Last week, the European Union made a new incursion on British sovereignty in Northern Ireland. The EU has decided that it intends to impose its AI Act on businesses and consumers in Northern Ireland. It submitted its proposal for joint UK–EU approval on 26 March. The British Government has yet to respond.
It should consider its response very carefully. The AI Act is partly responsible for the suffocation of the tech industry in Europe. Along with the Digital Markets Act, the Digital Services Act and GDPR, it has killed any hope of the European Union growing an innovative or viable digital economy. This is a great shame for the European people and European prosperity. One of the great benefits of Brexit is that the UK is free to diverge from these laws, and indeed it has done so, with a far more welcoming regulatory environment for innovation and experimentation in artificial intelligence, compared to the EU’s prescriptive and risk averse approach.
Why, then, is the EU trying to impose the AI Act on Northern Ireland? This is only possible thanks to the Windsor Framework, which applies the EU’s goods and food regulations in Northern Ireland. This replaced the unsatisfactory Northern Ireland Protocol with a worse arrangement, which looks set to lock Northern Ireland into EU regulations in perpetuity.
AI is not a good, however. The Windsor Framework was devised to protect the integrity of the EU’s single market, as the EU has been concerned about the possibility of Northern Ireland breaking open the Single Market and exposing Europeans to dangerous goods like Cumberland sausages. So why is the EU trying to implement the regulation of AI — a general-purpose technology — on Northern Ireland?
Most likely, it is trying its luck. This move is of questionable legality within the Windsor Framework, but it makes the EU’s intentions very clear. In its statement, the EU says that it needs to extend the AI Act to Northern Ireland to protect against the dangers posed by AI-powered goods which might run counter to “European values” and which are out of step with the EU’s risk-averse AI regulations.
The UK has little to gain and much to lose by realigning
The British Government should give this short shrift. The UK has taken a deliberately permissive approach to AI regulation and sees it as an economic policy priority. This is also, happily, a matter with cross-party consensus, as the current Government has continued the previous Government’s general approach. By attempting to impose the AI Act on consumers and businesses in Northern Ireland, the EU is attempting to deny the UK a competitive advantage over the EU and to exploit the Windsor Framework for maximum political and economic gain.
If this goes ahead, it will create a new regulatory barrier between Great Britain and Northern Ireland. Tech products available in Great Britain would have to undergo new approval processes to be deployed in Northern Ireland, and some would be unavailable for use altogether, as the EU’s approach has already led to AI tools like Google’s Gemini being delayed and curtailed in the EU compared to other markets. The Centre for Data Innovation estimates that the compliance costs for companies meeting these regulations — risk assessments, conformity assessment, mandatory external audit of safety and the like — will run into the tens of billions of Euros. Faced with a regulatory barrier between Great Britain and Northern Ireland, how will the Government respond? Will it deregulate in Great Britain and leave Northern Ireland isolated or will it follow EU regulations by stealth to keep Great Britain and Northern Ireland aligned. No wonder the EU is threatened by the UK’s more competitive economy on its doorstep.
This is the EU’s approach writ large. Instead of deregulating its own economy to make it more attractive for businesses and investors, it is instead attempting to keep the UK in its economic sphere of influence, and shackle it to its own prosperity-destroying regulations. Because AI is a general-purpose technology, the EU will likely try and use this as justification for expanding its regulatory remit over Northern Ireland and eventually the EU.
If the British Government does not reject this out of hand, we can see where this will lead in the so-called “reset” of UK–EU relations later this year. The Government is reportedly looking at dynamic alignment with the EU on a range of areas, including food standards, product regulation and energy policy. All of these are bad on their own terms, but the EU’s approach to extending the AI Act to Northern Ireland in the interest of product safety shows where the “reset” will lead. Goods alignment will rapidly morph from the UK following the EU’s costly regulations on product safety and packaging to being ordered to follow the EU’s rules on AI and technology regulation. After all, smartphones, drones, fridges, cars and a huge range of consumer goods may be powered by AI in some form, now or in the near future.
This should be taken as a warning. The EU is not only economically stuck, but its leading nations are in a state of total political paralysis, with barely functional governments in France and Germany. The bloc is stagnating, pulling itself in different directions on the illegal immigration crisis, which shows no sign of ending. The UK has little to gain and much to lose by realigning with its rules and regulations. Last week’s action on the Windsor Framework is the thin end of a much bigger wedge. It should be dealt with immediately in the interests of British sovereignty and prosperity.
