant into an industrial base. This is about the durability of capability, not the nationality of the supplier.

Looking ahead

Despite some eye-catching lines, personal anecdotes, and some new announcements, the Chancellor’s speech remained relatively light on detail ahead of the Autumn Budget, scheduled for Wednesday 28 October. Healey was clear to praise his predecessor, Rachel Reeves, and recommitted to her fiscal rules. He was also clear that “the money New Labour had in the 90s is simply not there now”, attempting to manage expectations among colleagues, conference delegates and beyond.

As the Chancellor recognised in his speech, it is only through business that we will achieve consistent growth in the long term. Ahead of the Budget, techUK is calling on the government to support the tech sector and drive growth across the economy in six key areas – strategically reindustrialising the UK, building the workforce of the future, keeping the UK at the forefront of innovation, building a smarter state, bolstering the UK’s sovereignty, security, and long-term resilience, and unlocking capital and enabling enterprise.

Economy 2030

Finally, as the Chancellor noted, “without growth there is no social democracy” and “growth drives progress”. That is exactly the argument in techUK’s new Economy 2030 report which argues that every public and political priority is downstream of economic growth, and tech is uniquely well placed to deliver that growth for three reasons - first, being a significant growth engine in its own right. Second, the impact of widespread tech adoption on increasing productivity and output across the wider economy, and finally, technology’s ability to make government’s own growth levers, such as skills training, more impactful.

Conclusion

Put simply, every promise that a government makes - on social care, defence or welfare - depends first and foremost on economic growth. Without it, every choice becomes a painful trade-off and every ambition shrinks, but with it, living standards rise, public services improve and public finances stabilise - and, ultimately, the government can reap the political dividends. However, economic growth cannot just be spoken into existence. Whilst the Chancellor’s speech contained some positive rhetoric, it was light on specific policies or an overarching theory of growth.

On this, the foundations are critical. Neither AI adoption nor reindustrialisation can help make the UK internationally competitive if the basic needs aren’t met for them to succeed. That means fixing energy costs, grid costs, regional connectivity, and planning reforms. It also means leveraging public sector procurement to drive adoption of these necessary technologies as well as ensuring we are building the technical talent to be able to use them. Finally, it means ensuring the UK remains a globally competitive and internationally accessible market.

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