British politics is hooked on flashy fake numbers and the AI investment debacle proves it | Jonathan Portes

"Except it wasn't exactly real: the number was a mixture of already promised apples and aspirational future oranges. So it should hardly be a surprise that when ministers proclaimed last year that the UK was attracting billions of pounds of new investment in AI, they were being more than a little economical with the truth."

"As a Guardian investigation revealed, much of it turns out not to be new at all: existing datacentres rented rather than built, a supercomputer site not yet even started, promised investments that might never arrive and claims of job creation that have little or no connection to reality."

"Companies do not make billion-pound investment decisions because a minister wants a photograph beside a server rack. Policy matters sometimes a great deal. But its effects are typically slow, uncertain and hard to attribute to any single government initiative."

"When a company expands its UK operations, for whatever reason, it's a victory for industrial policy. Existing plans and possible future investments are bundled together, given a headline figure and presented as proof that government policy is working."

Government ministers frequently announce large investment figures that misrepresent economic reality by combining already-promised commitments with speculative future investments. The Guardian investigation revealed that claimed billions in UK AI investment included existing datacentres rather than new construction, incomplete projects, and unverified job creation claims. This pattern reflects how political incentives prioritize impressive announcements over accurate reporting. Governments face pressure to demonstrate achievement through daily news cycles, leading them to rebrand existing corporate expansions as policy victories. The underlying economic effects of policy are typically slow, uncertain, and difficult to attribute to specific initiatives, yet announcements bundled with large numbers create misleading impressions of government effectiveness.

Read at www.theguardian.com